Oklahoma Supreme Court Reverses Course: Finds Arbitration Clause Printed on Shingles’ Wrapping Did Not Bind Homeowner to Arbitrate
A third-party contractor installed the defendant’s shingles on the plaintiffs’ roof. Subsequently, the plaintiffs filed suit for damages allegedly caused by the defendant’s faulty shingles and replacement of their roof. The defendant successfully moved to stay the proceeding and compel arbitration pursuant to an arbitration agreement found on the wrapping of each bundle of shingles.
The Oklahoma Supreme Court reversed the decision on appeal, finding that the plaintiffs were not bound to the arbitration agreement; the plaintiffs could not have had actual knowledge of the arbitration agreement and therefore could not consent to arbitration. Further, the contractors lacked the authority to enter into an arbitration agreement on the plaintiffs’ behalf without ratification, and there were no facts suggesting that the plaintiffs knew of the arbitration clause, so the plaintiffs “could not ratify the arbitration provision.”
The Supreme Court was not persuaded by the defendant’s argument that the plaintiffs sought to enforce their rights under the limited warranty provision, which contained the arbitration agreement, and could not now disclaim the arbitration agreement provision of that contract. The Supreme Court stated that the plaintiffs were “not seeking to enforce their rights under the limited warranty contract. Their claims arise in tort law not contract law.” Nor did the Supreme Court find that the plaintiffs could be estopped from challenging the arbitration agreement, lacking actual or constructive knowledge of the arbitration agreement until after they filed an initial warranty claim.
Williams v. TAMKO Bldg. Prods., Inc., No. 117190 (Okla. Oct. 1, 2019).