Louisiana Pacific Corporation and Richmond International Forest Products, LLC v. Newport Classic Homes, L.P., Western Rim Investors 2014-3, L.P., and Bridgewell Resources, LLC

CourtCourt of Appeals of Texas
DecidedApril 19, 2023
Docket05-21-00330-CV
StatusPublished

This text of Louisiana Pacific Corporation and Richmond International Forest Products, LLC v. Newport Classic Homes, L.P., Western Rim Investors 2014-3, L.P., and Bridgewell Resources, LLC (Louisiana Pacific Corporation and Richmond International Forest Products, LLC v. Newport Classic Homes, L.P., Western Rim Investors 2014-3, L.P., and Bridgewell Resources, LLC) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Louisiana Pacific Corporation and Richmond International Forest Products, LLC v. Newport Classic Homes, L.P., Western Rim Investors 2014-3, L.P., and Bridgewell Resources, LLC, (Tex. Ct. App. 2023).

Opinion

REVERSE in part; AFFIRM in part; REMAND and Opinion Filed April 19, 2023

S In The Court of Appeals Fifth District of Texas at Dallas No. 05-21-00330-CV

LOUISIANA-PACIFIC CORPORATION AND RICHMOND INTERNATIONAL FOREST PRODUCTS, LLC, Appellants V. NEWPORT CLASSIC HOMES, L.P., WESTERN RIM INVESTORS 2014-3, L.P., AND BRIDGEWELL RESOURCES, LLC, Appellees

On Appeal from the 199th Judicial District Court Collin County, Texas Trial Court Cause No. 199-02044-2016

MEMORANDUM OPINION Before Justices Pedersen, III, Garcia, and Breedlove1 Opinion by Justice Breedlove Louisiana-Pacific Corporation and Richmond International Forest Products,

LLC appeal the trial court’s order denying their motion to compel arbitration.

Because we conclude that appellees’ claims seek the benefit of a warranty that

contains a valid and enforceable arbitration agreement and appellants did not waive

1 Justice Lana Myers was a member of the panel at the time the case was submitted. Justice Myers has now retired. Justice Maricela Breedlove has succeeded Justice Myers as a member of the panel and has reviewed the briefs, record, and oral argument recording made at submission. their right to arbitrate by substantially invoking the judicial process, we reverse the

trial court’s order, in part, and remand to the trial court for referral to arbitration.

BACKGROUND

This suit addresses the applicability of an arbitration clause in a product

warranty, when the relationship between the manufacturer and ultimate purchaser is

complicated by intervening distributors and retailers. Newport Classic Homes, L.P.

and Western Rim Investors 2014-3, L.P. purchased Oriented Strand Board (OSB)

that was manufactured by Louisiana-Pacific Corporation (hereafter “LP”). They

purchased the materials from Bridgewell Resources, LLC, a retailer, who purchased

the materials from Richmond International Forest Products, LLC, the distributor.

Richmond is the only party who contracted directly with LP for the purchase of the

materials.

In 2015, Newport and Western Rim noticed problems with the OSB decking.

They complained that an inspection revealed “all floor decking was found to be

moist, soft, spongy, and fractured.” On October 24, 2015, Bridgewell filed a

warranty claim for the OSB flooring on Newport’s behalf. The claim was submitted

on an LP “Claim Request Form, Structural Products Warranty Office.” LP assigned

Claim Number 536711 to the complaint, and on November 19, 2015, LP emailed a

copy of the warranty to Western Rim.

In response to the claim, LP advised that it would need to inspect the flooring

and that it would either repair or replace the OSB panels, as provided by the LP

–2– warranty. LP eventually offered to pay $380,000.00 under its warranty. Newport

rejected the offer and asserted the full warranty cost was approximately $2.5 million,

and further advised that the “warranty claim will expand” to include a second

property.

On January 26, 2016, Marcus Hiles of Newport and Western Rim complained

that “[t]he product did not perform as intended as specified in the contract

documents.” Hiles continued, “Newport purchased LP’s OSB because, among other

things, LP’s published literature on its website made . . . representations and

warranties” about the product’s quality and features. He stated that although “LP

appears to be relying on its ‘limited warranty,’” the amount LP had offered to pay

under it was “only 1/4 of the true cost,” and was “wholly reject[ed].” He continued,

“[a]ccordingly, please consider this FORMAL NOTICE AND DEMAND that LP

stand by its representations and warranties and pay for the replacement of its faulty

products.” Hiles warned that he would instruct his legal counsel to file suit “[s]hould

LP fail to come [to] terms with its mistakes and misrepresentations and make us

whole.”

On May 11, 2016, Newport and Western Rim sued LP, Richmond, and

Bridgewell for fraud, fraud by nondisclosure, violations of the Texas Deceptive

Trade Practices Act (DTPA), and breach of the implied warranties of

merchantability and fitness for a particular purpose. They did not plead a cause of

action for breach of contract.

