Christopher J. Ashby, Scott W. Beynon, Jordan S. Nelson, and First American Title Insurance Company v. Anne D. Kern, 05-20-00985-CV

Background

Plaintiffs (an investor group) allege Rockwell and its principals ran a scheme to sell unregistered, lease‑backed real‑estate securities tied to a Plano property; transactions were documented by Purchase and Sale Agreements (PSAs), TIC agreements, management agreements, leases, and title policies.
The PSAs (signed by RDFP; Ashby signed for RDFP) contain a broad arbitration clause: “Any dispute between the parties will be submitted to binding arbitration…”
First American prepared title commitments and issued title policies that include a separate arbitration provision; Texas Title Insurance Manual Procedural Rule 36 requires notice and an opportunity to delete the arbitration clause before policy issuance.
Rockwell Individual Defendants (Ashby, Beynon, Nelson) moved to compel arbitration under the PSA despite being non‑signatories, invoking agency/equitable estoppel (claims arise from their agent roles). First American moved to compel under its title policies (and joined the PSA argument).
The trial court denied both motions. On interlocutory appeal the court reversed as to the Rockwell Individual Defendants (compel arbitration) and affirmed as to First American (deny), remanding to compel arbitration against the individual defendants only.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
1) Do appellees’ claims fall within the PSA arbitration clause so as to require arbitration of claims against Rockwell’s individual principals (non‑signatories)?	Appellees: PSA’s “As‑Is” / fraud carve‑out and fee‑in‑court language show fraud claims were intended for court, not arbitration.	Rockwell Indiv.: Clause covers “any dispute”; fraud exception limits liability not arbitrability; agency/estoppel allows non‑signatories to invoke clause.	Held: Clause is broad; “as‑is” language does not clearly exclude fraud from arbitration. Claims fall within arbitration clause. Arbitration compelled as to individual defendants.
2) Can non‑signatory individuals be compelled because their alleged wrongful acts were as agents of the signatory RDFP?	Appellees: Individuals are non‑signatories and can’t force arbitration.	Rockwell Indiv.: Appellees’ pleadings and public materials show agency/control; agency extends arbitration to agents.	Held: Appellees’ pleadings and evidence establish agency/close relationship; individual defendants may compel arbitration.
3) Can First American enforce the arbitration clause in its title policies despite Plaintiffs’ challenge that they were not given the required pre‑issuance deletion notice?	Appellees: First American failed to prove it complied with TDI Rule 36; therefore no consent to arbitrate.	First American: Produced title commitments and argued notice was given (or dates unreliable); alternatively, seek to enforce PSA arbitration via estoppel.	Held: First American failed to prove required pre‑issuance notice was provided; trial court did not abuse discretion in denying motion to compel under title policies.
4) Can First American compel arbitration under the PSA via intertwined‑claims or direct‑benefits estoppel?	Appellees: No close corporate affiliation; tort/statutory claims against First American arise under general law, not the PSA.	First American: Claims arise from the PSA/transaction so estoppel should apply.	Held: Intertwined‑claims estoppel not shown (no close corporate affiliation); direct benefits estoppel fails because Plaintiffs’ claims against First American arise from statutory/tort duties, not solely from the PSA. Denied.

Key Cases Cited

Henry v. Cash Biz, LP, 551 S.W.3d 111 (Tex. 2018) (standard of review and strong presumption favoring arbitration)
Prudential Sec. Inc. v. Marshall, 909 S.W.2d 896 (Tex. 1995) (presumption that arbitration clause should be interpreted broadly)
In re Vesta Ins. Grp., Inc., 192 S.W.3d 759 (Tex. 2006) (agents’ actions tied to corporate duties can fall within corporate arbitration agreements)
In re Merrill Lynch Trust Co. FSB, 235 S.W.3d 185 (Tex. 2007) (parties cannot evade arbitration simply by suing corporate agents individually)
Jody James Farms, JV v. Altman Group, Inc., 547 S.W.3d 624 (Tex. 2018) (limits on intertwined‑claims estoppel; requires close relationship beyond mere entanglement)
G.T. Leach Builders, LLC v. Sapphire V.P., LP, 458 S.W.3d 502 (Tex. 2015) (direct benefits estoppel applies only when non‑signatory liability arises solely from the contract)
In re FirstMerit Bank, N.A., 52 S.W.3d 749 (Tex. 2001) (fraud directed at the entire contract, not the arbitration clause specifically, is not a defense to arbitration)
RSR Corp. v. Siegmund, 309 S.W.3d 686 (Tex. App.—Dallas 2010) (trial court may rely on conflicting evidence regarding factual issues in arbitration motions)
Darocy v. Abildtrup, 345 S.W.3d 129 (Tex. App.—Dallas 2011) (control‑person liability is derivative of primary violator liability)