1 

In The

Court of Appeals

Ninth District of Texas at Beaumont

__________________

NO. 09-21-00354-CV 

__________________

LENNAR HOMES OF TEXAS LAND AND CONSTRUCTION, 

LTD. AND LENNAR HOMES OF TEXAS SALES AND 

MARKETING, LTD., SUCCESSORS BY MERGER TO 

CALATLANTIC HOMES OF TEXAS, INC., SUCCESSOR BY 

MERGER TO RH OF TEXAS LIMITED PARTNERSHIP, 

Appellants 

V.

BENJAMIN COCKERHAM AND KIMBERLY COCKERHAM, 

Appellees 

__________________________________________________________________

On Appeal from the 457th District Court

Montgomery County, Texas

Trial Cause No. 21-06-07674-CV

__________________________________________________________________

MEMORANDUM OPINION 

In this interlocutory appeal, the question is whether the appellees, 

non-signatories to an arbitration agreement, may be compelled to 

arbitrate their claims against a home’s builder when they sued the 

builder claiming the builder breached implied warranties of 
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workmanship and habitability based on its negligence acts in building 

the home. Because the homeowners bought the home from individuals 

who purchased the home from the builder, they didn’t sign the 

agreements that contain the arbitration provisions. So as the plaintiffs 

in the suit, they are subsequent purchasers of the home and not the 

individuals who originally bought the home from the entity that built it. 

Without specifying a reason for its ruling, the trial court denied the 

motion to enforce the arbitration agreement. The defendants in the suit, 

two successor partnerships who answered for the builder and claimed to 

have acquired the builder by merger, filed this appeal. 

When the defendant’s alleged liability is based on a contract that 

contains an arbitration clause, Texas law prevents a non-signatory 

plaintiff to the contract from avoiding an “arbitration clause that was 

part of that contract.”1 We conclude that under the doctrine of directbenefits estoppel, the agreement to arbitrate in the contract executed by 

the builder and the couple that originally purchased the home is valid 

and enforceable against the second couple. We also conclude that all 

1Lennar Homes of Tex. Land & Constr., Ltd. v. Whiteley, 672 S.W.3d 

367, 377 (Tex. 2023) (cleaned up).
3

claims the plaintiffs filed against the builder fall within the scope of the 

contract’s arbitration clause. 

Consequently, we hold the trial court erred in denying the 

defendants’ motion to compel arbitration. The trial court’s order denying 

the motion to compel arbitration is reversed, and the cause is remanded

to the trial court for further proceedings consistent with the opinion.

Background

In May 2016, Ray and Kimberly Wideman signed a purchase-andsale agreement (the contract) with CalAtlantic to build a home in the 

Woodforest Subdivision in Montgomery County, Texas. The contract 

included an arbitration clause, which applied to the sale. The arbitration 

agreement in the contract provides: 

This transaction involves interstate commerce and any 

dispute (whether contract, warranty, tort, statutory or 

otherwise). . . shall first be submitted to mediation and, if not 

settled during mediation, shall thereafter be submitted to 

binding arbitration as provided by the Federal Arbitration Act 

(9 U.S.C. §§ 1 et seq.), and not by or in a court of law. All 

decisions respecting the arbitrability of any dispute shall be 

decided by the arbitrator. 

The contract on the home included a “Limited Warranty.” In it, 

CalAtlantic purported to disclaim all implied warranties. The disclaimer 

language in the Limited Warranty states:
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Except as specifically set forth in this Agreement, You agree 

that the only express warranties that we give to You relating 

to the property and/or improvements are contained in the 

Your New Home Insured Limited Warranty, which is 

incorporated herein by reference for all purposes.

