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.

ACCEPTED
03-14-00782-CV
3837772
THIRD COURT OF APPEALS
AUSTIN, TEXAS
1/21/2015 9:02:50 AM
JEFFREY D. KYLE
CLERK
No. 03-14-00782-CV
____________________________
FILED IN
3rd COURT OF APPEALS
IN THE THIRD COURT OF APPEALS AUSTIN, TEXAS
AT AUSTIN, TEXAS 1/21/2015 9:02:50 AM
____________________________ JEFFREY D. KYLE
Clerk
SANTANDER CONSUMER USA, INC.
Appellant,
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.
Appellees.
____________________________
Appealed from the
rd
353 Judicial District Court
Travis County, Texas
Cause No. D-1-GN-13-000677
____________________________
JOINT BRIEF OF APPELLEES
____________________________
KAREN C. BURGESS
State Bar No. 00796276
STACY ROGERS SHARP
State Bar No. 24052109
Email: kburgess@richardsonburgess.com
Email: ssharp@richardsonburgess.com
Richardson + Burgess LLP
221 West 6th Street, Suite 900
Austin, Texas 78701-3445
Telephone: (512) 482-8808
Facsimile: (512) 499-8886
ATTORNEYS FOR APPELLEES
CENTROPLEX AUTOMOBILE
RECOVERY, INC. AND JOHN F.
THOMPSON
JOHN S. KENEFICK
State Bar No. 24006294
Email: jkenefick@macdonalddevin.com
JOHN R. SIGETY
State Bar No. 24083853
Email: jsigety@macdonalddevin.com
Macdonald Devin, PC
1201 Elm Street, Suite 3800
Dallas, Texas 75270-2130
Telephone: (214) 744-3300
Facsimile: (214) 747-0942
ATTORNEYS FOR APPELLEE
BLAKE THORNTON VANDUSEN
ii
CHRISTOPHER A. LOTZ
State Bar No. 24031630
Email: clotz@lstlaw.com
DAVID L. TREAT
State Bar No. 20205300
Email: dlt@lstlaw.com
Lindow ▪ Stephens ▪ Treat LLP
One Riverwalk Place
700 North St. Mary’s Street, Suite 1700
San Antonio, Texas 78205
Telephone: (210) 227-2200
Facsimile: (210) 227-4602
ATTORNEYS FOR APPELLEE
REDSHIFT INVESTIGATION INC.
iii
TABLE OF CONTENTS
TABLE OF CONTENTS ...................................................................................... iv
INDEX OF AUTHORITIES ...................................................................................v
STATEMENT OF THE CASE ...............................................................................1
ISSUE PRESENTED ...............................................................................................2
STATEMENT OF FACTS ......................................................................................2
SUMMARY OF THE ARGUMENT .....................................................................4
ARGUMENT ............................................................................................................5
I. Santander and Cross-Defendants have executed no arbitration
agreement. ................................................................................................5
II. Cross-Defendants cannot be compelled to arbitrate under the agreement
between Mata and Santander. ..................................................................7
A. Arbitration cannot be compelled because Cross-Defendants
are not parties to the Sale Contract...........................................7
B. None of the exceptions that would allow nonsignatories to be
compelled to arbitration applies here. ......................................9
III. Plaintiff never served the Centroplex Defendants, so only cross-claims
exist against them, and Santander agrees those are not arbitrable. .......15
IV. The Court Should Award Reasonable Fees to Cross-Defendants. ........16
PRAYER .................................................................................................................18
CERTIFICATE OF COMPLIANCE ..................................................................22
CERTIFICATE OF SERVICE ............................................................................22
APPENDIX .............................................................................................................vi
iv
INDEX OF AUTHORITIES
Cases
Bob Montgomery Chevrolet, Inc. v. Dent Zone Co., 409 S.W.3d 181 (Tex. App.—
Dallas 2013, no pet.). ............................................................................................12
Bridas S.A.P.I.C. v. Gov’t of Turkm., 345 F.3d 347 (5th Cir. 2003) .......... 10, 11, 14
Carr v. Main Carr Dev., LLC, 337 S.W.3d 489 (Tex. App.—Dallas 2011, pet.
denied). ..................................................................................................................11
E. Tex. Med. Ctr. Reg’l Healthcare Sys. v. Slack, 916 F. Supp. 2d 719 (E.D. Tex.
2013) .....................................................................................................................14
Gililland v. Taylor Inv., No. 11-03-00175-CV, 2004 WL 2126755 (Tex. App.—
Eastland Sep. 23, 2004, pet. denied). ............................................................. 16, 17
Hunt v. CIT Grp./Consumer Fin., Inc., 03-09-00046-CV, 2010 WL 1508082 (Tex.
