* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not

be published and is not precedent except under the limited circumstances set forth in 5TH CIR.

R. 47.5.4.

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 07-11138

VINEWOOD CAPITAL, LLC.,

Plaintiff - Appellee,

v.

DAR AL-MAAL AL-ISLAMI TRUST; ZIAD RAWASHDEH; KHALID

ABDULLA-JANAHI,

Defendants - Appellants.

Appeal from the United States District Court 

for the Northern District of Texas, Fort Worth Division

USDC No. 4:06-CV-316

Before DAVIS, CLEMENT, and ELROD, Circuit Judges.

PER CURIAM:*

Defendants, Dar Al-Maal Al-Islami Trust, Ziad Rawashdeh and Khalid

Abdulla-Janahi, appealthe denial oftheir motion for a stay pending arbitration.

Although the Defendants and Plaintiff Vinewood Capital, LLC (or “Vinewood”)

have had business dealings together on various issues, there is no written

agreement containing an arbitration agreement that was signed by both sets of

United States Court of Appeals

Fifth Circuit

F I L E D

October 10, 2008

Charles R. Fulbruge III

Clerk
No. 07-11138

2

parties to this dispute or that relates to the claims brought by Vinewood in this

case. For the reasons set forth below, we affirm. 

I. 

The Defendants’ motion for stay pending arbitration rests on facts relating

to an earlier dispute between some of the parties to this case. On April 1, 2004,

Wendel Pardue and Laird Fairchild filed suit in Texas state court (“2004 Texas

Action”) against their former employer, Overland Realty Capital,

LLC(“Overland”), related entities and several directors, including DefendantAppellant Rawashdeh (the “Overland Defendants”). The petition was later

amended to add claims against another director and Overland’s controlling

shareholder, Islamic Investment Company of the Gulf (“IICGB”), a subsidiary

of Defendant-Appellant Dar Al-Maal Al-IslamiTrust(“DMI Trust”). In the 2004

Texas Action, Pardue and Fairchild alleged that Overland terminated their

employment without cause, triggering payment obligations under their

employment contracts. They also raised claims for slander, tortious interference,

and civil conspiracy. 

In June 2004, another former Overland employee, James Conrad and

Fairchild met in Geneva with Rawashdeh and Janahi, as representatives of

Overland and IICGB, in an attempt to settle the litigation. No settlement was

reached. 

Several months later the parties reached a settlement and a written

Settlement Agreement was executed between the Overland Defendants, and

related parties, including Defendants-Appellants Rawashdeh and IICGB, as

Defendants, and Conrad, Pardue and Fairchild, as Plaintiffs. The agreement

called for a lump sum payment from the Defendants in the 2004 Texas Action

of $1.25 million to be split among several former Overland employees. 

During the settlement negotiations, Pardue, Fairchild and Conrad

proposed that they would create a new real estate investment company, to be
No. 07-11138

3

called Vinewood Capital, LLC. They proposed that Vinewood would be the

exclusive company used for real estate investments for DMI Trust and its

related entities and that it would take over the Asset Management Agreements

for real estate from Overland. They also discussed a proposal that the DMI

Trust entities would provide a $2.5 million loan to Vinewood as start up capital

and an additional $1.5 million payment to Vinewood. However, the final

Settlement Agreement simply states that it is an agreement to resolve the

issues related to Pardue’s, Fairchild’s and Conrad’s employment with Overland

and calls for a payment to them of $1.25 million. The Settlement Agreement

says nothing about Vinewood or any ofthe proposed terms relating to Vinewood.

It does contain a broad arbitration provision. 

