Dora Serna v. International Bank of Commerce

OPINION
No. 04-11-00097-CV
Dora SERNA,
Appellant
v.
INTERNATIONAL BANK OF COMMERCE,
Appellee
From the 111th Judicial District Court, Webb County, Texas
Trial Court No. 2005-CVQ-000148-D2
Honorable Raul Vasquez, Judge Presiding
Opinion by: Sandee Bryan Marion, Justice
Sitting: Karen Angelini, Justice
Sandee Bryan Marion, Justice
Steven C. Hilbig, Justice
Delivered and Filed: October 12, 2011
AFFIRMED
Appellant, Dora Serna, and appellee, International Bank of Commerce (“IBC”) entered
into negotiations involving Serna’s purchase of three properties pursuant to an earnest money
contract. When the negotiations failed, Serna sued IBC for fraud and for violations of the Texas
Deceptive Trade Practices Act. Less than two months after being sued, IBC filed a “Motion to
Compel Arbitration and Stay Civil Proceedings.” On May 17, 2006, the trial court granted the
motion. Following the denial of her petition for writ of mandamus seeking to overturn the trial
04-11-00097-CV
court’s order, Serna filed a “Demand for Arbitration with the American Arbitration Association.”
In her demand, Serna identified the “nature of the dispute” as “misrepresentations made in
connection with the attempted purchase of real estate in Mexico. Texas Law applies.” A hearing
before the arbitration panel commenced on April 7, 2010, and on June 11, 2010, the panel denied
all relief sought by Serna. Serna later moved to vacate the arbitration award, while IBC moved
to confirm the award. The trial court affirmed the award and this appeal by Serna ensued. On
appeal, Serna asserts the trial court erred in sending the case to arbitration and her constitutional
right to a jury trial was violated. We affirm.
MANDATORY ARBITRATION
In her first issue, Serna argues the arbitration provision contained in the earnest money
contract was not mandatory. Serna relies on a single sentence in the arbitration provision that
she contends allows the parties to seek either arbitration or judicial proceedings to resolve their
disputes. In the alternative, Serna contends she and IBC agreed not to arbitrate her DTPA claim.
We interpret arbitration agreements under traditional contract principles. J.M. Davidson,
Inc. v. Webster, 128 S.W.3d 223, 227 (Tex. 2003). We examine and consider the entire writing
in an effort to harmonize potential conflicts between differing provisions and give effect to all
the provisions of the contract so that none will be rendered meaningless. MCI Telecomms. Corp.
v. Texas Utils. Elec. Co., 995 S.W.2d 647, 652 (Tex. 1999); In re Premont Indep. Sch. Dist., 225
S.W.3d 329, 333 (Tex. App.—San Antonio 2007, orig. proceeding). No single provision taken
alone will be given controlling effect. In re Premont Indep. Sch. Dist., 225 S.W.3d at 333. If a
written contract is so worded that it can be given a certain or definite legal meaning or
interpretation, then it is not ambiguous and the court will construe the contract as a matter of law.
Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983). When a contract is not ambiguous, the
-2-
04-11-00097-CV
contract should be enforced as written. Lopez v. Munoz, Hockema & Reed, L.L.P., 22 S.W.3d
857, 862 (Tex. 2000).
Here, the arbitration provision contained in the earnest money contract provides as
follows:
ARBITRATION
The parties agree as follows:
(a) Any arbitrable dispute (defined below) between The Parties shall be settled by
arbitration, in accordance with the Commercial Arbitration Rules, then obtaining,
of the American Arbitration Association. . . . The award of the arbitrators, or a
majority of them, shall be final, and judgment upon the award rendered may be
entered in any court, state or federal, having jurisdiction.
(b) “Arbitrable disputes” include any controversy or claim between The Parties
including any claim based on contract, tort or statute, arising out or relating to
[sic] transaction evidenced by this Contract and all past, present and future
agreements involving The Parties, any transaction contemplated hereby, and any
aspect of the past, present or future relationship of The Parties.
...
