Opinion ID: 2375340
Heading Depth: 1
Heading Rank: 6

Heading: Arbitration expenses

Text: The purchase agreement is misleading as to arbitration expenses under the limited warranty. In the purchase agreement's clause labeled ATTORNEYS' FEES, which immediately follows the arbitration clause, the agreement provides that Pulte Homes will advance the fees necessary for the arbitration, even though each party is responsible for its own attorney fees and costs. [4] By referring simply to the arbitration, the purchase agreement's fees provision appears to apply to any arbitration, including arbitration under the limited warranty. [5] The limited warranty, however, provides that the party initiating arbitration must pay the necessary fees. [6] The fee provision, especially in light of the discrepancy between it and the purchase agreement, is one-sided. Moreover, as the district court noted, the documents fail to mention the potentially high amount of the arbitration costs. While that failure alone does not amount to substantive unconscionability, D.R. Horton, 120 Nev. at 559, 96 P.3d at 1166 (stating that the absence of language disclosing the potential arbitration costs and fees, standing alone, may not render an arbitration provision unenforceable), in this instance, the plan administrator is to determine the arbitration organization, and thus, the Gonskis were apparently unable to estimate potential costs at the time of signing, since they had to ask the plan administrator for a copy of the applicable arbitration rules. In D.R. Horton, this court noted its agreement with a Ninth Circuit ruling that invalidated a provision, in part because it required the arbitrating parties to split the fees. 120 Nev. at 557-58, 96 P.3d at 1165 (citing Ting v. AT & T, 319 F.3d 1126, 1148-49 (9th Cir.2003)). Here, the Gonskis were not required merely to split the fees, but to pay the fees up front. Thus, the limited warranty's arbitration provision is substantively unconscionable because it required the Gonskis to pay the initial arbitration costs.