Santander Consumer USA, Inc. v. Mario A. Mata Centroplex Automobile Recovery, Inc. Blake Thornton Vandusen, John F. Thompson D/B/A Centroplex Automobile Recovery, Inc. And Redshift Investigation, Inc. ( 2015 )

ACCEPTED
03-14-00782-CV
4070020
THIRD COURT OF APPEALS
AUSTIN, TEXAS
February 18, 2015 2/9/2015 11:21:23 AM
JEFFREY D. KYLE
CLERK
NO. 03-14-00782-CV
IN THE THIRD COURT OF APPEALS
AT AUSTIN, TEXAS
SANTANDER CONSUMER USA, INC.
Appellant,
v.
MARIO A. MATA, CENTROPLEX AUTOMOBILE RECOVERY, INC.,
JOHN F. THOMPSON d/b/a CENTROPLEX AUTOMOBILE RECOVERY, INC.
REDSHIFT INVESTIGATION, INC., and BLAKE THORNTON VANDUSEN,
Appellees.
Appealed from the
353rd Judicial District Court
Travis County, Texas
REPLY BRIEF OF APPELLANT
DONALD L. TURBYFILL
State Bar of Texas # 20296380
dturbyfill@dntlaw.com [E-MAIL]
DEBORAH C. S. RIHERD
driherd@dntlaw.com [E-MAIL]
State Bar of Texas # 24038904
VICKI W. HART
State Bar of Texas # 24046037
vhart@dntlaw.com [E-MAIL]
Devlin, Naylor & Turbyfill, P.L.L.C.
4801 Woodway, Suite 420-West
Houston, Texas 77056-1805
(713) 622-8338 [PHONE]
(713) 586-7053 [FACSIMILE]
ATTORNEYS FOR APPELLANT
SANTANDER CONSUMER USA, INC.
ORAL ARGUMENT REQUESTED
TABLE OF CONTENTS
INDEX OF AUTHORITIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iv
STATEMENT OF APPELLANT’S REPLY POINTS TO APPELLEES’ RESPONSE
.................................................................. 1
Reply to Issue I: In a debtor’s suit against a secured party and repossession
agents, the secured party can invoke the arbitration clause contained within the
security agreement to compel the debtor to arbitrate all claims against the
secured party and its repossession agents without regard to the repossession
agents’ nonsignatory status. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Reply to Issue II: Santander did not waive the incorporation by reference
theory, and the agency theory applies to Cross-Defendants under the theory of
vicarious liability.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Reply to Issue III: Centroplex and Thompson invoked the jurisdiction of the
trial court by filing an answer to Santander’s cross-claims. . . . . . . . . . . . . . 1
Reply to Issue IV: Damages should not be awarded to Cross-Defendants
because Santander’s appeal is not frivolous . . . . . . . . . . . . . . . . . . . . . . . . . 1
SUMMARY OF THE ARGUMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARGUMENT.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Reply to Issue I: In a debtor’s suit against a secured party and repossession
agents, the secured party can invoke the arbitration clause contained within the
security agreement to compel the debtor to arbitrate all claims against the
secured party and its repossession agents without regard to the repossession
agents’ nonsignatory status. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Reply to Issue II: Santander did not waive the incorporation by reference
theory, and the agency theory applies to Cross-Defendants under the theory of
vicarious liability.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Reply to Issue III: Centroplex and Thompson invoked the jurisdiction of the
trial court by filing an answer to Santander’s cross-claims. . . . . . . . . . . . . . 9
Reply to Issue IV: Damages should not be awarded to Cross-Defendants
because Santander’s appeal is not frivolous . . . . . . . . . . . . . . . . . . . . . . . . 11
CONCLUSION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
PRAYER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
-ii-
CERTIFICATE OF COMPLIANCE.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
CERTIFICATE OF SERVICE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
-iii-
INDEX OF AUTHORITIES
Cases Page
Ashraf v. Ashraf, No. 03-11-00467-CV, 2012 Tex. App. LEXIS 4345
(Tex. App.—Austin May 24, 2012, no pet.) (mem. op.). . . . . . . . . . . . . . . 11
Bridas S.A.P.IC. v. Gov’t of Turkmenistan,
345 F.3d 347 (5th Cir. 2003). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4, 8
