Reversed and Remanded and Memorandum Opinion filed January 9 , 202 4
.

In The 

## Fourteenth Court of Appeals

NO. 14

- 23

- 00028

- CV

PLAINS STATE BANK , Appellant

V. SVABIC PROPERTIES, LTD., SVABIC FAMILY PARTNER SHIP, LTD.; VOJISLAV W. SVABIC , INDIVIDUALLY A N D AS TRUSTEE OF THE ELIZABETH SVABIC 2012 TRU ST; SFP 711 CORPUS CHRISTI, L LC;

AND SVABIC OPERATING CO , LLC , Appellee s
On Appeal from the 152nd District Court

Harris Cou nty, Texas Trial Court Cause No. 2022

- 39182

MEMORANDUM OPINION Appellant P lains Sta t e Bank ( “ PSB ” ) appe als the t rial court ’ s order denying its motion to compel arbitration in the l aw su it filed by app ellee s Svabic Properties, Ltd. ; Svab ic Family Partnership, Lt d.; Vojislav W. Svabic , individually and as trus tee of the Elizabeth Sv ab i c 2012 T rust; S FP 711 Corpu s Christi, LLC ; and Svabic Operating Co mpany, LLC. See Tex. Civ. Prac. & R e m. Code Ann.2

§ § 51.016l , 171.021. 171.098( a)(1). In two issues we treat as one , PSB argue s th e trial court erred when it denied its motion to arbitrate claims rel a ting to the deeds of trust and security agreement s signed on June 28, 201 3, and July 29 , 2019. We reverse the trial cour t ’ s order and remand for f urther proceedings.
I. B ACKGROUND
P SB provi ded multiple commercial loans to appellees since April 2012

. On A pri l 26, 2012, the parties executed an a rbitration agreement , which provided that onl y PSB could invoke arbitration and that any disputes were to be re s o lved in

accor dance with the Federal A r bitratio n A ct ( “ FAA ” )

. 1 Subsequently , t he parties executed a “ D eed o f T rust and Security Agreement ” o n June 28, 201 3, and another

on July 29 , 2019 , e ac h of which contained a jury waiver provis ion

. O n J une 29, 2022, appelle es filed suit against P SB , seekin g an accounting for loan s issued by PSB and guaranteed by appel lees w hich were s old by PSB to anoth er lender

. A pp ellee s also asserted t hat PSB ’ s actions were discriminatory and constit ut e d unf

air pra ctice s.
On October 17 , 20 22 , PSB filed a plea in abatem ent and motion to compel arbitration , attaching a copy of the arbitr a tion agreement the parties signed on April 26, 2012

. Appellees filed a response in opposition , a rgu ing th at t he arbitration agreement PSB submitte d was u nsigned by PSB

. On November 9, 202 2 , t he t rial cou rt granted PSB ’ s motion

. A ppellees filed a motion t o set aside the trial court ’ s order, ar guing that the j ury waiver prov isio ns in the de e ds of trust an d security agreements executed on June 28, 201 3, and July 29 , 2019 , replaced the previo us arbitration a greement

. On

1 The a rbitration agreemen t further provided that arbitration was to be ca rri ed out in
a cco rdance with t he laws of the State of T exas to the ext ent the F AA was inapplicable, unenforceable, or invalid.3

December 27, 2022, t h e trial court issu e d an order, gra n ting appellees ’ motion in
p ar t and setting a side the portions of it s p revious o rder compelling arbitra tion of
any causes of action relating to the deeds of trust and security agreement s signed on June 28, 201 3, and July 29 , 2019

. The trial court also reinstated o nto the court ’ s d ocket the claims relating to the deeds of trust and security agreement signed on June 28, 201 3, and July 29 , 2019

. This interlocutory appe al fo llo wed.

