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See Jody James Farms, JV, 547 S.W.3d at 633. The Court has not identified covenants running with the land as one of those theories. We decline Lennar s invitation to expand Texas law and adopt a new principle previously unrecognized by the Texas Supreme Court despite decades of jurisprudence concerning arbitrations and well-established Texas law concerning the nature of covenants that run with the land. 2 Even though the parties arbitration proceeding was governed by the FAA, procedural confirm or vacate an arbitration award should be decided as other motions in civil cases; on notice and an evidentiary hearing, if necessary.
As cases are decided, summaries are updated with any opinions, dissents, or concurrences. Readers are encouraged to review the Court’s official opinions for specifics regarding each case. Links to the full case documents are included above.
LTD. LENNAR HOMES OF TEXAS LAND AND CONSTRUCTION Overview
The Court granted the petition for review and set oral argument for January 31, 2023. These examples are insufficient to bind Whiteley to the single-family warranty s arbitration provision under the theory of direct benefits estoppel. In her second amended petition, Whiteley asserted a Texas Deceptive Trade Practices claim that alleged Lennar reach an express or implied warranty. Whiteley asked Lennar to plant a tree on her property in December 2015 and April 2016.
An arbitration award, the party is not limited to challenging the denial of any application to vacate, modify, or correct the award ; he appealing party also may challenge any interlocutory order that merged into the trial court s final judgment ). Although the trial court s wording is not a model of clarity, we have been provided no evidence tending to suggest that it intended to grant relief that had not been requested. Therefore, because the vacatur of the arbitration award against Big Tex and Xalt was neither sought in Whiteley s motion nor explicitly granted by the trial court s March 7 order, we do not construe the order as granting this relief. A homebuyer purchased a house from Lennar Homes. Both the deed and the home’s warranty, which was attached to the purchase agreement, included an arbitration agreement. The original homebuyer later sold the home to Kara Whiteley.
LTD. LENNAR HOMES OF TEXAS LAND AND CONSTRUCTION - Houston
Moreover, the provision also states that the warranty s rights and obligations were not guaranteed; instead, they could be released by the original owner or one of his successors. The Texas Supreme Court has stated that there is a presumption against conferring third-party-beneficiary status on noncontracting parties. V. Lomas, 223 S.W.3d 304, 306 (Tex. 2007) . Accordingly, he contract must include a clear and unequivocal expression of the contracting parties intent to directly benefit a third party, and any implied intent to create a third-party beneficiary is insufficient. First Bank, 519 S.W.3d at 103 (quoting Tawes v. Barnes, 340 S.W.3d 419, 425 (Tex. 2011)). Case summaries are created by the Court's staff attorneys and law clerks and do not constitute the Court’s official descriptions or statements.
Grp., Inc., 271 S.W.3d 263, 267 (Tex. 2008) (orig. proceeding) . A party s status as a third-party beneficiary depends solely on the contracting parties intent. First Bank v. Brumitt, 519 S.W.3d 95, 102 (Tex. 2017). Specifically, a person seeking to establish third- party-beneficiary status must demonstrate that the contracting parties intended to secure a benefit to that third party and entered into the contract directly for the third party s benefit. Id. (quoting Stine v. Stewart, 80 S.W.3d 586, 589 (Tex. 2002) ). The benefit must be more than incidental; the parties intent to confer a direct benefit to the third party must be clearly and fully spelled out in the agreement.
Supreme Court
We review de novo whether an arbitration agreement is enforceable. Rachal v. Reitz, 403 S.W.3d 840, 843 (Tex. 2013). Big Tex and Xalt were not parties to the underlying proceeding when Lennar sought to confirm the arbitration award.
We decline to hold that, by reasserting the issue in her motion to vacate and receiving a favorable ruling, Whiteley waived the issue for appellate review. Under direct benefits estoppel, a nonsignatory plaintiff seeking the benefits of a contract is estopped from simultaneously attempting to avoid the contract s burdens, including the obligation to arbitrate. In re Kellogg Brown & Root, 166 S.W.3d at 739; see also Ali v. Smith, 554 S.W.3d 755, 760 (Tex. App. Houston [14th Dist.] 2018, no pet.). When a claim depends on the contract s existence and cannot stand independently that is, the alleged liability arises solely from the contract or must be determined by reference to it equity prevents a person from avoiding the arbitration clause that was part of that agreement. But when the substance of the claim arises from general obligations imposed by state law, including statutes, torts and other common law duties or federal law, rather than from the contract, direct benefits estoppel does not apply, even if the claim refers to or relates to the contract. Leach Builders, LLC v. Sapphire V.P., LP, 458 S.W.3d 502, 528 (Tex. 2015).
We overrule Lennar s argument that Whiteley assumed the special warranty deed s arbitration agreement when she purchased the House. Whiteley did not assume the special warranty deed s arbitration agreement when she purchased the House. Moreover, the Texas Supreme Court has identified six theories under which nonsignatories to an arbitration agreement may be bound by its terms.
Asserting the arbitration agreement is a restriction, condition, and covenant in the property records, Lennar argues Whiteley s general warranty deed evidences an agreement to assume the arbitration provision. When construing instruments recorded in real property records, we apply the same rules that govern the interpretation of contracts. Marzo Club, LLC v. Columbia Lakes Homeowners Ass n, 325 S.W.3d 791, 798 (Tex. App. Houston [14th Dist.] 2010, no pet.). Our primary objective is to ascertain and give effect to the intentions of the parties as expressed in the instrument. If the instrument can be given a certain or definite legal meaning or interpretation, it is unambiguous and we construe it as a matter of law. Matters regarding arbitration awards in Texas courts are governed by Texas procedural rules.
Soon after Whiteley purchased the home, she sued Lennar for negligent construction and breach of implied warranties, alleging that construction defects caused a serious mold problem in her home. The issue in this case is whether an arbitration agreement in a recorded deed runs with the land and therefore binds the home’s successive purchasers. Prior to the arbitration, Whiteley s attorney signed an Agreement for Arbitration agreeing to the designation of an arbitrator and the rules applicable to the proceeding. Throughout arbitration Whiteley continued to represent that she was voluntarily agreeing to and participating in the proceeding. Specifically, Whiteley agreed to all conditions precedent to the arbitration in preliminary hearings; participated in the merits hearing without objection; and submitted two proposed arbitration awards in which she stated that all conditions precedent to commencing this Hearing had been met. The arbitrator s award states that the Parties .
While the provision states that the warranty s rights and obligations . Fully transfer to each successor owner of the Home, that transfer is effective only if the House is sold during the Warranty Term. If the House is sold outside the Warranty Term , the successor owner is not entitled to any of the warranty s rights.
The single-family warranty was an attachment to the purchase and sale agreement between Lennar and Isaacson. It became effective as of the date Isaacson closed on the House and provided different warranty terms depending on whether issues arose from the House s workmanship, systems, or structural components. The single-family warranty also contains an arbitration agreement. The warranty provides that all of its rights and obligations, including the arbitration agreement, fully transfer to each successor owner of the Home.
The existence of a valid arbitration agreement between specific parties is a gateway matter for the court to decide. Mgmt., LLC, 577 S.W.3d 263, 267 (Tex. App. Houston [14th Dist.] 2018, pet. denied). Under the FAA, ordinary principles of state contract law determine whether the parties have a valid agreement to arbitrate. In re Rubiola, 334 S.W.3d 220, 224 (Tex. 2011) (orig. proceeding).
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