Humberto Rivas, Individually, Steve Rivas, Individually, Atlantis Custom Pools & Spas, Humberto Rivas D/B/A Atlantis Pools & Spas, and Steve Rivas D/B/A Atlantis Pools & Spas v. Carmen Molina ( 2024 )

COURT OF APPEALS
EIGHTH DISTRICT OF TEXAS
EL PASO, TEXAS
HUMBERTO RIVAS, Individually, §
STEVE RIVAS, Individually, ATLANTIS
CUSTOM POOLS & SPAS, § No. 08-23-00102-CV
HUMBERTO RIVAS d/b/a ATLANTIS
POOLS & SPAS, and STEVE RIVAS § Appeal from the
d/b/a ATLANTIS POOLS & SPAS,
§ 243rd Judicial District Court
Appellants,
§ of El Paso County, Texas
v.
§ (TC# 2021DCV0785)
CARMEN MOLINA,
§
Appellee.
MEMORANDUM OPINION
Appellants Humberto Rivas, individually, Steve Rivas, individually, Atlantis Custom
Pools & Spas, Humberto Rivas d/b/a Atlantis Pools & Spas, and Steve Rivas d/b/a Atlantis Pools
& Spas (collectively, the Rivas Defendants), appeal the trial court’s order denying Humberto
Rivas’s motion to compel arbitration. 1 The central issue of this appeal is whether the Rivas
1
The notice of appeal perfecting this appeal was filed jointly by all named Appellants. In a footnote of Appellee’s
brief, she concedes that Appellant Humberto Rivas has properly invoked this Court’s interlocutory jurisdiction, but
she calls into question whether any of the other appellants likewise invoked our jurisdiction of their appeals. Molina
points out that only Humberto Rivas filed a motion to compel arbitration in the trial court, and the trial court’s order
only addressed his motion. Because Molina concedes the jurisdiction of Humberto Rivas’s appeal, and because we
Defendants waived their arbitration right by substantially engaging in litigation to the detriment of
Appellee Carmen Molina. Based on the totality of the circumstances, we hold the trial court did
not abuse its discretion. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
On March 10, 2019, Molina contracted with the Rivas Defendants to construct a pool at
her residence for the cash contract price of $30,000. After two years, Molina filed a lawsuit
asserting the pool was faultily constructed and not completed on time. Molina alleged various
causes of action against the Rivas Defendants including breach of contract, breach of the common
law implied warranty of good and workmanlike services, negligence, and violation of the
Deceptive Trade Practices Act. With her original petition, she attached a copy of the parties’ one-
page, pool-construction contract. On its face, the contract included the following sentence written
all in bold: “THIS AGREEMENT IS SUBJECT TO ARBITRATION UNDER THE
COMMERCIAL ARBITRATION RULES OF THE AMERICAN ARBITRATION
ASSOCIATION.”
The Rivas Defendants responded by generally denying all allegations of the suit. After a
scheduling conference was held on September 2, 2021, the trial court set the case for a jury trial
on June 24, 2022. However, two months prior to this setting, the parties filed an agreed motion to
continue the trial date. The motion described that some discovery had been completed but
depositions and mediation still needed to be done. Molina also reported to the court that she had
hired contractors to perform construction and repairs on the pool at issue. She noted that new
conclude the trial court did not err in denying his motion to compel arbitration, we see no need to parse out whether
any of the other named appellants who are jointly aligned with Humberto Rivas had similarly invoked our jurisdiction.
2
information would subsequently be available regarding her claimed damages. The trial court
granted the continuance.
Several months later, on August 18, 2022, the trial court held a status hearing where Molina
informed the court that repairs were completed, and she calculated her damages at more than
$20,000. The parties then represented they were ready for the court to set the case for trial. On
August 30, 2022, the court issued an order setting the case for a jury trial on April 28, 2023, with
a corresponding pretrial conference set for April 13, 2023. The written order required all discovery
to be completed by the date of the pretrial conference.
Months later, on January 20, 2023, the Rivas Defendants sent Molina a demand to arbitrate.
And four days thereafter, their attorney filed a motion to compel arbitration attaching the same
one-page contract included with Molina’s petition. Initially, the trial court set the motion for
hearing on February 9, 2023, but it was then reset to March 2, 2023, based on Molina’s unopposed
request for more time to respond.