App.—Austin Apr. 15, 2010, pet. denied) (mem. op.) ............................ 19, 20, 21
In re Kellogg Brown & Root, Inc., 166 S.W.3d 732 (Tex. 2005) (orig. proceeding)
.......................................................................................................................... 6, 10
In re Merrill Lynch Trust Co. FSB, 235 S.W.3d 185 (Tex. 2007) ........... 6, 8, 14, 15
Jenkens & Gilchrist, P.C. v. Riggs, 87 S.W.3d 198 (Tex. App.—Dallas 2002, no
pet.) .......................................................................................................................16
Keytrade USA, Inc. v. AIN Temouchent M/V, 404 F.3d 891 (5th Cir. 2005) ..........13
Kvaerner ASA v. Bank of Tokyo-Mitsubishi, Ltd., 210 F.3d 262 (4th Cir. 2000)....13
McMillan Comp. Translation Sys., 66 S.W.3d 477 (Tex. App.—Dallas 2001, no
pet.) .......................................................................................................................16
One Beacon Ins. Co. v. Crowley Marine Servs., Inc., 648 F.3d 258 (5th Cir. 2011)
........................................................................................................................ 11, 12
v
SEB Inc. v. Campbell, No. 03-10-00375-CV, 2011 WL 749292 (Tex. App.—
Austin Mar. 2, 2011, no pet.)(mem. op). ....................................................... 16, 17
Smith v. Brown, 51 S.W.3d 376 (Tex. App.—Houston [1st Dist.] 2001, pet. denied)
...............................................................................................................................20
Volt Info. Scis., Inc. v. Bd. of Trs. of Leland Stanford Junior Univ., 489 U.S. 468
(1989). .....................................................................................................................6
Statutes
TEX. CIV. PRAC. & REM. CODE ANN. § 16.003(a). ...................................................17
vi
STATEMENT OF THE CASE
Mario Mata claims he was injured during the repossession of his
Chevrolet Suburban when he grasped hold of the rear bumper of the vehicle. (See
CR 6 at ¶11.) Mata brings tort, contract, and DTPA claims, alleging the
repossession should not have occurred because he paid off the Suburban in full.
(Id. ¶¶ 10–11.) Mata financed his purchase of the Suburban through a Sale
Contract he executed with Appellant–Defendant Santander’s predecessor. (See CR
71-72.) The Sale Contract had an arbitration agreement. (CR 76-80.)
Mata filed suit against and served Santander, Redshift Investigation,
Inc. (“Redshift”), and repossession agent Blake Vandusen. Mata did not serve the
remaining named Defendants. After the limitations period expired on Mata’s
claims, Santander brought Centroplex Automobile Recovery, Inc. (“Centroplex”)
and Centroplex’s president, John Thompson, into the case by asserting cross-
claims for contribution and indemnification against Centroplex, Thompson,
Redshift, and Vandusen (collectively, “Cross-Defendants”). (CR 47-54.)
Santander then moved to compel both Plaintiff and Cross-Defendants to
arbitration. (CR 65.) The Cross-Defendants opposed the motion on the grounds
that they had not signed an arbitration agreement with any party to the case. The
trial court granted Santander’s motion to compel as to Mata and ruled that the
Cross-Defendants could not be forced to arbitrate. (CR 251-55.)
1
ISSUE PRESENTED
Under the Federal Arbitration Act as applied in Texas, arbitration requires
consent of all parties. An auto-finance company contracted with independent
repossession agents without an arbitration provision. Years later, it added an
arbitration clause to its contracts with car buyers. The repossession agents never
signed or saw the consumer contracts. In a car buyer’s suit against the auto
company and repossession agents, can the auto-finance company compel the
repossession agents to arbitration?
STATEMENT OF FACTS
I. The Service and Recovery Agreements
Santander, under the assumed name of Drive Financial (collectively,
“Santander”) contracted with Redshift’s predecessor, Bay City, (collectively,
“Redshift”) to handle repossession of vehicles Santander financed. (CR 70.) This
Service Agreement was executed in early December 2002 and expressly
designated Redshift an independent contractor of Santander. (CR 81 at ¶ 2.)
Redshift later executed a Collateral Recovery Agreement to outsource
some of its repossession assignments to Centroplex. (CR 140-52.) When
Santander ordered repossession of Mata’s Suburban, Redshift tasked Centroplex
with the job, and Centroplex sent Mr. Vandusen to pick it up. (CR 119 at ¶ 6.)
2
It is undisputed that neither the Service Agreement nor the Recovery
Agreement contains an arbitration provision. (1 RR 10; see CR 81-85; 140-52.)
II. The Sale Contract between Mata and Santander
Mata financed the purchase of his Chevrolet Suburban through a Sale
Contract with Capitol Chevrolet (now Santander). The two parties executed the
agreement for sale and financing of the vehicle on December 28, 2002. (CR 71-
72.) They amended the Sale Contract in June 2009, adding an arbitration
agreement governed by the Federal Arbitration Act (“FAA”). (CR 75-80.)
It is undisputed that no Cross-Defendant was party to the original or
amended Sale Contract, or even saw it. (See Appellant’s Br. at 8; 1 RR 15.)
III. The Arbitration Provision
The Sale Contract is the only contract between any of the parties that
includes an arbitration provision, and it is undisputed that none of the Cross-
Defendants were party to the Sale Contract. (See Appellant’s Br. at 8.) Indeed,
Santander has stipulated that the Cross-Defendants had never seen the Sale
Contract before Santander brought them into this suit. (1 RR 15 (“I can stipulate
that these co-defendants had never seen the contract between my client and Mr.
Mata.”).)
Neither the Service Agreement nor the Recovery Agreement contains
a reference to the Sale Contract. (CR 81-85; 140-52.)