Carr v. Main Carr Dev. LLC,
377 S.W.3d 489 (Tex. App.—Dallas 2011, pet. denied). . . . . . . . . . . . . . . . 4
General Elec. Credit Corp. v. Midland Cent. Appraisal Dist.,
826 S.W.2d 124 (Tex. 1991) (per curiam). . . . . . . . . . . . . . . . . . . . . . . . . . 11
Gililland v. Taylor Investments, No. 11-03-00175-CV, 2004,
Tex. App. LEXIS 8521,
(Tex. App.–Eastland 2004, pet. denied) (mem. op.).. . . . . . . . . . . . . . . . . . . 6
Hunt v. CIT Group/Consumer Fin., Inc., No. 03-09-00046-CV,
2010 Tex. App. LEXIS 2767,
(Tex. App.—Austin Apr. 15, 2010, pet. denied). . . . . . . . . . . . . . . . . . . . . 11
Jenkins & Gilchrist v. Riggs,
87 S.W.3d 198 (Tex. App.–Dallas 2002, no pet.). . . . . . . . . . . . . . . . . . . . . 7
Mbank El Paso v. Sanchez,
836 S.W.2d 151 (Tex. 1992).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3, 7
McMillan v. Computer Translation Systems & Support, Inc.,
66 S.W.3d 477 (Tex. App.–Dallas 2001, no pet.). . . . . . . . . . . . . . . . . . . . 7
Moore v. Elektro-Mobil Technik GMBH,
874 S.W.2d 324 (Tex. App.--El Paso 1994, writ denied).. . . . . . . . . . . . . . . 9
N803RA, Inc. v. Hammer,
11 S.W.3d 363 (Tex. App.--Houston [1st Dist.] 2000, no pet.). . . . . . . . . . . 9
One Beacon Ins. Co. v. Crowley Marine Servs.,
648 F.3d 258 (5th Cir. 2011). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SEB, Inc. v. Campbell, No. 03-10-00375-CV,
2011 Tex. App. LEXIS 1588,
(Tex. App.–Austin Mar. 2, 2011, no pet.) (mem. op.). . . . . . . . . . . . . . . . . . 6
-iv-
Smith v. Brown, 51 S.W.3d 376
(Tex. App.—Houston [1st Dist.] 2001, pet. denied). . . . . . . . . . . . . . . . . . 11
Statutes Page
Tex. Bus. & Comm. Code § 9.609. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3, 7
Tex. Bus. & Comm. Code Ann.§ 17.565. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Tex. Civ. Prac. & Rem. Code Ann.§ 16.003.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Tex. Civ. Prac. & Rem. Code Ann.§ 16.004.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Tex. R. Civ. P. 120a.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Tex. R. Civ. P. 121. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Rules Page
Tex. R. App. P. 9.4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Tex. R. App. P. 45.2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
-v-
STATEMENT OF APPELLANT’S REPLY POINTS
TO APPELLEES’ RESPONSE
Appellant, SANTANDER CONSUMER USA, INC. (“Santander”) makes the
following reply points to the response of Appellees, CENTROPLEX AUTOMOBILE
RECOVERY, INC. (“Centroplex”), BLAKE THORNTON VANDUSEN
(“Vandusen”), JOHN F. THOMPSON d/b/a CENTROPLEX AUTOMOBILE
RECOVERY, INC. (“Thompson”), and REDSHIFT INVESTIGATION, INC.
(“Redshift”) (collectively called, “Cross-Defendants”).
Reply to Issue I: In a debtor’s suit against a secured party and repossession
agents, the secured party can invoke the arbitration clause contained within the
security agreement to compel the debtor to arbitrate all claims against the
secured party and its repossession agents without regard to the repossession
agents’ nonsignatory status.
Reply to Issue II: Santander did not waive the incorporation by reference
theory, and the agency theory applies to Cross-Defendants under the theory of
vicarious liability.
Reply to Issue III: Centroplex and Thompson invoked the jurisdiction of the
trial court as to all claims by filing an answer to Santander’s cross-claims.
Reply to Issue IV: Damages should not be awarded to Cross-Defendants
because Santander’s appeal is not frivolous.
SUMMARY OF THE ARGUMENT
Santander can invoke the Arbitration Provision contained within the security
agreement to compel Plaintiff MARIO A. MATA (“Mata”) to arbitrate all claims
against Santander as secured party and Cross-Defendants as repossession agents
without regard to the Cross-Defendants’ nonsignatory status. Santander did not
waive the incorporation by reference theory, because Santander argued this issue to
the trial court at the hearing on Santander’s Motion to Compel.
