Northpointe LTC, LTD., Grace Care Center at Northpointe v. Debbie A. Durant ( 2022 )

Opinion issued December 22, 2022
In The
Court of Appeals
For The
First District of Texas
————————————
NO. 01-22-00215-CV
———————————
NORTHPOINTE LTC, LTD. D/B/A GRACE CARE CENTER AT
NORTHPOINTE, Appellant
V.
DEBBIE A. DURANT, Appellee
On Appeal from the 164th District Court
Harris County, Texas
Trial Court Case No. 2018-44284
MEMORANDUM OPINION
This is a wrongful termination and premises liability case arising from
Appellee’s alleged slip and fall at her workplace. In 2018, Appellee Debbie A.
Durant (“Durant”) sued her former employer, Appellant Northpointe LTC., Ltd.
d/b/a Grace Care Center at Northpointe (“Northpointe”), for negligence, gross
negligence, wrongful termination, breach of employment contract, and tortious
interference with contract. Over three years later, Northpointe moved to compel
arbitration. Following a hearing, the trial court denied Northpointe’s motion. This
appeal ensued.1
In two issues, Northpointe argues the trial court abused its discretion in
denying its motion to compel arbitration because (1) there is a valid arbitration
agreement between Durant and Northpointe, and (2) Durant failed to satisfy her
burden to prove Northpointe waived its right to arbitration.
We reverse and remand.
Background
Durant worked as a certified nurse aide at Northpointe, a nursing home
facility. She alleges that in July 2016, while acting in the course and scope of her
employment, she slipped and fell in a hallway where the floor “had been
excessively waxed” by a member of Northpointe’s staff causing her significant
injuries. Durant alleges she sought medical treatment and was diagnosed with
“several herniated discs in her back and torn ligament in her knee.” According to
Durant, Northpointe terminated her employment because her injuries prevented her
from returning to work. She alleges she is “totally disabled” and receives Social
Security disability payments.
1
See TEX. CIV. PRAC. & REM. CODE § 171.098(a)(1) (“A party may appeal . . . an
order . . . denying an application to compel arbitration . . .”).
2
Durant filed suit in July 2018 asserting several causes of action against
Northpointe. She alleged that Northpointe (1) negligently failed to inspect and
make its premises safe and failed to warn of the slippery floors, and was grossly
negligent, (2) tortiously interfered with her contract with her employee disability
insurance carrier by failing to complete a claim form, resulting in the insurer’s
denial of her claim for disability payments, and (3) breached its oral employment
agreement with her and retaliated against her by firing her while she was still under
her doctor’s care for her injuries.
Northpointe filed an answer in October 2018, generally denying Durant’s
allegations and asserting several affirmative defenses. Northpointe did not identify
or reference an arbitration agreement in its answer.
Over three years later, on January 27, 2022, Northpointe filed an Opposed
Motion to Compel Arbitration (“Motion to Compel”), asserting that as part of her
employment with Northpointe, Durant had entered into a “Mutual Agreement to
Arbitrate” (“Agreement”). The Agreement, which Northpointe attached as an
exhibit to its Motion to Compel, contained the following language:
Any matter covered under this Agreement or concerning the legality
or interpretation of this Agreement shall be heard and decided under
the provisions and authority of the Federal Arbitration Act, 9 U.S.C.
§ 1 as applicable. For purposes of this Agreement, an employment-
related dispute includes, but is not limited to, all disputes, including
statutory and common law claims, whether under state, federal or
local law, including, but not limited to, theories arising from breach of
implied or express contract, implied covenant of good faith and fair
3
dealing, constructive discharge, wrongful discharge, negligence, gross
negligence, false imprisonment, fraudulent concealment, worker’s
compensation, retaliation, intentional infliction of emotional distress,
misrepresentation, personal injury, claims arising from work-related
activities, unsafe workplace, unlawful discrimination, retaliation or
harassment, sexual harassment, violations of Title VII of the Civil
Rights Act of 1964, as amended, Age Discrimination in Employment
Act (ADEA), Americans with Disabilities Act (ADA), Family and
Medical Leave Act (FMLA), Fair Labor Standards Act, (FLSA),
whistle blowing, wrongful termination in violation of public policy,
and defamation. I acknowledge that any employment dispute directly
or indirectly affecting my Company shall be subject to binding
arbitration, including disputes against supervisors and managers that
involve my employment.
Northpointe argued that (1) the Agreement was governed by the Federal
Arbitration Act (“FAA”), (2) the Agreement was enforceable based on principles
of contract law, and (3) Durant’s claims fell within the scope of the Agreement.
Three weeks after filing its Motion to Compel, on February 16, 2022,
Northpointe filed a “Submission of Its Business Records Declaration to Support Its
Motion to Compel Arbitration” (“Submission”) attaching the Agreement and a
business records declaration from its custodian of records, Harold Hadley
(“Hadley”), authenticating the Agreement. Hadley averred that the Agreement
attached to his declaration was “the original or [an] exact duplicate[] of the
original.” Northpointe asserted in its Submission that by filing Hadley’s
declaration, the Agreement was self-authenticated as a business record under Texas
Rule of Evidence 902.
