Englobal U.S., Inc. v. Rodrick Gatlin
449 S.W.3d 269
Tex. App.2014Background
- Plaintiff Rodrick Gatlin, a Clean Harbors employee, was injured while hydroblasting inside an oil storage tank at Phillips 66’s Lake Charles refinery; he sued Phillips 66, ConocoPhillips, and ENGlobal for premises liability, negligent undertaking, and gross negligence.
- ENGlobal, a contractor for Phillips 66, had a Master Service Agreement (MSA) with an arbitration clause covering disputes "arising out of, connected with or relating in any way to this Agreement." Gatlin is a non‑signatory to the MSA.
- ENGlobal moved to compel arbitration and filed a plea in abatement, invoking the Texas Arbitration Act and the doctrine of "direct benefits estoppel" to bind the non‑signatory plaintiff.
- The trial court denied ENGlobal’s motion; ENGlobal appealed interlocutorily under the TAA.
- The central legal question: whether Gatlin’s tort claims (premises liability and negligent undertaking) seek a direct benefit from the MSA such that direct benefits estoppel requires arbitration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Applicability of direct benefits estoppel to bind a non‑signatory to MSA arbitration clause | Gatlin: his claims arise from common‑law tort duties, not the MSA; he is not seeking contract benefits | ENGlobal: Gatlin’s claims depend on the MSA (e.g., contractual right of control and safety duties), so estoppel binds him to arbitrate | Court: Direct benefits estoppel does not apply; non‑signatory not bound here |
| Premises liability based on right of control | Gatlin: alleges ENGlobal exercised control (pleading silent on whether control was contractual or actual) | ENGlobal: Gatlin relies on MSA to establish contractual control, so arbitration clause applies | Court: Record does not show Gatlin is relying on contractual control; ENGlobal failed to prove claim seeks a direct benefit from MSA |
| Premises liability as creator of dangerous condition | Gatlin: claims ENGlobal created the dangerous condition and thus owes independent tort duty | ENGlobal: any duty flowed from the MSA, so arbitration applies | Court: Liability for creating dangerous condition arises from general tort law (not the contract); Weekley Homes controls—no direct benefit shown |
| Negligent undertaking (Restatement §324A) | Gatlin: claim rests on common‑law duty arising from undertaking, independent of MSA | ENGlobal: the duty to provide safety was owed solely by virtue of the MSA, so claim seeks contractual benefits | Court: Even if MSA required safety services, the tort duty to perform those services carefully arises under Texas law; claim does not seek direct benefit from MSA |
Key Cases Cited
- Rachal v. Reitz, 403 S.W.3d 840 (Tex. 2013) (standard of review and direct‑benefits‑estoppel principles)
- Kellogg Brown & Root, Inc. v. 166 S.W.3d 732 (Tex. 2005) (non‑signatory binding theories including direct benefits estoppel)
- In re Weekley Homes, L.P., 180 S.W.3d 127 (Tex. 2005) (personal‑injury bystander not bound by arbitration where liability arises from tort duties)
- J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223 (Tex. 2003) (existence of arbitration agreement is a gateway question reviewed de novo)
- In re Rubiola, 334 S.W.3d 220 (Tex. 2011) (general rule that non‑signatories are not bound absent applicable exceptions)