To the extent permitted by law Your New Home Insured 

Limited Warranty supersedes all implied warranties. You 

agree and understand that by signing this Agreement You are 

waiving any claim or cause of action under any theory of 

implied warranty, including the theory of implied warranty of 

good and workmanlike construction, and that such implied 

warranty is expressly replaced by the terms of the Your New 

Home Insured Limited Warranty.2 

Under the Limited Warranty, the Widemans received a ten-year, 

transferrable warranty on their new home. The Limited Warranty 

includes performance standards that applied to the home’s construction. 

Even so,the performance standards contain exceptions excluding several 

types of damages from coverage under the home’s Limited Warranty. The 

excluded items included damages caused by the homeowner, cosmetic

defects, and water damage. The Limited Warranty also disclaimed 

damages caused “by a condition not resulting in actual physical damage 

to the Home,” including “uninhabitability or health risk due to the 

presence or consequences of such things as . . . mold[.]”

2Capitalization removed. 
5

The contract included a disclosure addressing “Indoor Air Quality.”

As to indoor air, CalAtlantic’s agreement with the Widemans’ states:

Residential construction methods cannot keep out all indoor 

air contaminants. Contaminants such as pollen, dust mites, 

mold and other organics are a normal part of a residential 

home’s indoor air environment. Maintaining indoor air 

quality after Settlement is Your responsibility and requires 

regular cleaning, maintenance and timely repair of the Home. 

If excessive moisture is present in Your Home, You should 

immediately remove the moisture and repair the source of the 

moisture. We will not be responsible for damage to Your Home 

from failure to adequately and timely clean, maintain and 

repair Your Home. You agree that Your sole remedy for 

damages caused by mold, other fungi or other indoor air 

contaminants shall be the remedy set forth in the warranty 

documents provided to You.

In October 2018, the Widemans sold Benjamin and Kimberly 

Cockerham their home. Nearly three years later, in June 2021, the 

Cockerhams sued CalAtlantic, alleging there were construction defects 

in the home, which had “caused significant mold growth in Plaintiffs’ 

home.” The Cockerhams alleged the defects caused “extreme and 

inappropriate humidity and moisture levels to develop in the Home’s 

interior,” which resulted in “water damage and the development of 

elevated mold levels.” According to their petition, when CalAtlantic sold 

the home, it violated the DTPA, breached the implied warranties of 

habitability and workmanship, and had been negligent in the 
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construction methods it used in building the home. The theory in the 

Cockerham’s petition is that the construction methods CalAtlantic used 

in building the home created the conditions that allowed mold to grow in 

the home.

In response to the suit, Lennar Homes of Texas Land and 

Construction, Ltd. and Lennar Homes of Texas Sales and Marketing, Ltd.

answered. In their answer, Lennar Homes Land and Construction and 

Lennar Homes of Texas Sales and Marketing alleged they were the 

“successors by merger to CalAtlantic Homes of Texas Inc., [the] successor 

by merger to RH of Texas limited partnership.”For convenience, we will 

refer to the appellants collectively as “Lennar.”3

Lennar attached two exhibits to support its motion to compel 

arbitration:(1) a copy of the purchase-and-sale agreement, which we are 

calling the contract, and (2) a copy of CalAtlantic’s “New Home Warranty 

Program Insured Limited Warranty.” Both the contract and the Limited 

3Even though the appellate record doesn’t include evidence that 

establishes the Lennar partnerships are the entities that “merged” with 

CalAtlantic, as Lennar’s answer alleges, the Cockerhams have never 

contested that claim either in the trial court or on appeal. For purposes 

of the appeal, we accept the claim that the two Lennar partnership 

entities are the successors “by merger” as an undisputed fact for purposes 

of this appeal. See Tex. R. App. P. 38.1(g). 
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Warranty contain arbitration clauses. Under the arbitration agreements

in both exhibits, the Widemans agreed that the rules of the Federal 

Arbitration Act would apply to the arbitration of any disputes if a dispute 

arose under either the contract or the Limited Warranty.

The Cockerhams don’t dispute that the arbitration clauses in the 

contract and Limited Warranty are enforceable against the Widemans 

had the Widemans been the plaintiffs who sued CalAtlantic or Lennar. 