4
Durant filed a response to the Motion to Compel. She did not argue that
Northpointe had waived its right to arbitration. Instead, Durant argued that
because Northpointe had failed to present the Agreement to Durant before moving
to compel arbitration, Durant was “naturally . . . very concerned relative to the
authenticity of the purported document.” Durant argued that she needed “to see
the original to determine if in fact her lawful signature [was] properly affixed
thereto” or if the Agreement’s “existence [was] the result of some surreptitious
conduct by the Defendant . . . .” because she had only seen a photostatic copy of
the document and “[c]opies are easy to manipulate.”2 Durant argued she “did not
recognize the purported agreement” and that she had a “good-faith” belief she had
not actually signed the Agreement. She explained she wanted to inspect the
original Agreement to determine its authenticity. Durant did not submit evidence
in support of her response. Nor did she object to Northpointe’s filed Submission or
the attached Hadley declaration authenticating the Agreement.
The trial court held a hearing on Northpointe’s Motion to Compel on
February 16, 2022. During the hearing, the trial court asked Northpointe to explain
why it had waited over three years to file its Motion to Compel. Northpointe
explained that the case had been stagnant since early 2019 “as far as activity from
both parties,” and that it had gone into “quasi-abatement” in July 2019, when
2
Durant’s counsel clarified that she believed “in earnest [that Northpointe’s counsel
of record] would have nothing to do with such act.”
5
Durant’s counsel had, for medical reasons, asked for several continuances.3
Northpointe explained that it had not “really . . . started looking at records, asking
[] clients for records” until October 2021, and that it had just recently identified the
Agreement. Northpointe explained that Durant had not served discovery.4
In response, Durant’s counsel argued that her main concern was that it had
been “nearly four years” since inception of the lawsuit and her client had asked
whether the Agreement was “a real document.” While she conceded she had
experienced “health concerns,” Durant’s counsel argued that had she “known that
arbitration was mandatory . . . [she] wouldn’t have wasted all this time and money
in litigation.” Durant’s counsel did not explain what costs she had incurred or
elaborate further on her statement. Focusing instead on the authenticity of the
Agreement, she noted that Durant had yet to see the original of the Agreement, and
that Durant was concerned the copy of the Agreement “could be a forgery.”
Durant’s counsel argued she remained concerned with “the authenticity of the
document.” She stated:
We don’t believe that after four years [Durant] should lose her
constitutional right to a jury trial and be forced in front of someone
who can make a decision that is not appealable, that she’d be stuck
with. And that’s our only concern, that it is quite suspicious that at
3
The trial court granted agreed motions for continuance in August 2019, April
2020, and September 2021.
4
The record does not contain any discovery propounded by either party.
6
the 11th hour, there’s a document that takes away her constitutional
right to a trial[.]
Durant’s counsel stated her client could not recall the Agreement. She admitted
the signature looked like Durant’s signature, but she argued it could be a “cut and
paste.” Durant did not submit testimony or evidence in support of her allegations.
Northpointe responded that there was no evidence “beside Plaintiff’s
Counsel’s argument that this [Agreement] is not authentic.” Northpointe explained
that “[p]ursuant to the Rules of Evidence our Arbitration Agreement self-
authenticates because it’s accompanied with the business declaration.” Durant did
not respond to this argument. Nor did she object to Hadley’s declaration or seek a
ruling from the trial court on her authenticity objections.
At the conclusion of the hearing, the trial court judge stated that “[b]ased
upon what I have heard today, I am not ordering arbitration in this matter.”
Subsequently, on March 4, 2022, the trial court entered a written order denying
Northpointe’s Motion to Compel. The trial court did not make evidentiary findings
or state the grounds upon which it denied the motion. This appeal followed.
Discussion
Northpointe raises two issues on appeal. In its first issue, Northpointe
argues the trial court abused its discretion in denying its Motion to Compel because
the Agreement is enforceable and “Durant’s speculation that she may not have
signed the arbitration agreement is insufficient to defeat [its] enforcement.” In its
7
second point, Northpointe argues Durant failed to assert the affirmative defense of
waiver. Alternatively, Northpointe argues the trial court erred in denying its
Motion to Compel because Durant did not establish that (1) Northpointe
substantially invoked the judicial process, or (2) she suffered any prejudice as a
result.
Durant argues that the “only controlling issue of this appeal” is
Northpointe’s proffer of a copy, rather than the original, of the Agreement, which
according to Durant, does not satisfy Texas Rules of Evidence 1002, 1003, and
1004. She does not address Northpointe’s waiver argument. Instead, she argues
that “whether there has been a waiver” of Northpointe’s right to arbitration is
“irrelevant because there can be no waiver issue to discuss, unless and until the
burden of the Best Evidence Rule has been met.”
A. Standard of Review and Applicable Law
A party seeking to compel arbitration must establish that (1) a valid
arbitration agreement exists and (2) the claims fall within the scope of the
agreement.5 Bonsmara Nat. Beef Co. v. Hart of Tex. Cattle Feeders, LLC, 603
5
Neither party disputes that the FAA applies to the Agreement. See Henry v. Cash
Biz, LP, 551 S.W.3d 111, 115 (Tex. 2018) (“The Federal Arbitration Act (FAA)
generally governs arbitration provisions in contracts involving interstate
commerce.”). The Agreement states that it is governed by the Federal Arbitration
Act (“FAA”), 9 U.S.C. § 1, et seq. Under the FAA, “state law generally governs
whether a litigant agreed to arbitrate, and federal law governs the scope of the
arbitration clause.” In re Labatt Food Serv., L.P., 279 S.W.3d 640, 643 (Tex.
2009) (orig. proceeding). The parties do not dispute that Durant’s claims fall
8
S.W.3d 385, 397 (Tex. 2020). If the party seeking arbitration satisfies its initial
burden, the burden then shifts to the party resisting arbitration to present evidence
supporting a defense to the enforcement of the arbitration provision. Henry v.