Molina filed an objection to the motion on February 27, 2023, arguing primarily that the
Rivas Defendants had waived their right to compel arbitration by their litigation conduct. As a
second point, Molina argued that compelled arbitration would advantage the Rivas Defendants.
She pointed out that only a one-page contract had been produced, yet the terms indicated they
remained subject to a “reverse side.” Molina claimed she had concerns that, should the court
compel arbitration, the Rivas Defendants could argue to her detriment that her claims were not
properly arbitrable due to an unknown contract term. The Rivas Defendants replied with a series
of arguments: first, they denied they had substantially invoked the judicial process; second, they
urged they were not responsible for Molina’s delay in bringing the case to trial; and last, they
3
claimed Molina had failed to show she was prejudiced by their failure to seek arbitration at an
earlier time.
The trial court held a hearing on March 23, 2023. Counsel for both parties argued largely
about whether the Rivas Defendants had waived their right to compel arbitration. The trial court
noted that months earlier, at the status hearing of August 18, 2022, the parties expressed they were
both ready for trial, and the case was then set for jury trial in April 2023. Moreover, at that
conference, the trial court informed the parties that no further continuances would be granted.
Ending the hearing, the trial court particularly noted the case had been filed in 2021, and it was
now 2023. The trial court later signed a written order denying the motion to compel without
making any findings of fact or conclusions of law.
The Rivas Defendants timely appealed and shortly thereafter filed an opposed motion for
a stay of the jury trial scheduled for April 28, 2023. See TEX. CIV. PRAC. & REM. CODE ANN.
§ 171.098; TEX. R. APP. P. 29.3. We granted the motion, staying all trial court proceedings pending
resolution of the appeal or further order of this Court.
ISSUES ON APPEAL
The Rivas Defendants present two issues on appeal. First, they contend they established
the existence of a valid and enforceable agreement to arbitrate. Second, they argue Molina failed
to establish a waiver of the arbitration clause.
STANDARD OF REVIEW
Arbitration is a contractual proceeding by which parties—in order to obtain a speedy and
inexpensive final disposition of disputed matters—consent to have controversies resolved by an
arbitrator. See In re Phelps Dodge Magnet Wire Co., 225 S.W.3d 599, 605 (Tex. App.—El Paso
2005, no pet.) (citing Jack B. Anglin Co., Inc. v. Tipps, 842 S.W.2d 266, 268 (Tex. 1992)). A party
4
seeking to compel arbitration has the burden to prove that a valid arbitration agreement exists and
that disputed claims fall within the agreement’s scope. In re Rubiola, 334 S.W.3d 220, 223
(Tex. 2011).
If the moving party meets its burden of establishing a valid agreement, the burden shifts to
the party opposing arbitration to raise a valid defense against its enforcement. See In re McKinney,
167 S.W.3d 833, 835 (Tex. 2005) (per curiam). Absent evidence of a valid defense, the trial court
must compel arbitration. Hogg v. Lynch, Chappell & Alsup, P.C., 480 S.W.3d 767, 780
(Tex. App.—El Paso 2015, no pet.) (citing J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 227
(Tex. 2003)). As a defense, the nonmovant may assert the movant waived its right to compel
arbitration by substantially invoking the judicial process to the nonmovant’s detriment or
prejudice. See G.T. Leach Builders, LLC v. Sapphire V.P., LP, 458 S.W.3d 502, 511–12
(Tex. 2015); Perry Homes v. Cull, 258 S.W.3d 580, 593 (Tex. 2008).
“We review the trial court’s denial of a motion to compel arbitration for an abuse of
discretion.” Truly Nolen of Am., Inc. v. Martinez, 597 S.W.3d 15, 21 (Tex. App.—El Paso 2020,
pet. denied). “Under this standard, we defer to the trial court’s factual determinations that are
supported by the record and review legal questions de novo.” Id. We may uphold the trial court’s
decision on any appropriate legal theory urged below. F.T. James Constr., Inc. v. Hotel Sancho
Panza, LLC, 657 S.W.3d 623, 629 (Tex. App.—El Paso 2022, no pet.).
