Villa De Leon Condominiums, LLC, Patten Sales and Marketing, LLC, and Bill Bridges, Jr. v. Michael Stewart and Carrie Stewart ( 2015 )

COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH
NO. 02-14-00271-CV
VILLA DE LEON CONDOMINIUMS, APPELLANTS
LLC, PATTEN SALES AND
MARKETING, LLC, AND BILL
BRIDGES, JR.
V.
MICHAEL STEWART AND CARRIE APPELLEES
STEWART
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FROM THE 153RD DISTRICT COURT OF TARRANT COUNTY
TRIAL COURT NO. 153-269987-14
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CONCURRING MEMORANDUM OPINION 1
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I agree with the majority opinion’s conclusion that appellee Carrie Stewart
was bound to arbitrate her claims regarding the purchase of Unit 130, which fell
under the scope of the arbitration clause contained in the Contract that she
1
See Tex. R. App. P. 47.4.
signed. However, because appellee Michael Stewart did not sign the Contract
containing the arbitration clause, I believe this court must address whether the
arbitration clause may be enforced against a nonsignatory. Because I believe
the clause may be enforced against Michael even though he did not sign the
Contract containing the arbitration clause, I concur in the judgment.
The majority opinion correctly recites that we review the trial court’s denial
of a motion to compel arbitration for an abuse of discretion but that we review de
novo a trial court’s determination regarding whether a valid agreement to
arbitrate exists. 2 See In re Labatt Food Serv., L.P., 279 S.W.3d 640, 643 (Tex.
2009) (orig. proceeding); J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 227
(Tex. 2003). Further, we must uphold the trial court’s decision if there is
sufficient evidence to support the denial on any legal theory raised in the trial
court because the trial court did not enter findings of fact or conclusions of law to
2
The arbitration clause at issue does not specify whether the Federal
Arbitration Act or the Texas General Arbitration Act applies. Appellants did not
specify whether the FAA or the TGAA applied nor did they assert that the TGAA
conflicts with the FAA in any material respect or that the contract affected
interstate commerce. See 9 U.S.C.A. § 2 (West 2009) (providing FAA governs
contracts relating to interstate commerce); IKON Office Solutions, Inc. v. Eifert, 2
S.W.3d 688, 696 (Tex. App.—Houston [14th Dist.] 1999, orig. proceeding & no
pet.) (holding burden is on party seeking to compel arbitration to show FAA
applies). Thus, whether the TGAA or the FAA applies need not be addressed
and cases decided under the FAA or the TGAA may be cited interchangeably.
See Forest Oil Corp. v. McAllen, 268 S.W.3d 51, 56 n.10 (Tex. 2008);
Zaporozhets v. Ct. Appointed Receiver in Cause No. 12-DCV-199496, No. 14-
14-00143-CV, 2014 WL 5148151, at *2 (Tex. App.—Houston [14th Dist.] Oct. 14,
2014, no pet.) (mem. op.); Osornia v. AmeriMex Motor & Controls, Inc., 367
S.W.3d 707, 711 (Tex. App.—Houston [14th Dist.] 2012, no pet.).
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explain its denial of the motion to compel. Shamrock Foods Co. v. Munn &
Assocs., Ltd., 392 S.W.3d 839, 844 (Tex. App.—Texarkana 2013, no pet.); In re
Weeks Marine, Inc., 242 S.W.3d 849, 854 (Tex. App.—Houston [14th Dist.] 2007,
orig. proceeding [mand. denied]). To enforce an arbitration clause against a
signatory, the party seeking to compel arbitration must establish (1) a valid
arbitration agreement exists and (2) the claims asserted fall within the scope of
the agreement. In re Dillard Dep’t Stores, Inc., 186 S.W.3d 514, 515 (Tex. 2006)
(orig. proceeding). With a nonsignatory, the party seeking to compel arbitration
must establish that an accepted theory applies allowing the movant to bind the
nonsignatory to the arbitration clause. See In re Kellogg Brown & Root, 166
S.W.3d 732, 739 (Tex. 2005) (orig. proceeding); Glassell Producing Co. v. Jared
Res., Ltd., 422 S.W.3d 68, 80–81 (Tex. App.—Texarkana 2014, no pet.) (op. on
reh’g); CNOOC Se. Asia Ltd. v. Paladin Res. (SUNDA) Ltd., 222 S.W.3d 889,
895 (Tex. App.—Dallas 2007, pets. denied) (op. on reh’g). If the movant
establishes that a valid arbitration agreement governs the dispute, the burden
shifts to the party opposing arbitration to prove his or her defenses to arbitration.
In re AdvancePCS Health L.P., 172 S.W.3d 603, 607 (Tex. 2005) (orig.
proceeding). If the opposing party fails to do so, the trial court has no discretion
and must compel arbitration. See In re FirstMerit Bank, N.A., 52 S.W.3d 749,
754 (Tex. 2001) (orig. proceeding).
