NUMBER 13-23-00042-CV
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI – EDINBURG
SCI TEXAS FUNERAL SERVICES, LLC
D/B/A “FUNERARIA DEL ANGEL
BUENA VISTA AND BUENA VISTA
BURIAL PARK,” Appellant,
v.
YVONNE HOLLENBECK, Appellee.
On appeal from the 357th District Court
of Cameron County, Texas.
MEMORANDUM OPINION
Before Justices Tijerina, Silva, and Peña
Memorandum Opinion by Justice Silva
Appellant SCI Texas Funeral Services, LLC d/b/a “Funeraria Del Angel Buena
Vista and Buena Vista Burial Park,” appeal an order denying their motion to compel
arbitration and stay litigation pending arbitration. By what we construe as two issues,
appellant argues (1) the trial court abused its discretion in denying its motion to compel
because there exists an enforceable arbitration agreement, and appellee Yvonne
Hollenbeck, daughter of the decedent Maria Magdalena Gonzalez, is bound by her status
as a third-party beneficiary to the arbitration agreement; and (2) the trial court abused its
discretion in denying appellant’s motion to stay litigation predicated on its motion to
compel. We reverse and remand.
I. BACKGROUND
The underlying lawsuit arises from events surrounding Maria’s embalmment and
visitation services. In appellee’s original petition, appellee alleged that Maria passed away
on August 8, 2022, and Maria’s remains were taken to Funeraria Del Angel Buena Vista
in Brownsville, Texas. Lionel Lopez Gonzalez 1 , Maria’s husband and appellee’s
stepfather, entered into a contract with appellant for embalmment and visitation services, 2
and on August 16, 2022, the family held a viewing.
According to appellee, Maria’s body was in a severely decomposed state at the
time of the viewing, resulting in “a putrid odor of rotting flesh.” Appellee described Maria’s
body as follows:
[Maria’s] left eye was unstable, and her left hand was severely decomposed
with skin peeling off same. Before and during the viewing, [Maria’s] left hand
was covered by the right and a rosary laid over same to block the
translucent skin flaking and falling off [Maria’s] knuckle bones. Further,
[Maria’s] right ear was black, thin, and flat against her head, appearing
1 The Court will refer to Lionel Lopez Gonzalez as Lopez.
2 Only Lopez’s signature appears on the contract. However, appellee avers that her brother, Alfred
Hollenbeck Jr., paid for the services.
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shriveled. [Maria’s] neck and jaw line were not visible, and her chin
appeared to melt into her upper clavicle chest area.
Appellee asserted claims of negligence, negligence per se, and gross negligence against
appellant.
Appellant filed a motion to compel arbitration and to stay the suit pending
arbitration. Appellant urged that Lopez 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 “nonsignatory” issues;
and appellee, as a third-party beneficiary, was bound by this agreement. Appellant
supported its motion to compel arbitration with, inter alia, a copy of the arbitration
agreement, which stated in relevant part:
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 . . . . 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 . . . .
In response to appellant’s motion to compel, appellee argued that no valid and
enforceable arbitration agreement exists between her and appellant as appellee is a
nonsignatory to the agreement at issue. Moreover, appellee maintained that the theory of
third-party beneficiaries does not bind her.
Appellant filed a response, and in an attached affidavit signed by Kenndra Salinas,
an SCI employee, appellant averred that Salinas had met with Lopez, appellee’s brother,
and appellee regarding visitation services on August 9, 2022. Salinas was advised that
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appellee would be making the decisions regarding the contracted arrangements. Salinas
stated, “[Appellee] participated in finalizing the arrangements, provided me with direction
regarding her mother’s make-up and the clothes for her mother to wear for the visitation
and funeral services, and signed the Personal Effects Inventory.” The “Personal Effects
Inventory” form dated August 9, 2022, containing appellee’s signature above the
“Releasing Agent/Next-of-Kin” signature line, was also attached to appellant’s response.
The trial court signed an order denying appellant’s motion to compel and stay
litigation on January 11, 2023. This accelerated appeal followed. See TEX. CIV. PRAC. &
REM. CODE ANN. § 51.016 (authorizing interlocutory appeals under the Federal Arbitration
Act (FAA)); id. § 171.098(a)(1) (authorizing interlocutory appeals under the Texas
Arbitration Act (TAA)).