WAIVER
In their second issue, the Rivas Defendants assert Molina failed to prove they waived their
right to seek arbitration. Molina responds in her briefing by claiming that waiver is the “sole issue
for review.” Accordingly, we address waiver first as we agree it is dispositive when properly
established. See TEX. R. APP. P. 47.1. Because the parties raise no dispute over any of the relevant
5
facts, the waiver issue presents a question of law that we review de novo. Perry Homes, 258
S.W.3d at 598.
A. Applicable law
“Like any other contract right, arbitration can be waived if the parties agree instead to
resolve a dispute in court.” Id. at 593. That is, “waiver can be implied from a party’s conduct,
although that conduct must be unequivocal.” Id. The Supreme Court explained:
Since 1846, Texas law has provided that parties to a dispute may choose to arbitrate
rather than litigate. But that choice cannot be abused; a party cannot substantially
invoke the litigation process and then switch to arbitration on the eve of trial.
Id. at 584. Even so, the Court counseled there existed a strong, yet rebuttable presumption against
waiver of arbitration. 2 Id. (“There is a strong presumption against waiver of arbitration, but it is
not irrebuttable and was plainly rebutted here.”); see also Truly Nolen, 597 S.W.3d at 22–23.
(“[T]he purpose of the presumption against finding a waiver of contractual arbitration is to preserve
the purpose of the parties’ agreement to obtain a speedy and inexpensive final disposition of the
disputed matter.”).
Thus, “a party waives an arbitration clause by substantially invoking the judicial process
to the other party’s detriment or prejudice.” Perry Homes, 258 S.W.3d at 589–90. In short, a party
asserting a waiver must prove both of the following: (1) substantial invocation of the judicial
2
The United States Supreme Court recently clarified the meaning of the phrase, “policy favoring arbitration,” which
is often quoted in many cases governed by the Federal Arbitration Act (FAA). Morgan v. Sundance, Inc., 596 U.S.
411, 418 (2022). The Morgan Court explained the phrase, when first used, had referred to “the FAA’s commitment to
overrule the judiciary’s longstanding refusal to enforce agreements to arbitrate and to place such agreements upon the
same footing as other contracts.” Id. The Morgan Court noted it did not mean to suggest that federal courts could
invent “special, arbitration-preferring procedural rules.” Id. Instead, it clarified, “[t]he policy is to make ‘arbitration
agreements as enforceable as other contracts, but not more so.’” Id. (quoting Prima Paint Corp. v. Flood & Conklin
Mfg. Co., 388 U.S. 395, 404 n.12 (1967)). In short, it described that “[t]he federal policy is about treating arbitration
contracts like all others, not about fostering arbitration.” Id.6
process; and (2) prejudice. 3 See id. at 593. For “substantial invocation,” the amount of litigation
and extent of discovery depends on the context of each case. Id. (describing, for example, that
“three or four depositions may be all the discovery needed in one case, but purely preliminary in
another”). Prejudice refers to the inherent unfairness imposed on the nonmoving party in terms of
delay, expense, or damage to his or her legal position. Id. at 597.
Until Perry Homes, the Supreme Court noted it had yet to find a waiver of a right to
arbitration. Id. at 590. Rather, in a series of cases, it instead found that parties had not waived
arbitration by merely engaging in certain kinds of litigation activities. Id. (citing, e.g., In re
D. Wilson Const. Co., 196 S.W.3d 774, 783 (Tex. 2006) (no detriment shown by the filing of a
cross-action seeking indemnity); In re Vesta Ins. Group, Inc., 192 S.W.3d 759, 764 (Tex. 2006)
(moving to dismiss claim on lack of standing, not waiver); In re Bruce Terminix Co., 988 S.W.2d
702, 704 (Tex. 1998) (no waiver shown by a party filing an answer nor propounding a set of
discovery)). The Court noted that each of those cases had illustrated the type of conduct that fell
short of waiver when examined in context. Id. Despite these holdings, however, the Court
3
In Perry Homes, the Texas Supreme Court concluded that a showing of prejudice was required for a party to establish
a waiver of an arbitration right. 258 S.W.3d at 594. There, in 2008, it declined an invitation to reconsider the prejudice
requirement based on a party urging both that federal courts were split on the issue, and Texas law did not require a
showing of prejudice for waiver, but only an intentional relinquishment of a known right. Id. (citing, e.g., In re Gen.
