Broker fights sellers’ right to sue

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In the case McAvoy v. Hilbert, the plaintiffs, Randall and Trudy McAvoy, listed their business and the buildings that contained it for sale with the defendant, Dail Hilbert, a real estate broker who screwed up the paperwork. As a result, the McAvoys got sued -- not by the folks that bought it from them, but by the folks that bought it from the buyers. The McAvoys said they should be able to sue Hilbert for malpractice. Hilbert said his listing agreement with the plaintiff included an arbitration clause and that the McAvoys can't sue him; rather, the matter should be taken to an arbitrator. Analysis: The business listing agreement signed by the plaintiffs and the defendant did contain an arbitration clause, but the clause was not formatted in accordance with Section 1298 of the California Code of Civil Procedure, which requires that to be enforceable, arbitration clauses in real estate transaction contracts between an agent and client must include a separate heading and be ...