Fernando Osornia v. Amerimex Motor & Controls, Inc.

Affirmed and Opinion filed March 29, 2012.
In The
Fourteenth Court of Appeals
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NO. 14-11-00086-CV
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FERNANDO OSORNIA, Appellant
V.
AMERIMEX MOTORS & CONTROLS, INC., Appellee
On Appeal from the 152nd District Court
Harris County, Texas
Trial Court Cause No. 2010-53966
OPINION
This is an interlocutory appeal from the trial court’s order denying a defendant’s
application to compel arbitration under Texas Civil Practice and Remedies Code section
171.021. Because the claims asserted against the defendant by the plaintiff do not fall
within the scope of the arbitration agreement, the trial court did not err in refusing to
compel arbitration, and we affirm the trial court’s order.
I. FACTUAL AND PROCEDURAL BACKGROUND
In 2008, appellee/plaintiff AmeriMex Motor & Controls, Inc. and others filed suit
against appellant/defendant Fernando Osornia and others in Cause No. 2008-56215 in the
152nd District Court of Harris County (hereinafter the “First Lawsuit”). In late October
and early November of 2009, the parties to that lawsuit and other “Potential Parties”
entered into a “Mutual Release and Settlement Agreement” (hereinafter “Settlement
Agreement”). The parties to that agreement agreed that “any and all claims arising out of
this Agreement . . . shall be arbitrated.” Viking Offshore (USA), Inc. was not a party in
the First Lawsuit, nor was Viking a party to the Settlement Agreement, which contains no
reference to Viking.
AmeriMex alleges that in June 2010, Viking assigned to AmeriMex any and all
claims that Viking had against Osornia and Daniel Becker (the “Assigned Claims”). In
August 2010, AmeriMex filed suit in the trial court below against Osornia and Becker
(hereinafter the “Second Lawsuit”), alleging, in pertinent part, as follows:
In October 2006, Becker was a principal and officer of Odin Rig Services, Inc.
Odin was working under a contract with Viking to do the project management on an
upgrade of the “VIKING PRODUCER,” a semi-submersible rig.
During that same time period, Osornia was an officer and principal of AmeriMex.
Becker was aware of Osornia’s position with AmeriMex.
Odin’s only business was fulfilling the rig upgrade of the VIKING PRODUCER.
Under the contract between Viking and Odin, Odin was responsible for managing
this project.
Viking gave Odin substantial discretion to determine what was necessary to
complete the project.
In October 2006, Becker was in charge of this project for Odin. Becker’s major
responsibilities were the acquisition of the capital drilling equipment for the vessel.
It was Becker’s responsibility to select the vendor from whom to buy the capital
equipment to be installed on the VIKING PRODUCER. Viking’s budget for the
project was based upon Becker’s recommendations.
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Becker needed to buy six mud pump motors and three “draw work motors” for
installation on the VIKING PRODUCER.
AmeriMex is in the business of manufacturing and selling motors that can be used
for mud pumps and draw works on drilling rigs. Osornia and Becker conspired to
cause AmeriMex to assume contractual risks for the nine motors by a series of
maneuvers.
First, contrary to proper commercial practices, Becker, rather than the vendor
AmeriMex, prepared the quotation for the nine motors.
Second, when Becker issued the quotation, Osornia and Becker caused the
quotation to come from a Mexican company known as Motor Power Services S.A.
de C.V. (hereinafter “Motor Power”). Motor Power was used as a vehicle for
illegal activity that substantially damaged AmeriMex in other transactions.
When Becker caused Odin to issue the purchase order for the motors, he identified
the vendor as Motor Power. There was no commercial relationship between Motor
Power and AmeriMex, other than Osornia’s use of Motor Power as a vehicle to
commit crimes and cheat AmeriMex out of funds properly due it.
Becker was acting in the course and scope of his employment for Odin, which was
in the course and scope of its employment for Viking. Becker knowingly
participated in the fraudulent construction of the transaction.