Cash Biz, LP, 551 S.W.3d 111, 115 (Tex. 2018). Once the burden shifts to the
nonmovant, a presumption exists in favor of arbitration. Garcia v. Huerta, 340
S.W.3d 864, 869 (Tex. App.—San Antonio 2011, pet. denied). Absent a valid
defense to arbitration, “the trial court has no discretion but to compel arbitration
and stay its proceedings once the existence and application of the [arbitration]
agreement has been shown.” In re Automatic Partners, Ltd. P’ship, 183 S.W.3d
532, 534 (Tex. App.—Houston [14th Dist.] 2006, no pet.).
We review a trial court’s order denying a motion to compel arbitration for
abuse of discretion. Henry, 551 S.W.3d at 115 (citing In re Labatt Food Serv.,
L.P., 279 S.W.3d 640, 642–43 (Tex. 2009)). A trial court abuses its discretion if it
acts in an arbitrary or unreasonable manner or without reference to any guiding
rules or principles. Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241–
42 (Tex. 1985). “We defer to the trial court’s factual determinations if they are
supported by evidence but review its legal determinations de novo.” Henry, 551
S.W.3d at 115. Whether an arbitration agreement is enforceable and whether a
within the scope of the Agreement. Instead, Durant appears to challenge the
existence of the Agreement, an issue we analyze under state law.
9
party waived its right to arbitration are questions of law that we review de novo.
Id.
A trial court cannot deny a motion to compel arbitration on a ground not
raised by the nonmoving party. Ridge Nat. Res., L.L.C. v. Double Eagle Royalty,
L.P., 564 S.W.3d 105, 118 (Tex. App.—El Paso 2018, no pet.). Thus, we can
affirm a trial court’s order denying a motion to compel arbitration “only if one of
the grounds presented by the resisting party is valid.” Id. When a trial court does
not issue findings of fact or conclusions of law to explain its reasons for denying a
motion to compel arbitration, we must “uphold the trial court’s decision on any
appropriate legal theory urged below.” F.T. James Constr., Inc. v. Hotel Sancho
Panza, LLC, No. 08-20-00096-CV, __ S.W.3d ___, ___, 2022 WL 4538870, at *3
(Tex. App.—El Paso Sept. 28, 2022, no pet. h.).
Arbitration cannot be ordered absent a valid agreement to arbitrate. Branch
Law Firm L.L.P. v. Osborn, 532 S.W.3d 1, 12 (Tex. App.—Houston [14th Dist.]
2016, pet. denied). If the party resisting arbitration raises a genuine issue of
material fact over the existence of a valid arbitration agreement, the trial court
must conduct an evidentiary hearing. Jack B. Anglin Co. Inc. v. Tipps, 842 S.W.2d
266, 269 (Tex. 1992) (orig. proceeding); Fitness Entm’t Ltd. v. Hurst, 527 S.W.3d
699, 705 (Tex. App.—El Paso 2017, pet. denied). “The court makes this summary
determination based on the parties’ affidavits, pleadings, discovery, and
10
stipulations.” Branch Law Firm L.L.P., 532 S.W.3d at 12 (citing Jack B. Anglin,
842 S.W.2d at 269). The procedure is subject to the same evidentiary standards as
a motion for summary judgment. Id. (citing In re Jebbia, 26 S.W.3d 753, 756–57
(Tex. App.—Houston [14th Dist.] 2000, orig. proceeding)).
B. Existence of Valid Arbitration Agreement
In its first issue, Northpointe argues the trial court abused its discretion in
denying its Motion to Compel because a valid arbitration agreement exists and
Durant’s assertion that she may not have signed the Agreement does not defeat its
enforcement. Northpointe argues it established a valid agreement to arbitrate by
producing the Agreement bearing Durant’s signature and authenticating the
Agreement with a declaration from Northpointe’s custodian of records.
Northpointe argues that a “mere denial” by Durant that she did not sign the
Agreement does not create a genuine issue of material fact sufficient to defeat its
Motion to Compel. Northpointe notes that Durant “did not rise to the level of
outright denying that she signed the arbitration agreement. She merely speculated
that the signature ‘could be’ inauthentic.”
During the hearing on Northpointe’s Motion to Compel, Durant’s counsel
argued that “her first question . . . was how can we know this is a real document.”
She stated that in response to her request to see the original, Northpointe’s counsel
had only shown her a “photostatic copy” of the Agreement which she argued
11
“could be a forgery.” Durant’s counsel argued that it “could be something
nefarious that was surreptitiously prepared . . . [b]y the Defendant who has not
been fair with this claimant, their employee. So that is the Plaintiff’s concern [sic]
the authenticity of the document.”6 According to Durant’s counsel, Durant told her
she did not recall the Agreement:
That’s why she asked if she could look at it. She did tell me it looks
like my signature but I cannot be sure this is not a cut and paste. I
don’t know how they arrived at this. Because she said she never
heard the term Arbitration Agreement before I mentioned it to her two
days ago.
Northpointe responded there was no evidence the Agreement was not authentic. It
further argued that under the Texas Rules of Evidence, the Agreement was self-
authenticating because Northpointe had filed a business record declaration from its
custodian of records authenticating the Agreement.
On appeal, Durant argues only that the Agreement was inadmissible under
the best evidence rule because the original of the Agreement was unavailable for
inspection by Durant or the trial court. See TEX. R. EVID. 1002. She also argues
that the Agreement is not covered by an exception to the best evidence rule. See
TEX. R. EVID. 1003, 1004. Durant does not cite any cases in her brief or cite to the
record in support of her argument.
