Shrader & Associates, LLP v. Carrasco,
No. 01-19-00042-CV (Tex.App.- Houston [1st Dist.] Sep. 24, 2019, motion for rehearing filed Oct. 9, 2019, no pet. h.)
This case presents an arbitrability issue in a rare procedural posture. A Texas law firm sought to force clients residing in California to arbitrate their legal malpractice claim against it in Houston, to which the former clients, who had already sued the law firm in California, responded by filing a special appearance challenging personal jurisdiction over them. A Harris County District Court resolved the matter against the local law firm.
Through the lawsuit in Texas SHRADER & ASSOCIATES sought a declaration that the arbitration clause in a fee agreement that the clients had signed, but the law firm had not signed, was binding and enforceable. The trial court ruled contrariwise and the court of appeals affirmed on the basis that the law firm had not proven that the contract containing the arbitration agreement had been formed because no one had signed it on behalf of the law firm, and because the law firm had ultimately declined not to pursue a lawsuit on behalf of the clients. Under such circumstances, there was no showing of acceptance by conduct as an alternative to acceptance by signature.
The law firm's failure to file a personal injury suit on behalf of the former clients formed the basis for the malpractice claim because the statute had run in the interim.
A second interesting aspect of this case concerns the nature of the fee agreement. It was apparently a contingent fee agreement that must be signed by both client and attorney under a Texas statute. In Shrader, the Houston court of appeals did not delve into whether the arbitration agreement could be enforced independent of the question whether the contingent fee agreement (which contained it) was valid and enforceable under state law. That issue has previously surfaced in other cases. See, e.g., Law Office of Thomas J. Henry v. Priscilla Ann Garcia, No. 13-18-00275-CV (Tex.App.-Corpus Christi/Edinburg, Feb. 21, 2019, no pet.), in which the Thirteenth Court of Appeals compelled arbitration even though the contingent fee agreement had also not been signed by the attorney).
It could be argued that the clients accepted the agreement as drafted and presented to them by the law firm as long as they did not change any of the terms to turn it into a counter-offer, and that therefore a signature by the law firm was not required to create a mutual obligation to arbitrate disputes, even if such a second signature was required to make the contingent fee agreement itself valid and enforceable. Under the Federal Arbitration Act (FAA), arbitration agreements need not be signed as long as mutual assent is present, and the arbitration agreement could be severed from the remainder of the fee agreement if the other terms were held to be unenforceable as a matter of state law governing legal services agreements that provide for a contingent recovery of fees from judgment or settlement proceeds.
It will be interesting to see whether the case will end up in the Texas Supreme Court, which last year passed on an opportunity to weigh in on this issue. See Law Office of Thomas J. Henry v. Cavanaugh, No. 05-17-00849-CV, 2018 WL 2126936, at *4 (Tex. App.-Dallas May 7, 2018, pet. denied in Tex. No. 18-0562) (mem. op.) (firm's failure to sign fee agreement, standing alone, did not make its arbitration clause unenforceable).
Also see related post on this blawg: Is arbitration clause in non-compliant attorney-client fee agreement enforceable? - Preview of Jonathan Cavanaugh v. Law Office of Thomas J. Henry (PFR filed in Texas Supreme Court).
SHRADER & ASSOCIATES, L.L.P., Appellant,
v.
CRISSY CARRASCO AND DAVID CARRASCO, JR., Appellees.
Court of Appeals of Texas, First District, Houston.
Stephanie Taylor, Vincent L. Marable, III, Kendall C. Montgomery, William Fred Hagans, for Crissy Carrasco and David Carrasco, Jr., Appellee.
Nicholas Bruno, Marcos Rosales, David J. Beck, for Shrader & Associates, L.L.P., Appellant.
On Appeal from the 295th District Court, Harris County, Texas, Trial Court Case No. 2018-57553.
Panel consists of Justices Lloyd, Goodman, and Landau.
MEMORANDUM OPINION
GORDON GOODMAN, Justice.
Shrader & Associates, L.L.P. filed a declaratory judgment action seeking an order compelling Crissy Carrasco and David Carrasco, Jr. to arbitrate their legal malpractice claim against the firm. The Carrascos disputed personal jurisdiction. The trial court agreed with the Carrascos and dismissed the firm's suit. We affirm.
