E-Filed Document Oct :39: CA SCT Pages: 21 REPLY BRIEF OF APPELLANTS OLSHAN AND WAYNE BROWN

Transcription

1 E-Filed Document Oct :39: CA SCT Pages: 21 REPLY BRIEF OF APPELLANTS OLSHAN AND WAYNE BROWN

2 IN THE SUPREME COURT OF MISSISSIPPI OLSHAN FOUNDATION REPAIR CO. OF JACKSON, LLC d/b/a OLSHAN FOUNDATION SOLUTIONS & WAYNE BROWN APPELLANTS / DEFENDANTS V. NO CA GLORIA MOORE, PHILLIP R. MOORE, KATELYN A. MOORE APPELLEES / PLAINTIFFS Appeal from the Circuit Court of Perry County, Mississippi, Cause No W, The Honorable Jon Mark Weathers, Circuit Judge REPLY BRIEF OF APPELLANTS OLSHAN AND WAYNE BROWN ORAL ARGUMENT NOT REQUESTED LEANN W. NEALEY (MB # 8497) RICHARD M. DYE (MB #99147) KATHLEEN INGRAM CARRINGTON (MB #104220) BUTLER SNOW LLP Post Office Box 6010 Ridgeland, Mississippi Tel: Fax: ATTORNEYS FOR APPELLANTS OLSHAN FOUNDATION REPAIR CO. OF JACKSON, LLC d/b/a OLSHAN FOUNDATION SOLUTIONS & WAYNE BROWN

3 ORAL ARGUMENT NOT REQUESTED As noted in Appellants opening brief, oral argument is not necessary due to the straightforward nature of the facts and legal issues in this case, and therefore Appellants do not request it. i

4 TABLE OF CONTENTS TABLE OF CONTENTS... ii TABLE OF AUTHORITIES... iiii INTRODUCTION... 1 LAW AND ARGUMENT... 2 I. Katelyn Moore s parents, Phillip and Gloria Moore, are bound to arbitrate all their claims against Olshan and Wayne Brown II. A de novo standard of review applies here III. The foundation repair Agreement contains a valid agreement to arbitrate IV. Because a valid agreement to arbitrate exists, the Moores reliance on Hattiesburg Health & Rehab Ctr., LLC v. Brown is misplaced V. Estoppel principles require that Katelyn arbitrate her claims VI. A. All of Katelyn s claims touch matters covered by the foundation repair Agreement and thus must be arbitrated B. Katelyn s autism does not relieve her from arbitration Simmons Housing does not apply Hattiesburg Health and Rehab likewise does not apply The situation in In re Ford Motor Co. is closely analogous here C. That Katelyn s INIED claim differs from her father s does not allow her to avoid arbitration Katelyn is a third-party beneficiary to the agreement and is therefore bound to arbitrate her claims CONCLUSION CERTIFICATE OF SERVICE ii

5 Cases TABLE OF AUTHORITIES Adams Cmty. Care Ctr., LLC v. Reed, 37 So. 3d 1155 (Miss. 2010)... 5 Alqasim v. Capitol City Hotel Inv rs., 989 So. 2d 488 (Miss. Ct. App. 2008)... 13, 14 East Ford, Inc. v. Taylor, 826 So. 2d 709 (Miss. 2002)... 3 Fleetwood Enterprises, Inc. v. Gaskamp, 280 F.3d 1069 (5th Cir. 2002)... 9, 10, 11, 13, 14 GGNSC Batesville, LLC v. Johnson, 109 So. 3d 562 (Miss. 2013)... 5 Hattiesburg Health & Rehab Ctr., LLC v. Brown, 176 So. 3d 17 (Miss. 2015)... 3, 4, 5, 8, 10, 11 In re Ford Motor Co., 220 S.W.3d 21 (Tex. App. 2006)... 11, 12 Jones v. Singing River Health Ser. Found., No. 1:14cv447, 2016 WL (S.D. Miss. March 29, 2016)... 7 Price v. Credit Acceptance Corp., No. 2:10-cv-81, 2010 WL (S.D. Miss. June 11, 2010)... 7 Sawyers v. Herrin-Gear Chevrolet Co., 26 So. 3d 1026 (Miss. 2010)... 3 Scruggs v. Wyatt, 60 So. 3d 758 (Miss. 2011)... 3, 7, 10 Simmons Housing, Inc. v. Shelton ex rel. Shelton, 36 So. 3d 1283 (Miss. 2010)... 3, 8, 9, 11, 13, 14 Stewart ex rel. Womack v. City of Jackson, 804 So. 2d 1041 (Miss. 2002)... 13, 14 Terminix Intern., Inc. v. Rice, 904 So. 2d 1051 (Miss. 2004)... 7 iii

