Cotton Commercial USA, Inc. v. Clear Creek Independent School District

Affirmed, in Part, and Reversed and Remanded, in Part, and Opinion filed
November 6, 2012.

In The

Fourteenth Court of Appeals

NO. 14-12-00272-CV

COTTON COMMERCIAL USA, INC., Appellant

V.

CLEAR CREEK INDEPENDENT SCHOOL DISTRICT, Appellee

On Appeal from the 405th District Court
Galveston County, Texas
Trial Court Cause No. 10-CV-4248

OPINION

Appellant, Cotton Commercial USA, Inc. (hereinafter “SURVIVING
COMPANY”), appeals the trial court’s order denying its motion to compel arbitration of
appellee’s, Clear Creek Independent School District (hereinafter “the School District”),
claims. We affirm, in part, and reverse and remand, in part.

I. BACKGROUND

On September 8, 2012, the School District executed a “Restoration Service
Agreement” with Cotton Commercial USA, L.P. d/b/a Cotton USA (hereinafter
“CONTRACTOR”) for debris removal and remediation and restoration services to the
School District’s school campuses after Hurricane Ike (the Restoration Agreement).1 It is
undisputed that the Restoration Agreement contained the following arbitration provision:

Any controversy, dispute or claim arising out of this Agreement or the
Work done hereunder (which can not [sic] be amicably resolved by senior
management representatives of Cotton and the Customer), shall first be
submitted to non-binding mediation. Both parties shall share equally in the
expense of such mediation in which a non-interested mediator shall serve to
facilitate the resolution of the dispute. If such controversy, dispute or claim
can not [sic] be settled or resolved by non-binding mediation, either party
may then submit such dispute to arbitration in accordance with the terms of
this Article VII, provided, however, that in circumstances where equitable
(non-monetary) relief is sought, such dispute may be submitted to a court of
competent jurisdiction sitting in equity who may issue injunctive relief or
other equitable remedy.2

According to the School District’s amended petition, under the Restoration
Agreement, CONTRACTOR was “to remove debris from its premises and perform
remediation and restoration services following clean up.” The Restoration Agreement
specifically authorized the use of subcontractors and provided for payment in accordance
with a rate schedule. The Restoration Agreement also authorized the use of “a particular
trade or service” on a “cost plus 10% overhead and 10% profit” basis if there was a
“specific need” because CONTRACTOR did not provide those services.

1
For purposes of this opinion, the background facts are taken largely from the School District’s
original petition.
2
Emphases added.
2
 The debris removal occurred from approximately September 18, 2008, through
September 29, 2008. Remediation occurred through the end of October 2008.
CONTRACTOR invoiced the School District, and its invoices reflected work performed
by Cottonwood Debris Company, LLC (hereinafter “SUBCONTRACTOR”). The
School District questioned the invoices; the relationship between CONTRACTOR and
SUBCONTRACTOR; and the characterization of SUBCONTRACTOR as a
“subcontractor,” which gave rise to the higher billing under the Restoration Agreement.

CONTRACTOR sent its final invoice in December 2008, but persisted in billing
SUBCONTRACTOR’S services as a subcontractor. The School District refused to pay
the 20% markup associated with SUBCONTRACTOR’S characterization as a
subcontractor because it had determined that SUBCONTRACTOR was an entity “closely
related to” CONTRACTOR.

In the subsequent negotiations over SUBCONTRACTOR’S invoices,
SUBCONTRACTOR provided the School District with documentation to support certain
fuel charges billed by SUBCONTRACTOR. The School District determined that these
were fraudulent or fabricated invoices. Further, SUBCONTRACTOR included in its
billings a $6,000 per campus charge for “food disposal services.” SUBCONTRACTOR
could not back these charges up with supporting documentation; the School District
determined from its own records that the services had not been performed at all.
SUBCONTRACTOR’S billings included a $170.73 per cubic yard charge for debris
removal that was three times the cost permitted by Federal Emergency Management
Agency (“FEMA”), to whom the School District was applying for reimbursement. The
School District informed FEMA that it had concerns about the “authenticity of the
underlying invoices from [SUBCONTRACTOR].” FEMA denied the School District’s
application, resulting in the loss of $700,000 in FEMA reimbursements.

