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The Welk Group, operators of the Welk Resort San Diego, has lost its right to force owners into binding arbitration over mold damage to the property, Courthouse News Service reports. The time share community was originally opened by television personality Lawrence Welk in northern Escondido in 1964

Hermengildo "Jay" Martinez originally filed a class action suit in 2009 on behalf of time share owners at the property, alleging Welk Group and three partners concealed water leaks that led to serious mold and fungus damages at the site. His complaint has since been amended four times, and now that he has an operative lawsuit, the defendants have asked the court to compel owners into arbitration due to an agreement all owners are forced to sign.

Though the agreement is indeed binding, U.S. District Judge Anthony Battaglia ruled that the defendants had waived their right to force the action out of court and into the hands of an arbitrator. “It is indisputable that they knew of their right to seek arbitration,” Battaglia wrote in his decision, noting that the Welk Group waited through several rounds of complaints before attempting to force the arbitration only after receiving an “unwelcome” order from the court.

“The purpose of the [Federal Arbitration Act], and arbitration in general, is to promote quick, informal, and streamlined resolution of issues between parties,” Battaglia continued. “It is not to be used as a back-up plan for litigation strategies.”

Martinez has yet to file to have his class of owners certified, a move Welk Group will likely attempt to block due to an alleged conflict of interest concerning lawyers for the class and Wade Brent, a former engineer the defendants are pursuing with counter claims.

Bandleader Welk

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Visduh Jan. 17, 2012 @ 8:36 a.m.

That ruling is a novel one. Courts can find some very unexpected ways to void contracts, and this is just one of those. As to whether the legal system should recognize arbitration clauses in such matters is another question. When there is a gross imbalance in legal expertise and size between parties to a contract, they should be unenforceable. Will that ever happen? I doubt it.


dwbat Jan. 17, 2012 @ 9:22 a.m.

Lawrence Welk would probably have approved, as he was a notorious cheapskate. His TV show talent kept leaving, as he wouldn't give them a raise.


Burwell Jan. 18, 2012 @ 10:46 p.m.

All the "stars" on the Welk show who quit over money never made any after they left the show. Big Tiny Little Jr. was a big star on the Welk show, but after he quit over money issues he wound up playing the piano at bowling alley lounges.



TruthAboutMold Jan. 17, 2012 @ 1 p.m.

Mold can cause serious health problems. For accurate information about the health effects of mold, go to http://truthaboutmold.info and check out the Global Indoor Health Network at http://globalindoorhealthnetwork.com.


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