-1-
The Service Agreement and Recovery Agreement are dependent upon secured
transactions, such as the Contract, and provided Cross-Defendants notice of and
opportunity to review the terms of the underlying retail installment contracts for
which recovery services were to be provided such that Cross-Defendants may be
compelled to arbitration under the incorporation by reference theory. Also, because
Santander is vicariously liable for the actions of Cross-Defendants in repossessing
Mata’s vehicle, Cross-Defendants may be compelled to arbitration under the agency
theory.
The trial court and this Court have jurisdiction over Mata’s claims against
Centroplex and Thompson because they filed an answer to Santander’s cross-claims,
consenting to the jurisdiction of the trial court. And, Cross-Defendants fail to show
that Santander’s appeal is frivolous, so they are not entitled to damages.
ARGUMENT
Reply to Issue I: In a debtor’s suit against a secured party and
repossession agents, the secured party can invoke the arbitration clause
contained within the security agreement to compel the debtor to arbitrate
all claims against the secured party and its repossession agents without
regard to the repossession agents’ nonsignatory status.
Cross-Defendants seek to cast themselves as strangers to the contract in which
Mata granted to Santander a security interest in the vehicle that Cross-Defendants
repossessed. Cross-Defendants boil this litigation down to two undisputed facts: (1)
the contracts between Santander and Cross-Defendants do not contain arbitration
provisions; and (2) the Cross-Defendants never saw the contract executed by Mata
for the sale and finance of the vehicle they admit to have repossessed. These facts are
are undisputed, but irrelevant.
-2-
Equally undisputed are the relevant and material facts which underpin
Santander’s argument and which are ignored by the Cross-Defendants. Santander is
a secured party in which Mata is a debtor. (CR 71-72.) Santander held a perfected
purchase money financing in the vehicle owned by Mata. (CR 73-74.) To enforce its
security interest in the Mata vehicle, Santander contracted with Redshift, who in turn
contracted with Centroplex, who employed Vandusen to repossess Mata’s vehicle.
(CR 81-85, 34-46.) Mata alleges that during the course of Vandusen’s repossession
of the vehicle, he was injured. The relationship between the secured party and the
repossessors forms the basis of Mata’s claims against Santander as stated in his
Plaintiff’s Original Petition: “. . . when attempting repossession, the lender has the
specific legal duty of insuring neither the lender nor any of its agents or
representatives breach the peace. Tex. Bus. & Com. Code Ann. §9.609(b)(3); Mbank
El Paso, N.A. v. Sanchez, 836 S.W.2d 151, 151-154 (Tex. 1992). This is a non-
delegable duty. Id.” (CR 8.)
Cross-Defendants are not strangers to this secured transaction, but are active
participants compensated for their repossession services. (CR 81, 84, 150.) It is
disingenuous for the Cross-Defendants to decry the threatened loss of their right to
trial by jury by an unseen security agreement, in the absence of which any
repossession they performed would be unlawful.
-3-
Reply to Issue II: Santander did not waive the incorporation by reference
theory, and the agency theory applies to Cross-Defendants under the
theory of vicarious liability.
Cross-Defendants argue that Santander failed to raise the exception of
incorporation by reference in the trial court, such that it waived this issue on appeal.
Cross-Defendants cite Bridas S.A.P.IC. v. Gov’t of Turkmenistan, 345 F.3d 347, 356-
57 (5th Cir. 2003) and Carr v. Main Carr Dev. LLC, 377 S.W.3d 489, 494 (Tex.
App.—Dallas 2011, pet. denied) for this proposition. However, Bridas stands for the
proposition that arguments that are insufficiently addressed in the body of the brief
on appeal, are waived. Id. Santander’s brief thoroughly addresses the incorporation
by reference theory. Although this theory may not have been explicitly addressed in
Santander’s Motion to Compel, it was raised in the trial court at the hearing on the
Motion to Compel. Counsel for Santander argued to the trial court:
So for these parties to say, well, they had nothing to do with this retail
installment contract, that is absolutely with ignorance of the facts of this
case because of the actions they were taking. They knew they were
acting on behalf of a secured creditor. . . .When these defendants
engaged to take on this work, to repossess Mr. Mata's motor vehicle,
they knew full well why they were doing it. And these agreements
between the parties that, again, do not contain arbitration clauses, and
I will not say that they do, but the focus of every one of these contracts
is for one purpose and one purpose only and that is to enforce a secured
party's right in collection, recovery, repossession of its collateral. So far
as these agreements provide, Your Honor, these people have no business
except for the purpose of acting as repossessors. They were not engaged
by Santander to do anything else. So for them to say that, you know,
they weren't involved in the finance transaction, they were, pure and
simple. That was the very nature of their business. Now, yes, we have
claims between ourselves for indemnification and contribution. That's
not what we're seeking to have arbitrated, Your Honor. It's Mr. Mata's
claims. And Mr. Mata's claims not only directly against my client, but
against all parties for whom my client must answer.