BACKGROUND
Malpractice Suit
The Carrascos, California residents who have no contacts with Texas, retained Shrader & Associates, a Texas law firm, to represent them in a personal-injury matter. After the statute of limitations had expired as to the personal-injury claim and without filing suit, the law firm informed the Carrascos that it would be unable to represent them or pursue litigation on their behalf and therefore ended its representation of the Carrascos. The Carrascos then sued the firm in California state court, alleging legal malpractice.
Declaratory Judgment Action
Shrader & Associates filed this declaratory judgment action against the Carrascos seeking an order compelling arbitration of their legal malpractice claim. The firm alleged that the Carrascos had signed a fee agreement containing a mandatory arbitration clause as to any attorney-client disputes.
In relevant part, the fee agreement's arbitration clause states:
XVII. Arbitration. Any disagreement, dispute, claim or cause of action arising pursuant to the performance of this agreement shall be resolved through binding arbitration. The arbitration shall take place before a panel of three (3) arbitrators in conformance with the rules of the American Arbitration Association in Houston, Harris County, Texas.[1]
It is undisputed that the Carrascos signed the fee agreement and that a representative of Shrader & Associates did not do so despite a separate signature block for the firm. Above the parties' signature blocks, the agreement provides that, "This Attorney-Fee Contract was entered into on ______." The blank provided for the date of execution is empty.
The Carrascos filed a special appearance contesting personal jurisdiction. Shrader & Associates responded that the trial court had personal jurisdiction over the Carrascos for the limited purpose of compelling arbitration because the fee agreement's arbitration clause provided for arbitration in Houston.
The trial court granted the Carrasco's special appearance and dismissed the firm's declaratory judgment action for lack of personal jurisdiction. The trial court did not specify the rationale underlying its dismissal order.
Arbitral Proceeding
On the same day that it filed its declaratory judgment action, Shrader & Associates filed an arbitration demand with the American Arbitration Association. The Association administratively determined that the firm's arbitration clause violated its consumer arbitration rules, in part because the clause's requirement that the arbitration be held in Houston was not reasonably convenient for both parties. The Association requested that Shrader & Associates waive this aspect of the arbitration clause as a prerequisite to arbitration. The firm disputed that the consumer arbitration rules applied and refused the waive the clause's specification of Houston as the location of the arbitration. The Association therefore declined to administer the arbitration.
DISCUSSION
Shrader & Associates appeals from the trial court's order granting the Carrasco's special appearance. The firm does not contend that there is general or specific personal jurisdiction over the Carrascos. Instead, it contends that the fee agreement's arbitration clause provides personal jurisdiction over the Carrascos for the limited purpose of compelling them to arbitrate their legal malpractice claim. The Carrascos contend that the fee agreement, including its arbitration clause, is not enforceable because the firm neither signed the agreement nor submitted other evidence of its intent to be bound by the fee agreement. The Carrascos additionally contend that the American Arbitration Association's administrative dismissal of the firm's arbitration demand makes the firm's continued demand for arbitration futile.
Standard of Review
We review de novo whether a trial court has personal jurisdiction. Old Republic Nat'l Title Ins. Co. v. Bell, 549 S.W.3d 550, 558 (Tex. 2018). Because the trial court did not issue findings of fact and conclusions of law, we imply all facts necessary to support its judgment that are supported by the record. Id. To the extent that the facts relevant to our jurisdictional inquiry are undisputed, whether those facts establish personal jurisdiction is question of law. Id.
Applicable Law
When a party signs an agreement with a forum-selection clause, the party consents to personal jurisdiction in that forum, rendering ordinary principles of general and specific jurisdiction irrelevant. See Guam Indus. Servs. v. Dresser-Rand Co., 514 S.W.3d 828, 833 (Tex. App.-Houston [1st Dist.] 2017, no pet.). An arbitration clause is a type of forum-selection clause. Id. The fee agreement's arbitration clause in this case provided for arbitration in Houston. The dispositive question therefore is whether the arbitration clause is enforceable. See id.
