NUMBER 13-16-00204-CV
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI - EDINBURG
HENRY & SONS CONSTRUCTION CO., INC., Appellant,
v.
PABLO CAMPOS, Appellee.
On appeal from the County Court at Law No. 2
of Nueces County, Texas.
DISSENTING OPINION
Before Justices Rodriguez, Benavides, and Perkes
Dissenting Opinion by Justice Perkes
I respectfully dissent from the majority. I believe the arbitration agreement is not
illusory and is therefore valid and enforceable.
I. ARBITRATION
The majority correctly recites the facts of this case and correctly states the
standard of review and applicable law. However, I disagree with the majority’s
interpretation and application of the controlling precedent. I would conclude that the
arbitration agreement is valid and that the trial court erred by denying HSC’s motion to
compel arbitration.
A. Arbitration Agreements
The majority correctly states that where an arbitration clause is subject to unilateral
modification or termination, such agreements are upheld as binding when they feature
guarantees to prior notice and no retroactive application. See In re Halliburton Co., 80
S.W.3d 566, 569–70 (Tex. 2002). However, the majority concludes that because HSC’s
arbitration agreement did not provide for advance notice of modification, the agreement
is illusory and not mutually binding.
In Halliburton, the Texas Supreme Court analyzed language from an arbitration
agreement and concluded that the agreement was not illusory. Id. at 570. Halliburton’s
employee alleged that because the company was able to modify or terminate its
arbitration agreement, the promise to arbitrate was illusory and therefore unenforceable.
Id. at 569–70. The Halliburton agreement stated, however, that “no amendment shall
apply to a Dispute of which the Sponsor [Halliburton] had actual notice on the date of
amendment.” Id. Further, the termination provision stated that “termination shall not be
effective until 10 days after reasonable notice of termination is given to Employees or as
to Disputes which arose prior to the date of termination.” Id. Because Halliburton could
not avoid its promise to arbitrate by amending or terminating the dispute resolution
program, the Supreme Court held the arbitration agreement was not illusory. Id. at 570.
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Since Halliburton, the Supreme Court has addressed the requirements of
arbitration agreements on several occasions. In AdvancePCS Health, the court
considered whether an arbitration agreement was illusory where the management
company retained the right to terminate the agreement with contemporaneous notice to
the member pharmacies. See In re AdvancePCS Health LP, 172 S.W.3d 603, 607 (Tex.
2005). The agreement provided a 30-day window during which the arbitration clause
could not be cancelled and included a “savings clause” preventing any cancellation from
applying retroactively. See id. The court concluded that the agreement was not illusory
because had the pharmacies invoked arbitration rather than filing suit, the company could
not have avoided arbitration by terminating the agreement. See id. at 608–09. Likewise
in Polymerica, the Supreme Court again rejected an illusory-agreement argument. See
In re Polymerica, LLC, 296 S.W.3d 74, 76 (Tex. 2009). There, the termination provision
required notice to employees and applied prospectively only. See id. The court applied
the same logic, explaining that the company could not avoid its promise to arbitrate by
amending the provision or terminating it altogether. See id. (citing In re Halliburton, 80
S.W.3d at 570.)
B. Analysis
In the present case, HSC’s arbitration agreement expressly states that “revisions
to this Policy shall only apply prospectively . . . revisions will apply only to those claims
based upon actions or events that occur following the effective date of the revisions.”
Regarding termination, the agreement states that “HSC shall provide at least thirty days’
notice of any termination of the Policy. Any claim . . . that was initiated prior to the
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effective date . . . shall not be affected by such termination.” While the agreement does
not explicitly require HSC to provide the employee with advance notice of any modification
of the agreement, I do not believe such notice is required. Rather, the crux of the matter
is whether HSC or Campos can unilaterally avoid their mutual promises to arbitrate. See
In re AdvancePCS Health LP, 172 S.W.3d at 607. They cannot.
The arbitration agreement, based on its prospective application and advance
notice of termination, prevents HSC from avoiding its promise to arbitrate by amending
the agreement or cancelling it altogether. Had HSC initiated a suit against Campos, he
would have retained his right to compel HSC to arbitrate and HSC would have been
unable to avoid its obligation to do so. See In re Polymerica, LLC, 296 S.W.3d at 76.
The arbitration agreement is similar to the agreement in Halliburton and, if anything, it
provides more protection by giving thirty days’ notice of termination rather than ten days.
See In re Halliburton, 80 S.W.3d at 570. Thus, I would conclude that the arbitration
agreement is not illusory, and I would sustain HSC’s first issue.
II. CONCLUSION
Because the arbitration agreement applies prospectively and provides for notice
of termination, it is not illusory. Therefore, I would reverse the order of the trial court
denying HSC’s motion to compel arbitration. For the foregoing reasons, I respectfully
dissent.
GREGORY T. PERKES
Justice
Delivered and filed the
6th day of October, 2016.
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