Summary
The Texas Court of Appeals for the First District considered an interlocutory appeal from the denial of ConocoPhillips Company's motion to compel arbitration. The court held that ConocoPhillips was an intended third-party beneficiary of arbitration agreements between JVIC and its employees, Tonia Graham and Mindy Dicus, and that their injury claims fell within the agreements' scope. The court reversed and remanded with instructions to compel arbitration.
Topics
Practice areas
Questions Presented
- Whether ConocoPhillips, a nonsignatory to Graham's and Dicus's arbitration agreements with JVIC, was an intended third-party beneficiary entitled to enforce those agreements.
- Whether Graham's and Dicus's personal-injury and premises-liability claims against ConocoPhillips fell within the scope of the arbitration agreements.
- Whether the Federal Arbitration Act governed the arbitration agreements and supported interlocutory appellate review of the order denying arbitration.
Holdings
- ConocoPhillips was an intended third-party beneficiary of JVIC's arbitration agreements with Graham and Dicus and therefore could enforce those agreements despite being a nonsignatory.
- Graham's and Dicus's claims against ConocoPhillips fell within the scope of their arbitration agreements.
- Once ConocoPhillips established a valid arbitration agreement encompassing the claims, the trial court had no discretion to deny the motion to compel absent a proven defense to arbitration.
Key quotations
“If [an agreement to arbitrate] exists, then the law favors enforcing it. But the law favoring arbitration does not go so far as to create an obligation to arbitrate where none exists.” (at 455-56)
“We resolve any doubts as to whether Graham’s and Dicus’s claims fall within the scope of the agreement in favor of arbitration.” (at 862)
Factual background
ConocoPhillips operated a petroleum refinery and hired J.V. Industrial Companies, Ltd. (JVIC) to perform fabrication work there. JVIC's master services agreement with ConocoPhillips included indemnity, defense, and employee-safety obligations, while JVIC separately required employees Graham and Dicus to arbitrate specified claims involving JVIC's clients and facility owners. Graham and Dicus were working at ConocoPhillips's facility when a steam header ruptured, and they alleged injuries during the resulting evacuation. After they sued ConocoPhillips, JVIC assumed ConocoPhillips's defense and agreed to indemnify it.
Procedural history
Graham and Dicus sued ConocoPhillips for injuries allegedly sustained while evacuating its refinery during a steam-header rupture. ConocoPhillips moved to compel arbitration based on arbitration agreements between Graham and Dicus and their employer, JVIC, asserting that it was a third-party beneficiary of those agreements. The trial court denied the motion, and ConocoPhillips brought an interlocutory appeal.
Remand instructions
Reverse the trial court's order denying arbitration and remand with instructions to grant ConocoPhillips's motion to compel arbitration of Graham's and Dicus's claims and to take any other actions appropriate and consistent with the opinion.