An arbitration clause in a valid attorney-client agreement generally is enforceable. See Royston, Rayzor, Vickery & Williams, LLP v. Lopez, 467 S.W.3d 494, 500 (Tex. 2015); see also Labidi v. Sydow, 287 S.W.3d 922, 928 (Tex. App.-Houston [14th Dist.] 2009, no pet.) (attorney-client disputes involving contract, relationship, services rendered, or fees charged are arbitrable). In deciding whether to compel arbitration in a given case, a trial court must ascertain whether a valid, enforceable arbitration agreement exists, and, if so, whether the claims asserted fall within the scope of that agreement. Chambers v. O'Quinn, 305 S.W.3d 141, 146 (Tex. App.-Houston [1st Dist.] 2009, pet. denied).
The existence of an enforceable arbitration agreement is a legal question resolved by ordinary contract principles. Parker v. Schlumberger Tech. Corp., 475 S.W.3d 914, 922 (Tex. App.-Houston [1st Dist.] 2015, no pet.). Thus, the party that is trying to enforce the agreement must show that it "meets all requisite contract elements." J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 228 (Tex. 2003). These elements include an offer, an acceptance, a meeting of the minds, each party's consent to the terms, and the execution and delivery of the contract with the intent that it be mutual and binding. APMD Holdings, Inc. v. Praesidium Med. Prof'l Liab. Ins. Co., 555 S.W.3d 697, 707 (Tex. App.-Houston [1st Dist.] 2018, no pet.); see also S.C. Maxwell Family P'ship v. Kent, 472 S.W.3d 341, 344 (Tex. App.-Houston [1st Dist.] 2015, no pet.) (contract-formation issues going to very existence of agreement containing arbitration clause must be resolved by trial court).
The party trying to compel arbitration bears the burden of proving the existence of a valid arbitration agreement. Chambers, 305 S.W.3d at 146. Once the party trying to compel arbitration has done so, the burden shifts to the opposing party to establish a defense to the arbitration agreement, such as fraud, unconscionability, or waiver. See Lopez, 467 S.W.3d at 500; Chambers, 305 S.W.3d at 146.
Analysis
Shrader & Associates contends that the fee agreement's arbitration clause is enforceable even though a representative of the firm did not sign the agreement. In support, the firm primarily relies on our decision in Chambers, a legal malpractice suit in which we affirmed the trial court's order compelling arbitration based on an arbitration clause contained in fee agreements that had been signed by the clients but not by the attorney. See Chambers, 305 S.W.3d at 147, 152-53.
The Carrascos initially contend that the firm's failure to sign the fee agreement makes its arbitration clause unenforceable. They rely on section 82.065(a) of the Government Code, which requires contingent-fee contracts for legal services to be in writing and signed by the attorney and the client. TEX. GOV'T CODE § 82.065(a).
In Chambers, this court rejected the position that section 82.065(a) makes an arbitration clause in a fee agreement unsigned by the attorney unenforceable. 305 S.W.3d at 152-53. The court reasoned that the purpose of section 82.065(a), which is a statute of frauds, was fulfilled because the client—the party against whom the arbitration clause was being enforced—had signed the fee agreement. See id. at 152; accord Law Office of Thomas J. Henry v. Cavanaugh, No. 05-17-00849-CV, 2018 WL 2126936, at *4 (Tex. App.-Dallas May 7, 2018, pet. denied) (mem. op.) (firm's failure to sign fee agreement, standing alone, did not make its arbitration clause unenforceable). Accordingly, Shrader & Associates' failure to sign the agreement— in and of itself—does not render the agreement's arbitration clause unenforceable.
The Carrascos further contend, however, that the record lacks any evidence that the firm intended to be bound by the fee agreement. Because the firm neither signed the agreement nor introduced other evidence that the firm had accepted the agreement's terms, the Carrascos contend, Chambers is not dispositive.
We agree that Chambers is not dispositive. While that decision is controlling as to section 82.065(a)'s effect, the firm's failure to sign the fee agreement still presents a contract-formation issue under ordinary contract principles. See RSL Funding v. Newsome, 569 S.W.3d 116, 124 (Tex. 2018) (characterizing "whether a party ever signed a contract" as a contract-formation defense). In Chambers, there was ample evidence that the attorney had accepted the fee agreement and intended to be bound by it, despite the absence of his signature. Specifically, the attorney provided legal services under the agreement, representing the clients in litigation and settling their claims. See Chambers v. O'Quinn, 242 S.W.3d 30, 31 (Tex. 2007) (per curiam). Similarly, in Cavanaugh, the firm filed suit on its client's behalf and represented him in litigation for more than a year, which evidenced an intent to be bound by the agreement's terms. See Cavanaugh, 2018 WL 2126936, at *4.
