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SIG-TX Assets, LLC v. Serrato

Court of Appeals of Texas, Fifth District, Dallas

April 23, 2019

SIG-TX ASSETS, LLC D/B/A LINCOLN FUNERAL HOME, Appellant
v.
BEATRICE SERRATO, INDIVIDUALLY, BEATRICE SERRATO, AS MOTHER AND NEXT FRIEND OF M.S., A MINOR CHILD, PHILLIP SERRATO, AND SYLVIA RAMIREZ, Appellees

          On Appeal from the 95th District Court Dallas County, Texas, Trial Court Cause No. DC-17-17209

          Before Justices Bridges, Partida-Kipness, and Carlyle.

          MEMORANDUM OPINION

          ROBBIE PARTIDA-KIPNESS JUSTICE.

         Appellant SIG-TX Assets, LLC d/b/a Lincoln Funeral Home (SIG-TX) appeals the trial court's denial of its motion to compel arbitration of the claims filed against it by appellees Beatrice Serrato, individually and as next friend of M.S., a minor child, Phillip Serrato, and Sylvia Ramirez (collectively appellees). SIG-TX generally contends that although appellees did not sign an arbitration agreement with it, they are bound to arbitrate their claims under the equitable theory of direct-benefits estoppel.[1] SIG-TX also challenges the trial court's evidentiary rulings on its objections to Beatrice Serrato's affidavit. For the reasons that follow, we conclude SIG-TX (1) failed to establish the trial court abused its discretion in denying its motion to compel arbitration, and (2) did not establish the trial court's evidentiary rulings constituted reversible error. Accordingly, we affirm the trial court's order denying SIG-TX's motion to compel arbitration.

         BACKGROUND

         Appellees are, respectively, the daughter-in-law, biological grandchildren, and biological daughter of decedent Maria Serrato. SIG-TX took possession of Serrato's body pursuant to a contract for funeral services and a cemetery contract signed by Juana Serrato, another one of Serrato's daughters-in-law. Juana is not a party in this lawsuit. The present dispute arose after SIG-TX presented to appellees the wrong body for a private family viewing that was held before the funeral.

         According to appellees' petition, although they immediately realized the body presented to them on December 18 was not that of their loved one, a funeral home employee insisted it was the correct body. Appellees allege the employee checked the ankle identification on the body presented and discovered it was not Maria Serrato but another decedent whose first name was also "Maria." Appellees assert the employee did not reveal the true identity of the body to them at that time. Instead, appellees were later informed that Serrato's body had been buried on December 18 after a funeral service held for the family of the other decedent "Maria." The next day, December 19, Serrato's body was exhumed from the other grave and her clothes, accessories, and make-up were changed. Appellees filed this lawsuit against SIG-TX asserting claims for negligence, negligence per se, gross negligence, intentional infliction of emotional distress, and fraud. They sought damages for pain, medical expenses, mental anguish, loss of enjoyment of life, and exemplary damages.

         SIG-TX moved to compel arbitration of appellees' claims based on arbitration clauses contained in the funeral contract and the cemetery contract. Specifically, the arbitration clause in the funeral contract stated:

