Reversed and Rendered and Memorandum Majority and Concurring 

Opinions filed March 21, 2023.

In The

Fourteenth Court of Appeals

NO. 14-21-00398-CV

TAYLOR MORRISON OF TEXAS, INC. AND TAYLOR WOODROW

COMMUNITIES—LEAGUE CITY, LTD., Appellants

V.

MATTHEW GLASS AND MADELINE GLASS, Appellees

On Appeal from the 122nd District Court

Galveston County, Texas

Trial Court Cause No. 20-CV-0857

MEMORANDUM OPINION

Appellants Taylor Morrison of Texas, Inc. and Taylor Woodrow 

Communities—League City, Ltd. filed this interlocutory appeal from the trial 

court’s order ordering arbitration before an arbitrator other than the Judicial 

Arbitration and Mediation Services (“JAMS”).
2

Appellees Matthew Glass and Madeline Glass own a home built by 

appellants. The Glasses sued appellants for breach of the implied warranties of 

habitability and good workmanship, negligent construction, and violation of the 

Residential Construction Liability Act (“RCLA”).

1 Appellants filed a plea in 

abatement and moved to compel arbitration under the terms of the Purchase 

Agreement with the original owners, who were the predecessors-in-interest to the 

Glasses. The trial court denied the motion to compel arbitration with JAMS, the 

arbitration service named in the Purchase Agreement, and ordered the parties to

arbitrate their claims before an alternative arbitration service or arbitrator.

In a single issue on appeal, appellants argue that the trial court erred by 

ordering the Glasses’ dispute submitted to arbitration before a service or an

arbitrator other than the one specified in the Purchase Agreement, and under terms 

different from those provided in the agreement. We conclude that the trial court 

abused its discretion by attempting to modify a provision of the agreement.

Accordingly, we reverse and render judgment instructing the parties to arbitrate 

their claims before JAMS, as contemplated in the arbitration agreement.

I. BACKGROUND

In 2010, appellants entered into a Purchase Agreement with Thomas and

Kittee Cart. The Purchase Agreement between appellants and the Carts indicated

that the Carts were buying real property with a “residential single-family home to

be constructed thereon . . . in accordance with this Purchase Agreement.”

1 Appellants correctly argue on appeal that the RCLA itself does not create a cause of 

action. See Tex. Prop. Code Ann. § 27.005 (“This chapter does not create a cause of action or 

derivative liability or extend a limitations period.”); Vision 20/20, Ltd. v. Cameron Builders, Inc., 

525 S.W.3d 854, 856 (Tex. App.—Houston [14th Dist.] 2017, no pet.) (“The RCLA does not 

create a cause of action but provides defenses and limitations on damages. The RCLA also sets 

forth notice provisions.”) (internal citations omitted).
3

Paragraph 11 of the Purchase Agreement was titled “Dispute Resolution –

Arbitration” which states:

ANY AND ALL CLAIMS . . . BY OR BETWEEN THE PARTIES

HERETO, ARISING OUT OF OR RELATED TO THIS

PURCHASE AGREEMENT, THE PROPERTY, . . . OR ANY

TRANSACTION RELATED HERETO, WHETHER SUCH

DISPUTE IS BASED ON CONTRACT, TORT, STATUTE, OR

EQUITY, INCLUDING WITHOUT LIMITATION, ANY DISPUTE

OVER . . . ALLEGATIONS OF LATENT OR PATENT DESIGN

OR CONSTRUCTION DEFECTS . . . SHALL BE ARBITRATED

PURSUANT TO THE FEDERAL ARBITRATION ACT.

The arbitration provision also included a delegation clause, indicating that any

questions regarding the enforceability of the arbitration clause would be

determined by an arbitrator:

. . . ANY DISPUTE CONCERNING THE INTERPRETATION OR

THE ENFORCEABILITY OF THIS ARBITRATION

AGREEMENT, INCLUDING . . . ANY CHALLENGES TO THE

ENFORCEMENT OR THE VALIDITY OF . . . THIS

ARBITRATION AGREEMENT, OR THE SCOPE OF

ARBITRABLE ISSUES . . . AND ANY DEFENSE RELATING TO

THE ENFORCEMENT OF THIS ARBITRATION AGREEMENT

. . . SHALL BE DECIDED BY AN ARBITRATOR . . . AND NOT

BY A COURT OF LAW.

