Preview
Filed: 6/13/2023 4:14 PM
JOHN D. KINARD - District Clerk
Galveston County, Texas
Envelope No. 76580977
By: Shailja Dixit
6/13/2023 4:27 PM
NO. 21-CV-0951
MICHAEL GAVIS and KATY GAVIS, § IN THE DISTRICT COURT
Plaintiffs, §
v. §
§
TAYLOR MORRISON OF TEXAS, INC., §
and TAYLOR WOODROW COMMUNITIES § 10TH JUDICIAL DISTRICT
– LEAGUE CITY, LTD., §
Defendants/Third-Party Plaintiffs, §
v. §
§
BIG TEX AIR CONDITIONING, INC., et al., §
Third-Party Defendants. § GALVESTON COUNTY, TEXAS
DEFENDANTS’ SECOND SUPPLEMENTAL MOTION TO COMPEL ARBITRATION
TO THE HONORABLE JUDGE OF SAID COURT:
NOW COME Defendants Taylor Morrison of Texas, Inc. and Taylor Woodrow
Communities-League City, Ltd. (collectively “TM Defendants”) and, without waiving their
arbitration rights, ask the court for its order: compelling Plaintiffs to arbitrate their claims pursuant
to the Texas Supreme Court’s recent decisions in Lennar Homes of Tex. Land & Constr., Ltd. v.
Whiteley, 66 Tex. Sup. Ct. J. 874, 2023 Tex. LEXIS 407 (Tex., May 12, 2023), and TotalEnergies
E&P USA, Inc. v. MP Gulf of Mex., LLC, 66 Tex. Sup. Ct. J. 591, 2023 Tex. LEXIS 315 (Tex.,
April 14, 2023); and granting this additional request to compel Third-Party Defendant Big Tex Air
Conditioning, Inc. (“Big Tex AC”) to arbitration to resolve TM Defendants’ third-party claims
against Big Tex AC. In support of this motion, Defendants would show the following:
DEFENDANTS’ SECOND SUPPLEMENTAL MOTION TO COMPEL ARBITRATION PAGE 1
Gavis
I. BACKGROUND
1.1 Plaintiffs Michael and Katy Gavis purchased a home built by TM Defendants. 1 Big
Tex AC performed HVAC work on the Home pursuant to Master Agreements with each of the
TM Defendants. 2 In those Master Agreements, Big Tex AC agreed:
… if Taylor Morrison is involved in any arbitration or other alternative
dispute resolution proceeding with the Homeowner, or any other party, relating in
any way to Contractor’s Work… then Contractor hereby agrees to be joined to such
arbitration or alternative dispute resolution proceeding…. 3
1.2 Plaintiffs initiated this lawsuit on June 30, 2021, alleging “construction defects that
have caused significant mold growth in Plaintiffs’ home.” 4 Plaintiffs specifically alleged that their
home has experienced “unacceptably high levels of relative humidity and condensation.” 5
1.3 TM Defendants answered, including their request that the court compel Plaintiffs to
arbitrate their claims pursuant to the paragraph 11 arbitration agreement under the doctrine of
direct-benefits estoppel. 6 Subparagraph (d) of that paragraph 11 arbitration agreement also
expressly provides for the inclusion of subcontractors in any arbitration between the parties:
This arbitration agreement shall inure to the benefit of, and be enforceable by, Seller
and Seller’s affiliated and related entities, and each of their subcontractors, agents,
vendors, suppliers, design professionals, insurers, and any other person whom
Buyer contends is responsible for any alleged defect in or to the Property or any
improvement or appurtenance thereto. The parties contemplate the inclusion of
such parties in any arbitration of a dispute and agree that the inclusion of such
parties will not affect he enforceability of this arbitration agreement. 7
1
Plaintiffs’ Original Petition and Request for Disclosure, filed 6/30/2021, p. 2 @ ¶8, hereafter “Petition.” Plaintiffs
filed their Second Amended Petition on 5/6/2022.
2
See Exhibit A (DECLARATION OF JIM BLACK), Exhibit A-1 (MASTER AGREEMENT w/ Taylor Morrison of
Texas, Inc.), and Exhibit A-2 (MASTER AGREEMENT w/ Taylor Woodrow Communities-League City, Ltd.)
attached hereto and incorporated herein.
3
See supra note 2.
4
Plaintiffs’ Second Amended Original Petition, p. 2 @ ¶8, hereafter “Second Amended Petition.”
5
See supra note 4.
6
Defendants’ Original Answer, Including Motion to Compel Arbitration, Plea in Abatement & Special Exceptions,
filed 8/16/2021, hereafter “MTC Arb.”
7
MTC Arb, Ex. B-1, p. 8 @ ¶11)d.
DEFENDANTS’ SECOND SUPPLEMENTAL MOTION TO COMPEL ARBITRATION PAGE 2
Gavis
TM Defendants filed their third-party claims against subcontractor Big Tex AC. 8 Big Tex AC
answered “subject to arbitration.” 9
1.4 On March 23, 2022, this court heard and reserved rulings on TM Defendants’ Motion
to Compel Arbitration of Plaintiffs’ claims, Second Amended Objections to Entry of DCO, and
Plea in Abatement.
1.5 On July 20, 2022, Big Tex AC filed its own third-party claims “subject to arbitration”
against other alleged subcontractors: 1) Probuild South, LP; 2) Installed Building Products of
Houston, LLC; 3) Arnulfo Rodriguez Roofing Co., Inc.; 4) All Star Plumbing Management, Ltd.;
5) City Framers, LLC; 6) Wisenbaker Builder Services, Ltd. and 7) L&W Weatherstripping, LLC
(collectively “Fourth Party Defendants”). 10 Big Tex AC alleges that its claims against Fourth-Party
Defendants must also be arbitrated with claims alleged by Plaintiffs and by TM Defendants. 11
1.6 On March 23, 2023, the court held a Status Conference. Without expressly ruling on
TM Defendants’ Motion to Compel Arbitration, Plea in Abatement, and Objections to Entry of
Docket Control Order, the court signed and entered its Discovery and Docket Control Order
(“DCO”).
1.7 On May 12, 2023, the Supreme Court of Texas decided Lennar Homes of Tex. Land &
Constr., Ltd. v. Whiteley, 66 Tex. Sup. Ct. J. 874, 2023 Tex. LEXIS 407 (May 12, 2023). 12 The
Court held that a subsequent purchaser of a home was “bound by the arbitration clause in the
purchase-and-sale agreement [between the original purchaser and the builder] under the doctrine
of direct-benefits estoppel.” Whiteley, 2023 Tex. LEXIS 407 at *1-*2.
8
Defendants’ Third-Party Petition filed 2/17/2022.
9
See Big Tex AC’s Original Answer Subject to Arbitration … filed 2/23/2022.
10
See Big Tex AC’s: Fourth-Party Petition Subject to Arbitration filed 7/20/2022; and Amended Fourth-Party Petition
Subject to Arbitration filed 2/3/2023.
11
Big Tex AC’s Response to [Taylor Morrison Defendants’] Motion to Compel Arbitration filed 3/22/2022.
12
Copy attached hereto as Exhibit B.
DEFENDANTS’ SECOND SUPPLEMENTAL MOTION TO COMPEL ARBITRATION PAGE 3
Gavis
1.8 On April 14, 2023, the Supreme Court of Texas decided TotalEnergies E&P USA, Inc.
v. MP Gulf of Mex., LLC, 66 Tex. Sup. Ct. J. 591, 2023 Tex. LEXIS 315 (Tex., April 14, 2023).13
The Court held that an arbitration agreement to arbitrate in accordance with AAA rules “clearly
and unmistakably delegated arbitrability issues to the arbitrator.” TotalEnergies, 2023 Tex. LEXIS
315 at *1.
II. ARGUMENT AND AUTHORITIES
A. The court should compel Plaintiffs to arbitrate their claims against TM Defendants
pursuant to the Texas Supreme Court’s recent decisions.
2.1 Recent Texas Supreme Court caselaw requires Plaintiffs to arbitrate their claims against
TM Defendants. See Whiteley, 2023 Tex. LEXIS 407. In Whiteley, the plaintiff was the second
owner of a home built by Lennar Homes. Id. at *6. Lennar Homes built and sold the home by a
Purchase and Sale Agreement containing arbitration clauses. Id. at *2-*4. The plaintiff sued
Lennar Homes, alleging a “serious mold problem” and asserting causes of action for negligent
construction and breach of the implied warranties of habitability and good workmanship. Id. at *6-
*7. Lennar Homes moved to compel the plaintiff to arbitration. Id. at *7-*8. The plaintiff opposed
arbitration because she did not sign the original Purchase and Sale Agreement or any arbitration
agreement with Lennar Homes. Id. at *8.
2.2 The Supreme Court held that the plaintiff was obligated to arbitrate her claims under
the doctrine of direct benefits estoppel because her claims against the builder were based on the
original Purchase and Sale Agreement. Id. at *12-*20. Specifically, the Court: rejected her
suggestion that her claims for breaches of implied warranties of good workmanship and
habitability derived from common law, not from the original Purchase and Sale Agreement; and
confirmed that such implied warranties are part of that Agreement. Id. at *15-16. The Court also
13
Copy attached hereto as Exhibit C.
DEFENDANTS’ SECOND SUPPLEMENTAL MOTION TO COMPEL ARBITRATION PAGE 4
Gavis
recognized “the substantial overlap between the substance of a negligent construction claim and a
claim for breach of an implied warranty of good workmanship.” Id. at *17, n. 11.
2.3 Whiteley’s facts are virtually identical to those presented in this case. Subsequent
purchaser Plaintiffs allege “significant mold growth” in their home resulting from construction
defects and the home builders’ liability for breaches of implied warranties of good workmanship
and habitability and for negligent construction. 14 Whiteley establishes the legal rule: such implied
warranties are part of the contract for original construction and sale, and subsequent purchasers’
claims for breaches of such implied warranties “do not stand independently” of such contract. Id.
at *12-*20. That rule, along with the Court’s direct benefits estoppel rule (“When the alleged
liability arises from the contract or must be determined by reference to it, equity prevents the non-
signatory plaintiff from avoiding an arbitration clause that was part of that contract”) establishes
precedent for this court to follow. See id. at *14-*15 (quotations and citation omitted). Because
these Plaintiffs stand in Whiteley’s shadow, they must arbitrate their claims against TM
Defendants. See id.