3
SUMMARY OF THE ARGUMENT
The right to trial by jury requires that arbitration not be ordered
against a litigant without the litigant’s consent. The Cross-Defendants have never
waived this right, so the trial court correctly denied Santander’s motion to compel
arbitration as to the Cross-Defendants. The relevant facts in this appeal are
undisputed: The only contracts signed by any Cross-Defendant in this case contain
no arbitration provision, and the Cross-Defendants neither saw nor consented to
the Sale Contract between Mata and Santander that did contain an arbitration
provision.
Settled law requires that a party sign an arbitration agreement in order
to be compelled to arbitrate, and the Cross-Defendants were not signatories to the
Sale Contract. Santander seeks to circumvent this rule by citing two of the rule’s
narrow exceptions—but even the case law Santander cites proves that neither
exception applies. First, the “incorporation by reference” exception requires
language incorporating the arbitration contract. Santander cites no provision in
either the Service Agreement or Recovery Agreement that makes any reference to
the Sale Contract, original or amended. Second, the “agency” exception applies
only when an agent signs an arbitration agreement on behalf of a principal, and
Santander does not claim that it is an agent for the Cross-Defendants. It instead
4
tries to avoid this problem by relying on a body of cases that do not involve
compelling a nonsignatory to arbitration.
Santander executed no arbitration agreement with the Cross-
Defendants. When contracting for the outsourcing of repossession services,
Santander did not even include an arbitration provision in that contract. Indeed,
Santander conceded to the trial court that it could not compel arbitration as to the
cross-claims in this case. Yet, after losing at the trial court, Santander now renews
its meritless attempt to compel the Cross-Defendants to arbitrate. Like its trial
brief, its appellate brief is void of any support in the facts or law that would allow,
much less persuade, a court to order arbitration against nonparties to an arbitration
agreement.
The trial court correctly applied the law and facts and declined to
order the Cross-Defendants to arbitrate. The holding should be affirmed, and fees
should be assessed against Santander.
ARGUMENT
I. Santander and Cross-Defendants have executed no arbitration
agreement.
Because Santander and Cross-Defendants have never entered into an
arbitration agreement, Santander cannot compel them to arbitration. A party
seeking to compel arbitration under the FAA bears the burden of proving that: “(1)
5
there is a valid arbitration agreement, and (2) the claims raised fall within that
agreement’s scope.” In re Kellogg Brown & Root, Inc., 166 S.W.3d 732, 737
(Tex. 2005) (orig. proceeding). “However, the presumption arises only after the
party seeking to compel arbitration proves that a valid arbitration agreement
exists[.]” Id. at 737 (internal quotations omitted). Under the FAA, ordinary
principles of state contract law determine whether there is a valid agreement to
arbitrate, and the Texas Supreme Court has clarified that these principles mean that
the FAA generally “does not require parties to arbitrate when they have not agreed
to do so.” Id. at 738 (quoting Volt Info. Scis., Inc. v. Bd. of Trs. of Leland Stanford
Junior Univ., 489 U.S. 468, 478 (1989)).
This rule protects litigants’ constitutional right to trial by jury, which
is shared by plaintiffs and defendants alike. TEX. CONST. art. V, § 10 (“In the trial
of all causes in the District Courts, the plaintiff or defendant shall, upon application
made in open court, have the right of trial by jury”). Cross-Defendants intend to
try this case before a jury, and have at no point waived their right to do so.
Santander seeks to compel Cross-Defendants to arbitration simply
because it contracted with the Plaintiff to arbitrate. “But the right to a jury trial is
not discretionary. . . . If the parties have not agreed to arbitration, no trial court has
discretion to make them go. . . .” In re Merrill Lynch Trust Co. FSB, 235 S.W.3d
185, 193 (Tex. 2007). There is no arbitration agreement between Santander and
6
Cross-Defendants. Only one contract between Santander and any Cross-Defendant
is in the record—the Service Agreement—and it contains no arbitration provision.
If Santander sought to arbitrate suits involving repossession with its repossession
contractors, it could have contracted for arbitration rights in the Service
Agreement—or it could have included language expressly incorporating its sale
and financing contracts. When given the opportunity, Santander chose not to
include or incorporate an arbitration provision in the Service Agreement.
Without an agreement to arbitrate between Santander and the Cross-
Defendants, binding contract principles prevent Santander from compelling Cross-
Defendants to arbitrate this suit.
II. Cross-Defendants cannot be compelled to arbitrate under the
agreement between Mata and Santander.
Lacking an agreement to arbitrate with Cross-Defendants, Santander
attempts to compel arbitration based on the Sale Contract it executed with Plaintiff.
The Sale Contract is the sole document in the record that contains an arbitration
agreement, but Cross-Defendants are not signatories to it. And no exception to the
rule against compelling nonsignatories to arbitration applies here.
A. Arbitration cannot be compelled because Cross-Defendants are
not parties to the Sale Contract.
Cross-Defendants cannot be bound by the arbitration agreement in the
Sale Contract between Plaintiff and Santander because they did not agree to it.
7
Under the FAA, the United States Supreme Court “has repeatedly emphasized that
arbitration is a matter of consent, not coercion.” In re Merrill Lynch Trust, 235
S.W.3d at 187 (internal citations omitted). The FAA “does not require parties to
arbitrate when they have not agreed to do so.” Id.
