SUPREME COURT OF TEXAS APPLIES ARBITRATION CLAUSE IN PURCHASE AGREEMENT AGAINST NON-SIGNATORY MINOR CHILDREN UNDER DIRECT BENEFIT ESTOPPEL THEORY
In Taylor Morrison of Texas, Inc. v. Skufca as Next
Friend of KSX, the Supreme Court of Texas determined minor children who
join their parents as plaintiffs in breach of contract claims based on construction
defects in the home they resided in may be subject to arbitration clauses within
the applicable purchase agreement based on the theory of direct-benefits estoppel.
2023 WL 443852, at *2 (Tex. Jan. 27, 2023).
Plaintiffs Jack and Erin Skufca (the “Parents”) and their minor children
(collectively, “Plaintiffs”) sued Taylor Morrison of Texas, Inc. and Taylor
Woodrow Communities-League City, Ltd. (collectively, “Defendants”) for alleged construction
defects in the home they purchased from Defendants. The purchase agreement for the home contained
an arbitration clause which required arbitration of “any and all claims,
controversies, breaches or disputes by or between the parties hereto” that
“aris[e] out of or relate[ ] to this purchase agreement, the property, the
subdivision or community of which the property is a part, the sale of the
property by seller, or any transaction related hereto,” whether those claims were
based in “contract, tort, statute, or equity.”