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

• Plaintiffs Michelle and Jason Damon purchased a home that came with a warranty from StrucSure Home Warranty, LLC, which was originally issued to the builder and the home's first owners. After discovering structural defects in their home, the Plaintiffs filed a claim under the warranty and subsequently sued StrucSure and other defendants for failing to address the defects. The warranty included a binding arbitration agreement, which StrucSure sought to enforce by filing a motion to compel arbitration. The district court denied this motion, leading to StrucSure's appeal (paras 1-5).

Procedural History

• District Court of Bernalillo County: Denied StrucSure's motion to compel arbitration, leading to StrucSure's appeal (para 5).

Parties' Submissions

• Plaintiffs: Argued that they could not be bound by the arbitration provision in the warranty as they were not parties to the original warranty agreement and were unaware of the arbitration agreement until after purchasing the home (paras 3, 5).
• Defendant-Appellant (StrucSure): Contended that the Plaintiffs, by seeking to benefit from the warranty, should also be bound by its arbitration provision, even as nonparties to the original agreement (paras 10-11).

Legal Issues

• Whether a nonparty to a home warranty contract, who seeks to invoke its benefits, can be compelled to adhere to the contract's arbitration provision (para 1).

Disposition

• The Court of Appeals reversed the district court's decision, holding that the Plaintiffs are equitably estopped from refusing to comply with the arbitration provision contained in the warranty agreement (para 19).

Reasons

• The Court, per Judge Linda M. Vanzi, with Judges Michael D. Bustamante and Cynthia A. Fry concurring, reasoned that equitable estoppel applies when a nonparty to an agreement seeks to benefit from it, thereby preventing them from avoiding its arbitration clause. The Court distinguished this case from others cited by the district court, emphasizing that the Plaintiffs' actions of filing a warranty claim and suing under the warranty constituted an attempt to enforce some of its terms while avoiding others. This, according to the Court, made them subject to the arbitration provision under the doctrine of equitable estoppel. The Court also addressed and dismissed Plaintiffs' alternative arguments against enforcing the arbitration agreement, including challenges to its fairness and claims of unconscionability (paras 6-18).