The mere fact that some parties must arbitrate has never permitted the
court to steer the remaining parties into arbitration, too. See id. Where a plaintiff
asserted claims against both a company’s employees and its corporate affiliates and
all defendants moved to compel arbitration, the Texas Supreme Court held that
claims against the former could be compelled, but that the claims against the
affiliates could not. Id. at 187. Recognizing the inefficiency that is “inherent in
resolving these related issues in two different places,” the Court nonetheless ruled
that “interdependent” conduct of corporate defendants was not sufficient for
compelling arbitration. Id. at 192. Despite their relationship, “a contract with one
corporation—including a contract to arbitrate disputes—is generally not a contract
with any other corporate affiliates.” Id. at 191.1
The Texas Supreme Court has thus refused to create an exception
simply for convenience’s sake. See id. at 192 (“efficiency and convenience cannot
override either a signatory’s arbitration agreement or a nonsignatory’s right to a
1
As described in Section B(2), the case at bar lacks an additional key requirement for arbitration:
consent. Cross-Defendants are not nonsignatories seeking to enforce an arbitration agreement;
they are nonsignatories that Santander seeks to compel to arbitration without their consent.
8
jury trial.”). Santander has now conceded that the Cross-Defendants were not
parties to the Sale Contract. (Appellant’s Br. at 8.) It has even stipulated that
Cross-Defendants had never seen the Sale Contract before this lawsuit
commenced. (1 RR 15.) The Cross-Defendants cannot be forced to arbitrate based
on an agreement between two outside parties, especially when Cross-Defendants
did not even know that agreement existed.
B. None of the exceptions that would allow nonsignatories to be
compelled to arbitration applies here.
There are six exceptions to the rule that nonsignatories cannot be
bound to an arbitration agreement—none of which apply here. These exceptions
are: (1) incorporation by reference, (2) assumption, (3) agency, (4) alter ego, (5)
equitable estoppel, and (6) third-party beneficiary. Kellogg Brown & Root, 166
S.W.3d at 739 (citing Bridas S.A.P.I.C. v. Gov’t of Turkm., 345 F.3d 347, 356 (5th
Cir. 2003)). On appeal, Santander argues that two of these exceptions apply. But
the Cross-Defendants did not sign a contract incorporating the Sale Contract by
reference, and the agency exception to compelling nonsignatory arbitration is
inapposite.
1. Santander waived the incorporation-by-reference exception and,
in any event, the exception does not apply to the Agreements here.
Santander raises the “incorporation by reference” doctrine for the first
time on appeal. Despite Cross-Defendants’ briefing enumerating the six
9
exceptions above, Santander never invoked the incorporation exception to the trial
court, either in its briefing or at the hearing. Accordingly, the trial court had no
opportunity to rule on this basis, and the ground for appeal is waived. See TEX. R.
APP. P. 33.1(a)(1); e.g. Bridas, 345 F.3d at 356 (holding party failed to preserve
incorporation-by-reference and assumption arguments); Carr v. Main Carr Dev.,
LLC, 337 S.W.3d 489, 494 (Tex. App.—Dallas 2011, pet. denied)(when
considering nonsignatory exception to arbitration, holding that “[b]ecause Carr did
not raise the agency issue in the court below, it has not been preserved for our
review.”)
The incorporation-by-reference exception, even if preserved, would
not apply. Cross-Defendants executed no agreement that incorporated the Sale
Contract between Plaintiff and Santander, or that incorporated any other arbitration
agreement. Terms are incorporated by reference only if “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., Inc., 648 F.3d 258, 268 (5th Cir. 2011).
“The language in the signed document must show the parties intended for the other
document to become part of the agreement.” Bob Montgomery Chevrolet, Inc. v.
Dent Zone Cos., 409 S.W.3d 181, 189 (Tex. App.—Dallas 2013, no pet.). But
Santander stipulates that the Cross-Defendants had never seen the Sale Contract.
(1 RR 15.) They could not possibly have “ha[d] knowledge of” or “assent[ed]” to
10
the Sale’s Contract terms, see One Beacon Ins. Co., 648 F.3d at 268, and Santander
has not argued that they did. (Cf. 1 RR 17) (describing Cross-Defendant’s
knowledge as “irrelevant”). Neither the Service Agreement nor the Recovery
Agreement contains the barest mention of the Sale Contract, so the Agreements’
“language” cannot even arguably “show the parties intended for the [Sale Contract]
to become part of” those Agreements. See Bob Montgomery Chevrolet, Inc., 409
S.W.3d at 189.
The provisions Santander quotes from the Service and Recovery
Agreements do not, explicitly or implicitly, incorporate or even reference the Sale
Contract. The Service Agreement’s quoted provisions specify an intent to perform
recovery services for Santander’s accounts, and the Recovery Agreement’s quoted
provisions state the intent for Centroplex to receive recovery assignments from
Redshift. (See Appellant’s Br. at 15.) In stark contrast, the agreements in the two
cases Santander relies upon do contain incorporation provisions. In the first case,
the nonsignatory’s contract specified that “all terms and conditions, liberties and
exceptions . . . including the Law and Arbitration Clause, are herewith
incorporated.” Keytrade USA, Inc. v. AIN Temouchent M/V, 404 F.3d 891, 896–
97 (5th Cir. 2005) (emphasis added). In the second case, the nonsignatory’s
contract explicitly “guaranteed . . . each and every obligation” and adopted “the
same rights and remedies” as under the specific contract containing the arbitration
11
provision. See Kvaerner ASA v. Bank of Tokyo-Mitsubishi, Ltd., 210 F.3d 262,
264–65 (4th Cir. 2000). In both cases, the nonsignatory’s contract explicitly
incorporated the contract containing the arbitration provision by name.