Pardue, Fairchild and Conrad, who were parties to the Settlement

Agreement, created Vinewood during the negotiations for the Settlement

Agreement. Seven days after the Settlement Agreement was executed,

Vinewood entered into a Special Purpose Mudaraba Agreement with August

Investment Fund Limited I (“August”). August is a subsidiary of DMI Trust and

both Janahi and Rawashdeh are directors of August. This is the second contract

that contains a broad arbitration clause that the appellants rely on. A

Mudaraba Agreementis an Islamic financing instrument extending creditfor an

annual fee rather than compounding interest, which is prohibited under Islamic

law. Under the agreement August agreed to loan Vinewood $2.5 million. The

Mudaraba Agreement does not mention the Settlement Agreement and does not

mention any relationship between Vinewood and DMI Trust for real estate

investments or otherwise. August later transferred its interest in the Mudaraba

Agreement, with Vinewood’s consent, to Alpha Investment Fund I Limited. 

Vinewood alleges that in November and December of 2004, Vinewood

entered into several oral agreements with DMI Trust, through Rawashdeh and

Janahi,for managing real estate and thatthose agreements have been breached.
No. 07-11138

4

In May 2006, Vinewood filed this suit in Texas state court against DMI Trust,

Rawashdeh and Janahi for claims arising from those verbal agreements. The

case was timely removed to federal court. 

Defendants-Appellants in this case moved to stay these proceedings in

favor of arbitration or in the alternative to dismiss. The district court denied the

motion to stay the litigation in favor of arbitration. The district court also

denied the motion to dismiss, even though it found that Vinewood failed to state

a cause of action for any of the claims it raised in this suit. Instead it allowed

Vinewood an opportunity to amend. Vinewood has since filed a Second Amended

Complaint. Defendants have filed a motion to dismiss the amended complaint

which is pending. Defendants-Appellants appeal the denial of their motion for

stay pending arbitration. The merits of the motion to dismiss are not part of this

appeal. 

II. 

Ordinarily under 9 U.S.C. § 16(a)(1)(A), this court has jurisdiction to hear

an appeal of a court order denying a stay in favor of arbitration under 9 U.S.C.

§ 16(a)(3). Vetco Sales, Inc. v. Vinar, 98 Fed. Appx. 264, 265 (5th Cir. 2004); May

v. Higbee Co., 372 F.3d 757, 763 (5th Cir. 2004). Vinewood argues that

jurisdiction is lacking in this case because the matter is not ripe. It argues that

further factual developmentis required for this appeal because the district court

dismissed the complaint that was the basis for the motion to stay in favor of

arbitration and granted the Plaintiff’s leave to amend. Vinewood has filed a

Second Amended Complaint which Vinewood argues contains operative facts

that must be considered in any decision on the motion to stay. In addition, the

Defendants have filed another motion to stay directed towards the amended

complaint. 

This argument is without merit. The district court did not dismiss

Vinewood’s First Amended Complaint. In fact, it clearly denied the Defendants’
No. 07-11138

5

motion to dismiss as well as the motion for a stay in favor of arbitration. The

district court did instruct Vinewood to file an amended complaint. While the

Second Amended Complaint would make consideration of the motion to dismiss

not ripe in this appeal, it has no affect on the motion for stay. The renewed

motion for stay similarly has no affect on this appeal. Although the Defendants

did renew their motion for a stay along with a new motion to dismiss after the

filing of the Second Amended Complaint, they did so out of an abundance of

caution and the merits of the motion are addressed solely to the dismissal. The

only relevance is whether it contains allegations which might change the

outcome of the motion for stay. Based on our review, the essential allegations

in the Second Amended Complaint remain unchanged. The Plaintiff’s claims

still rest on the breach of alleged oral agreements, not breaches of the

Settlement Agreement or Mudaraba Agreement which contain the arbitration

provisions. Accordingly, nothing in the Second Amended Complaint affects the

analysis below of the merits of the motion for stay pending arbitration. 

Vinewood also argues that this Court has no jurisdiction over this appeal

because the appeal has been rendered moot by the Defendants’ second motion

to dismiss. This argument is similarly without merit. A case becomes moot if

an intervening factual event causes a party to no longer have a present right to

be vindicated or a stake or interest in the outcome. Dailey v. Vought Aircraft

Co., 141 F.3d 224, 227 (5th Cir. 1998). The filing of the Second Amended

Complaint and the second motion to dismiss affect only the issues relevantto the

motion to dismiss – not the motion for stay in favor of arbitration. Nothing has

happened in the district court that divests the parties of their stake in the

outcome of the motion for stay. 

