ACCEPTED
13-14-00641-CV
THIRTEENTH COURT OF APPEALS
CORPUS CHRISTI, TEXAS
4/23/2015 5:14:13 PM
DORIAN RAMIREZ
CLERK
FILED IN
NO. 13-14-00641-CV 13th COURT OF APPEALS
CORPUS CHRISTI/EDINBURG, TEXAS
4/23/2015 5:14:13 PM
__________________________________________________________________
DORIAN E. RAMIREZ
Clerk
IN THE COURT OF APPEALS
FOR THE 13th DISTRICT OF TEXAS
__________________________________________________________________
AOF SERVICES, LLC
Appellant
v.
RONALD SANTORSOLA
Appellee
ON APPEAL FROM AN INTERLOCUTORY ORDER OF THE
2nd 25th DISTRICT COURT OF GONZALES COUNTY, TEXAS
TRIAL COURT NO. 25,609-CV
REPLY BRIEF FOR THE APPELLANT
AOF SERVICES, LLC
Paul C. Allred
Texas Bar No. 01102000
8150 N. Central Expressway, Suite 700
Dallas, TX 75206
Tel (214) 448-9496
Fax (214) 276-1325
paulallred@msn.com
Attorney for Appellant
TABLE OF CONTENTS
CERTIFICATE OF COMPLIANCE .......................................................... ii
TABLE OF AUTHORITIES ........................................................................ iii
SUMMARY OF THE ARGUMENT ........................................................... 5
ARGUMENT AND AUTHORITIES .......................................................... 6
CONCLUSION/PRAYER.............................................................................. 12
CERTIFICATE OF SERVICE ..................................................................... 13
APPENDIX…………………………………..……………………….……….14
CERTIFICATE OF COMPLIANCE
I certify that this document was produced on a computer using Microsoft
Word and contains 1,910 words, as determined by the computer software’s word-
count function, excluding the sections of the document listed in Texas Rule of
Appellate Procedure 9.4(i)(1).
Paul C. Allred
TABLE OF AUTHORITIES
CASES page
Royston, Rayzor, Vickery & Williams, L.L.P. v. Lopez…………….…… 6, 7
2013 Tex. App. LEXIS 7843 at *23
(Tex. App. – Corpus Christi, June 27, 2013)
In re Poly-America, L.P. …………………………………………………… 7
262 S.W.3d 337, 355-56 (Tex. 2008) (orig. proceeding)
In re Fleetwood Homes of Texas, L.P……………………………………... 7
257 S.W.3d 692, 695 (Tex. 2008) (per curium)
APPELLANT’S REPLY BRIEF -Page 3
SUMMARY OF APPELLANT’s REPLY ARGUMENT
The Appellee’s arguments that the arbitration agreement is unconscionable
because it is one sided, because it unfairly limits discovery, and because it unfairly
splits fees, are all unsupported.
The arbitration agreement is bilateral between the parties.
The arbitration agreement does not unfairly limit discovery.
And the arbitration agreement does not unfairly split fees.
Accordingly, the evidence submitted by Appellee does not support the trial
court’s finding that the arbitration agreement was unconscionable on any of these
grounds. Therefore, the trial court erred in denying AOF’s Plea in Abatement and
Motion to Compel Arbitration.
AOF respectively requests this Court to reverse the trial court’s order
denying AOF’s Plea in Abatement and Motion To Compel Arbitration, and render
judgment in favor of Appellant compelling arbitration and abating pending suit
pending resolution of the arbitration proceeding.
APPELLANT’S REPLY BRIEF -Page 4
APPELLANT’s REPLY ARGUMENT AND AUTHORITIES
A. The arbitration agreement is a bilateral agreement to arbitrate that
applies equally to AOF and Appellee
Appellee argues that only his claims are subject to arbitration, while AOF’s
claims are excluded. This is contrary to the unambiguous language of the
arbitration agreement.
The arbitration agreement provides that:
“any claim, controversy, or other dispute relating to
my employment, separation from the company, or
following separation from the company, shall be resolved
by arbitration.” (Apx: Exhibit A at p4)
This agreement applies equally to employer and employee.
The agreement has certain exceptions, but these exceptions again apply
equally to employer and employee, and are primarily for claims subject to
administrative procedures.
The case Appellee relies on is wholly distinguishable and illustrates how an
agreement that a court found is one-sided is different from the AOF arbitration
agreement. In Royston, Rayzor, Vickery & Williams, L.L.P. v. Lopez, 2013 Tex.