6
Durant’s counsel clarified she was not accusing opposing counsel of “nefarious”
activity, “[n]ot by their firm at all.”
12
The burden of establishing the existence of an arbitration agreement “is
evidentiary and runs with the party seeking to compel arbitration.” DISH Network
L.L.C. v. Alexander, No. 13-20-00240-CV, 2021 WL 3085763, at *3 (Tex. App.—
Corpus Christi–Edinburg July 22, 2021, pet. denied) (mem. op.). A party can
satisfy its evidentiary burden by submitting a copy of an arbitration agreement
authenticated under Texas Rule of Evidence 901. Id. (citing TEX. R. EVID. 901(a)).
“A document is considered authentic if a sponsoring witness vouches for its
authenticity or if the document meets the requirement of self-authentication.” Id.Rule 901 states in part:
To satisfy the requirement of authenticating or identifying an item of
evidence, the proponent must produce evidence sufficient to support a
finding that the item is what the proponent claims it is.
TEX. R. EVID. 901(a). Rule 902, which addresses evidence that is self-
authenticating, states that “business records accompanied by affidavit” are “self-
authenticating; they require no extrinsic evidence of authenticity in order to be
admitted.” TEX. R. EVID. 902(10) (enumerating requirements of business record
affidavit or unsworn declaration); see also Roland’s Roofing Co., Inc. v.
Nationwide Mut. Ins. Co., No. 13-19-00580-CV, 2020 WL 3478658, at *4 (Tex.
App.—Corpus Christi–Edinburg June 25, 2020, no pet.) (mem. op.) (stating
business records affidavit authenticated copy of arbitration agreement signed by
both parties).
13
Pursuant to Texas Rules of Evidence 901(a) and 902(10), Northpointe
authenticated the Agreement by submitting a business records declaration from its
custodian of records. Northpointe thus met its evidentiary burden to establish the
existence of an arbitration agreement. To the extent Durant attempted to challenge
the authenticity of the Agreement, Durant failed to put that issue properly before
the trial court.
When a party seeks to challenge the authenticity of a signature on a
document, Texas Rule of Civil Procedure 93(7) is implicated. Rule 93(7) states
that a party must file a verified pleading when asserting a
[d]enial of the execution by himself or by his authority of any
instrument in writing, upon which any pleading is founded, in whole
or in part and charged to have been executed by him or by his
authority, and not alleged to be lost or destroyed. . . . In the absence of
such a sworn plea, the instrument shall be received in evidence as
fully proved.
TEX. R. CIV. P. 93(7). “[A] mere denial by the nonmovant that [s]he did not sign
the [arbitration] agreement, without more, fails to create a genuine issue of
material fact.” Knox Waste Serv., LLC v. Sherman, No. 11-19-00407-CV, 2021
WL 4470876, *8 (Tex. App.—Eastland Sept. 20, 2021, no pet.) (mem. op.). The
same is true for statements that a party does not recall signing an arbitration
agreement. Such statements, without more, do not raise a fact issue as to the
authenticity of the agreement. In re December Nine Co., Ltd., 225 S.W.3d 693,
699 (Tex. App.—El Paso 2006) (orig. proceeding) (holding statements that parties
14
“did not recall” signing forms acknowledging arbitration agreement “[did] not
raise a fact issue as to the authenticity of the written instruments”).
Durant did not file a verified pleading in response to Northpointe’s Motion
to Compel or Hadley’s declaration authenticating the Agreement. Thus, she failed
to contest the authenticity of the Agreement before the trial court. The opinion in
Wright v. Hernandez, 469 S.W.3d 744 (Tex. App.—El Paso 2015, no pet.) is
instructive. In that case, Wright and his law firm were sued by Hernandez, a
paralegal, for wrongful termination. 469 S.W.3d at 747. Wright moved to compel
arbitration and Hernandez did not respond. Id. at 748. Hernandez argued during a
hearing that Wright did not authenticate the arbitration agreement or prove that
Hernandez’s signature on the agreement was genuine. Id. at 748-49.7 The trial
court denied the motion to compel. Id. at 750.
7
Wright, the employer and movant, had not signed the arbitration agreement,
causing the trial court to consider whether the agreement was a binding contract.
Wright v. Hernandez, 469 S.W.3d 744, 749 (Tex. App.—El Paso 2015, no pet.).
Wright argued that Texas law does not require an employer to sign an arbitration
agreement provided there is sufficient evidence to establish a meeting of the minds
and that both parties intended to be bound by the agreement. Id. The court held
Wright’s signature was not a condition precedent to the enforceability of the
arbitration agreement. Id. at 756-57. This issue is not relevant to Durant’s
arguments on appeal.
15
Noting that Hernandez had not challenged the “genuineness of her signature
on the document” under Rule 93(7), the court of appeals held that the two
submitted business records affidavits authenticated the agreement:
Despite being served with copies of these affidavits authenticating the
agreement, Hernandez did not attempt to present any countervailing
evidence disputing the truth or validity of any of the statements made
in Wayne Wright’s supplemental affidavits. Therefore, assuming the
affidavits were properly filed and considered by the court, we
conclude that they were sufficient, as a matter of law, to authenticate
the arbitration agreement.
Id. at 752–53. The court of appeals reversed and remanded for entry of an order
compelling arbitration. Id. at 762.
