Stagg Restaurants, LLC D/B/A McDonalds 24388 v. Fred Serra

Fourth Court of Appeals
San Antonio, Texas
MEMORANDUM OPINION
No. 04-18-00527-CV
STAGG RESTAURANTS, LLC d/b/a McDonalds #24388,
Appellant
v.
Fred SERRA,
Appellee
From the 45th Judicial District Court, Bexar County, Texas
Trial Court No. 2014-CI-17438
Honorable John D. Gabriel, Jr., Judge Presiding
Opinion by: Luz Elena D. Chapa, Justice
Sitting: Sandee Bryan Marion, Chief Justice
Rebeca C. Martinez, Justice
Luz Elena D. Chapa, Justice
Delivered and Filed: February 13, 2019
AFFIRMED
Stagg Restaurants, LLC d/b/a McDonald’s #24388 appeals an order denying its motion to
compel arbitration. McDonald’s argues appellee Fred Serra’s personal injury claim falls within the
scope of an enforceable arbitration agreement. Because McDonald’s failed to satisfy its burden to
establish that Serra received notice of McDonald’s arbitration policy, we affirm the trial court’s
order.
04-18-00527-CV
PROCEDURAL BACKGROUND
In November 2014, Serra filed a lawsuit alleging McDonald’s negligence caused personal
injury he sustained while at work. McDonald’s filed a motion to compel arbitration and an answer
generally denying Serra’s allegations. McDonald’s also filed a brief, an affidavit, and exhibits in
support of its motion to compel arbitration.
According to supporting documents McDonald’s attached to its motion to compel, Serra
received an occupational injury plan on July 19, 2013, containing an agreement to arbitrate
disputes arising from personal injury sustained while on the job. In a sworn affidavit filed in
response to the motion to compel, Serra stated he did not receive the occupational injury plan and
was never notified about the arbitration provision. After the trial court heard and denied the motion,
McDonald’s timely appealed.
MOTION TO COMPEL ARBITRATION
The sole issue on appeal is whether the trial court erred by denying McDonald’s motion to
compel arbitration. The arbitration agreement at issue provides the agreement is governed by the
Federal Arbitration Act (FAA). “Under the FAA, a . . . party seeking to compel arbitration must
establish the existence of a valid arbitration agreement and that the claims at issue fall within the
scope of that agreement.” Henry v. Cash Biz, LP, 551 S.W.3d 111, 115 (Tex. 2018). “If the party
seeking to compel arbitration meets this burden, the burden then shifts, and to avoid arbitration,
the party opposing it must prove an affirmative defense to the provision’s enforcement, such as
waiver.” Id. If the party seeking to compel arbitration does not meet this burden, then the party
opposing the motion to compel need not prove an affirmative defense, such as waiver, to the
provision’s enforcement. See id.-2-
04-18-00527-CV
A. Standard & Scope of Review
When parties file a motion to compel arbitration and a response, the “trial court may
summarily decide whether to compel arbitration on the basis of affidavits, pleadings, discovery,
and stipulations.” Jack B. Anglin Co. v. Tipps, 842 S.W.2d 266, 269 (Tex. 1992). But when, as
here, “the material facts necessary to determine the issue are controverted, by an opposing affidavit
or otherwise admissible evidence, the trial court must conduct an evidentiary hearing to determine
the disputed material facts.” Id.“We review a trial court’s order denying a motion to compel arbitration for abuse of
discretion.” Henry, 551 S.W.3d at 115. “We defer to the trial court’s factual determinations if they
are supported by evidence but review its legal determinations de novo.” Id. When, as here, the trial
court does not make findings of fact and does not specify the basis for its order, we will infer the
trial court made all findings necessary to support its order and we will affirm the order on any
ground supported by the record. See Paragon Indus. Applications, Inc. v. Stan Excavating, LLC,
432 S.W.3d 542, 549 (Tex. App.—Texarkana 2014, no pet.).
B. Notice of the Arbitration Agreement
“An employer may enforce an arbitration agreement entered into during an at-will
employment relationship if the employee received notice of the employer’s arbitration policy and
accepted it.” In re Dallas Peterbilt, Ltd., L.L.P., 196 S.W.3d 161, 162 (Tex. 2006) (orig.
proceeding) (per curiam). When determining whether an employee received notice of an
arbitration policy, we consider all communications between the employer and employee, not
merely the underlying agreement. Id. “Notice is a fact question,” and cases may “boil[] down to
which version of facts the trial court credits.” Kmart Stores of Tex., L.L.C. v. Ramirez, 510 S.W.3d
559, 569 (Tex. App.—El Paso 2016, pet. denied).