Becker has testified that he considered the vendor to be AmeriMex at all material
times.
AmeriMex procured or manufactured the motors for sale to Viking. When it was
time to pay for the motors, Becker, on behalf of Odin, participated in a conspiracy
with Osornia to deprive AmeriMex of receipt of its funds for the nine motors and to
divert the funds to Motor Power.
Becker authored an email dated December 23, 2006, in which he advised Osornia to
lie to Odin about why payments were going to Motor Power. The lie that Becker
concocted was for Osornia to claim that Motor Power was a subsidiary of
AmeriMex. Motor Power has never been a subsidiary of AmeriMex, and Becker
knew this statement was false when he made it.
Becker continued on behalf of Odin, which, in turn, was acting on behalf of Viking,
to take affirmative actions to cheat AmeriMex out of its money by rushing the
checks through the normal pay process and making them payable to Motor Power.
Motor Power’s Alejandro Moeller actively conspired with Becker and Osornia to
deprive AmeriMex of its funds.
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On January 8,1 Becker caused Viking to pay Motor Power $130,500 for the draw
works motors and $261,000 for the mud pump motors.
Because of the conduct of Becker and Osornia, Viking did not receive the six mud
pump motors for which it paid Motor Power.
Becker has testified that he caused Viking to pay the wrong party.
Osornia has testified that Motor Power paid him a “kickback” of $1,000 for each
motor for which Motor Power received payment.
For good and sufficient consideration, Viking assigned its claims against Becker
and Osornia to AmeriMex.
Based upon these allegations and as assignee of Viking, AmeriMex has asserted
claims against Osornia for fraud, violations of the Texas Theft Liability Act, and tortious
interference with contractual relations. As assignee, AmeriMex also asserted claims
against Becker for fraud and tortious interference with contractual relations. On its own
behalf, AmeriMex asserted tort claims against Becker.
Osornia filed an application to compel arbitration, arguing that AmeriMex’s claims
against Osornia fall within the scope of the Settlement Agreement’s arbitration clause.
The trial court initially granted Osornia’s application but later reconsidered that ruling and
issued an order denying the application. The trial court denied Becker’s motion to compel
arbitration. Osornia filed this interlocutory appeal from the denial of his application to
compel arbitration. Becker did not file an interlocutory appeal.
II. ISSUES PRESENTED
Osornia presents two appellate issues. In his first issue, Osornia asserts that the
trial court erred in denying his application to compel arbitration. In his second issue,
Osornia asserts that the alleged assignment of claims by Viking to AmeriMex is void and
unenforceable as against public policy.
1
AmeriMex does not specify a year in this allegation.
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III. STANDARD OF REVIEW
It is undisputed that Osornia and AmeriMex entered into the Settlement Agreement,
and no party has challenged the validity of that agreement or its arbitration clause.
Whether this clause imposes a duty upon AmeriMex to arbitrate its claims against Osornia
in the Second Lawsuit is a matter of contract interpretation and a question of law for the
trial court. See IKON Office Solutions, Inc. v. Eifert, 2 S.W.3d 688, 694 (Tex.
App.—Houston [14th Dist.] 1999, no pet.). We review the trial court’s legal
determination in this regard under a de novo standard of review. See id.
IV. ANALYSIS
A. Did the trial court err in denying the application to compel arbitration?
We first examine whether the trial court erred in denying Osornia’s application to
compel arbitration. The Settlement Agreement is silent as to whether its arbitration clause
is governed by the Federal Arbitration Act (“Federal Act”) or the Texas General
Arbitration Act (“Texas Act”). Osornia asserts that the Texas Act applies, and AmeriMex
does not contest this assertion. Neither party asserts that the Federal Act applies or that it
preempts any aspect of the Texas Act relevant to this case. In this situation, we need not
address whether the Federal Act applies, and we treat this case as one under the Texas Act.