Elec. Capital Corp., 203 S.W.3d 314, 316 (Tex. 2006)). Nevertheless, Perry Homes declined the invitation to reject
prejudice as a waiver requirement based on both federal and state law. Id. Yet, more recently and more than a decade
after Perry Homes, the United States Supreme Court granted certiorari in Morgan expressly to resolve a federal circuit
split on whether prejudice was indeed a part of the waiver analysis. Morgan, 596 U.S. at 416 (describing that nine
circuits had invoked “the strong federal policy favoring arbitration” in support of an arbitration-specific waiver rule,
and thus, had demanded a showing of prejudice, while two circuits had rejected that rule). Ultimately, Morgan held
that prejudice was not “a feature of federal waiver law generally.” Id. at 415. It described that, under federal law,
courts are “wrong to condition a waiver of the right to arbitrate on a showing of prejudice.” Id. at 417–19. Though
Morgan clarified federal law, and Texas has long acknowledged “the importance of keeping federal and state
arbitration law consistent,” we still note that Perry Homes included a second ground for requiring prejudice under
Texas law. 258 S.W.3d at 595. The Supreme Court held, “[u]nder Texas law, waiver may not include a prejudice
requirement, but estoppel does.” Id. That is, “prejudice is an element of the normal contract rules.” Id. (“In cases of
waiver by litigation conduct, the precise question is not so much when waiver occurs as when a party can no longer
take it back.”).
7
reiterated it had previously warned that a party seeking arbitration on the eve of trial would evince
the type of conduct that was sufficient to support a waiver of the arbitration right. Id. (citing In re
Vesta Ins., 192 S.W.3d at 764).
Ultimately, to clarify how waiver is determined, Perry Homes developed a multi-factor,
totality-of-the-circumstances test. Id. at 590–92. At the same time, the Court emphasized that “tests
based on ‘reasonableness’ are never susceptible to mechanical application,” and instead, courts
should carefully examine waiver in terms of the litigation context, considering the size and
complexity of each case. Id. at 592–93. The relevant factors for a court to consider are:
• whether the party who pursued arbitration was the plaintiff or the defendant;
• how long the party who pursued arbitration delayed before seeking arbitration;
• when the party who pursued arbitration learned of the arbitration clause’s existence;
• how much the pretrial activity related to the merits rather than arbitrability or
jurisdiction;
• how much time and expense has been incurred in litigation;
• whether the party who pursued arbitration sought or opposed arbitration earlier in the
case;
• whether the party who pursued arbitration filed affirmative claims or dispositive
motions;
• how much discovery has been conducted and who initiated the discovery;
• whether the discovery sought would be useful in arbitration;
• what discovery would be unavailable in arbitration;
• whether activity in court would be duplicated in arbitration;
• when the case was to be tried; and
• whether the party who pursued arbitration sought judgment on the merits.
Id. at 591; Ellman v. JC Gen. Contractors, 419 S.W.3d 516, 519–20 (Tex. App.—El Paso 2013,
no pet.). Of these factors, waiting until the eve of trial to seek arbitration is an especially weighty
factor of the multi-factor test. See Perry Homes, 258 S.W.3d at 584. The Court more fully
described, “[t]he rule that one cannot wait until ‘the eve of trial’ to request arbitration is not limited
to the evening before trial; it is a rule of proportion[.]” See id. at 596.
8
Lastly, as the Court noted, all of the factors of the multi-factor test are rarely presented in
a single case; thus, waiver can be established based on only a few or even the existence of a single
one. Id. at 591. Here, this admonishment rings especially true given that neither party is claiming
the instant case is complicated or multi-faceted.
B. Substantial invocation of the judicial process
Applying the multi-factor test, we first address how long the Rivas Defendants delayed
before seeking arbitration. Molina filed this lawsuit on March 9, 2021, and on August 30, 2022,
the case was set for a jury trial starting April 28, 2023. Not until January 20, 2023, or twenty-two
months after the lawsuit was filed, and only three months prior to trial, did Humberto Rivas decide
he would seek arbitration by filing a motion to compel. As we earlier noted, the rule that one cannot
wait until the eve of trial to request arbitration is not limited to the evening prior to trial; instead,
it is a rule of proportion. Id. at 596. Here, the Rivas Defendants sought arbitration after litigating
for twenty-two of twenty-five months. This lengthy delay in seeking arbitration coupled with its
timing months shy of a trial setting weighs strongly in favor of finding substantial invocation of
the judicial process. See id. at 596–97 (describing that a 14-month delay coupled with an arbitration
request made shortly before the trial setting demonstrated waiver); see also Truly Nolen, 597
S.W.3d at 24 (18-month delay and request made on the eve of trial constituted a waiver of the
arbitration right).