II. D ISCUSSION
In one is sue , PSB argue s th e trial court erred i n d e nying its mot ion to compel arb itration claims relating to the deeds of trust a nd security agreement signed on June 28, 201 3, and July 29 , 2019

. PSB argue s the trial court erred becaus e (1) a valid arbitration a gre ement exists and the relevant claims are w i thi n the scope of th e ar b itration agreement , and (2) it was wi thout aut hority to modify its previous order to abate.
A. S TANDARD OF R EVIE W
We review a trial court ’ s order denying a motion to comp el arbitration fo r an abuse of discretion. Henry v. Cash Bi z , L P , 5 51 S.W.3d 111 , 115 (Tex. 2018). A trial court abuses it s disc ret ion if it acts unreasonably or without reference to guiding rules or principles

. Low v. Henry , 2 21 S.W.3d 609, 6 14 (Tex. 2007).
We review a t rial court ’ s legal determinations de novo. Henry , 5 51 S.W.3d
at 115 . The trial court ’ s deter mination of the arbitration agreement ’ s existence and validity are legal questions subject to de novo review. Jody J ames Farms, JV v
. Altm an Grp., Inc. , 547 S.W.3d 624 , 633 ( Tex. 2 018 ); J.M. Davidson , Inc. v
. W ebster , 128 S.W .3 d 233, 227 (Tex. 2003)

.4

B
. A PPLICABLE L AW
Arbitration is a creature of contract. In re Poly

- Am. , L.P. , 262 S.W .3d 337, 348 (Tex. 2008) (orig. proceeding)

. Thus , parties cannot be compelled to arbitrate
any co ntroversy unless they have con tractu all y agree d to do so. To tal Energies E&P USA , Inc. v. M

P Gulf of Mex., LLC , 667 S.W.3d 694, 701 (Tex. 20 23) ; Robinson v. Home Owners Mgmt. Enters. , 590 S.W.3d 518, 521 (Tex. 2019). A
contractu al agreement to arbitrate con troversies is severable f r o m a broad er contrac t that contains it

. Baby Dolls Topless Saloo ns, Inc. v. Sotero , 642 S.W.3d 583, 586 ( Tex. 2022)

. A party seeking to compel arbitration must establish that (1) a valid arbitration a greement exis ts, and (2) the claims at issue are within the scope of the
ag reement. In re Rubiola, 334 S.W.3d 220, 223 (Tex. 2 011) (orig. proceeding) . If the relevant parties did not sign the c ontract in which the arbitration agreement is contained , then addre ssing the first prong includes analysis of wheth er a non
s ign ato ry is bound by or can enforce the arbitration agreement. See id. at 223

– 24; Osornia, 367 S.W.3d at 711. If the trial finds a v alid arbitration agreement and that the claim s f

all within the sco pe of the agreement, then the burden shifts to the p arty

o ppo sin g a r bitrati on to raise a defense. J.M. Davidson , 128 S.W .3d at 227 ; see In re Poly

– Am., L.P. , 2 62 S.W.3d at 348

. Arbitration is favored under public policy

. In re Poly

– Am., L.P. , 262 S.W.3d
at 348 . I n deciding whether the parties have agreed to arb itr ate , we do not resolve doubts or indulge a presumption in favor of arbitration. See In re Kellogg Brown & Root, Inc. , 166 S.W.3d 732, 737 (Tex. 2 005) (orig. proceeding). Once an arbitration agreement is f ound to exist, doubts regarding an agreeme n t's sc ope ar e resolved in favor of arbitration because there is a strong presumption favoring agreements to arbitrate. I

d.5

C. A NALYSIS
The FAA applies to the arbitration agreement here because the parties
agre ed t o arbitrate under the FAA in the arbitrati o n agre eme nt

. See Rubiol a , 334 S.W.3d at 223

. 1. Interloc utory Jurisdiction
Firs t , we address appellee s ’ conten tio n t hat we lack jurisdiction to consider this inter locutory a ppeal because th e trial court did not deny PSB ’ s motion to compel arbitration claims r elatin g t o t he deeds of trust and security agreement signed on June 28, 201 3, and July 29 , 2019

. App ellees argue that the trial court
gr anted PSB ’ s motion to compe l arbitration in par t but reinstate d the remaining claims without den ying t he mot ion to comp e l as to these claims

. Appellate courts may consider appeals from interlo cutory orders when a statute explicitly authorizes an appeal. T ex. A & M Univ. Sys. v. Koseoglu , 233 S.W.3d 835, 840 (T ex. 2007). Te xas Civi l Practice and Remedies C ode § 51.016, whi c h authorizes appeals in matters subject to the FAA, provides that a party may

a ppeal an interlocutory order “under the same circumstance s tha t an appeal from a federal district court ’ s order o r decision would be p ermitted by 9 U.S.C. Sect ion 16 .” Tex. Civ