See Bates v. MTH Homes-Texas, L.P., 177 S.W.3d 419, 421 (Tex. App.—Houston [1st
Dist.] 2005, no pet.). Even so, because the substantive principles applicable to the
analysis in this appeal are the same under both the Federal Act and the Texas Act, we cite
in this opinion cases under the Federal Act and Texas Act without stating under which
statute the cases were decided. See Forest Oil Corp. v. McAllen, 268 S.W.3d 51, 56, n.10
(Tex. 2008).
A party seeking to compel arbitration must establish that (1) a valid arbitration
agreement exists2 and (2) the claims at issue are within the scope of the agreement. See In
2
If all relevant parties did not sign the contract in which the arbitration agreement is found, this first prong
5
re D. Wilson Const. Co., 196 S.W.3d 774, 780–81 (Tex. 2006) (orig. proceeding); In re
Igloo Prods. Corp., 238 S.W.3d 574, 577 (Tex. App.—Houston [14th Dist.] 2007, orig.
proceeding [mand. denied]). If these two showings are made, the burden shifts to the
party opposing arbitration to present a valid defense to the agreement, and absent evidence
supporting such a defense, the trial court must compel arbitration. See J.M. Davidson,
Inc. v. Webster, 128 S.W.3d 223, 227B28 (Tex. 2003); In re J.D. Edwards World Solutions
Co., 87 S.W.3d 546, 549 (Tex. 2002) (orig. proceeding); In re Igloo Prods. Corp., 238
S.W.3d at 577.
It is undisputed that Osornia and AmeriMex signed and entered into the Settlement
Agreement, and no party has challenged the validity of that agreement or its arbitration
clause. Nonetheless, AmeriMex argues that Osornia failed to establish the existence of an
arbitration agreement. AmeriMex notes that (1) AmeriMex only asserts claims against
Osornia as assignee of Viking, (2) AmeriMex could have asserted the Assigned Claims in
Viking’s name; and (3) there is no evidence of any arbitration agreement between Osornia
and Viking. Still, AmeriMex chose to bring suit in its own name, and AmeriMex is
asserting claims against Osornia, albeit as assignee of Viking. In this context, we
conclude that Osornia carried his burden of establishing the existence of a valid arbitration
agreement between the relevant parties—AmeriMex and Osornia.
Given the existence of a valid agreement to arbitrate, the next issue is whether
AmeriMex’s claims against Osornia are within the scope of the Settlement Agreement’s
arbitration clause. That clause reads in its entirety as follows:
The Parties to this Agreement agree that any and all claims arising out of this
Agreement, including any misrepresentations or warranties (including
disputes and interpretations), shall be arbitrated before Judge Caroline
Baker. If she is unwilling or unable to serve as arbitrator, the Parties shall
agree to an arbitrator who has served as a former State District Judge [sic] or,
may include issues as to whether a non-signatory is bound by or may enforce the arbitration agreement.
See In re Rubiola, 334 S.W.3d 220, 223–24 (Tex. 2011). Such issues are not present in this appeal.
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if no agreement can be reached, an arbitrator shall be appointed by a Court of
competent jurisdiction.3
Any doubts as to whether AmeriMex’s claims against Osornia fall within the scope
of the arbitration clause must be resolved in favor of arbitration. See Prudential Sec. Inc.
v. Marshall, 909 S.W.2d 896, 899 (Tex. 1995). A court should not deny arbitration unless
the court can say with positive assurance that an arbitration clause is not susceptible of an
interpretation that would cover the claims at issue. Id. In determining whether a claim
falls within the scope of an arbitration agreement, we focus on AmeriMex’s factual
allegations, rather than the legal claims asserted by AmeriMex. Id. at 900. The
presumption of arbitrability is particularly applicable when the clause is broad; that is, it
provides for arbitration of “any dispute arising between the parties,” or “any controversy or
claim arising out of or relating to the contract thereof,” or “any controversy concerning the
interpretation, performance or application of the contract.” See Babcock & Wilcox Co. v.
PMAC, Ltd., 863 S.W.2d 225, 230 (Tex. App.—Houston [14th Dist.] 1993, writ denied).