(RR 1:10, lines 1-6, 11-25; RR 1:11, lines 1-7.)
-4-
. . .[T]hese claims that Mr. Mata has against all of these defendants must
be arbitrated, not withstanding the fact that these repossessors did not
know that there was an arbitration clause. What they did know is that
there was a secured transaction. What they did know was that they were
being tasked with repossessing the collateral. They knew that.
(RR 1:18, lines 19-25.)
This argument by counsel for Santander at the hearing on Santander’s Motion
to Compel advanced the theory that the Service Agreement between Santander and
Redshift, and the Recovery Agreement between Redshift and Centroplex are
dependent upon and incorporate by reference the retail installment contracts, such as
the Contract executed by Mata, that grant a security interest in the collateral and for
which Redshift and Centroplex are to provide recovery services for such collateral.
The Service Agreement and the Recovery Agreement incorporate by reference the
underlying retail installment contracts for which recovery services will be provided
and are dependent upon secured transactions, such as the Contract. Thus, Santander
did not waive this theory on appeal.
Cross-Defendants argue that even if Santander did not waive this theory, the
incorporation by reference theory does not apply because the Service Agreement and
Recovery Agreement do not explicitly, or implicitly, incorporate or even reference
the specific Contract executed by Mata. However, terms incorporated by reference
will be valid so long as it is clear that the parties to the agreement had knowledge of
and assented to the incorporated terms. One Beacon Ins. Co. v. Crowley Marine
Servs., 648 F.3d 258, 268 (5th Cir. 2011). Notice of incorporated terms is reasonable
where, under the particular facts of the case, a reasonably prudent person should have
seen them. Id.
-5-
A party with notice of and opportunity to review contract terms is bound by
those terms even where party has not read them. Id. As shown above in Santander’s
counsel’s argument at the hearing on Santander’s Motion to Compel, and in
Santander’s principal brief, the Service Agreement and the Recovery Agreement
incorporate by reference the underlying retail installment contracts for which
recovery services will be provided and are dependent upon secured transactions, such
as the Contract. Cross-Defendants had knowledge of and assented to the terms of the
retail installment contracts because their rights under Service Agreement Recovery
Agreement to engage in repossessions were derived from the very terms of the retail
installment contracts, even if they had not read the retail installment contracts. As
such, Cross-Defendants, as nonsignatories to the Contract, are bound to arbitration
under the theory of incorporation by reference.
Cross-Defendants also argue that the agency theory does not bind them, as
nonsignatories, to arbitration. Cross-Defendants assert that the cases that Santander
cites in support of the proposition that a nonsignatory can be compelled to arbitration
under the agency theory are inapposite because these cases involve a nonsignatory
agent or employee seeking to compel arbitration against the signatories.
But, the holdings in these cases are not limited to the specific facts and broadly
hold that when the principal is bound by the terms of a valid arbitration agreement,
its agents, employees, and representatives are also covered by the agreement. SEB,
Inc. v. Campbell, No. 03-10-00375-CV, 2011 Tex. App. LEXIS 1588, *9 (Tex.
App.–Austin Mar. 2, 2011, no pet.) (mem. op.); Gililland v. Taylor Investments, No.
11-03-00175-CV, 2004 Tex. App. LEXIS 8521, *8-9 (Tex. App.–Eastland 2004, pet.
-6-
denied) (mem. op.); McMillan v. Computer Translation Systems & Support, Inc., 66
S.W.3d 477, 481 (Tex. App.–Dallas 2001, no pet.) (nonsignatories of arbitration
agreements may be bound by the agreement under ordinary contract and agency
principles).
