Jody James Farms, JV v. the Altman Group, Inc. and Laurie Diaz ( 2015 )

ACCEPTED
07-15-00060-CV
SEVENTH COURT OF APPEALS
AMARILLO, TEXAS
6/4/2015 5:34:23 PM
Vivian Long, Clerk
NO. 07-15-00060-CV
FILED IN
7th COURT OF APPEALS
IN THE AMARILLO, TEXAS
SEVENTH COURT OF 6/4/2015 5:34:23 PM
VIVIAN LONG
APPEALS CLERK
AMARILLO, TEXAS
JODY JAMES FARMS, JV,
Appellant,
V.
THE ALTMAN GROUP, INC.
AND LAURIE DIAZ,
Appellees.
_ _
Appeal from the 110th District Court of
Floyd County, Texas
Cause Number 10,422
APPELLANT’S BRIEF
June 4, 2015
Respectfully submitted,
JENKINS, WAGNON & YOUNG, P.C.
P.O. Box 420
Lubbock, TX 79408
(806) 796-7351
Fax: (806) 771-8755
Jody D. Jenkins
State Bar No. 24029634
jjenkins@jwylaw.com
ATTORNEYS FOR APPELLANT
ORAL ARGUMENT IS REQUESTED
IDENTITY OF PARTIES AND COUNSEL
Judge Presiding at Trial:
The Honorable William P. Smith
Plaintiff and Appellant:
Jody James Farms, JV
Plaintiff’s Trial and Appellate Counsel:
Jody Jenkins
Jenkins, Wagnon & Young, P.C.
P.O. Box 420
Lubbock, Texas 79408
Defendants and Appellees:
The Altman Group, Inc. and Laurie Diaz
Defendants’ Trial and Appellate Counsels:
J. Paul Manning
Anna McKim
Field, Manning, Stone, Hawthorne & Aycock, P.C.
2112 Indiana Avenue
Lubbock, Texas 79410
ii
TABLE OF CONTENTS
PAGE
IDENTITY OF PARTIES AND COUNSEL ................................................ ii
INDEX OF AUTHORITIES ..................................................................................iv
STATEMENT OF THE CASE................................................................... 1
ORAL ARGUMENT ...............................................................................................1
ISSUES PRESENTED ON APPEAL ........................................................ 2
STATEMENT OF FACTS ......................................................................................2
SUMMARY OF THE ARGUMENTS ................................................................... 4
ARGUMENTS AND AUTHORITIES................................................................... 6
ISSUE NUMBER 1
Whether a non-party to an arbitration agreement can compel
arbitration of claims that are not within the scope of the
arbitration agreement ...................................................................................6
CONCLUSION.......................................................................................................19
PRAYER .................................................................................................................19
SIGNATURE ..........................................................................................................20
CERTIFICATE OF SERVICE ............................................................................20
CERTIFICATE OF COMPLIANCE...................................................................21
APPENDIX .............................................................................................................23
iii
INDEX OF AUTHORITIES
Cases: Page
All-Tex Roofing, Inc. v. Greenwood Ins. Group, Inc., 73 S.W.3d 412 (Tex.
App.—Houston [1st Dist.] 2002, pet. denied) .........................................................17
Blumberg v. USAA Casualty Ins. Co., 790 So. 2d. 1061 (Fla. 2001) ......................16
Bosscorp, Inc. v. Donegal, Inc., 370 S.W.3d 68 (Tex. App.—Houston [14th
Dist.] 2012, no pet.) .................................................................................................13
Centex/Vestal v. Friendship W. Baptist Church, 314 S.W.3d 677 (Tex. App.—
Dallas 2010) .............................................................................................................18
Delfingen US-Texas, L.P. v. Valenzuela, 407 S.W.3d 791 (Tex. App.—El
Paso 2013) ........................................................................................................7, 8, 12
DeWitt Cnty. Elec. Coop., Inc. v. Parks, 1 S.W.3d 96 (Tex. 1999) ........................10
Ellman v. JC Gen. Contractors, 419 S.W.3d 516 (Tex. App. -- El Paso 2013,
no pet.)....................................................................................................................6, 7
Frost Nat'l Bank v. L & F Distribs., Ltd., 165 S.W.3d 310 (Tex. 2005) (per
curiam) .....................................................................................................................14
Great Am. Assur. Co. v. Sanchuck, LLC No. 8:10-CV-2568 –T-33AEP, 2012
U.S. Dist. LEXIS 7477 at * 20 (M.D. Fla. Jan. 23, 2012) .......................................16
G.T. Leach Builders, LLC v. Sapphire VP, LP, 2015 Tex. LEXIS 273 (Tex.
2015) ..............................................................................................................9, 10, 12
Gulf Oil Corp. v. Guidry, 327 S.W.2d 406 (Tex. 1959) ..........................................18
In re Dillard Dep't Stores, Inc., 186 S.W.3d 514 (Tex. 2006) .................................. 7
In re Kellogg & Root, Inc., 166 S.W.3d 732 (Tex. 2005) .................................12, 13
In re Labatt Food Serv., L.P., 279 S.W.3d 640 (Tex. 2009). .................................... 6
iv
In re Poly-America, L.P., 262 S.W.3d 337 (Tex. 2008) ............................................ 8
In re Weekley Homes, 180 S.W.3d 127 (Tex. 2005) ...........................................9, 10
In re Wells Fargo Bank, N.A., 300 S.W.3d 818 (Tex. App.—San Antonio
2009) ..........................................................................................................................7
J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223 (Tex. 2003) ......................7, 12, 14
Landmark Am. Ins. Co. v. Moulton Props., No. 3:05cv401/LAC, 2006 U.S.
Dist. LEXIS 73478 (N.D. Fla. July 19, 2006) .........................................................17
MCI Telecomms. Corp. v. Tex. Utils. Elec. Co., 995 S.W.2d 647 (Tex.1999)........ 12
Nafta Traders, Inc. v. Quinn, 339 S.W.3d 84 (Tex. 2011) ......................................19
Perry Homes v. Cull, 258 S.W.3d 580 (Tex. 2008)................................................... 7
Rice v. Louis A. Williams & Assocs., 86 S.W.3d 329 (Tex. App.—Texarkana,
2002, pet. denied) ...............................................................................................16, 17
South Texas Water Authority v. Lomas, 223 S.W.3d 304 (Tex. 2007)....................12
Stolt–Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662 (2010)......................19
Surplus, Inc. v. Home State Cnty. Mut. Ins. Co., No. 05-95-00007-CV, 1995
Tex. App. LEXIS 3305 at *13 (Tex. App.—Dallas Dec. 21, 1995, writ
denied) ......................................................................................................................14
Trinity Universal Ins. Co. v. Burnette, 560 S.W.2d 440 (Tex. App.—
Beaumont 1977) .......................................................................................................11
United Protective Servs., Inc. v. West Village Ltd. P'ship, 180 S.W.3d 430
(Tex. App.—Dallas 2005, no pet.)...........................................................................14
Statutes and Rules
9 U.S.C. § 10(a)(4) (2015) ................................................................................. 18, 19
Tex. Bus. & Com. Code Ann. §17.42(a) (West 2015) ............................................18
v
Tex. Bus. & Com. Code Ann. § 17.565 (West 2015) ........................................ 17, 18
Tex. Civ. Prac. & Rem. Code Ann. § 16.003 (West 2015) ..................................... 17
Tex. Civ. Prac. & Rem. Code Ann. §16.070 (West 2015) ......................................18
Tex. Civ. Prac. & Rem. Code Ann. § 171.021(a)(1) (West 2015) ............................ 7
Tex. Civ. Prac. & Rem. Code Ann. § 171.088 (West 2015) ............................. 18, 19
Tex. Const. Art. I, § 13 ............................................................................................19
vi
STATEMENT OF THE CASE
James filed suit against Altman and Diaz for breach of fiduciary duty and
violations of the Texas Deceptive Trade Practices Act. CR 3-6. After Altman and
Diaz answered with a general denial, they filed their Motion to Compel Arbitration.
CR 9-17. James filed its Response to Motion to Compel Arbitration denying that
an agreement to arbitrate existed and attached evidence. CR Supp. 4-76. After the
trial court granted the Motion to Compel Arbitration, CR 27, James asked the trial
court to reconsider or clarify its ruling to compel arbitration. CR 28-36. The trial
court ultimately denied the motion to reconsider and the case proceeded to
arbitration. CR 41.
After arbitration, Altman and Diaz filed their Petition to Confirm and Enforce
Final Arbitration Award and for Attorney Fees and Costs. CR 42-54. James
objected to the Petition to Confirm and Enforce Final Arbitration Award and filed
its Motion to Vacate and to Set Aside Arbitration Award. CR 57-73. The trial
court entered its Final Judgment on January 20, 2015. CR 125-126. James
subsequently filed its notice of appeal on February 17, 2015. CR 128.
ORAL ARGUMENT
Oral argument is requested in this matter.
1
ISSUE PRESENTED
ISSUE NUMBER 1:
Whether a non-party to an arbitration agreement can compel arbitration
of claims that are not within the scope of the arbitration agreement.