The Purchase Agreement also provided that JAMS would hear any disputes

between the parties:

. . . SUCH DISPUTE SHALL BE RESOLVED BY AND

PURSUANT TO THE ARBITRATION RULES AND

PROCEDURES OF THE JUDICIAL ARBITRATION AND

MEDIATION SERVICES (“JAMS”) . . . IN THE EVENT THAT

JAMS IS FOR ANY REASON UNWILLING OR UNABLE TO

SERVE AS THE ARBITRATION SERVICE, THE PARTIES

SHALL SELECT ANOTHER REPUTABLE ARBITRATON

SERVICE.
4

In 2014, the Glasses bought the home from the Carts. In the Glasses’

original petition, which was filed in 2020, they asserted causes of action for breach 

of implied warranties of habitability and good workmanship, negligent 

construction, and violation of the RCLA against appellants arising from “design 

and construction defects and related fraud that have caused excessive moisture, 

humidity, significant mold growth and mycotoxins causing personal injury and 

sickness as well as damage to the [Glasses’] home and numerous other properties 

in their neighborhood.” The Glasses further alleged that:

[appellants] knew of excessive moisture, humidity, significant mold 

and/or moisture problems that had occurred and were developing in 

identical and/or similar homes and floorplans as the [Glasses’ home]. 

[Appellees] would not have entered into the Sales Contract [with the 

Carts] and would not have closed if they had known of the other

significant problems in similarly designed houses.

According to the Glasses, after purchasing the home from the Carts, the house

“developed excessive moisture, humidity and significant mold growth and 

mycotoxins resulting from multiple design and construction defects.”

Appellants moved to compel arbitration with JAMS pursuant to the Purchase 

Agreement. Appellants argued that the Purchase Agreement was the source of the 

Glasses’ claims. Appellants argued that the Glasses, even as non-signatories to the

Purchase Agreement, should be compelled to arbitrate under the Purchase

Agreement based on direct benefit estoppel.

In January 2021, the Glasses filed their first amended petition, which 

clarified that the Glasses were filing causes of action for “common law breach of 

implied warranties” and “common law negligent construction.” The Glasses 

advanced two arguments as to why the trial court should deny the motion to

compel arbitration. First, they argued that they were non-signatories to the original 

Purchase Agreement, and that appellants did not meet their burden to prove the 
5

Glasses’ claims fell into one of the recognized exceptions to the general rule that a 

non-signatory cannot be compelled to arbitrate their claims. Second, the Glasses 

argued that the arbitration agreement is substantively unconscionable because it: 

(1) imposes an unconscionable “winner takes all” fee splitting that doesn’t exist in

law; (2) seeks to contract away the ability of the trial court to determine gateway 

issues; and (3) allows appellants to dictate an arbitral forum that is inaccessible due 

to prohibitive costs, by imposing unconscionable costs on the losing party.

On April 21, 2021, the trial court conducted a hearing on the motion to 

compel arbitration. At the hearing, appellants argued that although the Glasses 

were not signatories to the original Purchase Agreement, they should still be

compelled to arbitrate because they relied on, and sought benefits from, the

Purchase Agreement. The Glasses reasserted that they did not invoke the Purchase 

Agreement in their pleadings; instead, their claims were based on common law

causes of action, without reference to—or dependence on—the Purchase 

Agreement.

In June 2021, the trial court issued an order, stating in full:

Having reviewed the motions, briefings[,] and argument of 

counsel in a hearing held April 21, 2021, the Court DENIES the 

[Appellants’] Motion to Compel Arbitration. The Court finds that the

arbitration clause cited by [Appellants] contains unconscionable

provisions in that it purports to invalidate or waive substantive rights 

and remedies authorized by statute, is prohibitively expensive and 

prevents the [Glasses] the opportunity to be made whole.

The Court further finds that the arbitration provision results in 

the overall costs of arbitration to be excessive compared to litigation 

in this Court.

The parties are ORDERED to agree to an alternative arbitration 

service or arbitrator. If the parties are unable to agree, the COURT 

shall select an arbitrator from a list of three names proposed by each 

party.
6

Appellants filed this interlocutory appeal. See Tex. Civ. Prac. & Rem Code Ann. 

