Keefe Law Firm Wins New Jersey Supreme Court Appeal, Prevails in Amanda Kernahan v. Home Warranty Administrator of Florida, Inc.

nj supreme court

Argued September 12, 2018

Decided January 10, 2019

Red Bank, NJ January 14, 2019Keefe Law Firm today announced that John E. Keefe, Jr. and Stephen T. Sullivan, Jr. successfully argued before the New Jersey Supreme Court a consumer’s right to file a lawsuit for consumer fraud claims, defeating a home warranty service contract company’s attempt to enforce an ambiguous and contradictory arbitration provision on its customers.

Mr. Keefe argued on behalf of Amanda Kernahan, who purchased a Choice Home Warranty from a Florida company, the Home Warranty Administrator.  Service contracts like this are supposed to reduce the costs to homeowners for repair or replacement of certain home systems and appliances.  When Ms. Kernahan filed claims under the agreement with Choice Home Warranty, they were denied. She then brought a consumer fraud class action against the company pursuant to the New Jersey Consumer Fraud Act,  the New Jersey Truth in Consumer Contract, Warranty and Notice Act and the breach of the covenant of good faith and fair dealing arising from Choice Home Warranty’s misrepresentations and deceptive business practices.

The crux of the appeal was whether an arbitration provision in the contract was enforceable. If Choice Home Warranty had been successful, Ms. Kernahan would have been barred from maintaining her claims in court.  The New Jersey Supreme Court, however, found this to provision to be unenforceable due to its “inconspicuous location and confusing, inconsistent and contradictory terms.”  As it summarized, “[i]t is unreasonable to expect a lay consumer to parse through the contents of this small-font provision to unravel its material discrepancies.”

Why This Ruling is Important to Consumers

The Court’s decision preserves consumers’ long-standing right of access to the courts.  It emphasizes that companies may not hide arbitration provisions deep within their contracts and use confusing and conflicting language.  Arbitration provisions, like other contractual provisions, should be plainly written.  In this way, by agreeing to arbitration, consumers will know that they are waiving their time-honored right to bring a court action to settle a dispute.

“This is a win for consumers in that the decision preserves our jury trial system and sends a strong message to companies that they will held accountable for deceptive business practices” said John E. Keefe, Jr.

“Informed choice should be the polestar of consumer contracts.  The Court’s decision reaffirms almost century old precedent that contracts – especially consumer contracts – must be written clearly before rights are waived.”

About Keefe Law Firm

Founded in 2005, Keefe Law Firm is a full service law firm representing individuals and organizations. We are committed to providing experienced, aggressive representation and extremely responsive service for clients in New Jersey and nationwide. Our key practice areas include criminal, construction and commercial litigation, personal injury, subrogation actions, mass tort, employment, consumer fraud, workers compensation, alternative dispute resolution, real estate and land use, and trusts and estates.

John Keefe, the firm’s founder and New Jersey Certified Civil Trial Attorney currently serves as the president of the New Jersey State Bar Association and has served as plaintiff’s liaison in several NJ and national class action law suits.

The firm has offices in Red Bank, Newark, New Brunswick, and Point Pleasant, New Jersey. For more information, visit