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In re Weekley Homes10/28/2005
ON PETITION FOR WRIT OF MANDAMUS
Argued November 30, 2004
JUSTICE W ILLETT did not participate in the decision.
We are asked to decide whether Weekley Homes, L.P., a party to a contract containing an arbitration clause, can compel arbitration of a personal injury claim brought by Patricia Von Bargen, a nonparty. We have previously compelled arbitration by nonparties to an arbitration agreement when they brought suit "based on a contract," which Von Bargen purports to avoid here.
But as both state and federal courts have recognized, nonparties may be bound to an arbitration clause when the rules of law or equity would bind them to the contract generally. Because we find those rules applicable here, we conditionally grant mandamus relief.
I . Background
In the summer of 2000, Vernon Forsting contracted with Weekley for construction of a 4,000 square foot home at a purchase price of $240,000. At the time, Forsting was a seventy-eight year-old widower with an assortment of health problems. His intention in purchasing such a large home was to live with his daughter, Von Bargen (his only child) and her husband and three sons.
Von Bargen and her husband negotiated directly with Weekley on many issues before and after construction-paying a $1,000 deposit, selecting the floor plan, signing a letter of intent as "purchasers," and making custom design choices.
But only Forsting executed the various financing and closing documents on the home, including the Real Estate Purchase Agreement that contained the following arbitration clause:
Any claim, dispute or cause of action between Purchaser and Seller . . . , whether sounding in contract, tort, or otherwise, shall be resolved by binding arbitration . . . . Such claims, disputes or causes of action include, but are not limited to, those arising out of or relating to . . . the design, construction, preparation, maintenance or repair of the Property.
Shortly after closing, Forsting transferred the home to the Forsting Family Trust, a revocable trust established ten years earlier whose sole beneficiary was Von Bargen. At his deposition, Forsting testified that the only reason he signed the Purchase Agreement individually rather than as trustee was because he "forgot to put [the home] in the trust." Forsting and Von Bargen served as the only trustees of the Trust, the purpose of which was to transfer Forsting's property to Von Bargen after his death.
According to the plaintiffs' pleadings, numerous problems arose with the home after completion. When the family moved out of the house briefly so Weekley could perform some of those repairs, it was Von Bargen who requested and received reimbursement. Indeed, Von Bargen admitted handling "almost . . . all matters related to the house, the problems and the warranty work and even the negotiations."
Unsatisfied with the home and Weekley's efforts to repair it, Forsting, Von Bargen, and the Trust filed suit against Weekley in December 2002. Forsting and the Trust asserted claims for negligence, breach of contract, statutory violations, and breach of warranty. Von Bargen sued only for personal injuries, alleging Weekley's negligent repairs caused her to develop asthma.
Weekley moved to compel arbitration of all claims under the Federal Arbitration Act (FAA). The trial court concluded the FAA applied, and granted the motion as to all claims by Forsting and the Trust. But the trial court refused to compel arbitration of Von Bargen's claim because she did not sign the Purchase Agreement.
Mandamus relief is proper to enforce arbitration agreements gov
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