We presume for the purposes of our analysis that the Settlement Agreement’s arbitration
clause is broad. In such instances, absent any express provision excluding a particular
grievance from arbitration, only the most forceful evidence of purpose to exclude the claim
from arbitration can prevail, and AmeriMex has the burden of showing that its claims
against Osornia fall outside the scope of the arbitration clause. See Marshall, 909 S.W.2d
at 900; Babcock & Wilcox Co., 863 S.W.2d at 230. Nonetheless, the strong policy in favor
of arbitration cannot serve to stretch a contractual clause beyond the scope intended by the
parties or to allow modification of the unambiguous meaning of the arbitration clause.
See IKON Office Solutions, Inc., 2 S.W.3d at 697.
Under the unambiguous language of the arbitration clause, AmeriMex and Osornia
have agreed to arbitrate all claims arising out of the Settlement Agreement. The parties
did not agree to arbitrate all claims “relating to” or “connected with” the Settlement
3
This clause does not contain any provision in which the parties agree that the arbitrator, rather than the
courts, shall determine disputes regarding the scope of the arbitration clause. See Forest Oil Corp. v.
McAllen, 268 S.W.3d 51, 61 (Tex. 2008).
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Agreement. Nor did the parties agree to arbitrate all claims “arising out of” or “relating
to” the First Lawsuit or the occurrence giving rise to this lawsuit. Notably, Viking was not
a party to the First Lawsuit or to the Settlement Agreement, and no reference is made to
Viking in the Settlement Agreement. Focusing on the factual allegations in AmeriMex’s
live pleading, we note the following:
AmeriMex does not refer to the First Lawsuit or to the Settlement Agreement.
AmeriMex does not allege that Osornia breached the Settlement Agreement or any
other contract.
AmeriMex does not allege that there is any dispute over the interpretation of the
Settlement Agreement.
AmeriMex alleges tortious conduct by Becker and Osornia that allegedly occurred
before the Settlement Agreement was signed in 2009.
AmeriMex does not allege any tortious conduct that is alleged to have occurred after
the Settlement Agreement was signed.
AmeriMex alleges that, after the Settlement Agreement was signed, Viking
assigned its claims against Osornia to AmeriMex. As alleged assignee of Viking,
AmeriMex asserts three tort claims against Osornia. Assigned tort claims based upon
conduct that allegedly occurred before the Settlement Agreement was signed are simply
not claims “arising out of” the Settlement Agreement. See Washburn v. Societe
Commerciale de Reassurance, 831 F.2d 149, 150–52 (7th Cir. 1987) (holding that claims
based upon allegedly tortious conduct in which defendants allegedly used various
agreements and other devices to defraud various individuals did not fall within agreement
to arbitrate disputes with respect to the interpretation of one of the agreements or a party’s
performance under that agreement); Texaco, Inc. v. American Trading Transp. Co., 644
F.2d 1152, 1154 (5th Cir. 1981) (holding that tort claims based upon the defendants’
alleged conduct that allegedly caused damages to plaintiff’s dock did not fall within
agreement by plaintiff to arbitrate all disputes “arising out of” a time charter by the plaintiff
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of one of the vessels); Coffman v. Provost * Umphrey Law Firm, L.L.P., 161 F. Supp. 2d
720, 724–30 (E.D. Tex. 2001) (denying motion to compel arbitration and holding that
claims based upon breaches of prior partnership agreements, that allegedly occurred before
any arbitration clause was in effect, did not fall within clause in which plaintiff agreed to
arbitrate all claims “arising under” subsequent partnership agreements). We harbor no
doubts as to whether AmeriMex’s claims against Osornia fall within the scope of the
arbitration clause, and this court can say with positive assurance that the arbitration clause
is not susceptible of an interpretation that would cover AmeriMex’s claims against
Osornia. See Washburn, 831 F.2d at 150–52; Texaco, Inc., 644 F.2d at 1154; Coffman,
161 F. Supp. 2d at 724–30. We conclude that AmeriMex satisfied its burden of showing
that its claims against Osornia fall outside the scope of the arbitration clause.