The Agreements Cross-Defendants signed are not even arguably
analogous to the contracts in Keytrade or Kvaerner. No intent to incorporate the
Sale Contract is reflected in this record. The incorporation-by-reference exception
was not preserved for appeal and, in any event, is inapplicable here.
2. Santander’s use of the agency exception has no basis in law or
fact.
Santander cannot—and does not—argue that it was an agent of Cross-
Defendants, so the agency exception does not apply. And none of the authority
cited by Santander involved compelling a nonsignatory to arbitration, so its novel
reverse-agency theory, even if adopted, would not change the result here.
a. The agency exception would only apply if Santander were an
agent of Cross-Defendants, which it has not alleged to be.
The agency exception binds a nonsignatory only when a party to the
arbitration agreement signed as the agent of the nonsignatory. See Bridas, 345
F.3d at 356–57. The authority to bind the nonsignatory must exist at the time of
signing. See id. at 358. An ongoing relationship is not sufficient; Santander “has
the burden of proving [the signatory] signed the Agreement as an agent of [the
nonsignatory] and not for themselves alone.” See, e.g., E. Tex. Med. Ctr. Reg’l
12
Healthcare Sys. v. Slack, 916 F. Supp. 2d 719, 722 (E.D. Tex. 2013) (“Defendants
. . . argue that [the nonsignatory] has an agency relationship [because it is] a
wholly owned subsidiary [of the signatory]. A corporate relationship alone,
however, is generally not sufficient to bind a non-signatory to an arbitration
agreement.”)
To satisfy the agency exception, Santander would have to show that,
while executing the sale and financing of Mata’s vehicle, Santander signed the Sale
Contract as an agent of one of the past or future entities handling repossession
services for Santander’s vehicles. Santander had no authority to bind any of the
Cross-Defendants while financing Mata’s vehicle. Accordingly, even Santander
does not argue that it acted as an agent for Cross-Defendants.
b. Santander’s authority is inapposite.
Instead, in an attempt to shoehorn this case into the one doctrine that it
preserved for appeal, Santander makes a mirror-image agency argument.
Santander’s inverted logic urges that its vicarious liability for Cross-Defendants’
conduct made Cross-Defendants “agents” of Santander for purposes of the
nonsignatory arbitration exception. But agency law has never overridden the
constitutional requirement that all parties consent to arbitration. Whether Cross-
Defendants acted as agents of Santander when repossessing the Suburban in 2011
cannot retroactively and forcibly make Cross-Defendants parties to an arbitration
13
agreement executed two years earlier. “If the parties have not agreed to arbitration,
no trial court has discretion to make them go.” Merrill Lynch Trust, 235 S.W.3d at
192.
Santander cites several nonbinding cases in an attempt to advance its
agency argument. But none of these cases even involves compelling a
nonsignatory to arbitration. Instead, Santander’s cases all involve the reverse—a
nonsignatory who seeks to invoke an arbitration agreement.2 SEB and Gililland,
for example, both held a nonsignatory employee of its signatory employer could
compel arbitration against the other signatory to the agreement. SEB, 2011 WL
749292 at *4; Gililland, 2004 WL 2126755 at *3–4. They did not hold that the
employee could be forced to arbitrate against his will. See id.
“Arbitration agreements apply to nonsignatories only in rare
circumstances.” Bridas, 345 F.3d at 358. If an arbitration agreement applied to
every nonsignatory who contracted to perform services for a signatory company,
the exception would swallow the rule. And it plainly would not satisfy the basic
2
See SEB Inc. v. Campbell, No. 03-10-00375-CV, 2011 WL 749292, *4 (Tex. App.—Austin
Mar. 2, 2011, no pet.)(mem. op); Jenkens & Gilchrist, P.C. v. Riggs, 87 S.W.3d 198, 202–03
(Tex. App.—Dallas 2002, no pet.); McMillan Comp. Translation Sys., 66 S.W.3d 477, 481 (Tex.
App.—Dallas 2001, no pet.) (holding agents of signatory “were entitled to the benefit of the
arbitration agreement for these claims”); Gililland v. Taylor Inv., No. 11-03-00175-CV, 2004
WL 2126755, *3–4 (Tex. App.—Eastland Sep. 23, 2004, pet. denied). Moreover, Jenkens &
Gilchrist held the law firm seeking to enforce its client’s agreement was not an “agent” of its
client because the firm was an independent contractor. 87 S.W.3d at 202. Similarly, in the case
at bar, the sole contract Santander executed with any of the Cross-Defendants expressly
designated Redshift an independent contractor. (CR 81.)
14
consent requirement of an arbitration agreement. See In re Merrill Lynch Trust,
235 S.W.3d at 187. No case has so curtailed the right to jury trial.
The agency exception only operates to compel a party to arbitration
when the signatory was acting, at the time of signing, as an agent of a principal.
Because Santander plainly—and undisputedly—did not sign the Sale Contract on
behalf of the Cross-Defendants, the exception does not apply. There is nothing in
the record showing that Cross-Defendants intended to consent to arbitration. They
cannot now be compelled to arbitrate this suit under either of the two proffered
exceptions.
