Libel Lawsuit Against Consumer Waives Right to Arbitration of Underlying Dispute
From yesterday’s decision in Schumacher Homes of N.C. v. Buchananby Judge Max O. Cogburn Jr. (M.D.N.C.):
This case arises out of a dispute between Plaintiffs and Defendants over Plaintiffs’ construction of Defendants’ home, which Defendants allege was defective.
Plaintiff Schumacher Homes is “one of the largest residential, custom home builders in the United States” and is licensed as a general contractor in North Carolina…. Defendants Keith and Dianna Buchanan are married residents of McDowell County, North Carolina, who contracted with Plaintiffs to build a home, and now allege that the home Plaintiffs built for them was faulty.
To spread the word of Plaintiffs’ alleged faulty construction, Defendants set up the website “schumachervictims.com” and communicated with Plaintiffs’ former, existing, and prospective customers. Plaintiff Richards Smothers characterized this as a “smear campaign,” but Defendant Keith Buchanan “vehemently den[ied] that [he] has communicated anything other than the truth in [his] representations about Schumacher Homes.” In response, Plaintiffs filed suit before this Court seeking damages and injunctive relief, and moved for a Temporary Restraining Order … and Preliminary Injunction, asking this Court to enjoin Defendants from continuing their alleged “smear campaign.” In their Complaint, Plaintiffs alleged commercial disparagement, tortious interference with prospective economic advantage and with contract, and other causes of action. This Court granted Plaintiff’s motion in part and enjoined Defendants from unsolicited electronic communications with Plaintiffs’ customers; however, the Court denied the other preliminary relief sought by Plaintiffs….
But defendants also brought counterclaims related to the alleged defects in the home; plaintiffs moved to compel arbitration, under the arbitration provision of the builder-homeowner contract; and the court denied plain
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