§ 51.016 (permitting appeal under Federal Arbitration Act under same 

circumstances as appeal from federal district court under 9 U.S.C.A. 

§ 16(a)(1)(B)).

II. ANALYSIS

As a threshold matter, we first address whether we have interlocutory 

appellate jurisdiction to review appellants’ appeal.

A. INTERLOCUTORY APPEALS

1. Standard of Review & Applicable Law

The Federal Arbitration Act (“FAA”) applies to the arbitration agreement

here because the parties expressly agreed to arbitrate under the FAA. See In re

Rubiola, 334 S.W.3d 220, 223 (Tex. 2011) (orig. proceeding).

Appellate courts may consider appeals from interlocutory orders when a

statute explicitly authorizes an appeal. Tex. A & M Univ. Sys. v. Koseoglu, 233

S.W.3d 835, 840 (Tex. 2007). Civil Practice and Remedies Code § 51.016, which

authorizes appeals in matters subject to the FAA, provides that a party may appeal

an interlocutory order “under the same circumstances that an appeal from a federal

district court’s order or decision would be permitted by 9 U.S.C. Section 16.” Tex.

Civ. Prac. & Rem. Code § 51.016. Under § 16 of the FAA, a party may

immediately appeal a petition to order arbitration to proceed. See 9 U.S.C.

§ 16(a)(1)(B); Tex. Civ. Prac. & Rem. Code Ann. §§ 51.016, 171.098(a)(1); see 

also Taylor Morrison of Tex., Inc. v. Skufca, 650 S.W.3d 660, 672–73 (Tex. 

App.—Houston [1st Dist.] 2021, no pet.); In re Helix Energy Sols. Grp., Inc., 303 

S.W.3d 386, 395 n.7 (Tex. App.—Houston [14th Dist.] 2010, orig. proceeding).

When determining whether an order denies a motion to compel arbitration,

“[t]he substance and function of the order viewed in the context of the record
7

controls our interlocutory jurisdiction.” Natgasoline LLC v. Refractory Constr.

Servs., Co., 566 S.W.3d 871, 880 (Tex. App.—Houston [14th Dist.] 2018, pet.

denied) (quoting McReynolds v. Elston, 222 S.W.3d 731, 738 (Tex. App.—

Houston [14th Dist.] 2007, no pet.)); see Del Valle Indep. Sch. Dist. v. Lopez, 845

S.W.2d 808, 809 (Tex. 1992) (noting that “it is the character and function of an

order that determine its classification” for determining jurisdiction over an

interlocutory order).

2. Application

The parties’ dispute focuses on the nature of the trial court’s June 2021 

order. According to appellants, we have interlocutory appellate jurisdiction 

because the trial court’s order is properly classified as an order denying arbitration. 

Appellants argue that our court has repeatedly concluded that an order compelling 

arbitration under terms other than those in the specific agreement is grounds for an 

interlocutory appeal. In support of their argument, appellants cite to Natgasoline, 

566 S.W.3d at 880; Tex. La Fiesta Auto Sales, LLC v. Belk, 349 S.W.3d 872, 878 

(Tex. App.—Houston [14th Dist.] 2011, no pet.); and McReynolds, 222 S.W.3d at 

738. However, according to the Glasses, we do not have interlocutory jurisdiction 

because the trial court did not “deny” appellant’s motion to compel arbitration, but 

ordered the parties to arbitration albeit with an alternative arbitrator. In support of 

their position the Glasses aver that the present case is analogous to CMH Homes v. 

Perez, 340 S.W.3d 444, 449 (Tex. 2011).

In CMH, both parties agreed that their contract was governed by the FAA 

and that they had agreed to submit to arbitration; however, the parties could not 

agree on an arbitrator. Id. at 447. After the parties declared an impasse, the trial 

court issued an order titled “Order on Plaintiff’s Motion to Compel Arbitration,”

which appointed an arbitrator to preside over the dispute. Id. The Supreme Court of 
8

Texas concluded that interlocutory appeal was unavailable because the substance 

of the trial court’s order was simply to appoint an arbitrator. Id. at 449. However, 

because the appellant had requested in the alternative that its appeal be treated as a 

writ of mandamus, the Supreme Court of Texas instructed the court of appeals to

consider the issue as a writ of mandamus. See id.