III. Plaintiff never served the Centroplex Defendants, so only cross-claims
exist against them, and Santander agrees those are not arbitrable.
Centroplex and Thompson (collectively, “the Centroplex
Defendants”) cannot be compelled to arbitration because, even if the Court
accepted Santander’s novel arguments, there are no arbitrable claims against them.
Santander concedes that the cross-claims in this case cannot be compelled to
arbitration. (1 RR 7 (“I don’t believe that my client can compel arbitration as to
the cross-claims. It’s only those claims that are asserted by the plaintiff against all
of the defendants.”).) Its motion to compel therefore never sought to compel the
cross-claims to arbitration. (CR 65 (moving to compel only Plaintiff’s claims
against the Defendants); 1 RR 34 (“If we were seeking to have the cross-claims
arbitrated, yes, then that would be at issue today.”).)
15
As to the Centroplex Defendants, though, cross-claims are the only
claims pending because Plaintiff has never served the Centroplex Defendants with
any claims against them. The limitations period has passed in this case. The
repossession Plaintiff complains of occurred on February 23, 2011, (CR 6 at ¶ 11,)
so the two-year statute of limitations for personal injury expired on February 23,
2013. See TEX. CIV. PRAC. & REM. CODE ANN. § 16.003(a). The record reflects
that Plaintiff has never served the Centroplex Defendants with any claims, and
Santander waited until after limitations expired to serve the Centroplex Defendants
with its claims. There are not now, and never will be, claims by Plaintiff against
the Centroplex Defendants in this case.
The cross-claims are the only live claims against the Centroplex
Defendants, and Santander correctly chose not move to compel the cross-claims to
arbitration because of the lack of any arbitration agreement between Santander and
the Cross-Defendants. For all the reasons above, and specifically because there are
no arbitrable claims by or against the Centroplex Defendants, the trial court’s
ruling as to the Centroplex Defendants should be affirmed.
IV. The Court Should Award Reasonable Fees to Cross-Defendants.
The frivolous nature of this appeal warrants, at a minimum, a fee
award. The rules provide for damages when “the court of appeals determines that
an appeal is frivolous.” TEX. R. APP. P. 45. To determine whether to award
16
damages, this Court considers whether the appellant has “reasonable grounds to
believe the case could be reversed.” Hunt v. CIT Grp./Consumer Fin., Inc., 03-09-
00046-CV, 2010 WL 1508082, at *8 (Tex. App.—Austin Apr. 15, 2010, pet.
denied) (mem. op.) (citing Smith v. Brown, 51 S.W.3d 376, 381 (Tex. App.—
Houston [1st Dist.] 2001, pet. denied)).
Santander has no reasonable basis for curtailing the Cross-
Defendants’ federal Seventh Amendment and state constitutional rights to jury in
this case, particularly as to the Centroplex Defendants. Santander’s appeal lacks a
single basis in law or fact for overturning the trial court’s decision. The relevant
facts are undisputed and only one of two briefed issues was preserved for appeal.
The sole preserved issue is whether Cross-Defendants, though nonsignatories, can
be compelled to arbitrate on the basis of agency. On this issue, Santander fails to
cite a single case that involves compelling a nonsignatory to arbitration, and cites
no binding authority at all. See Hunt, 2010 WL 1508082 at *8 (awarding fees as
damages because of appellant’s “unsupported factual statements (and
misstatements), repeated failures to preserve error for appeal, and the absence of
legal merit in his arguments.”).
A reasonable attorney could not fail to conclude that the trial court’s
ruling would be upheld. See id; Smith, 51 S.W.3d at 381 (awarding $5000 in fees
because “[n]o reasonable attorney could fail to conclude this court would uphold
17
the trial court’s summary judgment”). Indeed, Santander’s counsel conceded on
the record to the trial court that it could not compel the cross-claims to arbitration,
(1 RR 7), yet it persisted in arguing the motion to the trial court and then pursuing
the issue on appeal. Cross-Defendants have had to spend unnecessary time and
expense defending against, first, Santander’s groundless motion, and now its
meritless appeal. Santander has thus unnecessarily forced the Cross-Defendants to
expend considerable resources—all to simply defend their constitutional right to be
heard in court.
Consequently, Cross-Defendants seek as damages an award of
attorneys’ fees and costs associated with those efforts, and have attached an
affidavit establishing the amount of reasonable and necessary fees. See TEX. R.
APP. P. 45; Hunt, 2010 WL 1508082, at *9 (identifying attorneys’ fees as the
typical damages award and noting that “proof by affidavit is a proper method of
establishing the appropriate sanction for the filing of a frivolous appeal”). A fee
award is appropriate as damages in this case because of the objectively groundless
nature of this appeal.
PRAYER
For the foregoing reasons, Cross-Defendants Centroplex Automobile
Recovery, Inc., John F. Thompson, Redshift Investigation, Inc., and Blake
18
Vandusen respectfully request that this Court affirm the trial court’s holding that
denied Santander’s Motion to Compel Arbitration and Stay of Case. Cross-
Defendants further ask this Court to impose damages upon Santander for this
frivolous appeal based on the attached affidavit for reasonable attorneys’ fees, and
grant the Cross-Defendants any additional relief, at law or in equity, to which they
are entitled.
