Trial court order compelling arbitration not immediately appealable

Can an order compelling arbitration signed by a trial judge be challenged in an immediate appeal so as to avoid the need to arbitrate? Generally no. Arbitration is favored. An order denying arbitration is a different matter. Texas statute authorizing interlocutory appeal tracks federal provision for such appeals.

Under the Federal Arbitration Act (FAA), an order compelling arbitration and granting a stay is not immediately reviewable. In re Gulf Exploration, LLC, 289 S.W.3d at 842; see 9 U.S.C.A. § 16(b)(1),(3)(West 2009)(interlocutory orders compelling arbitration and staying proceeding are not immediately reviewable under the FAA). Because such an order is not appealable under the FAA, it is not appealable under Section 51.016 of the Texas Civil Practice and Remedies Code. See TEX. CIV. PRAC. & REM. CODE ANN. § 51.016 (West Supp. 2012)(in matters subject to the FAA, an appeal is available only under the same circumstances that an appeal from federal district court's order would be permitted).

    MEMORANDUM OPINION FROM EL PASO   

In this employment-discrimination and -retaliation case, Benjamin Tice, Jr. appeals from the trial court's order granting El Paso Education Initiative, Inc. d/b/a Burnham Wood Charter School District's motion to compel arbitration and stay the proceedings. El Paso Education Initiative now moves to dismiss the appeal for want of jurisdiction.[1] Concluding that we lack jurisdiction over this appeal, we dismiss it.

It is well settled that appellate courts have jurisdiction over final judgments. Lehmann v. Har-Con Corp., 39 S.W.3d 191, 195 (Tex. 2001). A judgment is final if it disposes of all pending parties and claims. Id. An order compelling arbitration and staying proceedings pending arbitration does not dispose of all claims and parties. In re Gulf Exploration, LLC, 289 S.W.3d 836, 840-41 (Tex. 2009)(orig. proceeding). Thus, the trial court's order at issue here is interlocutory.

Appellate courts have jurisdiction to consider immediate appeals of interlocutory orders only if a statute explicitly confers appellate jurisdiction. See Stary v. DeBord, 967 S.W.2d 352, 352-53 (Tex. 1998). If a statute authorizes an interlocutory appeal, we strictly construe it. CMH Homes v. Perez, 340 S.W.3d 444, 447-48 (Tex. 2011); Nazareth Hall Nursing Ctr. v. Castro, 374 S.W.3d 590, 593 (Tex.App.-El Paso 2012, no pet.); Lucchese, Inc. v. Solano, 388 S.W.3d 343, 348 (Tex.App.-El Paso 2012, no pet.). The substance and function of the interlocutory order from which an appeal is taken controls our interlocutory jurisdiction. Castro, 374 S.W.3d at 593; Solano, 388 S.W.3d at 348; Texas La Fiesta Auto Sales, LLC v. Belk, 349 S.W.3d 872, 878 (Tex.App.-Houston [14th Dist.] 2011, no pet.). When a party attempts to appeal a non-appealable interlocutory order, we have no jurisdiction except to dismiss the appeal. Cantu Servs., Inc. v. United Freedom Assoc., Inc., 329 S.W.3d 58, 63 (Tex.App.-El Paso 2010, no pet.) [Quotation marks omitted].

Under the Federal Arbitration Act (FAA), an order compelling arbitration and granting a stay is not immediately reviewable. In re Gulf Exploration, LLC, 289 S.W.3d at 842; see 9 U.S.C.A. § 16(b)(1),(3)(West 2009)(interlocutory orders compelling arbitration and staying proceeding are not immediately reviewable under the FAA). Because such an order is not appealable under the FAA, it is not appealable under Section 51.016 of the Texas Civil Practice and Remedies Code. See TEX. CIV. PRAC. & REM. CODE ANN. § 51.016 (West Supp. 2012)(in matters subject to the FAA, an appeal is available only under the same circumstances that an appeal from federal district court's order would be permitted).

Here, both parties agreed at trial that the arbitration agreement was governed by the FAA, not the Texas General Arbitration Act (TAA).[2] The trial court's order compelling arbitration and staying the proceedings pending arbitration is therefore not reviewable by interlocutory appeal. We thus lack jurisdiction to consider Tice's appeal. Appellee's motion to dismiss the appeal for want of jurisdiction is hereby granted. Accordingly, we dismiss the appeal for want of jurisdiction.

SOURCE: EL PASO COURT OF APPEALS - No. 08-13-00014-CV – 1/13/2013

When should a motion to compel arbitration be granted, when not?

General principles of determining arbitrability as articulated by the Corpus Christi Court of Appeals in a recent appellate opinion.