The decision in APC Home Health Services, Inc. v. Martinez, 600 S.W.3d
381 (Tex. App.—El Paso 2019, no pet.) also is illustrative, and its facts are
analogous. APC was a home health care provider and its employee, Martinez, was
injured while working at a patient’s home. Id. at 385. She sued APC, which then
moved to compel arbitration. Id. Martinez opposed the motion to compel
arbitration on several grounds, including the fact that the agreement “was only a
copy and Martinez questioned its authenticity.” Id. at 386. She filed an affidavit
in support of her opposition to the motion to compel that said, among other things,
that she did “not remember signing” the arbitration agreement and did not
“remember anything about the document.” Id. at 387. The court of appeals stated
that “[n]ot recalling executing a document is different from denial of execution.”
16
Id. at 390. The court held that the Texas Rules of Civil Procedure “require a party
challenging the authenticity of a signature on a document to file a verified pleading
as a prerequisite to contesting execution of the document.” Id. (citing TEX. R. CIV.
P. 93(7)).8 The appellate court reversed and remanded for the trial court to
consider a question not relevant here, after which time the case was to be abated or
dismissed while the parties pursued arbitration.9 Id. at 401.
Because Durant did not file a verified denial contesting the signature on the
Agreement, we hold she did not properly present the authenticity issue to the trial
court. See, e.g., Wheeler v. Sec. State Bank, N.A., 159 S.W.3d 754, 756-57 (Tex.
App.—Texarkana 2005, no pet.) (holding authenticity of challenged signature was
not before trial court in absence of verified pleading denying execution of
promissory note and, accordingly, was not before appellate court); Gutierrez v.
Rodriguez, 30 S.W.3d 558, 562 (Tex. App.—Texarkana 2000, no pet.) (holding
8
APC “was prepared to present at the hearing a witness who would confirm the
execution of the agreement by Martinez.” APC Home Health Services, Inc. v.
Martinez, 600 S.W.3d 381, 389 (Tex. App.—El Paso 2019, no pet.). The witness
did not testify because Martinez argued she could not recall signing the document,
not that she had not signed it. Id. In concluding that Martinez had signed the
arbitration agreement, the court of appeals observed that Martinez had neither filed
a verified pleading to contest the signature nor insisted on the testimony of the
witness who would have testified that Martinez had signed the agreement. Id. at
390.
9
The court of appeals ordered the trial court to consider on remand whether the
arbitration agreement’s one-year notice provision was unconscionable and should
be severed from the agreement, after which the parties were to arbitrate. APC
Home Health Services, Inc., 600 S.W.3d at 401.
17
parties did not need to prove authenticity of signatures on deeds where opposing
party failed to file verified pleading denying documents’ execution).
We further note that even had Durant filed a verified denial contesting the
signature on the Agreement, she would not prevail. Durant did not object to
Hadley’s declaration or seek a ruling from the trial court on her authenticity
concerns. Her failure to secure such a ruling from the trial court failed to preserve
the issue for our review.10 See Branch Law Firm L.L.P., 532 S.W.3d at 15(“Osborn was required to obtain a ruling on his authentication objection to
preserve his appellate challenge”); Williams v. Bad-Dab, Inc., No. 01-11-00102-
CV, 2012 WL 3776347, at *6 (Tex. App.—Houston [1st Dist.] Aug. 30, 2012, no
pet.) (mem. op.) (“Objections to hearsay, improper authentication, or lack of
foundation are defects in form, which require a ruling for appellate review.”); B.
Gregg Price, P.C. v. Series 1 - Virage Master, LP, No. 01-20-00474-CV, 2021 WL
3204753, at *8 (Tex. App.—Houston [1st Dist.] July 29, 2021, pet. filed) (mem.
op.) (“[A] defect in the form of the authentication of a document, i.e., a defect in an
affidavit attempting to authenticate the attached document, is waived in the
absence of an objection and ruling in the trial court.”) (citing In re Longoria, 470
10
Because the summary judgment standard is applicable in this arbitration context,
copies of documents must be authenticated for them to constitute competent
evidence. Branch Law Firm L.L.P. v. Osborn, 532 S.W.3d 1, 14 (Tex. App.—
Houston [14th Dist.] 2016, pet. denied) (citing Republic Nat’l Leasing Corp. v.
Schindler, 717 S.W.2d 606, 607 (Tex. 1986)).
18
S.W.3d 616, 630 (Tex. App.—Houston [14th Dist.] 2015, orig. proceeding)); Segal
v. Bock, No. 01-10-00445-CV, 2011 WL 6306623, at *5 (Tex. App.—Houston [1st
Dist.] Dec. 15, 2011, no pet.) (mem. op.) (holding party who neither objected to
document’s authentication nor secured ruling from trial court on objection waived
any complaints on appeal regarding settlement agreement’s authenticity).11
During the hearing on Northpointe’s Motion to Compel, Durant’s counsel
merely argued, without submitting any evidence, that her client could not recall
signing the Agreement and that her signature could be a “cut and paste.” These
allegations, without more, are insufficient to raise a fact issue on the authenticity of
the Agreement. See In re December Nine Co., Ltd., 225 S.W.3d at 699; Knox
Waste Serv., LLC, 2021 WL 4470876 at *8.
We sustain Northpointe’s first issue.
C. Waiver of Arbitration
In its second issue, Northpointe argues that Durant failed to assert the
affirmative defense of waiver in the trial court. Alternatively, Northpointe argues
the trial court abused its discretion in denying its Motion to Compel because
11
But see In re Estate of Guerrero, 465 S.W.3d 693, 706–07 (Tex. App.—Houston
[14th Dist.] 2015, pet. denied) (holding objection to complete absence of
authentication is defect of substance and may be raised for first time on appeal).