When determining whether an order denies a motion to compel arbitration, 

“[t]he substance and function of the order viewed in the context of the record 

controls our interlocutory jurisdiction.” Natgasoline, 566 S.W.3d at 880 (quoting 

McReynolds, 222 S.W.3d at 738). Texas cases have consistently held that both the 

FAA and Texas Arbitration Act (“TAA”) permit interlocutory appellate review of 

an order that denies a party’s right to arbitrate in a specific manner under a specific 

contract, even if the parties are ultimately compelled to arbitrate. See Taylor

Morrison of Tex., Inc. v. Skufca, 650 S.W.3d at 675; Natgasoline, 566 S.W.3d at

876; Tex. La Fiesta, 349 S.W.3d at 878; McReynolds, 222 S.W.3d at 738. The trial

court’s order effectively denied appellants their potential contractual right to have 

JAMS serve as the arbitrator. Accordingly, we conclude that we have jurisdiction 

over this interlocutory appeal. See 9 U.S.C.A. § 16(a)(1)(B).2

2 Even if we were lacking subject-matter jurisdiction over the current appeal, we note that 

mandamus review would remain available to appellants. See CMH Homes v. Perez, 340 S.W.3d 

444, 454 (Tex. 2011) (“[M]andamus is proper to correct a clear abuse of discretion when there is 

no adequate remedy by appeal, as when a party is erroneously denied its contracted-for

arbitration rights under the FAA.”); Taylor Morrison of Tex., Inc. v. Skufca, 650 S.W.3d 660, 

676 (Tex. App.—Houston [1st Dist.] 2021, no pet.) (same); Tex. La Fiesta Auto Sales, LLC v. 

Belk, 349 S.W.3d 872, 879 (Tex. App.—Houston [14th Dist.] 2011, no pet.) (same); Aspen 

Tech., Inc. v. Shasha, 253 S.W.3d 857, 861 (Tex. App.—Houston [14th Dist.] 2008, no pet.)

(holding that, even though interlocutory appeal may appear to provide adequate relief, 

mandamus relief remained available when trial court erroneously denied appellant’s request for 

arbitration under the FAA as provided in a 2006 agreement between it and appellee, and instead 

ordered arbitration under a 2001 agreement between the parties).

Our resolution of appellants’ issue would be the same whether determined in an appeal or 

in an original proceeding seeking a writ of mandamus.
9

B. MOTION TO COMPEL ARBITRATION

Having determined that we have subject-matter jurisdiction, we next address 

appellants’ sole issue on appeal alleging that the trial court erred by ordering 

arbitration before an arbitrator other than JAMS, as was specified in the agreement.

1. Standard of Review & Applicable Law

We review the trial court’s denial of a motion to compel arbitration under an 

abuse of discretion standard. In re Labatt Food Serv., L.P., 279 S.W.3d 640, 643 

(Tex. 2009) (orig. proceeding); Branch Law Firm L.L.P. v. Osborn, 532 S.W.3d 1, 

12 (Tex. App.—Houston [14th Dist.] 2016, pet. denied). We defer to the trial 

court’s factual determinations if they are supported by the record; we review the 

trial court’s legal determinations de novo. In re Labatt Food Serv., L.P., 279 

S.W.3d at 643; Branch Law Firm L.L.P., 532 S.W.3d at 12.

Because arbitration is an alternative forum, the FAA establishes boundaries 

limiting judicial involvement in the process. In re Nat’l Health Ins. Co., 109 

S.W.3d 552, 556 (Tex. App.—Tyler 2002, orig. proceeding). When a trial court 

modifies the agreement of the parties concerning the manner in which the 

arbitrator is to be appointed, it transcends those boundaries. Id.; see also 9 

U.S.C.A. § 5.

2. Analysis

Appellants argue that the trial court erred by ordering the case to be 

submitted to arbitration in a manner different than that specified in the Purchase 

Agreement. Moreover, appellants argue that the Purchase Agreement contained a 

delegation clause, which assigned the resolution of all gateway issues, such as 

enforceability and the interpretation of terms, to the arbitrator instead of the trial 

court. Additionally, appellants argue that the Glasses failed to produce evidence 
10

that arbitration with JAMS would be prohibitively expensive.