. Prac. & Rem. Code Ann. § 51.016. Under § 16 of the FAA, a party may imme diatel y appeal the denial of a motion to compel ar bitration

. Se e 9 U.S.C. § 16(a)(1) (B), (C) ; Tex. Civ. Prac. & Rem. Code Ann. §§ 51.016, 17 1.098(a)(1); see also Tay lor Mo rrison of T e x. , Inc. v. Skufca , 650 S.W.3d 660, 672

– 73 (Tex. App.

— Houston [1st Dist.] 2021, n o pet.); In re Helix Energy Sols. Grp. , 303 S.W.3d 386, 395 n.7 (T ex. App.

— Houston [14th Dist.] 2010, orig. proceeding ). When determ ining whether an order de nie s a motion to c ompel arbitration, our interloc utory jurisdiction is controlled by t he sub stance and function of the order viewed in the contex t of the record

. Nat gasoline LLC v. Refractory Const r
. Servs. ,6

Co. , 566 S.W.3d 871 , 88 0 (Tex. App.

— Houston [14th Dist.] 20 07, pe t . denie d )

. H e re, the subst ance of the trial court ’ s order was to effectively den y PSB ’ s motion to compel arbitratio n of any claims rela ting to the deeds of trust and security agreement s signed on June 28, 201 3, a nd July 29 , 2019

. The trial court

ac t ed on PSB ’ s m otion to compel arbitration by granting it in part , and it i mplicitly denied it as to the claims related to the deeds of tr ust and security agre ements by reinstating them on the court ’ s docket. Accordingly, we conclude th at w e have juri sdiction ove r this interl ocutory appeal of the trial court ’ s order signed December 27, 2022

. See 9 U.S.C

. § 16(a)(1)(B) ; Tex. Civ. Prac. & Rem. Code Ann. § 51.016

. 2. Existence of an A greement to A rbitrate
Ne xt , we address PSB ’ s argument that the trial court erred when i t denied its motion to c om

p el a rbitr ation regarding any claims relating to the deeds of trust and security agreement signed on June 28, 201 3, and July 29 , 2019

. The t rial court implicitly found that there is a v alid agreement t o arbitrate , and the trial c ourt deni ed PSB ’ s motion to com pel arbitra tion in part based on appellees ’ argu ment that the a rbitration agreement was replaced by the subsequent

non
- jury trial provis ions contained in the deed of trust and s ecurity agre ement s
. Her e, the arbitration agre e ment prov ides :
Bin ding Arb itra tion
. Notwithstanding any provision in any Documents ( defined below ) to the contrary, up on t he request of , and at the sole election of , the above named lender, whether made before
or af t er the institution of any legal procee d ing , any action, di spute , c laim or controversy of any kind ( for example, whether in contract or in tort , under statutor y or common law , or legal or equitable ) now existing or hereafter arising between or among any of the undersigned ( “ collectively called t he “ parti es ” and in dividual ly c alled a “ party ” ) in any way arising out of, pertaining to or in connection with ( 1 ) the7

referenced loan , any rela ted agreements , documents , or instruments ( collectively , the “ Documents ” ) or any transaction contemplated there b y , before or after maturit y , or ( 2 ) all past , present and future loans , notes , instruments , guarantees, letters of cred it, contracts or agreemen ts and all other aspects of any past , present , o r future relationships o

f the parties to the documents shall be resolved by mandat ory and bindi ng arbitration in accordance with the terms of this Arbitrati on Program

. The occurrence of any of the foregoing m atters shall be referred to as a “ Dispute ”

. At Len der ’ s sole option , the Lender may bring by summary proceeding s ( for exa mple , a p lea in
a batem ent or motion to stay further proceedings ) an action in court to compel arbitration of a ny Dispute

. (emp h asis a dded). We conclude that a binding agreement to ar bi trate between t he part ies exis ts and that the italicized porti o n above e ncompass es cl aims related to the de eds of trust an d security agreements ex ecuted on June 28, 201 3, and July 29 , 2019

. See Total

Energies E&P USA , Inc. , 66 7 S.W.3d at 702

. 2
3. Novation Defense Appellees argue d at the trial court

— and argue o n appeal

— t h at the A p ril 26, 2012 , agreement to arbitrate was revok ed when the parties execut e d the subsequent deeds of trust that included the jury waiver provisions

.

