First American Title Insurance lost its bid to force arbitration in a case over failed real estate projects and disputed escrow funds.
On July 22, 2025, the US Court of Appeals for the Tenth Circuit affirmed a lower court’s refusal to send claims against First American and one of its employees, Kirsten Parkin, to arbitration. The decision stems from lawsuits brought by more than 50 individual and family investors who put money into event center developments in Florida and Ohio through Rockwell Debt Free Properties, Inc. The investors say their money was supposed to be held in escrow and used only for land purchases and construction. Instead, they allege, the funds were released almost immediately to Rockwell, which then funneled money to Noah Corporation for executive pay, obligations to earlier investors, and operating costs.
The contracts at the center of the case were Purchase and Sale Agreements between the investors and Rockwell. Each agreement named First American as escrow agent but was signed only by the buyers and Rockwell. Those agreements included an arbitration clause requiring “any dispute between the parties” to be submitted to binding arbitration under the American Arbitration Association’s rules in either Florida or Ohio, depending on the project.
When the investors sued, First American moved to compel arbitration. The insurer argued it could enforce the arbitration provision for four reasons: it was a party to the agreements, it was a third-party beneficiary, it acted as Rockwell’s agent, and the investors should be barred under equitable estoppel from avoiding arbitration.
The appellate court, in an opinion by Judge Harris Hartz, rejected each argument. It found that First American was never a party to the agreements; the documents were “by and between” Rockwell and the buyers and did not include promises to or from First American. As for third-party beneficiary status, the court said there was no evidence the agreements were meant to directly benefit First American beyond the limited role of holding escrow funds.
The agency theory collapsed after Rockwell’s bankruptcy trustee waived arbitration during bankruptcy proceedings. That waiver applied broadly, covering “the Debtor entities, the estate, and all agents, assigns, employees, and representatives thereof.” The court held that the waiver eliminated any ability for First American to enforce arbitration. Finally, the court rejected the equitable estoppel claim, explaining that the arbitration clause applied only to disputes “between the parties” - a phrase that referred exclusively to Rockwell and the investors.
The ruling leaves the investors’ claims - including breach of fiduciary duty and aiding securities fraud - headed for litigation rather than private arbitration, sending a clear message to title insurers and escrow professionals about the limits of arbitration clauses in contracts they do not sign.