19
Respectfully submitted,
RICHARDSON + BURGESS LLP
221 West 6th Street, Suite 900
Austin, Texas 78701-3445
Telephone: (512) 482-8808
Facsimile: (512) 499-8886
Email: kburgess@richardsonburgess.com
Email: ssharp@richardsonburgess.com
/s/ Stacy Rogers Sharp
By: ______________________________
Karen C. Burgess
State Bar No. 00796276
Stacy Rogers Sharp
State Bar No. 24052109
ATTORNEYS FOR APPELLEES
CENTROPLEX AUTOMOBILE
RECOVERY, INC. AND JOHN F.
THOMPSON
MACDONALD DEVIN, PC
1201 Elm Street, Suite 3800
Dallas, Texas 75270-2130
Telephone: (214) 744-3300
Facsimile: (214) 747-0942
Email: jkenefick@macdonalddevin.com
Email: jsigety@macdonalddevin.com
/s/ John S. Kenefick
By: ______________________________
John S. Kenefick
State Bar No. 24006294
John R. Sigety
State Bar No. 24083853
ATTORNEYS FOR APPELLEE
BLAKE THORNTON VANDUSEN
20
LINDOW ▪ STEPHENS ▪ TREAT LLP
One Riverwalk Place
700 North St. Mary’s Street, Suite 1700
San Antonio, Texas 78205
Telephone: (210) 227-2200
Facsimile: (210) 227-4602
Email: clotz@lstlaw.com
Email: dlt@lstlaw.com
/s/ Christopher A. Lotz
By: ______________________________
Christopher A. Lotz
State Bar No. 24031630
David L. Treat
State Bar No. 20205300
ATTORNEYS FOR APPELLEE
REDSHIFT INVESTIGATION INC.
21
CERTIFICATE OF COMPLIANCE
I certify that this document was produced on a computer using Microsoft
Word 2010 and contains 3,670 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).
/s/ Stacy Rogers Sharp
_________________________________
Stacy Rogers Sharp
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the foregoing instrument has
been 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 this 20th day of January, 2015, as
follows:
Donald L. Turbyfill
Deborah C. S. Riherd
Vicki W. Hart
Devlin, Naylor & Turbyfill, PLLC
4801 Woodway Drive, Suite 420-West
Houston, Texas 77056-1884
Facsimile: (713) 586-7053
ATTORNEYS FOR APPELLANT
SANTANDER CONSUMER USA, INC.
Mario A. Mata
Mario A. Mata, PLLC
111 Congress Avenue, Suite 400
Austin, Texas 78701-4143
Facsimile: (214) 276-7305
APPELLEE, pro se
/s/ Stacy Rogers Sharp
_________________________________
Stacy Rogers Sharp
22
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.,
BLAKE THORNTON VANDUSEN, JOHN F. THOMPSON D/B/A
CENTROPLEX AUTOMOBILE RECOVERY, INC., AND REDSHIFT
INVESTIGATION, INC.
Appellees.
____________________________
Appealed from the
rd
353 Judicial District Court
Travis County, Texas
Cause No. D-1-GN-13-000677
____________________________
APPELLEES’ APPENDIX
____________________________
LIST OF DOCUMENTS
TEX. CIV. PRAC. & REM. CODE ANN. § 16.003(a) .............................................TAB 1
Service Agreement ............................................................................................TAB 2
Collateral Recovery Agreement ........................................................................TAB 3
Affidavit of Karen C. Burgess ..........................................................................TAB 4
vi
TAB 1
§ 16.003. Two-Year Limitations Period, TX CIV PRAC & REM § 16.003
Vernon's Texas Statutes and Codes Annotated
Civil Practice and Remedies Code (Refs & Annos)
Title 2. Trial, Judgment, and Appeal
Subtitle B. Trial Matters
Chapter 16. Limitations
Subchapter A. Limitations of Personal Actions (Refs & Annos)
V.T.C.A., Civil Practice & Remedies Code § 16.003
§ 16.003. Two-Year Limitations Period
Effective: September 1, 2005
Currentness
(a) Except as provided by Sections 16.010, 16.0031, and 16.0045, a person must bring suit for trespass for injury to the estate
or to the property of another, conversion of personal property, taking or detaining the personal property of another, personal
injury, forcible entry and detainer, and forcible detainer not later than two years after the day the cause of action accrues.
(b) A person must bring suit not later than two years after the day the cause of action accrues in an action for injury resulting
in death. The cause of action accrues on the death of the injured person.
Credits
Acts 1985, 69th Leg., ch. 959, § 1, eff. Sept. 1, 1985. Amended by Acts 1995, 74th Leg., ch. 739, § 2, eff. June 15, 1995; Acts
1997, 75th Leg., ch. 26, § 2, eff. May 1, 1997; Acts 2005, 79th Leg., ch. 97, § 3, eff. Sept. 1, 2005.
Editors' Notes
REVISOR'S NOTE
2002 Main Volume
(1) The revised law omits the reference to firms and public and private corporations in the source law. The
Code Construction Act (V.A.C.S. Article 5429b-2) includes business entities and governmental entities within the
definition of “person.”
(2) The revised law omits the source law material that provides for suits to be brought within two years of the
effective date of V.A.C.S. Article 5526a (March 7, 1934) because the two-year period has expired.