II. ARBITRATION PROVISION
By appellant’s first issue, appellant asserts the trial court abused its discretion in
denying its motion to compel arbitration.
A. Standard of Review and Applicable Law
“Under the FAA, ‘a party seeking to compel arbitration must establish the existence
of a valid arbitration agreement and the existence of a dispute within the scope of the
agreement.’” Lennar Homes of Tex. Land & Constr., Ltd. v. Whiteley, 672 S.W.3d 367,
376 (Tex. 2023) (quoting Baby Dolls Topless Saloons, Inc. v. Sotero, 642 S.W.3d 583,
585–86 (Tex. 2022)). While we review a trial court’s order denying a motion to compel
arbitration for abuse of discretion, Henry v. Cash Biz, LP, 551 S.W.3d 111, 115 (Tex.
2018), questions of whether a valid arbitration agreement exists and whether an
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arbitration agreement is binding on a nonparty are reviewed de novo. Whiteley, 672
S.W.3d at 376. A trial court abuses its discretion if it “acted without reference to guiding
rules or principles or in an arbitrary or unreasonable manner.” In re Copart, Inc., 619
S.W.3d 710, 713 (Tex. 2021) (orig. proceeding) (per curiam) (cleaned up).
“Who is bound by an arbitration agreement is normally a function of the parties’
intent, as expressed in the agreement’s terms.” Jody James Farms, JV v. Altman Grp.,
547 S.W.3d 624, 633 (Tex. 2018). “But sometimes a person who is not a party to the
agreement can compel arbitration with one who is, and vice versa.” Whiteley, 672 S.W.3d
at 376 (quoting Meyer v. WMCO-GP, LLC, 211 S.W.3d 302, 305 (Tex. 2006)) (footnotes
omitted). “Courts have recognized six theories, arising out of common principles of
contract and agency law, that may bind non[]signatories to arbitration agreements: (1)
incorporation by reference; (2) assumption; (3) agency; (4) alter ego; (5) equitable
estoppel; and (6) third-party beneficiary.” Id. (cleaned up). Specifically, appellant
contends appellee is bound by direct-benefits estoppel, as a third-party beneficiary of the
agreement, or both.
B. Analysis
We first consider whether appellant has met its burden of showing that appellee is
bound by the arbitration provision as a third-party beneficiary as it is dispositive. At the
outset, we note that we recently addressed a similar question in SCI Texas Funeral
Services, LLC v. Gonzalez, No. 13-21-00453-CV, 2023 WL 3637979, at *4 (Tex. App.—
Corpus Christi–Edinburg May 25, 2023, no pet.) (mem. op.).
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In Gonzalez, the decedent’s adult children and grandchildren sued the funeral
home following the execution of a contract for visitation and embalmment services signed
by a nonparty individual. Id. Allegations stemmed from the funeral home’s purported
treatment of the decedent’s body; namely, a failure to properly embalm or store the
decedent; a “fail[ure] to exercise due care in order to avoid leakage of embalming
fluid/blood from Decedent’s mouth, ears, nose and eyes”; and a “fail[ure] to properly care
for Decedent’s body, as would a person using ordinary care under the same or similar
circumstances.” Id. at *5. Appellees asserted causes of action for negligence, intentional
infliction of emotional distress, breach of fiduciary duty, and violations of the Deceptive
Trade Practices Act (DTPA). Id. at *1. The contract at issue in Gonzalez, like here,
provided that the funeral home was authorized “to prepare and care for the body of the
decedent named in [the] Agreement and to conduct the funeral and services . . . listed in
said Agreement” and contained language binding “any person who claims to be a third[-
]party beneficiary of this Agreement.” Id. at *3, *5.
We determined in Gonzalez that (1) the factual allegations in the live pleading
concerned the handling of the decedent’s remains in preparation for the funeral services,
i.e., the subject of the contract at issue; (2) the contract’s language did not leave any
doubt as to the creation of a third-party beneficiary status; and (3) although the
appellees—the decedent’s immediate family members—had not been signatories to the
contract, the appellees received the benefit of the funeral service contract. Id. at *4. Thus,
the appellees were both subjected to the existing contract and bound to its arbitration
provision. Id.