App. LEXIS 7843 at *23 (Tex. App. – Corpus Christi, June 27, 2013), an attorney
engagement agreement provided that disputes about services provided under the
APPELLANT’S REPLY BRIEF -Page 5
agreement would be subject to arbitration but a dispute over payment of services
would not. Id. at *2. That is two sides of the same coin, and it is thus not
surprising that, particularly in an attorney/client agreement where a fiduciary duty
is owed to the client, the court found this to be unfairly one-sided.
The opposite is true here. The arbitration agreement does not provide that
one type of claim is arbitrable for the employee but not for the employer. Thus,
Appellee failed to meet his burden of proving that the arbitration agreement is
substantively unconscionable.
B. The arbitration agreement does not unfairly limit discovery
The arbitration agreement’s limitation on discovery is appropriate and fully
enforceable.
The Texas Supreme Court held that “limited discovery is one of arbitration’s
‘most distinctive features.’” In re Fleetwood Homes of Texas, L.P., 257 S.W.3d
692, 695 (Tex. 2008) (per curium). The Court further noted that the argument that
“‘streamlined’ discovery makes arbitration unconscionable would nullify almost
all arbitration agreements. We hold that arbitration's limits on discovery for both
parties does not make it unconscionable.” Id.
Likewise, the Supreme Court in Poly-America held that discovery limits of
APPELLANT’S REPLY BRIEF -Page 6
25 interrogatories and 25 requests for production in the arbitration agreement at
issue in that case were not substantively unconscionable.
Appellee’s so-called evidence in support of his response to the motion to
compel in which Appellee’s counsel states that in these types of cases he sends
“approximately 85 requests for production” and “21 interrogatories with permitted
subparts” (see Apx: Exhibit B p1) is no evidence at all.
Appellee fails to identify and provide specific evidence as to why the
Appellee cannot reasonably meet his proof burden based upon the discovery that is
provided for in the arbitration agreement.
Appellee fails to provide specific evidence of what information Appellee
reasonably must obtain from AOF in the additional 60 requests for production and
the additional 7 Interrogatories that Appellee’s attorney allegedly normally serves
in this type of case, and why that information is not otherwise reasonably
obtainable through deposition testimony, or any other discovery that the parties
could agree to.
Furthermore, Appellee fails to provide any evidence that Appellee cannot
reasonably obtain the information he needs to meet his burden of proof under the
discovery limitations in the arbitration agreement.
APPELLANT’S REPLY BRIEF -Page 7
C. The fee-splitting agreement in the arbitration agreement is fair and
reasonable
Appellee’s argument that the arbitration agreement is substantively
unconscionable because it requires the Appellee to pay “astronomical” arbitration
costs is unsupported by the Espinoza affidavit.
The Espinoza affidavit states that the arbitration of the Christine Torres v.
Stagg Restaurants case to which the attached aribtors’ invoice is attached was for
an arbitration that lasted only one day, stating in relevant part:
“…The arbitration took place in San Antonio, TX in the
spring of 2013 and lasted only one day.” (Apx: Exhibit B at
p1)
This statement directly conflicts with the arbitrator’s invoice which identifies
anticipated arbitrator’s fees and costs for three days of arbitration (identified on the
invoice as the days of 01/22/2013, 01/22/2013, and 01/23/2013), stating in relevant
part:
“..Your Share of the Neutral Compensation Deposit
covering 3 days of Hearing…..7,500” (Apx: Exhibit B at p2)
Additionally, the Invoice/Statement reflects anticipated arbitrator’s charges
of $7,500 for 24 hours of Study.
The Invoice/Statement attached to the Espinoza affidavit is only a cost
APPELLANT’S REPLY BRIEF -Page 8
estimate, or a request for a deposit for a three day arbitration and a deposit for 24
hours’ worth of “Study” by the arbitrator.
The Invoice/Statement on its face is not a representation of the actual costs
incurred in the arbitration of the Christine Torres v Stagg Restaurants case.
The Espinoza affidavit states that the “Total cost for the entire arbitration,
from start to finish, was $20,225.” This large figure is not represented on the
attached Invoice/Statement anywhere, and based upon the Invoice/Statement it
cannot be accurate or valid for the actual charges incurred for a one day arbitration,
which could only reasonably be guessed at being a third of the $17,250 figure of
the Invoice/Statement.
There is no evidence that 24 hours of “Study” for the arbiter would be
applicable to the arbitration of Appellee’s claim against AOF.
