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Dispute Resolution Keyed to Carbonneau, 8th Ed.
Allied-Bruce Terminix Cos. v. Dobson
Citation:
513 U.S. 265 (1995)Facts
In 1987, Steven Gwin purchased a lifetime “Termite Protection Plan” from Allied-Bruce Terminix for his house in Birmingham, Alabama. The contract contained an arbitration clause stating that any controversy arising out of the agreement would be settled exclusively by arbitration. In 1991, Gwin sold his house to the Dobsons and transferred the protection plan to them. Allied-Bruce had inspected the house before the sale and declared it termite-free. Shortly after the purchase, however, the Dobsons discovered the house was infested with termites. Allied-Bruce attempted to treat and repair the house, but the Dobsons found these efforts inadequate. They sued the Gwins, Allied-Bruce, and Terminix in Alabama state court. Allied-Bruce and Terminix moved for a stay to allow arbitration to proceed, but the Alabama courts denied the stay based on a state statute invalidating predispute arbitration agreements.
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