STATEMENT OF FACTS
Altman is an independent insurance agency who markets for Rain and Hail,
L.L.C. (Rain and Hail); Rain and Hail is owned and controlled by ACE Property
and Casualty Insurance Company; ACE Property and Casualty Insurance Company
issues crop insurance policies. CR Supp. 21 (stating in the caption of the Multiple
Peril Crop Insurance Application and reporting form that Rain and Hail services
ACE’s policies; the document also bears the signature of Barry Altman in his
capacity as “Licensed Agent”); see also CR Supp. 56 (Diaz testifying that Rain and
Hail hired the insurance adjuster). Altman has been James’s agent for crop
insurance since approximately 2008. CR Supp. 51-58. Diaz is a registered
insurance agent employed by Altman where she also serves as Altman’s
Operations Manager; she has been employed with Altman for the entire time that
Altman has been James’s agent. CR Supp. 52. At some point before James
incurred a loss, Diaz became involved with James’s 2010 crop insurance policy.
CR Supp. 53. Sometime thereafter, James incurred a loss on its insured crop during
the policy period. CR Supp. 55.
2
James purchased a Crop Revenue Coverage Insurance Policy (the “Policy”
attached as Exhibit 4 to the Appendix of this Brief) from Rain and Hail via his
agent Altman to indemnify against loss on its 2010 milo crop. See CR Supp. 21;
25-50. The Crop Revenue Coverage Insurance Policy required Rain and Hail to
indemnify James for any loss that arose under the Policy. CR Supp. 25-50. The
arbitration clause contained in the Policy with Rain and Hail stated as follows at
paragraph 20:
If you and we fail to agree on any determination made by us except
those specified in Section 20(d), the disagreement may be resolved
through mediation in accordance with Section 20(g). If resolution
cannot be reached through mediation, or you and we do not agree to
mediation, the disagreement must be resolved through arbitration.
CR Supp. 44.
In November of 2010, James incurred a loss on an insured milo crop. CR
Supp. 23. After the loss was incurred, Diaz was notified by telephone of the loss.
CR Supp. 23. Based on James’s relationship and prior dealings with Altman and
Diaz, James did not follow up his claim in writing. CR Supp. 54-55 (Diaz explains
that it is common for clients to call in a claim without confirming it in writing).
After receiving evidence of the loss, Diaz delayed turning in the claim. CR Supp.
56 (Diaz explained that she didn’t turn in the claim and send it to Rain and Hail
until later).
3
Eventually, Rain and Hail denied James’s claim alleging it was untimely
submitted. CR Supp. 64-68. Rain and Hail explained that because the claim was
untimely filed, it was unable “to make the necessary and required loss
determinations.” CR Supp. 64.
With no other recourse for his injury, James subsequently filed suit against
Altman and Diaz for their inaction in submitting the claim. CR 3-6. Against the
objection of James, the trial court compelled arbitration between James and
Altman and Diaz. CR 27; CR 41. The trial court based its decision on James’s
previous agreement with Rain and Hail to arbitrate disputes over determinations
made by Rain and Hail. CR 27; CR 41. Ultimately, James unwillingly participated
in the compelled arbitration and the arbitrator ruled against James. CR 52-54.
James now appeals the trial court’s order compelling arbitration and later enforcing
the arbitration award.
SUMMARY OF ARGUMENT
The trial court’s decision to compel arbitration and subsequently enforce the
arbitration award should be reversed and this case remanded for trial.
First, there was no agreement to arbitrate between James and Altman and
Diaz. The only arbitration agreement that James entered into was with Rain and
Hail. Further, James did not agree to arbitrate with parties outside of its contract
4
with Rain and Hail. Altman and Diaz could not possibly be a party to the
arbitration agreement because Altman and Diaz could not make a determination
under the Policy, and are not agents of Rain and Hail for the purposes of making
determinations under the Policy.
Second, James is not estopped from denying the enforceability of the
arbitration agreement. James never sought a direct benefit under the Policy from
Altman and Diaz. Instead, James filed the instant claims based on a breach of
Altman and Diaz’s fiduciary duty and under the Texas Deceptive Trade Practices
Act.
Third, Altman and Diaz are not third-party-beneficiaries who can enforce the
arbitration agreement. Altman and Diaz were only incidental third-party-
beneficiaries to the contract between James and Rain and Hail. There was never
any intent on behalf of James or Rain and Hail to directly benefit Altman and Diaz
through the Policy.
Fourth, James’s claims arose outside the scope of the otherwise
unenforceable arbitration agreement. The arbitration agreement to which James
agreed covered only determinations made by the insurance company providing
insurance. The whole basis of James’s claims is that a determination was never
made due to Altman and Diaz’s breach of their duties.
5
Fifth, the trial court could not rewrite the arbitration agreement to bring
James’s claims within its scope. The arbitration clause at issue contemplated
review by the Federal Crop Insurance Corporation, which could not review
determinations by private insurance contractors; and set a one year limitation
period in violation of Texas law.
Last, the trial court erred by enforcing an arbitration award which the
arbitrator had no authority to issue under either the Federal Arbitration Act or the
Texas Arbitration Act.
ARGUMENTS & AUTHORITIES
ISSUE NUMBER 1:
Whether a non-party to an arbitration agreement can compel
arbitration of claims that are not within the scope of the arbitration
agreement.
1. Standard of Review
A court reviewing a trial court's decision to grant a motion to compel
arbitration reviews the trial court’s decision under an abuse of discretion standard.
Ellman v. JC Gen. Contractors, 419 S.W.3d 516, 520 (Tex. App. -- El Paso 2013,
no pet.). Under this standard, the reviewing court must defer to a trial court's
factual determinations if they are supported by evidence, and must review a trial
court's legal determinations de novo. In re Labatt Food Serv., L.P., 279 S.W.3d
6
640, 643 (Tex. 2009). Ellman, 419 S.W.3d at 520.
2. The trial court erred by granting Appellees’ Motion to
Compel Arbitration because there was not an agreement
to arbitrate between James and Altman and Diaz.
A party seeking to compel arbitration must establish the existence of a valid
arbitration agreement. Tex. Civ. Prac. & Rem. Code Ann. § 171.021(a)(1) (West
2015). “The burden of establishing the existence of a valid and enforceable
arbitration agreement includes proving that the party seeking to compel arbitration
was a party to the agreement or had the right to enforce the arbitration agreement.”
In re Wells Fargo Bank, N.A., 300 S.W.3d 818, 824 (Tex. App.—San Antonio
2009).
Under both the Federal Arbitration Act and the Texas Arbitration Act, state
contract law principles determine whether a valid arbitration agreement exists. J.M.
Davidson, Inc. v. Webster, 128 S.W.3d 223, 227 (Tex. 2003); Delfingen US-Texas,
L.P. v. Valenzuela, 407 S.W.3d 791, 797 (Tex. App.—El Paso 2013). The
determination of whether the parties agreed to submit the claims to arbitration
depends on an interpretation of the parties’ contracts, which is reviewed de novo.
See Id. (citing In re Dillard Dep't Stores, Inc., 186 S.W.3d 514, 515 (Tex. 2006);
J.M. Davidson, 128 S.W.3d at 227).
Arbitration agreements are not more enforceable than other contracts. Perry
7
Homes v. Cull, 258 S.W.3d 580, 597 (Tex. 2008). No presumption in favor of
arbitration exists when a state court assesses whether a valid and enforceable
arbitration agreement exists under Texas law. In re Poly-America, L.P., 262
S.W.3d 337, 347 (Tex. 2008). In fact, a party seeking to compel arbitration is not
entitled to a presumption favoring arbitration until they prove that a valid
arbitration agreement exists. Delfingen, 407 S.W.3d at 797.
In the case at bar, no valid and enforceable arbitration agreement exists
between the parties. In fact, the only agreement James entered into on the subject
matter at issue was with Rain and Hail. See CR Supp. 25-50. The Policy expressly
states that the words “you” and “your” refer to the named insured, which is James;
and the words “we,” “us,” and “our” refer to the “insurance company providing
insurance,” which is Rain and Hail. CR Supp. 25.
The only mention of “insurance agent” within the Policy is in the beginning
paragraph and under “Your Duties:” “All notices required in this section that must
be received by us within 72 hours may be made by telephone or in person to your
crop insurance agent but must be confirmed in writing within 15 days,” with
“your” referring to the named insured under the Policy. CR Supp. 25, 38-39.
Because the insurance agent is not defined as a party under the Policy and is only
referenced in passing, the trial court’s conclusion that a non-party to the arbitration
8
agreement in the Policy could enforce it is erroneous.
Furthermore, the arbitration clause in the Policy could not possibly cover
Altman and Diaz, because Altman and Diaz could not, by their own admission,
make a determination. CR Supp. 56 (Diaz stated that, “Once the claim is turned in,
Federal crop rules says that the agent can no longer be involved.”). The arbitration
clause specifically and unambiguously covered only “any determination made by
us,” with “us” being defined by the Policy as “the insurance company providing
insurance.” CR Supp. 25, 44. Therefore, because Altman and Diaz were neither an
“insurance company providing insurance” nor a person with the capability of
making a determination, there was no valid and enforceable agreement between
James and Altman and Diaz.
3. The arbitration agreement cannot be enforced by Altman
and Diaz through estoppel.