Not only does the Espinoza affidavit completely misrepresent the arbitrator’s
actual charges for a 1 day arbitration based on the attached Invoice/Statement,
more critically it fails to ever state: a) that the arbitration of Appellee’s claims
against AOF in this dispute will require 3 days arbitration and 24 hours of “Study”
by the arbitrator so that an arbitrator’s fee in excess of $20,000 is reasonably
anticipated; and b) that the Appellee will likely actually incur arbitration costs
exceeding $5,000.
APPELLANT’S REPLY BRIEF -Page 9
The Espinoza affidavit states that Appellee’s case against AOF is very
similar to the Christine Torres v Stagg Restaurants case, which at best implies that
it would require a 1 day arbitration, since it identifies the cases as being similar,
and not a 3 day arbitration.
Based on the Invoice/Statement, the arbitrator’s fees for a 1 day arbitration
in the Christine Torres v Stagg Restaurants case could not possibly be the $20,225
asserted in the affidavit. The Invoice/Statement does not state what the
arbitrator’s fees actually were for a 1 day arbitration in the Christine Torres v
Stagg Restaurants case.
What the Espinoza affidavit specifically states regarding the anticipated
arbitrator’s fees is as follows:
“If Mr. Santorsola is required to arbitrate his case through
a similar arbitration association, the cost for the arbitration
and litigation process will reasonably exceed $5,000, if he is
require to pay approximately twenty percent of the costs”.
(Apx: Exhibit B at p1)
Espinoza’s statement in the affidavit alleges that the entire cost of the
arbitration and litigation process will reasonably exceed $5,000, but fails to
specifically allege what Mr. Santorsola’s portion of those costs would be.
The affidavit fails to specifically state what Mr. Santorsola’s anticipated
portion of the anticipated arbitrator’s fees would be.
APPELLANT’S REPLY BRIEF -Page 10
In additional support for its argument, Appellee also submits the affidavit of
Ronald Santorsola (Apx: Exhibit C), which states in relevant part:
“…If it is determined that I must bring my lawsuit against
my employer in arbitration, and risk having to pay over
$5,000 in arbitrator fees, I will probably not continue with
my claim. This risk is too great for me and I do not have
that type of money…” (Apx: Exhibit C at p1)
Santorsola’s affidavit does not state that he reasonably anticipates incurring $5,000
in arbitrator’s fees in the arbitration of his claim against AOF.
Neither the Espinoza nor the Santorsola affidavits state what the actual
anticipated arbitrator’s costs Santorsola reasonably anticipates incurring would be
for the arbitration of his claim against AOF.
The record fails to offer any evidence of what the actual anticipated
arbitrator’s costs Santorsola reasonably anticipates incurring would be.
APPELLANT’S REPLY BRIEF -Page 11
CONCLUSION/PRAYER
For the reasons stated herein, AOF requests this Court to find that the trial
court erred by finding that 1) the arbitration agreement is unconscionable, and 2)
that the arbitration agreement is unenforceable. AOF requests this Court to find
that the trial court erred by denying the Plea in Abatement and Motion to Compel
Arbitration.
Accordingly, AOF respectfully requests that the order denying the Plea in
Abatement and Motion to Compel Arbitration be reversed. In the alternative, AOF
prays that this Court remand this cause to the trial court for further proceedings
consistent with its opinion on the issues presented herein. AOF further requests
that this Court award it its costs of court on appeal.
AOF further prays for such other and further relief, both general and special,
at law or in equity, to which it is justly entitled, and for which it will ever pray.
APPELLANT’S REPLY BRIEF -Page 12
Respectfully Submitted,
LAW OFFICES OF PAUL C. ALLRED
Paul C. Allred
State Bar Number: 001102000
Campbell Centre II
8150 North Central Expressway, Suite 700
Dallas, Texas 75206
Telephone Number (214) 449-9496
Facsimile Number (214) 276-1325
ATTORNEY FOR APPELLANT
CERTIFICATE OF SERVICE
The undersigned attorney at law, does hereby certify that a true and correct
copy of the foregoing attached instrument has been served upon the Appellee,
Ronald Santorsola by and through his respective attorney of record on this the 23rd
day of April, 2015.
Paul C. Allred
APPELLANT’S REPLY BRIEF -Page 13
APPENDIX
Exhibit A: Affidavit for Admission of Business Records
Exhibit B: Affidavit of Javier Espinoza
Exhibit C: Affidavit of Ronald Santorsola
APPELLANT’S REPLY BRIEF -Page 14
APPELLANT’s REPLY BRIEF
EXHIBIT A
EXHIBIT A
APPELLANT’s REPLY BRIEF
EXHIBIT B
APPELLANT’s REPLY BRIEF
EXHIBIT C