Osornia relies upon a line of cases containing language to the effect that “‘if the
facts alleged ‘touch matters,’ have a ‘significant relationship’ to, are ‘inextricably
enmeshed’ with, or are ‘factually intertwined’ with the contract that is subject to the
arbitration agreement, the claim will be arbitrable.’” AutoNation USA Corp. v. Leroy, 105
S.W.3d 190, 195 (Tex. App.—Houston [14th Dist.] 2003, no pet.) (quoting Pennzoil Co. v.
Arnold, 30 S.W.3d 494, 498 (Tex. App.—San Antonio 2000, no pet.)). Significantly, the
cases in which this formulation4 has been utilized have involved very broad arbitration
clauses in which the parties agree to arbitrate all claims arising out of or relating to a
contract or in which the parties agree to arbitrate all disputes that may arise among them.
See In re Prudential Securities, Inc., 159 S.W.3d 279, 281, 283–84 (Tex. App.—Houston
[14th Dist.] 2005, orig. proceeding); In re BP America Production Co., 97 S.W.3d 366,
370–71 (Tex. App.—Houston [14th Dist.] 2003, orig. proceeding); AutoNation USA
Corp., 105 S.W.3d at 195–96; Arnold, 30 S.W.3d at 498–99; Hou-Scape, Inc. v. Lloyd, 945
S.W.2d 202, 205–06 (Tex. App.—Houston [1st Dist.] 1997, orig. proceeding); Fridl v.
4
Under this formulation, courts also note that “if the facts alleged in support of the claim stand alone, are
completely independent of the contract, and the claim could be maintained without reference to the
contract, the claim is not subject to arbitration.” See AutoNation USA Corp., 105 S.W.3d at 195 (quoting
Arnold, 30 S.W.3d at 498).
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Cook, 908 S.W.2d 507, 510–13 (Tex. App.—El Paso 1995, writ dism’d w.o.j.). Though
we have presumed that the arbitration clause in the Settlement Agreement is broad, it is not
as broad as the clauses involved in the cases resting upon this formulation. Therefore, this
line of cases is not on point. If we followed this formulation in the case under review, we
would impermissibly expand the scope of the arbitration clause beyond the plain meaning
of “any and all claims arising out of this Agreement.” See IKON Office Solutions, Inc., 2
S.W.3d at 697.
Osornia also argues that this court cannot conclude that AmeriMex’s claims are
outside the scope of the arbitration clause unless this court concludes with positive
assurance that the claims are not “factually intertwined” with arbitrable claims. In support
of this argument, Osornia cites the following sentence from Prudential Securities, Inc. v.
Marshall: “On this record, we cannot conclude with positive assurance that the statements
at issue here are not at least ‘factually intertwined’ with the arbitrable claims.” 909 S.W.2d
896, 900 (Tex. 1995) (per curiam). In Marshall, the Supreme Court of Texas held that
various defamation claims asserted by two former stockbrokers against their former
employer fell within the scope of arbitration agreements in which the stockbrokers agreed
to arbitrate all controversies with the former employer arising out of the employment or
termination of employment of the respective stockbrokers. See id. at 897–900. The
claims based upon the alleged defamatory statements fell within the scope of the arbitration
agreements without the need to rely upon a conclusion that the claims were factually
intertwined with arbitrable claims. See id.