Prior to this suit, and as alleged in the School District’s petition, CONTRACTOR
and SUBCONTRACTOR were “merged out of existence” to form SURVIVING

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COMPANY. Thus, when, on December 1, 2010, the School District filed suit arising
from the previously described conduct by SUBCONTRACTOR, the School District
named only SURVIVING COMPANY. Specifically, its claims are for fraud and money
had and received.

On May 18, 2011, SURVIVING COMPANY filed its motion to stay and compel
arbitration of the School District’s claims. In its motion to stay and to compel arbitration,
SURVIVING COMPANY stated that it had not formally asserted its counterclaims for
the School District’s failure to pay $705,123 in the action pending in the trial court
because of the arbitration clause in the Restoration Agreement. Instead, in its draft
statement of claim and demand for arbitration filed with the American Arbitration
Association, which was attached to its motion to compel arbitration, SURVIVING
COMPANY asserted causes of action for breach of contract and violations of the Prompt
Pay Act for failing to pay $705,123.

On March 1, 2012, the trial court (1) denied SURVIVING COMPANY’S motion
to stay and compel arbitration with respect to the School District’s claims against
SURVIVING COMPANY; and (2) granted SURVIVING COMPANY’S motion to stay
and compel arbitration with respect to SURVIVING COMPANY’S counterclaims
against the School District.

On April 23, 2012, the trial court made the following findings of fact:

1. After Hurricane Ike made landfall, Clear Creek Independent School
District (CCISD) and Cotton Commercial USA, L.P. d/b/a Cotton
USA (Cotton USA) entered into a contract for hurricane
remediation.

2. CCISD and Cotton USA’s contract contained on [sic] arbitration
provision.

3. Cotton USA employed a subcontractor, Cottonwood Debris
Company, LLC, to perform some hurricane remediation for CCISD.

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 4. Cottonwood was not a party [to] or a signatory to the contract
between Cotton USA and CCISD.

5. Cottonwood was not a party to or a signatory to the arbitration
agreement between Cotton USA and CCISD.

6. Cottonwood and Cotton USA merged into a single entity in
September 2010, Cotton Commercial USA, Inc. f/k/a Cottonwood
Debris Company, LLC, (Cotton Commercial).

7. In December 2010, CCISD filed suit against Cotton Commercial
asserting claims related to Cottonwood’s hurricane remediation
work.

8. Cotton Commercial failed to present any evidence demonstrating
that Cottonwood and CCISD were signatories to an arbitration
agreement.

9. Cotton Commercial failed to present any evidence demonstrating
that Cottonwood was an intended third-party beneficiary of the
contract between CCISD and Cotton USA.

The trial court also reached the following conclusions of law:

1. In the absence of an agreement to arbitrate, a party cannot be
compelled to arbitrate a claim.

2. A non-signatory to an arbitration agreement cannot compel a party
to proceed to arbitration.

3. The party moving to compel arbitration bears the burden of proving
the existence of an enforceable arbitration agreement.

SURVIVING COMPANY appeals the trial court’s order denying its motion to
compel arbitration of the School District’s claims. The School District has not appealed
the trial court’s order granting SURVIVING COMPANY’S motion to compel arbitration
of its claims against the School District.

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 II. ANALYSIS

On appeal, SURVIVING COMPANY contends that the trial court erred in
denying its motion to compel arbitration of the School District’s claims.3 The School
District asserts that its claims are actually against SUBCONTRACTOR, but it only sued
SURVIVING COMPANY because SUBCONTRACTOR ceased to exist after the
merger. The School District maintains that it cannot be compelled to arbitrate its claims
against SUBCONTRACTOR because there is no agreement to arbitrate between the
School District and SUBCONTRACTOR. The trial court determined that there was no
valid arbitration agreement. We reverse the portion of the trial court’s order denying
arbitration of the School District’s claims.