Here, there was not an absence of authentication; rather, Hadley’s business records
declaration was attached to the Agreement.
19
Durant did not establish (1) Northpointe substantially invoked the judicial process,
and (2) that she suffered resulting prejudice.
1. Asserting Waiver as a Defense
Northpointe argues that Durant did not argue waiver of Northpointe’s right
to arbitration in her written response to the Motion to Compel or during the hearing
on the motion. Northpointe argues that during the hearing, Durant “did not
specifically discuss whether Appellant had substantially invoked the judicial
process, other than generally alleging delay.” Thus, according to Northpointe,
Durant did not present the issue of waiver to the trial court.
We agree with Northpointe that during the hearing on its Motion to Compel,
Durant focused primarily on the authenticity of the Agreement. Durant, however,
also argued that she was concerned Northpointe had waited almost four years to
move for arbitration, that had she known arbitration was mandatory she “wouldn’t
have wasted all this time and money in litigation,” and that “after four years she
should [not] lose her constitutional right to a jury trial and be forced in front of
someone who can make a decision that is not appealable, that she’d be stuck with.”
We hold that these arguments sufficiently raised the defense of waiver. As we
ultimately conclude, however, Durant failed to meet her burden to prove the
defense.
20
2. Waiver of Right to Arbitrate
There is a strong presumption against waiver, and any doubts are resolved in
favor of arbitration. In re D. Wilson Constr. Co., 196 S.W.3d 774, 783 (Tex.
2006); see also Kennedy Hodges, L.L.P. v. Gobellan, 433 S.W.3d 542, 543 (Tex.
2014) (“Proving waiver is a high hurdle due to the strong presumption against
waiver of arbitration.”); In re Bruce Terminix Co., 988 S.W.2d 702, 705 (Tex.
1998) (noting the “heavy burden of proof” required to establish waiver of the right
to arbitration). The waiver analysis involves two queries: whether the party
seeking arbitration substantially invoked the judicial process and, if so, whether the
resisting party was prejudiced as a result. Okorafor v. Uncle Sam & Assocs., Inc.,
295 S.W.3d 27, 39 (Tex. App.—Houston [1st Dist.] 2009, pet. denied). “Waiver
. . . asks whether a party has substantially invoked the judicial process to an
opponent’s detriment, the latter term meaning inherent unfairness caused by ‘a
party’s attempt to have it both ways by switching between litigation and arbitration
to its own advantage.’” In re Citigroup Global Mkts., 258 S.W.3d 623, 625 (Tex.
2008) (quoting Perry Homes v. Cull, 258 S.W.3d 580, 597 (Tex. 2008)). The party
opposing arbitration has the burden to establish waiver. Henry, 551 S.W.3d at 116.
a. Substantially Invoking the Judicial Process
The determination of whether a party has substantially invoked the judicial
process “depends on the totality of the circumstances.” G.T. Leach Builders, LLC
21
v. Sapphire V.P., LP, 458 S.W.3d 502, 512 (Tex. 2015) (citing Perry Homes, 258
S.W.3d at 590-91). The “wide variety” of factors courts consider in determining
whether the judicial process has been “substantially invoked” include:
(1) how long the party moving to compel arbitration waited to do so;
(2) the reasons for the movant’s delay; (3) whether and when the
movant knew of the arbitration agreement during the period of delay;
(4) how much discovery the movant conducted before moving to
compel arbitration, and whether that discovery related to the merits;
(5) whether the movant requested the court to dispose of claims on the
merits; (6) whether the movant asserted affirmative claims for relief in
court; (7) the extent of the movant’s engagement in pretrial matters
related to the merits (as opposed to matters related to arbitrability or
jurisdiction); (8) the amount of time and expense the parties have
committed to the litigation; (9) whether the discovery conducted
would be unavailable or useful in arbitration; (10) whether activity in
court would be duplicated in arbitration; and (11) when the case was
to be tried.
G.T. Leach, 458 S.W.3d at 512 (Tex. 2015) (citing Perry Homes, 258 S.W.3d at
590–91). No particular factor is dispositive. RSL Funding, LLC v. Pippins, 499
S.W.3d 423, 430 (Tex. 2016). Nor must all or most of these factors be present to
support waiver. Perry Homes, 258 S.W.3d at 591. “Courts look to the specifics of
each case.” Courtright v. Allied Custom Homes, Inc., 647 S.W.3d 504, 516 (Tex.
App.—Houston [1st Dist.] 2022, pet. denied).
(i) Delay
The information available to this Court pertains mostly to the first three
factors concerning delay. Durant filed suit on July 3, 2018. Northpointe did not
22
file its Motion to Compel until January 27, 2022, more than three years after
Durant filed suit.
During the hearing on Northpointe’s Motion to Compel, Northpointe
explained it had not moved to compel arbitration previously because it had only
recently found out about the Agreement. It further explained that although the case
had been on file for nearly four years, the case had remained largely stagnant for a
prolonged period of time. Northpointe explained:
[T]his case has went [sic] stagnant early on in 2019 as far as activity
from both parties. We went into quasi-abatement back in July, 2019,
when the Plaintiff’s Counsel herself asked for a continuance based on
a medical issue. Which we wholly respected. And, candidly, my
office, Your Honor, at that point, basically, put the case in abatement.
And this case didn’t really activate, Your Honor, I’d say until October
2020, plus or minus in relation to after we filed joint motions for
continuance because of Plaintiff’s health condition. It’s another
reason why we haven’t taken the Plaintiff’s deposition. I’m assuming
maybe that’s why Plaintiff hasn’t issued written any discovery.