In contrast, the record in this case does not contain equivalent evidence of performance, or other evidence, showing that the firm bound itself to the agreement. Shrader & Associates admits that several months after the Carrascos signed the fee agreement, the firm "communicated to Chrissy that it would be unable to proceed with the representation" and then sent a formal letter a week later explaining that the firm "would be `unable to represent you or otherwise pursue a case.'"
Shrader and Associates maintains that before ending its representation of the Carrascos, the firm evaluated their claims and that this work undertaken on their behalf is sufficient performance to evidence the firm's acceptance of the fee agreement. Assuming without deciding that the firm's pre-suit evaluation of its clients' claims could serve as proof of the requisites of contract formation, the record is devoid of evidence that the firm made a pre-suit evaluation of the Carrascos' claims or that it engaged in any other activities on their behalf. Because the firm bears the burden of proving an enforceable arbitration agreement, the absence of evidence supporting contract formation is fatal to its suit to compel arbitration.
Shrader & Associates contends that the requisites of contract formation are immaterial because an assertion that any of these requisites is lacking constitutes an attack on the validity of the fee agreement as a whole rather than its arbitration clause in particular. The firm argues that the Carrascos must successfully challenge the enforceability of the arbitration clause, not the entire agreement, in order to escape the arbitration clause. When a party challenges the very existence of an agreement on contract-formation grounds, however, these challenges present threshold issues that must be decided by the trial court before it can compel arbitration. RSL Funding, 569 S.W.3d at 124-25; S.C. Maxwell, 472 S.W.3d at 344.
Finally, Shrader & Associates contends that the Carrascos cannot avoid the arbitration clause because their legal malpractice claim depends on the fee agreement's existence. An attorney-client relationship, however, may exist without a written contract. See Span Enters. v. Wood, 274 S.W.3d 854, 858 (Tex. App.-Houston [1st Dist.] 2008, no pet.) (attorney-client relationship may be created by express contract or implied from parties' conduct). The Carrasco's legal malpractice claim therefore does not depend on the existence of the fee agreement. See id.
In sum, the material facts are not in dispute. Shrader & Associates did not sign the fee agreement and the blank for indicating its date of execution is unfilled. There is no evidence that the firm performed under the fee agreement. Nor is there evidence showing that the firm otherwise intended to be bound by the fee agreement. On this record, the trial court did not err by implicitly concluding that the there was not a valid, enforceable fee agreement and that personal jurisdiction over the Carrascos therefore could not be asserted on the basis of that agreement's arbitration clause.
As the fee agreement's arbitration clause is unenforceable, it is not necessary for us to consider the Carrascos' alternative argument that it would be futile to order them to arbitrate their legal malpractice claim due to the American Arbitration Association's administrative refusal to hear the dispute. See TEX. R. APP. P. 47.1.
CONCLUSION
We affirm the judgment of the trial court.
[1] The original text appears in bold font and ALL CAPS. These qualities have been omitted here for ease of readability.
LAW OFFICE OF THOMAS J. HENRY, Appellant,
v.
PRISCILLA ANN GARCIA, Appellee.
Court of Appeals of Texas, Thirteenth District, Corpus Christi, Edinburg.
Jack George Ternan, Greggory A. Teeter, Gabi S. Canales, for Priscilla Ann Garcia, Appellee.
Ray N. Donley, Ryan Squires, Steve McConnico, Jane M.N. Webre, Darrell L. Barger, for Law Office of Thomas J. Henry, Appellant.
On appeal from the County Court at Law No. 3 of Nueces County, Texas.
Before Chief Justice Contreras and Justices Longoria and Hinojosa.[1]
MEMORANDUM OPINION
Memorandum Opinion by Justice LETICIA HINOJOSA.
The Law Office of Thomas J. Henry (the Firm), appellant, appeals from the trial court's interlocutory order staying arbitration between it and former client Priscilla Ann Garcia, appellee. See TEX. CIV. PRAC. & REM. CODE ANN. § 171.098(a)(2) (West, Westlaw through 2017 1st C.S.). In one issue, the Firm contends that the trial court abused its discretion in staying arbitration because there was an enforceable agreement to arbitrate between it and Garcia. We reverse and remand.
