Edwards v. Schuh

• Citation: 5 S.W.3d 829
• Parties: (Tex.App.-Austin 1999) Mark Edwards, doing business as The Austin Edwards Company, Appellant v. Dwain J. Schuh; Kimberly Schuh; Hardwood Furniture, Inc.; Cabela Properties, a Texas General Partnership; and Carl Lasner, Appellees NO. 03-99-00097-CV
• Decision Date: 14 October 1999
• Court: Court of Appeals of Texas

Page 829

5 S.W.3d 829 (Tex.App.-Austin 1999)

Mark Edwards, doing business as The Austin Edwards Company, Appellant v. Dwain J. Schuh; Kimberly Schuh; Hardwood Furniture, Inc.; Cabela Properties, a Texas General Partnership; and Carl Lasner, Appellees

NO. 03-99-00097-CV

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

October 14, 1999

Released for publication November 12, 1999.

FROM THE DISTRICT COURT OF TRAVIS COUNTY, 345TH JUDICIAL DISTRICT NO. 98-06176, HONORABLE MARGARET A. COOPER, JUDGE PRESIDING

[Copyrighted Material Omitted]

Before Justices Jones, B. A. Smith and Yeakel

Bea Ann Smith, Justice

We must determine whether a subsequent purchaser, when suing a builder based on the breach of express and implied warranties, is bound by an arbitration clause in the construction contract entered between the builder and original owner/developer of the building. Because we conclude that the express warranty exists independently of the construction contract, the subsequent purchaser is not bound by the arbitration clause. We will affirm the trial-court order denying a motion to compel arbitration.

Background

Carl Lasner executed a contract on behalf of his company, Austin Hardwoods, Inc., with appellant Mark Edwards, doing business as The Austin Edwards Company, to construct three warehouses on adjacent lots. The construction contract contained an arbitration clause and also a one-year express warranty regarding defects caused by faulty materials, equipment or workmanship. After completion of the buildings, Edwards wrote a letter to Lasner on April 1, 1997 expressly providing a one-year warranty against defects in materials and labor incorporated into the construction. The warranty provided that "[a]ny defects arising during [the one-year period] will be corrected free of charge to the owner." (Emphasis added.) The warranty also included conditions with which the owner must comply for the warranty to apply. (Emphasis added.)

After completion of the buildings, Lasner sold one property to appellees Dwain J. Schuh, Kimberly Schuh and Hardwood Furniture, Inc., ("Schuh") and another to appellee Cabela Properties. Cabela and Schuh later sued Edwards, Lasner and Lasner's real estate broker, for problems with the buildings. Cabela and Schuh allege Edwards breached the implied warranty that the improvements were constructed in a good and workmanlike manner, and that Edwards breached the express warranty set out in his April 1, 1997 letter. Edwards filed a motion to compel arbitration pursuant to the arbitration clause in the earlier construction contract. The trial court denied the motion to compel arbitration and Edwards brings this appeal.

Discussion

In his first issue, Edwards complains that the trial court erred in denying his motion to compel arbitration with Lasner. The trial court denied Edwards' motion to compel arbitration with Lasner because Lasner has not filed a claim against Edwards. A court has no jurisdiction to render an advisory opinion on a controversy that is not yet ripe or to decide a case on speculative, hypothetical or contingent fact situations. Camarena v. Texas Employment Comm'n, 754 S.W.2d 149, 151 (Tex. 1988); Leibman v. Grand, 981 S.W.2d 426, 438 (Tex. App.- El Paso 1998, no pet.). Until there are justiciable claims asserted between Lasner and Edwards, the issue of compelling arbitration between Edwards and Lasner is not ripe for consideration. The trial court properly denied Edwards' request to compel Lasner to arbitrate. We overrule Edwards' first issue.

Edwards contends in his second issue that the trial court erred by denying his request to compel Schuh and Cabela to arbitrate. Edwards argues that the warranty expressed in the April 1, 1997 letter does not apply to Schuh and Cabela because it is addressed to Lasner and only memorialized the construction contract's warranty. Because Schuh and Cabela base their cause of action on the express warranty which flows from the construction contract according to Edwards, he contends they are bound by the construction contract's arbitration clause. Edwards acknowledges that Schuh and Cabela as subsequent purchasers did not sign the construction contract; however, he asserts that Schuh and Cabela are third party beneficiaries of the construction contract, who are bound by its terms.

Without a specific agreement, a party is under no duty to arbitrate. See Porter & Clements, L.L.P. v. Stone, 935 S.W.2d 217, 220 (Tex. App.-Houston [1st Dist.] 1996, no writ); BDO Seidman v. Miller, 949 S.W.2d 858, 860 (Tex.App.-Austin 1997, writ dism'd w.o.j.). Both Cabela and Schuh testified that they did not agree with Lasner or with Edwards to submit disputes to arbitration. The only arbitration clause involved is in the construction contract. It obligated Edwards and Lasner to arbitrate all claims and disputes relating to the contract. The contract contains numerous provisions relating to construction which have no applicability once the building is completed. For example, the contract addresses work change order provisions, the contractor's...