Opinion Information Sheet

			

Townsend v. The Quadrant Corp.

                                         No. 84422-4

       STEPHENS, J. (concurring/dissenting) -- I dissent from that part of the lead 
opinion ordering arbitration of the children's claims.1           It is well-established that 

nonsignatories to a contract are not bound by an arbitration clause.  Satomi Owners 

Ass'n v. Satomi, LLC, 167 Wn.2d 781, 810, 225 P.3d 213 (2009).  Under principles 

of equitable estoppel, however, a party who knowingly exploits a contract for 

benefit cannot simultaneously avoid the burden of arbitrating.  See id. at 811 n.22; 

see also Woodall v. Avalon Care Ctr. -- Fed. Way, LLC, 155 Wn. App. 919, 923-24, 

231 P.3d 1252 (2010).           The  lead opinion      holds equitable estoppel requires 

arbitration of the Lehtinen and Sigafoos children's injury claims because the 

complaint includes the children as "plaintiffs" and among the plaintiffs' claims are

allegations of breach of warranty and a request for rescission.  Lead opinion at 10-

       1 On the separability issue, I agree with the lead opinion that this case presents a 
different situation from that in McKee v. AT&T Corp., 164 Wn.2d 372, 191 P.3d 845 
(2008), because the contracting plaintiffs challenged the purchase and sale agreement as a 
whole, not simply the arbitration provision.  See Prima Paint Corp. v. Flood & Conklin 
Mfg. Co., 388 U.S. 395, 87 S. Ct. 1801, 18 L. Ed. 2d 1270 (1967). 

Townsend v. The Quadrant Corp., 84422-4 (Stephens, J. Concurrence/Dissent)

11.  This is hardly a sufficient basis for applying equitable estoppel.

       Importantly, the lead opinion rejects the Court of Appeals' holding that the 

children must arbitrate because "the source of the duty of care Quadrant owed the 

Homeowners and their children arises from the sale of the home."  Townsend v. 

Quadrant Corp., 153 Wn. App. 870, 888, 224 P.3d 818 (2009).  Without doubt, 

Quadrant owed the children an independent duty that does not arise from the 

purchase and sale agreement.  The children assert personal injury claims, the precise 

scope of which the trial court will decide, but which are not grounded in the 

contract.  This court has recently emphasized the independent duty of building 

professions to individuals who foreseeably sustain personal injuries as a result of 

negligent acts or omissions.   See Affiliated FM Ins. v. LTK Consulting Servs., Inc., 

170 Wn.2d 442, 243 P.3d 521 (2010) (lead and concurring opinions recognizing 

common law duty); Davis v. Baugh Indus. Contractors, Inc., 159 Wn.2d 413, 150 

P.3d 545 (2007) (rejecting contract-based defense rooted in privity and recognizing 

deterrent effect of tort liability).  Accordingly, it is a misnomer to label the duty at 

issue here a contractual duty.

       Having rejected the Court of Appeals faulty reasoning, the lead opinion

should have reversed the order compelling arbitration of the children's claims.  

Instead, the lead opinion focuses narrowly on the complaint's assertion of a 

rescission and a breach of warranty claim to reach the remarkable conclusion that 

the children "knowingly exploit[ed] the terms of the contract."  Lead opinion at 11.  

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Townsend v. The Quadrant Corp., 84422-4 (Stephens, J. Concurrence/Dissent)

This conclusion ignores the crux of the children's claims, which sound in tort and 

allege personal injuries.  True, the parents are obliged to arbitrate their tort claims 

along with their contract claims, but this is because the arbitration agreement in the 

contract they signed says so.  It does not follow that nonsignatories are bound to 

arbitrate tort claims that do not arise out of the contract.  In the end, the lead 

opinion's reasoning sweeps aside the full facts and reduces the children's action to 

the sum total of only two claims.  This is a wholly insufficient basis for concluding 

the children have exploited the benefits of the contract and are therefore estopped

from having their tort claims heard in court.  

       There being no sufficient factual basis for applying equitable estoppel, I 

would rely on the general rule that nonsignatories to a contract are not bound by the 

contract's arbitration clause.  I would reverse the Court of Appeals on this issue.

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Townsend v. The Quadrant Corp., 84422-4 (Stephens, J. Concurrence/Dissent)

AUTHOR:
        Justice Debra L. Stephens

WE CONCUR:

        Justice Charles W. Johnson

        Justice Tom Chambers                             Justice Charles K. Wiggins

        Justice Mary E. Fairhurst

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