The better reading of the Marshall opinion is that it does not stand for the broad
proposition that, when no other claims between the parties are being sent to arbitration, a
claim that does not fall within the language of an arbitration clause still must be arbitrated
unless the court can say with positive assurance that the claim is not “factually intertwined”
with the arbitrable claims. See id. Significantly, in various cases the Supreme Court of
Texas has relied upon the legal standard in Marshall, yet in none of them has the high court
described the “factually intertwined” standard advanced by Osornia. See, e.g., In re
10
Rubiola, 334 S.W.3d 220, 223–24 (Tex. 2011) (stating the legal standard from Marshall
without mentioning the “factually intertwined” language upon which Osornia relies). In
addition, this court has held that claims did not fall within the scope of an arbitration
agreement without addressing whether the claims were “factually intertwined” with
arbitrable claims. See In re Igloo Prods. Corp., 238 S.W.3d at 581; IKON Office
Solutions, Inc., 2 S.W.3d at 693–97. In the context of this case, to conclude that
AmeriMex’s claims are outside the scope of the arbitration clause, it is unnecessary for this
court to determine whether it can conclude with positive assurance that these claims are not
“factually intertwined” with arbitrable claims.5 See In re Rubiola, 334 S.W.3d at 223–24.
Under the applicable standard of review, we conclude that the trial court did not err
in denying Osornia’s application to compel arbitration. 6 Accordingly, we overrule
Osornia’s first issue.
B. Is the issue of whether the assignment is void relevant to this appeal?
In his second issue, Osornia argues that the alleged assignment of claims by Viking
to AmeriMex is void because it is contrary to public policy. Therefore, Osornia asserts,
this court should sustain his second issue, reverse the trial court’s order, and render a
take-nothing judgment against AmeriMex on its claims against Osornia. As part of the
allegations in its live pleading, AmeriMex asserts that Viking assigned its claims against
Becker and Osornia to AmeriMex. To succeed on the merits, AmeriMex will have to
prove this assignment, and in responding on the merits Osornia is free to assert any
5
In Jack B. Anglin Co. v. Tipps, the Supreme Court of Texas concluded that because the breach-of-contract
claim between the parties was going to be arbitrated and because certain tort claims were factually
intertwined with the breach-of-contract claim, the tort claims should be arbitrated to avoid multiple
determinations of the same matter. See 842 S.W.2d 266, 271 (Tex. 1992). This case is not on point
because this doctrine only applies when at least one claim between the parties is already going to
arbitration. See In re Weekley Homes, L.P., 180 S.W.3d 127, 132 & n. 25 (Tex. 2005); In re Prudential
Securities, Inc., 159 S.W.3d at 281–84.
6
Osornia also argues that AmeriMex had notice of Viking’s claims against Osornia and Becker before
AmeriMex signed the Settlement Agreement. Any such notice is not relevant to whether the claims that
AmeriMex asserts against Osornia in the Second Lawsuit are within the scope of the arbitration clause.
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argument he wishes, including that the assignment is void. But, the merits of AmeriMex’s
claims are not relevant to determining whether the trial court erred in denying Osornia’s
application to compel arbitration. See AT & T Techs., Inc. v. Communications Workers of
Am., 475 U.S. 643, 649–50, 106 S. Ct. 1415, 1419, 89 L. Ed. 2d 648 (1986); Universal
Computer Systems, Inc. v. Dealer Solutions, L.L.C., 183 S.W.3d 741, 749 (Tex.
App.—Houston [1st Dist.] 2005, pet. denied). Accordingly, we overrule Osornia’s
second issue.
V. CONCLUSION
As Viking’s assignee, AmeriMex asserts tort claims against Osornia. These
claims are based upon conduct that allegedly occurred before the Settlement Agreement
was signed. We harbor no doubts as to whether AmeriMex’s claims against Osornia fall
within the scope of the arbitration clause, and this court can say with positive assurance
that the arbitration clause is not susceptible of an interpretation that would cover
AmeriMex’s claims against Osornia. These claims are not claims “arising out of” the
Settlement Agreement. AmeriMex satisfied its burden of showing that its claims against
Osornia fall outside the scope of the arbitration clause. Whether the alleged assignment is
void is not an issue relevant to determining whether AmeriMex must arbitrate these claims.
Accordingly, because these claims are not within the scope of the arbitration clause,
AmeriMex cannot be compelled to arbitrate them.
The trial court’s order is affirmed.
/s/ Kem Thompson Frost
Justice
Panel consists of Justices Frost, Seymore, and Jamison.
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