SCI Tex. Funeral Servs., L.L.C. v. Montoya

SCI TEXAS FUNERAL SERVICES, L.L.C., ET AL., Appellants, v. CLAUDIA MONTOYA, INDIVIDUALLY AND AS NEXT FRIEND OF ORLANDO ODELL MONTOYA JR.,HERMINIA LISA MONTOYA, LYDIA MARIA MONTOYA, DENISE RENEE MONTOYA,AND DANIELLE NICOLE MONTOYA, Appellees.

NUMBER 13-19-00088-CV

COURT OF APPEALS THIRTEENTH DISTRICT OF TEXAS CORPUS CHRISTI - EDINBURG

September 17, 2020

On appeal from the 107th District Court of Cameron County, Texas

MEMORANDUM OPINION

Before Chief Justice Contreras and Justices Benavides and Longoria

Memorandum Opinion by Justice Benavides

SCI Texas Funeral Services, LLC (successor-in-interest to SCI Texas Funeral Services, Inc.) d/b/a Restlawn Memorial Park, SCI Management, LP, SCI Shared Resources, LLC, and Dignity Memorial Network, Inc., appeal an order denying their motion to compel arbitration. We reverse and remand.

I. BACKGROUND

The underlying lawsuit arises from events surrounding the interment of decedent Orlando Odell Montoya. In their original petition,¹ the appellees, who are family members of Orlando, alleged that Orlando passed away and his remains were taken to Garcia & Trevino Funeral Home of Mercedes, Texas. After visitation and a memorial service, the parties and mourners proceeded to Restlawn Memorial Cemetery in La Feria, Texas, for a graveside ceremony. There, while the family was placing flowers on Orlando's coffin, the lowering device for the coffin failed and the coffin fell and flipped into the grave. The maintenance workers attempted to raise the coffin, however, it fell a second time and cracked open. After the mourners departed, the workers removed the casket and Orlando's remains, placed Orlando's remains in a "shed," and ultimately placed his remains in a second casket.

The appellees filed suit against appellants for negligence, negligent hiring, breach of contract, deceptive trade practices, and an unconscionable action or course of action. They sought "general" damages, mental anguish damages, and exemplary and "multiple" damages. The appellees include the decedent's widow, Claudia Montoya, who filed suit individually and as next of friend of their minor children Orlando Odell Montoya Jr. andHermina Lisa Montoya; and the adult daughters of the decedent, Lydia Maria Montoya, Denise Renee Montoya, and Danielle Nicole Montoya.

The appellants filed a motion to compel arbitration and for abatement of the suit pending arbitration. They urged that Claudia and Orlando had signed a contract containing an arbitration agreement; the matter involved interstate commerce; the arbitrator should decide issues pertaining to arbitrability and the trial court should only resolve "non-signatory" issues. The appellants supported their motion to compel arbitration with, inter alia, a copy of the arbitration agreement and the affidavit of Abelardo Perez. Perez's affidavit stated, in relevant part:

2. I am the Market Manager of SCI Texas Funeral Services, LLC. I also served in the same capacity for SCI Texas Funeral Services, Inc., at the time of the burial of Orlando Odell Montoya and at the time of the contract discussed in this affidavit. It is in this capacity that I have personal knowledge of the facts stated herein. SCI Texas Funeral Services, LLC, is the successor in interest to SCI Texas Funeral Services, Inc. When I use the term "SCI Texas" in this affidavit, I am referring to SCI Texas Funeral Services, Inc., with regard to events prior to the merger of March 2017 and to SCI Texas Funeral Services, LLC, regarding events occurring thereafter.

3. The company that contracted and dealt with Plaintiff Claudia Montoya and her husband Orlando Odell Montoya regarding the Orlando Odell Montoya's burial was SCI Texas.

4. The plaintiffs had no dealings with Defendants SCI Management, LP, SCI Shared Resources, LLC, and Dignity Memorial Network, Inc. I will refer to these defendants collectively as the "SCI Affiliates."

5. The following was true at the time SCI Texas contracted with Mr. and Mrs. Montoya, at the time of the burial of Mr. Montoya, and through the present day:

a. SCI Texas did and does business as Restlawn Memorial Park;

b. the SCI Affiliates were and are entities affiliated with SCI Texas; andc. all of the defendants were and are owned indirectly by the same parent company, Service Corporation International.