2.4 And, according to TotalEnergies E&P USA, Inc. v. MP Gulf of Mex., LLC, Plaintiffs
may not further burden this court with objections to arbitration of their claims by the American
Arbitration Association (“AAA”), the arbitration service designated by the paragraph 11
arbitration agreement. 15 TotalEnergies establishes another applicable legal rule: an agreement to
arbitrate in accordance with the AAA makes its rules part of the agreement. 2023 Tex. LEXIS 315
at *19-*20. Here, AAA Construction Industry Arbitration Rule R-2 “authorize[s] the AAA to
administer the arbitration” and Rule R-9 delegates to the arbitrator “the power to rule on his or her
own jurisdiction, including any objections with respect to the existence, scope, or validity of the
14
Second Amended Petition, p. 2-4.
15
MTC Arb, p. 7 @ ¶11)b.
DEFENDANTS’ SECOND SUPPLEMENTAL MOTION TO COMPEL ARBITRATION PAGE 5
Gavis
arbitration agreement.” 16 Because these Plaintiffs stand in the shadows of TotalEnergies and
applicable AAA Rules, they must arbitrate their claims against TM Defendants through the AAA.
B. The court should compel arbitration of TM Defendants’ claims against Big Tex AC based
on the express language in the Purchase Agreement’s paragraph 11 arbitration
agreement and in the Master Agreements.
2.5 Just as Plaintiffs must arbitrate their claims against TM Defendants by the Purchase
Agreement’s paragraph 11 arbitration agreement, HVAC subcontractor Big Tex AC must join that
arbitration to resolve TM Defendants’ third-party claims. Big Tex AC is a third-party beneficiary
of the arbitration agreement. See In re Next Fin. Group, Inc., 271 S.W.3rd 263, 267 (Tex. 2008);
In re Rubiola, 334 S.W.3d 220, 222 (Tex. 2011) (including 3rd party in arbitration when arbitration
agreement included such party). Big Tex AC is also bound to the arbitration agreement through
equitable estoppel. Allegations of intertwined claims of substantially interdependent and concerted
misconduct regarding construction defects estop Big Tex AC from denying arbitration of TM
Defendants’ third-party claims. See Meyer v. WMCO-GP, LLC, 211 S.W.3d 302, 305-306 (Tex.
2006) (application of equitable estoppel is warranted when arbitration clause signatory alleges
substantially interdependent and concerted misconduct by signatory and non-signatory); Cotton
Comm’l USA, Inc. v. Clear Creek ISD, 387 S.W.3d 99, 104-105 (Tex. App.—Houston [14th Dist.]
2012, no pet.). Plaintiffs’ specific claim of “unacceptably high levels of relative humidity and
condensation” clearly relates to Big Tex AC’s work. Pursuant to the paragraph 11 arbitration
agreement and Big Tex AC’s own arbitration agreements that it “agrees to be joined in such
arbitration,” Big Tex AC must join Plaintiffs’ arbitration against TM Defendants to resolve third-
party claims against Big Tex AC. Thus, in addition to ordering Plaintiffs to arbitrate their claims,
the court should also order Big Tex AC to join Plaintiffs’ arbitration and abate this lawsuit. See 9
16
AAA Construction Industry Arbitration Rules …, attached hereto and incorporated herein as Exhibit D, p. 14, 18.
DEFENDANTS’ SECOND SUPPLEMENTAL MOTION TO COMPEL ARBITRATION PAGE 6
Gavis
U.S.C. § 3 (“courts of the United States… shall on application of one of the parties stay the trial
of the action until such arbitration has been had in accordance with the terms of the agreement.”);
In re Merrill Lynch Trust Co. FSB, 235 S.W.3d 185, 195 (Tex. 2007) (both the FAA and the Texas
Arbitration Act require courts to stay litigation of issues that are subject to arbitration).
2.6 Big Tex AC expressly contemplated arbitration when it first appeared and answered,
and again when it asserted its own third-party claims against “Fourth Party Defendants.” 17 Big Tex
AC judicially admitted its arbitration agreements with TM Defendants and the propriety of
arbitration:
• Pursuant to the clear meaning of Paragraph 11, Subsection (d) of the Purchase
Agreement if the Court orders Plaintiffs’ claim to arbitration, then the claims
against Big Tex should be included in arbitration; 18 and
• Article 12 of the … Master Agreement … also requires the claims against Big
Tex … to go to arbitration. 19
2.7 Assertions of fact that are deliberate, clear, and unequivocal are regarded as judicial
admissions. Mapco, Inc. v. Carter, 817 S.W.2d 686, 687 (Tex. 1991). Big Tex AC’s judicial
admissions are conclusive against it and relieves TM Defendants of the burden of proving the
admitted facts. Mendoza v. Fidelity & Guar. Ins. Underwriters, Inc., 606 S.W.2d 692, 694 (Tex.
1980).
2.8 Big Tex AC’s admissions notwithstanding, TM Defendants’ proof of Big Tex AC’s
arbitration agreements—within Article 12.2 of each Master Agreement with TM Defendants—
show Big Tex AC expressly agreed “to be joined in such arbitration [with a homeowner] … to
resolve all outstanding issues, claims, and defenses between [Big Tex AC] and Taylor Morrison
17
See supra notes 9 and 10.
18
See supra note 11, p. 4.
19
See supra note 11, p. 4.
DEFENDANTS’ SECOND SUPPLEMENTAL MOTION TO COMPEL ARBITRATION PAGE 7
Gavis
in such arbitration … and to be bound by the results of such arbitration.” 20 TM Defendants’ third-
party claims against Big Tex AC are within the scope of Big Tex AC’s arbitration agreements, and
should be arbitrated in Plaintiffs’ arbitration proceeding.
C. Compelling all parties to arbitration is not a condition to compel Big Tex AC to
arbitration.
2.9 The TM Defendants did not and do not assert claims against Big Tex AC’s “Fourth-
Party Defendants.” Ideally, all parties will simply assert and prosecute their claims against other
allegedly liable parties in the same arbitration proceeding. However, Big Tex AC asked the court
to “order all claims in this matter shall be included in arbitration. 21 If Big Tex AC claims that it
cannot be compelled to arbitration without also compelling “Fourth-Party Defendants” to
arbitration, that claim is wrong. No such condition precedent appears in Big Tex AC’s arbitration
agreements with TM Defendants. No such condition precedent appears in the Purchase
Agreement’s paragraph 11 arbitration agreement.
2.10 As TM Defendants originally requested, the court should order Plaintiffs to initiate
arbitration with AAA to resolve their claims and the court should abate this case. As TM
Defendants now request, the court should also order Big Tex AC to join Plaintiffs’ arbitration. See
9 U.S.C. § 3; In re Merrill Lynch, 235 S.W.3d at 195.
WHEREFORE PREMISES CONSIDERED, TM Defendants pray that the court sign an
order compelling Plaintiffs, TM Defendants, and Big Tex AC to arbitration with the American
Arbitration Association and abating this case.
Respectfully submitted,
By: /s/ Jennifer Taylor
Jennifer Taylor
State Bar No. 24102559
jtaylor@brstexas.com
20
Ex. A-1, p. 11. Ex. A-2, p. 11.
21
See supra note 11, p. 1 (emphasis added).
DEFENDANTS’ SECOND SUPPLEMENTAL MOTION TO COMPEL ARBITRATION PAGE 8
Gavis
BUSH RUDNICKI SHELTON, PC
James W. Rudnicki
State Bar No. 24006148
james@brstexas.com
Diana M. Alcala
State Bar No. 24007590
dalcala@brstexas.com
Jennifer Taylor
State Bar No. 24102559
jtaylor@brstexas.com
2508 Ashley Worth Blvd., Suite 200
Austin, Texas 78738
Telephone: 512-263-8408
Facsimile: 512-263-2562
-and-
Carl J. Wilkerson
State Bar No. 21478400
cwilkerson@brstexas.com
David M. Jones
State Bar No. 24042684
djones@brstexas.com
200 N. Mesquite St., Suite 200
Arlington, Texas 76011
Telephone: 817-274-5992
Facsimile: 817-261-1671
ATTORNEYS FOR TAYLOR
MORRISON OF TEXAS, INC. and
TAYLOR WOODROW
COMMUNITIES-LEAGUE CITY,
LTD.
DEFENDANTS’ SECOND SUPPLEMENTAL MOTION TO COMPEL ARBITRATION PAGE 9
Gavis
CERTIFICATE OF CONFERENCE
I certify that on June 9 and 12, 2023, TM Defendants’ attorney conferred in good faith by
emailing attorneys of record regarding TM Defendants’ requested relief and requesting their
positions. The following attorneys responded:
1. Dax Faubus, attorney for Plaintiffs, responded: “Dax will not agree until the
[Texas Supreme] Court has ruled on the [Lennar Homes v. Whiteley] motion
for reconsideration.”
2. Amy Nilsen, attorney for Big Tex Air Conditioning, Inc., responded: “Big Tex
does not oppose your motions. We will be filing a Motion to Compel the 4th
Parties to Arbitration.”
3. Randall Beaty, attorney for Arnulfo Rodriguez Roofing Co, Inc. responded: “I
am unopposed to your motions but cannot agree for Rodriguez Roofing to
voluntarily be joined in the arbitration.”
4. Ian McLin, attorney for BFS Group, LLC, responded: “BFS does not have an
opinion on whether Plaintiffs, Defendants, and Big Tex go to arbitration;
however, BFS would oppose arbitration of the Big Tex claims against BFS.”
5. Timothy McMurtrie, attorney for City Framers, LLC, responded: “City Framers
has no objection to the case being compelled to arbitration. However, unless
City Framers is made part of the arbitration, it does object to the abatement you
plan to request.”
6. Paul Starr, attorney for L&W Weatherstripping, LLC, responded: “I am
unopposed to your motion, so long as it does not seek to compel fourth party
defendants into arbitration.
7. Mallorie Walker, attorney for Wisenbaker Builder Services, Inc., responded:
“Wisenbaker is unopposed to this, so long as your motion does not seek to
compel fourth party defendants into arbitration.”
/s/ Jennifer Taylor
Jennifer Taylor
DEFENDANTS’ SECOND SUPPLEMENTAL MOTION TO COMPEL ARBITRATION PAGE 10
Gavis
CERTIFICATE OF SERVICE
I certify that a true and correct copy of the foregoing document was delivered to all counsel
of record in accordance with Rule 21a of the Texas Rules of Civil Procedure, via electronic
delivery through the e-filing system on June 13, 2023.
Dax O. Faubus Amy Nilsen
THE FAUBUS FIRM JOHNSON, TRENT & TAYLOR, L.L.P.