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04-18-00527-CV
McDonald’s argues Serra is bound by the arbitration policy contained in its occupational
injury plan. Serra did not sign McDonald’s occupational injury plan, but the arbitration policy
outlined within it provided that the arbitration policy was a mandatory condition of employment
to which the employee automatically agreed when accepting and continuing employment with
McDonald’s. “While this maneuver spares an employer from having to get an employee’s physical
signature on an arbitration agreement as a prerequisite to arbitral forum access, this practice is not
without risk, . . . .” Alorica v. Tovar, No. 08-18-00008-CV, 2018 WL 6167963, at *3 (Tex. App.—
El Paso Nov. 26, 2018, no pet. h.). “[R]elying on implied consent by notice can create potential
fact issues on formation that can undermine an arbitration agreement’s validity more easily than
would a physical signature indicating that an employee affirmatively assents to arbitration.” Id.In support of its motion to compel arbitration, McDonald’s produced the occupational
injury plan, an affidavit from its business director George McClure, and copies of Serra’s
employment documents. McClure swore in his affidavit that Serra received a copy of the
occupational injury plan. Yet Serra’s employment documents did not include the occupational
injury plan and none mention an arbitration agreement. One of the employment documents is titled
“Initial Orientation,” and contains a list of documents, but again the occupational injury plan is not
listed. Another employment document titled “Hiring Packet Checklist” contains another list of
other employment-related documents, but the occupational injury plan is again not listed. On the
Hiring Packet Checklist, Serra initialed next to the HIPAA Authorization and “Authorization for
Initial Treatment and Prescription Services” forms, indicating he had read and understood those
forms. The Authorization for Initial Treatment and Prescription Services form, which is signed
only by a McDonald’s representative and not Serra, states: “You are authorized to provide
medically necessary treatment and/or prescription services, subject to the terms of the Employer’s
occupational injury plan for conditions related to the reported injury.” Although the form mentions
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04-18-00527-CV
the occupational injury plan, the form does not state whether Serra received a copy of the plan,
indicate whether Serra agreed to the plan, or mention the arbitration agreement contained in the
plan. Similarly, the HIPAA Authorization form refers to the occupational injury plan, but does not
state whether Serra received a copy of the plan, indicate whether Serra agreed to the plan, or
mention the arbitration agreement contained in the plan. Serra produced his affidavit in his
response, swearing he did not receive a copy of the occupational injury plan and was never notified
about the arbitration provision.
None of Serra’s employment documents show that Serra agreed to or had notice of the
arbitration policy in the occupational injury plan. Although two of Serra’s employment documents
refer to the occupational injury plan, none of the documents state whether Serra received a copy
of the plan, indicate whether Serra agreed to the plan, or mention the arbitration agreement
contained in the plan. McDonald’s only evidence showing that Serra was notified about the
arbitration policy in the occupational injury plan was McClure’s affidavit. But McClure’s affidavit
testimony was discredited by Serra’s employment documents, which do not list the occupational
injury plan among the forms and policies that Serra received at the initial orientation or within his
hiring packet. Furthermore, although McClure swore in his affidavit that Serra received the
occupational injury plan and was notified about the plan’s arbitration policy, Serra swore in his
affidavit that he did not receive the occupational injury plan and was not notified about the plan’s
arbitration policy.
Because the motion to compel arbitration and the response presented conflicting evidence
as to whether Serra received notice of the arbitration policy, McDonald’s had the burden to prove
at an evidentiary hearing that Serra received notice of the arbitration policy. See Jack B. Anglin
Co., 842 S.W.2d at 269; MP Ventures of S. Tex., Ltd., 276 S.W.3d at 529. At the hearing on
McDonald’s motion to compel arbitration, McDonald’s presented no further evidence. See Vireo,
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P.L.L.C. v. Cates, 953 S.W.2d 489, 490–91 & n.3 (Tex. App.—Austin 1997, pet. denied)
(summarily overruling challenge to sufficiency of the evidence when trial court denied motion to
compel arbitration when no evidence was received at hearing). Given the absence of evidence at
the hearing on McDonald’s motion to compel arbitration and the conflicting evidence produced in
support of McDonald’s motion, and Serra’s response, we cannot say the trial court abused its
discretion by denying McDonald’s motion to compel arbitration. See Henry, 551 S.W.3d at 115;
Alorica, 2018 WL 6167963, at *3; Kmart Stores, 510 S.W.3d at 569.
CONCLUSION
McDonald’s failed to satisfy its burden to establish that Serra agreed to the arbitration
policy it asked the trial court to enforce. Because McDonald’s did not meet this burden, Serra was
not required to establish an affirmative defense, such as waiver, to the provision’s enforcement.
See Henry, 551 S.W.3d at 115. We therefore need not address McDonald’s issue regarding waiver.
We affirm the trial court’s order denying McDonald’s motion to compel arbitration.
Luz Elena D. Chapa, Justice
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