...
[W]hat I’m trying to articulate is that in answering your questions
about why we didn’t know about the Arbitration Agreement is simply
because when we put the case in a continuance because of Plaintiff’s
medical condition –
...
So let’s fast forward to October 21 and not until that time is really
when our office started looking at records, asking our clients for
records. Because I didn’t even realize, Your Honor, that Plaintiff’s
[sic] had not issued written discovery.
23
In response, Durant’s counsel argued that her main concern was that it had
been “nearly four years” since inception of the lawsuit and her client had asked
whether the Agreement was “a real document.” She conceded she had experienced
“health concerns” but noted that she would not have “wasted all this time and
money in litigation” had she known arbitration was mandatory. Durant argued that
after four years, she should not lose “her constitution right to a jury trial.”
(ii) Discovery
During the hearing on Northpointe’s Motion to Compel, Northpointe stated
that Durant had not served written discovery and Durant did not correct him. The
parties did not discuss whether Northpointe had served discovery, and the record
lacks discovery from any party.12 Northpointe also explained that neither party’s
deposition had been taken.
(iii) Affirmative Relief and Pretrial Matters
The record is silent as to whether Northpointe filed any dispositive motions.
And the record does not reflect any affirmative claims for relief filed by
Northpointe. Northpointe argues in its brief that it did not assert affirmative claims
or file any dispositive motions, and Durant does not dispute that statement. And
12
The record contains a page from the “Trial Court Activity Inquiry Screen” that
reflects the March 24, 2021 denial of an order compelling discovery. There is no
information as to which party sought the discovery.
24
Durant did not argue or provide any information regarding pretrial activity, or
whether any such activity in the trial court would be duplicated in arbitration.
(iv) Time and Expense
There is no information in the record regarding the time and expense the
parties spent on the litigation until Northpointe moved to compel. Nor did Durant
refer to these matters during the hearing, except to state that had she “known that
arbitration was mandatory shortly after attempting to make [a] worker’s
compensation claim, [she] wouldn’t have wasted all this time and money in
litigation.” Durant did not elaborate on the amount of time or money spent.
(v) Trial Setting
Northpointe stated in a letter brief to the court that the parties had agreed to
three joint motions for continuance from 2019 to 2021 because of the COVID-19
pandemic, Durant’s counsel’s health issues, and “resulting discovery
complications.” The most recent trial setting in the appellate record is June 27,
2022. Durant did not argue she had prepared for trial in anticipation of this trial
setting or that she anticipated proceeding to trial on that date.
Considering all of the factors in this case, the most significant is undeniably
the first one: the period of delay in moving to compel arbitration. Northpointe did
not file its Motion to Compel until three and one-half years after suit was filed.
But delay in moving to compel is not the end of the analysis. “Generally, delay
25
alone does not establish waiver.” Turnbull Legal Group, PLLC v. Microsoft Corp.,
No. 01-20-00851-CV, 2022 WL 14980287, at *9 (Tex. App.—Houston [1st Dist.]
Oct. 27, 2022, no pet. h.) (mem. op.) (citing In re Vesta Ins. Grp., Inc., 192 S.W.3d
759, 763 (Tex. 2006) (orig. proceeding)); see also SEB, Inc. v. Campbell, No. 03-
10-00375-CV, 2011 WL 749292, at *6 (Tex. App.—Austin Mar. 2, 2011, no pet.)
(mem. op.) (“[D]elay alone is generally not sufficient to establish waiver.”)
(holding waiver did not occur when motion to compel arbitration was filed forty-
five months after suit was filed).13 Moreover, courts have found there to be no
13
Courts have found waiver when there were shorter periods of delay, but as noted,
waiver is generally not based on delay alone. See, e.g., Courtright v. Allied
Custom Homes, Inc., 647 S.W.3d 504, 517 (Tex. App.—Houston [1st Dist.] 2022,
pet. denied) (finding waiver when arbitration was sought twenty-six months after
filing suit and movants knew about arbitration “from the outset” and engaged in
“significant” discovery and motion practice before seeking to compel arbitration);
Perry Homes v. Cull, 258 S.W.3d 580, 596 (Tex. 2008) (finding waiver where
party delayed request for arbitration fourteen months after filing suit and after
“most of the discovery” had been completed when motion to compel was filed);
Menger v. Menger, No. 01-19-00921-CV, 2021 WL 2654137, at *5–6 (Tex.
App.—Houston [1st Dist.] June 29, 2021, no pet.) (mem. op.) (finding party’s six-
month delay before requesting arbitration supported finding of waiver when
movant knew of arbitration “long before” filing motion to compel and non-movant
had produced nearly 1,400 pages of documents in its discovery responses and had
incurred more than $77,000 in attorney fees); Read v. Sibo, No. 14-18-00106-CV,
2019 WL 2536573, at *5 (Tex. App.—Houston [14th Dist.] June 20, 2019, pet.
denied) (mem. op.) (finding party’s approximate twenty-three-month delay in
seeking arbitration supported finding of waiver because “much had happened in
the case,” including granting of dispositive motions and appeal of interlocutory
order); Adams v. StaxxRing, Inc., 344 S.W.3d 641, 649 (Tex. App.—Dallas 2011,
pet. denied) (finding party’s thirteen-month delay before invoking arbitration
supported finding of waiver where party seeking arbitration had propounded
nearly 200 discovery requests, moved to compel discovery responses, cross-
examined non-movant during at least three evidentiary hearings, and arbitration
motion was filed after discovery ended); In re Christus Spohn Health Sys. Corp.,
26
waiver when the parties engaged in significantly more pretrial activity than they
did here. See, e.g, Granite Const. Co. v. Beaty, 130 S.W.3d 362, 367 (Tex. App.—
Beaumont 2004, no pet.) (holding no waiver of arbitration right despite filing of
motion to transfer venue, propounding of written discovery, preparation of
discovery responses, presentation of two witnesses for deposition, and participation
in unsuccessful mediation).
