Service Finance Company v. Adriatic Insurance Company

IN THE

TENTH COURT OF APPEALS

No. 10-99-027-CV

     SERVICE FINANCE,

                                                                              Appellant

     v.

     ADRIATIC INSURANCE COMPANY, ET AL.,

                                                                              Appellees

From the 74th District Court

McLennan County, Texas

Trial Court # 90-445-3

                                                                                                                

MEMORANDUM OPINION

                                                                                                                

      We decided this appeal in an opinion issued on May 2, 2001. See Service Fin. v. Adriatic Ins. Co., No. 10-99-027-CV, 2001 Tex. App. LEXIS 2934 (Tex. App.—Waco May 2, 2001, no pet. h.). The parties have since filed a joint motion to dismiss this appeal. In relevant portion, Rule 42.1(a) of the Texas Rules of Appellate Procedure provides:

(a) The appellate court may dispose of an appeal as follows:

(2) in accordance with a motion of appellant to dismiss the appeal or affirm the appealed judgment or order; but no other party may be prevented from seeking any relief to which it would otherwise be entitled.

Tex. R. App. P. 42.1(a)(2).

      The parties state that they have settled their controversy and ask this Court to dismiss this appeal. However, they do not request that we withdraw our May 2 opinion. Rule of Appellate Procedure 42.1(c) requires this Court to determine whether we will withdraw the opinion. See id. 42.1(c).

      As we have stated on a prior occasion in a similar situation, “[b]ecause our opinion in this case addresses matters of public importance, our duty as a public tribunal constrains us to publish our decision.” Polley v. Odom, 963 S.W.2d 917, 918 (Tex. App.—Waco 1998, order, no pet.). Accordingly, we vacate our prior judgment dated May 2, 2001 and substitute in its place a judgment of even date herewith dismissing this appeal. We will not withdraw our prior opinion. See id. Costs are taxed against the party incurring same.

                                                                   PER CURIAM

Before Chief Justice Davis,

      Justice Vance, and

      Justice Gray

Appeal dismissed

Opinion delivered and filed June 20, 2001

Publish

bts about an arbitration agreement’s scope in favor of arbitration.  In re FirstMerit Bank, N.A., 52 S.W.3d 749, 753 (Tex. 2001). 

 

            Arbitration agreements are interpreted under traditional contract principles.  J.M. Davidson, 128 S.W.3d at 227.  If the trial court finds a valid agreement, the burden shifts to the party opposing arbitration to raise an affirmative defense to enforcing arbitration.  Id.  Absent a defense to enforcing the arbitration agreement, the trial court has no discretion but to compel arbitration and stay its own proceedings.  In re J.D. Edwards World Solutions Co., 87 S.W.3d 546, 549 (Tex. 2002) (per curiam).

 

LDF Constr., Inc. v. Bryan, No. 10-08-00315-CV, 2010 WL 1052863, at *2 (Tex. App.—Waco Mar. 10, 2010, no pet. h.).

            Souter and Rossa assert that the provision is not an arbitration provision because it is not specifically identified as an “arbitration” agreement.  We disagree.  An arbitration agreement does not have to be in any particular form.  Manes v. Dallas Baptist College, 638 S.W.2d 143, 145 (Tex. App.—Dallas 1982, writ ref’d n.r.e.).  An agreement in any form is only arbitration if it meets the definition of “arbitration.”  In re Anaheim Angels Baseball Club, Inc., 993 S.W.2d 875, 879-80 (Tex. App.—El Paso 1999, orig. proceeding).  Arbitration has been defined as

a contractual proceeding by which the parties to a controversy or dispute, in order to obtain a speedy and inexpensive final disposition of matters involved, voluntarily select arbitrators or judges of their own choice, and by consent submit the controversy to such tribunal for determination in substitution for the tribunals provided by the ordinary processes of the law.

 

Jack B. Anglin Co. v. Tipps, 842 S.W.2d 266, 268 (Tex. 1992).  Another definition is:

 

A method of dispute resolution involving one or more neutral third parties who are usu. agreed to by the disputing parties and whose decision is binding.

 

Black’s Law Dictionary 119 (9th ed. 2009).

 

            The provision at issue is an arbitration agreement.

            Souter and Rossa next assert that the provision only covers the issue of damages and that therefore liability can be litigated.  We disagree.

To determine whether an arbitration agreement covers a party’s claims, a court must focus on the complaint’s factual allegations, not the legal causes of action asserted.  FirstMerit Bank, 52 S.W.3d at 754.  We are to construe arbitration clauses broadly, and when a contract contains an arbitration clause, there is a presumption of arbitrability.  See AT & T Tech., Inc. v. Communications Workers of Am., 475 U.S. 643, 650, 106 S. Ct. 1415, 1419, 89 L. Ed. 2d 648 (1986).  Any doubts as to arbitrability are to be resolved in favor of coverage.  FirstMerit Bank, 52 S.W.3d at 754.  Likewise, we resolve any doubts about the scope of the arbitration agreement in favor of coverage.  Id.  In fact, the policy in favor of enforcing arbitration agreements is so compelling that a court should not deny arbitration unless it can be said with positive assurance that an arbitration clause is not susceptible of an interpretation covering the dispute at issue.  Prudential Sec., Inc. v. Marshall, 909 S.W.2d 896, 899 (Tex. 1995).

            Generally, if the facts alleged “touch matters” that are covered by, have a “significant relationship” to, are “inextricably enmeshed” with, or are “factually intertwined” with the contract that contains the arbitration agreement, the claims are arbitrable.  Pennzoil Co. v. Arnold Oil Co., 30 S.W.3d 494, 498 (Tex. App.—San Antonio 2000, orig. proceeding).  In other words, to come within the scope of the arbitration provision, a party’s allegations need only be factually intertwined with arbitrable claims or otherwise touch upon the subject matter of the agreement containing the arbitration provision.  See Prudential, 909 S.W.2d at 900; Jack B. Anglin Co., 842 S.W.2d at 271.

            In their petition, Souter and Rossa plead that the whole purpose of the addendum was to add requirements governing ETF’s actions on the properties and the restoration of the properties’ surface.  Their factual allegations regarding surface damage caused and not remediated by ETF pertain to both liability and damages, which are factually intertwined.  Therefore, we hold that all the claims against ETF are within the scope of the arbitration agreement and sustain ETF’s sole issue.  We reverse the trial court’s order denying ETF’s motion to compel arbitration and remand this case for the entry of an order compelling the parties to arbitration and for further proceedings consistent with this opinion.

 

 

REX D. DAVIS

Justice

           

Before Chief Justice Gray,

Justice Reyna, and

Justice Davis

Reversed and remanded

Opinion delivered and filed April 21, 2010

[CV06]

 

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[1] Souter and Rossa also sue for specific performance under the agreement and for declaratory judgment relating to disputes on interpretation of the agreement.

 

[2] In their petition, Souter and Rossa assert that ETF breached the agreement by:

·         Failing to restore the low water crossings;

·         Rendering the existing low water crossings unusable;

·         Creating ridges on the properties that divert water flow and cause erosion;

·         Failing to re-seed the properties with native grasses;

·         Failing to restore proper gating;

·         Failing to accurately and properly mark the pipelines; and

·         Failing to perform proper erosion control.

 

[3] ETF asserts that the Federal Arbitration Act applies because the pipeline involves interstate commerce.  See 9 U.S.C. § 2.  Souter and Rossa do not disagree.