in Re MHI Partnership, Ltd. D/B/A Plantation Homes ( 2002 )

heading for mandamus

    No. 04-01-00253-CV

IN RE MHI PARTNERSHIP, LTD.

d/b/a Plantation Homes

Original Mandamus Proceeding

Arising from the 408th Judicial District Court, Bexar County, Texas

Trial Court No. 2000-CI-17100

Honorable Phylis Speedlin, Judge Presiding ⁽¹⁾

Opinion by: Paul W. Green, Justice

Sitting: Paul W. Green, Justice

Sarah B. Duncan, Justice

Sandee Bryan Marion, Justice

Delivered and Filed: March 6, 2002

PETITION FOR WRIT OF MANDAMUS CONDITIONALLY GRANTED

This original proceeding arises out of a lawsuit by Jackie L. and Catherine D. Davis to recover damages for the defective construction and repair of their home. Relator MHI Partnership, Ltd. d/b/a Plantation Homes constructed and sold the home in question. MHI brings this mandamus proceeding challenging the trial court's denial of MHI's plea in abatement and motion to compel arbitration. Because we hold the arbitration clause is enforceable, we conditionally grant the writ of mandamus.

Background

In connection with the construction and sale of the Davises' house, all parties signed an earnest money contract dated October 30, 1996, containing an arbitration clause which provides in part:

ARBITRATION: ANY CONTROVERSY ARISING OUT OF OR RELATING DIRECTLY OR INDIRECTLY TO THIS CONTRACT OR THE CONSTRUCTION OR REPAIR OF THE HOME WHICH IS THE SUBJECT OF THIS CONTRACT AND/OR THE PROPERTY, . . . SHALL BE SETTLED BY ARBITRATION UNDER THE FEDERAL ARBITRATION ACT . . . .

MHI filed a motion to abate and to compel arbitration, citing the arbitration provision in the October 30 earnest money contract. The Davises filed no written response to the motion. They do not dispute that their claims for multiple defects in the plumbing and air conditioning systems of the home fall within the scope of the arbitration agreement. However, at a hearing on the motion, the Davises introduced a September 22, 1996 earnest money contract they contend controls as to any arbitration agreement. On appeal, the Davises contend: (1) the September 22 contract controls any arbitration; (2) the Federal Arbitration Act does not apply because MHI failed to offer evidence the contract involved interstate commerce; and (3) MHI is barred by laches from presenting its petition for writ of mandamus.

Standard for Mandamus Review

Mandamus issues only to correct a clear abuse of discretion or a violation of a duty imposed by law when there is no other adequate remedy at law. Walker v. Packer, 827 S.W.2d 833, 839 (Tex. 1992). The trial court abuses its discretion when it fails to properly apply the law to the undisputed facts, when it acts arbitrarily or unreasonably, or when its ruling is based on factual assertions unsupported by the record. Microsoft Corp. v. Manning, 914 S.W.2d 602, 607 (Tex. App.-Texarkana 1995, writ dism'd). The erroneous denial of a motion to compel arbitration under the Federal Arbitration Act is reviewable by mandamus because the harm of denying arbitration, that is, the time and cost of trial, is not capable of remedy by appeal. In re Bruce Terminix Co., 988 S.W.2d 702, 704 (Tex. 1998).

The Controlling Contract

We interpret the provisions of an unambiguous contract as a matter of law. City of Pinehurst v. Spooner Addition Water Co., 432 S.W.2d 515, 517 (Tex. 1968). In doing so, we examine the entire instrument so that none of the provisions is rendered meaningless. R&P Enter. v. LaGuarta, Gavrel & Kirk, Inc., 596 S.W.2d 517, 519 (Tex. 1980). "If a written instrument is so worded that a court may properly give it a certain or definite legal meaning or interpretation, it is not ambiguous." Id.

MHI's motion to compel arbitration is based on the October 30, 1996 contract signed by all parties. The Davises say any arbitration must be based on an earlier contract signed by the Davises on September 22, 1996. That contract states:

This Contract shall become effective as of the date it is signed and accepted by Seller's [MHI] management as indicated below; Buyer acknowledges and agrees that Seller's sales representative who signs a copy of this Contract does not have the authority to bind Seller and this Contract shall not be binding upon Seller until such time as it is also executed by a representative of Seller's management.