6 INTRODUCTION All of Katelyn Moore s claims against Olshan and Wayne Brown stem from Defendants alleged failure to timely and properly perform the foundation repair work covered by the Agreement at issue here. Her claims all fall within the broad arbitration provision in that Agreement. And Katelyn brings the same claims as those brought by her parents claims which will already be arbitrated pursuant to the Circuit Court s final order. Estoppel principles and the third-party beneficiary doctrine require that Katelyn likewise be compelled to arbitrate her claims. Allowing Katelyn to pursue her same claims in Circuit Court would render meaningless the Agreement s valid arbitration provision a result contrary to the strong national policy encouraging arbitration that is consistently recognized by the Mississippi state and federal courts. There is no legal or logical basis for the parties to try these same claims concerning the same witnesses, evidence, and legal arguments in separate forums. This risks inconsistent results and essentially requires the parties to litigate these same claims twice. Moreover, a rule of law that allows a child to pursue the same claims in court that his or her parents would be required to arbitrate essentially nullifies arbitration agreements; attorneys for a family desiring to avoid arbitration would simply bring claims on behalf of a child. This, too, would be directly contrary to the broad policy favoring arbitration. The Circuit Court s decision denying Olshan and Wayne Brown s motion to compel arbitration as to Katelyn s claims should be reversed, with instructions to the Circuit Court to refer Katelyn s claims to arbitration. 1

7 LAW AND ARGUMENT I. Katelyn Moore s parents, Phillip and Gloria Moore, are bound to arbitrate all their claims against Olshan and Wayne Brown. The issue on appeal is whether Katelyn Moore s claims against Olshan and Wayne Brown should be arbitrated. They should be for all the reasons Olshan and Wayne Brown detail in their opening brief and below. Before addressing these issues, however, one remark the Moores made in their response brief must be corrected. The Moores suggest that Phillip and Gloria Moore may pursue their claims against Wayne Brown in the Circuit Court. Appellees Br. at 14. They may not and that issue has been finally resolved. Specifically, the Moores sued Olshan and Wayne Brown, as the general manager and employee of Olshan (R. 1 (Compl. 3)) for damages arising from foundation repair work done by Olshan. See R Olshan and Wayne Brown filed a Motion to Compel Arbitration before the Circuit Court as to all of the Moores claims. See R The Circuit Court granted Olshan and Wayne Brown s motion as to all of Phillip and Gloria s claims. Nowhere in its Order did the Circuit Court rule that Phillip and Gloria Moore could proceed against Wayne Brown, individually, in Perry County Circuit Court. See R.E. 2, R (Order). The Moores did not appeal the Circuit Court s decision granting Olshan and Wayne Brown s Motion to Compel Arbitration as to all their claims. Thus the Circuit Court s Order as to them is final. All of Phillip and Gloria s claims against Olshan and Wayne Brown must be arbitrated. See Appellants Br. at 4-5. II. A de novo standard of review applies here. The Moores agree that the Court applies a de novo standard when reviewing a decision denying arbitration. See Appellees Br. at 7. See also Scruggs v. Wyatt, 60 So. 3d 758, 766 2

