Pruitt v KB Homes
Judge Approves KB Home Settlement
People who bought a house from KB Home in the past 10 years will not have to submit to binding arbitration in warranty disputes, according to an agreement between the builder and plaintiffs in a class-action lawsuit. A court in Laredo recently approved the final agreement.
The agreement covers Texas owners who bought a house from KB Home after January 1996. It covers about 60,000 homeowners in San Antonio, the Rio Grande Valley, Austin, Houston, Dallas and Fort Worth.
The lead plaintiff in the case, Laredo truck driver Timothy D. Pruitt, said KB Home tried to require binding arbitration in a warranty dispute after it had agreed with federal regulators that it would not do so.
Arbitration lets disputes be settled without a lawsuit. Consumer advocates have long opposed the practice of imposing binding arbitration clauses in consumer contracts, arguing that the process gives big companies unfair advantages.
Janet Ahmad, president of HomeOwners for Better Building, said KB Home is now the only builder barred from requiring buyers to sign such agreements but that she hopes other builders will follow suit.
