JACQUELYNN (JACKIE) L. JACKS; STUART L. REES, Wife and Husband; HARLEY J. JACKS; JACQUELYNN (JACKIE) L. JACKS, as Next Friend for T.J.M., a minor, and A.J.J., a minor, Plaintiffs - Appellees,
CMH HOMES, INC., d/b/a Oakwood Homes Oklahoma City, and d/b/a Clayton Manufactured Homes; CMH MANUFACTURING, INC., a/k/a Karsten Homes, Defendants-Appellants, and VANDERBILT MORTGAGE AND FINANCE, INC., Defendant.
FROM THE UNITED STATES DISTRICT COURT FOR THE WESTERN
DISTRICT OF OKLAHOMA (D.C. NO. 5:15-CV-00044-M)
Scott Simpson of Simpson, McMahan, Glick & Burford, PLLC,
Birmingham, Alabama (Jonathan E. Beling of Simpson, McMahan,
Glick & Burford, PLLC, Birmingham, Alabama, and Joseph R.
Farris, Sarah Buchan, and Brynna Schellbar of Franden,
Farris, Quillin, Goodnight Roberts, Tulsa, Oklahoma, with
him on the briefs) for Defendants-Appellants.
Michael M. Reynolds of DeBois, Sherrill & Reynolds,
Duncan, Oklahoma, for Plaintiffs- Appellees.
MATHESON, McKAY, and MORITZ, Circuit Judges.
2009, Jacquelyn Jacks bought a manufactured home from CMH
Homes, Inc., on installment. The purchase was financed
through CMH Homes under a manufactured-home retail
installment contract. The contract contains an arbitration
agreement, which provides that all disputes arising from, or
relating to, the contract would be resolved by binding
arbitration. By its terms, "[t]his Arbitration Agreement
also covers all co-signors and guarantors who sign this
Contract and any occupants of the manufactured Home (as
intended beneficiaries of this Arbitration Agreement)."
(Appellants' App. at 31.) Ms. Jacks was the only
"buyer" to sign the contract; there were no
cosigners or guarantors. Ms. Jacks, along with her husband
and their children, moved into the manufactured home soon
after it was delivered and installed by CMH Homes.
five years later, Ms. Jacks and her family brought suit in
state court against CMH Homes and CMH Manufacturing, which
had manufactured the home, and Vanderbilt Mortgage and
Finance, which is not a party to this appeal. They claimed:
(1) CMH negligently installed and repaired the manufactured
home's water system, which caused toxic mold to grow; (2)
the manufactured home was unreasonably dangerous at the time
it left the control of CMH; (3) the manufactured home was not
fit for habitation. Ms. Jacks also sought to rescind her
purchase of the manufactured home, along with her agreement
to pay Vanderbilt Mortgage and Finance the indebtedness
incurred to purchase the home.
defendants removed the case from state to federal court and
moved to compel arbitration and stay the court proceedings.
Defendants argued that Ms. Jacks, having signed the contract,
was barred by the arbitration agreement from pursuing her
claims in court. The district court agreed and granted the
motion to compel as to the claims of Ms. Jacks.
district court denied the motion as to the remaining
plaintiffs who were not parties to the installment contract.
Defendants had argued that Ms. Jacks' husband and their
children were likewise bound by the arbitration agreement,
even though they never signed the contract. Because "all
Plaintiffs were occupants of the Home and intended third
party beneficiaries to the Arbitration Agreement, "
Defendants maintained below, "a valid agreement to
arbitrate exists between all Plaintiffs and CMH Homes under
Oklahoma contract law." (Id. at 18.)
district court did not agree. It held that "the single
sentence in the Arbitration Agreement generically referencing
'any occupants of the Manufactured Home (as intended
beneficiaries of this Arbitration Agreement)' is not
sufficient to make the non-signatory plaintiffs, who are
occupants of the home, third party beneficiaries of the
Arbitration Agreement and subject to being compelled to
arbitration." (Id. at 83.)
district court also rejected Defendants' contention that
the nonsignatory plaintiffs were "bound to arbitrate
their claims" under "the doctrine of equitable
estoppel" (id. at 24), holding that
"Defendants have not satisfied any of the elements of
equitable estoppel, " (id. at 84):
There have been no false representations or concealment of
facts by the non-signatory plaintiffs. Further, the Court
finds no equitable reason why the non-signatory plaintiffs
should be bound by the Arbitration Agreement; the
non-signatory plaintiffs have engaged in no conduct which
would equitably warrant that they be bound by the Arbitration
(Id. at 84.)
timely appealed the district court's partial denial of
their motion to stay and to compel arbitration. We have
jurisdiction under the Federal Arbitration Act, which
authorizes an interlocutory appeal of an order "refusing
a stay of any action under section 3 of this title" or
"denying a petition under section 4 of this ...