in Re Homes of Legend, Inc. ( 2004 )

In The

Court of Appeals

Ninth District of Texas at Beaumont

____________________

NO. 09-04-300 CV NO. 09-04-366 CV ____________________

HOMES OF LEGEND, INC., Appellant

V.

LOUANNA M. MCNIEL, individually and as next friend of SHANNA ROMERO, Appellees

and

IN RE HOMES OF LEGEND, INC.

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On Appeal from the 356th District Court Hardin County, Texas Trial Cause No. 39646 and Original Proceeding

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MEMORANDUM OPINION  

Louanna M. McNiel filed suit on her own behalf and as next friend for Shanna Romero, a minor child, for alleged damages arising from the purchase of a manufactured home built by Homes of Legend, Inc., (Legend) and sold by Golden Triangle Homes, Inc. (Golden Triangle). Legend moved to compel arbitration. The trial court denied the motion. Legend filed a petition for writ of mandamus under the Federal Arbitration Act (FAA) and contemporaneously pursued an interlocutory appeal under the Texas Arbitration Act (TAA), seeking to compel arbitration. See 9 U.S.C.A. §§ 1-16 (West 1999 & Supp. 2004); Tex. Civ. Prac. & Rem. Code Ann. §§ 171.001-.098 (Vernon 1997 & Supp. 2004). Legend contends the agreement in question falls within the scope of the Federal Arbitration Act. McNiel does not contend otherwise. Accordingly, we dismiss the appeal for want of jurisdiction and proceed with the petition for writ of mandamus. See Rogers v. Maida, 126 S.W.3d 643 (Tex. App.--Beaumont 2004, orig. proceeding).

The party seeking to compel arbitration must establish the existence of an arbitration agreement and show that the claims raised fall within the scope of the agreement. See In re Oakwood Mobile Homes, Inc., 987 S.W.2d 571, 573 (Tex. 1999). "If the arbitration agreement encompasses the claim at issue and there are no defenses to enforcement of the arbitration agreement itself, the trial court has no discretion but to compel arbitration and stay its own proceedings." In re J.D. Edwards World Solutions Co., 87 S.W.3d 546, 549 (Tex. 2002).

The contract between McNiel and Golden Triangle includes a "NOTICE" section, containing an acknowledgment that McNiel "received a separate written warranty from [Golden Triangle] on the newly manufactured home. . .." The "Limited One Year Service Warranty" from Legend contains a "LIMITATION OF REMEDIES PROVISION" that provides:

Any controversy, claim or dispute between or among the parties arising from or relating to the warranty, contract, or any agreements or instruments relating hereto or delivered in connection herewith, or the breach thereof, and any claim based on or arising from an alleged tort, and if the controversy, claim or dispute cannot be settled through direct discussions or negotiations, the parties agree first to the settle the dispute in an amicable manner by mediation administered by the American Arbitration Association under its Commercial Mediation Rules before resorting to arbitration. Thereafter, any unresolved controversy, claim or dispute arising from or relating to this contract, or breach thereof, and any claim based on or arising from an alleged tort, shall be settled by Arbitration Administered by the American Arbitration Association in accordance with its Commercial Arbitration Rules and judgement on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. . . .

McNiel does not contest the existence of an agreement between herself and Legend and does not argue her claims against Legend are outside the scope of the arbitration agreement. Rather, McNiel contends there is no agreement to arbitrate as to Golden Triangle or between Golden Triangle and Legend. That does not defeat the agreement to arbitrate between McNiel and Legend under the circumstances presented. ⁽¹⁾ Accordingly, we find Legend established the existence of an arbitration agreement and that the claims raised fall within the scope of the agreement.

McNiel raises waiver as a defense to enforcement of the arbitration agreement.

There is a strong presumption against finding that a party has waived its right to arbitrate and the burden to prove waiver is a heavy one. See EZ Pawn Corp. v. Mancias, 934 S.W.2d 87, 89-90 (Tex.1996). Length of delay alone is not a basis for inferring waiver. Id; In re MONY Sec. Corp., 83 S.W.3d 279, 285 (Tex. App.--Corpus Christi 2002, orig. proceeding).

Granite Const. Co. v. Beaty, 130 S.W.3d 362, 366 (Tex. App.--Beaumont 2004, no pet.). McNiel filed suit in 1999. The record reflects an agreed scheduling order was entered and at the hearing on the motion to compel, plaintiff's counsel asserted the case had been "fully discovered" and was ready for trial. An unsuccessful mediation had also occurred. However, propounding discovery will not, in and of itself, waive the right to compel arbitration and answering discovery does not establish prejudice, as discovery is permitted under the rules of the AAA. Granite, 130 S.W.3d at 367. The record does not establish the time and expenses incurred in litigation that would not have been expended in arbitration. Accordingly, McNiel has not demonstrated she was prejudiced by any action or delay on the part of Legend. Id. We find McNiel has not shown Legend waived its right to arbitrate.

Cause No. 09-04-366 CV is dismissed for lack of jurisdiction. The petition for writ of mandamus filed in No. 09-04-300 CV is conditionally granted. We order respondent to vacate his order denying arbitration in the case below and enter an appropriate order compelling arbitration. The writ will only issue in the event the trial court fails to act in accordance with this opinion.

APPEAL DISMISSED; WRIT CONDITIONALLY GRANTED.

PER CURIAM

Submitted on October 14, 2004

Opinion Delivered October 28, 2004

Before McKeithen, C.J., Burgess and Gaultney, JJ.

1.

See In re Adhi-Lakshmi Corp, 138 S.W.3d 559 (Tex. App.--Beaumont 2004, orig. proceeding).