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Reasons to Read
This month, I follow a good news, bad news, good news format.  Some good news for a client came in the form of an appellate decision that highlighted the broad view taken of the scope of arbitration agreements.  Bad news for nearly everyone else relates to construction job losses and continued weakness in the residential construction and real estate market.  Finally, the good news is that for some homeowners, the market dynamics allow them, if underwater but carrying some cash, to sell their current home at a loss and buy a bigger home for less at a historically low interest rate.
 
mug shotAs always, I appreciate the time you have taken to review this e-newsletter.  Please feel free to contact me if you have any questions, comments, or suggestions for future articles.
 
Jim Dixon
216-515-1642
Ohio Courts Use Broad Review to Assess Scope of Written Arbitration Agreements 
In an article published by Builders Exchange Magazine, I discuss a case we handled where the appellate court looked at the parties' relationship to assess whether all of their disputes were covered by an arbitration agreement.  In that case, a developer and a site work contractor had disputes on several phases of the project.  Some of those disputes were on phases where the parties had not executed written agreements.  Because the disputes arose in the context of a relationship where arbitration agreements were the norm, all of the disputes were subject to arbitration.
Residential Real Estate Headlines
 
Typically, the construction industry drives an economic recovery.  Not so this time, or at least this year, as May's construction permitting activity manifested the drop expected with the expiration of the tax credit, falling back to levels seen last December, while June's activity manifested a drop to levels seen last October. Residential sales figures followed the same trend.
 
Nationally, inventory may yet increase this year as new foreclosures join an anticipated increase in new construction that is a result of home builders building on land they purchased for low prices last year.
 
Cuyahoga County foreclosure filings were higher in 2010 than 2009, with the suburbs accounting for more of the numbers.
Greater Cleveland Continues to Lose Construction Jobs
While Columbus managed to add construction jobs in the last year, the Cleveland area lost one-third of the state's total (one in ten construction jobs in the region), according to an article in The Plain Dealer that summarized a report from the Associated General Contractors. Steubenville and Lima had it worse. Even so, Ohio ranked twenty-first in construction job losses. 
Under Water?  Sell At A Loss And Live Large
A Columbia Business School Economist, in this fascinating article from the Wall Street Journal, encouraged homeowners to get over their "loss aversion" and consider trading up.  Why should the loss matter when the cost of the home you buy is low too?  Factor in historically low interest rates, and the math can strongly favor a change. Or, what about a "cash in" refinance?  In some instances, it makes sense to pay cash to help retire an old mortage and obtain a new one at a lower rate. One third of those who refinanced in 2009 put in cash to do so. Both of these unusual strategies are available only to those with available cash.  Considering the stock market is at the end (we hope) of a lost decade, pulling cash from stocks and using it to retire high-rate debt creates an instant return. 
Upcoming Seminars
We frequently lecture on a range of subjects at the offices of businesses, trade groups, and bar association groups.  If you are interested in providing training for your employees on specific legal issues, please feel free to contact me.  Otherwise, you can attend the following seminars offered by our various practice groups:
 
October 15, 2010:  Fellow Construction Group member Ian Frank will be discussing Ohio's Prompt Payment Act as a part of a teleconference from 1:00 to 2:30 PM.  More information to come once the sponsor (Lorman) posts a link.
 
December 16, 2010: Brett Bacon will lecture on Federal Court Practice.  More information to come once the sponsor (NBI) posts a link.
Disclaimer
This document is intended to provide general information about legal developments, not legal advice. Receipt of this information does not create an attorney-client relationship.