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Home Warranty Lawsuit Goes to the New Jersey Supreme Court

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Trenton, NJPlaintiffs who bring home warranty lawsuits against home warranty companies commonly assert allegations of shoddy workmanship, delays or denials of claims. However in this case, the plaintiff alleged violations to New Jersey’s Consumer Fraud Act and Truth in Consumer Contract, Warrant and Notice Act with regard to a contract that was allegedly misleading in stated coverage periods, amongst other claims.

The home warranty lawsuit went all the way to the New Jersey Supreme Court, which has agreed to review the case.

According to Law360 12/01/17) plaintiff Amanda Kernahan entered into a home warranty service agreement with defendants Home Warranty Administrator of Florida Inc. and Choice Home Warranty. The agreement, initiated in 2015, was intended to cover the repair, or replacement of home appliances and systems (although what the ‘systems’ were, were not identified).

In her home warranty insurance lawsuit, Kernahan stated that the cover page of the agreement reflected a coverage period that extended from April 23, 2015 through to October 23, 2018 – a period of 42 months, or three and one-half years.

However, according to Kernahan the second page of the home warranty service contract specified a coverage period that reflected a time frame different from that reflected on the contract cover page.

“[C]overage starts 30 days after acceptance of application by Us [sic] and receipt of applicable contract fees and continues for 365 days from that date,” according to court records. That suggests a coverage period of just over a year, or less than a third of the coverage period suggested by the cover page of the contract.

The plaintiff also asserted that the final page of the contract document, entitled ‘Mediation,’ failed to spell out that in accepting the contract Kernahan was waiving her right to bring a home warranty lawsuit.

She asserted bad faith insurance, amongst other claims.

The defendants, according to court documents attempted to have the case dismissed or, alternatively to force arbitration as outlined in the arbitration provisions in the contract.

The trial court denied the defendants’ motion to dismiss, or alternatively compel arbitration. Defendants appealed, and in June a two-judge appellate panel upheld the trial court’s ruling that the arbitration clause in Kernahan’s agreement could not be enforced under requirements established by Atalese v. US Legal Services Group LP. In that case, the New Jersey Supreme Court held that such provisions needed to be clear and not ambiguous in any way.

The appellate panel determined that arbitration provisions in Kernahan’s contract were ambiguous, and unclear.

But the defendants were not done, and took their case all the way to the New Jersey Supreme Court. On Friday, December 1 the Supreme Court agreed to hear the case.

Stay tuned.

The home warranty lawsuit is Amanda Kernahan v. Home Warranty Administrator of Florida Inc. et al., Case No. A-1355-16T4, in the Supreme Court of New Jersey.

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READER COMMENTS

Posted by

on
I canceled my Choice Home Warranty policy today, Monday, October 14, 2018, and went with a PA Company, where I am a resident. The last three times I needed covered repairs, the "service people" were very unprofessional. I needed a ceiling fan replaced and the first "service person" I contacted called to say his truck broke down, and he needed my help getting a replacement vehicle to get to the job site. When I called Choice, they sent out a second technician who spent more time on the phone than he did replacing the old ceiling fan. The fan was wobbling so badly, I had to call Choice a third time, and a week later, they sent out a service person from the same company who re-installed the fan, but complained that it was "his day off", and he didn't appreciate having to come and do the job all over again. And I had to go purchase the ceiling fan myself, because none of the service people had the time to do so, even though I provided them with all the information they needed to purchase the fan. I'm a senior citizen, and didn't need all the aggravation.

Posted by

on
. Denied claim due to picture of AC coil. CHW stated via picture coils were dirty and not maintained, however, their own technician stated coils were clean and system well maintained. thanks Dan Buttrey

Looking for legal help. NC

Posted by

on
In the heat of the summer heat index over 100 sometimes 110 index....takes 4 weeks then declined due to normal wear for reasonable use....Technicians are not repair people...the technicians are people retired or not certified that deliver an opinion that are per the Choice home warranty wishes.....They make the fraud by selling the warranty and creating decline claim circumstances.....most circumstances are false and the technician is not certified. Bad Faith all over their dealings.. We keep on sweating from June to August 2018.....Worthless Home Waranty

Posted by

on
Been with [Home Warranty] for over 10 years and have been happy until now! Your customer service is horrible and unwilling to help solve problems that we were having with 2 unqualified service contractors . One that damaged our motherboard and the other who kept canceling appointments and made a deceitful recommendation . Where upon a customer service rep suggested a cash out to us which later denied us this option. Not having heat in the winter because of a company that is being runned by telephone operators is crimson and fraudulent and you are not standing by what we are paying for ! Disgraceful !

Posted by

on
I agree with this complaint. I purchased the home warranty on three of my homes (rental properties) and they denied repairs, companies refused to provide service due to the issue of the home warranty failure to pay or simply they just never responded to the repair request.

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