A. Whether an Agreement to Arbitrate Exists

A party must establish the existence of a valid arbitration agreement, and that the
claims fall within the scope of that agreement. In re Dilliard Dep’t Stores, Inc., 186
S.W.3d 514, 515 (Tex. 2006) (orig. proceeding) (per curiam); McReynolds v. Elston, 222

3
Although SURVIVING COMPANY relied only on the Texas General Arbitration Act (TAA)
when it moved in the trial court to compel arbitration, it has asserted on appeal that both the TAA and the
Federal Arbitration Act (FAA) are applicable. See 9 U.S.C. §§ 1–16 (West 2009) (FAA); TEX. CIV.
PRAC. & REM. CODE ANN. §§ 171.001–.098 (West 2011) (TAA). The School District asserts that
SURVIVING COMPANY has waived its argument that the FAA applies because it is being raised for the
first time on appeal. Prior to September 1, 2009, whether the TAA or the FAA applied was relevant to
determining an appellate court’s jurisdiction when a party complained of an order denying arbitration:
mandamus was the proper remedy when the FAA governed, while interlocutory appeal was the procedure
under the TAA. See TEX. CIV. PRAC. & REM. CODE ANN. § 171.098 (providing for interlocutory appeal
of orders denying arbitration under the TAA); In re Weekley Homes, L.P., 180 S.W.3d 127, 130 (Tex.
2005) (orig. proceeding) (explaining that mandamus was the proper remedy to enforce an arbitration
agreement under the FAA). The Texas Civil Practice and Remedies Code now provides for the
interlocutory appeal of a trial court’s denial of a motion to compel arbitration under the FAA. See TEX.
CIV. PRAC. & REM. CODE ANN. § 51.016 (West Supp. 2012). Therefore, parties are no longer required to
pursue such “parallel proceedings” when appealing an order denying arbitration under the TAA and the
FAA. Whether this case is governed by the FAA or the TAA, our disposition is the same. See Aspen
Tech., Inc. v. Harrity, No. 01-11-00925-CV, 2012 WL 897778, at *2 n.1 (Tex. App.—Houston [1st Dist.]
Mar. 15, 2012, no pet.) (mem. op.) (stating outcome of appeal would be the same under the FAA and
TAA); see also Forest Oil Corp. v. McAllen, 268 S.W.3d 51, 56 n.10 (Tex. 2008) (stating that whether a
case is governed by the FAA or TAA, “many of the underlying principles are the same; where
appropriate, this opinion relies interchangeably on cases that discuss the FAA and TAA”).
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S.W.3d 731, 739 (Tex. App.—Houston [14th Dist.] 2007, no pet.). Whether a valid
arbitration agreement exists is a legal question subject to de novo review. J.M. Davidson,
Inc. v. Webster, 128 S.W.3d 223, 227 (Tex. 2003).

The parties agree and the trial court determined that there is an arbitration
provision in the Restoration Agreement between CONTRACTOR and the School
District. There is, however, no arbitration agreement between the School District and
SUBCONTRACTOR. Contrary to appellant’s suggestion, SURVIVING COMPANY is
not a signatory to the Restoration Agreement. Moreover, contrary to appellee’s
insistence that its claims are “really against” SUBCONTRACTOR, the School District’s
claims are and must be against SURVIVING COMPANY, not SUBCONTRACTOR.
See Bailey v. Vanscot Concrete Co., 894 S.W.2d 757, 759 (Tex. 1995) (“Civil suits may
be maintained only by or against parties having an actual legal existence.”); Smith v. CDI
Rental Equip., Ltd., 310 S.W.3d 559, 565 (Tex. App.—Tyler 2010, no pet.) (explaining
that one of two named plaintiffs ceased to exist after it had merged with another entity
and, therefore, had no actual or legal existence).

Generally, an arbitration agreement is only enforced between signatories to the
agreement. Van Zanten v. Energy Transfer Partners, L.P., 320 S.W.3d 845, 847 (Tex.
App.—Houston [1st Dist.] 2010, no pet.). However, the trial court’s bright-line
conclusion that a nonsignatory to an arbitration agreement cannot compel a signatory to
arbitrate is clearly incorrect. “[S]ometimes a person who is not a party to the agreement
can compel arbitration with one who is, and vice versa.” Meyer v. WMCO-GP, LLC, 211
S.W.3d 302, 305 (Tex. 2006) (footnotes omitted). Texas courts recognize several
circumstances in which signatories may compel nonsignatories to arbitrate claims
covered by an arbitration agreement and vice versa.4 Thus, the question presented here is

4
As the Texas Supreme Court stated most concisely: “Several rules of law and equity may bind
nonsignatories to a contract. For example, we have held that the principles of equitable estoppel and
agency may bind nonsignatories to an arbitration agreement.” In re Labatt Food Serv., L.P., 279 S.W.3d
640, 644 (Tex. 2009) (orig. proceeding); see also id. at 644–47 (holding that nonsignatory, wrongful
death beneficiaries were bound by the decedent’s arbitration agreement); In re Merrill Lynch Trust Co.
7
whether this case falls within one of the circumstances in which Texas courts recognize
an arbitration agreement as binding between a signatory and a nonsignatory. We hold
that there is valid arbitration agreement binding upon the School District.