8 (Miss. 2011), citing Sawyers v. Herrin-Gear Chevrolet Co., 26 So. 3d 1026, 1034 (Miss. 2010) (citing East Ford, Inc. v. Taylor, 826 So. 2d 709, 713 (Miss. 2002)). Even so, the Moores then rely on federal law to argue that the Circuit Court s decision on direct-benefit estoppel is subject to an abuse of discretion standard of review. Appellees Br. at 7. This is incorrect. State law, not federal law, governs the review standard this Court will apply on appeal. And the Mississippi Supreme Court consistently reviews de novo a decision denying arbitration, regardless of the grounds asserted. See, e.g., Scruggs, 60 So. at 766 (citing de novo standard); see id. at (discussing estoppel principles with no mention of a different standard of review). The Moores should know this because this same de novo standard is articulated in Simmons Housing and Hattiesburg Health & Rehab, two cases addressing decisions denying arbitration which the Moores primarily rely upon. See Hattiesburg Health & Rehab Ctr., LLC v. Brown, 176 So. 3d 17, 20 (Miss. 2015); Simmons Housing, Inc. v. Shelton ex rel. Shelton, 36 So. 3d 1283, (Miss. 2010). In neither case does the Court hold that an abuse of discretion standard applies to the estoppel issues raised in those cases. See Hattiesburg Health & Rehab, 176 So. 3d at 23-24; Simmons Housing, Inc., 36 So. 3d at The de novo standard of review applies to all issues raised here. III. The foundation repair Agreement contains a valid agreement to arbitrate. The Moores agree that the first inquiry in reviewing a decision on a motion to compel arbitration is whether a valid arbitration agreement exists. See Appellees Br. at 7; see also R.E. 2, R. 69 (Order 3); Appellants Br. at On this point the Circuit Court squarely determined that the arbitration provision in the foundation repair Agreement is valid. R.E. 2, R (Order 4). In particular, the Circuit Court held that [t]he arbitration agreement is valid on its face and no evidence of procedural or substantive unconscionability or fraudulent 3

9 inducement has been presented to the Court. R.E. 2, R. 69 (Order 4). The Circuit Court s determination that a valid agreement to arbitrate exists is final and binding on all parties because no party has appealed it. See Appellants Br. at IV. Because a valid agreement to arbitrate exists, the Moores reliance on Hattiesburg Health & Rehab Ctr., LLC v. Brown is misplaced. The Moores, however, appear to misapprehend these straightforward rules of law. For example, they argue that Katelyn lacks the capacity to contract so she cannot be bound to arbitrate. Appellees Br. at 8-9. But Katelyn is a non-signatory to the foundation repair Agreement, so her capacity to contract is not at issue. Rather, estoppel principles and the thirdparty beneficiary doctrine require that her claims be arbitrated. Nevertheless, the Moores rely on Hattiesburg Health & Rehab Ctr., LLC v. Brown to argue that Katelyn should not be required to arbitrate her claims due to her autism. 1 Appellees Br. at Hattiesburg Health & Rehab does not apply. Unlike the situation here, in that case the nursing home admission agreement containing the arbitration provision was found invalid so Leo Brown, the nursing home resident, could not be a third-party beneficiary of a contract that never existed. Hattiesburg Health & Rehab, 76 So. 3d at To elaborate, Leo Brown was incapacitated at the time he was admitted to Hattiesburg Health & Rehab Center (HHRC), and his wife, Emma, signed the admission agreement both individually and on Leo s behalf. Id. at The agreement contained an arbitration provision. Id. at 19. When Leo died shortly after being discharged from HHRC, Emma brought a wrongful death lawsuit against it, individually, as the executrix of Leo s estate, and on behalf of the wrongful death beneficiaries. Id. at Katelyn Moore sued Olshan and Wayne Brown in her individual capacity (R. 6 (Compl.)) and her mother, Gloria Moore, also sued Olshan and Wayne Brown on her behalf as Natural Mother, Next Friend and Natural Guardian of Katelyn A. Moore. Id. 4

