recognizing that one who “seeks by his claim to derive a direct benefit from the contract containing the arbitration provision may be equitably estopped from refusing arbitration”
How later courts described this case
- recognizing that one who “seeks by his claim to derive a direct benefit from the contract containing the arbitration provision may be equitably estopped from refusing arbitration”
- stating and applying principle of direct-benefits estoppel that a claimant cannot seek to benefit from the agreement but avoid its arbitration clause
- recognizing two equitable circumstances when a signatory plaintiff may enforce an arbitration clause against a nonsignatory: (1) when the signatory plaintiff must rely on the contract’s terms to assert its claims against the nonsignatory and (2
- quoting, Walker v. Packer , 827 S.W.2d 833, 840 (Tex. 1992)
Written by the judges who cited it.
Distinguished
Distinguished by Cooper Industries, LLC v. Pepsi-Cola Metropolitan Bottling Co., 2015 Tex. App. LEXIS 8882 (2015)
Appellees argue that Meyer is distinguishable because the non-signatories, in that ease were, not strangers to the agreement,, as they, contend Cooper is here.
The opinion
Justice O’NEILL,
dissenting.
Clearly, a nonsignatory can compel a party who has signed an arbitration agreement to arbitrate a dispute under appropriate circumstances. E.g., Grigson v. Creative Artists Agency, 210 F.3d 524, 528 (5th Cir.2000); MS Dealer Serv. Corp. v. Franklin, 177 F.3d 942 , 947 (11th Cir. 1999). A party who has signed an agreement containing an arbitration clause may be compelled to arbitrate disputes with a nonsignatory when the signatory must rely on the terms of the agreement to prosecute claims against the nonsignatory. Grigson, 210 F.3d at 527 (citing MS Dealers Serv. Corp., 177 F.3d at 947). A non-signatory may also be entitled to compel arbitration when claims asserted by a signatory allege “substantially interdependent and concerted misconduct by both the nonsignatory and one or more of the signatories to the contract.” Id. (quoting MS Dealers Serv. Corp., 177 F.3d at 947). But even the exceptionally strong policy favoring arbitration cannot justify requiring litigants to forego a judicial remedy when they have not agreed to do so. E.E.O. C. v. Waffle House, Inc., 534 U.S. 279, 293-94 , 122 S.Ct. 754 , 151 L.Ed.2d 755 (2002).
I agree with the court of appeals that neither prong of the Grigson test is satisfied in this case. While WMCO asserts that Ford and Meyer tortiously interfered with the purchase and sales agreement between WMCO and Bullock, its claims depend on the existence of the agreement, not its terms. In similar circumstances, the Fifth Circuit has declined to compel arbitration, noting that the mere fact that a dispute touches on an agreement containing an arbitration clause is an insufficient basis on which to compel arbitration. Hill v. G.E. Power Sys., Inc., 282 F.3d 343, 348-49 (5th Cir.2002). Neither is the second prong fulfilled. WMCO does not allege any substantially interrelated misconduct between Bullock and Ford or Meyer. To the contrary, WMCO asserts that Bullock was compelled by Ford and Meyer to breach the purchase and sales agreement and would have fully performed absent their interference.
Finally, I also agree with the court of appeals that the terms of the arbitration clause in the purchase and sales agreement between Bullock and WMCO express an intent to require arbitration of a relatively narrow scope of disputes — disputes “between the parties to [the] Agreement involving the construction or application of *309 any of the terras, covenants, or conditions of [the] Agreement....” 126 S.W.3d 313, 319 . This language is considerably narrower than the standard, broad arbitration clause requiring arbitration of “ ‘[a]ny controversy or claim arising out of or relating to this contract, or the breach thereof ....’” Beckham v. William Bayley Co., 655 F.Supp. 288, 291 (N.D.Tex.1987) (quoting Hoeliering, Arbitrability of Disputes, 41 Bus. Law. 125 (Nov.1985) (citing K. Seide, A Dictionary of Arbitration and Its Terms 21 (1970))). The strong policy favoring arbitration “cannot serve to stretch a contractual clause beyond the scope intended by the parties.” Id. at 291-92 .
Under these circumstances, the trial court did not abuse its discretion in refusing to compel arbitration. I respectfully dissent.