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Dispute Resolution Keyed to Folberg, 4th Ed.
Allied-Bruce Terminix Cos. v. Dobson
Citation:
513 U.S. 265 (1995)Facts
In August 1987, Steven Gwin purchased a lifetime “Termite Protection Plan” from Allied-Bruce Terminix Companies. The Plan promised to protect Gwin’s house against termite attacks, provide periodic inspections and necessary treatments, and repair damage up to $100,000 caused by new termite infestations. The contract included a written arbitration clause stating that any controversy arising from the agreement would be settled exclusively by arbitration. In 1991, when the Gwins wanted to sell their house to the Dobsons, Allied-Bruce reinspected the house and provided a clean bill of health. Shortly after the Dobsons purchased the house and the Plan was transferred to them, they discovered the house was infested with termites. Allied-Bruce attempted to treat and repair the house, but the Dobsons found these efforts inadequate. The Dobsons sued the Gwins, Allied-Bruce, and Terminix in Alabama state court. Allied-Bruce and Terminix requested a stay to allow arbitration, citing the Plan’s arbitration clause and § 2 of the Federal Arbitration Act, but the court denied the stay.
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