Cross-Defendants also argue that they are independent contractors, not agents,
of Santander such that they cannot be compelled to arbitration. They claim that
Jenkins & Gilchrist v. Riggs, 87 S.W.3d 198, 202 (Tex. App.–Dallas 2002, no pet.)
supports this position. In Riggs, the court of appeals found that an attorney, who was
a nonsignatory to an arbitration agreement between his client, a television station, and
an employee of the television station that required arbitration of any disputes between
employees and the television station “and/or” the agents of the television station,
could not compel arbitration as to the employee’s claims against him on an agency
theory because the attorney was an independent contractor to the television station
and not an employee. Id. at 201-202. The court of appeals found that the term
“agents” includes those persons for whom the television station would be vicariously
liable but that an attorney can never vest in a third person adequate control to render
that third person vicariously liable for his conduct. Id. at 202.
Here, however, although Cross-Defendants argue that they are independent
contractors, they fail to address that as matter of law, Santander is vicariously liable
for the actions of Cross-Defendants in repossessing Mata’s vehicle. Tex. Bus. &
Comm. Code § 9.609(b)(2); Mbank, 836 S.W.2d at 153-54.
-7-
For the purposes of arbitration, this makes Cross-Defendants agents of
Santander. And, Cross-Defendants cite no authority to support their contention that
they may not be compelled to arbitration under the agency theory pursuant to
Santander’s vicarious liability for their actions.
Cross-Defendants cite to Bridas, 345 F.3d at 356-57 for the proposition that the
agency theory binds a nonsignatory only when a party to the arbitration agreement
signed as the agent of the nonsignatory. Thus, they argue, Santander would have to
show that it signed the Arbitration Provision as an agent of the Cross-Defendants.
However, that is not the holding of Bridas. In Bridas, Bridas entered into a joint
venture agreement with Turkmenneft, a production association formed and owned by
the government of Turkmenistan. Id. at 351. The government of Turkmenistan was
not a signatory to the joint venture agreement, which contained an arbitration clause.
Id. at 351-52. The government of Turkmenistan later ordered Bridas to suspend its
work under the joint venture agreement and prohibited Bridas from making imports
and exports in or from Turkmenistan. Id. at 352. Bridas initiated arbitration
proceedings, including the government of Turkmenistan as a party, and the district
court found that the government was bound to arbitration under the principles of
agency and equitable estoppel. Id. at 352, 354.
The Fifth Circuit found that there was insufficient evidence that the parties
intended Turkmenneft to sign the joint venture agreement as an agent of the
government of Turkmenistan and thus found that the district court erred in compelling
the government of Turkmenistan to arbitration. Id. at 358.
-8-
As discussed above, Cross-Defendants’ status as agents for purposes of
arbitration is established as a matter of law. Thus, Cross-Defendants may be
compelled to arbitration under the incorporation by reference theory or the agency
theory, and the trial court erred in failing to order Mata’s claims against Cross-
Defendants to arbitration.
Reply to Issue III: Centroplex and Thompson invoked the jurisdiction
of the trial court by filing an answer to Santander’s cross-claims.
Centroplex and Thompson argue that there are no arbitrable claims asserted
against them because Mata never served them with the petition in which he asserted
claims against them. This argument is completely without merit. “An answer shall
constitute an appearance of the defendant so as to dispense with the necessity for the
issuance or service of citation upon him.” Tex. R. Civ. P. 121. A party enters a
general appearance whenever it invokes the judgment of the court on any question
other than the court's jurisdiction, or seeks affirmative action from the court on other
issues. Moore v. Elektro-Mobil Technik GMBH, 874 S.W.2d 324, 327 (Tex. App.—El
Paso 1994, writ denied). CentroPlex and Thompson filed an answer in this case
asserting affirmative defenses against Mata’s claims, asserting cross-claims against
Redshift, and praying that [Mata] and Santander take nothing by this suit. . . .” (CR
24-27.)
CentroPlex and Thompson failed to make any objections to the jurisdiction of
the trial and failed to file a special appearance; thus, they made a general appearance
and consented to the trial court’s jurisdiction. See Tex. R. Civ. P. 120a; Tex. R. Civ.
P. 121; N803RA, Inc. v. Hammer, 11 S.W.3d 363, 366 (Tex. App.—Houston [1st
Dist.] 2000, no pet.).