James did not seek a direct benefit from Altman and Diaz through the
Policy. Although a party that seeks a direct benefit under a contract which includes
an arbitration clause cannot deny that the arbitration clause applies to a non-
signatory, independent claims are not subject to this defense. G.T. Leach Builders,
LLC v. Sapphire VP, LP, 2015 Tex. LEXIS 273 *54 (Tex. 2015). “Whether a claim
seeks a direct benefit from a contract containing an arbitration clause turns on the
substance of the claim.” Id. (quoting In re Weekley Homes, 180 S.W.3d 127, 131-
9
32 (Tex. 2005)).
It is not enough, however, that the party's claim ‘relates to’ the
contract that contains the arbitration agreement. Instead, the party
must seek “to derive a direct benefit”—that is, a benefit that “stems
directly”—from that contract. The claim must “depend on the
existence” of the contract, and be unable to “stand independently”
without the contract. The alleged liability must “arise[] solely from
the contract or must be determined by reference to it.”
G.T. Leach Builders, LLC, at *55 (internal citations omitted).
“[T]he fact that the claims would not have arisen but for the existence of the
. . . contract is not enough to establish equitable estoppel.” Id. at *59. “‘[W]hen the
substance of the claim arises from general obligations imposed by state law,
including statutes, torts and other common law duties, or federal law,’” rather than
from the contract, ‘direct benefits’ estoppel does not apply, even if the claim refers
to or relates to the contract.” Id. at *55 (emphasis added) (internal citations
omitted); see also Weekley Homes, 180 S.W.3d at 132; DeWitt Cnty. Elec. Coop.,
Inc. v. Parks, 1 S.W.3d 96, 105 (Tex. 1999) (“The measure of damages, standing
alone, is not always determinative of whether a tort claim can co-exist with a
breach of contract claim).
Here, the substance of James’s claim arises under Texas common law and
the Deceptive Trade Practices Act. “‘A local agent . . . owes his clients the greatest
possible duty. He is the one the insured looks to and relies upon. Most people do
10
not know what company they are insured with.’” Trinity Universal Ins. Co. v.
Burnette, 560 S.W.2d 440, 442 (Tex. App.—Beaumont 1977) (emphasis added).
The substance of James’s claim is the breach of this duty, which James has
characterized as a “fiduciary duty,” and the breach of the duty imposed by the
Deceptive Trade Practices Act. See CR 4-5.
James specifically claimed that Altman and Diaz “breached their fiduciary
duty to Plaintiff by failing to timely submit the crop loss claim to Rain and Hail,
LLC.” CR 4. Altman and Diaz’s fiduciary duty is based on their relationship and
prior dealings with James, where Altman and Diaz would submit James’s claims
based on a notification of the claim by telephone without a confirmation by
writing. CR Supp. 54-55. It is the breach of this duty, upon which James based part
of its claims. Such duties are independent of the Policy and apply to James’s
relationship with its insurance agent and not to the Policy.
Because Altman and Diaz’s liability does not arise from the Policy, estoppel
does not mandate arbitration of the claims asserted by James. In fact, the only
duties under the Policy are referred to as “Your Duties,” which refer to the “named
insured,” and “Our Duties,” which refer to the “insurance company providing
insurance.” CR Supp. 25, 38-39. There are no duties allocated by the Policy to
Altman and Diaz, as an insurance agency and James has not sued for any breach of
11
the Policy.
4. Altman and Diaz are not third party beneficiaries that can
enforce the arbitration clause.
Under certain circumstances, which are not present here, third party
beneficiaries can enforce an arbitration agreement even though they are not parties
to the agreement. See In re Kellogg & Root, Inc., 166 S.W.3d 732, 739 (Tex.
2005); see also G.T. Leach Builders, LLC at *43. However, the third party
beneficiary must be able to enforce the contract through state contract law
principles. See J.M. Davidson, 128 S.W.3d at 227; Delfingen, 407 S.W.3d at 797.
To do so, the third party beneficiary must overcome the “presumption against
conferring third-party-beneficiary status on noncontracting parties.” South Texas
Water Authority v. Lomas, 223 S.W.3d 304, 306 (Tex. 2007).
Under Texas law, incidental third-party-beneficiaries are unable to enforce
contract provisions. Id. “A third party may only enforce a contract when the
contracting parties themselves intend to secure some benefit for the third party and
entered into the contract directly for the third party's benefit.” Id. “The intent to
confer a direct benefit upon a third party ‘must be clearly and fully spelled out or
enforcement by the third party must be denied.’” Id. (quoting MCI Telecomms.
Corp. v. Tex. Utils. Elec. Co., 995 S.W.2d 647, 651 (Tex.1999)).
Here, Altman and Diaz are at most incidental third-party-beneficiaries.
12
There was no intent to confer a direct benefit upon Altman and Diaz by either
James or Rain and Hail. James entered into the contract with Rain and Hail only to
benefit itself via insurance for a crop, and Rain and Hail sought only to sale its
insurance products. CR Supp. 21, 25-50. The fact that Altman and Diaz might have
received a commission for facilitating the sale does not show a “clear and fully
spelled out” intent to directly benefit Altman and Diaz. In fact, Altman and Diaz
are not mentioned by name anywhere in the Crop Revenue Coverage Insurance
Policy. See CR Supp. 25-50. Thus, Altman and Diaz as incidental third-party-
beneficiaries are unable to enforce the arbitration provision between James and
Rain and Hail.
5. Even if there was an agreement between the parties to
arbitrate, the trial court erred in compelling arbitration
because James’s claims arose outside the scope of the
arbitration clause.
The determination of whether a claim is within the scope of the arbitration
clause is based on an interpretation of the parties’ contracts, which courts review
de novo. Bosscorp, Inc. v. Donegal, Inc., 370 S.W.3d 68, 75-76 (Tex. App.—
Houston [14th Dist.] 2012, no pet.). Disputes concerning the scope of an
arbitration agreement are generally resolved in favor of arbitration. In re Kellogg &
Root, Inc., 166 S.W.3d at 737. However, when construing a written contract, the
court’s primary concern is to ascertain the true intentions of the parties as
13
expressed in the instrument. See J.M. Davidson, 128 S.W.3d at 229.
Courts consider the entire writing and attempt to harmonize and give effect
to all the provisions of the contract by analyzing the provisions with reference to
the whole agreement. Frost Nat'l Bank v. L & F Distribs., Ltd., 165 S.W.3d 310,
312 (Tex. 2005) (per curiam); J.M. Davidson, 128 S.W.3d at 229. Courts should
assume the parties intended every provision to have some effect. See United
Protective Servs., Inc. v. West Village Ltd. P'ship, 180 S.W.3d 430, 432 (Tex.
App.—Dallas 2005, no pet.). And, only when the provisions of a contract appear to
conflict, should courts attempt to harmonize the provisions. See Id. However,
courts cannot rewrite an arbitration agreement to bring claims within its scope,
even if those claims are intertwined with issues covered by the arbitration
agreement. See Surplus, Inc. v. Home State Cnty. Mut. Ins. Co., No. 05-95-00007-
CV, 1995 Tex. App. LEXIS 3305 at *13 (Tex. App.—Dallas Dec. 21, 1995, writ
denied).
The arbitration clause in the case at bar solely covered “determinations.” CR
Supp. 44-45. Specifically, the arbitration clause obligated the parties to arbitrate
disputes arising out of “determinations made by us,” defining “us” as “the
insurance company providing insurance.” CR Supp. 25, 44-45. The breach of duty
by James’s agents, Altman and Diaz, was not a determination under the Policy and
14
falls outside the scope of the arbitration agreement. No provisions in the Policy
even discuss the duties of Altman and Diaz to James.
Further, evidence of the inapplicability of the arbitration clause to the
dispute at hand are the provisions of the arbitration agreement that cannot apply as
written. Section 20(a)(1) of the insurance contract states that if there is a “dispute
[which] in any way involves a policy or procedure interpretation. . . you or we
must obtain an interpretation from [the Federal Crop Insurance Corporation
“FCIC”] in accordance with 7 CFR part 400. CR Supp. 45. However, review by
the FCIC is not allowed for determinations made by private insurance contractors
such as Altman and Diaz. 7 CFR 400.91.
In the instant suit, James has alleged that Altman and Diaz breached a duty
to it by failing to report a claim. CR 4. If Section 20(a)(1) is applied, Altman and
Diaz’s alleged conduct could be subject to review by the FCIC, which, by law,
cannot review the decisions made by private insurance contractors such as Altman
and Diaz.
Another example of the error created by the application of the Rain and Hail
Arbitration Clause is that Section 20(b) requires arbitration to occur within 1 year
of the date “we denied your claim or rendered the determination with which you
disagree.” CR Supp. 44. Altman and Diaz did not deny James’s claims or render a
15
determination with which he disagreed. CR Supp. 56 (Diaz stated that, “Once the
claim is turned in, Federal crop rules says that the agent can no longer be
involved.”). The denial of coverage was made by Rain and Hail prior to this suit
being initiated. CR Supp. 60-62. It was not until this dispute was resolved through
the first arbitration that James’s damages could be ascertained against Altman and
Diaz. See Great Am. Assur. Co. v. Sanchuck, LLC No. 8:10-CV-2568 –T-33AEP,
2012 U.S. Dist. LEXIS 7477 at * 20 (M.D. Fla. Jan. 23, 2012); Rice v. Louis A.
Williams & Assocs., 86 S.W.3d 329, 337 (Tex. App.—Texarkana, 2002, pet.
denied).