A corporate relationship between SURVIVING COMPANY, CONTRACTOR,
and SUBCONTRACTOR, standing alone, is insufficient to compel arbitration. See In re
Merrill Lynch Trust Co. FSB, 235 S.W.3d at 191. However, the Texas Supreme Court
recognizes an “intertwined-claims” test that has been applied by other courts in
circumstances where a nonsignatory defendant has a “close relationship” with one of the
signatories and the claims are “‘intimately founded in and intertwined with the
underlying contract obligations.’” Id. at 193–94 (quoting Thomson-CSF, S.A. v. Am.
Arbitration Ass’n, 64 F.3d 773, 779 (2d Cir. 1995)). By this exception, the court rejected
“strategic pleading” to avoid arbitration. See id. at 194; see also Grigson, 210 F.3d at
527 (“‘When each of a signatory’s claims against a nonsignatory makes reference to or
presumes the existence of the written agreement, the signatory’s claims arise out of and
relate directly to the written agreement, and arbitration is appropriate.’” (quoting M/S
Dealer Serv. Corp. v. Franklin, 177 F.3d 942, 947 (11th Cir. 1999))).

The Texas Supreme Court has also applied the “intertwined-claims” test to prevent
a signatory plaintiff from “having it both ways.” See Meyer, 211 S.W.3d at 307–08. In
Meyer, a motor vehicle manufacturer exercised its right of first refusal to acquire its
dealer’s business and then transferred its right to an assignee, thereby preempting the

FSB, 235 S.W.3d 185, 191–95 (Tex. 2007) (orig. proceeding) (recognizing that estoppel may bind a
nonsignatory to an arbitration agreement but holding that plaintiffs were not bound to arbitration
agreement under “concerted misconduct estoppel” because it was not a recognized theory of estoppel
under Texas law); In re Kellogg Brown & Root, Inc., 166 S.W.3d 732, 739 (Tex. 2005) (orig. proceeding)
(noting that nonsignatories may be bound to arbitration agreement under “direct benefits estoppel”); In re
FirstMerit Bank, N.A., 52 S.W.3d 749, 755–56 (Tex. 2001) (orig. proceeding) (holding that a
nonsignatory who sues based on a contract subjects himself to the contract’s terms, including its
arbitration agreement). The U.S. Court of Appeals for the Fifth Circuit has held that nonsignatory
defendants may compel a signatory plaintiff to arbitration. Grigson v. Creative Artists Agency, L.L.C.,
210 F.3d 524, 526 (5th Cir. 2000).

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dealer’s agreement with another buyer. Id. at 304. The thwarted buyer sued the
manufacturer and the assignee for interference with the buyer’s Purchase and Sales
Agreement (“PSA”) with the dealer. Id. These defendants demanded arbitration based
upon the arbitration provision within the PSA—to which they were not signatories. Id. at
304–05. The trial court refused arbitration; the court of appeals affirmed. Id. at 305.

The supreme court reversed and ordered the buyer’s claims in Meyer arbitrated, in
part, under a theory of intertwined claims. Specifically, the court examined the court of
appeals’ determination that the claims were not intertwined and found that determination
to be “simply wrong.” Id. at 307. Instead, the supreme court held arbitration to be proper
between the signatory (buyer) and the nonsignatories (manufacturer and assignee)
because the buyer was “asserting rights that it would not have but for the PSA, but
refusing to honor its agreement to arbitrate disputes over those rights.” Id. at 308.

The circumstances of this case more compellingly signal arbitration than those of
Meyer. The School District’s pleadings outline the Work performed under the
Restoration Agreement and detail the initial dispute over characterization of
SUBCONTRACTOR as a subcontractor, as that term is defined under the agreement.
Because of that initial dispute, SUBCONTRACTOR undertook to explain its billings—
forwarded through CONTRACTOR—in further detail. When CONTRACTOR provided
the detailed invoices, now alleged to be false, fraudulent, and inflated, the School District
sued. The School District’s dispute with SURVIVING COMPANY over
SUBCONTRACTOR’S billings is even more significantly intertwined with the
Restoration Agreement than the buyer’s claims against the manufacturer and assignee
were with the PSA in Meyer.