I. BACKGROUND
On October 24, 2012, a vehicle Garcia operated collided with a commercial motor vehicle owned by Alamo Concrete Products Company (Alamo Concrete). Later the same day, Garcia signed a "Power of Attorney and Contingent Fee Contract" (the Representation Agreement). The Representation Agreement provides, in relevant part, the following:
THIS CONTRACT IS SUBJECT TO ARBITRATION
This agreement is made between Client(s), referred to as "client" and the Law Offices of Thomas J. Henry, hereinafter referred to as "Attorneys".
. . . .
2. ATTORNEY'S FEES
In consideration of the services rendered to Client by Attorneys, Client does hereby assign, grant and convey to Attorney the following present undivided interests in all the claims and courses [sic] of action for and as a reasonable contingent fee for Attorneys' services and said contingent attorneys' fee will be figured on the total gross recovery which included any money received, including but not limited to personal injury protection (PIP), uninsured motorist coverage or any type of insurance coverages.
37.5% of any settlement or recovery made before suit is filed thereon;
42.5% of any settlement or recovery made after suit is filed;
50% of any settlement or recovery made after a notice of appeal has been given or an appeal bond has been filed.
3. ASSIGNMENT OF INTEREST
In consideration of Attorneys' services, the Client hereby conveys and assigns to Attorney and agrees to pay to Attorneys an undivided interest in and to all of Client's claims and causes of action to the extent of the percentage set out in Paragraph 2.
. . . .
10. ARBITRATION
Any and all disputes, controversies, claims or demands arising out of or relating to this Agreement or any provision hereof, the providing of services by Attorneys to Client, or in any way relating to the relationship between Attorneys and Client, whether in contract, tort or otherwise, at law or in equity, for damages or any other relief, shall be resolved by binding arbitration pursuant to the Federal Arbitration Act in accordance with the Commercial Arbitration Rules then in affect [sic] with the American Arbitration Association. Any such arbitration shall be conducted in Nueces County, Texas. This arbitration provision shall be enforceable in either federal or state court in Nueces County, Texas, pursuant to the substantive federal laws established by the Federal Arbitration Act. Any party to any award in such arbitration proceeding may seek a judgment upon the award and that judgment may be entered by any federal or state court in Nueces County, Texas, having jurisdiction.
. . . .
THIS CONTRACT IS SUBJECT TO ARBITRATION UNDER THE TEXAS GENERAL ARBITRATION STATUTE.
The Firm admits that the Representation Agreement was not immediately signed by an authorized Firm attorney.
On July 16, 2014, Greggory A. Teeter, an attorney affiliated with the Firm,[2] filed an original petition against Alamo Concrete on Garcia's behalf. Since Garcia's lawsuit was filed, Teeter took or defended twelve depositions in the case, participated in written discovery, filed several motions or responses to motions, and attended several hearings.
In December 2016, the Firm terminated its affiliation with Teeter. Approximately a week thereafter, Garcia, represented by Teeter, notified the Firm that she was discharging it from representing her in her lawsuit against Alamo Concrete. At some point after Teeter's termination, a Firm attorney countersigned the Representation Agreement.
On January 4, 2017, the Firm intervened in Garcia's personal injury lawsuit seeking to collect its attorney's fees under the Representation Agreement. The Firm also initiated arbitration proceedings with the American Arbitration Association. Eventually, the trial court severed the Firm's request for attorney's fees from Garcia's personal injury lawsuit.[3] Garcia then filed a motion to stay the Firm's arbitration proceeding in the Firm's lawsuit for attorney's fees, to which the Firm filed a written response. The trial court held an evidentiary hearing wherein it considered the in-court testimony of Garcia, Thomas J. Henry, and two paralegals who had been employed by the Firm. The trial court granted Garcia's motion to stay arbitration. This interlocutory appeal followed. See TEX. CIV. PRAC. & REM. CODE ANN. § 171.098(a)(2).
