The Fort Worth Court of Appeals has delivered a prodigiously well-researched opinion on the law of enforcing arbitration agreements against nonsignatory agents of a corporate defendant.
Maireni Peguero; Brad Young; and Dyno Petro v. Jerry Freishtat and Justin Freishtat (No. 02-25-00299-CV; October 16, 2025) arose from an oil-and-gas investment gone bad. Plaintiffs, the Freishtats, sued Dyno, in which they invested, Dyno’s president Young, and three individuals, including Peguero. Plaintiffs alleged that Peguero and another individual, Torres, identifying themselves as agents of Dyno, pitched an investment in producing property in Louisiana. Plaintiffs later worked with another individual, Hunter, who became President of Dyno in 2024. Plaintiffs invested and each signed a subscription agreement documenting their investments. The agreement included an arbitration clause for “any dispute [that] arises between the undersigned subscriber and the company of any of their legal representatives, officers, shareholders, attorneys, accountants, agents[,] or employees.” When the investments didn’t work out, Plaintiffs sued, alleging fraud, unjust enrichment, breach of fiduciary duty, violation of the Uniform Fraudulent Transfer Act, conspiracy, and alter ego. Only the fraud claim included all of the individuals involved in the deal. Dyno and Young filed a motion to compel arbitration. Plaintiffs responded that the arbitration clause was unenforceable, particularly as to the nonsignatory individuals. After a hearing that created confusion as to who worked for Dyno at the relevant times, the trial court granted the motion to compel as to Dyno Petro and Young and issued a 90-day stay. Dyno and Petro, as well as Peguero, appealed.
In an opinion by Justice Bassel, the court of appeals affirmed in part and reversed and remanded in part. First, Plaintiffs argued that since Hunter and Torres did not file notices of appeal, the court lacked jurisdiction to determine whether the trial court erred by not ordering arbitration of the claims against them. They argued further that Dyno had no standing to challenge the trial court’s order, either, because it had no stake in the trial court’s decision as to Hunter and Torres. The court disagreed on the basis that Dyno articulated a personal stake in the trial court’s decision to send the claims of its agents to arbitration. Moreover, Plaintiffs should not be able to evade an arbitration clause by suing the agents of an entity rather than the entity itself on the same claims.
Next, Dyno and Peguero argued that the three nonsignatories to the subscription agreement were agents of Dyno and should have been compelled to arbitration as well. The question boiled down to whether the nonsignatories “functioned as Dyno Petro’s agents and thus were embraced by the Subscription Agreements’ arbitration clauses.” The problem for Dyno was that Young, Dyno’s president at the relevant time, “introduced a controversy regarding whether Torres and Peguero were Dyno Petro’s agents” (though Peguero became employed by Dyno at a later date). Given this uncertainty, the trial court had discretion to deny the motion to compel arbitration as to them. On cross-examination Hunter conceded that neither Torres nor Peguero were working for Dyno when they pitched the deal to Plaintiffs. Torres testified merely that he “was part of the team creating awareness for the projects,” but never explained who directed or employed the team. Peguero, Young testified, was associated with Torres. Nobody could say that either Torres or Peguero “were subject to the type of control that would have made them agents” or had any particular authorization to act as Dyno’s agents. Given the state of the record, the court concluded, it could not find that the trial court abused its discretion in not compelling Torres and Peguero to arbitration.
As to Hunter, however, everyone agreed that his representations were made in an agency capacity (i.e., as a sales associate for Dyno), so the trial court erred in not sending him to arbitration along with Dyno and Hunter. The reason for the trial court’s ruling, however, was unclear. Hunter’s counsel stated at the hearing that his client didn’t want to bear the expense of arbitration. But later he conceded that Dyno was right about the law. The court concluded that Plaintiffs’ fraud claims against Hunter came within the ambit of the arbitration provision.
Finally, the court ruled that the doctrine of direct-benefits estoppel did not apply to Plaintiffs’ claims. Dyno argued that their claims against Torres and Peguero should still be arbitrated under the doctrine on the basis that “Plaintiffs are attempting to derive a benefit from the Subscription Agreements and [] should also bear their burden in the form of the arbitration clauses.” In this case, however, Plaintiffs fraudulent inducement claims against Torres and Peguero arose from “general obligations of state law,” not from the duties imposed by the contract. Had they been agents of Dyno, Plaintiffs could probably not have avoided arbitration by recasting a contract claim into a fraudulent-inducement claim because “[i]t is simply too easy to recast a contract claim into a fraudulent-inducement claim against an agent and avoid the arbitration clause.” Since Dyno couldn’t establish that Torres and Peguero were its agents, howwever, the trial court could reasonably conclude that “this concern was not in play.” Additionally, the fraudulent-inducement claim against them “did not depend on the existence of the Subscription Agreements.” In any event, the court held, Torres’s and Peguero’s status was so ambiguous that the trial court could have concluded that there was no valid arbitration agreement between Plaintiffs and them. [By the way, Peguero didn’t appear in the trial court, nor did she argue her points on appeal.]
The court sent the case back to the trial court to reformulate its stay, since the 90-day stay period had expired. The parties disagreed as to whether Plaintiffs’ claims against the nonsignatories should proceed at the same time as the arbitration involving the other defendants. Here the trial court evidently worried that if it didn’t grant a short stay to incentivize the parties to actually go to arbitration, the case would get stuck on its docket and that would look bad in the court’s performance reports to OCA. The court held that the trial court should grant a “reasonable” stay of the claims the trial court had compelled to arbitration and then decide what to do about the claims not sent to arbitration.