2 On appeal, appellees argue that t he April 26 , 20 12 , arbitration agreemen t was u n signed by PSB , and thus, it was never binding on the pa rties. Appellees advanced th is arg u ment at the trial court in r esponse to PSB ’ s motion to compel arbitration , and the trial court rejected this argument a nd implicitly found that the agreement had be e n executed despite lackin g PS B ’ s signature because t h e tri al court granted the mot io n and orde red the parties to arbitrate. Appellees did not seek review of the trial court ’ s ruling that a valid arbitration a greement exist s via a petition for writ of mand a mus
. See Chambers v. O ’ Quinn , 242 S.W.3d 30, 31

– 32 (Tex. 2007) (per curi am)

. ( “ Because the FA A does no t pro vide f or interlocutory appeal s from orders compelling arbitration, we concl uded that

. . . mandamus was the appropriate remedy. ” ). Our inter locutory jurisdiction is limited to the order denying the motion to comp e l arbitr ati on , which in this case is t he or der gr anting appellees ’ motion to set aside the trial court ’ s o rder . Thus, appell ees have waived any complaint as to the missing s ign ature. In any e v ent, we note th at

“ [u ]nless parties explicitly require that a party on an arbitrat ion agreement sign t he ag reemen t to manifest the party ’ s assent thereto, a party may manifest i ts assent to the arbitration agreement by its acts, conducts , or acquiescence i n the terms of the agre ement

. . . . ” G SC Wholesa l e, LLC v. Young , 654 S.W.3d 558, 56 3 (Tex. App.

— Hous ton [ 14th D ist.] 2022, pet. denied)

.8

Parties to an arbitration agreement can agree to modify or supersede their arbitration agreement

. R o ehr s v. F SI Hold i ngs, Inc. , 246 S.W.3d 796, 808 (Tex. App.

— Dallas 2008, pet. deni e d); see Zaporo zhet s v. C t

. Appointed Receiver in Cause No. 12

- DCV

- 199496 , No. 14

- 14

- 00143

- CV, 2014 WL 5 148151, at *2

– 7 (Tex. App.

— Ho uston [14th Dist.] Oct. 14, 2014, no pet. ) (m em. op .); see also Adcock v. Five Star Rentals/Sales, Inc. , No. 04

- 17

- 00531

- CV , 2018 WL 18316 46, at *2 (Tex. App.

— San Antonio Apr. 18, 2018, no pet.) ( me m. op.). A novation , or the substitution of a new agreemen t , occurs when a contract evinces an inte n tio n to

r elinquis h and extinguish pre

- existing claims and ri ghts of action; in li e u of the old

o bligation, a party accepts the promise of performance of t he new obligation instead of the performance itself. See N. Y

. Party Shuttle , LLC v. Bilello , 414 S.W. 3 d 2 06, 21 4 (Tex. App.

— Houston [1st Dist.] 2013, pet. denied); Zaporozhet s , 2014 W L 5 148151, at * 3; see also Fulcrum Cent. v. AutoTester, Inc. , 102 S.W.3d 274, 277 (Tex. App.

— Dallas 2003, no pet.). The novation cont r act discharges the original obligation a n d o nly th e new ob ligat ion may be enforced. N

. Y. Party Shuttle , LLC , 414 S.W.3d at 214 ; Zaporozh e t s , 2014 WL 5 148151, at * 3

. A novation requires (1) a prev ious, valid obligation; (2) a mutual agreement of the partie s to the acceptance of a new contract; (3 ) th e exti nguishme nt of the old

c ontract; and (4) the validity of the new contract

. Vickery v. Vi ckery , 999 S.W.2d 342, 356 (Tex. 1999)

. A court can infer that a new contract is a novation of a previous contract if the two contracts are so inconsistent wit h on e anot her that they cannot subsist together. Zaporozhet s , 2014 WL 5 148151, at * 3 ; Farkooshi v

. Afisco Int

. , LLC , No. 14

- 13

- 00201

- CV, 2014 WL 4161708, a t *4 (Tex. App.