1001 Texas Avenue, 11th Floor 919 Milam, Suite 1500
Houston, Texas 77002 Houston, Texas 77002
dax-notice@faubusfirm.com anilsen@johnsontrent.com
ATTORNEY FOR PLAINTIFFS
Carlos A. Balido
Randall L. Beaty WALTERS BALIDO & CRAIN, L.L.P.
NEWTON JONES & MCNEELY 10440 North Central Expy., Suite 1500
3405 Marquart Dallas, Texas 75231
Houston, Texas 77027 Balidoedocsnotifications@wbclawfirm.com
rbeaty@newton-lawyers.com ATTORNEYS FOR BIG TEX AIR
ATTORNEY FOR ARNULFO RODRIGUEZ CONDITIONING, INC.
ROOFING CO., INC.
Ian M. McLin Timothy D. McMurtrie
Thomas Lillibridge ROYSTON, RAYZOR, VICKERY & WILLIAMS, L.L.P.
LANGLEY & BANACK 802 N. Carancahua, Suite 1300
745 E. Mulberry, Suite 900 Corpus Christi, Texas 78401-0021
San Antonio, Texas 78212 tim.mcmurtrie@roystonlaw.com
imclin@langleybanack.com
tlillibridge@langleybanack.com Maulik P. Shah
ATTORNEYS FOR BFS GROUP, LLC ROYSTON, RAYZOR, VICKERY & WILLIAMS, L.L.P.
1600 Smith Street, Suite 5000
Brian Cano Houston, Texas 77002
Justin Diaz maulik.shah@roystonlaw.com
FEE, SMITH & SHARP, LLP ATTORNEYS FOR CITY FRAMERS, LLC
2777 Allen Parkway, Suite 800
Houston, Texas 77019 Paul Byron Starr
bcano@feesmith.com GERMER BEAMAN & BROWN PLLC
jdiaz@feesmith.com 1501 S. Mopac Expressway, Suite A400
ATTORNEYS FOR INSTALLED BUILDING Austin, Texas 78746
PRODUCTS OF HOUSTON, LLC pstarr@germer-austin.com
ATTORNEY FOR L&W
WEATHERSTRIPPING, LLC
Spencer Edwards
Mallorie Walker
THE HUDGINS LAW FIRM
24 Greenway Plaza, Suite 2000
Houston, Texas 77046
sedwards@hudgins-law.com
mwalker@hudgins-law.com
ATTORNEYS FOR WISENBAKER BUILDER
SERVICES, INC.
/s/ Jennifer Taylor
Jennifer Taylor
DEFENDANTS’ SECOND SUPPLEMENTAL MOTION TO COMPEL ARBITRATION PAGE 11
Gavis
Exhibit A
TAYLORMORRISON
MASTER AGRl';EMENTFORVERTICAL CONSTRUCTION SERVICES
. . - -- - (TEXAS) -- -
.ATTN: . .JANA TOVAR • ATTN: Matthew ('Matt':) C.hishtilm
TELEl"HONI;: -t713)631~773S TELEPHONE: 1281\ 598°3008
FAX: FAX: (2$1)598'"3112
j
EMAIL: dana1t;,bfanc@bigtexair:com EMAIL: mchisholrn@tayforrriotrison.com
LICENSE,#:
. FED. TAX IDj#: FED. TAX ID#: 74-2012460
..
Thi$ Mast\,lr A/iieement for Vertical Com,buction servrces ("Agreement') is made effective ,,s of this 12th day of
Oecem~r. 201i3 {"Effect[ve .Qate"), and shall govern the relationship between Contractor and TayforMQr.nSQil for any
·· new home CQfl$1rQctie>n and associated lot .Improvement project a$ del'cribed in a specific Purchase_ Oril!!r pursuant to
i.Vhlc;h Contract,:,r provid/ls service_s to toe Taylor Morrison bivislon identified above (collectively, a. "Home'); Contractor
·- · · •andTayrorMonjison agree ai, f61Tows: · -- ·
ARTICLE 1...;R~LATlt>NSHIP OF THE PARTIES ,
l
_ l'!li:; J\greernenl establishes the t$111'lS ·a_nd wni:litions on which Taylor MorrisQn mey, frQrn time to. time, anq ill Taylor
Mom\;Qn'.$ si>_!e,~fsqret1on, purchase or obtain from Contractor the labor; .supervision, ai;lmi~lt,ltion, and .other activities,
_and-the equip~ent, to!>ls ar!i;I materrals as required lly th!! terms of this A{,reementto complete _the Wo~ (as. defined
below) setforth 1i!1 one qr more PUrt::tlase Order(s) (as i'.lefinei:I b¢1ow). Once executed, the provisions of this Agreement
Slla_l! apply to. Je to the parties in
the event Contra\:k'r performs ,:iny W61'.k for Taylor Morrison pursu,:int to a Purchase Order. ·
, ARTICLE 2...;cO~'TRACT DOCUMENTS, PURCHASE ORPERS AND ELECTRONIC COMMUNICATIO!IIS PROTOCOL
2.1 ·CONTRACT OOCUMENTS: This Agreement. arid any amendment hereto (if applicable),. together with. the
exhibits, addenda and other hard or electronic documents describei:1 below, shall be collectively referred to as the
"ContractDoeuments," and are hereby incorporated Into and made part of this Agreem~
Taylor Morrison
' U-contractor V TM
Master Agreernerjt for Ver!icai---Construction Services · ..,.,,,ct,
Ver.6,3.13-TEXA~ " - -
Exhibit A-1 1
(a) i Geri,irai Gondi!ion,s (Exhibit Al; . . .. . . . ..
(bl i S<;ope ofWork {Exhlliit BYand any Scope of Wort< Addendum (a represeritalive forin of which is ;:tttac!Jed
'' ias ExhibirO);
(c) · !Site Safety Rules (ExhibitC);
{d) j Insurance Requiramenls.(Exhibit El;
(f:l) iPaymentTerins(Exhibitf};
(f) iEleetronii: ®mmunicalion Protocol (Exhibit G);
(g) iJofrlt'C!Jeck Agreement(a representative form of which is attache(j as Exhibit HJ;
(h} )Plan$. Spll(:illc;a!ions and bidS(www.buzzsaw.com); and
(il /AnY Pllrc.hai;e 0/'!lsrs or. VPOs (as defined below) issued pursuanuo tlris.Agfi'lenle\1t.
.
22 . SCOPd OF Tfll~ AGijEEMENT. This Agreement does notauthoriZe ConfractorJo comm\,!'!ce ;,111y WOit unHt
sueh time. as T~ylor l',lofl'.iSon deliVEl!S. to Conttactor a Purcilase Order (!he "Purchase. Order'). Tile PJJri:hiil;El Qrderwur.
from time ·to time, be prt>Yided by Taylor Morrison to Contractor In Taylor Morrison's sole dlscreoon .for !)ach HQme, In
addition tothe furchaseOrder, Contractor hereby acknowledges ,mdagrees to be bound by the terms .md conditions
contained in the General Conditions attached hereto es Exhibit A, th¢ Scope of Work in a Scope of Work Addendum
defined below ahd !he lnsul'c!nce Requirements attached hereto as ExhibitE.
2.3 SCOP~ OF WORK. Contractor agrees to furnish ail· supervision, labor, materials. equipment, facilities,
technology, and, services required to complete the Work based upon the scope of work attached hereto as Exhibit B and
as may also be rr,ore p,irticularty d~scril:>ed in a. specific Scope of Wo11< Addendum (collectively,. whether on!il or more, tire
•Sl:ope of. Worl() (hElreinalter, coUeclfveiy tire 'Work'') in ciimpliance with all Contract Document.s, as those dOl)Uments
are k!entifiad· tierein. The Work shaU inpluda au supervision, labor, materials, equipment,. facHillel;, technology,
JSL!!)ervisitm alli:llservices that.era:
(a) ~asonably inferable from the Scope of Wort< specified;
(b) .;custQnliuily perfQll'nei:l and provided by competent contractors .a$ part of thsl proper perfo.imance of tire
Work oHhe type $pacified;
(C) iieoslSJSaryfur1hesµcc:essflll, timely and.safe completion of the Work;
•.....• ,~ (d)
i,ecessary to cut, f,t or patch portions of the Work as required to mak¢ its several ps3rts come togettier
properly, a~d t<;> lit it to rac1.;}y~0 or be received by. !he work.. of Qther" conttactors, as shown. UJ:!On~!)r
r..asonably implied by Ifie ConfFciet Documents; and . . . . . . . . . • . . . .~... . · ...
(e) beceqllilry to. fulfill tt\e uhdertakln!l$, covenants, guarantees, if!presenta!ions ani:l warranlleJS set forthin·
jhisAgteement, the. Contract Documents and Homeowner (as definetj below) or Homeowner,'\sliOcialfon
yvarrarity tequestg approved by Taylpt Mo!Tison,
'
2.4 . ACCEPTANCE OF PURCHAS~ORPER(S). If Contractor commences performance of the Work, wlth grwitl)out ·
. .a· Pµ~hese Ord.~r; it will be deemed to have <1ccepted the t!)JJTIS .ind condili.ons qf this Ag~ment If Taylor Morl"i$on
issues a .PurQh$e Prd.ir.fpr a Horne, and Contractor undertakes Work (in the Home, CQntraclor, by. undertaking the
Work, wm be llo~nd by th¢ Purqhase Order just as .If Contractor had signed su!'h document If Contrac!Qr commences
Work on a liom,i WithOIJt a Purchase Ord,ir having.been issued by Taylor Morrisoq, it sf)all do so at its own risk and.cost
Taylor Morrison jnay $Ubsequently issue a Purchase Order. Which shall 9ovem all Wo.rk perfoTTJJicld before llrid .after the
Purchase Order(s} are issued, .uqf~ it :;pecificaliy P©Vides OthE,J:Wise. Taylor Morrison wiU, wh,in .applical:ilii, OQtify j!je
Contractor of ruiJexcepJion to the requirement of having a Pµrchase Order prior to starting thf:l'Work. This .exceptlorr Will
apply to cert.aln. i):fentified categories of work were the exai;t quantity cannot be oe.termine until the Work 1s complete, In
this exception,. ff\e. Contract9r \\'ill .Pill per!he. agreed upon quotes and a Purohase Order wm be.issued tp cover the. Work
and payment afujr the quantity has be..n determined based on the actual quan!iti,is used forthe Work.
~ontractor TM
Taylor Morrison i 2
· MasterAgr~meljt for Vertical Construction Services,,.•c.,'>
Ver, 6.3;13-TE)()\!S
Exhibit A-1 2
· 2.5 '. PLJRCi:JASEORDERS; VARIAN¢E f\lRCliASE ORDERS AND CHANGE ORDERS.