-9-
CentroPlex and Thompson also argue that the limitations period has expired
on Mata’s claims for personal injury on February 23, 2013, that they were never
served with Mata’s claims, and that Santander failed to file its cross-claims until after
the expiration of the statute of limitations. Mata has asserted several different causes
of action, some with a two-year statute of limitations, and some with a four-year
statute of limitations, as follows:
• breach of contract - 4 years. Tex. Civ. Prac. & Rem. Code Ann. §
16.004(a),(c);
• conversion - 2 years. Tex. Civ. Prac. & Rem. Code Ann. § 16.0034(a);
• common-law fraud - 4 years. Tex. Civ. Prac. & Rem. Code Ann. § 16.004(a);
• trespass to real property - 2 years. Tex. Civ. Prac. & Rem. Code Ann. §
16.003(a);
• gross negligence - 2 years. Tex. Civ. Prac. & Rem. Code Ann. § 16.003(a);
and;
• violations of the Texas Deceptive Trade Practices Act - 2 years. Tex. Bus. &
Comm. Code Ann.§ 17.565.
•
Mata filed his suit on February 22, 2013, and the event complained of occurred
on February 23, 2011. (CR 3-10.) Thus, Mata filed suit one day before the statute
of limitations expired on his causes of action with a two-year statute of limitations,
and the claims are not time-barred.
Centroplex and Thompson’s arguments that they are not subject to the
jurisdiction of the trial court or this Court and that Mata’s claims against them are
time-barred are without merit.
-10-
Reply to Issue IV: Damages should not be awarded to Cross-
Defendants because Santander’s appeal is not frivolous.
Rule 45 permits an appellate court to award a prevailing party "just damages"
for "frivolous appeals." Tex. R. App. P. 45.2. The appellate court applies an
objective test in determining whether an appeal is frivolous. Ashraf v. Ashraf, No.
03-11-00467-CV, 2012 Tex. App. LEXIS 4345, at *27-28 (Tex. App.—Austin May
24, 2012, no pet.) (mem. op.). The appellate court reviews the record from the
viewpoint of the advocate and ask whether the advocate had reasonable grounds to
believe the judgment could be reversed. Id. at *28. Whether to grant sanctions for a
frivolous appeal is a matter within the appellate court’s discretion, that an appellate
court exercises with prudence and caution and only after careful deliberation; but it
will do so only in circumstances that are truly egregious. Id. The fact that an
appellate court rejects a party’s arguments, or even finds deficiencies in the appeal,
does not constitute “truly egregious circumstances.” Id. This is because the right to
appeal is a most sacred one. Smith v. Brown, 51 S.W.3d 376, 381 (Tex. App.
—Houston [1st Dist.] 2001, pet. denied).
Santander’s appeal constitutes an informed, good-faith challenge to the trial
court’s order denying Santander’s motion to compel arbitration with regard to Mata’s
claims against Cross-Defendants. See Hunt v. CIT Group/Consumer Fin., Inc., No.
03-09-00046-CV, 2010 Tex. App. LEXIS 2767, at *29 (Tex. App.—Austin Apr. 15,
2010, pet. denied) (mem. op.) (citing General Elec. Credit Corp. v. Midland Cent.
Appraisal Dist., 826 S.W.2d 124, 125 (Tex. 1991) (per curiam)). Santander’s
arguments are supported with factual statements from the record and legal authorities,
and its arguments have legal merit.
-11-
A reasonable attorney could conclude, based on Santander’s arguments, that
the Arbitration Provision contained in the Contract is incorporated by reference into
the Service Agreement and the Recovery Agreement or that Cross-Defendants are
bound to arbitrate under an agency theory such that Cross-Defendant are bound to
arbitrate Mata’s claims against them. Cross-Defendants fail to show any “truly
egregious circumstances” that warrant an award of damages against Santander. Thus,
this Court should not award damages to Cross-Defendants.
CONCLUSION
Santander can invoke the Arbitration Provision contained within the security
agreement to compel Mata to arbitrate all claims against Santander as secured party
and Cross-Defendants as repossession agents without regard to the Cross-Defendants’
nonsignatory status. Santander did not waive the incorporation by reference theory,
because Santander argued this issue to the trial court at the hearing on Santander’s
Motion to Compel. The Service Agreement and Recovery Agreement are dependent
upon secured transactions, such as the Contract, and provided Cross-Defendants
notice of and opportunity to review the terms of the underlying retail installment
contracts for which recovery services were to be provided such that Cross-Defendants
may be compelled to arbitration under the incorporation by reference theory. Also,
because Santander is vicariously liable for the actions of Cross-Defendants in
repossessing Mata’s vehicle, Cross-Defendants may be compelled to arbitration under
the agency theory.
-12-
The trial court, and this Court, have jurisdiction over Mata’s claims against
Centroplex and Thompson because they filed an answer to Santander’s cross-claims,
consenting to the jurisdiction of the trial court. And, Cross-Defendants fail to show
that Santander’s appeal is frivolous, so they are not entitled to damages.
