Equitable Estoppel Cannot Broaden “Between the Parties” Arbitration Clauses; Principal’s Waiver Extinguishes an Agent’s Ability to Compel Arbitration — Fucci v. First American Title Insurance Co. (10th Cir. 2025)

Equitable Estoppel Cannot Broaden “Between the Parties” Arbitration Clauses; Principal’s Waiver Extinguishes an Agent’s Ability to Compel Arbitration — Fucci v. First American Title Insurance Co. (10th Cir. 2025)

Introduction

In this published decision, the Tenth Circuit resolved whether nonsignatory escrow agents can force signatories to arbitrate under purchase-and-sale agreements (PSAs) when the arbitration clause is limited to “any dispute between the parties.” The case arises from failed real-estate development projects in Florida and Ohio marketed by Rockwell Debt Free Properties, Inc. Investors (the Plaintiffs) bought tenant-in-common interests through PSAs containing American Arbitration Association clauses. First American Title Insurance Company and its employee, Kirsten Parkin (the FA Defendants), served as escrow/title agents in closings but did not sign the PSAs. When the projects collapsed, Plaintiffs sued the FA Defendants in the District of Utah alleging breach of fiduciary duty and related torts.

The FA Defendants moved to compel arbitration, asserting four theories to enforce the PSAs’ arbitration provisions notwithstanding their non-signatory status: (1) they were “parties” to the PSAs, (2) they were third-party beneficiaries, (3) they acted as Rockwell’s agents, and (4) equitable estoppel bound Plaintiffs to arbitrate. During Rockwell’s bankruptcy, the trustee expressly waived arbitration in a signed letter agreement with Plaintiffs’ counsel. The district court denied the FA Defendants’ renewed motion to compel, and the FA Defendants appealed under 9 U.S.C. § 16(a)(1)(C).

Applying Florida law to the Florida PSAs and Ohio law to the Ohio PSAs (as the contracts require), the Tenth Circuit affirmed. The court’s ruling clarifies several points of state contract law as applied through the Federal Arbitration Act (FAA) to nonsignatories: (a) being named as escrow agent in a PSA does not make the escrow company a “party” to that PSA; (b) merely benefitting from a contract (e.g., by receiving escrow work) does not make the escrow agent an “intended third-party beneficiary” entitled to enforce its arbitration clause; (c) an agent’s ability to invoke arbitration grounded in its principal’s contract is extinguished if the principal waives the clause; and (d) equitable estoppel cannot expand an arbitration clause limited to “disputes between the parties” to cover disputes between signatories and nonsignatories.

Summary of the Opinion

  • Arbitration clause scope: The PSAs provided that “Any dispute between the parties will be submitted to binding arbitration.” Only Rockwell and each buyer signed the PSAs.
  • Not “parties”: The FA Defendants were not signatories, were not identified as “parties,” and undertook no promises under the PSAs; they were referenced only as the escrow agent to receive and disburse funds. They therefore cannot compel arbitration on a “party” theory.
  • No third-party beneficiary status: Under both Florida and Ohio law, to be an intended third-party beneficiary, the contract must be made primarily and directly for the third party’s benefit. Naming the escrow agent to perform ministerial functions does not meet that standard; any benefit to First American was incidental.
  • Agency theory defeated by waiver: Assuming arguendo the FA Defendants acted as Rockwell’s agents, Rockwell’s bankruptcy trustee expressly waived the arbitration clause “on behalf of the Debtor entities, the estate, and all agents, assigns, employees, and representatives thereof.” A principal’s waiver and revocation terminate the agent’s authority to compel arbitration under that contract.
  • Equitable estoppel cannot enlarge scope: Even where equitable estoppel allows a nonsignatory to rely on an arbitration clause, Florida and Ohio law do not permit using estoppel to expand a clause limited to disputes “between the parties.” Because the FA Defendants are not “parties,” the clause does not reach disputes between them and Plaintiffs.
  • Other objections rejected: The trustee’s waiver was in writing and signed; Plaintiffs’ counsel could sign for Plaintiffs; Section 363 of the Bankruptcy Code did not apply; and judicial estoppel was inapplicable because any prior inconsistent statements by the FA Defendants had not been accepted by the court below.
  • Holding: The Tenth Circuit affirmed the denial of the motion to compel arbitration.

