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A Texas appellate court held that an arbitration agreement applies to nonsignatories' third-party beneficiaries and nonsignatories with claims that rely upon contracts that contain agreements to arbitrate.
In Global Fin. Servs., LLC v. Estate of McLean, No. 04-04-00854-CV, 2007 WL 1759940 (Tex. App. June 20, 2007), McLean died leaving behind over $100,000,000. Aguirre, his son, sued Global alleging it had concocted a scheme to take assets from McLean's estate.
Global then filed a motion to compel arbitration as a third party beneficiary to a Customer Agreement between Sandfern and brokerage Bear Stearns containing an arbitration clause. The trial court denied Global's motion and Global appealed.
The Court found that there was a valid arbitration agreement encompassing Aguirre's claims. Although neither Global nor Aguirre signed the arbitration agreement, the agreement provided that Sandfern's broker was a third party beneficiary. Global was Sandfern's broker and therefore the arbitration provision mandating arbitration of "all matters" applied to it.
Further, Aguirre was bound to the agreement because the law requires that nonsignatories may be bound to an arbitration agreement when law or equity would bind them to the contract generally. In this case, Aguirre's claims are derivative of the estate's claims. Moreover, Aguirre's claims rely upon the original relationship between Sandfern and Global created by the Customer Agreement. Finally, the Customer Agreement specifies that "all matters" and "any controversies" between Global and the estate shall be resolved through arbitration.
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