Moreover, the broad arbitration provision in the Restoration Agreement covers
“[a]ny controversy, dispute or claim arising out of this Agreement or the Work done
hereunder.” The trial court made the finding of fact that CONTRACTOR hired
SUBCONTRACTOR “as subcontractor to perform some remediation work for [the

9
School District].” The trial court further made a finding of fact that the School District
filed suit asserting “claims related to [SUBCONTRACTOR’S] hurricane remediation
work.” The School District does not challenge these findings.

In support of its claims for fraud and money had and received, the School District
alleged in its petition that (1) SUBCONTRACTOR fabricated gasoline invoices for
amounts of gasoline that were not delivered to SUBCONTRACTOR; (2)
SUBCONTRACTOR did not remove and dispose of spoiled food at six out of the thirty-
eight campuses; (3) SUBCONTRACTOR engaged in price gouging by invoicing the
School District for debris removal at a rate that was “nearly triple the highest cost
allowable by FEMA”; and (4) FEMA denied the School District’s application for
reimbursement for debris removal costs because of “fraudulent underlying invoices” from
SUBCONTRACTOR.

The School District never had a contract with SUBCONTRACTOR. Thus, any
right the School District has to recover damages for the outlined claims depends on the
Restoration Agreement because SUBCONTRACTOR’S obligations to the School
District arise from the Restoration Agreement. For example, SUBCONTRACTOR had
no obligation to provide invoices but for its Work under the Restoration Agreement.
Similarly, if SUBCONTRACTOR had an obligation to set prices for the Work within a
FEMA guideline, such obligation arises from the Restoration Agreement.5 In fact, the
Restoration Agreement speaks to “indirect costs associated with mobilization and
management of the related recovery services,” and Exhibit A to the Restoration
Agreement is a detailed rate schedule. The School District’s claim that
SUBCONTRACTOR claimed to have provided spoiled food (debris) removal that it did

5
In its response to SURVIVING COMPANY’S motion to compel arbitration, the School District
acknowledged that it demanded that both SUBCONTRACTOR AND CONTRACTOR repay the amounts
FEMA did not reimburse prior to releasing any final payment under the Restoration Agreement.
Although the School District argues that it resolved its dispute with CONTRACTOR, the School
District’s failure to pay the $705,123 balance on CONTRACTOR and SUBCONTRACTOR invoices
because it was not reimbursed by FEMA is the claim ordered to arbitration by the trial court.
10
not perform is a failure to perform under the Restoration Agreement. Therefore, the
School District’s claims are completely interwoven with the Restoration Agreement.

The School District is a signatory to the Restoration Agreement. The School
District agreed to arbitrate “any controversy, dispute or claim arising out of [the
Restoration Agreement] or the Work done [thereunder].”6 The School District cannot
artfully choose its defendant or plead its claims to avoid arbitration. See In re Merrill
Lynch Trust Co. FSB, 235 S.W.3d at 188.

The School District urges that permitting SURVIVING COMPANY to enforce the
arbitration clause is bad policy because it means that a company can avoid a jury trial
simply by merging into a company with an arbitration clause before it is sued. Here,
however, it is the School District’s pleading of the facts underlying its claims7 that has
controlled the determination that its claims are intertwined with and dependent upon the
Restoration Agreement. More importantly, the School District’s fear is belied by the
independent, second prong of the analysis—the dispute must fall within the scope of the
arbitration clause.

Under the unique circumstances of this case, there is a greater policy concern
arising from litigation of some claims under the Restoration Agreement and arbitration of
others, all between the same two parties. The School District does not appeal the trial
court’s order that it arbitrate the Restoration Agreement claims of SURVIVING
COMPANY—a nonsignatory—against the School District. But the School District urges
that its claims arising directly from Work performed under the Restoration Agreement
against the same nonsignatory cannot be compelled to arbitration. On this record,
therefore, SURVIVING COMPANY is arbitrating its alleged breach of contract claims

6
Emphasis added.
7
In fact, the School District devotes half of the factual background in its petition to outlining the
terms of the Restoration Agreement and its receipt of “Invoices From a Sham ‘Subcontractor’—
Cottonwood Debris Company, LLC—With a 20% Markup.” The propriety of the markup for work
performed by Cottonwood as a subcontractor cannot be characterized as anything other than a dispute
under the Restoration Agreement.
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against the School District, yet the School District is litigating its complaints regarding
invoices and performance that could be characterized as also defensive to the contract
claims. It would be contrary to Texas policy favoring arbitration and against artful
pleading to avoid arbitration to allow the School District to avoid its agreement to
arbitrate claims or to piecemeal such claims in two forums simply because its contracting
counterpart has merged with another company.