Detailed Analysis

Precedents Cited and How They Shaped the Ruling

  • FAA and state contract law
    • Arthur Andersen LLP v. Carlisle, 556 U.S. 624 (2009): Whether nonsignatories can enforce arbitration agreements is governed by state contract doctrines. Guided the court to apply Florida law to Florida PSAs and Ohio law to Ohio PSAs.
    • Hill v. Ricoh Americas Corp., 603 F.3d 766 (10th Cir. 2010): FAA favors arbitration, but only where parties have agreed to arbitrate. Reinforces primacy of consent.
    • Brock v. Flowers Foods, Inc., 121 F.4th 753 (10th Cir. 2024); Brayman v. KeyPoint Gov’t Solutions, Inc., 83 F.4th 823 (10th Cir. 2023): Standards of review and questions of who is bound by an arbitration clause.
  • “Party” status
    • Jackson v. Shakespeare Found., Inc., 108 So. 3d 587 (Fla. 2013) and Taylor v. Ernst & Young, L.L.P., 958 N.E.2d 1203 (Ohio 2011): Courts honor the parties’ intent as expressed in contract language; do not override clear text based on arbitration policy.
    • Restatement (Second) of Contracts §§ 2, 9: Clarifies that “parties” are the promisor and promisee; a beneficiary is different from a party.
  • Third-party beneficiary doctrine
    • Arch Ins. Co. v. Kubicki Draper, LLP, 318 So. 3d 1249 (Fla. 2021): Florida requires a clear intent to primarily and directly benefit the third party.
    • Morgan Stanley DW Inc. v. Halliday, 873 So. 2d 400 (Fla. 3d DCA 2004), and Peters v. The Keyes Co., 402 F. App’x 448 (11th Cir. 2010) (applying Florida law): Nonsignatories (trust beneficiary; escrow agent) could not compel arbitration absent clear beneficiary status.
    • Caruso v. National City Mortg. Co., 931 N.E.2d 1167 (Ohio Ct. App. 2010); Huff v. FirstEnergy Corp., 957 N.E.2d 3 (Ohio 2011): Ohio requires evidence that the contract was intended to directly benefit the third party; incidental benefits are insufficient.
    • Global Pac., LLC v. Kirkpatrick, 88 N.E.3d 431 (Ohio Ct. App. 2017); West v. Household Life Ins. Co., 867 N.E.2d 868 (Ohio Ct. App. 2007): Third-party beneficiary status rejected where agreement was not primarily for the third party’s benefit.
    • First Am. Title Ins. Co. v. Barron, 540 P.3d 623 (Utah Ct. App. 2023): The court notes but questions Barron’s application of Colorado law in a similar escrow context; ultimately irrelevant because Florida/Ohio law controls here.
  • Agency and waiver
    • Restatement (Third) of Agency §§ 2.01, 3.07(4), 3.10(1): An agent’s authority flows from the principal and terminates upon revocation or when the principal’s power ceases; an agent cannot act contrary to the principal’s manifested wishes.
    • Laurel Baye Healthcare of Lake Lanier, Inc. v. NLRB, 564 F.3d 469 (D.C. Cir. 2009): When the delegating entity’s powers are suspended, the agent’s authority terminates as well.
    • Morrell v. Wayne Frier Manufactured Home Ctr., 834 So. 2d 395 (Fla. 1st DCA 2003); Griffith v. Linton, 721 N.E.2d 146 (Ohio Ct. App. 1998): Arbitration rights can be expressly waived.
  • Equitable estoppel and the scope of arbitration
    • Florida: Fla. Roads Trucking, LLC v. Zion Jacksonville, LLC, 384 So. 3d 817 (Fla. 1st DCA 2024); Beck Auto Sales, Inc. v. Asbury Jax Ford, LLC, 249 So. 3d 765 (Fla. 1st DCA 2018); Kroma Makeup EU, LLC v. Boldface Licensing + Branding, Inc., 845 F.3d 1351 (11th Cir. 2017) — equitable estoppel cannot expand an arbitration clause limited to disputes between named signatories.
    • Ohio: I Sports v. IMG Worldwide, 813 N.E.2d 4 (Ohio Ct. App. 2004); West, 867 N.E.2d at 872; Ohio Dep’t of Admin. Servs. v. Design Grp., Inc., 2007 WL 4171131 (Ohio Ct. App. 2007) — similar principle; arbitration remains a matter of contract and scope control.
    • Contrasting examples where scope is broad: Allied Pros. Ins. Co. v. Fitzpatrick, 169 So. 3d 138 (Fla. 4th DCA 2015) (clause expressly covering disputes by non-parties claiming rights under the policy); Neal v. Navient Sols., LLC, 978 F.3d 572 (8th Cir. 2020) (applying Ohio law; clause expressly encompassed third-party disputes).
  • Judicial estoppel
    • Stender v. Archstone-Smith Operating Trust, 910 F.3d 1107 (10th Cir. 2018); New Hampshire v. Maine, 532 U.S. 742 (2001): Judicial estoppel requires that the earlier position was accepted by the court; not so here.

