BATON ROUGE, La. — A mobile home owner must arbitrate both contract and mold tort claims arising from alleged defects and mold exposure, but his wife and child were not parties to the purchase agreement and can pursue personal injury claims in court, a Louisiana appellate court ruled Feb. 16. Snyder v. Belmont Homes Inc., No. 2004 CA 0445 (La. App., 1st Cir.).

Doug Johnson and Courtney Snyder initially sued Belmont Homes Inc. and Bayou State Mobile Homes Inc. in 2002, alleging defects in a mobile home purchased that same year by Johnson, prior to the couple's marriage. They sought damages for redhibition, breach of warranty, negligent misrepresentation and unfair trade practices.

A year later, Johnson and Snyder amended the complaint to allege injuries to themselves and to their newborn child arising from exposure to mold.

Belmont Homes filed an exception, contending that the purchase contract mandated mediation and binding arbitration of all matters arising from the purchase of the mobile home.

The 19th Judicial District Court, Parish of East Baton Rouge, denied the exception and Belmont appealed.

The 1st Circuit Court of Appeal distinguished Johnson's claims from those of his wife and child, noting that Johnson was the only party to the purchase agreement.

The court reversed on Johnson's contract and related redhibition claims, ruling that Johnson was bound by the contract's arbitration provision on those claims.

Johnson's tort claims were more problematic and there are no Louisiana cases directly on point, the court continued.

The Louisiana Arbitration Law directs the courts to follow the Federal Arbitration Act, and the federal law requires a two-step determination: whether the parties agreed to arbitration, and whether that agreement was 'broad' or 'narrow.'

A narrow clause would limit arbitration to matters relating to the performance of the contract, but the language in this instance is broad, the court explained, requiring arbitration of 'a dispute, controversy or claim of any kind or nature arising between he parties.'

The court noted that while there are no Louisiana cases on point, California appellate courts have applied arbitration agreements to tort claims 'when the tort liability 'had its roots' in the sales agreement containing the arbitration clause' (Izzi v. Mesquite Country Club, 186 Cal. App. 3d 1309, 231 Cal; Rptr. 315 [1986]).

'The wording of this particular agreement clearly states that any and all claims of any nature, contract or tort, will be settled by arbitration,' the court said. ''But for' the defects in the product resulting in the mold, Johnson would have no tort claim against defendants for toxic mold. Therefore, this clause is sufficiently broad and sufficiently clear to include this toxic mold tort claim.'

The court added that courts have found that a party seeking to enforce the provisions of a contract must accept all provisions.

Snyder also asserted contract claims, but was not a party to the purchase agreement and was not married to Johnson at the time of purchase, the court said. The court found no evidence that Snyder has a right of action or interest in the suit, but gave her 30 days to amend the petition.

But Snyder can continue to pursue her products liability claims, as can her child, the court decided.

'There is nothing in the record showing that Snyder had knowledge of the arbitration agreement,' the court said. 'Nor is there any evidence that she was obligated under the contract, or the obligation was incurred on her behalf, or that she benefited in anyway from that agreement.'

'We are therefore in agreement with the trial court's conclusion that Snyder cannot be bound to arbitrate based on a contract which she did not sign when there is no evidence she knew about the agreement, was obligated by it, that it was incurred on her behalf, or that she benefited from it,' the court decided. 'It should be obvious without citation, that a party cannot create title in herself by judicial confession, where there is no legal basis for her title.'

Richard C. Dalton of Dalton Law Firm in Lafayette, La., represents Johnson and Snyder.

John P. Wolff III and Kyle A. Ferachi of Keogh, Cox & Wilson in Baton Rouge are counsel for Belmont Homes. Larry D. Book of Baton Rouge is counsel for Bayou State Mobile Homes.

     XXXXXXXXXXXXXXXXXXXXXXX

        Pure Air Control Services, Inc.

        1-800-422-7873