10 The trial court denied HHRC s motion to compel arbitration, and the Mississippi Supreme court affirmed. In addressing HHRC s third-party beneficiary argument, the Court held: Emma had no authority to contract on behalf of Leo ((which we discuss below), 2 so Leo cannot be a third-party beneficiary to a nonexistent contract. Id. at 22; see also id. at 21-22, discussing GGNSC Batesville, LLC v. Johnson, 109 So. 3d 562, 565 (Miss. 2013) (First determining that nursing home resident s sister had no authority to contract for him and then holding that [b]ecause a valid contract [did] not exist, a third-party beneficiary cannot exist. Id. at 565) and Adams Cmty. Care Ctr., LLC v. Reed, 37 So. 3d 1155, 1158 (Miss. 2010) (finding that resident s sons were not authorized to sign nursing home agreement on resident s behalf and that lack of valid agreement prevented court from reaching issue of whether non-signatory resident was third-party beneficiary of the agreement). Here, in direct contrast to Hattiesburg Health & Rehab, a valid agreement to arbitrate does exist as determined in the Circuit Court s final order. Under these circumstances, the Mississippi courts recognize a number of theories for binding a non-signatory to an arbitration agreement. See Appellants Br. at 15. Two theories are relevant in this case: Whether Katelyn Moore, as a non-signatory, is bound to arbitrate her claims as a third-party beneficiary to the Agreement, or by application of estoppel principles. Both theories bind Katelyn to arbitration and there is no legal basis for the Moores proposition that Katelyn s mental incapacity allows her to avoid arbitration here. See Section V.B, below. 2 Later in the opinion, the Court determined that Emma was not Leo s healthcare surrogate and so she had no authority to contract on his behalf. Hattiesburg Health & Rehab Ctr., LLC v. Brown, 176 So. 3d 17, (Miss. 2015). 5

11 V. Estoppel principles require that Katelyn arbitrate her claims. In their response brief the Moores admit that (i) Katelyn has brought the same claims against Olshan and Wayne Brown as those of her parents; (ii) these claims stem[] from Olshan s failure to competently repair their foundation (Appellees Br. at 3); and (iii) the foundation repair work was covered by the Agreement containing the arbitration provision: Katelyn, along with her parents Phillip and Gloria Moore, sued Olshan and Wayne Brown, as the employee and GM of Olshan, in Perry County Circuit Court for breach of contract, breach of warranty, negligence, fraud, and Intentional/Negligent Infliction of Emotional Distress (INIED) 3 claims stemming from Olshan s failure to competently repair their foundation. The foundation work was governed by an Agreement that contained an Arbitration Provision on the back. Appellees Br. at 3 (Statement of the Case). These frank concessions acknowledging that Katelyn has brought the same claims as her parents, which all arise from Defendants work performed under the foundation repair Agreement show the very reason why Katelyn Moore must arbitrate her claims. A. All of Katelyn s claims touch matters covered by the foundation repair Agreement and thus must be arbitrated. The Moores, however, rely solely on Katelyn s Intentional/Negligent Infliction of Emotional Distress (INIED) claim in arguing that she should not be compelled to arbitrate because that claim arises independently of the contract s terms. Appellees Br. at 6. This is not so. Katelyn, together with her parents, also alleged claims for breach of contract, breach of warranty, negligence, and fraud against Olshan and Wayne Brown. Some of these claims 3 Katelyn and her father, Phillip, assert INIED claims. Gloria Moore has not. See R. 4 (Compl. at (e). 6