2,5.1 : Purchase Orders are c.reated byTaylor Morris6o and :are available lo Contractqr as provided -in Exhibit G.
Whereas_ the Contract Doc::t.1111e111$ coJlectively d~_rifie ·the Work ·to be· undertaken at a Home, the
Purchase Order is ilitended to provide Contractor the' no!fflfliltit!ri"retjuired to oommence a $Jl&eilio l)Ol1ion
of the Work and the ptice for the same. The P11rchiise Or,ter roay also specify materials, quanllties, color
an,t. style selections, cir other pertinent infQmlaijon,. lfapi)licable; which. information may a1tem11~vely be
pmvideQfavailable. through SupplyPro, Buµsaw or a Tc1ylo; MC!rrisorr supenntendent All Pi,oha~
Qrdl;!rs are llllJillly bindin!J contracts an~ ;lf!I il1qQrp9t,l(ed Jtjto. this A!Ji~mertt as tholl!iJh fully set forth
Il
herein ;is and when i$Slled by Taylor MQ~n. ~I! Worl( p-erfotrned under the Purchase Order sti~I ,be
paid in ttte,amountsli!ited on the Purchase Order.ind Will not b!)adj1JS!El(f after the Work is comp~_. ·
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2,5.2 ··variance Pur.cl]ase Orders ("VPO's") are for construction field vatiances on a single lot only and are
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issued by Taylor Mollison, if and when .applic:alife. Unless otherwise agree<:! to in writing by Taylor
Morrison, no devialiOII in the Workis to be done by Contractor prior to the issu.inceofa VPO, Once
Taylor Mortison creates a VPO, which Will be available to Contractor as provided in Exhibit G, then
construction of the Work .descnbed th.erein can be9in. Unless otherwise agreed to in writing by Taylor .
Morrison, if Contractor engages in Work prior to the issuance of the applicable VPO, Taylor Morrison shall
not have any_liabilily for paymenffor such Work. I
2.5.3 •Change Qrd!,!rs ("Ch1111{1a Orders") are for changes to the pricing, quantities. materials and/or Work
,described in a i,ar!iculiir Change Order Addendum that will atfect every Jot !jnd/<:>r plan going forward
,subject to a specific Change QrderAdtjl;!ndurn. The .Change Order will be described in i;i Change Order
Addendum and are issged by Taylor MorriSl;in i,100 !)Qt the: Contractor.. Unless. otherMse agreed 10 by
Taylor Morrison, ho deviation in the Work des(i:fibed In. a f'archase Order is to be done by Contractor <:>r
[Contractor's subOoniractors prior to the lssµance of.ii Change Order. Once TaylorMorrison creates a.
,Change Order, WhiclJ Will bedelivered to Contraciorforlts signature, then construction oftheWork under
...... · · - ·· ·· -·· ····· · :a Purchase Order describ!)d therein .can begin subject to the Change Order.
2:6'. E:EECTIRONIC COMMUNICATION PROTOCOL. . To help facintate uniform and'Iecunt1;;;n;mittal of electronic .
communication~. and to protect and preserve data e:¢hE11J9ecJ via electrii.oic communications, the partie$ hereby agree J
that their eleclr~ic communications related to any Work will be governed by Extiibit G.
l\RTJGLE 3.,.CONTRACTOR'S OBLIGATION$ AND REPRESENTATIONS
·a.1 _' REPRE~ENTATIONS AND WARRANTIES, Contractor her!)by, and at all times during the performarice- of any
Work, representj; and warrants that: · ·
(a) Contractor is .in expert in .its field and trade;
(b) pontractor is financially solven~ able tti_pay its debts as they mature and has sufficient working capital to
perform its obligations underthE! ContractD1l¢llm!inls;
(c) . bontrac!Qr is a duly formed and existing entity and is allthoriz;ed to do business in the state where the
(-Jome is located; . . . . ··
(d} ~ontractor ls properly qualified, certified and_ licensed by all governmental and quasi-govemmental
$uthorities with jurisdiction over any Home, and shaU contin\Je to be so cer!ffled and licensed al all times
during performance of the Work (inclusive of any warranty obligations hereunder);
(e) Contractor has disclosed to Taylor Marrison, in writing, any pending claims and actions, including
arbitration and litigation, in. which· it is a party;
(f) Contractor's execution _and delivery of the Contri;ict Documents, where required, an<:! performance of the
Work, is within its duly authorized powers and has been duly authorized; ·
(g) Gontractor is, at all times~ in comi)liance with ail health and safety requirements and training, as required ·
in the local jurisdiction; and will at all times during the p13rforrnance of the Work maintain a competent
person ffi$J)Onsible for all safety and health requirements at the Site (as defined below);
Taylor Morrison 3
~tra~or ~ TM
"'-·,•'"" Mast,!r Agreemerj! for Vertical Construction Services
Ver.6.3.13·~
Exhibit A-1 3
(h) ! Unless otherwise set forth in the Contract Documents, Contractor shall give public authorities all nolfCE>S
· \ required by law and Shall obtain and pc1y for all necessary permits, licenses c1nd renewals. pertaining to
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(i} I
t the Worl(; and
Contractor shall timely provide to Taylor Morrison copies of any and all notlces, permits, licenses c1nd
I reneWals required under the Contract Documents.
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3./! SUP!=~VISIQN; Prior to commencement of the Work. Contractor llhafl s ~ its superviS/Jr for each Horne (the
•S11pervil!Ol") ciand will nCllify Taylor Morrison in writing as to the n>lffie and contact information for such Supervisor.
Contractor sha!J Jmmedic1tely nolify Taylor Morrison in writing of any temparary or perm;;ilient Chang,is to such designee.
At ,any time Cantrac!Clr ii; performing .th,;,- Work, and at .other times as necess<11Y, the Supervisor sh;:111 be present at the
Site., Conlraclbr repr•nts th.rt the Supervisor. (i) is highly qualified and has an excellemtl'eCQfd Qfe.iqlerieilce and I
perrormance oh work slmUar to thlil Work; (ii) hc1s the Hnguislic skills necessary to comm1iniCE1te With Contractofs
-employees, .sut,oontractors, suppliers and others for whom Contractor is responsillle, wll.rtever·tl!eir prjhla,y language
rrf"i.i)'be, as Well as to communicate fully with Taylor Morrison t;ihd its contractors; (iii) is fully km,wledg!l.ible regarding the
Work and the $quirements of the Contract Documents; .ind (Iv) is authorized to respond to !he needs .ind requirements
of Taylor Moni~On without obtaining further autoorization. If Contractor falls to have adequate supervision on the Site, in
addition fo- anYI other remedies avail.ible to Taylor Morrison under ,th)!; Agreernen~ T!lylor Morrison may supply its own
supervision, atpontractor's sole cost, or in the alternative, cause all Contractor's employees to ceal!e Work until adequate
supervision is provided, again at Contractor's sole cost.
3.3 CORRECTION OF DEFECTIVE WORK. At any lime during perfonnance of the Work and so long as Taylor
Morrison remai~s liable for any portion of !he Work, Contractor sh.ill remove and repair or repliioe any of its workmanship,
rnate1na·1s and equipment that are defective or substandard .ind any equipment that f.iils to develop ratings, capacities, or
ntractor, and not Taylor Morrison, is the ·controlling employel" and
· therefore has (he au!horily and responsibillty fpr !he safety of its ernployees, subcontractors, sub-'subcontractors, I
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cpn,;/uJt.ints <1nc( materialmen, as well as the safety of other con.tractors subcontract9r, sub-subcontractors, consutt?nts
<1nd trades in relation to Contractor's Work; while on tiu,·"Sile (as defined below).· All necessary personal protective
eqµiprnei:it deen;ied i;ippropriate for the work assignment will be provldll9 by Contractdrat its e~nse to .ill personnel VI/ho
will be in!>tructe~ by Contractor in the proper selection, care and use of sll(!h safety devices and s.ife goords. As the
"controlling .employer'' with regard to the safely of its own employees, contractor shall have a designated- "Responsible,
] -A!lthor~a.d Perspn for Safety" on. the Site at.all times that Contractors personnel are working on th<. Home. CQlltractdr will ·
:t identify i!11d arr$ge for additional safely training .is the need arises, will perform continuous hazard recognition for unsafe
_WQi"k. practices ~nd/or unsafe work conditions and will abate same, and will .eliminate aJI unacceptable risks h_owsoever -
!! . cereated- Contf1lctor shaU comply with .ill requirements and standard$ with re_$pec:t to occupational health and safety, .
I- accident preve11pon and safety equipment and practices, health .ind safetytraining of Contractor's employees and any
subcontractor ernployees 9n-s1te, .ind any accident prevention and safety program of Taylor Morrison, including the Site
S'11'efy Rules a!tilched hereto as Exhibit C and the General Conditions attached hereto as .Exhibit A Contractor accepts
sole're$ponsibili(y for providing .i safe place to work for its employees .ind for employees of its subcontractors, suppliers
and -others fer wj\om it is responsible, _including without umilation the adequo'$ei, of this Asr.eement, "flazaJ'dous Sub$tance" means any materials or poJlut!!nts Wh\ch poi,e a l l ~ ttJ_ Ill!!,
Home qr the Sfle, or tQ persons on or about the same, or cause the Home or the 9ile to. be in vlplaJion of any l,1w or f91;al
lilpproval. or a!l,, clefiwd as or inch1cled in the definition of "hazardous subslances," 'hazardous wastes," "hazardoµs
materials;or "tpidc" on.vqr~ of similar import ~nder any· applicable law or regulation. ·,
3.6 MOLD.! Contractor shall deliver the Home and all Work free from mold or conditions reasonably likely to lead. to
ll!e developme~t of mold. If mold arises out of Contracior's Work, Cont~tor shall beiir sole responsibility and cost, after
notification by iTaylor Morrison, to eliminate and remediate such mold (and any resulting damages) in a manner
acceptabletoi:aylorMorrison. However, Taylor Morrison may, in its sole discretion, eliminate.and reme.diate such mold
(with other $ubcontractors or otheiwise) and seek any imd all available remedies against ContracloJ", inc:lud{ng the right to
back charge orJ setoff. No materials sqpplied or installed by Contractor shall exceed acceptable moisture levels at the
Ume of installatlbn into the Home.