ARBITRATION: YOU AGREE THAT ANY CLAIM YOU MAY HAVE RELATING TO THE TRANSACTION CONTEMPLATED BY THIS AGREEMENT (INCLUDING ANY CLAIM OR CONTROVERSY REGARDING THE INTERPRETATION OF THIS ARBITRATION CLAUSE) SHALL BE SUBMITTED TO AND FINALLY RESOLVED BY MANDATORY AND BINDING ARBITRATION IN ACCORDANCE WITH THE APPLICABLE RULES OF THE AMERICAN ARBITRATION ASSOCIATION ("AAA"); PROVIDED, HOWEVER, THAT THE FOREGOING REFERENCE TO THE AAA RULES SHALL NOT BE DEEMED TO REQUIRE ANY FILING WITH THAT ORGANIZATION, NOR ANY DIRECT INVOLVEMENT OF THAT ORGANIZATION. THE ARBITRATOR SHALL BE SELECTED BY MUTUAL AGREEMENT OF THE PARTIES. IF THE PARTIES FAIL TO OR ARE UNABLE TO AGREE ON THE SELECTION OF AN APPROPRIATE ARBITRATOR, THE AAA SHALL SELECT THE ARBITRATOR PURSUANT TO ITS RULES AND PROCEDURES UPON THE APPLICAIOTN (SIC) OF ONE OR BOTH PARTIES. THIS AGREEMENT TO ARBITRATE ALSO APPLIES TO ANY CLAIM OR DISPUTE BETWEEN OR AMONG THE SELLER, YOU AS THE PURCHASER, ANY PERSON WHO CLAIMS TO BE A THIRD PARTY BENEFICIARY OF THIS AGREEMENT, ANY OF THE SELLER'S EMPLOYEES OR AGENTS, ANY OF THE SELLER'S PARENT, SUBSIDIARY, OR AFFILIATE CORPORATIONS, AND ANY OF THE EMPLOYEES OR AGENTS OF THOSE PARENT, SUBSIDIARY OR AFFILIATE CORPORATIONS. EXCEPT AS MAY BE REQUIRED BY LAW, NEITHER PARTY NOT (SIC) AN ARBITRATOR MAY DISCLOSE THE EXISTENCE, CONTENT, OR RESULTS OF ANY ARBITRATION HEREUNDER WITHOUT THE PRIOR WRITTEN CONSENT OF BOTH PARTIES.

         The cemetery contract contained a similar arbitration provision:

ARBITRATION: THE PARTIES HERETO AGREE THAT ANY AND ALL DISPUTES, CLAIMS OR CONTROVERSIES OF ANY KIND OR CHARACTER ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY PARTY'S PERFORMANCE OF THIS AGREEMENT OR THE GOODS AND/OR SERVICES PROVIDED PURSUANT TO THIS AGREEMENT SHALL BE RESOLVED EXCLUSIVELY BY BINDING ARBITRATION BEFORE A SINGLE ARBITRATOR AND CONDUCTED IN ACCORDANCE WITH THE COMMERCIAL ARBITRATION RULES OF THE AMERICAN ARBITRATION ASSOCIATION AND STATE LAW. SUCH ARBITRATION SHALL BE HELD IN THE STATE AND COUNTY OF EXECUTION OF THIS AGREEMENT, OR ELSEWHERE IN THE EVENT ALL PARTIES TO THIS AGREEMENT SO CONSENT. THE PARTIES HERETO SPECIFICALLY WAIVE ANY RIGHTS TO TRIAL OF ANY CLAIMS BY A JUDGE OR JURY, AT ANY TIME PRIOR TO THE COMMENCEMENT OF AN ARBITRATION PROCEEDING AS PROVIDED FOR HEREINABOVE, THE PARTIES SHALL AT ALL TIMES HAVE THE RIGHT TO MUTUALLY AGREE TO MEDIATE OR SETTLE A DISPUTE.

         Appellees opposed SIG-TX's motion arguing they were not parties to, and did not sign, any contract with SIG-TX. In support of their position, appellees submitted the affidavit of Beatrice Serrato. Among other things, Beatrice stated that Juana Serrato signed the agreement because she accompanied Maria in 2008 at the initial meeting with the funeral home and made payments on Maria's behalf. Beatrice further testified that she did not make any payments to the funeral home nor did she negotiate or change the terms of the agreement between Maria and the funeral home. SIG-TX objected to the following statements in Beatrice's affidavit as hearsay and not based on personal knowledge:

(1) To the best of my knowledge, the balance had been paid by my mother-in-law and Juana Serrato prior to her death.
(2) To the best of my knowledge, the terms were decided without my presence, before the death of my mother-in-law.
(3) To the best of my knowledge, my mother-in-law selected certain details regarding plot location, memorial stone, and memorial stone inscription during her first meeting with the funeral home in 2008, and prior to the death of her husband which occurred in September of 2008.

         After hearing oral argument on the motion, the trial court overruled SIG-TX's objections to the affidavit statements and denied the motion to compel arbitration. This interlocutory appeal ensued.

         ANALYSIS

         In its first, third, and fourth issues, SIG-TX generally contends that the trial court erred in denying its motion to compel appellees to arbitrate their claims because they were bound by the arbitration clauses in the funeral and ...


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