Highlights

Major victory: 19th Judicial District Chief Judge Donald Johnson ruled D.R. Horton's arbitration clause "not legally binding or enforceable"
Lawsuit stays in court: Dixon family case will remain in state court instead of being forced into private arbitration
Contract discrepancies: Judge found material differences between two sales contracts Dixon family signed months apart
Class action potential: Ruling clears path for case to expand to hundreds of Louisiana homeowners
Appeals expected: D.R. Horton almost certain to challenge ruling in First Circuit Court of Appeal

Louisiana Judge Rules Homeowners Can Take D.R. Horton to Court Over Moldy Homes

A Baton Rouge judge delivered a major victory Tuesday for Louisiana homeowners fighting the nation's largest homebuilder

BATON ROUGE, La. (KPEL News) — Lafayette Parish homeowners picked up a big win in court on Tuesday, opening the door for more Louisiana families to have a chance to seek damages from the nation's largest homebuilder, D.R. Horton.

19th Judicial District Chief Judge Donald Johnson released a 22-page order late Tuesday afternoon determining that the sales contract West and Alicia Dixon signed to buy their Youngsville home in 2014 "is not legally binding or enforceable."

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The ruling means the Dixons' lawsuit won't be relegated to arbitration, where plaintiff attorneys said evidentiary rules are more restrictive and litigation could cost the family tens of thousands of dollars. Instead, the case will remain in district court, where it could proceed to trial for a jury to decide whether D.R. Horton should pay damages.

"Big Win" for Louisiana Homeowners

Lance Unglesby, the New Orleans attorney leading the Dixons' legal team, called it a "big win" that will hold up on appeal.

"We are confident Chief Judge Don Johnson's thoughtful opinion is bulletproof," Unglesby said. "The Dixons always knew that if given the opportunity to present the evidence in a fair forum, the facts would carry the day."

The attorney said the ruling represents a victory for all Louisiana homeowners. "This is a big win for Louisiana homeowners," Unglesby added. "We are looking forward to our day in court in front of Louisiana citizens."

Judge Finds Contract Problems

Judge Johnson's ruling centered on material differences between the two sales agreements the Dixons signed months apart in 2014.

The original sales agreement the Dixons signed in April 2014 differed from the sales agreement they signed two months later in June. Sales agents told the family they were simply updating the original contract because it was illegible and needed to be reprinted.

Johnson found that the price of the home was different on the two contracts. He also noted that no D.R. Horton representatives signed the second contract of sale, making it unenforceable under Louisiana law.

Path Clear for Class Action Lawsuit

Johnson's ruling is the first time a judge weighed in on the arbitration issue after more than three years of legal battles. The decision clears the path for the case to become a sweeping class-action lawsuit involving hundreds of other Louisiana homeowners who purchased D.R. Horton homes after 2007.

The Dixons filed their lawsuit in March 2022, alleging D.R. Horton sold them a home with a poorly designed HVAC system that wasn't built to withstand Louisiana's humidity. Attorneys argued company officials knew their ventilation systems were faulty and schemed to keep buyers from taking legal action by tricking them into signing sales contracts with buried arbitration clauses.

Appeals Expected

Johnson's decision remains far from final. The ruling is almost certain to be challenged in the First Circuit Court of Appeal, and possibly the Louisiana Supreme Court.

D.R. Horton attorneys and spokespersons were not immediately available for comment Tuesday evening after the ruling was released.

The company has maintained from the beginning that the dispute should be settled in arbitration. They cited the fact that the Dixons twice signed a sales contract with a binding arbitration clause directing legal disputes into mediation under construction industry arbitration rules.

What This Means

The ruling represents a significant legal victory for Louisiana families who believe they were sold defective homes. If the decision survives appeals, it could open the door for hundreds of Louisiana homeowners to pursue damages against D.R. Horton in state court rather than expensive private arbitration proceedings.

The case involves allegations that D.R. Horton built homes across south Louisiana with HVAC systems that can't handle the state's intense humidity, leading to mold growth and water intrusion problems in homes from Lake Charles to Slidell.