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Energy Home, Division of Southern Energy Homes, Inc. v. Peay

Supreme Court of Kentucky

August 29, 2013

ENERGY HOME, DIVISION OF SOUTHERN ENERGY HOMES, INC. APPELLANT
v.
BRIAN PEAY AND LORI PEAY APPELLEES

ON REVIEW FROM COURT OF APPEALS CASE NO. 2009-CA-000657-MR DAVIESS CIRCUIT COURT NO. 08-CI-01493

COUNSEL FOR APPELLANT: Larry Colby Deener Elizabeth Anna Deener.

COUNSEL FOR APPELLEES: Zack N. Womack.

OPINION

VENTERS JUSTICE

Appellant Energy Homes, Division of Southern Energy Homes, Inc. (SEHI), appeals from an opinion of the Court of Appeals affirming the Daviess Circuit Court's denial of a motion to compel arbitration. For the reasons stated herein, we reverse and remand this matter to the Daviess Circuit Court for entry of an order consistent with this decision.

I. FACTUAL AND PROCEDURAL HISTORY

In November 2005, Brian Peay and his wife, Lori, decided to purchase a manufactured home from American Dream Housing Inc. (American Dream). American Dream is a retail dealer of manufactured homes located in Owensboro, Kentucky. The home selected by the Peays was manufactured by SEHI. Although the written purchase contract identified the buyers as "Brian 8& Lori Peay, " the contract was signed only by Brian Peay and an agent of American Dream. SEHI was not a party to the agreement and Lori Peay did not sign it. The purchase contract contained a merger and integration clause that said: "This agreement contains the entire understanding between dealer and buyer and no other representation or inducement, verbal or written, has been made which is not contained in this contract." No express warranties were provided by the purchase contract.

Several weeks later, the home was delivered to American Dream directly from SEHI's factory in Alabama. American Dream then delivered it to the Peays' home site. There, it was set in place on a basement foundation constructed by independent contractors who are not parties to this action.

On June 26, 2006, the parties met for a closing to complete the transfer of ownership of the home to the Peays. At the closing, SEHI offered the Peays certain written warranties on the home in exchange for the Peays' agreement that any disputes over the home would be submitted to binding arbitration. Brian Peay accepted the warranties and signed the "Binding Arbitration Agreement and Jury Waiver" (Arbitration Agreement), which was also signed by a representative of American Dream and a representative of SEHI. Additionally, Mr. Peay watched a video, entitled "Closing Video, " which included guidelines for selecting a site for the house, an explanation of the delivery and installation process, and an explanation of the Arbitration

Agreement. He signed a transcript of the Closing Video and the "Original Home Owner Registration Card, " which was then stamped "Warranty Card."

The Arbitration Agreement provides:

You and We agree to arbitrate any and all claims and disputes arising from or relating to the Contract, the Manufactured Home, the sale of the Manufactured Home, the design and construction of the Manufactured Home, the financing of the Manufactured Home, and any other disputes between You and Us, including any disputes regarding the enforceability, interpretation, breadth, scope, meaning of this Agreement. The arbitration will be binding. You and We further agree to waive any right to trial by jury in any civil action arising from or relating to the Contract, the Manufactured Home, the sale of the Manufactured Home, the design and construction of the Manufactured Home, the financing of the Manufactured Home and any other disputes between You and Us.
DEFINITIONS
"You" shall mean the buyer or buyers named on the Contract and any occupants of the Manufactured Home. If there is more than one buyer named on the Contract or more than one occupant of the Manufactured Home, "You" shall refer not only to each buyer or occupant ...

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