Service Corporation International v. Ruiz

2018 WL 549196 (2018)

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Nature of the Case

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Facts

After Ernesto's unexpected death, an autopsy was performed by the medical examiner. The medical examiner put Ernesto's organs in a plastic bag and then placed the bag back into the body cavity, stitched up the incision, and released the body to D. D employees embalmed Ernesto's remains. Ruiz (P) asserts that she never consented to the embalming. While making arrangements for the funeral services, P toured the mausoleum where the service was to be held and noted a 'musty smell' and a lack of air-conditioning. She was assured by D that these problems would be resolved before the service. P arrived at the funeral home early and when she and her son approached the casket they found 'Ernesto's face, ears, and chest . . . covered with what looked like gnats but could have been small flies.' During the service, the air-conditioning did not function, and friends and family were forced to 'fan away the ever-present haze of insects.' Three days after the service, P met with D's general manager, 'Mr. Guerra.' Mr. Guerra revealed that the bag containing Ernesto's organs had not been buried with his remains. Mr. Guerra explained that there were two options: (1) disinter Ernesto's remains, place the organs next to Ernesto's body, and re-inter the casket; or (2) cremate the organs and inter them near Ernesto's burial plot. P alleges fraud by nondisclosure. P alleged that D breached its duty to disclose material facts related to the funeral which were known only to D. P claims D knew and failed to disclose at the time of contracting: that Ernesto's remains were received in a condition that would cause insect infestation, that the remains had suffered a mishap or would be mishandled by D in a manner that would cause insect infestation, and that the remains were to be buried without internal organs, among other allegations. P sued for fraud as both a claim for relief and as an affirmative defense to arbitration. D filed a motion to compel arbitration. Internment Agreement and the Funeral Agreement both contain arbitration provisions in which P agreed that any claims she had relating to the Agreements, including any dispute about the interpretation of its arbitration clause, would be submitted to arbitration under the rules of the American Arbitration Association. Under the Interment Agreement, P agreed to many terms favorable to D, such as D's disclaimer of warranties. D agreed to maintain the funeral grounds and to make deposits into a trust fund for grounds maintenance. Under the Funeral Agreement, D agreed to other provisions favorable to D, such as D's disclaimer of warranties and consequential damages. P argued that the arbitration provisions were unconscionable. P cited fraud as an affirmative defense against arbitration and that her sole claim for relief-a claim for fraud-fell outside the scope of the arbitration clauses. P argued that no valid consideration supported the arbitration clauses. The trial court held that P's fraud claim did not fall within the scope of the arbitration clauses. D filed this interlocutory appeal challenging the denial of its motion to compel arbitration.