The wording of the contract is unambiguous. The contract is not effective if signed only by the sales representative and not by MHI's management representative. No MHI management representative signed the September 22 contract; therefore, it never became binding on MHI. ⁽²⁾ The controlling contract is the October 30, 1996 earnest money contract signed by all parties.

Standard of Review for Enforcement of Arbitration

Having identified the controlling contract, we must determine whether an enforceable arbitration agreement exists. Henry v. Gonzalez, 18 S.W.3d 684, 688 (Tex. App.-San Antonio 2000, pet. dism'd by agmt.). ⁽³⁾ The party seeking arbitration has the initial burden to come forward with summary proof that a valid arbitration agreement exists. In re Jebbia, 26 S.W.3d 753, 757 (Tex. App.-Houston [14th Dist.] 2000, orig. proceeding); Weekley Homes, Inc. v. Jennings, 936 S.W.2d 16, 18 (Tex. App.-San Antonio 1996, writ denied). The summary judgment proof should resolve any issues of enforceablity without creating an issue of material fact. In re Jebbia, 26 S.W.3d at 757. The party opposing arbitration must then come forward with some ground for revocation of the agreement or some evidence supporting every element of a defensive claim that the agreement is unenforceable. Id.; Henry, 18 S.W.3d at 692.

In reviewing the trial court's denial of the motion to compel arbitration, we use an abuse of discretion standard. ANCO Ins. Servs. of Houston, Inc. v. Romero, 27 S.W.3d 1, 5 (Tex. App.-San Antonio 2000, pet. denied). We give deference to the trial court's findings of fact and review legal conclusions de novo. Id. The trial court's decision must be upheld unless we determine the trial court could reasonably have reached only one conclusion. Id.

Applicability of the FAA

On appeal, the Davises argue for the first time that the Federal Arbitration Act (FAA) does not apply to the contract because MHI failed to show the contract involves interstate commerce. However, when, as here, the contract clearly specifies the arbitration will be governed by the FAA, we apply the statute as designated by the parties. See Stewart Title Guar. Co. v. Mack, 945 S.W.2d 330, 333 (Tex. App.-Houston [1st Dist.] 1997, writ dism'd by agmt.) (party must show facts establishing right to arbitrate under FAA when there is no express agreement for application of FAA).

Laches  

Finally, we address the Davises' complaint that MHI's delay of approximately two and one-half months before seeking mandamus relief bars MHI's recovery. Mandamus is an equitable doctrine designed to assist the diligent, not those who slumber on their rights. See Rivercenter Assoc. v. Rivera, 858 S.W.2d 366, 367 (Tex. 1993). Ordinarily a petition for writ of mandamus should be brought promptly. However, we have held that mandamus recovery should not be denied based on delay if no harm has occurred. Shearson Lehman Hutton, Inc. v. McKay, 763 S.W.2d 934, 939 (Tex. App.-San Antonio 1989, no writ).

In this case, the Davises have not submitted any facts showing they were prejudiced by the delay in filing for mandamus. There is nothing in the record to indicate any harm to the Davises or to the efficient administration of the trial court's docket. We hold the request for mandamus relief is not barred by laches.

Conclusion

We hold the October 30, 1996 contract controls the parties' arbitration agreement. Further, we hold the arbitration agreement is enforceable and mandamus relief is not barred by laches. Because the trial court erred in denying the motion to compel arbitration, we conditionally grant the writ of mandamus. We expect the trial court will vacate its order of January 29, 2001, and grant MHI's plea in abatement and motion to compel arbitration within twenty days. If it does not, the writ will issue.

Paul W. Green, Justice

Do Not Publish

1. Although the Honorable Michael P. Peden signed the Order about which relator complains, the proper respondent is the Honorable Phylis Speedlin (permanent judge of the 408th District Court), who presided over the hearing and rendered an oral decision reflected in the order.

See In re Acevedo, 956 S.W.2d 770, 770 n.1 (Tex. App.-San Antonio 1997, orig. proceeding).

2. The Davises make a conclusory argument that the September contract is enforceable because MHI "agreed" to the contract irrespective of the lack of signature. There is no evidence in the record that MHI began to perform on the contract or otherwise agreed to the September contract.

3. The parties do not dispute that the claims in this case fall within the scope of the arbitration agreement, only whether the agreement is enforceable.

See id.