For its part, Lennar recognizes that the Cockerhams didn’t sign the 

contract or the Limited Warranty that it seeks to enforce. That said, in 

the trial court Lennar argued the arbitration agreements in the contract 

and Limited Warranty are enforceable against the Cockerhams under 

the doctrine of direct-benefits estoppel because the Cockerhams had sued 

to enforce benefits based on the Widemans’ purchase of the home. 

According to the argument Lennar made in its motion to compel, the 

Cockerhams could not on one hand seek to enforce terms of the contract 

or Limited Warranty without on the other hand accepting the terms of 

the entire agreement, which included the clauses that required the 

arbitration of the claims at issue in the dispute.
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The Cockerhams presented the trial court with three arguments in 

response to Lennar’s motion. First, they argued that since they didn’t buy 

the home from CalAtlantic but bought it from the Widemans,the doctrine 

of direct-benefits estoppel didn’t apply to their claims. Second, they 

argued that Lennar’s theory that they had received a direct benefit by 

suing CalAtlantic to enforce the implied warranties that arise in the sale 

of a new home is a theory that has been repeatedly rejected by Texas 

courts. Third, the Cockerhams claimed the doctrine of direct-benefits 

estoppel didn’t apply because their claims existed independently and did 

not depend on the terms of CalAtlantic’s contract with the Widemans.

The trial courtdenied Lennar’s motion to compel but did not specify 

the reason for its ruling. In response to the trial court’s ruling, Lennar

filed an interlocutory appeal.4 On appeal, Lennar filed a brief raising one 

issue. It argues the trial court “erred by denying Appellants’ Plea in 

Abatement and Motion to Compel Arbitration.” 

4See Tex. Civ. Prac. & Rem. Code Ann. § 51.016 (authorizing 

appeals from interlocutory orders denying arbitration under the FAA).
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Analysis

A party seeking to compel arbitration must establish: (1) the 

existence of a valid, enforceable arbitration agreement, and (2) the 

disputed claims fall within the agreement’s scope.5 Here, Lennar argues

the arbitration agreement in the contract is enforceableand encompasses 

the Cockerhams’ claims. The Cockerhams disagree.They argue that the 

agreements to arbitrate in the contract and Limited Warranty are 

unenforceable because they weren’t parties to the contract with 

CalAtlantic, so they didn’t sign the contract containing the arbitration 

agreements that CalAtlantic’s successor Lennar asked the trial court to 

enforce.6

Whether an arbitration agreement is enforceable is reviewed de 

novo as a question of law.7 Generally, courts will require the parties to a 

valid and enforceable arbitration agreement to submit the dispute to 

arbitration.8 Yet under some circumstances, even a non-party to an 

5See Wagner v. Apache Corp., 627 S.W.3d 277, 284 (Tex. 2021).

6The Cockerhams don’t dispute that the PSA contains a valid 

arbitration agreement that, if enforceable against them, would 

encompass their claims. 

7In re Weekley Homes, L.P., 180 S.W.3d 127, 130 (Tex. 2005). 8In re Kellogg, Brown & Root, Inc., 166 S.W.3d 732, 738 (Tex. 2005)

(orig. proceeding). 
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arbitration agreement may be compelled to arbitrate a claim when the 

non-party has filed a claim against another that is covered by an 

agreement to arbitrate.9

Courts have identified “six scenarios in which arbitration with nonsignatories may be required: (1) incorporation by reference, (2) 

assumption, (3) agency, (4) alter ego, (5) equitable estoppel, and (6) thirdparty beneficiary.”10 In the trial court, Lennar relied on equitable 

estoppel. Boiled down,Lennar argued that the Cockerhams shouldn’t be 

permitted to sue CalAtlantic and benefit from the warranties CalAtlantic 

created in building the home without accepting the other obligations—

specifically the arbitration requirements—that are found in those 

agreements too. 