12 expressly invoke the terms of the Agreement. 4 More importantly, all of these claims, including the INIED claim, touch matters covered by the foundation repair Agreement. Katelyn must arbitrate her claims because even when some of a non-signatory s claims sound in tort, arbitration will be imposed where as here the factual allegations of the complaint show that all claims touch matters covered by the parties... agreement[] [containing the arbitration provision]. Scruggs, 60 So. 3d at 766 (other citations omitted). In other words, the fount of Olshan s alleged liability flows from the foundation repair Agreement (cf. Scruggs, 60 So. 3d at 771); all of Katelyn s claims challenge [Olshan s] performance of the contract (cf. Terminix Intern., Inc. v. Rice, 904 So. 2d 1051, 1053, 1055, 1057 (Miss. 2004)); each claim is premised upon the Agreement whether ex contractu [or] ex delicto (cf. Price v. Credit Acceptance Corp., No. 2:10-cv-81, 2010 WL , at **3-4 (S.D. Miss. June 11, 2010)); and all of Katelyn s claims essentially arise from the workmanlike standards imposed by the Agreement. Cf. Jones v. Singing River Health Ser. Found., No. 1:14cv447, 2016 WL , at **1-3 (S.D. Miss. March 29, 2016). Despite these sound principles, the Moores argue that compelling arbitration based on a common nexus of events could lead to the absurd outcome that an injured worker on the foundation repair site, for example, would be compelled to arbitrate. See Appellees Br. at 14. There is no merit to this argument. An injured worker would have no standing to assert claims under the foundation repair Agreement between Olshan and Phillip Moore. Katelyn, on the other hand, has expressly invoked the terms of the foundation repair Agreement, and all her claims stem from the 4 As for Katelyn s breach of contract and warranty claims, plainly she is attempting to invoke rights under the [foundation repair Agreement] while at the same time trying to disclaim the arbitration provision grounds enough for compelling her to arbitrate all her claims. See Appellants Br. at

13 foundation repair work it covers. Additionally, as addressed in Section VI, below, the injured worker could not be a third-party beneficiary to the Agreement. Unlike the legal, continuing duty Phillip and Gloria Moore owe Katelyn to protect and shelter her, the Moores owe no such duty to an injured worker. Nor were the foundation repair improvements described in the Agreement done for any workers benefit, unlike the direct benefit Katelyn was intended to derive from the foundation repair under the Agreement. For all these reasons, Katelyn is bound to arbitrate her claims with those of her parents. B. Katelyn s autism does not relieve her from arbitration. The Moores rely on Simmons Housing and Hattiesburg Health & Rehab to argue that estoppel principles should not apply to Katelyn because she is autistic. See, e.g., Appellees Br. at 6, 10. They go so far as saying these cases show that Mississippi disfavors arbitration for incompetent senior citizens and children. Id. at 6. But neither case supports these ideas under the circumstances here. 1. Simmons Housing does not apply. Though the Court affirmed denial of defendants motion to compel arbitration as to the Shelton children in Simmons Housing, 5 it was not because they were minors. Rather, the Court found that the non-signatory children s contract-related claims [were] expressly relinquished. 5 In Simmons Housing, Mr. and Mrs. Shelton purchased a mobile home under a retail installment contract with an arbitration provision, and also signed a separate arbitration agreement. Simmons Housing, Inc. v. Shelton ex rel. Shelton, 36 So. 3d 1283, (Miss. 2010). When the mobile home later developed a mold and mildew problem, Mr. and Mrs. Shelton, and Mrs. Shelton on behalf of her minor children, sued Simmons Housing, the seller, and Southern Energy. The Sheltons asserted a number of claims, including breach of contract, breach of warranties under the UCC, strict liability, negligence, fraud, misrepresentation, and violations under the Magnuson-Moss Warranty Act. Id. at The Court affirmed the trial court s denial of defendants motion to compel arbitration as to the minors claims, finding they had relinquished their contract claims and so estoppel should not apply because their remaining claims were not dependent on the terms of the contract. Id. at