PRAYER
WHEREFORE, PREMISES CONSIDERED, Appellant, SANTANDER
CONSUMER USA, INC., fully prays that this Court grant oral argument on this
appeal, and thereafter, reverse the trial court’s order denying Santander’s motion to
compel arbitration as to Mata’s claims against the other Defendants, enter an order
compelling arbitration of all of Mata’s claims in the underlying cause of action, and
for all other and further relief to which Santander Consumer USA, Inc. may show
itself to be justly entitled.
Respectfully submitted,
DEVLIN, NAYLOR & TURBYFILL, P.L.L.C.
DONALD L. TURBYFILL
State Bar of Texas # 20296380
dturbyfill@dntlaw.com [E-MAIL]
DEBORAH C. S. RIHERD
State Bar of Texas # 24038904
driherd@dntlaw.com [E-MAIL]
VICKI W. HART
State Bar of Texas # 24046037
vhart@dntlaw.com [E-MAIL]
4801 Woodway, Suite 420-West
Houston, Texas 77056-1805
(713) 622-8338 [PHONE]
(713) 586-7053 [FACSIMILE]
ATTORNEYS FOR APPELLANT
SANTANDER CONSUMER USA, INC.
-13-
CERTIFICATE OF COMPLIANCE
I certify that this document was produced on a computer using Corel
WordPerfect X5 and contains 3,150 words, as determined by the computer software's
word-count function, excluding the sections of the document listed in Tex. R. App.
P. 9.4(i)(1).
DEBORAH C. S. RIHERD
CERTIFICATE OF SERVICE
The undersigned does hereby certify that a true and correct copy of the above
and foregoing instrument was served upon the following parties either electronically
through an electronic filing manager or in the alternative served by fax prior to 5:00
p.m., in person, by mail, commercial delivery service, or email, on February 9, 2015:
Mario A. Mata John S. Kenefick
Mario A. Mata, PLLC JKenefick@MacdonaldDevin.com [E-MAIL]
111 Congress Avenue, Suite John R. Sigety
400Austin, Texas 78701 JSigety@MacdonaldDevin.com [E-MAIL]
(512) 681-4461 [PHONE] MacDonald Devin, P.C.
(512) 682-2147 [FACSIMILE] 3800 Renaissance Tower
APPELLEE, pro se 1201 Elm Street
Dallas, Texas 75270-2130
David L. Treat (214) 744-3300 [PHONE]
dlt@lstlaw.com [E-MAIL] (214) 747-0942 [FACSIMILE]
Lindow Stephens Treat, LLP ATTORNEYS FOR APPELLEE
The Vogue Building BLAKE THORNTON VANDUSEN
600 Navarro Street, Sixth Floor
San Antonio, Texas 78205 Karen C. Burgess
(210) 227-2200 [PHONE] kburgess@richardsonburgess.com [E-MAIL]
(210) 227-4602 [FACSIMILE] Richardson + Burgess LLP
ATTORNEY FOR APPELLEES 221 West 6th Street, Suite 900
REDSHIFT INVESTIGATION Austin, Texas 78701-3445
INC. (512) 482-8808 [PHONE]
(512) 499-8886 [FACSIMILE]
ATTORNEY FOR APPELLEES
CENTROPLEX AUTOMOBILE
RECOVERY, INC. AND JOHN F.
THOMPSON
DEBORAH C. S. RIHERD
-14-
ACCEPTED
03-14-00782-CV
4075522
THIRD COURT OF APPEALS
AUSTIN, TEXAS
2/9/2015 2:40:37 PM
JEFFREY D. KYLE
CLERK
NO. 03-14-00782-CV
IN THE THIRD COURT OF APPEALS
AT AUSTIN, TEXAS
SANTANDER CONSUMER USA, INC.
Appellant,
v.
MARIO A. MATA, CENTROPLEX AUTOMOBILE RECOVERY, INC.,
JOHN F. THOMPSON d/b/a CENTROPLEX AUTOMOBILE RECOVERY, INC.
REDSHIFT INVESTIGATION, INC., and BLAKE THORNTON VANDUSEN,
Appellees.