In Lennar’s motion to compel, it argued that the doctrine of directbenefits estoppel precluded the Cockerhams from avoiding arbitration 

because their claims against CalAtlantic relied on CalAtlantic’s contract 

with the Widemans. When the doctrine of direct-benefits estoppel

applies, “a non-signatory plaintiff seeking the benefits of a contract is 

9Id. 

10Jody James Farms, JV v. Altman Grp., Inc., 547 S.W.3d 624, 633 

(Tex. 2018).
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estopped from simultaneously attempting to avoid the contract’s 

burdens, such as the obligation to arbitrate disputes.”11

To determine “whether a claim seeks a direct benefit from a 

contract containing an arbitration clause[,]” we examine the “substance 

of the claim,” and we look past a party’s “artful pleading.”12 “While the 

boundaries of direct-benefits estoppel are not always clear, nonparties 

generally must arbitrate claims if liability arises from a contract with an 

arbitration clause, but not if liability arises from general obligations 

imposed by law.”13 In other words, “the claim must depend on the 

existence of the contract. . . and be unable to stand independently without 

the contract.”14

While this appeal was pending, the Supreme Court of Texas decided 

Lennar Homes of Texas Land & Construction, Ltd. v. Whiteley, 672 

S.W.3d 367, 372-73 (Tex. 2023). In our opinion, Whiteley is dispositive of 

the issue that Lennar has raised in this appeal. The facts in Whiteley are 

like the appeal before us in at least four respects. First, Whiteley involved

11See In re Kellogg, Brown & Root, Inc., 166 S.W.3d at 739.

12In re Weekley Homes, 180 S.W.3d at 131-32.

13In re Vesta Ins. Grp., Inc., 192 S.W.3d 759, 761 (Tex. 2006).

14G.T. Leach Builders, LLC v. Sapphire V.P., LP, 458 S.W.3d 502, 

527-28 (Tex. 2015) (cleaned up).
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a plaintiff who sued a homebuilder alleging that defects in the 

construction of a home by its builder were responsible for creating the 

conditions that allowed mold to grow in the home. Second, the plaintiff 

in Whiteley was a subsequent purchaser of the home, not the home’s 

original purchaser. Third, in Whiteley, the plaintiff sued the builder for 

negligent construction and breaching the implied warranties of 

habitability and good workmanship.15 Fourth, even though the 

arbitration clauses in Whiteley and the case before us are not exactly the 

same, they are also very broad.16 Even though the plaintiff in Whiteley

did not sign the agreements containing the arbitration provisions since 

she was a subsequent purchaser of the home, the Supreme Court of Texas

held that the doctrine of direct-benefits estoppel applied to her suit, and 

it required the plaintiff to arbitrate her claims.17

In explaining why direct-benefits estoppel applied to the plaintiff’s 

claims in Whiteley, the Supreme Court of Texas also rejected the same 

arguments the Cockerhams relied on in the trial court. For example, the 

Cockerhams argued that when building the home, CalAtlantic breached 

15Whiteley, 672 S.W.3d at 373-74.

16Id. at 372-73. 

17Id. at 377-80.
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the implied warranties workmanship and habitability. And like the 

subsequent purchaser in Whiteley, the Cockerhams alleged that 

CalAtlantic was negligent when it built the Widemans’ home. The 

Cockerhams just like the appellee in Whiteley argued that the implied 

warranties that exist are common law and apply to a builder of a new 

home and don’t rely on and exist independently from the contract 

between the builder and the purchaser of a new home.

Yet the Whiteley Court rejected all these arguments, explaining 

that “a warranty which the law implies from the existence of a written 

contract is as much a part of the writing as the express terms of the 

contract.”18 The Court also said that even though “such warranties are 

imposed by operation of law, the obligation still arises from the contract 

and becomes part of the contract.”19 Thus, the Supreme Court of Texas 

reasoned, that it follows the warranties arising when contracts are signed 

by buyers and sellers of homes at common law are “implicit in the 

contract between the builder/vendor and original purchaser and are 

automatically assigned to the subsequent purchaser.”20

18Id. at 377.

