504 F. App'x 694
10th Cir.2012Background
- FAS and FCC appeal district court orders denying arbitration in Patton and Lovato cases about care at Hobbs Center and Vida Encantada respectively.
- Patton case: Patton sued Hobbs Center and affiliates; arbitration clause signed by Patton's step-daughter as representative; district court held Hobbs Center and THI-NM covered, FAS/FCC not.
- Lovato case: Lovato sued Vida Encantada and affiliates; arbitration clause signed by Duran’s estate’s representative; district court held Vida Encantada/THI-NM covered, FAS/FCC not.
- FAS and FCC are non-signatories; dispute whether they qualify as third-party beneficiaries or agents under the arbitration agreements.
- Appellate court applies de novo review of district court decisions denying arbitration and adopts Patton’s reasoning for Lovato.
- Court ultimately affirms district court judgments that FAS/FCC cannot compel arbitration in both Patton and Lovato.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are FAS/FCC third-party beneficiaries able to compel arbitration? | FAS/FCC argue they are covered as affiliates under the clause. | Patton/Lovato contend they must be parties to the contract or clearly intended beneficiaries. | No; not shown as third-party beneficiaries. |
| Does 'affiliates' scope extend to FAS/FCC under the arbitration clause? | Plain language includes 'parents, affiliates, and owners' of Hobbs Center. | Definitions are undefined; relationship too attenuated to assume affiliates. | Not established; district court proper to deny arbitration. |
| Are FAS/FCC 'agents' of Hobbs Center who can compel arbitration? | Arbitration clause language could cover agents. | Not raised below; cannot be considered on appeal. | Not considered; issue waived. |
| In Lovato, can Vida Encantada/THI-NM compel arbitration while FAS/FCC cannot? | Argue consistency with Patton; same reasoning should apply to Lovato. | Different entities bind different parties; non-signatories not covered. | Affirmed district court; Vida Encantada/THI-NM bound, FAS/FCC not. |
Key Cases Cited
- Avedon Eng’g, Inc. v. Seatex, 126 F.3d 1279 (10th Cir. 1997) (arbitration threshold showing of valid agreement; de novo review)
- Corum v. Roswell Senior Living, LLC, 248 P.3d 329 (N.M. Ct. App. 2010) (burden on party to show valid arbitration agreement; third-party beneficiary)
- Tarin’s, Inc. v. Tinley, 3 P.3d 680 (N.M. Ct. App. 1999) (burden on third-party beneficiary to show intention to benefit)
- Fleet Mortg. Corp. v. Schuster, 811 P.2d 81 (N.M. 1991) (intent to benefit third parties governs arbitration coverage)
- Horanburg v. Felter, 99 P.3d 685 (N.M. Ct. App. 2004) (non-signatories generally not bound absent third-party beneficiary)