AI Generated Opinion Summaries

This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.

Facts

• The Plaintiff contracted with the Defendant, a home inspection company, to inspect a prospective home. The inspection report described the roof as fair with minor damage, leading the Plaintiff to purchase the home and negotiate minor concessions from the seller. After moving in, the Plaintiff discovered significant roof damage and, following unsatisfactory discussions with the Defendant, filed a lawsuit seeking damages for the alleged substandard inspection.

Procedural History

• [Not applicable or not found]

Parties' Submissions

• Plaintiff: Argued that the arbitration clause in the contract was substantively unconscionable and unenforceable because it limited the consumer’s statute of limitations to one year, imposed a cost-sharing provision that deprived the consumer of statutory rights to attorney’s fees and costs, and authorized an award of attorney’s fees and costs against a party who breached the Agreement’s resolution of disputes clause.
• Defendant: Filed a motion to compel arbitration based on the contract's arbitration clause, contending that disputes arising from the agreement should be resolved through arbitration.

Legal Issues

• Whether the arbitration clause in the Residential Inspection Agreement is substantively unconscionable and therefore unenforceable.

Disposition

• The district court's decision to deny the motion to compel arbitration was affirmed.

Reasons

• The Court, with Judges Bruce D. Black, Megan P. Duffy, and Jane B. Yohalem concurring, found the arbitration clause substantively unconscionable due to its one-sided nature, particularly the time-to-sue provision that limited the Plaintiff to a one-year period for filing a claim while imposing no such limit on the Defendant. The Court also found the cost-sharing provision unconscionable as it conflicted with the Unfair Practices Act by preventing a prevailing consumer from recovering attorney’s fees and costs. The Court applied a de novo standard of review for the denial of a motion to compel arbitration and relied on New Mexico’s strong policy preference for arbitration, balanced against the equitable doctrine of unconscionability. The Court concluded that the unconscionable provisions were central to the agreement and that severance was not an appropriate remedy, thus affirming the district court's decision in its entirety (paras 1-18).