A Texas appellate court held that non-signatory heirs to an arbitration agreement must arbitrate survival action claims, such as negligence claims, because the signatory agreed to arbitrate such claims; however, non-signatory heirs are not required to arbitrate wrongful death claims because those claims are personal to the non-signatories.

In In re Jindal Saw Ltd., No. 01-07-01068-CV, 2008 WL 2186086 (Tex. Ct. App. May 22, 2008), Carlos Lara agreed to a benefit plan with his employer, Jindal Saw, and it included an arbitration agreement that bound his "heirs, beneficiaries and assigns." Carlos died because of an accident at work, and his wife, Yvonne, sued Jindal Saw for negligence and wrongful death.

Jindal Saw moved to compel arbitration under the arbitration agreement, and in opposing the motion, Yvonne argued that she did not sign the agreement so she was not bound by it. The trial court refused to compel arbitration, and Jindal Saw sought mandamus relief to compel arbitration.

The Court held that under Texas case law – specifically, In re Kepka, 178 S.W.3d 279 (Tex. Ct. App. 2005) – a non-signatory is not bound to an agreement to arbitrate entered into by the deceased in wrongful death actions. Kepka reasoned that "[w]rongful-death claims are personal to the statutory beneficiaries who assert the claims, and recovery for those claims does not benefit the estate . . . [s]imply put, a surviving wife may be an heir, within the meaning of an arbitration agreement that she did not sign individually, to her late husband's claims; she cannot be an heir to her own claims."

However, in regard to the claims for negligence, the Court held that Yvonne was required to arbitrate them because those claims were filed in her capacity as the legal representative of Carlos's estate, and also because Carlos bound his heirs to the arbitration agreement. The Court, citing Kepka, reasoned that when the contracting parties included "heirs" in the agreement, they meant only to the extent that those heirs were functioning in the same capacity as the signatories, but not when the heirs were suing on their own behalf for their own personal loss.

Thus, the Court held that "Carlos had the power to bind his heirs in the survival [negligence] action filed on his behalf but could not bind the personal wrongful-death claims." Accordingly, the Court compelled arbitration for the negligence claims but not for the wrongful death claims.

Jindal Saw also asserted alternate theories for enforcement of the arbitration agreement, including arguments under the Texas Family Code, third-party beneficiary theory, and direct-benefits estoppel. However, since Jindal Saw did not assert those arguments at the trial court, the Court considered them waived.