Gonski v. Second Judicial District Court Ex Rel. County of Washoe
126 Nev. 551
| Nev. | 2010Background
- Gonskis signed a Reno home purchase agreement containing an arbitration clause; the separate limited warranty also contained an arbitration clause; the two clauses cover construction defects and may be incorporated together; the district court compelled arbitration under the purchase agreement's clause despite objections; the Gonskis argued the clauses were procedurally and substantively unconscionable and violated NRS Chapter 40 rights; mandamus relief was sought to overturn the arbitration order; the court below found no unconscionability and granted arbitration, prompting this review.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are the arbitration provisions procedurally unconscionable? | Gonskis claim signing circumstances and hidden terms prevented meaningful assent | Pulte Homes argues clauses were conspicuous and terms clear | Procedural unconscionability present; signing context and lack of conspicuous notice found. |
| Are the arbitration provisions substantively unconscionable? | Clauses are one-sided, limit Chapter 40 rights, and misstate costs | Arbitration terms are fair and enforceable under governing law | Substantive unconscionability shown; provisions unfairly limit statutory rights and shift costs. |
| Do the arbitration provisions preserve NRS Chapter 40 rights or impermissibly waive them? | Arbitration confines or waives Chapter 40 protections | Chapter 40 rights can be subject to arbitration when applicable | Arbitration clauses impermissibly waive NRS Chapter 40 rights, violating public policy. |
| Did the district court abuse its discretion in compelling arbitration? | Courts should not enforce unconscionable terms; unconstitutional under Nevada public policy | Arbitration enforceability should be upheld if agreement valid | District court abused its discretion; mandamus warranted to vacate; pending district court action. |
Key Cases Cited
- D.R. Horton, Inc. v. Green, 120 Nev. 549 (Nev. 2004) (unconscionability defense to arbitration; conspicuousness and notice matter)
- Burch v. Dist. Ct., 118 Nev. 438 (Nev. 2002) (writ petitions challenging arbitration orders; mixed law/fact review)
- Armendariz v. Foundation Health Psychcare, 24 Cal.4th 83 (Cal. 2000) (sliding-scale approach to unconscionability; statutory rights concerns)
- Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, 473 U.S. 614 (U.S. 1985) (arbitration of statutory claims; waiver concerns)
- Kindred v. Dist. Ct., 116 Nev. 405 (Nev. 2000) (statutory rights survive arbitration; public policy considerations)
- Olson v. Richard, 120 Nev. 240 (Nev. 2004) (NRS Chapter 40 rights; construction defect claims)
- Skender v. Brunsonbuilt Constr. & Dev. Co., 122 Nev. 1430 (Nev. 2006) (NRS Chapter 40 considerations; homeowner protections)
- Graham Oil v. ARCO Products Co., 43 F.3d 1244 (9th Cir. 1994) (waivers of statutory damages in arbitration)
- Rent-A-Center, West, Inc. v. Jackson, 561 U.S. _, 130 S. Ct. 2772 (U.S. 2010) (delegation clause validity and arbitrability decisions)