3.7 . PROJEt:T SITE. By commencing Work, Comractor Warrants that it has carefully examined the site of the Work
· (the "Site•), inc(uding but not limited !o all boundary and edge conditions, proposed house construction. phase locations
· and sequences,! lumber cut yards, material storage locations, wash out pits, and sequrity, safety, traffic and parkins Issues
and con!lems; t~ make certain that it is. acceptable to, Contractor and the Site is ready to acc;eptthe WQr!<, that Is has been
pfl fimited to a request by a homeowner or prospective homeowner) not specifically,.agreed to inwritingby
Taylor Monison : 5
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c·: Contractor V TM
Master Agreement tor Vertical Construction Services . --,....
Ver. 6.3.13-TEx,i\S
. .. J·,
Preview
Filed: 6/13/2023 4:14 PM JOHN D. KINARD - District Clerk Galveston County, Texas Envelope No. 76580977 By: Shailja Dixit 6/13/2023 4:27 PM NO. 21-CV-0951 MICHAEL GAVIS and KATY GAVIS, § IN THE DISTRICT COURT Plaintiffs, § v. § § TAYLOR MORRISON OF TEXAS, INC., § and TAYLOR WOODROW COMMUNITIES § 10TH JUDICIAL DISTRICT – LEAGUE CITY, LTD., § Defendants/Third-Party Plaintiffs, § v. § § BIG TEX AIR CONDITIONING, INC., et al., § Third-Party Defendants. § GALVESTON COUNTY, TEXAS DEFENDANTS’ SECOND SUPPLEMENTAL MOTION TO COMPEL ARBITRATION TO THE HONORABLE JUDGE OF SAID COURT: NOW COME Defendants Taylor Morrison of Texas, Inc. and Taylor Woodrow Communities-League City, Ltd. (collectively “TM Defendants”) and, without waiving their arbitration rights, ask the court for its order: compelling Plaintiffs to arbitrate their claims pursuant to the Texas Supreme Court’s recent decisions in Lennar Homes of Tex. Land & Constr., Ltd. v. Whiteley, 66 Tex. Sup. Ct. J. 874, 2023 Tex. LEXIS 407 (Tex., May 12, 2023), and TotalEnergies E&P USA, Inc. v. MP Gulf of Mex., LLC, 66 Tex. Sup. Ct. J. 591, 2023 Tex. LEXIS 315 (Tex., April 14, 2023); and granting this additional request to compel Third-Party Defendant Big Tex Air Conditioning, Inc. (“Big Tex AC”) to arbitration to resolve TM Defendants’ third-party claims against Big Tex AC. In support of this motion, Defendants would show the following: DEFENDANTS’ SECOND SUPPLEMENTAL MOTION TO COMPEL ARBITRATION PAGE 1 Gavis I. BACKGROUND 1.1 Plaintiffs Michael and Katy Gavis purchased a home built by TM Defendants. 1 Big Tex AC performed HVAC work on the Home pursuant to Master Agreements with each of the TM Defendants. 2 In those Master Agreements, Big Tex AC agreed: … if Taylor Morrison is involved in any arbitration or other alternative dispute resolution proceeding with the Homeowner, or any other party, relating in any way to Contractor’s Work… then Contractor hereby agrees to be joined to such arbitration or alternative dispute resolution proceeding…. 3 1.2 Plaintiffs initiated this lawsuit on June 30, 2021, alleging “construction defects that have caused significant mold growth in Plaintiffs’ home.” 4 Plaintiffs specifically alleged that their home has experienced “unacceptably high levels of relative humidity and condensation.” 5 1.3 TM Defendants answered, including their request that the court compel Plaintiffs to arbitrate their claims pursuant to the paragraph 11 arbitration agreement under the doctrine of direct-benefits estoppel. 6 Subparagraph (d) of that paragraph 11 arbitration agreement also expressly provides for the inclusion of subcontractors in any arbitration between the parties: This arbitration agreement shall inure to the benefit of, and be enforceable by, Seller and Seller’s affiliated and related entities, and each of their subcontractors, agents, vendors, suppliers, design professionals, insurers, and any other person whom Buyer contends is responsible for any alleged defect in or to the Property or any improvement or appurtenance thereto. The parties contemplate the inclusion of such parties in any arbitration of a dispute and agree that the inclusion of such parties will not affect he enforceability of this arbitration agreement. 7 1 Plaintiffs’ Original Petition and Request for Disclosure, filed 6/30/2021, p. 2 @ ¶8, hereafter “Petition.” Plaintiffs filed their Second Amended Petition on 5/6/2022. 2 See Exhibit A (DECLARATION OF JIM BLACK), Exhibit A-1 (MASTER AGREEMENT w/ Taylor Morrison of Texas, Inc.), and Exhibit A-2 (MASTER AGREEMENT w/ Taylor Woodrow Communities-League City, Ltd.) attached hereto and incorporated herein. 3 See supra note 2. 4 Plaintiffs’ Second Amended Original Petition, p. 2 @ ¶8, hereafter “Second Amended Petition.” 5 See supra note 4. 6 Defendants’ Original Answer, Including Motion to Compel Arbitration, Plea in Abatement & Special Exceptions, filed 8/16/2021, hereafter “MTC Arb.” 7 MTC Arb, Ex. B-1, p. 8 @ ¶11)d. DEFENDANTS’ SECOND SUPPLEMENTAL MOTION TO COMPEL ARBITRATION PAGE 2 Gavis TM Defendants filed their third-party claims against subcontractor Big Tex AC. 8 Big Tex AC answered “subject to arbitration.” 9 1.4 On March 23, 2022, this court heard and reserved rulings on TM Defendants’ Motion to Compel Arbitration of Plaintiffs’ claims, Second Amended Objections to Entry of DCO, and Plea in Abatement. 1.5 On July 20, 2022, Big Tex AC filed its own third-party claims “subject to arbitration” against other alleged subcontractors: 1) Probuild South, LP; 2) Installed Building Products of Houston, LLC; 3) Arnulfo Rodriguez Roofing Co., Inc.; 4) All Star Plumbing Management, Ltd.; 5) City Framers, LLC; 6) Wisenbaker Builder Services, Ltd. and 7) L&W Weatherstripping, LLC (collectively “Fourth Party Defendants”). 10 Big Tex AC alleges that its claims against Fourth-Party Defendants must also be arbitrated with claims alleged by Plaintiffs and by TM Defendants. 11 1.6 On March 23, 2023, the court held a Status Conference. Without expressly ruling on TM Defendants’ Motion to Compel Arbitration, Plea in Abatement, and Objections to Entry of Docket Control Order, the court signed and entered its Discovery and Docket Control Order (“DCO”). 1.7 On May 12, 2023, the Supreme Court of Texas decided Lennar Homes of Tex. Land & Constr., Ltd. v. Whiteley, 66 Tex. Sup. Ct. J. 874, 2023 Tex. LEXIS 407 (May 12, 2023). 12 The Court held that a subsequent purchaser of a home was “bound by the arbitration clause in the purchase-and-sale agreement [between the original purchaser and the builder] under the doctrine of direct-benefits estoppel.” Whiteley, 2023 Tex. LEXIS 407 at *1-*2. 8 Defendants’ Third-Party Petition filed 2/17/2022. 9 See Big Tex AC’s Original Answer Subject to Arbitration … filed 2/23/2022. 10 See Big Tex AC’s: Fourth-Party Petition Subject to Arbitration filed 7/20/2022; and Amended Fourth-Party Petition Subject to Arbitration filed 2/3/2023. 11 Big Tex AC’s Response to [Taylor Morrison Defendants’] Motion to Compel Arbitration filed 3/22/2022. 12 Copy attached hereto as Exhibit B. DEFENDANTS’ SECOND SUPPLEMENTAL MOTION TO COMPEL ARBITRATION PAGE 3 Gavis 1.8 On April 14, 2023, the Supreme Court of Texas decided TotalEnergies E&P USA, Inc. v. MP Gulf of Mex., LLC, 66 Tex. Sup. Ct. J. 591, 2023 Tex. LEXIS 315 (Tex., April 14, 2023).13 The Court held that an arbitration agreement to arbitrate in accordance with AAA rules “clearly and unmistakably delegated arbitrability issues to the arbitrator.” TotalEnergies, 2023 Tex. LEXIS 315 at *1. II. ARGUMENT AND AUTHORITIES A. The court should compel Plaintiffs to arbitrate their claims against TM Defendants pursuant to the Texas Supreme Court’s recent decisions. 2.1 Recent Texas Supreme Court caselaw requires Plaintiffs to arbitrate their claims against TM Defendants. See Whiteley, 2023 Tex. LEXIS 407. In Whiteley, the plaintiff was the second owner of a home built by Lennar Homes. Id. at *6. Lennar Homes built and sold the home by a Purchase and Sale Agreement containing arbitration clauses. Id. at *2-*4. The plaintiff sued Lennar Homes, alleging a “serious mold problem” and asserting causes of action for negligent construction and breach of the implied warranties of habitability and good workmanship. Id. at *6- *7. Lennar Homes moved to compel the plaintiff to arbitration. Id. at *7-*8. The plaintiff opposed arbitration because she did not sign the original Purchase and Sale Agreement or any arbitration agreement with Lennar Homes. Id. at *8. 2.2 The Supreme Court held that the plaintiff was obligated to arbitrate her claims under the doctrine of direct benefits estoppel because her claims against the builder were based on the original Purchase and Sale Agreement. Id. at *12-*20. Specifically, the Court: rejected her suggestion that her claims for breaches of implied warranties of good workmanship and habitability derived from common law, not from the original Purchase and Sale Agreement; and confirmed that such implied warranties are part of that Agreement. Id. at *15-16. The Court also 13 Copy attached hereto as Exhibit C. DEFENDANTS’ SECOND SUPPLEMENTAL MOTION TO COMPEL ARBITRATION PAGE 4 Gavis recognized “the substantial overlap between the substance of a negligent construction claim and a claim for breach of an implied warranty of good workmanship.” Id. at *17, n. 11. 2.3 Whiteley’s facts are virtually identical to those presented in this case. Subsequent purchaser Plaintiffs allege “significant mold growth” in their home resulting from construction defects and the home builders’ liability for breaches of implied warranties of good workmanship and habitability and for negligent construction. 