The following is a prepared statement by political activist Jordan Fogal of Houston, Texas.
On April 15, 2002 we moved into what was going to be our last home. It had all the eye candy, even an elevator. The children told everybody at school that their grandmother had an elevator. We are senior citizens. We had a 30-year mortgage, 6 percent interest rate. We could afford our payments. We had an elevator in case our knees went. We had a medical center close by, and a funeral home three blocks away.
The first night in our new home, my husband tried out new Jacuzzi tub on the third floor. When he pulled the plug, 100 gallons of water crashed through our dining room ceiling into the dining room. This was not one overlooked plumbing connection, as my husband and I so desperately wanted to believe. It was previews of coming attractions.
For 29 months, we begged our builder to fix our house. They would come in and seal up the windows inside so the water wouldn’t run in, and then they would seal up the crack on the outside in the stucco so the water couldn’t run out. So the house just filled up with water, and the mold grew. An accredited laboratory said they had never seen toxic readings that high in an inhabited dwelling.
Our doctor told us to move out immediately. We sent the reports to the builder. He lied under oath, saying that he never received it, and the engineer received it that day, his engineer. We moved out. We had estimates for over $150,000 and our new home did not last 29 months.
After we exhausted all other remedies, I began protesting my builder’s new property. I felt foolish standing on a street corner holding up a sign because it was the only option left to me. We did not file on our builder in arbitration. Our builder filed on us for taking advantage of the only thing we had left, our First Amendment rights. He warned me that his attorneys would take care of me in arbitration. Two weeks after I stepped out on that corner, we received our arbitration papers. The builder filed a fast-track to dispose of us more expediently than regular arbitration.
We couldn’t afford a lawyer anymore. We were paying for our new house, moving costs, deposits on the apartment, storage for our things. We had to keep the insurance and lights on in our new house, even if we couldn’t live there, because the builder said that we had caused the damage. We knew that he was not going to buy it back. He told us he only sold houses. He didn’t buy them.
We also called the mortgage company and sent them the reports. After never being late with one payment, we allowed our home to go into foreclosure. We felt ashamed. At the same time, we also were paying for engineering, moisture, infrared, mold, and air quality testing, and our builder knew that all of this was unnecessary.
In arbitration, all the burden of proof is on the homeowner. The builder lets you do all the work and pay for it, and he sit there smugly knowing all the while that you will run out of money, shut up, go away, or he will win in arbitration. We did everything right. We had our house inspected. We hired a licensed realtor. We paid $3,400 a year for homeowners insurance, but substandard construction and builder defects are not covered by homeowners insurance. We were not in good hands with Allstate.
We paid good money for an uninhabitable house and had no recourse. We were constantly tormented by the American Arbitration Association and billed a $6,000 counterclaim fee that got us out of fast-track and into regular arbitration. We were billed for case service fees, arbitration fees, even for the rent on the room. After receiving hardship, our case was dismissed due to failure of payment of fees by both parties.
Now, we could finally file in court and charge the builder with fraud. We were dragged through 10 hearings before the judge ordered us to return to arbitration. Once again in arbitration, two years passed. We have not had a Christmas tree. We have not grilled out. We have not planted a flower. We have not had company. Our grandchildren have no place to stay with us. We live in a small third-story apartment, a temporary situation because surely justice was going to come soon.
After successfully proving fraud, my net award, including my attorney fees, is $26,000. I had to pay $1,690 for a study after arbitration was over before the arbitrator would issue her award. They do not have to face you when they render their verdicts. I feel an overwhelming responsibility as I sit here before you today because I feel like I have to represent the hundreds of families I have talked to over the years and the hundreds of thousands that I have never met who have suffered so much more than I have.
Please don’t tell us that our houses would cost more if they were built correctly, or tell us that arbitration works so well. If it worked so well, why does it have to be mandatory? By mandatory arbitration, we have lost our Seventh Amendment rights to a trial by jury, and maybe a fight to getting their First Amendment rights due to the abuses and harassment from arbitrators and unethical corporations.
In closing, I would like to quote our second president:
“Representative government and a trial by jury are the heart and lungs of liberty. Without them, we have no other fortification against being ridden like horses, fleeced like sheep, worked like cattle, and fed and clothed like swine.”
Mr. Adams must have had a premonition about the privatization of the justice system we now refer to as arbitration.