Legacy Funeral Holdings of Nev., LLC v. Ouzenian
CourtNevada Supreme Court
Date FiledNovember 5, 2026
Docket91044
JudgeCadish, J.
StatusPublished
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Full Opinion
IN THE SUPREME COURT OF THE STATE OF NEVADA
LEGACY FUNERAL HOLDINGS OF No. 91044
NEVADA, LLC, D/B/A DAVIS
FUNERAL HOME & MEMORIAL
PARK, A DOMESTIC LIMITED
LIABILITY COMPANY,
Appellant,
vs.
ALICE M. OUZENIAN, INDIVIDUALLY
AND AS CO-SPECIAL
ADMINISTRATOR OF THE ESTATE
OF AIDA OUZENIAN; ANGELA
GABOURY, AS CO-SPECIAL
ADMINISTRATOR OF THE ESTATE
OF AIDA OUZENIAN; ALEK
OUZENIAN, INDIVIDUALLY; AND
ART OUZENIAN, INDIVIDUALLY,
Respondents.
Appeal from a district court order denying a motion to compel
arbitration. Eighth Judicial District Court, Clark County; Erika Mendoza,
Judge.
Affirmed in part, reversed in part, and remanded with instructions.
Schnitzer Johnson & Watson, Chtd., and Gina M. Mushmeche, Michael R.
Esposito, and Jacob A. Suty, Las Vegas,
for Appellant.
Christian Morris Trial Attorneys and Christian M. Morris and Jamie N.
McInelly, Henderson,
for Respondents.
BEFORE THE SUPREME COURT, STIGLICH, CADISH, and LEE, JJ.
OPINION
By the Court, CADISH, J.:
This appeal arises from a dispute over an agreement for cremation
services, which appellant Legacy Funeral Holdings of Nevada and respondent
Alice Ouzenian signed. After Legacy completed the cremation services, Alice
and her siblings, respondents Alek and Art Ouzenian, sued Legacy for breach
of contract and various torts, alleging that Legacy failed to provide promised
notice and an opportunity to cancel the services before their completion.
Legacy moved to compel arbitration pursuant to the agreement. The district
court denied the motion, concluding that factual issues remained concerning
the enforceability of the agreement and its arbitration provision. We address
whether those threshold enforceability issues must be resolved by the
arbitrator under NRS 38.219(3), despite Legacy’s failure to invoke the
agreement’s delegation provision below, and whether nonsignatories are bound
by the arbitration provision under the doctrine of equitable estoppel.
Because NRS 38.219(3) requires the arbitrator to consider the
enforceability of a contract containing a valid arbitration clause, we conclude
that the district court erred by denying Legacy’s motion to compel arbitration
and reserving that threshold enforceability question for itself. Although
Legacy did not invoke the agreement’s delegation provision when it moved to
compel arbitration, NRS 38.219(3) independently requires the arbitrator to
resolve whether a contract containing a valid agreement to arbitrate is
enforceable. We also conclude that, under equitable estoppel, nonsignatories
are bound by an arbitration agreement when they seek to derive a direct
benefit from the contract containing the arbitration provision. Because
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nonsignatories Art and Alek seek such a benefit, the arbitration provision
applies to them. Accordingly, we reverse and remand for the district court to
grant Legacy’s motion to compel arbitration as to the Ouzenians and stay the
district court proceedings under NRS 38.221(7). We also affirm the portion of
the district court’s order denying the motion to compel arbitration as to the
decedent’s estate.
FACTS AND PROCEDURAL HISTORY
Alice, Art, and Alek entered into an agreement with Legacy for the
cremation of their mother Aida’s remains on August 14, 2024. The agreement
was comprised of both a Purchase Agreement and an Authorization for
Cremation. The Purchase Agreement contained an arbitration clause and an
integration clause. Only Alice signed the Purchase Agreement, while all three
Ouzenians signed the Authorization for Cremation. Both forms were executed
on the same day.
The Ouzenians allege that over the next two weeks, they made
several attempts to contact Legacy to cancel the cremation but never received
a return call. On August 26, Legacy’s funeral director sent a text message to
Art confirming that Legacy’s technicians would contact him 30 minutes before
the cremation to discuss any concerns. On September 2, Legacy cremated
Aida’s body without notification. The following day, Legacy’s funeral director
informed Art via text message that his mother’s remains had been cremated.
The Ouzenians and Aida’s estate sued Legacy for breach of
contract; breach of the implied covenant of good faith and fair dealing; breach
of fiduciary duty; negligence/negligence per se; negligent hiring, training,
retention, and supervision; and negligent infliction of emotional distress based
on Legacy’s alleged failure to provide notice and an opportunity to cancel before
performing the cremation. As relevant here, Legacy moved to dismiss the
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proceedings to enforce the arbitration agreement under NRS 38.219. 1 The
Ouzenians opposed, arguing Legacy failed to show that all of the plaintiffs
agreed to arbitrate the claims, while acknowledging that “Alice might have
agreed to arbitrate her individual claims if the [Purchase Agreement] is
enforceable under Nevada law.”