14 Simmons Housing, Inc., 36 So. 3d at Because their claims sounded only in tort, the Shelton children were not attempting to invoke[ ] rights under the [sales installment] contract while at the same time trying to disclaim the arbitration provision. They thus would not be bound to arbitrate. Id. at The Court in Simmons Housing relied on the Fifth Circuit s analysis of Texas law in Fleetwood Enterprises, Inc. v. Gaskamp to reach this conclusion. Id. There, too, the court did not compel arbitration as to the non-signatory, minor children because their claims did not concern the sales contract at issue: At no point have the Gaskamp children attempted to enforce the [sales] contract, or sue on the basis of any warranties contained in the contract; the Gaskamps' complaint... does not rely at all on the terms of any agreement with the... defendants. Thus, it cannot be said that the children sued on the contract, thereby subjecting themselves to the arbitration agreement. Fleetwood Enterprises, Inc. v. Gaskamp, 280 F.3d 1069, 1075 (5th Cir. 2002). Simmons Housing and Gaskamp do not have anything to do with the non-signatory children s minority or inability to understand the retail installment contract/arbitration provisions at issue there. As noted, in Simmons Housing the children relinquished their contract claims; in Gaskamp the court found that none of the children s claims were based on the contract containing the arbitration clause. In contrast, the Moores have not, in any way, revoked or repudiated Katelyn s claims for breach of contract or warranty under the foundation repair Agreement. Because she is invoking rights under this Agreement, and all Katelyn s claims stem from the contract, principles of estoppel require that Katelyn likewise be bound by the Agreement s arbitration provision. 6 6 Additionally, the contracts at issue in both Simmons Housing and Gaskamp were sales contracts, not a performance contract like the foundation repair Agreement here. Thus the factual basis for the Sheltons claims recovery for injuries caused by mold and mildew that 9

15 2. Hattiesburg Health and Rehab likewise does not apply. Nor does Hattiesburg Health and Rehab stand for the proposition that Katelyn should not be required to arbitrate because of her mental incompetency. The Moores mistakenly rely on the Court s analysis of direct-benefit estoppel where a non-signatory embraces a contract by knowingly seeking and obtaining direct benefits from that contract. Appellees Br. at Under this test the Court considered Leo Brown s incompetency, and held that his estate could not be bound to arbitrate: [T]here is simply no evidence that Leo knowingly did anything, much less knowingly seek and obtain direct benefits from the admission agreement. 176 So. 3d at 24. But Olshan and Wayne Brown have not disputed Katelyn s autism at this stage in the proceedings 7 and have never argued that Katelyn knowingly sought and obtained direct benefits from the foundation repair Agreement. That is why this holding in Hattiesburg Health and Rehab is not relevant here. Rather, direct-benefit estoppel applies because Katelyn Moore has embraced the contract... by seeking to enforce the terms of that contract or asserting claims that must be determined by reference to that contract. Scruggs, 60 So. 3d at 768 (emphasis omitted)(other citations omitted); see Hattiesburg Health and Rehab, 176 So. 3d at 24 (other citations omitted). developed in their mobile home had nothing to do with any actions or performance by Simmons Housing or Southern Energy under the sales contract. Similarly, the factual basis for the Gaskamp children s claims formaldehyde exposure in their mobile home did not arise out of the sales contract. Fleetwood Enterprises, Inc. v. Gaskamp, 280 F.3d 1069, 1075 (5th Cir. 2002). In contrast, all of Katelyn s claims stem from the allegedly untimely and unsatisfactory work performed by defendants under the foundation repair Agreement. 7 As noted in Appellants Brief at p. 1, n. 1, there has been no discovery in this case due to the filing of the motion to compel arbitration. As such, Olshan and Wayne Brown have no independent verification of the fact that Katelyn Moore is autistic, but have no reason to question whether this information is accurate at this juncture. 10

