SCI Alabama Funeral Services, Inc. v. Lanyon

Summary

The Supreme Court of Alabama held that a nonsignatory administrator was bound by an arbitration provision in a funeral-services purchase agreement because he was a third-party beneficiary who negotiated for and benefited from the agreement. The court concluded that his negligence, wantonness, and outrage claims arose from the agreement's embalming services, reversed the denial of arbitration, and remanded the case.

Holdings

1. A nonsignatory third-party beneficiary who negotiated for and benefited from services provided under an agreement containing an arbitration provision may be required to arbitrate claims against the signatory arising from that agreement.
2. A party may not avoid a broad arbitration clause by labeling claims as tort claims when those claims arise out of the transaction governed by the agreement.

Questions Presented

1. Whether a nonsignatory who benefited from a funeral-services agreement containing an arbitration clause may be compelled to arbitrate as a third-party beneficiary.
2. Whether tort claims concerning allegedly defective embalming arise out of the Purchase Agreement and fall within its broad arbitration clause.

Disposition

reversed_and_remanded