Nishimura v. Gentry Homes, Ltd.Annotate this Case
Plaintiffs, individually and on behalf of all persons similarly situated, filed a first amended class action complaint alleging that Gentry Homes, Ltd. constructed Plaintiffs’ home without adequate high wind protection. Gentry filed a motion to compel arbitration pursuant to a provision in the Home Builder’s Limited Warranty (HBLW) between Gentry and Plaintiffs. The circuit court ordered Plaintiffs to arbitrate their claims against Gentry but severed and struck an arbitrator-selection provision for potential conflict of interest. The intermediate court of appeals concluded that the circuit court should have enforced the HBLW’s arbitrator-selection provision. The Supreme Court vacated the ICA’s judgment and affirmed the circuit court orders, holding (1) the ICA erred in required a party challenging an arbitrator-selection provision to show evidence of “actual bias”; and (2) in resolving a challenge to an arbitrator-selection provision, the “fundamental fairness” standard should be applied, and under this standard, the arbitrator-selection provision was fundamentally unfair.