16 In addressing this basis for applying direct-benefit estoppel, the Court in Hattiesburg Health and Rehab did not rely on or point to Leo Brown s mental incapacity in determining that his estate was not bound to arbitrate. Instead, the Court looked to the claims his estate asserted, and found none of them concerned the nursing home admissions agreement. As such, the Court held that his estate was not attempting to enforce the admission contract: Id. at 24. [W]e find that Leo's estate (through Emma) is not attempting to enforce the terms of the admission agreement, nor is it asserting claims that must be determined by reference to it. Simply put, Leo's estate's claims sound in tort, and Emma could pursue those claims without an admission agreement at all. Here, because all of Katelyn s claims arise out of the foundation repair Agreement, she is bound to arbitrate. In short, the Mississippi cases addressed in Section V(A), above and in Appellants opening brief at pages 15-23, amply support applying estoppel principles here. 3. The situation in In re Ford Motor Co. is closely analogous here. In re Ford Motor Co. offers further guidance. There the Texas Court of Appeals 8 applied estoppel principles to non-signatory children compelling them to arbitrate their claims against Ford for their father s death in a rollover accident. In particular, the children s mother (Ms. DeLeon) and father (Mr. Leija) purchased a Ford Expedition. The sales contract contained an arbitration provision. In re Ford Motor Co., 220 S.W.3d, 22 (Tex. App. 2006). When Mr. Leija was later killed in a rollover accident, his wife 8 In Simmons Housing the Mississippi Supreme Court looked to Texas law in the arbitration context, finding that Fleetwood Enterprises, Inc. v. Gaskamp, 280 F.3d 1069 (5th Cir. 2002) (applying Texas law) was persuasive under the facts of that case. See Simmons Hous., Inc. v. Shelton ex rel. Shelton, 36 So. 3d 1283, 1287, 1288 (Miss. 2010). Though Gaskamp and Simmons Housing are factually distinguishable from this case (see Section V(B)(1), above and Section VI, below), the analogous facts and analysis in In re Ford Motor Co., make this case persuasive authority here. 11

17 sued Ford in her name and on behalf of their three minor children. Id. at 23. Mr. Leija s parents were also parties to that lawsuit. All parties filed a joint petition alleging identical claims. The Breach of Warranty claim in the joint petition specifically invoked the terms of the sales contract. Id. Under these facts, directly comparable to those here, the court held that Mr. Leija s nonsignatory parents and his non-signatory, minor children were bound to arbitrate all their claims: [T]he joint petition does not even attempt to distinguish the nonparties' claims from those of DeLeon, a party to the contract. It is thus clear that Leija's children and parents, although not parties to the sales contract, seek to enforce express warranties, as if they were parties to the sales contract and thereby subject [ ] themselves to the contract's terms, including the Arbitration Addendum. [citation omitted] Because Leija's children and parents chose to pursue contractual breach of warranty claims, they must pursue all of their claims in arbitration. [citation omitted]. Id. at 24 (emphasis added). In re Ford Motor Co. plainly shows that a child s minority, or a person s inability to understand a contract, will not allow that person to avoid arbitration where that person pursues claims under the agreement containing the arbitration provision. Katelyn has done so here. She is bound to arbitrate all her claims. C. That Katelyn s INIED claim differs from her father s does not allow her to avoid arbitration. The Moores also say that Katelyn should not be shuffled off into arbitration because her INIED claim it is not the same as her father s INIED claim in that they reacted differently to the chaos and stress allegedly resulting from the foundation repair. Appellees Br. at 6. But that is not a reason to allow Katelyn to avoid arbitration. Whether estoppel applies does not turn on how Katelyn or her father reacted to the disruption the foundation repair allegedly caused. Rather, it is the factual nature of Katelyn s claims, in relation to the foundation repair Agreement, which is relevant in determining whether she must arbitrate. Like her parents, 12

18 all Katelyn s claims touch matters covered by the foundation repair Agreement. She is bound by its arbitration provision. VI. Katelyn is a third-party beneficiary to the Agreement and is therefore bound to arbitrate her claims. The Moores argue that Katelyn is not a third-party beneficiary of the Agreement because she is not named in it, or contemplated by its terms. Appellees Br. at But this case concerns a performance contract and the legal, continuing duty the Moores have to protect and shelter Katelyn. That is why this case is distinguishable from Simmons Housing and Gaskamp, and why the Moores argument fails. The foundation repair Agreement relates directly to Phillip and Gloria Moore s substantial interest in making improvements to their home for their autistic daughter s benefit. Katelyn lives in the home specifically described in the Agreement and the benefit she was intended to receive improvements to the Moore residence in the form of foundation repair was the direct result of the performance within the contemplation of the parties as shown by its terms. Stewart ex. rel Womack, 804 So. 2d 1041, 1050 (Miss. 2002) (emphasis added). As such, Katelyn is a third-party beneficiary of that Agreement. See, e.g., id. (holding that nonsignatory elderly and disabled passenger was a third-party beneficiary of contract between city of Jackson and Central Mississippi Planning and Development District/Area Agency on Aging to provide transportation to adult day care); Alqasim v. Capitol City Hotel Inv rs., 989 So. 2d 488, 492 (Miss. Ct. App. 2008) (holding non-signatory hotel guest attacked in parking lot was a thirdparty beneficiary of security services contract between the hotel and security company). See Appellants Br. at In contrast, in Simmons Housing and Gaskamp the courts held that the children, though living in the mobile homes at issue, were incidental, not direct beneficiaries. See Simmons 13

