Basura

Defendant and appellant U.S. Home Corporation (Home) appeals an order denying its petition to compel arbitration of an action brought by plaintiffs and respondents Edward D. Basura, Jr. et al. (collectively plaintiffs or buyers). -

The issues presented are (1) the effect of Home’s failure to initial the arbitration clause in the sales agreements as to certain buyers; (2) as to those arbitration agreements which were bilaterally executed, the enforceability of said agreements in view of section 1298.7, which permits a purchaser to sue for construction defects despite having signed an agreement containing an arbitration clause; and (3) whether section 1298.7 is preempted herein by the Federal Arbitration Act (FAA) ( 9 U.S.C. § 2 ).

We conclude section 1298.7 is preempted by the FAA because the undisputed facts indicate the instant agreements involve interstate commerce. Therefore, plaintiffs cannot invoke section 1298.7 to avoid the arbitration agreements.

With respect to 28 plaintiffs as to whom Home did not initial the arbitration clauses, the trial court is directed to conduct a factual inquiry on remand to determine whether Home intended to be bound by arbitration,…