A national company accused of building homes that cannot handle Louisiana's humidity "fraudulently induced" buyers into signing contracts, so their claims against the firm should be heard by a judge rather than an arbitrator, a lawyer for an Acadiana couple — and potentially thousands of other homeowners — argued to a judge Monday.
But an attorney for D.R. Horton, the national developer, denied the fraud allegations and told 19th Judicial District Judge Don Johnson that the couple's contract explicitly states that all claims against the company must go to binding arbitration.
"All of these issues go to arbitration. There's just no question about it," D.R. Horton lawyer James Brown told the judge. "The arbitration clause could not be clearer. It's just not open for debate."
Lance Unglesby, one of the lawyers for Youngsville couple Alicia and West Dixon and potentially thousands of other homeowners across south Louisiana and the Gulf Coast if the Dixon's lawsuit is certified as a class action, countered that the lawsuit belongs before the judge because D.R. Horton "misinformed" prospective home buyers and did not warn them of potential problems.
"These homes are not designed for Louisiana humidity," Unglesby argued, saying the homes are plagued with mold issues. "It would be an absurdity to mandate arbitration."
Johnson gave both sides until next Monday to file additional written arguments, and said he intends to rule within a week of those filings.
D.R. Horton brands itself as "America's builder."
Brown said after court that the health and safety of the people that buy the company's homes "is our most important priority."
"We take the plaintiffs’ claims seriously, as we do with all issues homeowners raise with us. We desire to satisfy the folks that buy homes from us, to respond to their concerns and take them seriously. We take pride in the homes we build and sell. We build them up to code," he said.
Unglesby said outside the courtroom that thousands of Louisiana residents have been fraudulently induced into buying homes "that by their very nature are defective."
"These D.R. Horton homes are defective because significant moisture from outside is intruding inside. What makes this so outrageous is D.R. Horton knew about this defect before they ever started building in Louisiana," he said. "It is not news to Louisiana residents that we live in a humid climate, yet, a representative of D.R. Horton said these homes are 'not really designed for houses in South Louisiana.' We have talked to hundreds of D.R. Horton homeowners who have all voiced the same complaints."
Unglesby said the plaintiffs' legal team will continue to challenge D.R. Horton’s attempts to arbitrate.
"Our aim is to hold D.R. Horton accountable on behalf of these hardworking Louisiana homeowners," he added.
D.R. Horton has faced multiple lawsuits in the state, most recently the proposed class action filed in March by the Dixons. Another lawsuit claims the developer built new homes in a neighborhood in a way that pushed water onto existing neighborhoods.
In the Dixon case, the plaintiffs' lawyers allege that D.R. Horton and one of its subcontractors, Bell Mechanical Services, knowingly constructed homes that cannot weather Louisiana humidity. The attorneys also claim the builder and its HVAC subcontractor did not properly address homeowner concerns raised during new home warranty periods.
Youngsville Mayor Ken Ritter, who was a member of the city council in 2014, has said he plans to propose stricter building codes in response to the lawsuit.
It alleges D.R. Horton and Bell Mechanical "conspired together to intentionally mislead" the Dixons and other homebuyers in a "scheme of fraud and racketeering" while installing and repairing HVAC systems in the new homes.
The lawsuit claims the Dixons' home was constructed with improper attic ventilation and an improper air-conditioning system that created a negative pressure environment in the home, which draws warm, moist air inside.
The plaintiffs' attorneys say thousands of other homeowners across Louisiana and the Gulf Coast could be impacted, including those who bought a D.R. Horton home after 2012 and experienced problems with mold or mildew growth and damage to their homes not properly addressed during the home's warranty period.
The company's lawyers are asking Johnson to either dismiss the lawsuit and compel the plaintiffs to deal with their claims through binding arbitration, or halt the lawsuit until the company has a chance to address the claims through arbitration.