19 Housing, 36 So. 3d at , also discussing Gaskamp, 280 F.3d at This makes sense and shows how these two cases are distinguishable. Namely, the mobile home sales contracts at issue in Simmons Housing and Gaskamp were not performance contracts. Unlike the foundation repair Agreement here, the sales contracts did not cover specific actions the defendants were to perform for the direct benefit of the children living in those mobile homes. Compare, too, the premises security agreement in Alqasim, and the transportation services agreement in Stewart. Like the foundation repair Agreement here, both were performance agreements. Both also covered specific acts the defendants were to perform for the direct benefit of the plaintiffs in those cases, i.e., the hotel guest in Alqasim and the elderly bus passenger being transported to adult day care in Stewart. That is why plaintiffs in those cases were held to be third-party beneficiaries of those performance contracts. Stewart, 804 So. 2d at 1050; Alqasim, 989 So. 2d at 492. The same analysis applies here and shows why Katelyn should arbitrate her claims as a third-party beneficiary to the foundation repair Agreement. CONCLUSION For all the reasons detailed above and in Olshan and Wayne Brown s opening brief, Appellants respectfully request that the Court reverse the ruling of the Circuit Court denying Olshan and Wayne Brown s Motion to Compel Arbitration as to the claims of Katelyn Moore; instruct the Perry County Circuit Court to refer Katelyn Moore s claims to arbitration; and to stay the matter pending arbitration with the decision of the arbitrator to be entered as the judgment of the Circuit Court. Appellants seek all further, different, or additional relief as this Court deems appropriate. 14

20 THIS, the 18 th day of October, OF COUNSEL: LeAnn W. Nealey (MB # 8497) Richard M. Dye (MB #99147) Kathleen Ingram Carrington (MB #104220) BUTLER SNOW LLP Post Office Box 6010 Ridgeland, Mississippi Tel: Fax: By: /s/ LeAnn W. Nealey LEANN W. NEALEY (MB # 8497) RICHARD M. DYE (MB #99147) KATHLEEN INGRAM CARRINGTON (MB #104220) BUTLER SNOW LLP Post Office Box 6010 Ridgeland, Mississippi Tel: Fax: ATTORNEY FOR APPELLANTS OLSHAN FOUNDATION REPAIR CO. OF JACKSON, LLC d/b/a OLSHAN FOUNDATION SOLUTIONS & WAYNE BROWN 15

21 CERTIFICATE OF SERVICE I, LeAnn W. Nealey, one of the attorneys for Olshan Foundation Repair Company of Jackson, LLC d/b/a Olshan Foundation Solutions and Wayne Brown, hereby certify that I electronically filed the foregoing Appellants Reply Brief with the Clerk of the Court using the MEC system which sent notification of such filing to the following: Robin L. Roberts, Esq. robin@rablaw.net ROBERTS & ASSOCIATES Post Office Box 1953 Hattiesburg, MS Counsel for Plaintiffs Further, I hereby certify that I have mailed by U.S. Mail, postage prepaid, the document to the following: Hon. Jon Mark Weathers Circuit Court Judge P.O. Box 830 Hattiesburg, MS Circuit Court Judge SO CERTIFIED this 18 th day of October, /s/ LeAnn W. Nealey LEANN W. NEALEY v1 16