19Id. 20Id. at 378. (emphasis in original) (cleaned up).
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Given the manner in which implied warranties arise under the law, 

the Whiteley Court explained that there are at least three reasons why 

implied warranty claims don’t exist independently from the original sales 

agreement between the builder and a home’s subsequent purchaser.21

First, the Court observed that the implied warranty of workmanship (like 

other implied warranties) moves with a home “by operation of law, from 

purchaser to purchaser,” so downstream purchasers of a home “cannot 

obtain a greater warranty than that given to the original purchaser.”22

Second, the Whiteley Court noted that because the implied 

warranty of workmanship serves as a gap-filler claim, courts must look 

to the contract involved in the builder’s sale of the home to determine the 

extent to which the implied warranty of workmanship may have been 

superseded.23 So if the sales contracts includes an “express warranty”

that “specifically describes the manner, performance, or quality of the 

[seller’s] services,”there may be no gaps that are required to be filled by 

the implied warranty of workmanship.24 For that reason, the Whiteley

21Id. at 378.

22Id. 23Id. 24Id. (cleaned up).
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Court said, a court must refer to the original contract of sale on the home 

to determine the extent to which the implied warranty of workmanship 

exists.25

Third, the Whiteley Court noted that resolving a claim for breaching

the implied warranty of habitability requires that a court and factfinder 

look to the builder’s contract with the original purchaser to determine the 

extent to which the builder disclosed defects existed in the home.26

Simply put, the implied warranty of habitability requires an examination 

of the builder’s prior disclosure of defects since the implied warranty of 

habitability doesn’t “include defects, even substantial ones, that are 

known by or expressly disclosed to the buyer.”27

We conclude the holding in Whiteley—thatdirect-benefits-estoppel 

applies to arbitration provisions in a builder’s contract when a 

subsequent homeowner sues the builder alleging the builder breached 

the implied warranties of workmanship and habitability in constructing 

the home—applies to the Cockerham’s claims. Under the evidence 

presented to the trial court, we conclude the Cockerhams’ implied 

25Id. 26Id. at 379. 

27Id. (cleaned up).
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warranty claims against CalAtlantic and its successor Lennar cannot 

stand independently from the contract and Limited Warranty executed 

in 2016 when the home was originally sold. 

Besides the implied warranty claims, which we have discussed, the 

Cockerhams petition includes Deceptive Trade Practices Act and 

negligence claims against CalAtlantic and its successor Lennar. Under 

Texas law, when “the relied-upon arbitration clause is broad enough to 

cover both tort and contract claims, if the plaintiff pursues one claim on 

the contract, then the plaintiff must pursue all claims—tort and 

contract—in arbitration.”28

The arbitration clause in the purchase-and-sale agreement between 

CalAtlantic and the Widemans is broad. We have already held that it 

applies to the Cockerham’s breach of warranty claims. The express terms 

of the arbitration agreement require the parties to the arbitration 

agreement to arbitrate “any dispute (whether contract, warranty, tort, 

statutory or otherwise)[.]” We conclude the arbitration provisions are 

sufficiently broad to require the Cockerhams’ arbitrate these claims too. 

28Id. at 377.
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Conclusion

As a matter of law, we conclude the arbitration clause is broad 

enough to cover all claims the Cockerhams filed against CalAtlantic and 

its successor, Lennar. We sustain Lennar’s sole issue. We reverse the 

trial court’s order denying Lennar’s motion to compel arbitration and 

remand the case to the trial courtfor further proceedings consistent with 

this opinion.

REVERSED AND REMANDED. 

 

 HOLLIS HORTON

 Justice

Submitted on March 6, 2023

Opinion Delivered November 16, 2023

Before Golemon, C.J., Horton and Johnson, JJ.