STANDARD OF REVIEW AND APPLICABLE LAW

"We review a trial court's denial on a motion to compel arbitration for an abuse of discretion." Nazareth Hall Nursing Ctr. v. Melendez, 372 S.W.3d 301, 304 (Tex. App.-El Paso 2012, no pet.) (citing Sidley Austin Brown & Wood, LLP v. J.A. Green Dev. Corp., 327 S.W.3d 859, 862-63 (Tex. App.-Dallas 2010, no pet.)). Under that standard, "we defer to the trial court's factual determinations if they are supported by evidence, but we review the trial court's legal determinations de novo." In re Labatt Food Serv., L.P., 279 S.W.3d 640, 643 (Tex. 2009); see Melendez, 372 S.W.3d at 305.

"Whether an arbitration clause imposes a duty to arbitrate is a matter of contract interpretation and a question of law for the Court to review de novo." Ascendant Anesthesia PLLC v. Abazi, 348 S.W3d 454, 458 (Tex. App.-Dallas 2011, no pet.). "In a de novo review, the trial court's decision is given absolutely no deference." Id.

Although Villareal opposes arbitration, he does not contest that the FAA applies to the Account Agreement with Edward Jones.

"A party seeking to compel arbitration under the FAA must establish that (1) there is a valid arbitration clause, and (2) the claims in dispute fall within that agreement's scope." In re Rubiola, 334 S.W.3d 220, 223 (Tex. 2011) (orig. proceeding); see In re East Rio Hondo Water Supply Corp., No. 13-12-538-CV, 2012 Tex. App. LEXIS 9098, at *10 (Tex. App.-Corpus Christi Oct. 29, 2012, orig. proceeding) (mem. op.). "When deciding whether claims fall within an arbitration agreement, courts employ a strong presumption in favor of arbitration." In re Rubiola, 334 S.W.3d at 225.

"Nonetheless, the strong policy in favor of arbitration cannot serve to stretch a contractual clause beyond the scope intended by the parties or to allow modification of the unambiguous meaning of the arbitration clause." Osornia v. AmeriMex Motor & Controls, Inc., 367 S.W.3d 707, 712 (Tex. App.-Houston [14th Dist.] 2012, no pet.).

"To determine whether a claim falls within the scope of the agreement, courts must `focus on the factual allegations of the complaint, rather than the legal causes of action asserted.'" In re Rubiola, 334 S.W.3d at 225 (quoting Prudential Sec. Inc. v. Marshall, 909 S.W.2d 896, 900 (Tex. 1995)); In re Stanford Group, 273 S.W.3d 807, 813 (Tex. App.-Houston [14th Dist.] 2008, orig. proceeding) ("We look at the facts alleged, rather than the legal causes of actions presented, and consider whether the facts touch matters covered by the underlying arbitration agreement.") Generally, under the FAA, state law governs whether the contracting parties agreed to arbitrate and federal law determines the scope of the arbitration clause. In re Weekley Homes, L.P., 180 S.W.3d 127, 130 (Tex. 2005) (orig. proceeding); see In re Rubiola, 334 S.W.3d at 224 ("Under the FAA, ordinary principles of state contract law determine whether there is a valid agreement to arbitrate.").

Arbitration agreements containing phrases such as "relating to" are interpreted broadly. In re Guggenheim Corporate Funding, LLC, 380 S.W.3d 879, 887-88 (Tex. App.-Houston [14th Dist.] 2012, orig. proceeding) (citing In re Bank One, N.A., 216 S.W.3d 825. 826-27 (Tex. 2007) (resolving doubt as to scope of arbitration agreement covering disputes "arising from or relating in any way to this Agreement" in favor of coverage); 950 Corbindale, L.P. v. Kotts Capital Holdings Ltd. P'ship, 316 S.W.3d 191, 196-97 (Tex. App.-Houston [14th Dist.] 2010, no pet.) (holding that broad arbitration provision defining "disputes" as "any dispute under or related to the partnership agreement or any document executed pursuant to the partnership agreement or any of the transactions contemplated by the partnership agreement shall be subject to arbitration" applied to all claims); TMI Inc. v. Brooks, 225 S.W.3d 783, 791 n.7 (Tex. App.-Houston [14th Dist.] 2007, orig. proceeding) (holding that phrase "arising out of and/or related to" in arbitration agreement is "broad form in nature, evidencing the parties' intent to be inclusive rather than exclusive")). "

However, if the facts alleged in support of the claim stand alone, are completely independent of the contract, and the claim could be maintained without reference to the contract, the claim is not subject to arbitration." Serv. Corp. Int'l v. Lopez, 162 S.W.3d 801, 810 (Tex. App.-Corpus Christi 2005, no pet.); see Osornia, 367 S.W.3d at 714 n.4.; AutoNation USA Corp. v. Leroy, 105 S.W.3d 190, 195 (Tex. App.-Houston [14th Dist.] 2003, orig. proceeding); see also In re Estate of Rowan, No. 05-06-681-CV, 2007 Tex. App. LEXIS 4466, at *8-9 (Tex. App.-Dallas June 7, 2007, no pet.) (mem. In construing the arbitration provision, we first determine whether it is possible to enforce the contract as written, without resort to parol evidence. J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003).

