Taylor Morrison of Texas, Inc. and Taylor Woodrow Communities-League City, Ltd. v. Erin Skufca as Next of Friend of Ksx and Ksxx, Minor Children, 660 S.W.3d 525

Jack and Erin Skufca signed a purchase agreement for a new home containing a broad arbitration clause covering any dispute arising from the agreement or the property.
Less than a year after moving in, the home allegedly developed mold that caused continuous illness to the Skufca children.
In 2019 the Skufcas sued Taylor Woodrow/Taylor Morrison for multiple claims (breach of contract, negligent construction, fraud, implied warranties, RCLA, quantum meruit, DTPA); the petition named Mr. and Mrs. Skufca individually and Mrs. Skufca as next friend of the two minors.
The petition did not distinguish which plaintiffs asserted which causes of action; the breach-of-contract count referred generally to “Plaintiffs” without limiting that term to the parents.
The trial court denied Taylor Morrison’s motion to compel arbitration as to the children; the court of appeals affirmed. The Supreme Court of Texas granted review.
The Supreme Court held the children joined the parents’ breach-of-contract claim and, under direct-benefits estoppel, must arbitrate claims falling within the arbitration clause.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the minors joined the parents’ breach-of-contract claim such that they can be compelled to arbitrate	Skufca: the petition focuses children’s allegations on tort/personal-injury and the children lack legal basis to sue on the contract, so they did not join the contract claim	Taylor Morrison: petition uses “Plaintiffs” uniformly and does not distinguish claims, so minors joined breach-of-contract and are bound by arbitration clause	The petition unambiguously shows the children joined the breach-of-contract claim; direct-benefits estoppel compels arbitration
Whether direct-benefits estoppel applies to nonsignatory minors who seek relief tied to the parents’ contract	Skufca: minors did not contract and so are not bound by arbitration	Taylor Morrison: nonsignatories who sue based on a contract or seek its benefits may be estopped from avoiding arbitration	Held: a litigant who sues based on a contract is subject to its terms; the minors sued on contract-based allegations and are estopped from avoiding arbitration

In re FirstMerit Bank, N.A., 52 S.W.3d 749 (Tex. 2001) (a party who sues based on a contract submits to the contract’s terms, including arbitration)
In re Weekley Homes, L.P., 180 S.W.3d 127 (Tex. 2005) (direct-benefits estoppel can require nonsignatories to arbitrate when they seek benefits from a contract)
Dairyland Cnty. Mut. Ins. Co. v. Roman, 498 S.W.2d 154 (Tex. 1973) (minors’ contracts generally voidable; minors cannot accept benefits and repudiate obligations)
Johnson v. Newberry, 267 S.W. 476 (Tex. Comm’n App. 1924) (contracts for necessaries may create liability for minors)
Taylor Morrison of Tex., Inc. v. Skufca, 650 S.W.3d 660 (Tex. App.—Houston [1st Dist.] 2021, no pet.) (court of appeals decision below rejecting arbitration as to children)