The district court denied Legacy’s motion based on the possibility
that the contract itself was unenforceable, finding that the Purchase
Agreement and Authorization were “silent as to cancellation of the cremation”
and that “the inability [to] cancel the cremation would lead to serious doubts
as to if there was ever a valid and enforceable contract for cremation services.”
The court further found that because the estate, Alek, and Art did not sign the
Purchase Agreement, they could not be bound by the arbitration clause. The
court determined that equitable estoppel did not overcome that shortcoming
because the Ouzenians and the estate alleged that the agreement “extended
beyond the document with the arbitration clause.” The court acknowledged
that Alice signed the Purchase Agreement “and normally would be bound to it,
but based on the specific facts alleged in the Complaint, there [were]
outstanding questions of fact to resolve before determining whether the
purchase agreement and/or arbitration clause contained therein is
enforceable.” Last, the court stated that it would reconsider the arbitration
clause as to Alice pending further factual development. Legacy appeals under
NRS 38.247(1)(a).
1While Legacy moved to dismiss under NRS 38.219, the proper procedure
when a motion to compel arbitration is granted is to stay the proceedings under
NRS 38.221(7).
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DISCUSSION
The district court erred in reserving the issue of the enforceability of the
agreement for cremation services to itself because, under NRS 38.219(3), that
issue should have been determined by the arbitrator
Legacy first argues that the Purchase Agreement incorporates the
American Arbitration Association (AAA) rules and thus delegates issues of
enforceability and arbitrability of the arbitration provision to the arbitrator.
See Uber Techs., Inc. v. Royz, 138 Nev. 690, 695, 517 P.3d 905, 910 (2022)
(recognizing that “incorporating the AAA’s rules, even without more,
constitutes clear and unmistakable evidence of intent to submit the question
of arbitrability to the arbitrator”). The Ouzenians contend that Legacy waived
this argument by failing to raise it in the district court. We agree that Legacy
waived its contractual delegation argument. “A point not urged in the trial
court, unless it goes to the jurisdiction of that court, is deemed to have been
waived and will not be considered on appeal.” Old Aztec Mine, Inc. v. Brown,
97 Nev. 49, 52, 623 P.2d 981, 983 (1981). That waiver principle applies where
a party advocating for arbitration fails to raise a delegation-clause argument
in district court. See Express Scripts, Inc. v. Aegon Direct Mktg. Servs., Inc.,
516 F.3d 695, 701-02 (8th Cir. 2008) (holding that respondent waived its
argument that the parties incorporated the AAA rules into their agreement by
failing to raise the issue in district court); In re Checking Acct. Overdraft Litig.,
754 F.3d 1290, 1298 (11th Cir. 2014) (holding that a party waived its argument
that an arbitrator must determine arbitrability pursuant to a delegation clause
by not raising it below).
But Legacy’s failure to invoke the contractual delegation provision
does not resolve who must decide the enforceability of the Purchase
Agreement, apart from the enforceability of the arbitration provision contained
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therein. Legacy separately argues that NRS 38.219(3) requires the arbitrator
to decide that issue. We agree.
We review orders denying motions to compel arbitration de novo.
Uber Techs., 138 Nev. at 692, 517 P.3d at 908. Absent a delegation clause,
“[u]nder Nevada law, district courts typically decide the threshold question of
whether a dispute is subject to an arbitration agreement.” Id. at 690, 517 P.3d
at 907; see NRS 38.219(2). But NRS 38.219(3) creates a separate rule for
determining the enforceability of an agreement containing an arbitration
clause: “[a]n arbitrator shall decide whether a condition precedent to
arbitrability has been fulfilled and whether a contract containing a valid
agreement to arbitrate is enforceable.” Thus, although Legacy waived its
argument that the parties themselves delegated the question of the arbitration
clause’s enforceability to the arbitrator, the legislature has independently
assigned the question of the contract’s enforceability to the arbitrator.
The Ouzenians’ arguments against arbitration focus not on the
validity of the arbitration provision but rather on the substantive
enforceability of the entire agreement. Specifically, the Ouzenians contend
that the agreement is unenforceable because the “contract at issue lacked any
terms as to how to cancel the agreement or cremation,” which is also the basis
for their breach of contract and breach of the implied covenant of good faith
and fair dealing claims below. Thus, although the Ouzenians’ claims depend
on the existence of an agreement for cremation services, they dispute whether
the agreement is enforceable based on the circumstances surrounding the
alleged right to cancel.
The district court pointed to this dispute in denying the motion to
compel arbitration, finding “there is information to suggest that possibly
recission would be appropriate or that it would be unenforceable for various
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reasons that depend on a factual analysis of what actually happened here.”
But whether those facts render the Purchase Agreement unenforceable is
precisely the question NRS 38.219(3) assigns to the arbitrator. The statute
does not condition the arbitrator’s authority on the absence of factual disputes
concerning enforceability; rather, it requires the arbitrator to decide whether
a contract containing a valid agreement to arbitrate is enforceable.