Next, we look to the nature and amount of discovery and pre-trial activities before
arbitration was sought. Molina’s lawsuit sought damages based on her allegation that the Rivas
Defendants had failed to construct a swimming pool according to contract obligations. The Rivas
Defendants generally denied Molina’s breach of contract claim without otherwise asserting a right
to arbitration. Additionally, they responded to requests for production of documents and
9
interrogatories. They listed multiple witnesses to be called at trial including custodians of records
of several businesses and of the County of El Paso Sheriff’s Department. They also propounded
discovery on Molina. Molina produced 72 pages of documents and responded to twenty
interrogatories. Broadly, all discovery was directed towards the merits of the case, not towards
arbitrability issues. Discovery addressed contract terms, the subsequent repair of the pool, and
facts related to Molina’s breach-of-contract allegations. In the context of the nature of this dispute,
we conclude the amount and extent of the discovery weighs in favor of a finding of a substantial
invocation of the judicial process. See Perry Homes, 258 S.W.3d at 596–97 (describing that
arbitration is ordinarily sought to reduce delay by severely limiting both pretrial discovery and
post-trial review); Truly Nolen, 597 S.W.3d at 25.
Another factor to consider is when the Rivas Defendants learned of the arbitration clause’s
existence. At the hearing on their motion, the Rivas Defendants argued they only learned of the
clause while answering discovery in December 2022, or early 2023. Molina’s counsel responded
first by arguing that parties are charged with having knowledge of provisions contained in their
own contracts. And second, to rebut the assertion of a lack of awareness of the right to arbitrate,
Molina’s counsel next produced a response to a pre-suit demand letter dated in 2020 wherein the
Rivas Defendants’ counsel mentioned the contract provided for binding arbitration. Molina’s
counsel explained that, at that time, Molina was concerned about whether missing terms on a
purported reverse side of the one-page contract might need interpretation by the court. Thus,
counsel filed the lawsuit anticipating a second page of the contract would soon be produced. But
after answering with a general denial, the Rivas Defendants merely engaged in the litigation
process without relying on or producing a double-sided contract. Ultimately, Molina argued the
10
Rivas Defendants knew of the arbitration clause well before late 2022 as they now argued at the
hearing.
In briefing on appeal, the Rivas Defendants no longer claim they lacked notice of the
arbitration clause or only learned of its existence in late 2022 or early 2023. As a result, we
conclude this factor weighs in favor of substantial invocation of the judicial process as the Rivas
Defendants were not unaware of their right to arbitrate from March 2021, when the litigation
process had begun with the arbitration clause included in the one-page contract. Perry Homes, 258
S.W.3d at 593 (“Like any other contract right, arbitration can be waived if the parties agree instead
to resolve a dispute in court.”).
Last, we consider whether the Rivas Defendants filed affirmative claims or dispositive
motions. The record shows the Rivas Defendants did not formally file any affirmative claims or
dispositive motions, and the trial court did not hold any merits-based hearings before ruling on the
motion to compel arbitration. We agree with the Rivas Defendants that this factor weighs against
a finding of substantial invocation of the judicial process.