–3– On June 24, 2016, LP filed a notice of removal to United States district court.

While in federal court, LP filed a motion to dismiss Newport and Western Rim’s

claims. LP contended that Newport and Western Rim’s tort and statutory claims

failed as a matter of law because their complaints regarding the OSB materials fell

under the written warranty.

On July 22, 2016, Newport and Western Rim filed a motion to remand.

Newport and Western Rim requested a stay of the litigation while the motion to

remand was pending. LP, Richmond, and Bridgewell agreed to the stay. In its order

of March 31, 2017, the federal district court remanded the case to the trial court upon

concluding that the parties were not diverse. Back in the trial court, Newport and

Western Rim amended their petition to add causes of action against some or all of

the defendants for negligence, gross negligence, negligent misrepresentation, aiding

and abetting and joint enterprise, and conspiracy. Bridgewell had previously filed

cross-claims against LP for indemnification and contribution, and against Richmond

for breach of contract, indemnification and contribution.

In the months following remand, Newport, Western Rim, Richmond, and LP

moved to compel arbitration. On May 11, 2017, LP filed a motion to compel

arbitration and to stay the trial court proceedings. On August 17, 2017, Richmond

filed a separate motion to compel arbitration. Thereafter, on October 11, 2017,

Newport and Western Rim filed a motion to compel arbitration, albeit under a

different arbitration agreement. The record reflects that various combinations of the

–4– parties agreed to arbitrate with each other under several different agreements, but LP

and Richmond rely only on the arbitration provision in LP’s warranty in this appeal.

Consequently, we limit our review to that provision.

In its motion to compel arbitration, LP asserted that while Newport and

Western Rim did not assert a legal cause of action for breach of warranty, the factual

allegations asserted by them necessarily relied on the warranty, which contained a

binding arbitration agreement. The product’s written warranty stated:

5. REMEDIES

This section provides for the sole remedy available to the Owner from LP for any Product nonconformance. a. If any nonconformance covered by Section 1(a) or 1(b) of this warranty or any implied warranty is confirmed, LP, at its option, will repair or replace the non-conforming Product together with any affected surface materials, including reasonable cost of labor.

b. Any dispute concerning the meaning or applicability of the warranty shall be submitted to binding arbitration under the Commercial Arbitration Rules of the American Arbitration Association. The arbitration shall take place before a single arbitrator, the jurisdiction of the arbitrator over the dispute shall be exclusive, and the decision of the arbitrator shall be binding on the parties and not subject to appeal and shall be enforceable in any court having competent jurisdiction.

Newport and Western Rim responded, arguing that LP’s motion should be

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Rodriguez v. Transnave Inc.
8 F.3d 284 (Fifth Circuit, 1993)
J.M. Davidson, Inc. v. Webster
128 S.W.3d 223 (Texas Supreme Court, 2003)
In Re AdvancePCS Health L.P.
172 S.W.3d 603 (Texas Supreme Court, 2005)
In Re Weekley Homes, L.P.
180 S.W.3d 127 (Texas Supreme Court, 2005)
Perry Homes v. Cull
258 S.W.3d 580 (Texas Supreme Court, 2008)
In Re Service Corporation Intern.
85 S.W.3d 171 (Texas Supreme Court, 2002)
Sidley Austin Brown & Wood, LLP v. J.A. Green Development Corp.
327 S.W.3d 859 (Court of Appeals of Texas, 2010)
Holmes, Woods & Diggs, v. Laurie Gentry
333 S.W.3d 650 (Court of Appeals of Texas, 2009)
G.T. Leach Builders, LLC v. Sapphire V.P., Lp
458 S.W.3d 502 (Texas Supreme Court, 2015)
Jody James Farms, Jv v. the Altman Group, Inc. and Laurie Diaz
547 S.W.3d 624 (Texas Supreme Court, 2018)
Richmont Holdings, Inc. v. Superior Recharge Systems, L.L.C.
455 S.W.3d 573 (Texas Supreme Court, 2014)
RSL Funding, LLC v. Pippins
499 S.W.3d 423 (Court of Appeals of Texas, 2016)
Henry v. Cash Biz, LP
551 S.W.3d 111 (Texas Supreme Court, 2018)
Morgan v. Sundance, Inc.
596 U.S. 411 (Supreme Court, 2022)

Cite This Page — Counsel Stack

Bluebook (online)
Louisiana Pacific Corporation and Richmond International Forest Products, LLC v. Newport Classic Homes, L.P., Western Rim Investors 2014-3, L.P., and Bridgewell Resources, LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/louisiana-pacific-corporation-and-richmond-international-forest-products-texapp-2023.