Accordingly, we conclude that the district court erred by reserving the issue of
the contract’s enforceability for itself and denying Legacy’s motion to compel
arbitration on that basis.
The district court erred in finding that Alek and Art are not bound by the
Purchase Agreement’s arbitration clause
Legacy challenges the district court’s finding that the Purchase
Agreement and Authorization for Cremation were separate contracts and,
consequently, that Alek and Art were not bound by the Purchase Agreement’s
arbitration clause. Legacy argues that although Alek and Art did not sign the
Purchase Agreement, equitable estoppel binds them to its arbitration provision
because they seek a direct benefit from the agreement. Legacy further
contends that where nonsignatories assert claims derived from a contract, the
arbitration clause within that contract binds them. We agree.
“Equitable estoppel precludes a party from claiming the benefits of
a contract while simultaneously attempting to avoid the burdens that contract
imposes.” RUAG Ammotec GmbH v. Archon Firearms, Inc., 139 Nev. 465, 472,
538 P.3d 428, 435 (2023) (internal quotation marks omitted). Thus, “a
nonsignatory is estopped from refusing to comply with an arbitration clause
when it receives a direct benefit from a contract containing an arbitration
clause.” Id. (internal quotation marks omitted). A nonsignatory, however, is
not bound merely because its claim relates to an agreement containing the
arbitration provision; the nonsignatory must seek, through its claims, to derive
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a direct benefit from that agreement, such as by asserting a claim for breach
of that very agreement. El Jen Med. Hosp., Inc. v. Tyler, 139 Nev. 322, 333,
535 P.3d 660, 670 (2023).
Here, Alice, the signatory to the Purchase Agreement, is bound by
its arbitration provision. Alek and Art, although they did not sign the
Purchase Agreement, are likewise bound under principles of equitable
estoppel. The complaint asserts claims for breach of contract and breach of the
implied covenant of good faith and fair dealing on behalf of the three Ouzenians
and the estate, alleging that Legacy agreed to provide cremation services,
assured the Ouzenians they could change their decision before the cremation,
and then proceeded with the cremation without providing the promised notice
or opportunity to cancel. The Ouzenians seek damages based on Legacy’s
alleged failure to honor those obligations. Thus, Alek and Art seek to enforce
rights they allege arose from the parties’ cremation-services transaction while
avoiding the arbitration provision contained in the written agreement
governing that transaction.
The fact that the Ouzenians assert tort and negligence theories in
addition to breach-of-contract theories does not alter this conclusion. Their
claims rest on the same alleged failure to honor the promised opportunity to
withhold consent or cancel the cremation before it occurred. Because Alek and
Art seek to recover from breach of the contractual relationship while
attempting to avoid the arbitration provision in the contract that governs that
relationship, we conclude that equitable estoppel applies.
Legacy claims that the estate is also bound to the arbitration
clause but does not present any argument connecting the heirs’ obligations
under the contract to the decedent’s estate. Cf. id. at 329, 535 P.3d at 667-68
(recognizing that under NRS 41.085, a decedent cannot bind a statutory heir’s
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wrongful death claim to arbitration because an heir’s claim is distinct from the
decedent’s and estate’s claims). Because Legacy fails to cogently argue why
the estate should be bound to the arbitration provision, we affirm the portion
of the district court’s order denying the motion to compel arbitration as to the
decedent’s estate. Edwards v. Emperor’s Garden Rest., 122 Nev. 317, 330 n.38,
130 P.3d 1280, 1288 n.38 (2006) (explaining that this court will not consider
claims unsupported by cogent argument and relevant authority).
We do not decide whether the Ouzenians in fact had a right to
cancel, whether Legacy agreed to provide such a right, or whether any alleged
cancellation or notification term is part of the Purchase Agreement. Those
issues concern the merits and enforceability of the parties’ agreement and are
thus for the arbitrator to decide. At this stage, the relevant question is whether
Alek and Art seek a direct benefit from the contract containing the arbitration
provision. Because they do, they are equitably estopped from avoiding that
provision.
CONCLUSION
Although Legacy did not invoke the Purchase Agreement’s
delegation provision in litigating the motion to compel arbitration in the
district court and therefore waived the issue of whether that provision applies
to delegate to the arbitrator any question as to the validity of the arbitration
clause, NRS 38.219(3) independently requires the arbitrator to determine
whether the Purchase Agreement is enforceable. The district court therefore
erred by reserving that issue for itself to resolve and denying Legacy’s motion
to compel arbitration. Alice, as a signatory to the Purchase Agreement, is
bound by its arbitration provision, and Alek and Art are likewise bound under
equitable estoppel because they seek to derive a direct benefit from the
contractual relationship containing the arbitration provision by suing for
breach thereof. Accordingly, we affirm in part the portion of the district court’s
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order denying the motion to compel arbitration as to the decedent’s estate, but
we reverse in part and remand for the district court to enter an order granting
the motion to compel arbitration as to Alice, Art, and Alek and staying the
proceedings per NRS 38.221(7).
Cadish, J.
We concur:
Stiglich, J.
Lee, J.
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