Negligence claims maintained by first-party insureds against insurance
agents do not ripen until the Plaintiff’s interests are confronted with a specific and
concrete risk of harm. Rice v. Louis A. Williams & Assocs., 86 S.W.3d 329, 337
(Tex. App.—Texarkana 2002, pet denied). See also Great Am. Assur. Co. v.
Sanchuk, LLC, No. 8:10-cv-2568-T-33AEP, 2012 U.S. Dist. LEXIS 7477 at *20
(M.D. Fla. Jan. 23, 2012) (finding that a negligence cause of action against an
insurance agent accrues at the conclusion of a related or underlying proceeding
because a plaintiff cannot make a claim against an insurance agent for negligence
while simultaneously claiming policy coverage) (emphasis added); citing Blumberg
v. USAA Casualty Insurance Co., 790 So. 2d. 1061, 1065 (Fla. 2001) and
16
Landmark Am. Ins. Co. v. Moulton Props., No. 3:05cv401/LAC, 2006 U.S. Dist.
LEXIS 73478 (N.D. Fla. July 19, 2006).
Although the issues in the case at bar do not revolve around a limitations
issue like the cases cited above, James had at least a two year period in which to
file suit under Texas law for the claims in the instant suit. Tex. Bus. & Com. Code
Ann. § 17.565 (West 2015); Tex. Civ. Prac. & Rem. Code Ann. § 16.003 (West
2015). The arbitration agreement conflicts with that law. See CR Supp. 60-62
(denying James’s arbitration claim due to Diaz’s negligence in failing to timely file
James’s crop loss claim on April 10, 2012). See CR Supp. 63-68 (letter denying
coverage on April 26, 2011). It would be impractical for James to be required to
file suit before the determination was made because there was always a chance, no
matter how remote, that the arbitrator would find for James. Rice v. Louis A.
Williams & Assocs., 86 S.W.3d, at 339 (citing All- Tex Roofing, Inc. v. Greenwood
Ins. Group, Inc., 73 S.W.3d 412 (Tex. App.—Houston [1st Dist.] 2002, pet.
denied). In any event, limitations was not held to preclude James’s recovery in the
second arbitration and the clause had to be rewritten by the arbitrator or the court to
avoid that improper result.
Specifically, Section 20(b)(1) provides that arbitration must be instituted
within one year of denial of the claim or the rendering of a determination. See CR
17
Supp. 44. The DTPA specifically provides a two year statute of limitations period
for DTPA claims, Tex. Bus. & Com. Code Ann. § 17.565 (West 2015), and waiver
of any subsection under the DTPA is against public policy. Id. at 17.42(a); see also
Tex. Civ. Prac. & Rem. Code Ann. §16.070 (West 2015) (precluding a contract
which limits the statute of limitations to less than 2 years). Although not asserted
by the parties as a defense, enforcement of the arbitration clause as written required
a re-writing of its terms which cannot be done, and which would be against public
policy. Therefore, the only way the James’s claims could be within the scope of the
arbitration clause, was for the court or arbitrator to rewrite the arbitration clause
itself.
6. The arbitrator had no authority to enter an award relating
to this case. Thus, the trial court abused its discretion in
enforcing the arbitration award.
Under both the Texas Arbitration Act and the Federal Arbitration Act, an
arbitrator cannot issue a decision on matters outside the scope of the arbitration
agreement. See Tex. Civ. Prac. & Rem. Code Ann. § 171.088 (West 2015); 9
U.S.C. § 10(a)(4) (2015). An arbitrator has no authority to issue a decision when
parties have not agreed to arbitrate claims because an arbitrator derives their power
from the arbitration agreement itself. Centex/Vestal v. Friendship W. Baptist
Church, 314 S.W.3d 677, 684 (Tex. App.—Dallas 2010) (citing Gulf Oil Corp. v.
18
Guidry, 327 S.W.2d 406, 408 (Tex. 1959)); Nafta Traders, Inc. v. Quinn, 339
S.W.3d 84, 90 (Tex. 2011) (quoting Stolt–Nielsen S.A. v. AnimalFeeds Int’l Corp.,
559 U.S. 662, 682 (2010)). Both Texas law and federal law require vacatur of an
arbitration award when an arbitrator exceeds their authority. Tex. Civ. Prac. &
Rem. Code Ann. § 171.088 (West 2015); 9 U.S.C. § 10(a)(4) (2015).
Here, the arbitrator exceeded his authority by entering an award where no
agreement to arbitrate existed and the scope of the arbitration agreement did not
cover the disputes. See infra Part I.A-E. Thus, because the arbitrator exceeded his
authority in entering an award, the trial court abused its discretion when it enforced
the arbitration award.
CONCLUSION
The right to open access to the courts is a fundamental right in Texas. See
Tex. Const. Art. I, § 13. Here, that right was violated when the trial court
erroneously compelled James to arbitrate and when the trial court enforced the
arbitration award against James. Justice requires that this Court reverse the trial
court’s order enforcing the arbitration award and remand of this case for trial.
PRAYER
WHEREFORE, Appellant, Jody James Farms, J.V., prays that the Court
reverse the trial court’s decision to compel arbitration and enforce the arbitration
19
award, and remand this case for a new trial.
Respectfully submitted,
JENKINS, WAGNON & YOUNG, P.C.
/s/ Jody D. Jenkins
JODY JENKINS
State Bar No. 24029634
P.O. Box 420
Lubbock, Texas 79408
(806) 796-7351
Fax: (806) 771-8755
jjenkins@jwylaw.com
ATTORNEYS FOR APPELLANT
CERTIFICATE OF SERVICE
The undersigned certifies that a true and correct copy of the foregoing
instrument has been served via the Court’s Electronic Filing System on this 4th
day of June, 2015.
J. Paul Manning
Anna McKim
Field, Manning, Stone, Hawthorne
& Aycock, P.C.
2112 Indiana Ave.
Lubbock, Texas79410
/s/ Jody D. Jenkins
Jody D. Jenkins
20
CERTIFICATE OF COMPLIANCE
I hereby certify that the word count in Appellant’s Brief is 3,532 words.
/s/ Jody D. Jenkins
Jody D. Jenkins
21
APPENDIX TO APPELLANT’S BRIEF
22
APPENDIX TABLE OF CONTENTS
EXHIBIT
Order Granting Motion to Arbitrate (CR 27)....................................................... 1
Final Judgment (CR 125-127) ............................................................. 2
Notice of Appeal (CR 128) .......................................................................................3
Crop Revenue Coverage (CRC) Insurance Policy (CR Supp. 25-50) ................. 4
9 U.S.C. § 10(a)(4) (2015).........................................................................................5
Tex. Bus. & Com. Code Ann. §17.42(a) (West 2015) ............................................ 6
Tex. Bus. & Com. Code Ann. § 17.565 (West 2015) ............................................. 7
Tex. Civ. Prac. & Rem. Code Ann. § 16.003 (West 2015) .................................... 8
Tex. Civ. Prac. & Rem. Code Ann. §16.070 (West 2015) ..................................... 9
Tex. Civ. Prac. & Rem. Code Ann. § 171.021(a)(1) (West 2015).......................10
Tex. Civ. Prac. & Rem. Code Ann. § 171.088 (West 2015) ................................11
Tex. Const. Art. I, § 13...........................................................................................12
23
806-792-1048
10:38:35a.m. 06-27-2013 3/3
No.l0,422
JODY JAMES FARMS, JV § IN THE II om DISTRICT COURT
§
v. § OF
§
THE ALTMAN GROUP, INC. AND §
LAURIEDIAZ § FLOYD COUNTY, TEXAS
ORDER GRANTING MOTION TO ARBITRATE
ON TIDS the 20'11 day ofMay, 2013, the Court considered the Motion of Defendants, THE
ALTMAN GROUP, INC. AND LAURIE DIAZ, to Compel Arbitration and, after considering the
pleadings, affidavit, evidence, and the argument of counsel, the Court hereby grants said motion.
IT IS THEREFORE ORDERED that the Motion of Defendants, THE ALTMAN GROUP,
INC. AND LAURIE DIAZ to arbitrate this matter is hereby in all things GRANTED.
SIGNED this..$-y of c,LY~-t · .
June, 2013. . ·
.. ~:~
FILED JUDGE PRESIDING
Pcdfg~
District Clerk, Floyd Co1.1nty, 'f.9xa8
By '-22-WE . L;/~
-.