The Court’s Legal Reasoning

The Tenth Circuit addressed each of the FA Defendants’ theories in turn, applying Florida or Ohio law under Arthur Andersen.

1) The FA Defendants were not “parties” to the PSAs

The PSAs said they were “by and between” Rockwell and the buyer; only those two signed. First American was named solely as the escrow agent to receive and disburse funds and to process 1031 exchange logistics; it made no promises and undertook no obligations in the instrument. Under basic contract principles (Restatement (Second) of Contracts §§ 2, 9), the “parties” to a contract are the promisor and promisee. Because First American and Parkin neither promised anything nor received promises directed to them, they are not parties in the meaning of the arbitration clause. The court rejected reliance on decisions that merely recognize that escrow agents can owe fiduciary duties or have implied escrow agreements; those cases do not transform an escrow agent into a “party” to the sale contract itself. Nor did the FA Defendants show any assignment or mutual assent that could bind them to the PSAs’ arbitration clause.

2) The FA Defendants were not intended third-party beneficiaries

Florida and Ohio require a clear intent that the contract be made primarily and directly for the third party’s benefit. The PSAs were about selling interests in event centers from Rockwell to the buyers. Naming First American as escrow agent provided, at most, an incidental benefit (escrow work), but the text did not express an intent to give First American enforceable rights under the PSAs, much less to bestow the arbitration clause “for its benefit.” Accordingly, Florida cases like Morgan Stanley v. Halliday and Peters v. The Keyes Co., and Ohio cases like Caruso, Huff, Global Pacific, and West, foreclose third-party beneficiary status here.

The court noted, without deciding Colorado law, that it questioned the Utah Court of Appeals’ reasoning in First American Title Ins. Co. v. Barron (which had found First American to be a third-party beneficiary under Colorado law in a related context). In any event, Florida and Ohio law controlled and did not support the FA Defendants’ position.

3) Agency could not save arbitration because the principal waived the clause

Even if the FA Defendants had acted as Rockwell’s agents, they could not compel arbitration after Rockwell’s bankruptcy trustee executed a written “Waiver of Arbitration,” expressly waiving the arbitration provision in each PSA “on behalf of the Debtor entities, the estate, and all agents, assigns, employees, and representatives thereof.” Several principles underpin the court’s analysis:

  • Principal’s waiver terminates the agent’s authority: Under Restatement (Third) of Agency §§ 3.07(4) and 3.10(1), an agent’s actual authority ends upon the principal’s revocation or loss of power. Once the trustee waived arbitration, Rockwell had no remaining right to demand arbitration; any agent-based right vanished with it.
  • Actual authority requires acting in accordance with the principal’s wishes: Restatement (Third) § 2.01 and Restatement (Second) of Agency § 33 stress that an agent cannot act contrary to the principal’s manifested intent. After notice of the waiver (the letter was attached to Plaintiffs’ October 20, 2021 filing), the FA Defendants could not continue to assert a right their principal had relinquished.
  • Timing: The FA Defendants’ initial motion to compel did not create vested rights or irreversible consequences. The district court had not ruled before the waiver. There was no authority to keep pressing arbitration post-waiver.
  • Formalities satisfied: The PSAs required modifications to be in writing and signed by the parties. The trustee signed for Rockwell; Plaintiffs’ counsel signed for Plaintiffs; the letter expressly stated it deleted the arbitration clause from each PSA. The court rejected the argument that Plaintiffs’ counsel lacked authority and found no contrary authority.
  • Bankruptcy Code § 363: The FA Defendants offered no authority that a contractual right to demand arbitration is “property of the estate” requiring a notice-and-hearing process under 11 U.S.C. § 363. The court declined to impose such a requirement.
  • No thwarted third-party beneficiary rights: Because the FA Defendants were not third-party beneficiaries, the waiver did not impair any vested third-party rights.

4) Equitable estoppel cannot expand a “between the parties” clause to cover nonsignatories

The FA Defendants invoked two familiar estoppel strands: (1) “direct-benefit” or “intertwined claims” estoppel (where the signatory’s claims rely on or presuppose the contract), and (2) “concerted misconduct” (where the signatory alleges collusive misconduct by the nonsignatory and a signatory). The court did not need to decide whether either strand otherwise applied, because Florida and Ohio law share a threshold rule: equitable estoppel cannot expand the scope of an arbitration clause.

The PSAs’ clause applies only to disputes “between the parties,” i.e., Rockwell and each buyer. Disputes with nonsignatories like First American and Parkin lie outside that scope. Florida authorities (Kroma; Calvert; Fla. Roads Trucking; Beck Auto Sales) and Ohio authorities (Miller; Ohio Dep’t of Administrative Services) reflect the same principle: arbitration is a matter of contract; courts will not rewrite a clause limited to specific parties to reach non-parties through estoppel.

The court contrasted cases where clauses expressly encompassed disputes involving nonsignatories or third parties (e.g., Allied Professionals in Florida; Neal v. Navient applying Ohio law). Had the PSAs contained similar language, the outcome could differ. Here they did not.

Practical Impact and Forward-Looking Implications

  • Nonsignatories face a high bar with party-limited clauses: Where arbitration provisions are textually confined to “disputes between the parties,” nonsignatories (including escrow/title companies, consultants, brokers, and affiliates) will generally be unable to compel arbitration under Florida and Ohio law, even if claims are intertwined with the contract.
  • Agency theories hinge on the principal’s current rights: An agent’s ability to enforce a principal’s arbitration clause depends on the principal’s own right to arbitrate. A trustee’s or principal’s post-suit waiver extinguishes the agent’s authority to compel arbitration. This has particular purchase in bankruptcy contexts where trustees may waive contract rights to streamline litigation.
  • Third-party beneficiary status requires clear drafting: To position service providers to enforce arbitration, contracts must expressly identify them as intended beneficiaries of both the agreement and the arbitration clause (and, better still, confer direct rights and obligations on them). Merely designating an escrow agent by name, or routing funds through it, is not enough.
  • Equitable estoppel is not a scope-enlarger: In both Florida and Ohio, equitable estoppel cannot be used to broaden a clause that, by its terms, only reaches signatory-versus-signatory disputes. Contract drafters should avoid “between the parties” limitations if they wish to capture related-entity disputes.
  • Drafting lessons:
    • Use broad arbitration language (e.g., “any claim or dispute arising out of or relating to this Agreement or the relationships resulting therefrom, between or among the parties, their affiliates, agents, employees, officers, directors, successors, assigns, and any third party claiming by, through, or in relation to any of the foregoing”).
    • Include nonsignatory enforcement provisions (e.g., “This arbitration clause may be enforced by and against the parties and any affiliated or related persons or entities, including agents, escrow holders, and service providers involved in the transaction.”).
    • Consider a separate, stand-alone escrow agreement with its own arbitration clause—signed by the escrow/title agent and the transacting parties—if arbitration is desired for escrow disputes.
    • Avoid language cabining arbitration to “between the parties” without definitions that include affiliates, agents, and intended beneficiaries.
  • Litigation strategy:
    • For plaintiffs: When suing nonsignatories in Florida/Ohio, point to party-limited clauses to resist compelled arbitration.
    • For nonsignatories: If relying on equitable estoppel, first confirm the clause’s scope permits nonsignatory disputes; if not, explore alternative bases (e.g., a signed, separate agreement; assignment; or a broad clause in a related instrument).
    • In bankruptcy: A trustee’s waiver can be dispositive against agent-driven arbitration attempts. Consider timing; early waivers can avoid motion practice complications.
  • Doctrinal stability: The decision harmonizes state-law contract doctrines with federal arbitration policy by ensuring consent-based enforcement. It is binding on federal courts within the Tenth Circuit applying Florida and Ohio law and will be persuasive elsewhere, given the reliance on widely accepted state-law rules and Restatements.