Considering the totality of the multi-factors applied, we conclude the greater weight of
relevant factors favors a finding of substantial invocation of the judicial process, while only one
factor weighs against that result. On one side, the Rivas Defendants were aware of the arbitration
provision from the outset of the litigation yet they waited more than twenty-two months before
seeking compelled arbitration; moreover, during that period of litigation activity, they filed a
general denial and thereafter propounded and answered merits-based discovery including
disclosure of trial witnesses; finally, after the trial court gave an eight month lead time before an
April 2023 trial setting, they waited another five months before seeking arbitration only three
months before trial. The overall weight of these factors establishes a substantial invocation of the
11
judicial process. Proportionally, a movant waiting until three months before trial after engaging in
twenty-two months of judicial activity is an especially weighty factor of the multi-factor test. See
Perry Homes, 258 S.W.3d at 584. And while it may be said that the amount of discovery was
limited in quantity, we are counseled that “[h]ow much litigation conduct will be ‘substantial’
depends very much on the context[.]” Although we note that discovery was modest in quantity, its
scope extended beyond arbitrability disputes to matters related to trial preparation. In context, this
discovery may be all that was needed for a relatively straightforward case. See id. at 596; Truly
Nolen, 597 S.W.3d at 25 (totality of the circumstances established substantial invocation of the
judicial process based on the delay until the eve of trial and extensive conduct in pursuing
discovery); Green v. Velocity Invs., LLC, No. 05-20-00795-CV, 2022 WL 3655232, at *5
(Tex. App.—Dallas, no pet.) (mem. op.) (totality of the circumstances supported finding of
substantial invocation where arbitration sought on the eve of trial); Sivanandam v. Themesoft, Inc.,
No. 05-21-00645-CV, 2022 WL 872623, at *5 (Tex. App.—Dallas, pet. denied) (mem. op.)
(same).
Here, rather than explain the reason for their nearly two-year delay in seeking arbitration,
the Rivas Defendants simply direct our attention to Molina’s conduct. First, they point out that
Molina sought a continuance of the jury trial originally set for June 24, 2022, which resulted in a
reset to April 28, 2023. The record shows that Molina based her agreed motion for continuance on
her having hired new contractors to repair the swimming pool. Once the work was completed, she
informed the court that additional information would be available regarding her claimed damages,
and the parties would be in a position to begin taking depositions. Second, the Rivas Defendants
also assert that Molina was the one who twice requested a continuance of the hearing on the motion
to compel arbitration and it was also delayed by the trial court. They also note that additional delay
12
arose from the trial court itself delaying its ruling on the motion to compel. Notwithstanding these
circumstances, we are not persuaded by these arguments. Notably, whether or not a nonmovant
sought trial continuances, or other delays occurred, those circumstances are not factors included
in the multi-factor test. Instead, Perry Homes more narrowly directs us to consider only “how long
the movant delayed before seeking arbitration.” 258 S.W.3d at 591.
The Rivas Defendants also argue that a party can be involved in different types of conduct
without substantially invoking the judicial process. They cite to a number of different Supreme
Court cases, claiming each illustrates their point. Some of the cited cases include activity similar
to activity occurring here, while others do not. 4 For example, they cite to the following cases,
which include similar activities or circumstances occurring here: RSL Funding, LLC v. Pippins,
499 S.W.3d 423, 432 (Tex. 2016) (per curiam) (concluding that defensive conduct alone is not
waiver); In re Fleetwood Homes of Texas, L.P., 257 S.W.3d 692, 694 (Tex. 2008) (per curiam)
(determining that an 8-month delay in seeking arbitration while discussing a trial setting and
allowing limited discovery did not evince waiver as movant did not waive until the eve of trial to
move to compel); EZ Pawn Corp. v. Mancias, 934 S.W.2d 87, 90 (Tex. 1996) (per curiam)
(describing that answering suit, propounding discovery, and entering into an agreed order resetting
the case for a later trial date “is not prejudicial”); and In re Bruce Terminix Co., 988 S.W.2d at 704
(finding that participation in minimal discovery was useful to arbitration and failed to establish
prejudice). Of the similar-activity cases, only RSL Funding and Fleetwood Homes were decided
4
Other cases cited by Appellants include a number highlighting activity not relevant to this case. See, e.g., In re Bank
One, N.A., 216 S.W.3d 825, 827 (Tex. 2007) (per curiam) (filing a motion for new trial following a default judgment
does not waive arbitration right); In re D. Wilson Constr. Co., 196 S.W.3d 774, 783 (Tex. 2006) (filing suit does not
waive arbitration right); In re Vesta Ins. Grp., Inc., 192 S.W.3d 759, 764 (Tex. 2006) (per curiam) (taking depositions
does not waive arbitration right). We distinguish these cases because the activities addressed are not relevant to the
instant case, and these cited cases, as well, all pre-date Perry Homes.
