Fourth Court of Appeals

San Antonio, Texas

OPINION

No. 04-13-00273-CV

IBS ASSET LIQUIDATIONS LLC f/k/a Icon Building Systems, LLC,

Appellant

v.

Multiples Del Norte SA de 

SERVICIOS MULTIPLES DEL NORTE SA DE CV,

Appellee

From the 150th Judicial District Court, Bexar County, Texas

Trial Court No. 2012-CI-06095

Honorable Richard Price, Judge Presiding

Opinion by: Sandee Bryan Marion, Justice

Dissenting opinion by: Patricia O. Alvarez, Justice

Sitting: Sandee Bryan Marion, Justice

Marialyn Barnard, Justice

Patricia O. Alvarez, Justice

Delivered and Filed: November 20, 2013

REVERSED AND REMANDED

In this interlocutory appeal, IBS Asset Liquidations LLC, formerly known as Icon Building 

Systems, LLC, (“Icon”), appeals the trial court’s denial of its motion to compel arbitration 

asserting Servicios Multiples Del Norte SA de CV (“Servicios”) failed to offer any evidence in 

support of its defense of waiver. We reverse and remand.
04-13-00273-CV

BACKGROUND

Servicios and Icon entered into a contract under which Icon agreed to design and 

manufacture airplane hangars for installation in Mexico. The contract contained an arbitration 

clause which provided:

[A]t [Icon’s] sole and exclusive option, all claims, disputes or controversies arising 

out of, or in relation to the interpretation, application, or enforcement of this 

Contract shall be decided by arbitration utilizing a single arbitrator . . . The parties 

acknowledge and agree that this Agreement includes activities in Interstate 

Commerce and that the Federal Arbitration Act . . . shall control and apply to any 

arbitration conducted hereunder.

On November 1, 2010, Servicios filed suit in McLennan County against Icon asserting 

breach of contract, DTPA claims, conversion, negligence, gross negligence, and fraud claims. Icon 

filed an answer, participated in discovery, and, in April of 2012, the parties filed a joint motion to 

transfer to Bexar County. The case was set for a jury trial in Bexar County on August 19, 2013. 

On March 22, 2013, nearly two and one-half years after the suit was initiated and approximately 

five months before trial was set to commence, Icon filed a motion to compel arbitration pursuant 

to the contract between the parties. Servicios filed a response, asserting waiver of arbitration. On 

April 9, 2013, the trial court denied Icon’s motion to compel arbitration and this interlocutory 

appeal followed.

WAIVER OF ARBITRATION

“There is a strong presumption against waiver of arbitration, but it is not irrebuttable . . . .” 

Perry Homes v. Cull, 258 S.W.3d 580, 584 (Tex. 2008). Waiver of arbitration is a question of law. 

In re Medallion, Ltd., 70 S.W.3d 284, 288 (Tex. App.—San Antonio 2002, orig. proceeding). We 

review whether a party has waived its right to arbitration de novo, giving no deference to the trial 

court’s ruling. Perry Homes v. Cull, 258 S.W.3d 580, 598 (Tex. 2008). A party waives arbitration 

by substantially invoking the judicial process to the other party’s detriment. Perry Homes, 258 

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S.W.3d at 589-90; J.B. Hunt Transport, Inc. v. Hartman, 307 S.W.3d 804, 810 (Tex. App.—San 

Antonio 2010, orig. proceeding). “Due to the strong presumption against waiver of arbitration, 

this hurdle is a high one.” Perry Homes, 258 S.W.3d at 590. The test for determining waiver 

requires us to ask (1) whether the party seeking arbitration substantially invoked the judicial 

process; and (2) whether the opposing party proved it suffered prejudice as a result. Medallion, 

79 S.W.3d at 288. This test requires us to look at the totality of the circumstances. Perry Homes, 

258 S.W.3d at 591.

We agree with the dissent’s analysis and conclusion that Icon’s participation amounted to 

Icon “substantially invoking the judicial process.” However, we must conclude Servicios did not 

carry its burden to prove the second requirement, i.e., that it would suffer prejudice if compelled 

to arbitration. In its response to Icon’s motion to compel arbitration, Servicios asserted:

By substantially invoking the judicial process, [Icon] has prejudiced [Servicios]. 