Complex Concepts Simplified

  • Nonsignatory enforcement of arbitration agreements: The FAA does not itself make nonsignatories arbitrate or allow them to compel arbitration. Whether a nonsignatory can enforce an arbitration clause depends on state-law doctrines such as third-party beneficiary, agency, assumption, incorporation by reference, veil piercing/alter ego, or equitable estoppel.
  • Third-party beneficiary: A person or entity that is not a signatory can sometimes enforce a contract if the contract was made primarily and directly for their benefit. Incidental benefits (e.g., a service provider getting work because it’s named in the contract) do not suffice.
  • Equitable estoppel (arbitration context):
    • Direct-benefit/intertwined claims estoppel: If a signatory sues a nonsignatory but the claim presupposes the contract (e.g., alleges breach of duties created by the contract), some courts may estop the signatory from avoiding the contract’s arbitration clause.
    • Concerted-misconduct estoppel: If a signatory alleges the nonsignatory conspired with a signatory in wrongdoing tied to the contract, estoppel may prevent the signatory from splitting litigation between court and arbitration.
    • Key limit: Estoppel cannot expand the arbitration clause’s scope. If the clause only covers “disputes between the parties,” courts will not use estoppel to extend arbitration to nonsignatories.
  • Agency and waiver: An agent’s authority to act comes from the principal. If the principal revokes or waives a right (e.g., to arbitrate), the agent cannot continue asserting that right on the principal’s behalf. Notice of revocation or waiver terminates actual authority.
  • “Like-kind” 1031 exchange: A tax-deferral mechanism allowing real property owners to exchange into other qualifying property. Transactions often involve an “accommodator” and escrow/title agents to manage funds and closings; those roles, without more, do not make the service providers “parties” to the sale contract.

Conclusion

Fucci v. First American Title Insurance Co. fortifies fundamental arbitration principles rooted in state contract law. The opinion makes three central contributions:

  • Text matters: Where a clause is expressly limited to “disputes between the parties,” courts will not compel arbitration of disputes with nonsignatories—equitable estoppel cannot be used to broaden the clause’s scope.
  • Beneficiary status is exceptional: Naming a service provider in a contract or routing funds through it does not convert it into an intended third-party beneficiary, absent a clear expression that the contract (and the arbitration clause) is for that entity’s primary and direct benefit.
  • Agency cannot outrun waiver: An agent’s ability to enforce a principal’s arbitration rights ends when the principal revokes or waives those rights; a trustee’s written waiver suffices and does not require a § 363 process in the absence of authority treating an arbitration right as “property of the estate.”

For drafters, the case is a cautionary tale: if arbitration with affiliates, agents, and related service providers is desired, say so plainly. For litigants, it is a roadmap for evaluating nonsignatory enforcement theories in Florida- and Ohio-governed contracts. Above all, the decision underscores that arbitration remains a matter of consent, not coercion, and that state contract principles define who can compel whom to arbitrate.

Case Details

Year: 2025
Court: Court of Appeals for the Tenth Circuit

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