II. DISCUSSION
Garcia's motion to stay arbitration was premised on section 82.065(a) of the Texas Government Code (the barratry statute), section 171.002(a)(3) of the Texas Civil Practice and Remedies Code (the TAA), and our opinion in Godt. TEX. CIV. PRAC. & REM. CODE ANN. § 171.002(a)(3) (West, Westlaw through 2017 1st C.S.); TEX. GOV'T CODE ANN. § 82.065(a) (West, Westlaw through 2017 1st C.S.); In re Godt, 28 S.W.3d 732, 734-39 (Tex. App.-Corpus Christi 2000, orig. proceeding). The gravamen of Garcia's argument was that the Firm's failure to countersign the Representation Agreement invalidated it and the arbitration clause included therein under both statutes. As part of the Firm's issue, it contends that Garcia's reliance on the authority she referenced to the trial court is misplaced.
A. Standard of Review
When reviewing an order granting a motion to stay arbitration, we apply a no-evidence standard to the trial court's factual determinations and a de novo standard to its legal determinations. Valerus Compression Servs., LP v. Austin, 417 S.W.3d 202, 212 (Tex. App.-Austin 2013, no pet.); see also Bennett v. Leas, No. 13-06-00469-CV, 2008 WL 2525403, at *2 (Tex. App.-Corpus Christi Jun. 26, 2008, pet. abated) (mem. op.). Whether a valid arbitration agreement exists is a legal question that we review de novo. J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 227 (Tex. 2003).
B. Applicable Law
Under the Texas Arbitration Act (TAA)[4] a court may stay an arbitration commenced or threatened on application and a showing that there is not an agreement to arbitrate. TEX. CIV. PRAC. & REM. CODE ANN. § 171.023(a) (West, Westlaw through 2017 1st C.S.). Once a court finds an enforceable arbitration agreement, a "strong presumption" favoring arbitration arises "such that myriad doubts—as to waiver, scope, and other issues not relating to enforceability—must be resolved in favor of arbitration." In re Poly-Am., L.P., 262 S.W.3d 337, 348 (Tex. 2008) (orig. proceeding). Courts determine whether an enforceable agreement to arbitrate exists by applying "ordinary principles of state contract law." G.T. Leach Builders, LLC v. Sapphire V.P., LP, 458 S.W.3d 502, 524 (Tex. 2015). Generally, "parties must sign arbitration agreements before being bound by them." Id. (quoting In re Rubiola, 334 S.W.3d 220, 224 (Tex. 2011) (orig. proceeding)). But the question of who is actually bound by an arbitration agreement is essentially "a function of the intent of the parties, as expressed in the terms of the agreement." In re Rubiola, 334 S.W.3d at 224 (quoting Bridas S.A.P.I.C. v. Gov't of Turkmenistan, 345 F.3d 347, 355 (5th Cir. 2003)). We make this determination by interpreting the agreement as a whole in accord with the plain and ordinary meaning of the language the parties chose to use in the document. Great Am. Ins. Co. v. Primo, 512 S.W.3d 890, 892 (Tex. 2017). "And we assign terms their ordinary and generally accepted meaning unless the contract directs otherwise." Id. at 893. Whether an agreement to arbitrate is enforceable is a question of law that we review de novo. Rachal v. Reitz, 403 S.W.3d 840, 843 (Tex. 2013).
In Godt, a patient telephoned the Firm to discuss retaining it to represent her in a medical malpractice case stemming from complications following hip surgery. 28 S.W.3d at 734. The Firm dispatched a paralegal to the patient's home to obtain her signature on a representation agreement. Id. According to the patient, the Firm failed to investigate or pursue her medical malpractice claim and withdrew from representing her shortly before limitations expired. Id. The patient sued the Firm and asserted claims for negligence, gross negligence, fraud, misrepresentation, breach of fiduciary duty, and violations of the Texas Deceptive Trade Practices Act. Id. at 735. The trial court granted the Firm's motion to compel arbitration and stayed the patient's lawsuit pending resolution by arbitration. Id. We granted the patient mandamus relief and directed the trial court to vacate its previous order and sign an order denying the Firm's motion to compel arbitration. Id. at 740. In Godt we addressed both of the statutory provisions that Garcia relies on. Id. at 738-39.