The Glasses argue that the trial court erred in compelling them to arbitrate 

their claims because appellants failed to establish the existence of an arbitration 

agreement between themselves and the Glasses. More specifically, the Glasses

argue that they were not parties to the Purchase Agreement and, as non-signatories,

they cannot be bound by the arbitration agreement because they do not rely on or 

seek benefits from the Purchase Agreement. But, appellees have not filed a notice 

of appeal. See Tex. R. App. P. 25.1(c) (“A party who seeks to alter the trial court’s 

judgment or other appealable order must file a notice of appeal.”). The Supreme 

Court of Texas held that an appellee in the court of appeals who has not filed a 

notice of appeal may not seek to alter the trial court’s judgment in a way that 

would award the appellee more relief than the trial court granted the appellee in its 

judgment. See Lubbock Cnty., Tex. v. Trammel’s Lubbock Bail Bonds, 80 S.W.3d 

580, 584 (Tex. 2002); see also Frontier Logistics, L.P. v. Nat’l Prop. Holdings, 

L.P., 417 S.W.3d 656, 666 (Tex. App.—Houston [14th Dist.] 2013, pet. denied). 

Because appellees have not filed a notice of appeal, they may not seek to alter the

trial court’s order to award them more relief than the trial court granted in its order. 

Frontier Logistics, 417 S.W.3d at 666. By asserting an issue challenging whether 

they are bound by the agreement at issue, appellees improperly seek to alter the 

trial court’s order to afford them more relief that the trial court granted.

Therefore, we focus our inquiry on appellants’ claim that the trial court erred 

by failing to compel the parties to submit to arbitration with JAMS. As we noted 

above, the trial court’s order effectively denied appellants their contractual right to

have JAMS serve as the arbitrator. The trial court did not completely deny 

appellant’s motion to compel arbitration; instead, the trial court found a portion of 

the arbitration agreement unconscionable and attempted to modify the agreement 
11

to remedy an “unconscionable provision.” However, the trial court abused its 

discretion in doing so. See In re Serv. Corp. Int’l, 355 S.W.3d 662, 663 (Tex. 

2011) (orig. proceeding) (per curiam) (“[T]rial court abused its discretion by 

appointing an arbitrator instead of following the agreed-upon method of selection 

outlined in the contract.”); see also In re Highland Homes-Houston, LLC, No. 01-

21-00585-CV, 2022 WL 400844, at *4 (Tex. App.—Houston [1st Dist.] Feb. 10, 

2022, orig. proceeding) (mem. op.) (“[W]e conclude that the Arbitration Clause . . . 

identified two potential ways for an arbitrator to be selected: by an agreement 

between [the parties] or by the AAA . . . . As such, we hold that the trial court 

abused its discretion in appointing an [arbitrator] of its choosing . . . .”).

The primary purpose of the FAA is to require enforcement of arbitration 

agreements “according to their terms.” In re Serv. Corp. Int’l, 355 S.W.3d 655, 

659 (Tex. 2011) (orig. proceeding) (per curiam) (quoting Volt Info. Scis. v. Bd. of

Trs., 489 U.S. 468, 479 (1989)). Because the FAA requires the trial court to follow 

the arbitrator selection method detailed in the agreement, we first determine the 

method of appointment required by the agreement.

The agreement in this case provides a dispute “shall be resolved by and 

pursuant to the arbitration rules and procedures of the Judicial Arbitration and 

Mediation Services (“JAMS”).” The only exception to the use of JAMS as the 

arbitration service is if “JAMS is for any reason unwilling or unable to serve as the 

arbitration service[.]” However, there is no evidence that JAMS was “unwilling or 

unable” to serve as the arbitrator. Because the agreement plainly requires 

arbitration to be conducted by JAMS unless JAMS is unwilling or unable to serve, 

the trial court abused its discretion by failing to order the parties to arbitrate their 

claims before JAMS because that was the agreed-upon primary method of 

selection as outlined in the arbitration agreement. See In re Nat’l Health Ins. Co., 
12

109 S.W.3d at 556 (trial court has no discretion to modify or contravene specified 

rules set out in a contract); see also In re Serv. Corp. Intern., 355 S.W.3d at 663.

We sustain appellant’s sole issue on appeal.

V. CONCLUSION

We reverse the trial court’s order with instructions to order the parties to 

arbitrate their claims before JAMS.

/s/ Margaret “Meg” Poissant

Justice

Panel consists of Justices Zimmerer, Spain, and Poissant (Spain, J., concurring).