14 Whiteley establishes the legal rule: such implied warranties are part of the contract for original construction and sale, and subsequent purchasers’ claims for breaches of such implied warranties “do not stand independently” of such contract. Id. at *12-*20. That rule, along with the Court’s direct benefits estoppel rule (“When the alleged liability arises from the contract or must be determined by reference to it, equity prevents the non- signatory plaintiff from avoiding an arbitration clause that was part of that contract”) establishes precedent for this court to follow. See id. at *14-*15 (quotations and citation omitted). Because these Plaintiffs stand in Whiteley’s shadow, they must arbitrate their claims against TM Defendants. See id. 2.4 And, according to TotalEnergies E&P USA, Inc. v. MP Gulf of Mex., LLC, Plaintiffs may not further burden this court with objections to arbitration of their claims by the American Arbitration Association (“AAA”), the arbitration service designated by the paragraph 11 arbitration agreement. 15 TotalEnergies establishes another applicable legal rule: an agreement to arbitrate in accordance with the AAA makes its rules part of the agreement. 2023 Tex. LEXIS 315 at *19-*20. Here, AAA Construction Industry Arbitration Rule R-2 “authorize[s] the AAA to administer the arbitration” and Rule R-9 delegates to the arbitrator “the power to rule on his or her own jurisdiction, including any objections with respect to the existence, scope, or validity of the 14 Second Amended Petition, p. 2-4. 15 MTC Arb, p. 7 @ ¶11)b. DEFENDANTS’ SECOND SUPPLEMENTAL MOTION TO COMPEL ARBITRATION PAGE 5 Gavis arbitration agreement.” 16 Because these Plaintiffs stand in the shadows of TotalEnergies and applicable AAA Rules, they must arbitrate their claims against TM Defendants through the AAA. B. The court should compel arbitration of TM Defendants’ claims against Big Tex AC based on the express language in the Purchase Agreement’s paragraph 11 arbitration agreement and in the Master Agreements. 2.5 Just as Plaintiffs must arbitrate their claims against TM Defendants by the Purchase Agreement’s paragraph 11 arbitration agreement, HVAC subcontractor Big Tex AC must join that arbitration to resolve TM Defendants’ third-party claims. Big Tex AC is a third-party beneficiary of the arbitration agreement. See In re Next Fin. Group, Inc., 271 S.W.3rd 263, 267 (Tex. 2008); In re Rubiola, 334 S.W.3d 220, 222 (Tex. 2011) (including 3rd party in arbitration when arbitration agreement included such party). Big Tex AC is also bound to the arbitration agreement through equitable estoppel. Allegations of intertwined claims of substantially interdependent and concerted misconduct regarding construction defects estop Big Tex AC from denying arbitration of TM Defendants’ third-party claims. See Meyer v. WMCO-GP, LLC, 211 S.W.3d 302, 305-306 (Tex. 2006) (application of equitable estoppel is warranted when arbitration clause signatory alleges substantially interdependent and concerted misconduct by signatory and non-signatory); Cotton Comm’l USA, Inc. v. Clear Creek ISD, 387 S.W.3d 99, 104-105 (Tex. App.—Houston [14th Dist.] 2012, no pet.). Plaintiffs’ specific claim of “unacceptably high levels of relative humidity and condensation” clearly relates to Big Tex AC’s work. Pursuant to the paragraph 11 arbitration agreement and Big Tex AC’s own arbitration agreements that it “agrees to be joined in such arbitration,” Big Tex AC must join Plaintiffs’ arbitration against TM Defendants to resolve third- party claims against Big Tex AC. Thus, in addition to ordering Plaintiffs to arbitrate their claims, the court should also order Big Tex AC to join Plaintiffs’ arbitration and abate this lawsuit. See 9 16 AAA Construction Industry Arbitration Rules …, attached hereto and incorporated herein as Exhibit D, p. 14, 18. DEFENDANTS’ SECOND SUPPLEMENTAL MOTION TO COMPEL ARBITRATION PAGE 6 Gavis U.S.C. § 3 (“courts of the United States… shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement.”); In re Merrill Lynch Trust Co. FSB, 235 S.W.3d 185, 195 (Tex. 2007) (both the FAA and the Texas Arbitration Act require courts to stay litigation of issues that are subject to arbitration). 2.6 Big Tex AC expressly contemplated arbitration when it first appeared and answered, and again when it asserted its own third-party claims against “Fourth Party Defendants.” 17 Big Tex AC judicially admitted its arbitration agreements with TM Defendants and the propriety of arbitration: • Pursuant to the clear meaning of Paragraph 11, Subsection (d) of the Purchase Agreement if the Court orders Plaintiffs’ claim to arbitration, then the claims against Big Tex should be included in arbitration; 18 and • Article 12 of the … Master Agreement … also requires the claims against Big Tex … to go to arbitration. 19 2.7 Assertions of fact that are deliberate, clear, and unequivocal are regarded as judicial admissions. Mapco, Inc. v. Carter, 817 S.W.2d 686, 687 (Tex. 1991). Big Tex AC’s judicial admissions are conclusive against it and relieves TM Defendants of the burden of proving the admitted facts. Mendoza v. Fidelity & Guar. Ins. Underwriters, Inc., 606 S.W.2d 692, 694 (Tex. 1980). 2.8 Big Tex AC’s admissions notwithstanding, TM Defendants’ proof of Big Tex AC’s arbitration agreements—within Article 12.2 of each Master Agreement with TM Defendants— show Big Tex AC expressly agreed “to be joined in such arbitration [with a homeowner] … to resolve all outstanding issues, claims, and defenses between [Big Tex AC] and Taylor Morrison 17 See supra notes 9 and 10. 18 See supra note 11, p. 4. 19 See supra note 11, p. 4. DEFENDANTS’ SECOND SUPPLEMENTAL MOTION TO COMPEL ARBITRATION PAGE 7 Gavis in such arbitration … and to be bound by the results of such arbitration.” 20 TM Defendants’ third- party claims against Big Tex AC are within the scope of Big Tex AC’s arbitration agreements, and should be arbitrated in Plaintiffs’ arbitration proceeding. C. Compelling all parties to arbitration is not a condition to compel Big Tex AC to arbitration. 2.9 The TM Defendants did not and do not assert claims against Big Tex AC’s “Fourth- Party Defendants.” Ideally, all parties will simply assert and prosecute their claims against other allegedly liable parties in the same arbitration proceeding. However, Big Tex AC asked the court to “order all claims in this matter shall be included in arbitration. 21 If Big Tex AC claims that it cannot be compelled to arbitration without also compelling “Fourth-Party Defendants” to arbitration, that claim is wrong. No such condition precedent appears in Big Tex AC’s arbitration agreements with TM Defendants. No such condition precedent appears in the Purchase Agreement’s paragraph 11 arbitration agreement. 2.10 As TM Defendants originally requested, the court should order Plaintiffs to initiate arbitration with AAA to resolve their claims and the court should abate this case. As TM Defendants now request, the court should also order Big Tex AC to join Plaintiffs’ arbitration. See 9 U.S.C. § 3; In re Merrill Lynch, 235 S.W.3d at 195. WHEREFORE PREMISES CONSIDERED, TM Defendants pray that the court sign an order compelling Plaintiffs, TM Defendants, and Big Tex AC to arbitration with the American Arbitration Association and abating this case. Respectfully submitted, By: /s/ Jennifer Taylor Jennifer Taylor State Bar No. 24102559 jtaylor@brstexas.com 20 Ex. A-1, p. 11. Ex. A-2, p. 11. 21 See supra note 11, p. 1 (emphasis added). DEFENDANTS’ SECOND SUPPLEMENTAL MOTION TO COMPEL ARBITRATION PAGE 8 Gavis BUSH RUDNICKI SHELTON, PC James W. Rudnicki State Bar No. 24006148 james@brstexas.com Diana M. Alcala State Bar No. 24007590 dalcala@brstexas.com Jennifer Taylor State Bar No. 24102559 jtaylor@brstexas.com 2508 Ashley Worth Blvd., Suite 200 Austin, Texas 78738 Telephone: 512-263-8408 Facsimile: 512-263-2562 -and- Carl J. Wilkerson State Bar No. 21478400 cwilkerson@brstexas.com David M. Jones State Bar No. 24042684 djones@brstexas.com 200 N. Mesquite St., Suite 200 Arlington, Texas 76011 Telephone: 817-274-5992 Facsimile: 817-261-1671 ATTORNEYS FOR TAYLOR MORRISON OF TEXAS, INC. and TAYLOR WOODROW COMMUNITIES-LEAGUE CITY, LTD. DEFENDANTS’ SECOND SUPPLEMENTAL MOTION TO COMPEL ARBITRATION PAGE 9 Gavis CERTIFICATE OF CONFERENCE I certify that on June 9 and 12, 2023, TM Defendants’ attorney conferred in good faith by emailing attorneys of record regarding TM Defendants’ requested relief and requesting their positions. The following attorneys responded: 1. Dax Faubus, attorney for Plaintiffs, responded: “Dax will not agree until the [Texas Supreme] Court has ruled on the [Lennar Homes v. Whiteley] motion for reconsideration.” 2. Amy Nilsen, attorney for Big Tex Air Conditioning, Inc., responded: “Big Tex does not oppose your motions. We will be filing a Motion to Compel the 4th Parties to Arbitration.” 3. Randall Beaty, attorney for Arnulfo Rodriguez Roofing Co, Inc. responded: “I am unopposed to your motions but cannot agree for Rodriguez Roofing to voluntarily be joined in the arbitration.” 4. Ian McLin, attorney for BFS Group, LLC, responded: “BFS does not have an opinion on whether Plaintiffs, Defendants, and Big Tex go to arbitration; however, BFS would oppose arbitration of the Big Tex claims against BFS.” 5. Timothy McMurtrie, attorney for City Framers, LLC, responded: “City Framers has no objection to the case being compelled to arbitration. However, unless City Framers is made part of the arbitration, it does object to the abatement you plan to request.” 6. Paul Starr, attorney for L&W Weatherstripping, LLC, responded: “I am unopposed to your motion, so long as it does not seek to compel fourth party defendants into arbitration. 