(e) Any aggrieved Party shall serve a written notice of intention to arbitrate to
any and all opposing Parties and to an American Arbitration Association office
within the State of Texas within 365 days after [the] dispute has arisen. A dispute
is deemed to have arisen upon receipt of written demand or service of judicial
process. Failure to serve a notice of intention to arbitrate within the time
specified above shall be deemed a waiver of the aggrieved Party’s right to compel
arbitration of such claim. Such notice of intention to arbitrate may be informal
and need not comply with Rule 6 of the American Arbitration Association. The
Parties agree that legal action regarding this agreement and any liabilities
hereunder shall either be brought by arbitration, as described herein, or by judicial
proceedings, but shall not be pursued in different or alternate forums. The issue
of waiver pursuant to this paragraph is an arbitrable issue.
....
On appeal, Serna asserts the statement that “[t]he Parties agree that legal action regarding
this agreement and any liabilities hereunder shall either be brought by arbitration, as described
herein, or by judicial proceedings” indicates arbitration was not mandatory and either party could
-3-
04-11-00097-CV
elect to resolve their dispute in a judicial proceeding. Alternatively, Serna contends this sentence
renders the arbitration provision ambiguous, and therefore, unenforceable. We disagree with
both arguments.
Paragraph (a) unambiguously mandates that any “arbitrable dispute” “shall be settled by
arbitration.” Paragraph (b) broadly defines “arbitrable dispute” to include “any claim based on
contract, tort or statute” that arises out of or relates to the transaction evidenced by the earnest
money contract. Paragraphs (a) and (b), therefore, require that any contractual, tort-based, or
statutory claim arising out of or related to the earnest money contract must be submitted to
arbitration. The sentence in paragraph (e) on which Serna relies may be harmonized with this
mandate because paragraph (e) addresses the resolution of any dispute other than one arising out
of or related to the earnest money contract, arising in contract, tort or statute, and provides that
any other such dispute may be brought by arbitration or by judicial proceedings, so long as the
dispute is not pursued in different or alternate forums. Because Serna does not contend her
claims against IBC are not within the scope of an “arbitrable dispute” as that term is defined in
the agreement, paragraph (a) requires that the dispute be settled by arbitration. To hold
otherwise, would render paragraph (a) meaningless.
As to Serna’s argument that she and IBC agreed not to arbitrate whether the bank
violated the DTPA, Serna relies on the following clause, which is contained in a section entitled
“DISCLAIMER, WAIVER OF CLAIMS, AND INDEMNIFICATION”:
To the extent applicable and permitted by law (and without admitting such
applicability), [Serna] hereby waives the provisions of the Texas Deceptive Trade
Practices-Consumer Protection Act, Chapter 17, Subchapter E, Sections 17.41
through 17.63 inclusive (other than Section 17.555, which is not waived).
-4-
04-11-00097-CV
Contrary to Serna’s contention on appeal, this provision does not evidence an agreement between
the parties that DTPA claims will not be subject to arbitration. Instead, this clause addresses
Serna’s waiver of her right to bring a DTPA claim. 1
RIGHT TO A JURY TRIAL
In her final issue, Serna asserts the trial court erred in compelling arbitration because she
did not agree to mandatory arbitration and she did not waive her constitutional right to trial by
jury.
As we concluded above, the arbitration provision contained in the earnest money contract
was mandatory. There is no dispute Serna signed the earnest money contract that contained this
provision, that she filed her own “Demand for Arbitration with the American Arbitration
Association,” and that she fully participated in the arbitration proceeding. Therefore, the record
does not support Serna’s contention that she did not agree to mandatory arbitration. See Cantella
& Co., Inc. v. Goodwin, 924 S.W.2d 943, 944 (Tex. 1996) (Texas law presumes a party who
signs a contract has read it and knows of its contents).
Serna’s argument that arbitration deprived her of her constitutional right to a jury trial
also lacks merit. When, as here, a party agrees to have a dispute resolved through arbitration
rather than a judicial proceeding, that party has waived its right to a jury trial. Massey v. Galvan,
822 S.W.2d 309, 318 (Tex. App.—Houston [14th Dist.] 1992, writ denied) (holding appellants
could not claim they were entitled to jury trial after they submitted to arbitration and arbitrators
made an award appellants felt was in error).
1
We do not address the propriety or enforceability of this waiver clause because that issue is not before us.
-5-
04-11-00097-CV
CONCLUSION
We overrule Serna’s issues on appeal and affirm the trial court’s judgment.
Sandee Bryan Marion, Justice
-6-