[Servicios] invested a significant amount of time and expense into litigating this 

case over the past 2 1⁄2 years. [Servicios] has incurred significant attorney’s fees 

and costs associated with litigation preparation. 

However, showing prejudice is generally an evidentiary burden. Williams Indus., Inc. v. Earth 

Dev. Sys. Corp., 110 S.W.3d 131, 135 (Tex. App.—Houston [1st Dist.] 2003, no pet.). Here, no 

evidentiary hearing was held on the motion to compel and Servicios did not attach any evidence 

to its response to support its general allegations. Generalized complaints about delay and expense, 

without evidentiary support, are insufficient to establish prejudice. Pennzoil Co. v. Arnold Oil Co., 

Inc., 30 S.W.3d 494, 499 (Tex. App.—San Antonio 2000, orig. proceeding); see also Williams 

Indus., 110 S.W.3d at 135 (Tex. App.—Houston [1st Dist.] 2003, no pet.) (“to show prejudice . . .

EDS would have had to show how the delay, its fees and costs, the volume of discovery, or the 

information that Williams obtained in discovery had prejudiced EDS. EDS did not do so.”); Lyda 

Swinerton Builders, Inc. v. Pools by Blue Haven, Inc., No. 04-10-00631-CV, 2011 WL 721469, 

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04-13-00273-CV

*6 (Tex. App.—San Antonio March 2, 2011, no pet.) (concluding no waiver of right to arbitrate 

and stating, “[a]bsent from the record . . . is any evidence detailing the time and resources allegedly 

expended by Blue Haven in connection with this matter”). 

In Perry Homes, the Supreme Court considered several factors, including when the movant 

knew about the arbitration clause, how much discovery has been conducted, who initiated the 

discovery, whether the discovery related to the merits rather than arbitrability, how much of the 

discovery would be useful in arbitration, and whether the movant sought judgment on the merits. 

258 S.W.2d at 592. Here, the arbitration clause is contained in the parties’ contract; therefore; 

Icon either knew or should have known about the clause before it was sued on November 1, 2010. 

Icon did not move for arbitration until March 22, 2013. But, “[w]e do not consider the length of 

any delay separate from the totality of the circumstances.” In re ADM Investor Serv., Inc., 304 

S.W.3d 371, 374 (Tex. 2010) (citing to Perry Homes, 258 S.W.3d at 595-97).

As the dissent notes, the arbitration clause provides that “[e]xcept for the exchange of 

relevant, material and non-privileged documents between the Parties and a reasonable number of 

depositions, there shall be no interrogatories or other discovery in any arbitration hereunder.” We 

disagree with the dissent’s conclusion that Icon obtained the benefits of discovery. Our review is 

limited to the record before the trial court. Perry Homes, 258 S.W.3d at 596, n.89. Because there 

was no evidentiary hearing, because Servicios did not attach evidence to its response to the motion 

to compel arbitration, and because Servicios did not ask the trial court to take judicial notice of its 

files, the only record before the court was Servicios’s response. Its response listed a number of 

pleadings allegedly filed by both parties. However, a close examination of this list reveals all of 

Icon’s “discovery” consisted only of its designation of fact and expert witnesses and Icon’s 

responses to discovery requested by Servicios. “[A] party who requests lots of discovery is not 

prejudiced by getting it and taking it to arbitration in the same way that a party who produces lots 

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04-13-00273-CV

of discovery outside the stricter discovery limits in arbitration.” Id. at 600. The record before the 

trial court does not show whether any of the requested discovery went to the merits rather than to 

arbitrability, how much of the discovery would be useful in arbitration, or, as allowed by the 

arbitration clause, whether any of the discovery involved “relevant, material and non-privileged 

documents.” Finally, Icon did not seek judgment on the merits, and all requests for trial settings 

were filed by Servicios.

CONCLUSION

After examining the totality of the circumstances on this sparse record, we conclude 

Servicios did not satisfy the “high hurdle” of demonstrating “the fact of prejudice.” Perry Homes, 

258 S.W.3d at 584, 599. Therefore, the trial court erred in denying Icon’s motion to compel 

arbitration. We reverse the trial court’s order and remand the case to the trial court for further 

proceedings. 

Sandee Bryan Marion, Justice

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