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The facts now before us necessitate the same outcome. The contract here
authorized the funeral home “to prepare and care for the body of [Maria] . . . and to
conduct the funeral and services . . . listed in said Agreement.” The factual allegations in
the live pleading exclusively concern appellant’s handling of Maria’s remains in
preparation for the funeral services and execution of said services, specifically alleging
as follows:
a. [Appellant] fail[ed] to provide a proper viewing of [Maria];
b. [Appellant] fail[ed] to properly refrigerate [Maria] so as to avoid a foul
smell emitting from [Maria] at the time of the funeral services;
c. [Appellant] fail[ed] to properly care for [Maria’s] body, as would a
person using ordinary care under the same or similar circumstances;
d. [Appellant] fail[ed] to exercise due care in [Maria’s] refrigeration;
e. [Appellant] fail[ed] to give [appellee] ample time to visit with the
[Maria] at the viewing . . . .
In other words, the live pleading sets forth allegations which are “inextricably enmeshed”
or “factually intertwined” with the underlying contract which provided for how Maria’s body
would be prepared for viewing and stored. See Pinto Tech. Ventures, L.P. v. Sheldon,
526 S.W.3d 428, 440 (Tex. 2017); Rodriguez v. Tex. Leaguer Brewing Co. L.L.C., 586
S.W.3d 423, 432 (Tex. App.—Houston [14th Dist.] 2019, pet. denied); see also Gonzalez,
2023 WL 3637979, at *4.
Additionally, the contract contained language binding “any person who claims to
be a third[-]party beneficiary of this Agreement,” and the arbitration clause stated that it
applied to “any claim or dispute.” See Henry, 551 S.W.3d at 116 (noting that there exists
a presumption favoring arbitration and a policy to construe arbitration clauses broadly);
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see also FD Frontier Drilling (Cyprus), Ltd. v. Didmon, 438 S.W.3d 688, 691, 695 (Tex.
App.—Houston [1st Dist.] 2014, pet. denied) (concluding that board arbitration clauses,
such as, “[a]ny dispute arising out of or in connection with this contract,” “embrace all
disputes between the parties having a significant relationship to the contract regardless
of the label attached to the dispute”). Moreover, the parties here do not dispute that
appellee is an immediate family member of the deceased who partook in the organization
of the services and attended said service. Though appellee was not a signatory to the
contract between appellant and Lopez, appellee received a benefit of the contracted
service, and appellant’s alleged ill performance of the contracted service is at the crux of
appellee’s suit. See Henry, 551 S.W.3d at 115; see also Gonzalez, 2023 WL 3637979, at
*4 (“While appellees were not signatories to the contract, it has been held that contracts
for funeral services can be intended for the benefit of immediate family members of the
deceased.”); see generally Taylor Morrison of Tex., Inc. v. Ha, 660 S.W.3d 529, 533 (Tex.
2023) (“A nonsignatory can seek the benefits of a contract either by suing based on the
contract, or by conduct that deliberately seeks and obtains substantial benefits from the
contract itself.”). Therefore, appellee was bound by the arbitration agreement, and the
trial court abused its discretion in denying appellant’s motion to compel arbitration. See
Henry, 551 S.W.3d at 115; see also Gonzalez, 2023 WL 3637979, at *4. We sustain
appellant’s first issue.
III. STAY PENDING ARBITRATION
By way of a second issue, appellant argues that the trial court abused its discretion
in denying its motion to stay litigation pending arbitration. “The FAA generally requires
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courts to stay lawsuits involving arbitrable issues if a party with the right to arbitration
seeks a stay pending arbitration of those issues.” RSL Funding, LLC v. Pippins, 499
S.W.3d 423, 429 (Tex. 2016) (per curiam); see 9 U.S.C.A. § 3; see also Gonzalez, 2023
WL 3637979, at *5. “On motion of a party to an arbitration agreement the trial court must
order arbitration even though the order might result in less efficient, separate
proceedings.” RSL Funding, 499 S.W.3d at 430.
Having already determined that the trial court erred in denying appellant’s motion
to compel arbitration, the trial court must stay any further proceedings. See 9 U.S.C.A.
§ 3 (requiring stay of proceedings in trial court “upon any issue referable to arbitration”);
see also Gonzalez, 2023 WL 3637979, at *5. We sustain appellant’s second issue.
IV. CONCLUSION
We reverse and remand for proceedings consistent with this memorandum
opinion.
CLARISSA SILVA
Justice
Delivered and filed on the
19th day of October, 2023.
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