In construing a written contract, the primary concern of the court is to ascertain the true intentions of the parties as expressed in the instrument. In re Guggenheim Corporate Funding LLC, 380 S.W.3d at 887 (citing J.M. Davidson, 128 S.W.3d at 229). In the arbitration context, we must give effect to the parties' intent, whether enforcing an agreement to arbitrate or construing an arbitration clause. Id. Following arbitration jurisprudence, we apply a common-sense examination of the underlying claim and the forum-selection clause to determine if the claim comes within the scope of the clause. Id. (citing In re Lisa Laser USA, Inc., 310 S.W.3d 880, 884 (Tex. 2010) (orig. proceeding) (per curiam)). "A contract is unambiguous if it can be given a definite or certain legal meaning." J.M. Davidson, 128 S.W.3d at 229. "On the other hand, if the contract is subject to two or more reasonable interpretations after applying the pertinent rules of construction, the contract is ambiguous, creating a fact issue on the parties' intent." Id. A contract is not ambiguous merely because the parties disagree on its meaning. Seagull Energy E & P, Inc. v. Eland Energy, Inc., 207 S.W.3d 342, 345 (Tex. 2006). The issue of contractual ambiguity may be considered sua sponte by a reviewing court. See Progressive Cnty. Mut. Ins. Co. v. Kelley, 284 S.W.3d 805, 808 (Tex. 2009). op.).

SOURCE:   CORPUS CHRIST-EDINBURG COURT OF APPEALS - 13-12-00166-CV – 2/21/2013

Undue delay renders mandamus relief unavailable

Due diligence is required in seeking mandamus relief. That alone will not guarantee success, of course; but if you wait too long before deciding to complain about the trial court judge in the court of appeals, you may as well forget it.

PER CURIAM MEMORANDUM OPINION FIRST COURT OF APPEALS IN HOUSTON

By petition for writ of mandamus, relator, Cox Ventures, Inc. d/b/a Media Ink, seeks mandamus relief compelling the trial court to vacate its order granting Real Party in Interest, KNG L.L.C. d/b/a Texas Direct Bindery & Letterpress's application to compel arbitration and motion to sever.[1] We deny Cox's petition for writ of mandamus.

Background

On October 4, 2011, KNG sued Cox alleging claims based on a sworn account, breach of contract, quantum meruit, and unjust enrichment. Following the filing of its original answer, Cox asserted a counterclaim against KNG alleging breach of contract and conversion. KNG timely filed its answer.

KNG subsequently filed an application to compel arbitration of Cox's counterclaim and a motion to sever it from KNG's claims. Cox filed its response and a counter-motion to compel arbitration of all of the parties' claims. On April 9, 2012, the trial court signed an order granting KNG's application to compel arbitration of Cox's counterclaim and its motion to sever.

Discussion

On September 28, 2012, Cox filed this petition for writ of mandamus. In its petition, Cox complains that the trial court abused its discretion by compelling arbitration of Cox's counterclaim and severing it from KNG's claims rather than compelling arbitration of all of the parties' claims.

Mandamus is an extraordinary remedy; it is not issued as a matter of right but rather at the discretion of the court. Rivercenter Assocs. v. Rivera, 858 S.W.2d 366, 367 (Tex. 1993). Mandamus relief is not an equitable remedy but its issuance is largely controlled by equitable principles. Id. One such principle is that "[e]quity aids the diligent and not those who slumber on their rights." Id. (quoting Callahan v. Giles, 155 S.W.3d 793 (1941)).

Here, Cox filed its petition for writ of mandamus nearly six months after the court signed its April 9 order.[2] Cox offers no justification for its delay in seeking mandamus relief and the record reveals none. Delay alone provides ample ground to deny mandamus relief. See International Awards, Inc. v. Medina, 900 S.W.2d 934, 936 (Tex. App.-Amarillo 1995, orig. proceeding) (finding four-month delay between court's severance order of counterclaim and relator's petition for writ of mandamus provided grounds to deny requested relief); Furr's Supermarkets, Inc. v. Mulanax, 897 S.W.2d 442, 443 (Tex. App.-El Paso 1995, orig. proceeding) (denying relator's motion for leave to file petition for writ of mandamus filed four months after court's oral discovery ruling and one month after written order was signed and where relator offered no explanation for delay); Bailey v. Baker, 696 S.W.2d 255, 256 (Tex. App.-Houston [14th Dist.] 1985, orig. proceeding) (denying motion for leave to file petition for writ of mandamus where relator waited nearly four months to file motion and provided no justification for delay). 
  
Accordingly, we deny Cox's petition for writ of mandamus and lift the stay entered on September 26, 2012.

SOURCE: HOUSTON COURT OF APPEALS  FIRST DISTRICT - No. 01-12-00879-CV - 3/7/2013

[1] The underlying case is KNG, L.L.C. d/b/a Texas Direct Bindery & Letterpress v. Cox Ventures, Inc. d/b/a Media Ink, Cause No. 1002161, pending in County Civil Court at Law No. 1 of Harris County, Texas, the Honorable Debra Ibarra Mayfield, presiding.