The barratry statute provides that "[a] contingent fee contract for legal services must be in writing and signed by the attorney and client." TEX. GOV'T CODE ANN. § 82.065(a). In Godt, we held:
It is undisputed that the agreement was signed only by Godt; neither Henry nor anyone from his office signed the agreement. We hold, therefore, that Henry may not enforce the arbitration agreement because it fails to comply with the requirements set forth in the government code. We do not address the issue of whether Godt may enforce the agreement.
The TAA provides:
(a) This chapter does not apply to:
. . .
(3) a claim for personal injury, except as provided by Subsection (c);
. . .
(c) A claim described by Subsection (a)(3) is subject to this chapter if:
(1) each party to the claim, on the advice of counsel, agrees in writing to arbitrate; and
(2) the agreement is signed by each party and each party's attorney.
TEX. CIV. PRAC. & REM. CODE ANN. § 171.002. In Godt we held that the patient's legal malpractice claim constituted a personal injury claim under section 171.002 of the Texas Civil Practice and Remedies Code. 28 S.W.3d at 738-39.
C. Analysis
We conclude that Godt does not control in this case for two reasons. First, unlike in Godt, the Representation Agreement in this case was eventually countersigned by an attorney with the Firm. Further, in this case the Firm provided legal services by filing suit on Garcia's behalf and pursuing her claims. The Firm did not file suit on the patient's behalf in Godt. Therefore, for purposes of section 82.065(a) of the Texas Government Code, Godt is distinguishable. Second, the Firm's plea in intervention seeking attorney's fees cannot be classified as a personal injury claim under section 171.002 of the Texas Civil Practice and Remedies Code because it is premised on provisions in the Representation Agreement and not on a personal injury. Cf. id.; see also Law Office of Thomas J. Henry v. Cavanaugh, No. 05-17-00849-CV, 2018 WL 2126936, at *6 (Tex. App.-Dallas May 7, 2018, pet. denied) (holding that a lawsuit to recover attorney's fees is not based on a claim for personal injury, and therefore, section 171.002(a)(3) is not applicable).
Garcia based her motion to stay arbitration exclusively on Godt and its interpretation of the barratry statute and the TAA. Thus, Garcia failed to show that there was not an agreement to arbitrate. See TEX. CIV. PRAC. & REM. CODE ANN. § 171.023(a). Therefore, we conclude that the trial court abused its discretion in granting Garcia's motion to stay arbitration. We sustain the Firm's sole issue.
III. CONCLUSION
We reverse the trial court's order staying arbitration and remand for further proceedings.
[1] Chief Justice Contreras not participating.
[2] The trial court admitted "under seal" a document titled "Contract for Contracted Professional Services with the Law Office of Thomas J. Henry" signed by Teeter. We need not determine the exact nature of the document for our disposition.
[3] According to representations by the Firm's counsel, Garcia settled her claims against Alamo Concrete for $650,000. The settlement proceeds were dispersed under three separate checks made out to: (1) the Firm and Teeter in the amount of $276,250 for attorney's fees; (2) Garcia in the amount of $258,825.50 for Garcia's recovery; and (3) the Firm and Teeter in the amount of $114,924.50 for expenses.
[4] The Representation Agreement is inconsistent regarding whether it is governed by the Federal Arbitration Act (FAA) or the Texas Arbitration Act (TAA). Nothing in the record indicates that the Representation Agreement involves interstate commerce. See Henry v. Cash Biz, LP, 551 S.W.3d 111, 115 (Tex. 2018) ("The Federal Arbitration Act (FAA) generally governs arbitration provisions in contracts involving interstate commerce."). Accordingly, we conclude that the TAA governs.
RELATED PAPERS ON ARBITRATION AND CONTINGENT FEE CONTRACTS
IN TEXAS
Must Former Client Arbitrate Fee Dispute With Law Firm When Arbitration Clause Was Embedded in a Noncompliant Contingent Fee Contract? – Texas Judges Not of One Mind (May 7, 2019). Available at SSRN: https://ssrn.com/abstract=3152325
Dividing the Spoils: Multilateral Contingent Fee Fights in Texas (Amicus Curiae Brief in Garza v. The Pruneda Law Firm, No. 13-18-00222-CV (Tex.App.- Corpus Christi, Edinburg, June 4, 2019, pet. to be filed under Tex. No. 19-0664). Available at SSRN: https://ssrn.com/abstract=3420991