B. Scope of the Arbitration Agreement

We now turn to the School District’s assertion that its claims for fraud and money
had and received do not fall within the scope of the arbitration agreement.

In determining whether a claim falls within the scope of an arbitration agreement,
we focus on the factual allegations of the complaint rather than the causes of action
asserted. Prudential Sec., Inc. v. Marshall, 909 S.W.2d 896, 900 (Tex. 1995) (orig.
proceeding) (per curiam). The party opposing arbitration has the burden to show that the
claims fall outside the scope of the arbitration agreement. Id. Courts must resolve any
doubts about an arbitration agreement’s scope in favor of arbitration. In re FirstMerit
Bank, N.A., 52 S.W.3d at 753. A court should not deny arbitration unless it can be said
with positive assurance that an arbitration agreement is not susceptible to an
interpretation that would cover the dispute at issue. McReynolds, 222 S.W.3d at 740.

The presumption of arbitrability is particularly applicable where 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.”
Babcock & Wilcox Co. v. PMAC, Ltd., 863 S.W.2d 225, 230 (Tex. App.—Houston [14th
Dist.] 1993, writ denied). “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.” Id.

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 If the facts alleged “touch matters,” have a “significant relationship” to, are
“inextricably enmeshed” with, or are “factually intertwined” with the contract containing
the arbitration agreement, the claim is arbitrable. Pennzoil Co. v. Arnold Oil Co., 30
S.W.3d 494, 498 (Tex. App.—San Antonio 2000, orig. proceeding) (citing Hou-Scape,
Inc. v. Lloyd, 945 S.W.2d 202, 205–06 (Tex. App.—Houston [1st Dist.] 1997, orig.
proceeding)). However, “[i]f 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.” Id. (citing Fridl v. Cook,
908 S.W.2d 507, 511 (Tex. App.—El Paso 1995, writ dism’d w.o.j.)).

We conclude that the School District’s claims for fraud and money had and
received fall within the scope of the arbitration agreement. The arbitration agreement
provides for arbitration of “[a]ny controversy, dispute or claim arising out of this
Agreement or the Work done hereunder.” The School District’s claims are based on
SUBCONTRACTOR’S alleged (1) fabrication of gasoline invoices submitted to
substantiate charges for Work performed under the Restoration Agreement; (2) failure to
perform the actual removal/disposal of food at several campuses for which it had
submitted invoices under the Restoration Agreement; and (3) price gouging by charging
an inflated rate for Work performed under the Restoration Agreement in which rates are
established by the Restoration Agreement. Therefore, the School District’s claims “touch
matters,” have a “significant relationship” to, are “inextricably enmeshed” with, and are
“factually intertwined” with the Restoration Agreement, and cannot stand alone.

III. CONCLUSION

We conclude that the trial court erred by not compelling arbitration of the School
District’s claims against SURVIVING COMPANY—Cotton Commercial USA, Inc.—
and sustain its first issue.8 Accordingly, we reverse that part of the trial court’s order

8
SURVIVING COMPANY also initially asserted that the trial court erred by denying its motion
to stay the trial court proceedings. On May 25, 2012, after SURVIVING COMPANY filed its opening
13
denying arbitration of Clear Creek Independent School District’s claims against Cotton
Commercial USA, Inc. and remand to the trial court for proceedings consistent with this
opinion, and affirm the remainder of the order.

/s/ Sharon McCally
Justice

Panel consists of Justices Boyce, Christopher, and McCally.

brief in this court, the trial court granted the parties’ joint motion to stay the case. Therefore, we need not
address this contention.
SURVIVING COMPANY also brought a second issue in this appeal, in which it contends that, if
this court determines that disputed fact issues exist, then the trial court erred by failing to conduct an
evidentiary hearing. Because we hold that the trial court erred by not compelling arbitration, we need not
address the second issue.
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