EXHIBIT 1 27
8067921048 12:38:02 p.m. 01-16-2015 2/3
No. 10,422
JODY JAMES FARMS, N § IN THE llOTH DISTRICT COURT
§
v. § OF
§
THE ALTMAN GROUP, INC. AND §
LAURIEDIAZ § FLOYD COUNTY, TEXAS
FINAL JUDGMENT
On this day came on to be heard the above-entitled and numbered cause wherein JODY
JAMES FARMS, JV is Plaintiff and THE ALTMAN GROUP, INC. and LAURIE DIAZ, are the
Defendants in the above entitled and numbered cause. The Court has read the pleadings and the
papers on file, has considered the announcement of the parties and determined that it ·had
jurisdiction over the subject matter and the parties to this proceeding. The Court is of the opinion
that upon consideration of Defendants' Petition to Confirm and Enforce Final Arbitration Award
and Plaintiff, JODY JAMES FARMS, JV.'s, Motion to Vacate Arbitration Award and all
responses, briefs in support, exhibits and replies, if any, respectively thereto, it is hereby
ORDERED and DECREED that Defendants' Petition to Confirm and Enforce Final Arbitration
Award is GRANTED and the clerk is ordered to enter a judgment in favor of Defendants and
against Plaintiff, JODY JAMES FARMS, JV and that Plaintiff, JODY JAMES FARMS, JV take
nothing and all court costs are assessed against Plaintiff, JODY JAMES FARMS, JV. The judgment
is to accrue interest at the rate of 5.00% per annum from the date of judgment until paid, plus all
costs of court.
IT IS FURTHER ORDERED, ADJUDGED AND DECREED that Plaintiff's Motion
to Vacate the Arbitration Award is DENIED.
IT IS FURTHER ORDERED, ADJUDGED AND DECREED that Defendants request
for attorney's fees is DENIED.
Final Judgment Page 1
EXHIBIT 2 125
. 8067921048 12:38:26 p.m. 01-16-2015 3/3
IT IS, THEREFORE, ORDERED, ADJUDGED, AND DECREED that Defendants,
THE ALTMAN GROUP, INC. and LAURIE DIAZ have judgment against Plaintiff, JODY
JAMES FARMS, JV, as follows:
1. Plaintiff take nothing;
2. All costs of court are taxed against Plaintiff, JODY JAMES
FARMS,JV;and
3. Post judgment interest on all costs and fees incurred at five
percent (5%) per year from the date of this judgment.
IT IS, FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant shall
have all writs and processes as may be necessary to enforce this Judgment.
All relief not expressly granted herein is denied. This judgment is final, disposes of all
claims and all parties, and is appealable.
The court orders execution to issue for this judgment.
/L
SIGNED on this diJ- day of January, 2015.
Final Judgment Page 2
EXHIBIT 2 126
8067921048 08:47: 13 a.m. 01-15-2015 2/4
January 15, 2015
Page2
Very truly yours,
FJELD, MANNlNG, STONE,
HAWTHORNE & AYCOCK, P.C.
~."?~N\~
J.PaulManning ``
JPM:slm
Enclosure
Fax: 771-8755
E-Mail jjenkins@jwvlaw.com
pc: JODY JENKINS
JENKlNS, WAGNON & YOUNG, P.C.
P.O. Box420
Lubbock, TX 79408 FILED
``·
District C~rk, Flo)O County, Thxae
ay /-;I/J-c2LJ/5 ~/LI~,;n_,
u~
EXHIBIT 2 127
No.10,422
JODY JAMES FARMS, JV § IN THE llOTH DISTRICT COURT
§
v. § OF
§
THE ALTMAN GROUP, INC. AND §
LAURIEDIAZ § FLOYD COUNTY, TEXAS
NOTICE OF APPEAL
TO THE HONORABLE JUDGE OF SAID COURT:
~
Plaintiff,
~--_....- "'::
Jody }ame~f(lrms,
.---=--~ - •. ---- -
~---·
JY,~desiresJo- app~alJrom
-.,.- ·- - __ . . __.. . .
~-- -.-.__..
the- FinaU!!4gme11t~gl!ed.by
-- .. ~
this_.:;__ ---~
Court on January 16,2015.
Plaintiff, Jody James Farms, JV, appeals to the Seventh Court of Appeals, Amarillo, Texas.
zctfully submitted,
YJENKINS
SBN: 24029634
Jenkins, Wagnon & Young, P.C.
P.O. Box420
Lubbock, Texas79408-0420
(806) 796-73 51
FAX (806) 771-8755
jjenkins@jwylaw.com
ATTORNEYS FOR PLAINTIFF
CERTIFICATE OF SERVICE
.-:--::-..: _,- ·---·---,.-...·- :~- . . . ---~.,...._......,..,..,.~...,........-``-~=-__;._ " ____ _)
This is to certify that a true and correct copy of the above and foregoing instrument has
been served upon the following via facsimile this 13th day ofFebruary, 2015.
J. Paul Manning
Field, Manning, Stone, Hawthorne & Aycock, P.C.
2112 Indiana A venue
Lubbock, Texas79410
Fax: (806)792-9148
J,_Jenkins
FILED
Poiit; .o,/IYJI-i~
(( '
OiS1r1tl Lie. •, Flutu Cour~y, T~
{) ~11 ·;)OJ;) i r. 11 ~
EXHIBIT 3 128
.. CROP REVENUE COVERAGE (CRC) INSURANCE POUCY 2005-NCIS 7008-CRC
(This Is a continuous policy. Refer to section 3.)
This Insurance policy Is reinsured by the Federal Crop Insurance Corporation (FCIC) under the authority of section 50B(h) of the
)9deral Crop Insurance Act (Act), as amended (7 U.S.C. 1508(h)). All provisions of the policy and rights and responsibUities of the
,...arties are specifically subject to the Act. The provisions of the policy may not be waived or varied in any way by us, our Insurance
agent or any other contractor or employee of ours or any employee of USDA unless the policy specificaHy authorizes a waiver or
modification by written agreement. We will use the procedures (handbooks, manuals, memoranda and bulletins), as Issued by FCIC
and published on the RMA website at htto:l/nna.usda.gov/ or a successor website, in the administration of this policy, including the
adjustment of any loss or claim submitted hereunder. In the event that we cannot pay your loss because we are Insolvent or are
otherwise unable to perfonn our duties under our reinsurance agreement with FCIC. your claim will be settled In accordance with the
provisions of this policy and FCIC will be responsible for any amounts owed. No state guarantee fund will be liable for your loss.
Throughout the policy, "you" and "your" refer to the named insured shown on the accepted application and "we," •us; and •our" refer to
the insurance company providing insurance. Unless the context Indicates otherwise, use of the plural fonn of a word includes the
singular and use of the singular form of the word includes the plural.
AGREEMENT TO INSURE: In return for the payment of the premium, and subject to all of the provisions of this policy, we agree with
you to provide the insurance as stated In this policy. If there Is a conflict between the Act, the regulations pubHshed at 7 CFR chapter
IV, and the procedures as Issued by FCIC, the order of priority Is as follows: {1) the Act: (2) the regulations: and (3) the procedures as
Issued by FCIC, with (1) controlling (2), etc. If there is a conflict between the policy provisions and the administrative regulations
published at 7 CFR part 400, the policy provisions control. If a conflict exists among the policy provisions, the order of priority is: (1) the
Catastrophic Risk Protection Endorsement, as applicable; (2) the Special Provisions: (3) the Crop Provisions; and (4} these Basic
Provisions, with (1) controlling (2), etc.
BASIC PROVISIONS
Terms and Conditions
1. Definitions at 100 percent of the Base Price, or a comparable
Abandon - Failure to continue to care for the crop, coverage.
providing care so Insignificant as to provide no benefit to Administrative fee • An amount you must pay for
the crop, or failure to harvest In a timely manner, unless additional coverage for each crop year as specified in
an Insured cause of loss prevents you from property caring section B.
for or harvesting the crop or causes damage to It to the Agricultural commodity - Any crop or other commodity
extent that most producers of the crop on acreage with produced, regardless of whether or not it is Insurable.
similar characteristics In the area would not normally Agricultural experts - Persons who are employed by the
further care for or harvest it Cooperative State Research, Education and Extension
Acreage report - A report required by section 7 of these Service or the agricultural departments of universities, or
Basic Provisions that contains, In addition to other other persons approved by FCIC, whose research or
required Information, your report of your share of an occupation is related to the specific crop or practice for
acreage of an insured crop In the county, whether which such expertise is sought.
Insurable or not Insurable. Annual crop • An agricultural commodity that normally
Acreage reporting date - The date contained In the must be planted each year.