Appealed from the
353rd Judicial District Court
Travis County, Texas
APPELLANT SANTANDER CONSUMER USA, INC.’S AMENDED
CERTIFICATE OF SERVICE
The undersigned certifies that on February 9, 2015, SANTANDER
CONSUMER USA, INC., Appellant herein, served a true and correct copy of the
REPLY BRIEF OF APPELLANT in a manner prescribed by Tex. R. Civ. P. 21a, on
the following:
Mario A. Mata John S. Kenefick
Mario A. Mata, PLLC JKenefick@MacdonaldDevin.com [E-MAIL]
111 Congress Avenue, Suite John R. Sigety
400Austin, Texas 78701 JSigety@MacdonaldDevin.com [E-MAIL]
(512) 681-4461 [PHONE] MacDonald Devin, P.C.
(512) 682-2147 [FACSIMILE] 3800 Renaissance Tower
APPELLEE, pro se 1201 Elm Street
Dallas, Texas 75270-2130
(214) 744-3300 [PHONE]
(214) 747-0942 [FACSIMILE]
ATTORNEYS FOR APPELLEE
BLAKE THORNTON VANDUSEN
David L. Treat Karen C. Burgess
dlt@lstlaw.com [E-MAIL] kburgess@richardsonburgess.com [E-MAIL]
Christopher A. Lotz Richardson + Burgess LLP
clotz@lstlaw.com [E-MAIL] 221 West 6th Street, Suite 900
Lindow Stephens Treat, LLP Austin, Texas 78701-3445
The Vogue Building (512) 482-8808 [PHONE]
600 Navarro Street, Sixth Floor (512) 499-8886 [FACSIMILE]
San Antonio, Texas 78205 ATTORNEYS FOR APPELLEES
(210) 227-2200 [PHONE] CENTROPLEX AUTOMOBILE
(210) 227-4602 [FACSIMILE] RECOVERY, INC. AND JOHN F.
ATTORNEYS FOR APPELLEES THOMPSON
REDSHIFT INVESTIGATION
INC.
Respectfully submitted,
DEVLIN, NAYLOR & TURBYFILL, P.L.L.C.
DONALD L. TURBYFILL
State Bar of Texas # 20296380
dturbyfill@dntlaw.com [E-MAIL]
DEBORAH C. S. RIHERD
State Bar of Texas # 24038904
driherd@dntlaw.com [E-MAIL]
VICKI W. HART
State Bar of Texas # 24046037
vhart@dntlaw.com [E-MAIL]
4801 Woodway, Suite 420-West
Houston, Texas 77056-1805
(713) 622-8338 [PHONE]
(713) 586-7053 [FACSIMILE]
ATTORNEYS FOR APPELLANT
SANTANDER CONSUMER USA, INC.
Amended Certificate of Service 2
CERTIFICATE OF SERVICE
The undersigned does hereby certify that a true and correct copy of the above
and foregoing instrument was served upon the following parties either electronically
through an electronic filing manager or in the alternative served by fax prior to 5:00
p.m., in person, by mail, commercial delivery service, or email, on February 9, 2015:
Mario A. Mata John S. Kenefick
Mario A. Mata, PLLC JKenefick@MacdonaldDevin.com [E-MAIL]
111 Congress Avenue, Suite John R. Sigety
400Austin, Texas 78701 JSigety@MacdonaldDevin.com [E-MAIL]
(512) 681-4461 [PHONE] MacDonald Devin, P.C.
(512) 682-2147 [FACSIMILE] 3800 Renaissance Tower
APPELLEE, pro se 1201 Elm Street
Dallas, Texas 75270-2130
David L. Treat (214) 744-3300 [PHONE]
dlt@lstlaw.com [E-MAIL] (214) 747-0942 [FACSIMILE]
Christopher A. Lotz ATTORNEYS FOR APPELLEE
clotz@lstlaw.com [E-MAIL] BLAKE THORNTON VANDUSEN
Lindow Stephens Treat, LLP
The Vogue Building Karen C. Burgess
600 Navarro Street, Sixth Floor kburgess@richardsonburgess.com [E-MAIL]
San Antonio, Texas 78205 Richardson + Burgess LLP
(210) 227-2200 [PHONE] 221 West 6th Street, Suite 900
(210) 227-4602 [FACSIMILE] Austin, Texas 78701-3445
ATTORNEY FOR APPELLEES (512) 482-8808 [PHONE]
REDSHIFT INVESTIGATION (512) 499-8886 [FACSIMILE]
INC. ATTORNEY FOR APPELLEES
CENTROPLEX AUTOMOBILE
RECOVERY, INC. AND JOHN F.
THOMPSON
DEBORAH C. S. RIHERD
Amended Certificate of Service 3