7. Mallorie Walker, attorney for Wisenbaker Builder Services, Inc., responded: “Wisenbaker is unopposed to this, so long as your motion does not seek to compel fourth party defendants into arbitration.” /s/ Jennifer Taylor Jennifer Taylor DEFENDANTS’ SECOND SUPPLEMENTAL MOTION TO COMPEL ARBITRATION PAGE 10 Gavis CERTIFICATE OF SERVICE I certify that a true and correct copy of the foregoing document was delivered to all counsel of record in accordance with Rule 21a of the Texas Rules of Civil Procedure, via electronic delivery through the e-filing system on June 13, 2023. Dax O. Faubus Amy Nilsen THE FAUBUS FIRM JOHNSON, TRENT & TAYLOR, L.L.P. 1001 Texas Avenue, 11th Floor 919 Milam, Suite 1500 Houston, Texas 77002 Houston, Texas 77002 dax-notice@faubusfirm.com anilsen@johnsontrent.com ATTORNEY FOR PLAINTIFFS Carlos A. Balido Randall L. Beaty WALTERS BALIDO & CRAIN, L.L.P. NEWTON JONES & MCNEELY 10440 North Central Expy., Suite 1500 3405 Marquart Dallas, Texas 75231 Houston, Texas 77027 Balidoedocsnotifications@wbclawfirm.com rbeaty@newton-lawyers.com ATTORNEYS FOR BIG TEX AIR ATTORNEY FOR ARNULFO RODRIGUEZ CONDITIONING, INC. ROOFING CO., INC. Ian M. McLin Timothy D. McMurtrie Thomas Lillibridge ROYSTON, RAYZOR, VICKERY & WILLIAMS, L.L.P. LANGLEY & BANACK 802 N. Carancahua, Suite 1300 745 E. Mulberry, Suite 900 Corpus Christi, Texas 78401-0021 San Antonio, Texas 78212 tim.mcmurtrie@roystonlaw.com imclin@langleybanack.com tlillibridge@langleybanack.com Maulik P. Shah ATTORNEYS FOR BFS GROUP, LLC ROYSTON, RAYZOR, VICKERY & WILLIAMS, L.L.P. 1600 Smith Street, Suite 5000 Brian Cano Houston, Texas 77002 Justin Diaz maulik.shah@roystonlaw.com FEE, SMITH & SHARP, LLP ATTORNEYS FOR CITY FRAMERS, LLC 2777 Allen Parkway, Suite 800 Houston, Texas 77019 Paul Byron Starr bcano@feesmith.com GERMER BEAMAN & BROWN PLLC jdiaz@feesmith.com 1501 S. Mopac Expressway, Suite A400 ATTORNEYS FOR INSTALLED BUILDING Austin, Texas 78746 PRODUCTS OF HOUSTON, LLC pstarr@germer-austin.com ATTORNEY FOR L&W WEATHERSTRIPPING, LLC Spencer Edwards Mallorie Walker THE HUDGINS LAW FIRM 24 Greenway Plaza, Suite 2000 Houston, Texas 77046 sedwards@hudgins-law.com mwalker@hudgins-law.com ATTORNEYS FOR WISENBAKER BUILDER SERVICES, INC. /s/ Jennifer Taylor Jennifer Taylor DEFENDANTS’ SECOND SUPPLEMENTAL MOTION TO COMPEL ARBITRATION PAGE 11 Gavis Exhibit A TAYLORMORRISON MASTER AGRl';EMENTFORVERTICAL CONSTRUCTION SERVICES . . - -- - (TEXAS) -- - .ATTN: . .JANA TOVAR • ATTN: Matthew ('Matt':) C.hishtilm TELEl"HONI;: -t713)631~773S TELEPHONE: 1281\ 598°3008 FAX: FAX: (2$1)598'"3112 j EMAIL: dana1t;,bfanc@bigtexair:com EMAIL: mchisholrn@tayforrriotrison.com LICENSE,#: . FED. TAX IDj#: FED. TAX ID#: 74-2012460 .. Thi$ Mast\,lr A/iieement for Vertical Com,buction servrces ("Agreement') is made effective ,,s of this 12th day of Oecem~r. 201i3 {"Effect[ve .Qate"), and shall govern the relationship between Contractor and TayforMQr.nSQil for any ·· new home CQfl$1rQctie>n and associated lot .Improvement project a$ del'cribed in a specific Purchase_ Oril!!r pursuant to i.Vhlc;h Contract,:,r provid/ls service_s to toe Taylor Morrison bivislon identified above (collectively, a. "Home'); Contractor ·- · · •andTayrorMonjison agree ai, f61Tows: · -- · ARTICLE 1...;R~LATlt>NSHIP OF THE PARTIES , l _ l'!li:; J\greernenl establishes the t$111'lS ·a_nd wni:litions on which Taylor MorrisQn mey, frQrn time to. time, anq ill Taylor Mom\;Qn'.$ si>_!e,~fsqret1on, purchase or obtain from Contractor the labor; .supervision, ai;lmi~lt,ltion, and .other activities, _and-the equip~ent, to!>ls ar!i;I materrals as required lly th!! terms of this A{,reementto complete _the Wo~ (as. defined below) setforth 1i!1 one qr more PUrt::tlase Order(s) (as i'.lefinei:I b¢1ow). Once executed, the provisions of this Agreement Slla_l! apply to. Je to the parties in the event Contra\:k'r performs ,:iny W61'.k for Taylor Morrison pursu,:int to a Purchase Order. · , ARTICLE 2...;cO~'TRACT DOCUMENTS, PURCHASE ORPERS AND ELECTRONIC COMMUNICATIO!IIS PROTOCOL 2.1 ·CONTRACT OOCUMENTS: This Agreement. arid any amendment hereto (if applicable),. together with. the exhibits, addenda and other hard or electronic documents describei:1 below, shall be collectively referred to as the "ContractDoeuments," and are hereby incorporated Into and made part of this Agreem~ Taylor Morrison ' U-contractor V TM Master Agreernerjt for Ver!icai---Construction Services · ..,.,,,ct, Ver.6,3.13-TEXA~ " - - Exhibit A-1 1 (a) i Geri,irai Gondi!ion,s (Exhibit Al; . . .. . . . .. (bl i S<;ope ofWork {Exhlliit BYand any Scope of Wort< Addendum (a represeritalive forin of which is ;:tttac!Jed '' ias ExhibirO); (c) · !Site Safety Rules (ExhibitC); {d) j Insurance Requiramenls.(Exhibit El; (f:l) iPaymentTerins(Exhibitf}; (f) iEleetronii: ®mmunicalion Protocol (Exhibit G); (g) iJofrlt'C!Jeck Agreement(a representative form of which is attache(j as Exhibit HJ; (h} )Plan$. Spll(:illc;a!ions and bidS(www.buzzsaw.com); and (il /AnY Pllrc.hai;e 0/'!lsrs or. VPOs (as defined below) issued pursuanuo tlris.Agfi'lenle\1t. . 22 . SCOPd OF Tfll~ AGijEEMENT. This Agreement does notauthoriZe ConfractorJo comm\,!'!ce ;,111y WOit unHt sueh time. as T~ylor l',lofl'.iSon deliVEl!S. to Conttactor a Purcilase Order (!he "Purchase. Order'). Tile PJJri:hiil;El Qrderwur. from time ·to time, be prt>Yided by Taylor Morrison to Contractor In Taylor Morrison's sole dlscreoon .for !)ach HQme, In addition tothe furchaseOrder, Contractor hereby acknowledges ,mdagrees to be bound by the terms .md conditions contained in the General Conditions attached hereto es Exhibit A, th¢ Scope of Work in a Scope of Work Addendum defined below ahd !he lnsul'c!nce Requirements attached hereto as ExhibitE. 2.3 SCOP~ OF WORK. Contractor agrees to furnish ail· supervision, labor, materials. equipment, facilities, technology, and, services required to complete the Work based upon the scope of work attached hereto as Exhibit B and as may also be rr,ore p,irticularty d~scril:>ed in a. specific Scope of Wo11< Addendum (collectively,. whether on!il or more, tire •Sl:ope of. Worl() (hElreinalter, coUeclfveiy tire 'Work'') in ciimpliance with all Contract Document.s, as those dOl)Uments are k!entifiad· tierein. The Work shaU inpluda au supervision, labor, materials, equipment,. facHillel;, technology, JSL!!)ervisitm alli:llservices that.era: (a) ~asonably inferable from the Scope of Wort< specified; (b) .;custQnliuily perfQll'nei:l and provided by competent contractors .a$ part of thsl proper perfo.imance of tire Work oHhe type $pacified; (C) iieoslSJSaryfur1hesµcc:essflll, timely and.safe completion of the Work; •.....• ,~ (d) i,ecessary to cut, f,t or patch portions of the Work as required to mak¢ its several ps3rts come togettier properly, a~d t<;> lit it to rac1.;}y~0 or be received by. !he work.. of Qther" conttactors, as shown. UJ:!On~!)r r..asonably implied by Ifie ConfFciet Documents; and . . . . . . . . . • . . . .~... . · ... (e) beceqllilry to. fulfill tt\e uhdertakln!l$, covenants, guarantees, if!presenta!ions ani:l warranlleJS set forthin· jhisAgteement, the. Contract Documents and Homeowner (as definetj below) or Homeowner,'\sliOcialfon yvarrarity tequestg approved by Taylpt Mo!Tison, ' 2.4 . ACCEPTANCE OF PURCHAS~ORPER(S). If Contractor commences performance of the Work, wlth grwitl)out · . .a· Pµ~hese Ord.~r; it will be deemed to have <1ccepted the t!)JJTIS .ind condili.ons qf this Ag~ment If Taylor Morl"i$on issues a .PurQh$e Prd.ir.fpr a Horne, and Contractor undertakes Work (in the Home, CQntraclor, by. undertaking the Work, wm be llo~nd by th¢ Purqhase Order just as .If Contractor had signed su!'h document If Contrac!Qr commences Work on a liom,i WithOIJt a Purchase Ord,ir having.been issued by Taylor Morrisoq, it sf)all do so at its own risk and.cost Taylor Morrison jnay $Ubsequently issue a Purchase Order. Which shall 9ovem all Wo.rk perfoTTJJicld before llrid .after the Purchase Order(s} are issued, .uqf~ it :;pecificaliy P©Vides OthE,J:Wise. Taylor Morrison wiU, wh,in .applical:ilii, OQtify j!je Contractor of ruiJexcepJion to the requirement of having a Pµrchase Order prior to starting thf:l'Work. This .exceptlorr Will apply to cert.aln. i):fentified categories of work were the exai;t quantity cannot be oe.termine until the Work 1s complete, In this exception,. ff\e. Contract9r \\'ill .Pill per!he. agreed upon quotes and a Purohase Order wm be.issued tp cover the. Work and payment afujr the quantity has be..n determined based on the actual quan!iti,is used forthe Work. ~ontractor TM Taylor Morrison i 2 · MasterAgr~meljt for Vertical Construction Services,,.•c.,'> Ver, 6.3;13-TE)()\!S Exhibit A-1 2 · 2.5 '. PLJRCi:JASEORDERS; VARIAN¢E f\lRCliASE ORDERS AND CHANGE ORDERS. 2,5.1 : Purchase Orders are c.reated byTaylor Morris6o and :are available lo Contractqr as provided -in Exhibit G. Whereas_ the Contract Doc::t.1111e111$ coJlectively d~_rifie ·the Work ·to be· undertaken at a Home, the Purchase Order is ilitended to provide Contractor the' no!fflfliltit!ri"retjuired to oommence a $Jl&eilio l)Ol1ion of the Work and the ptice for the same. The P11rchiise Or,ter roay also specify materials, quanllties, color an,t. style selections, cir other pertinent infQmlaijon,. lfapi)licable; which. information may a1tem11~vely be pmvideQfavailable. through SupplyPro, Buµsaw or a Tc1ylo; MC!rrisorr supenntendent All Pi,oha~ Qrdl;!rs are llllJillly bindin!J contracts an~ ;lf!I il1qQrp9t,l(ed Jtjto. this A!Ji~mertt as tholl!iJh fully set forth Il herein ;is and when i$Slled by Taylor MQ~n. ~I! Worl( p-erfotrned under the Purchase Order sti~I ,be paid in ttte,amountsli!ited on the Purchase Order.ind Will not b!)adj1JS!El(f after the Work is comp~_. · ' . •..". 