III.

The Defendants-Appellants rely on the arbitration provisions in the

Settlement Agreement and the Mudaraba Agreement as a basis to force
No. 07-11138

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arbitration in this case. Although there is a strong and liberal policy favoring

arbitration and the enforcement of arbitration agreements, “courts may require

a party to submit a dispute to arbitration only if the party has expressly agreed

to do so.” Pers. Sec. & Safety Sys., Inc. v. Motorola Inc., 297 F.3d 388, 392 (5th

Cir. 2002)(citations omitted). The district court correctly found that “[i]t is

undisputed that Defendants [DMI Trust, Rawashdeh and Janahi] are not parties

to the Mudaraba Agreement as that agreement is a written contract between

Vinewood and Alpha Investment. It is also undisputed that Vinewood is not a

party to the Settlement Agreement.” The Settlement Agreement is between

Pardue, Fairchild and Conrad and Overland Realty, Rawashdeh and IICGB.

There is no agreement to which all Plaintiffs and Defendants in this case are

both parties which requires arbitration of disputes. 

The Defendants-Appellants argue thatthe Settlement Agreement and the

Mudaraba Agreement are part of a series of interrelated agreements,

negotiations and discussions. They point out that Vinewood signed the

Mudaraba Agreement and Vinewood’s principals,Pardue,Fairfield and Conrad,

signed the Settlement Agreement and the present dispute involves claims

relating to negotiations that were entered into surrounding both the Settlement

Agreement and the Mudaraba Agreement. However, Pardue, Fairfield and

Conrad did not enter into the Settlement Agreement as representatives of

Vinewood. They signed that agreement settling their personal disputes in their

individual capacities. In addition, both the Settlement Agreement and the

Mudaraba Agreement contain provisions stating that the written agreements

constitute the entire agreement between the parties and that the respective

writings supercede all prior agreements and understandings between the

parties. Therefore, the arbitration provisions in the Settlement Agreement and

the Mudaraba Agreement cannot form a basis to compel arbitration involving

issues outside those agreements. 
No. 07-11138

7

The Defendants-Appellants also argue that Vinewood should be compelled

to arbitrate under the doctrine of equitable estoppel. The purpose of the

equitable estoppel doctrine in this context is to prevent the Plaintiff from

claiming the benefits of a contract while at the same time avoiding its burdens.

Washington Mutual Finance Group, LLC v. Bailey, 364 F.3d 260, 268 (5th Cir.

2004). Equitable estoppel can be applied to require a signatory to arbitrate a

claim against a nonsignatory if the signatory’s claims against a nonsignatory

rely on the existence and terms of a written agreement which contains an

arbitration provision. Equitable estoppel also applies when a signatory to a

contract containing an arbitration clause claims substantially interdependent

and concerted misconduct by a nonsignatory and a signatory to the contract.

Grigson v. Creative Artists Agency, L.L.C., 210 F.3d 524, 527 (5th Cir. 2000). 

Neither situation applies in this case. Both bases for equitable estoppel

require the party bringing the claim be a party to the agreement containing the

arbitration provision. The Settlement Agreement does not provide a basis for

arbitration because Vinewood is not a signatory to that agreement. Although

Vinewood is a signatory to the Mudaraba Agreement, none of the Defendants is

a signatory to that agreement. In addition, neither the Settlement Agreement

nor the Mudaraba Agreement, although they may be peripherally related to the

dispute in this case, provide a basis to support Vinewood’s claims against the

Defendants. 

IV. 

The district court thoroughly analyzed the Defendants’ arguments in favor

of arbitration. For the reasons set forth above and in the district court’s Order

Denying Defendants’ Motion to Stay or Dismiss dated September 26, 2007, we

affirm. 

AFFIRMED.