Special Provisions or as provided In section 7 by which Application - The form required to be completed by you
you are required to submit your acreage report. and accepted by us before insurance coverage will
Act - The Federal Crop Insurance Act (7 U.S.C. 1501 et commence. This form must be completed and filed in your
seq.). agent's offiCe not later than the sales closing date of the
Actual Production History (APH) - A process used to initial Insurance year for each crop for which Insurance
determine production guarantees In accordance with 7 coverage Is requested. If cancellation or termination of
CFR part 400, subpart (G). insurance coverage occurs for any reason, Including but
Actual Yield - The yield per acre for a crop year not limited to Indebtedness, suspension, debarment,
calculated from the production records or claims for disqualification, cancellation by you or us, or violation of
indemnities. The actual yield Is determined by dividing the controlled substance provisions of the Food Security
total production (which Includes harvested and appraised Act of 1985, a new application must be ffled for the crop.
production) by planted acres. Insurance coverage will not be provided if you are
Actuarial documents - The material for the crop year ineligible under the contract or under any Federal statute
which Is available for public Inspection In your agent's or regulation.
offiCe and published on RMA's website at Approved yield - The actual production history (APH)
htto:/fwww.rma.uscla.gov/ or a successor website, and yield, calculated and approved by the verifier, used to
which shows available coverage levels, Information determine the Final Guarantee by summing the yearly
needed to determine amounts of insurance, premium actual, assigned, adjusted or unadjusted transitional yields
rates, premium adjustment percentages, practices, and dividing the sum by the number of yields contained in
particular types or varieties of the Insurable crop, Insurable the database, which will always contain at least four
~creage, and other related information regarding crop yields. The database may contain up to 10 consecutive
Insurance In the county. crop years of actual or assigned yields. The approved
Additional coverage - A level of coverage equal to or yield may have yield adjustments elected under section
greater than 50 percent of the approved yield Indemnified 35, revisions according to sectl~o~l.iiW·``````
PLAINTIFF'S
C 2004 National Crop Insurance Services, Inc. Page 1 of26
EXHIBIT
EXHIBIT 4
I 25
s
.. according to FCIC approved procedures applied when full text of the CFR is available in electronic fonnat a
calculating the approved yield. This yield is established for hHo:/fwww.access.Qoo.gov/ or a successor website.
basic or optional units. The approved yield for each basic Consent - Approval in writing by us allowing you to take f
or optional unit comprising an enterprise unit Is retained specific action.
" for premium and Anal Guarantee purposes under an Contract- (see •Polley".)
1 enterprise unit Contract change date - The calendar date by whict
Area - Land surrounding the insured acreage with changes to the policy, if any, wiU be made available lr
geographic characteristics, topography, soil types and accordance with section 5 of these Basic Provisions.
climatic conditions similar to the Insured acreage. Conventional farming practice - A system or process fo1
Assignment of Indemnity - A transfer of policy rights, producing an agricultural commodity, excluding organic
made on our form, and effective when approved by us. It farming practices, that Is necessary to produce the crop
Is the arrangement whereby you assign your right to an that may be, but is not required to be, generally
Indemnity payment to any party of your choice for the crop recognized by agricultural experts for the area to conserve
year. or enhance natural resources and the environment.
Average yield • The yield, calculated by summing the County - Any county, parish, or other political subdivision
yearly actual, assigned, adjusted or unadjusted transitional of a state shown on your accepted appUcatlon, Including
yields and dividing the sum by the number of yields acreage In a field that extends Into an adjoining county If
contained In the database, prior to any adjustments, the county boundary Is not readily discernible.
Including those elected under section 35, revisions Coverage - The insurance provided by this policy, against
according to section 4, or other limitations according to insured loss of revenue by unit as shown on your
FCIC approved procedures. summary of coverage.
Base premium rate - A premium rate used to calculate Cover crop - A crop generally recognized by agricultural
the risk associated with yield. experts as agronomically sound for the area for erosion
Base Price - The Initial price determined in accordance control or other purposes related to conservation or soil
with the Commodity Exchange Endorsement and used to Improvement. A cover crop may be considered to be a
calculate your premium and Minimum Guarantee. second crop (see the definition of •second crop•).
Buffer zone - A parcel of land, as designated In your Coverage begins, date - The calendar date Insurance
organic plan, that separates agricultural commodities begins on the Insured crop, as contained In the Crop
grown under organic practices from agricultural Provisions, or the date planting begins on the unit (see
commodities grown under non-organic practices, and used section 12 of these Basic Provisions for specific provisions
to minimize the possibility of unintended contact by relating to prevented planting).
prohibited substances or organisms. Crop Provisions - The part of the policy that contains the
CertJffed organic acreage - Acreage In the certified specific provisions of insurance for each Insured crop.
organic farming operation that has been certified by a Crop year - The period within which the Insured crop Is
certifying agent as conforming to organic standards in normally grown, regardless of whether or not It Is actually
accordance with 7 CFR part 205. grown, and designated by the calendar year In whlch the
Certifying agent - A private or governmental entity Insured crop Is normally harvested, unless otherwise
accredited by the USDA Secretary of Agriculture for the specified In the Crop Provisions.
purpose of certifying a production, processing or handling Damage - InJury, deterioration, or loss of revenue of the
operation as organic. Insured crop due to Insured or uninsured causes.
CRC base rate- The premium rate used to calculate the Days - Calendar days.
risk associated with revenue. Deductible - The amount determined by subtracting the
CRC high price factor· A premium factor, as set forth In coverage level percentage you choose from 100 percent.
the actuarial documents, used to calculate the risk For example, If you elected a 65 percent coverage level,
associated with an Increase In the Harvest Price relative to =
your deductible would be 35 percent (1 00% - 65% 35%).
the Base Price. Delinquent debt - Any administrative fees or premiums
CRC low price factor - A premium factor, as set forth in for insurance issued under the authority of the Act, and the
the actuarial documents, used to calculate the risk Interest on those amounts, If applicable, that are not
associated with a decrease In the Harvest Price relative to postmarked or received by us or our agent on or before
the Base Price. the termination date unless you have entered into an
Calculated Revenue - The production to count for the agreement acceptable to us to pay such amounts or have
insured crop multiplied by the Harvest Price. filed for bankruptcy on or before the termination date; any
Cancellation date • The calendar date specified In the other amounts due us for Insurance issued under the
Crop Provisions on which coverage for the crop will authority of the Act (Including, but not limited to,
automatically renew unless canceled in writing by either Indemnities, prevented planting payments or replanting
you or us, or terminated In accordance with the policy payments found not to have been earned or that were
terms. overpaid), and the Interest on such amounts, If applicable,
Claim for Indemnity - A claim made on our form by you which are not postmarked or received by us or our agent
for damage or loss to an insured crop and submitted to us by the due date specified In the notice to you of the
not later than 60 days after the Harvest Price is released amount due; or any amounts due under an agreement
(see section 15). with you to pay the debt, which are not postmarked or
Code of Federal Regulations (CFR) - The codification of received by us or our agent by the due dates specified In
general and permanent rules published In the Federal such agreement.
Register by the Executive departments and agencies of Disinterested third party - A person that does not have
the Federal Government. Rules published In the Federal any familial relationship (parents, brothers, sisters,
) children, spouse, grandchildren, aunts, uncles, nieces,
Register by FCIC are contained in 7 CFR chapter IV. The
nephews, first cousins, or grandparents, related by blood,
C 2004 National Crop Insurance Services, Inc. Page2of26
EXHIBIT 4 26
.. adoption or marriage, are considered to have a famHial or contained In the organic plan. We may, or you rna~
relationship) with you or who will not benefit financially request us to, contact FCIC to determine whether or no
from the sale of the Insured crop. Persons who are production methods will be considered to be "good farmln~
authorized to conduct quality analysis In accordance with practices.·
the Crop Provisions are considered disinterested third Harvest Price - The final price determined In accordancE
parties unless there Is a familial relationship. with the Commodity Exchange Endorsement and used t<
Double crop - Producing two or more crops for harvest on calculate your Calculated Revenue and the Harves
the same acreage In the same crop year. Guarantee.
Earliest planting date - The initial planting date contained Household - A domestic establishment Including thE
In the Special Provisions, which is the earliest date you members of a family (parents, brothers, sisters, children
may plant an Insured agricultural commodity and qualify spouse, grandchildren, aunts, uncles, nieces, nephews
for a replanting payment If such payments are authorized first cousins, or grandparents, related by blood, adoptior
by the Crop Provisions. or marriage, are considered to be family members) anc
End of Insurance period, date of - The date upon which others who live under the same roof.
your crop Insurance coverage ceases for the crop year Insurable loss - Damage for which coverage is providec
(see Crop Provisions and section 12). under the terms of your policy, and for which you accep
FCIC - The Federal Crop Insurance Corporation, a wholly an Indemnity payment.
owned government corporation within USDA. Insured - The named person shown on the applicatlor
Field - AU acreage of liftable land within a natural or accepted by us. This term does not extend to any othe
artificial boundary (e.g., roads, waterways, fences, etc.). person having a share or interest In the crop (for example
Different planting patterns or planting different crops do a partnership, landlord, or any other person) unle~
not create separate fields. specifically indicated on the accepted application.
Final Guarantee - The number of dollars guaranteed per Insured crop - The crop in the county for which coverage
acre determined to be the higher of the Minimum is available under your policy as shown on the applicatior
Guarantee or the Harvest Guarantee, where: accepted by us.
(1) Minimum Guarantee - The approved yield per acre lnterplanted - Acreage on which two or more crops are
multiplied by the Base Price multiplied by the planted In a manner that does not permit separate
coverage level percentage you elect. agronomic maintenance or harvest of the Insured crop.
(2) Harvest Guarantee - The approved yield per acre Irrigated practice - A method of producing a crop b}
multiplied by the Harvest Price, multiplied by the which water Is artificially applied during the growin~
coverage level percentage you elect. season by appropriate systems and at the proper times
If you elect enterprise unit coverage, the basic units or with the Intention of providing the quantity of water needec
optional units comprising the enteJprise unit will retain to produce at least the yield used to establish the Rna
separate Anal Guarantees. Guarantee on the irrigated acreage planted to the lnsurec
Final planting date - The date contained in the Special crop.