2,5.2 ··variance Pur.cl]ase Orders ("VPO's") are for construction field vatiances on a single lot only and are I I I issued by Taylor Mollison, if and when .applic:alife. Unless otherwise agree<:! to in writing by Taylor Morrison, no devialiOII in the Workis to be done by Contractor prior to the issu.inceofa VPO, Once Taylor Mortison creates a VPO, which Will be available to Contractor as provided in Exhibit G, then construction of the Work .descnbed th.erein can be9in. Unless otherwise agreed to in writing by Taylor . Morrison, if Contractor engages in Work prior to the issuance of the applicable VPO, Taylor Morrison shall not have any_liabilily for paymenffor such Work. I 2.5.3 •Change Qrd!,!rs ("Ch1111{1a Orders") are for changes to the pricing, quantities. materials and/or Work ,described in a i,ar!iculiir Change Order Addendum that will atfect every Jot !jnd/<:>r plan going forward ,subject to a specific Change QrderAdtjl;!ndurn. The .Change Order will be described in i;i Change Order Addendum and are issged by Taylor MorriSl;in i,100 !)Qt the: Contractor.. Unless. otherMse agreed 10 by Taylor Morrison, ho deviation in the Work des(i:fibed In. a f'archase Order is to be done by Contractor <:>r [Contractor's subOoniractors prior to the lssµance of.ii Change Order. Once TaylorMorrison creates a. ,Change Order, WhiclJ Will bedelivered to Contraciorforlts signature, then construction oftheWork under ...... · · - ·· ·· -·· ····· · :a Purchase Order describ!)d therein .can begin subject to the Change Order. 2:6'. E:EECTIRONIC COMMUNICATION PROTOCOL. . To help facintate uniform and'Iecunt1;;;n;mittal of electronic . communication~. and to protect and preserve data e:¢hE11J9ecJ via electrii.oic communications, the partie$ hereby agree J that their eleclr~ic communications related to any Work will be governed by Extiibit G. l\RTJGLE 3.,.CONTRACTOR'S OBLIGATION$ AND REPRESENTATIONS ·a.1 _' REPRE~ENTATIONS AND WARRANTIES, Contractor her!)by, and at all times during the performarice- of any Work, representj; and warrants that: · · (a) Contractor is .in expert in .its field and trade; (b) pontractor is financially solven~ able tti_pay its debts as they mature and has sufficient working capital to perform its obligations underthE! ContractD1l¢llm!inls; (c) . bontrac!Qr is a duly formed and existing entity and is allthoriz;ed to do business in the state where the (-Jome is located; . . . . ·· (d} ~ontractor ls properly qualified, certified and_ licensed by all governmental and quasi-govemmental $uthorities with jurisdiction over any Home, and shaU contin\Je to be so cer!ffled and licensed al all times during performance of the Work (inclusive of any warranty obligations hereunder); (e) Contractor has disclosed to Taylor Marrison, in writing, any pending claims and actions, including arbitration and litigation, in. which· it is a party; (f) Contractor's execution _and delivery of the Contri;ict Documents, where required, an<:! performance of the Work, is within its duly authorized powers and has been duly authorized; · (g) Gontractor is, at all times~ in comi)liance with ail health and safety requirements and training, as required · in the local jurisdiction; and will at all times during the p13rforrnance of the Work maintain a competent person ffi$J)Onsible for all safety and health requirements at the Site (as defined below); Taylor Morrison 3 ~tra~or ~ TM "'-·,•'"" Mast,!r Agreemerj! for Vertical Construction Services Ver.6.3.13·~ Exhibit A-1 3 (h) ! Unless otherwise set forth in the Contract Documents, Contractor shall give public authorities all nolfCE>S · \ required by law and Shall obtain and pc1y for all necessary permits, licenses c1nd renewals. pertaining to -1 l •. (i} I t the Worl(; and Contractor shall timely provide to Taylor Morrison copies of any and all notlces, permits, licenses c1nd I reneWals required under the Contract Documents. I i I 3./! SUP!=~VISIQN; Prior to commencement of the Work. Contractor llhafl s ~ its superviS/Jr for each Horne (the •S11pervil!Ol") ciand will nCllify Taylor Morrison in writing as to the n>lffie and contact information for such Supervisor. Contractor sha!J Jmmedic1tely nolify Taylor Morrison in writing of any temparary or perm;;ilient Chang,is to such designee. At ,any time Cantrac!Clr ii; performing .th,;,- Work, and at .other times as necess<11Y, the Supervisor sh;:111 be present at the Site., Conlraclbr repr•nts th.rt the Supervisor. (i) is highly qualified and has an excellemtl'eCQfd Qfe.iqlerieilce and I perrormance oh work slmUar to thlil Work; (ii) hc1s the Hnguislic skills necessary to comm1iniCE1te With Contractofs -employees, .sut,oontractors, suppliers and others for whom Contractor is responsillle, wll.rtever·tl!eir prjhla,y language rrf"i.i)'be, as Well as to communicate fully with Taylor Morrison t;ihd its contractors; (iii) is fully km,wledg!l.ible regarding the Work and the $quirements of the Contract Documents; .ind (Iv) is authorized to respond to !he needs .ind requirements of Taylor Moni~On without obtaining further autoorization. If Contractor falls to have adequate supervision on the Site, in addition fo- anYI other remedies avail.ible to Taylor Morrison under ,th)!; Agreernen~ T!lylor Morrison may supply its own supervision, atpontractor's sole cost, or in the alternative, cause all Contractor's employees to ceal!e Work until adequate supervision is provided, again at Contractor's sole cost. 3.3 CORRECTION OF DEFECTIVE WORK. At any lime during perfonnance of the Work and so long as Taylor Morrison remai~s liable for any portion of !he Work, Contractor sh.ill remove and repair or repliioe any of its workmanship, rnate1na·1s and equipment that are defective or substandard .ind any equipment that f.iils to develop ratings, capacities, or ntractor, and not Taylor Morrison, is the ·controlling employel" and · therefore has (he au!horily and responsibillty fpr !he safety of its ernployees, subcontractors, sub-'subcontractors, I l cpn,;/uJt.ints <1nc( materialmen, as well as the safety of other con.tractors subcontract9r, sub-subcontractors, consutt?nts <1nd trades in relation to Contractor's Work; while on tiu,·"Sile (as defined below).· All necessary personal protective eqµiprnei:it deen;ied i;ippropriate for the work assignment will be provldll9 by Contractdrat its e~nse to .ill personnel VI/ho will be in!>tructe~ by Contractor in the proper selection, care and use of sll(!h safety devices and s.ife goords. As the "controlling .employer'' with regard to the safely of its own employees, contractor shall have a designated- "Responsible, ] -A!lthor~a.d Perspn for Safety" on. the Site at.all times that Contractors personnel are working on th<. Home. CQlltractdr will · :t identify i!11d arr$ge for additional safely training .is the need arises, will perform continuous hazard recognition for unsafe _WQi"k. practices ~nd/or unsafe work conditions and will abate same, and will .eliminate aJI unacceptable risks h_owsoever - !! . cereated- Contf1lctor shaU comply with .ill requirements and standard$ with re_$pec:t to occupational health and safety, . I- accident preve11pon and safety equipment and practices, health .ind safetytraining of Contractor's employees and any subcontractor ernployees 9n-s1te, .ind any accident prevention and safety program of Taylor Morrison, including the Site S'11'efy Rules a!tilched hereto as Exhibit C and the General Conditions attached hereto as .Exhibit A Contractor accepts sole're$ponsibili(y for providing .i safe place to work for its employees .ind for employees of its subcontractors, suppliers and -others fer wj\om it is responsible, _including without umilation the adequo'$ei, of this Asr.eement, "flazaJ'dous Sub$tance" means any materials or poJlut!!nts Wh\ch poi,e a l l ~ ttJ_ Ill!!, Home qr the Sfle, or tQ persons on or about the same, or cause the Home or the 9ile to. be in vlplaJion of any l,1w or f91;al lilpproval. or a!l,, clefiwd as or inch1cled in the definition of "hazardous subslances," 'hazardous wastes," "hazardoµs materials;or "tpidc" on.vqr~ of similar import ~nder any· applicable law or regulation. ·, 3.6 MOLD.! Contractor shall deliver the Home and all Work free from mold or conditions reasonably likely to lead. to ll!e developme~t of mold. If mold arises out of Contracior's Work, Cont~tor shall beiir sole responsibility and cost, after notification by iTaylor Morrison, to eliminate and remediate such mold (and any resulting damages) in a manner acceptabletoi:aylorMorrison. However, Taylor Morrison may, in its sole discretion, eliminate.and reme.diate such mold (with other $ubcontractors or otheiwise) and seek any imd all available remedies against ContracloJ", inc:lud{ng the right to back charge orJ setoff. No materials sqpplied or installed by Contractor shall exceed acceptable moisture levels at the Ume of installatlbn into the Home. 3.7 . PROJEt:T SITE. By commencing Work, Comractor Warrants that it has carefully examined the site of the Work · (the "Site•), inc(uding but not limited !o all boundary and edge conditions, proposed house construction. phase locations · and sequences,! lumber cut yards, material storage locations, wash out pits, and sequrity, safety, traffic and parkins Issues and con!lems; t~ make certain that it is. acceptable to, Contractor and the Site is ready to acc;eptthe WQr!<, that Is has been pfl fimited to a request by a homeowner or prospective homeowner) not specifically,.agreed to inwritingby Taylor Monison : 5 ~ - c·: Contractor V TM Master Agreement tor Vertical Construction Services . --,.... Ver. 6.3.13-TEx,i\S . .. J·,