Notes of Decisions (2559)
V. T. C. A., Civil Practice & Remedies Code § 16.003, TX CIV PRAC & REM § 16.003
Current through the end of the 2013 Third Called Session of the 83rd Legislature
End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 1
TAB 2
,·~vv.J.uh.m..li.'"n"'' •
Agerioy .a·J~re``s.``?:?perty in accordancewithapplicable state. laws.
4S8684!B. 09803765
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148
III. Impounds
a. Vehicles located at Tow Company with bailout fees must be approved before
pickup.
b. It is always appreciated if bailout fees can be fronted for prompt recovery,
. however if agents policies do not comply then RSI will next day air bailout
amount.
c. All authorized fees are required to have a bailout receipt that matches the amount
approved and billed.
IV. Keys
a. Regular keys are included in the standard repossession fee, unless agents key
charge is pre~approved. Security keys are only made with client's approval.
b. Keys charges of any kind will not be paid ifnot pre-approved.
V. Mileage
a. Mileage can only be paid if pre-approved with name and date or representative in
writing; email is an acceptable fonnat.
VI. Finders Fees
a. Finders fees are sometimes an effective way to recover a vehicle however they
can only be approved by the client. ·
b. Finders fee.s will not be paid if not pre-approved
VII. Releasing Vehicles
a. Agent can only release/redeem a vehicle to the debtor with written permission
from RSI or its client. ·
VIII. Transport and Storage
a. RSI will send transpoti instructions. {See line XL Fee Schedule for rates).
b. If vehicle is on agent's lot for more than 30 days without instructions to trnnsport
or hold then agent must notify RSI in an email of stored vehicle. Email address:
info{a)Jedshi ftinvesti gation.com.
c. Storage agent approves 10 free days of storage to all clients.
d. Storage fee to client is $8.00 per day starting on the (11) eleventh day.
i. Exception
L VW Credit/Audi Financial is $7.00 per day starting on the (11)
eleventh day.
IX. Closing Assignments
a. Only when approved by RSl- most assignments are on a contingent basis
however if close fee has been approved the amount is $75.00 unless pre-approved
for a higher amount.
b. If you have reached a dead end and want to close the assignment it still must be
approved by RSI or client. ·
c. If not authorized then the assignment can only be suspended in your system and
RSI will advise when the client has authorized the close for billing.
d. Close fees of any kind will not be paid if not approved.
X. Accounting Procedures
a. Invoice RSI immediately following the repossession within 24 hours. Invoices
should be sent either fax or scanned and emailed. DO NOT MAIL INVOICES.
i. Fax number: 707-452-8650
ii. Email address: info@redshiftinvestigation.com
45868417.3 09803765 A-2
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149
b. lnyoices should. include: RSI.accountnwnber•. full debtor name; vehicle
information, and last.six.ofVIN#. · ·
c. Subini.t Invoices :ih a tirtiely.m``er. AnY invoice sent oyer 9.0 days from the time
of~pqssession cannot and willnot be paid.
XI. Fee Schedtile:
a. Standar:tfRepossession F.ee .............................. $350.00
L Exceptions ·
1. Carmax ................ ~ ........................ $·325.00
2, VW Credit/Aqdi Finan,ciaJ., .:~ .....•..$325. .00
b. Close Fee ......... "'" .............. ·.·.·~·``.··· .......~ . ~ ··11:·· '·~ ~ .... :.:.~ ~·~C<:>ntingent ·
i •. '!;!';.•
i. Exceptions ·
L VW Credit/Audi Pinimqial .................. $75.00
2. Pre-approved.Close·Fee..................more than $75.00
c. Transpe>I1!Delivery Fee......... ~ ........ , .................pre-approved only
.i. Exceptions .
I.. Carmax (within 50 miles) ...............up to $75.00
2. Carmax (oyer 50 miles)....•.....~ .• 1 ..... ,pre``pp:rQv~d only
d.. Miletige Fee.................................... ;, ............. pre-approved only
.e. Key_ Fee . ".~· •:•· ".~ ......... a, .. ~ ..... •·.t: ~ -:;.,:.,
!' ..• ,.~ ~····"
olio, ................. ·pre-approved Otily
••• . . . . . . . . II' . . . . . . . . •
f.. Finders: Fee ............................................ ·~ .~ ......pre-approved only
4S868417.3098Q3765 A:-3
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150
Exhibit B
Notification Report
Recovery Company: Client: Debtor:
Recovered by: _ _ _ _ _ Recovery Address: _ _ _ _--"-_ _ _ _ _ _ __
Recovery Date: Account#: ----~--------- W/0# --------
Year:_____ Make:_______ Model:_ _ _ _ _ _ _ _ __
Color: _ _ _ _ _ Runs:_ _ _ _ _ _ _..,... Keys:_ _ _ _ _ _ _ _ _ __
Tags: License:_ _ _ _ _ _ _ Property in Vehicle: _ _ _ _ __
Tow Dolly
Agency:_ _ _ _ _ _ _ _ _ _ _ _ _ _ Phone: _ _ _ _ _ _ _ _ __
Notification Date & Time: Badge#:_ _ _ _ _ _ _ _ __
Storage ,_,v.._,.... ~'"·----------------···-----------
Notes:_ _ _ _~-----------,---~-------------
458684173 09803765 B-1
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151
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AFFIDAVIT OF KAREN C. BURGESS Page 2