Trend Homes, Inc. v. Superior Court

Petitioner, a builder of single-family homes, challenges the trial court’s denial of its motion to compel judicial reference of the underlying construction defect action brought against it by homebuyers. The trial court refused to enforce a clause in home purchase contracts requiring homebuyers who sue petitioner to submit the dispute to judicial reference on the ground the clause is unconscionable. In contrast to the trial court, we find the provision enforceable and grant the relief petitioner seeks.

STATEMENT OF FACTS

Petitioner Trend Homes, Inc. (Trend), constructed single-family homes in a Fresno development. Real parties in interest own six homes within that development. Real parties, along with 39 other individuals who own 26 other homes within the development, filed suit against Trend and Robert McCaffrey (who the plaintiffs allege is Trend’s majority shareholder, officer and “Responsible Managing Officer”) to recover damages allegedly suffered due to defective construction of their homes.

The standard purchase and sale agreements between Trend and real parties contain a paragraph entitled “JUDICIAL REFERENCE” (the provision). The provision requires any civil…