In light of our review of the relevant factors and the facts of this case, we
conclude Durant failed to establish that Northpointe substantially invoked the
judicial process.
b. Prejudice
Even if there was evidence Northpointe substantially invoked the judicial
process, the analysis would not end there. The second prong of the waiver
analysis, prejudice, must also be established. “[T]he party opposing arbitration . . .
must prove that it has been prejudiced by establishing that the party seeking to
compel arbitration . . . has substantially invoked the litigation process to the
opposing party’s ‘detriment.’” Okorafor, 295 S.W.3d at 38; see also Prudential
Sec. Inc. v. Marshall, 909 S.W.2d 896, 898–99 (Tex. 1995) (orig. proceeding) (“A
231 S.W.3d 475, 480–81 (Tex. App.—Corpus Christi–Edinburg 2007, orig.
proceeding) (finding waiver after fourteen months of litigation, “voluminous”
discovery, at least seventeen depositions, and resetting of trial date three times).
27
party does not waive a right to arbitration merely by delay; instead, the party
urging waiver must establish that any delay resulted in prejudice.”)
In determining waiver of the right to arbitrate, detriment or prejudice to the
opponent means “inherent unfairness caused by ‘a party’s attempt to have it both
ways by switching between litigation and arbitration to its own advantage.’”
Okorafor, 295 S.W.3d at 38 (citing In re Fleetwood Homes, 257 S.W.3d 692, 694
(Tex. 2008) (orig. proceeding) (citing Perry Homes, 258 S.W.3d at 596)); see also
G.T. Leach, 458 S.W.3d at 515 (“Prejudice may result when a party seeking
arbitration first sought to use the judicial process to gain access to information that
would not have been available in arbitration . . . .”); Courtright, 647 S.W.3d at 516
(“Such inherent unfairness may be manifested ‘in terms of delay, expense, or
damage to a party’s legal position that occurs when the party’s opponent forces it
to litigate an issue and later seeks to arbitrate that same issue.’”) (quoting Perry
Homes, 258 S.W.3d at 597).
Durant did not address prejudice either at the trial court or in her appellate
brief. The vast majority of her arguments, below and on appeal, pertain to the
authenticity of the Agreement. At most, during the hearing on Northpointe’s
Motion to Compel, Durant argued that had she known arbitration was mandatory,
she would not have “wasted all this time and money in litigation.” This statement,
without more, is insufficient to establish prejudice or that Northpointe substantially
28
invoked the judicial process to her detriment. See Structured Capital Res. Corp. v.
Arctic Cold Storage, LLC, 237 S.W.3d 890, 896 (Tex. App.—Tyler 2007, no pet.)
(“Generalized complaints about delay and expense, absent explanations and
evidentiary support, will not establish prejudice.”); IBS Asset Liquidations LLC v.
Servicios Multiples Del Norte SA de CV, 419 S.W.3d 573, 575 (Tex. App.—San
Antonio 2013, pet. denied) (same); see also Williams Indus., Inc. v. Earth Dev. Sys.
Corp., 110 S.W.3d 131, 139 (Tex. App.—Houston [1st Dist.] 2003, no pet.)
(finding no showing of prejudice in absence of evidence showing “how the delay,
its fees and costs, the volume of discovery, or the information . . . obtained in
discovery had prejudiced” the party resisting arbitration); Texas Residential
Mortg., L.P. v. Portman, 152 S.W.3d 861, 864 (Tex. App.—Dallas 2005, no pet.)
(holding prejudice not established when party resisting arbitration showed
“absolutely no evidence” of prejudice when her counsel failed to identify work
done or costs incurred that would not have occurred in anticipation of arbitration);
Associated Glass, Ltd. v. Eye Ten Oaks Invs., Ltd., 147 S.W.3d 507, 514 (Tex.
App.—San Antonio 2004, orig. proceeding) (holding prejudice not established
when party resisting arbitration failed to submit evidence in support of general
allegations of prejudice by “increased and ‘destructive’ discovery expenses”).
“Showing prejudice is generally an evidentiary burden.” Williams Indus.,
110 S.W.3d at 135. Durant did not make any other argument that could be
29
construed as addressing prejudice in the trial court or in this Court, nor did she
adduce any evidence to establish she was prejudiced. See id. at 141 (holding party
resisting arbitration “failed to carry its heavy burden of showing actual prejudice
because it offered no evidence in support”).14 We thus hold Durant did not meet
her evidentiary burden to establish prejudice.
We sustain Northpointe’s second issue.
Conclusion
We reverse the trial court’s order denying Northpointe’s Motion to Compel.
We remand for the trial court to sign an order (1) compelling the parties to arbitrate
Durant’s claims and (2) staying the proceedings pending completion of the
arbitration.
Veronica Rivas-Molloy
Justice
Panel consists of Chief Justice Radack and Justices Countiss and Rivas-Molloy.
14
Durant declined to discuss waiver in her appellate brief, stating that “there can be
no waiver issue to discuss, unless and until the burden of the Best Evidence Rule
has been met.”
30