— Houston [14th Dist .] Aug. 21, 2014, no pet. ) (mem

. op.). A novation is never presumed ; the parti es’ inte nt to no vate must be clear. Zaporozhet s , 2014 WL 5 148151, at * 3 ; SecurityComm G r p. v
. Brocail , No. 14

- 09

- 00295

- CV, 2010 WL9

5514333, at *1 6 (Tex. App.

— Houston [14th Dist .] De c . 28 , 2010, pet. denied ) (mem. op.). Whether a new contract ope r ates as a novation of a n earlier contract is usually a question of fact and become s a question o f law only when the state of the eviden ce is such that reas onable minds cannot differ as to its effect. Chastain v. Coo per & Reed , 152 Tex. 322 , 257 S.W.2d 422 , 424 (1953 ) ; see A llsta te Ins. v
. Clarke , 471 S.W. 2d 901, 907 (Tex. App.

— Houston [ 1 st Dist.] 19 71 , wr it re f ’ d n.r.e.) ; see also In re B.N.L.

- B. , 523 S.W.3d at 264 ; In re Bath Junkie Franchise , Inc. , 246 S.W.3d 356, 36 5 (Tex. App.

— Beaumont 2008, orig

. proc e edin g ); Fu lcrum , 1 02 S. W.3d at 278

. Here, the arbitration agreement provided : Othe r Matte rs an d Miscellaneous

. . . . The provisions of this Arbit ration Program shall survive any termination, amendment , or expiratio n of the Documents or the Relationship , u nles s the parti es other wise expressly a gree in writing

. . . . T his Arbitration Pro g ram may be amended , changed , or modified only by the express pr ovisions of a writing which specifically refers to this Arbitration P rogram and which is signed by all the pa r ties heret o
. T he non

- jury trial provisions appellees rely on do not spec i fically ref er to th is arbitration agreement as is required to amend it or modify i t

. Further, the non
- jury tri al pr ov ision a

ppellees rely on states :
J URY WAIVER : Every party to this Deed of Tr ust hereby expressly waives any right to tr i al by jury of any cla im, demand, action, or cause of action (a) arising under this Deed of Trust or any other instrument, document, or agreement executed or delivered in connection herewith; or (b) in a ny way c on nec ted with or related or incidental to the dealings of the parti es hereto or any of them with respect to this Deed of Trust or any other instrument, doc ument, or agreement exe cuted or delivered in connection here w ith, or the transactions relate d hereto or th ereto, in each case whether now existing or hereafte r arising and whether sounding in contract or tort or otherwise; and each party hereby agrees and consents that any such claim, demand, action, or cause or act ion shall be decided by court t r ial with ou t a jury, and that10

any party to this Deed o f Trust may file an or iginal counterpart or a copy of this section with any court as written evidence of the c onsent of the parties h ereto to the waiver of their right to trial by jury

. This jury waiver prov ision is not so inconsistent with the ag r eement to a rbitrate that the two can not subsist togethe r . This is because PSB is the only party that can invoke a rbitratio n , and if PSB does not invoke arbitration, then the w aiver of jury trial applies

. Furthe r more , ther e is no evidence o f any intent by the parties to replace the a rbitration agreement with t he jury waiver provision in the relevant deeds of trus t and security agreement s . We conclude that the jury waiver provisi on did not re place the parties ’ pre v ious arbit ration agreement. As noted above, the arbitration a greement here is broad in scope , and appellees ’ only argument at the trial co urt and on appeal concerning the scope of the arbitration agreement was that the ju ry waiver p rovisio ns replaced th e a rbi tration agr eement

. We conclude that the trial court erred when it denied PSB ’ s motion to arbit rate any claims relating to the deeds of trust and security agreement signed on June 28, 201 3, and July 29 , 2 019 . W e sustai n PSB ’ s sol e issue.
III. C ONCLUSI ON
We r eve r s e the trial court ’ s December 27, 20 22, order and r emand for fu rther proce edings.

/s/ Margaret “Meg” Poissant Justice

Panel consists of Chief Justice Christopher and Justices Zimmerer and Poissant.