Again, the majority correctly determines that (1) as to Carrie, the Contract,
letter agreement, First Addendum, and Second Addendum, viewed as a whole,
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contained an enforceable arbitration agreement and (2) Carrie, as a signatory to
each document, was bound by the enforceable arbitration clause contained in the
Contract. It is important to note, however, that by pleading tort claims, Carrie
cannot avoid this enforceable arbitration clause because Appellants’ alleged
liability arose solely from the contract or must be determined by reference to it.
See In re Weekley Homes, L.P., 180 S.W.3d 127, 131–32 (Tex. 2005) (orig.
proceeding). Thus, the trial court erred by denying Appellants’ motion to compel
arbitration as to Carrie.
But Michael was not a signatory to the Contract containing the arbitration
clause and only initialed selected portions of the Contract. Although Carrie is
bound to the enforceable arbitration agreement contained in the Contract as a
signatory, I cannot conclude that Michael is bound to the arbitration clause in the
Contract as a nonsignatory merely because he signed subsequent agreements
and addendums, none of which contained an arbitration clause. Thus, Michael
may be compelled to arbitrate his claims only if no other legal basis supports the
trial court’s denial, i.e., only if Appellants established that the clause bound
Michael to arbitrate under an established theory governing nonsignatories.
Michael asserted in the trial court that he did not sign the Contract and, therefore,
could not be bound by the arbitration clause. Thus, I will address whether
Appellants established a theory binding Michael as a nonsignatory. 3
3
Indeed, the trial court indicated at the hearing that Michael’s nonsignatory
status was an important factor in the denial.
4
As recited previously, a party seeking to compel a nonsignatory to arbitrate
his claims must establish: (1) a valid arbitration agreement exists binding the
nonsignatory under an established contractual theory and (2) the claims at issue
fall within the scope of the agreement. See In re Rubiola, 334 S.W.3d 220, 223
(Tex. 2011) (orig. proceeding); Osornia, 367 S.W.3d at 711. The presumptions
favoring arbitration do not apply to a court’s determination as to whether the first
showing has been made. See Kellogg, 166 S.W.3d at 737–38. Instead, because
arbitration is contractual, a court must first decide whether an agreement was
reached, applying state-law principles of contract interpretation. In re Poly–Am.,
L.P., 262 S.W.3d 337, 347–48 (Tex. 2008) (orig. proceeding); Am. Med. Techs.,
Inc. v. Miller, 149 S.W.3d 265, 273 (Tex. App.—Houston [14th Dist.] 2004, orig.
proceeding & no pet.).
Here, no one disputes on appeal that the Stewarts’ claims fell within the
scope of the arbitration clause. Thus, the only question is whether Appellants
established that the arbitration agreement in the Contract bound Michael as a
nonsignatory to arbitrate his claims related to the purchase of Unit 130.
Appellants argued in the trial court that the arbitration clause was binding on
Michael as a nonsignatory under the doctrine of direct-benefits estoppel because
he (1) brought claims in a lawsuit seeking direct benefits from the contract
containing the arbitration clause and (2) deliberately sought and obtained
substantial benefits from the contract itself outside of litigation. Indeed, direct-
benefits estoppel applies to “non-signatories who, during the life of the contract,
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have embraced the contract despite their non-signatory status but then, during
litigation, attempt to repudiate the arbitration clause in the contract.” Hellenic Inv.
Fund, Inc. v. Det Norske Veritas, 464 F.3d 514, 517–18 (5th Cir. 2006). See
generally MaxEn Capital, LLC v. Sutherland, No. H-08-3590, 2009 WL 936895,
at *5 (S.D. Tex. Apr. 3, 2009) (collecting cases enforcing arbitration and forum-
selection clauses against nonsignatories based on estoppel).
By bringing claims against Appellants directly related to the contractual
purchase of Unit 130 and that necessarily must be determined by reference to
the duties arising under that contract, Michael is seeking a benefit from a contract
he did not sign. This is the classic scenario under which nonsignatories are held
to the dictates of an arbitration clause or other type of forum-selection clause
under direct-benefits estoppel. See Carlile Bancshares, Inc. v. Armstrong, Nos.
02-14-00014-CV, 02-14-00018-CV, 2014 WL 3891658, at *7–8 (Tex. App.—Fort
Worth Aug. 7, 2014, no pet.) (mem. op.). Similarly, Michael obtained direct and
substantial benefits from the Contract, as amended by the letter agreement and
the First and Second Addendums. As Appellants argue, Michael lived in Unit
130, received a special warranty deed to Unit 130, and received a home warranty
policy. By seeking a benefit from the Contract through his claims arising under
the Contract and by receiving benefits under the Contract, Michael is estopped
from avoiding enforcement of the arbitration clause contained in the Contract he
did not sign. See, e.g., Hellenic, 464 F.3d at 520; Weekley Homes, 180 S.W.3d
at 131–33.
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Because no legal theory supports the trial court’s denial of Appellants’
motion to compel arbitration as to Carrie and Michael, the trial court erred. I
concur in the majority opinion’s judgment reversing the trial court’s denial and
remanding to the trial court for further, consistent proceedings.
/s/ Lee Gabriel
LEE GABRIEL
JUSTICE
DELIVERED: February 19, 2015
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