13
after Perry Homes. Thus, the Rivas Defendants rely in part on cases not applying Perry Homes’
multi-factor test nor its consideration of the totality of the circumstances in context. See Perry
Homes, 258 S.W.3d at 591. As for RSL Funding and Fleetwood Homes, which are the two
remaining cases relied upon, we find those cases factually distinguishable based on their shorter
delay in seeking arbitration and their lack of any indication of the movant waiting until the eve of
trial. In RSL Funding, the Court concluded that a delay of less than three months as to one party
and less than eight months as to others did not rise to substantial invocation of the judicial process.
499 S.W.3d at 432. While in Fleetwood Homes, it decided that serving one set of written discovery
and not waiting until the eve of trial to move to compel arbitration was not enough to overcome
the presumption against waiver. 257 S.W.3d at 694.
In sum, though we have no quarrel with any of the cited authorities, we simply find them
distinguishable due to shorter delays in seeking arbitration, the complexity of the cases considered
as compared to the case at hand, and the lack of any eve-of-trial circumstance. As Perry Homes
cautioned, “[h]ow much litigation conduct will be ‘substantial’ depends very much on the
context[.]” 258 S.W.3d at 593. Though the Rivas Defendants invite us to consider each factor
individually, we are instructed not to apply a mechanical approach, but instead to consider the
totality of the circumstances in context. Id. Doing so, we conclude the factors weigh in favor of
substantial invocation of the judicial process.
Having reached this conclusion, we move next to consider whether Molina established she
was prejudiced by the Rivas Defendants’ conduct.
14
C. Prejudice 5
Even though Molina failed to provide evidence showing the expenses she incurred while
engaged in the litigation process and in pre-trial preparation, these activities are plainly not without
costs and expense. See Ellman, 419 S.W.3d at 522 (holding that the party opposing arbitration is
not always required to prove the cost of the discovery in order to prove prejudice). Moreover, this
Court has found there is some minimal showing of damage to a plaintiff’s legal position where the
plaintiff has responded to merits-based discovery and produced pretrial disclosures including lists
of trial witnesses and exhibits. See Truly Nolen, 597 S.W.3d at 25. And again, in light of the
straightforward nature of the present case, we cannot say the expense demonstrated and late timing
of the change of course after completion of written discovery lacks proof of an inherent unfairness.
Based on the showing of an unexcused delay, undeniable expenses associated with
litigation, and damage to her legal position, we conclude Molina showed the necessary prejudice
resulting from the Rivas Defendants’ substantial invocation of litigation. See Perry Homes, 258
S.W.3d at 597 (holding that a party’s conduct prejudiced the other party opposing arbitration
where, in part, the party received extensive discovery and delayed disposition by switching to
arbitration when trial was imminent); F.T. James Constr., 657 S.W.3d at 635 (determining that
prejudice had been shown by the time and expense incurred during litigation as the record showed
the movant had known of the existence of an arbitration clause); Truly Nolen, 597 S.W.3d at 25
(holding that the extreme delay, undeniable expense, and at least a minimal showing of damage to
plaintiff’s legal position evidenced the necessary showing of prejudice); see also Com-Tech
5
We reiterate that the United States Supreme Court recently rejected any requirement of prejudice as an “arbitration-
specific” federal procedural rule in cases brought in federal court. See Morgan, 596 U.S. at 416–19. To date, however,
this requirement remains an open question with regard to state law and procedure. Regardless of whether Morgan
governs our analysis, we nevertheless determine that Molina established she suffered prejudice as a result of the Rivas
Defendants’ substantial invocation of the judicial process up until the eve of trial.
15
Assocs. v. Computer Assocs. Int’l, Inc., 938 F.2d 1574, 1578 (2nd Cir. 1991) (holding that the
district court’s conclusion that the defendants had forfeited their contractual right to compel
arbitration was supported by: (1) the proximity of a previously scheduled trial; and (2) the
defendants’ full participation in discovery, including the deposition of seven plaintiffs).
We conclude the record established the Rivas Defendants waived their right to compel
arbitration by their substantial invocation of the judicial process to Molina’s detriment.
Accordingly, the trial court did not err in denying the Rivas Defendants’ motion to compel
arbitration. We overrule the Rivas Defendants’ second issue. Based on this conclusion, there is no
longer a need to consider their first issue. See TEX. R. APP. P. 47.1.
CONCLUSION
We affirm the trial court’s order denying the motion to compel arbitration.
GINA M. PALAFOX, Justice
February 15, 2024
Before Alley, C.J., Palafox and Soto, JJ.
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