6. Additionally, the facts stated in this paragraph were true at the time the agreement described above was entered and continue to be true today. The interment rights and goods and services sold by SCI Texas have been sold to out-of-state and international customers as well as Texans. Such goods and services include interment services, memorials, grave markers, and related items. Further, goods that SCI Texas sold to Texas residents, including the plaintiffs, like caskets, grave markers, and concrete liners, are purchased from out-of-state companies. In addition, services provided by SCI Texas to Texas residents, including the plaintiffs, utilize equipment purchased from out-of-state companies, such as machinery used to open graves. Thus, the transactions with the plaintiffs, like all of SCI Texas's transactions, involved interstate commerce.

Perez attached to his affidavit a copy of the contract, entitled "Cemetery Interment Rights, Merchandise, and Services Purchase/Security Agreement" between appellants, Orlando, and Claudia. In relevant part, the contract included a notice before the signature lines that stated: "NOTICE: BY SIGNING THIS AGREEMENT, PURCHASER IS AGREEING THAT ANY CLAIM PURCHASER MAY HAVE AGAINST THE SELLER SHALL BE RESOLVED BY ARBITRATION AND PURCHASER IS GIVING UP HIS/HER RIGHT TO A COURT OR JURY TRIAL AS WELL AS HIS/HER RIGHT OF APPEAL." The contract contains the signatures of Orlando and Claudia. The contract further provides:

PURCHASER AGREES THAT ANY CLAIM HE/SHE 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 APPLICATION 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 NOR AN ARBITRATOR MAY DISCLOSE THE EXISTENCE, CONTENT, OR RESULTS OF ANY ARBITRATION HEREUNDER WITHOUT THE PRIOR WRITTEN CONSENT OF BOTH PARTIES.

The contract is numbered 008973 and is dated September 5, 2011.

The record indicates that the same day, the parties executed a "Child and Grandchild Protection Plan Certificate," which states that it is a "supplement" to the "Cemetery Interment Rights, Merchandise and Services Purchase/Security Agreement" and "is subject to all of the terms and conditions set forth on Agreement Number 008973 entered into on 9-5-11." The agreement expressly named Denise, Danielle, Lydia, Herminia, and Orlando Jr., and provided those individuals with contiguous interment rights:

As an additional pre-need benefit, at no additional cost to the Purchaser(s), and subject to the terms and conditions stated below, in the event of death of any unmarried child (including any legally adopted child/stepchild) or grandchild (including legally adopted grandchild/stepgrandchild) under the age of 21 of the Purchaser or Co-Purchaser, the Cemetery, whenever possible, will provide a contiguous Interment Right of the same type being purchased. In the event that a contiguous Interment Right is not available, then the Interment Right being purchased may be exchanged for a comparable Interment Right else-where in the Cemetery, provided that the original Interment Rights are re-conveyed to the Cemetery.

The above obligations are subject to the following additional conditions and restrictions:

A. To the best of their knowledge at the time this Certificate is signed, Purchaser(s) certifies that all children and/or grandchildren named herein are in good health and not under the care of a medical practitioner for any chronic ailment or disease.

B. Purchaser(s) shall not be in default on any installment payment due under the Agreement for a period exceeding thirty (30) days.

C. Benefits are valid only if the interment is made in an affiliated cemetery.

D. The maximum total benefit provided each child/grandchild named herein shall not exceed $5,000.00.

E. The Purchaser shall be responsible for any endowment care charges.

F. The cost of merchandise, interment, disinterment and reinterment will be paid by the Purchaser(s).

G. The child or grandchild's death shall not have occurred from suicide.

H. In the event the Agreement is cancelled for any reason whatsoever, the Child and Grandchild Protection Plan shall become null and void in its entirety.

I. The benefit is available only to those who purchase items pre-need.

The appellees filed a response in opposition to the appellants' motion to compel arbitration. The appellees asserted that Claudia was not bound by the arbitration clause because the arbitration clause lacked mutuality and was illusory.² They further arguedthat the appellees who were not signatories to the contract, including two minor children, were not bound as third-party beneficiaries; equitable estoppel did not...