Fifth Circuit Allows Non-Signatories To Enforce Arbitration Agreement

The Fifth Circuit has affirmed an order compelling arbitration, despite the fact that the parties seeking to compel arbitration were not signatories to the relevant arbitration agreement.

The litigation arose out of a 1998 transaction in which Henry House purchased a home and real property from Jim Walter Homes, Inc. and Mid-State Trust IV. The sale contract contained an arbitration agreement under which the parties agreed to arbitrate any disputes "in accordance with the Comprehensive Arbitration Rules and Procedures administered by J●A●M●S/Endispute."

In 2016, Mr. House sued Green Tree Servicing, L.L.C. and Walter Investment Management Corporation (WIMC), alleging that they conspired with Jim Walter Homes and Mid-State Trust IV to induce Mr. House to enter into the 1998 agreement based on the false premise that he would get a properly constructed home. Green Tree and WIMC moved in federal court to compel arbitration. Mr. House argued that Green Tree and WIMC, as