Provisions for the Insured crop by which the crop must Late planted - Acreage initially planted to the insured CI'OJ=
Initially be planted in order to be Insured for the full Anal after the final planting date.
Guarantee. Late planting period - The period that begins the da~
First Insured crop -With respect to a single crop year and after the final planting date for the insured crop and ends
any speclfic crop acreage, the first Instance that an 25 days after the final planting date, unless otherwise
agricultural commodity Is planted for harvest or prevented specified in the Crop Provisions or Special Provisions.
from being planted and is insured under the authority of Liability - The dollar amount of insurance coverage use 2004 National Crop Insurance Services, Inc. Page26 of26
EXHIBIT 4 50
| | Positive
As of: June 4, 2015 4:28 PM EDT
9 USCS § 10
Current through PL 114-13, approved 5/19/15
United States Code Service - Titles 1 through 54 > TITLE 9. ARBITRATION > CHAPTER 1.
GENERAL PROVISIONS
§ 10. Same; vacation; grounds; rehearing
(a) In any of the following cases the United States court in and for the district wherein the award
was made may make an order vacating the award upon the application of any party to the
arbitration--
(1) where the award was procured by corruption, fraud, or undue means;
(2) where there was evident partiality or corruption in the arbitrators, or either of them;
(3) where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon
sufficient cause shown, or in refusing to hear evidence pertinent and material to the
controversy; or of any other misbehavior by which the rights of any party have been
prejudiced; or
(4) where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual,
final, and definite award upon the subject matter submitted was not made.
(b) If an award is vacated and the time within which the agreement required the award to be made
has not expired, the court may, in its discretion, direct a rehearing by the arbitrators.
(c) The United States district court for the district wherein an award was made that was issued
pursuant to section 580 of title 5 may make an order vacating the award upon the application
of a person, other than a party to the arbitration, who is adversely affected or aggrieved by the
award, if the use of arbitration or the award is clearly inconsistent with the factors set forth in
section 572 of title 5.
History
(July 30, 1947, ch 392, § 1,61 Stat. 672; Nov. 15, 1990, P.L. 101-552, § 5, 104 Stat. 2745; Aug. 26,
1992, P.L. 102-354, § 5(b)(4), 106 Stat. 946; May 7, 2002, P.L. 107-169, § 1, 116 Stat. 132.)
Prior law and revision:
This section is based on Act Feb. 12, 1925, ch 213, § 10, 43 Stat. 885 (§ 10 of former Title 9).
EXHIBIT 5
| | Neutral
As of: June 4, 2015 4:31 PM EDT
Tex. Bus. & Com. Code § 17.42
This document is current through the 2013 3rd Called Session
Texas Statutes and Codes > BUSINESS AND COMMERCE CODE > TITLE 2. COMPETITION AND
TRADE PRACTICES > CHAPTER 17. DECEPTIVE TRADE PRACTICES > SUBCHAPTER E.
DECEPTIVE TRADE PRACTICES AND CONSUMER PROTECTION
§ 17.42. Waivers: Public Policy
(a) Any waiver by a consumer of the provisions of this subchapter is contrary to public policy and
is unenforceable and void; provided, however, that a waiver is valid and enforceable if:
(1) the waiver is in writing and is signed by the consumer;
(2) the consumer is not in a significantly disparate bargaining position; and
(3) the consumer is represented by legal counsel in seeking or acquiring the goods or services.
(b) A waiver under Subsection (a) is not effective if the consumer’s legal counsel was directly or
indirectly identified, suggested, or selected by a defendant or an agent of the defendant.
(c) A waiver under this section must be:
(1) conspicuous and in bold-face type of at least 10 points in size;
(2) identified by the heading ″Waiver of Consumer Rights,″ or words of similar meaning; and
(3) in substantially the following form:
″I waive my rights under the Deceptive Trade Practices-Consumer Protection Act, Section
17.41 et seq., Business & Commerce Code, a law that gives consumers special rights and
protections. After consultation with an attorney of my own selection, I voluntarily consent
to this waiver.″
(d) The waiver required by Subsection (c) may be modified to waive only specified rights under
this subchapter.
(e) The fact that a consumer has signed a waiver under this section is not a defense to an action
brought by the attorney general under Section 17.47.
History
Enacted by Acts 1973, 63rd Leg., ch. 143 (H.B. 417), § 1, effective May 21, 1973; am. Acts 1981, 67th
Leg., ch. 307 (S.B. 619), § 1, effective August 31, 1981; am. Acts 1983, 68th Leg., ch. 883 (H.B. 1438),
§ 1, effective August 29, 1983; am. Acts 1987, 70th Leg., ch. 167 (S.B. 892), § 5.02(6), effective
September 1, 1987; am. Acts 1989, 71st Leg., ch. 380 (S.B. 437), § 1, effective September 1, 1989; am.
Acts 1995, 74th Leg., ch. 414 (H.B. 668), § 1, effective September 1, 1995.
EXHIBIT 6
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As of: June 4, 2015 4:31 PM EDT
Tex. Bus. & Com. Code § 17.565
This document is current through the 2013 3rd Called Session
Texas Statutes and Codes > BUSINESS AND COMMERCE CODE > TITLE 2. COMPETITION AND
TRADE PRACTICES > CHAPTER 17. DECEPTIVE TRADE PRACTICES > SUBCHAPTER E.
DECEPTIVE TRADE PRACTICES AND CONSUMER PROTECTION
§ 17.565. Limitation
All actions brought under this subchapter must be commenced within two years after the date on which
the false, misleading, or deceptive act or practice occurred or within two years after the consumer
discovered or in the exercise of reasonable diligence should have discovered the occurrence of the
false, misleading, or deceptive act or practice. The period of limitation provided in this section may be
extended for a period of 180 days if the plaintiff proves that failure timely to commence the action was
caused by the defendant’s knowingly engaging in conduct solely calculated to induce the plaintiff to
refrain from or postpone the commencement of the action.
History
Enacted by Acts 1979, 66th Leg., ch. 603 (S.B. 357), § 8, effective August 27, 1979; am. Acts 1987,
70th Leg., ch. 167 (S.B. 892), § 5.02(7), effective September 1, 1987 (renumbered from Sec. 17.56A).
Annotations
Case Notes
Antitrust & Trade Law: Consumer Protection: General Overview
Antitrust & Trade Law: Consumer Protection: Deceptive Acts & Practices: General Overview
Antitrust & Trade Law: Consumer Protection: Deceptive Acts & Practices: State Regulation
Antitrust & Trade Law: Consumer Protection: Deceptive Labeling & Packaging: State Regulation
Antitrust & Trade Law: State Civil Action
Antitrust & Trade Law: Trade Practices & Unfair Competition: General Overview
Antitrust & Trade Law: Trade Practices & Unfair Competition: State Regulation: Claims
Banking Law: Consumer Protection: State Law: General Overview
Civil Procedure: Pleading & Practice: Defenses, Demurrers & Objections: Affirmative Defenses:
General Overview
Civil Procedure: Pleading & Practice: Defenses, Demurrers & Objections: Affirmative Defenses:
Statutes of Limitations: General Overview
Civil Procedure: Pleading & Practice: Pleadings: Amended Pleadings: General Overview
Civil Procedure: Pleading & Practice: Pleadings: Amended Pleadings: Relation Back
Civil Procedure: Pleading & Practice: Pleadings: Time Limitations: General Overview
Civil Procedure: Summary Judgment: General Overview
Civil Procedure: Summary Judgment: Burdens of Production & Proof: General Overview
EXHIBIT 7
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As of: June 4, 2015 4:32 PM EDT
Tex. Civ. Prac. & Rem. Code § 16.003
This document is current through the 2013 3rd Called Session
Texas Statutes and Codes > CIVIL PRACTICE AND REMEDIES CODE > TITLE 2. TRIAL,
JUDGMENT, AND APPEAL > SUBTITLE B. TRIAL MATTERS > CHAPTER 16. LIMITATIONS >
SUBCHAPTER A. LIMITATIONS OF PERSONAL ACTIONS
§ 16.003. Two-Year Limitations Period
(a) Except as provided by Sections 16.010, 16.0031, and 16.0045, a person must bring suit for
trespass for injury to the estate or to the property of another, conversion of personal property,
taking or detaining the personal property of another, personal injury, forcible entry and detainer,
and forcible detainer not later than two years after the day the cause of action accrues.
(b) A person must bring suit not later than two years after the day the cause of action accrues in
an action for injury resulting in death. The cause of action accrues on the death of the injured
person.
History
Enacted by Acts 1985, 69th Leg., ch. 959 (S.B. 797), § 1, effective September 1, 1985; am. Acts 1995,
74th Leg., ch. 739 (H.B. 2330), § 2, effective June 15, 1995; am. Acts 1997, 75th Leg., ch. 26 (H.B.
368), § 2, effective May 1, 1997; am. Acts 2005, 79th Leg., ch. 97 (S.B. 15), § 3, effective September
1, 2005.
Annotations
Notes
Legislative Note. --
* See Texas Litigation Guide, Ch. 72, Limitation of Actions.
