Mayer successfully secured a unanimous appellate victory in a complex construction dispute involving claims against our client, the managing member of a construction company, reversing the trial court’s denial of a motion to compel arbitration.

The dispute began when the Plaintiff homeowners, after extensive pre-suit litigation with the construction company, filed a state court lawsuit against our client, the individual managing member. The Plaintiff’s claims included fraudulent inducement, fraudulent misrepresentation, fraud by non-disclosure, breach of fiduciary duty, violations of the Texas Deceptive Trade Practices Act, and later, claims for conversion, trespass, and conspiracy. In their complaint, the Plaintiffs alleged that our client had fraudulently induced them to hire him as the contractor for a home renovation despite being unqualified to handle the work.

The Plaintiffs had already entered into an arbitration agreement with the construction company but argued that additional matters pertaining to our client in an individual capacity were not subject to that agreement.

After oral argument, the Dallas Court of Appeals agreed with our position and ruled that the arbitration agreement bound the Plaintiffs to arbitrate with our client, even as an individual, and stressed the significance of the arbitration agreement’s binding effect provision, because as signatories, the Plaintiffs “were put on notice that they could be forced to arbitrate claims with persons affiliated with” the construction company. The Court of Appeals also noted the agreement’s incorporation of AAA rules, demonstrating the parties’ intent to delegate arbitrability issues to the arbitrator.

Following the Court of Appeals’ opinion, the arbitrator agreed that the claims against our client were within the scope of the arbitration agreement and should be litigated in arbitration alongside the Plaintiffs’ claims against the company.

Our client was represented in the trial court by partner Wesley S. Alost and associates William S. Roberts and Kasia Daniec. In the court of appeals, our client was represented by partner Andrew J. Upton and William S. Roberts.

The case is Scott v. Grim, No. 05-23-01250-CV, 2024 WL 4532963 (Tex. App.—Dallas Oct. 21, 2024, no pet.).