Editor’s Notes. --
Acts 2005, 79th Leg., ch. 97 (S.B. 15), § 10 provides: ″There is a direct appeal to the supreme court
from an order, however characterized, of a trial court granting or denying a temporary or otherwise
interlocutory injunction or a permanent injunction on the grounds of the constitutionality or
unconstitutionality, or other validity or invalidity, under the state or federal constitution of all or any
part of this Act. The direct appeal is an accelerated appeal.″
2005 amendment,
added ″16.0031″ in (a).
Case Notes
Banking Law: Consumer Protection: Fair Debt Collection: Unfair Practices
Bankruptcy Law: Case Administration: Examiners, Officers & Trustees: General Overview
EXHIBIT 8
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As of: June 4, 2015 4:34 PM EDT
Tex. Civ. Prac. & Rem. Code § 16.070
This document is current through the 2013 3rd Called Session
Texas Statutes and Codes > CIVIL PRACTICE AND REMEDIES CODE > TITLE 2. TRIAL,
JUDGMENT, AND APPEAL > SUBTITLE B. TRIAL MATTERS > CHAPTER 16. LIMITATIONS >
SUBCHAPTER D. MISCELLANEOUS PROVISIONS
§ 16.070. Contractual Limitations Period
(a) Except as provided by Subsection (b), a person may not enter a stipulation, contract, or
agreement that purports to limit the time in which to bring suit on the stipulation, contract, or
agreement to a period shorter than two years. A stipulation, contract, or agreement that
establishes a limitations period that is shorter than two years is void in this state.
(b) This section does not apply to a stipulation, contract, or agreement relating to the sale or
purchase of a business entity if a party to the stipulation, contract, or agreement pays or receives
or is obligated to pay or entitled to receive consideration under the stipulation, contract, or
agreement having an aggregate value of not less than $ 500,000.
History
Enacted by Acts 1985, 69th Leg., ch. 959 (S.B. 797), § 1, effective September 1, 1985; am. Acts 1991,
72nd Leg., ch. 840 (S.B. 935), § 2, effective August 26, 1991.
Annotations
Notes
1991 Note:
The amendments made by Acts 1991, 72nd Leg., ch. 840 apply to a stipulation, contract, or agreement
entered into before, on, or after August 26, 1991. Acts 1991, 72nd Leg., ch. 840, § 5.
* See Texas Litigation Guide, Ch. 72, Limitation of Actions.
Case Notes
Civil Procedure: Federal & State Interrelationships: Choice of Law: General Overview
Civil Procedure: Federal & State Interrelationships: Federal Common Law: General Overview
Contracts Law: Breach: Causes of Action: General Overview
Contracts Law: Contract Conditions & Provisions: Conditions Precedent
Contracts Law: Defenses: Statutes of Limitations
Governments: Legislation: Statutes of Limitations: General Overview
Governments: Legislation: Statutes of Limitations: Time Limitations
Governments: Legislation: Statutes of Limitations: Waivers
Insurance Law: Claims & Contracts: Policy Interpretation: General Overview
EXHIBIT 9
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As of: June 4, 2015 4:35 PM EDT
Tex. Civ. Prac. & Rem. Code § 171.021
This document is current through the 2013 3rd Called Session
Texas Statutes and Codes > CIVIL PRACTICE AND REMEDIES CODE > TITLE 7. ALTERNATE
METHODS OF DISPUTE RESOLUTION > CHAPTER 171. GENERAL ARBITRATION >
SUBCHAPTER B. PROCEEDINGS TO COMPEL OR STAY ARBITRATIONS
§ 171.021. Proceeding to Compel Arbitration
(a) A court shall order the parties to arbitrate on application of a party showing:
(1) an agreement to arbitrate; and
(2) the opposing party’s refusal to arbitrate.
(b) If a party opposing an application made under Subsection (a) denies the existence of the
agreement, the court shall summarily determine that issue. The court shall order the arbitration
if it finds for the party that made the application. If the court does not find for that party, the
court shall deny the application.
(c) An order compelling arbitration must include a stay of any proceeding subject to Section
171.025.
History
Enacted by Acts 1997, 75th Leg., ch. 165 (S.B. 898), § 5.01, effective September 1, 1997.
Annotations
Notes
Editor’s Notes. --
For information regarding the reorganization of former Chapter 171, see the editor’s notes following
Tex. Civ. Prac. & Rem. Code § 171.001.
Case Notes
Business & Corporate Law: Corporations: Finance: Franchise Tax: Penalties for Noncompliance
Civil Procedure: Pleading & Practice: Defenses, Demurrers & Objections: Motions to Dismiss
Civil Procedure: Discovery: Methods: General Overview
Civil Procedure: Summary Judgment: Motions for Summary Judgment: General Overview
Civil Procedure: Alternative Dispute Resolution: General Overview
Civil Procedure: Alternative Dispute Resolution: Arbitrations: General Overview
Civil Procedure: Alternative Dispute Resolution: Arbitrations: Arbitrability
Civil Procedure: Alternative Dispute Resolution: Arbitrations: Federal Arbitration Act: General
EXHIBIT 10
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As of: June 4, 2015 4:35 PM EDT
Tex. Civ. Prac. & Rem. Code § 171.088
This document is current through the 2013 3rd Called Session
Texas Statutes and Codes > CIVIL PRACTICE AND REMEDIES CODE > TITLE 7. ALTERNATE
METHODS OF DISPUTE RESOLUTION > CHAPTER 171. GENERAL ARBITRATION >
SUBCHAPTER D. COURT PROCEEDINGS
§ 171.088. Vacating Award
(a) On application of a party, the court shall vacate an award if:
(1) the award was obtained by corruption, fraud, or other undue means;
(2) the rights of a party were prejudiced by:
(A) evident partiality by an arbitrator appointed as a neutral arbitrator;
(B) corruption in an arbitrator; or
(C) misconduct or wilful misbehavior of an arbitrator;
(3) the arbitrators:
(A) exceeded their powers;
(B) refused to postpone the hearing after a showing of sufficient cause for the postponement;
(C) refused to hear evidence material to the controversy; or
(D) conducted the hearing, contrary to Section 171.043, 171.044, 171.045, 171.046, or
171.047, in a manner that substantially prejudiced the rights of a party; or
(4) there was no agreement to arbitrate, the issue was not adversely determined in a proceeding
under Subchapter B, and the party did not participate in the arbitration hearing without
raising the objection.
(b) A party must make an application under this section not later than the 90th day after the date
of delivery of a copy of the award to the applicant. A party must make an application under
Subsection (a)(1) not later than the 90th day after the date the grounds for the application are
known or should have been known.
(c) If the application to vacate is denied and a motion to modify or correct the award is not pending,
the court shall confirm the award.
History
Enacted by Acts 1997, 75th Leg., ch. 165 (S.B. 898), § 5.01, effective September 1, 1997.
EXHIBIT 11
Tex. Const. Art. I, § 13
This document is current through the 2015 regular session, 84th Legislature, S.B. 293 (chapter 2).
Texas Constitution > CONSTITUTION OF THE STATE OF TEXAS 1876 > ARTICLE I. BILL OF
RIGHTS
§ 13. Excessive Bail or Fines; Cruel and Unusual Punishment; Remedy by Due
Course of Law.
Excessive bail shall not be required, nor excessive fines imposed, nor cruel or unusual punishment
inflicted. All courts shall be open, and every person for an injury done him, in his lands, goods, person
or reputation, shall have remedy by due course of law.
Annotations
Case Notes
OPINIONS OF ATTORNEY GENERAL
Administrative Law: Judicial Review: Reviewability: Jurisdiction & Venue
Business & Corporate Law: Corporations: Dissolution & Receivership: Termination & Winding Up:
Limited Survival
Business & Corporate Law: Corporations: Shareholders: Actions Against Corporations: Derivative
Actions: General Overview
Civil Procedure: Justiciability: General Overview
Civil Procedure: Justiciability: Case or Controversy Requirements: Immediacy
Civil Procedure: Justiciability: Standing: General Overview
Civil Procedure: Justiciability: Standing: Burdens of Proof
Civil Procedure: Justiciability: Standing: Injury in Fact
Civil Procedure: Jurisdiction: General Overview
Civil Procedure: Jurisdiction: Subject Matter Jurisdiction: Jurisdiction Over Actions: General
Overview
Civil Procedure: Jurisdiction: Subject Matter Jurisdiction: Jurisdiction Over Actions: Concurrent
Jurisdiction
Civil Procedure: Equity: General Overview
Civil Procedure: Removal: Proceedings: Fraudulent Joinder
Civil Procedure: Federal & State Interrelationships: Abstention
Civil Procedure: Pleading & Practice: Pleadings: Amended Pleadings: General Overview
Civil Procedure: Pleading & Practice: Pleadings: Proceedings in Forma Pauperis: Prisoners: Petitions
Civil Procedure: Parties: Capacity of Parties: General Overview
Civil Procedure: Parties: Prisoners: Dismissals of Petitions
Civil Procedure: Parties: Prisoners: Screening of Petitions
Civil Procedure: Joinder of Claims & Remedies: General Overview
Civil Procedure: Judicial Officers: Judges: Discretion
Civil Procedure: Dismissals: Involuntary Dismissals: General Overview
Civil Procedure: Dismissals: Involuntary Dismissals: Failures to Prosecute
EXHIBIT 12