1 In The 

### Court of Appeals Ninth District of Texas at Beaumont

___________________ NO. 09
- 17
- 00248
- CV

___________________
THE SINCLAIR GROUP, LTD., H.L. SINCLAIR AND WHITNEY FOX , Appellants

V. HENRI HAGGBLOM , Appellee

__________________________________________________________________

On Appeal from the 284 th District Court Montgomery County, Texas Trial Cause No. 17
- 04
- 04582
- CV

__________________________________________________________________ OPINION
In this interlocutory appeal, T he Sinclair Group, L imited , H.L. Sinclair and Whitney Fox (collectively, Sinclair) appeal from an order denying their joint motion to compel arbitration of their claim s , which relate to their dispute with Henri Haggblom, an individual who was employed as the manager of The Sinclair Group,
L imited (The Sinclair Group) and the Sinclair Group Texas, LLC ( the LLC). See2

Tex. Civ. Prac. & Rem. Code A nn . § 171.098(a)(1) (West 2011) (authorizing interlocutory appeals from rulings on applications to compel arbitration subject to the Texas Arbitration Act). The claims Sinclair asked the trial court to refer to arbitration concern ed primarily whether the appraiser who was employed by the parties to evaluate the fair market value of Haggblom’s membership interest in The Sinclair Group followed the method of appraisal set out in the written agreement s that he had with The Sinclair Group and the L LC . T he record reflects that the written agreements relevant to Haggblom’s employment included arbitration provisions , which required the parties to arbitrat e “ [ a ] ny and all disputes, controversies, or claims arising out of or relating to this Agreement, i ncluding without limitation, claims based on contract, tort, or statute[.] ”
W e hold the trial court erred by denying Sinclair’s motion to compel arbitration regarding the parties’ dispute . Accordingly, we reverse the trial court’s order and remand the cau se to the trial court , with instruction s order ing the parties
to resolve through arbitrat ion t heir dispute over whether the appraiser followed the method of appraisal that is required in the parties’ written agreements , which specifically addressed t he method to be used in v aluing a limited partner’s membership interest in The Sinclair Group

.3 Background Haggblom signed a “Company Agreement” when he began employment to be one of two manager s of the LLC, which is the general partner of The Sinclair Gr oup . T he Company Agreement includes a provision restrict ing the right s of a member owning an interest in The Sinclair Group from dispos ing of that interest through a method other than the one that is provided under the Company Agreement

. Under the Company Agreement , The Sinclair Group had a five

- year period from the date Haggblom signed the agreement to purchase the interest of any member with an ownership interest in T he Sinclair Group who no longer worked there

. The Company Agreement included a provision containing a formula to be used to calculat e the value of a limited partner ’ s interest in The Sinclair Group. The Company Agreement required that the parties select an “accredited Business Valuator” (appraiser), and required the appraiser to then calculate the fair market value of the limited partner’s interest in The Sinclair Group by using a specific formula that included criteria allowing the appraiser to consider certain matters but preventing the appraiser from considering others

. T he Company Agreement includes a n arbitration provision , which provides that the parties shall arbitrate “ [ a ] ny and all disputes, controversies, or claims arising out of or relating to this Agreement, including without limitation, claims based on contract, tort, or statute[.]”4

Approximately eight months after signing the Company Agreement , Haggblom signed a n “ Employment Agreement ” with The Sinclair Group

. Under the Employment Agreement, Haggblom acquired a “5% Partnership Interest” in The Sinclair Group

. The Employment Agreement reflects that H a ggblom was being employed to manage the business of the LLC . The Employment Agreement also has

an arbitration provision that is identical to the one in the Company Agreement

. I n 2015 , Sinclair terminated Haggblom’s contracts . At that time, The Sinclair Group exercised its right to purchase Ha ggblom’s partnership interest in T he Sinclair Group

. T he record that was before the trial court when it ruled on Sinclair’s motion to compel arbitration shows t hat after Haggblo m was terminated , the parties retained a consulting firm to appraise “ the fair market value” of Haggb l om’s five percent limited partner ship interest in The Sinclair Group , as of December 31, 2015 . In April 2016, the appraiser provided the parties with a draft of his appraisal on Haggblom’s partnership interest in The Sinclair Group, which placed a fair market value on Haggblom’s interest at an amount exceeding $1,000,000

. In June 2016, Sinclair sent the appraiser ’s consulting firm a letter compla ining the appraiser had failed to follow “the agreements of Sinclair Group and Mr. Haggblom relative to [valuing Haggblom’s interest]

. ” Sinclair demanded that the consulting firm “withdraw from this engagement without issuing any further draft5

reports or o pinions or any final reports or opinions.” The record does not show that the appraiser ever finalize d his April 2016 draft report or issue d a final report

. I n April 2017, Haggb l om sued Sinclair in Montgomery County , Texas , seeking to recover a judgment against Sinclair based on the value of his interest as determined by the appraiser in his April 201 6 draft report . In the suit, Haggblom asked the trial court to c onfirm the appraiser ’s determination and render a judgment against Sinc lair based on the opinion regarding the value expressed by the appraiser

. Haggblom ’s petition alleges the appraiser’s opinion regarding value was final because the Company Agreement states that the appraiser’s determination “ shall be binding upon the parti es.” Hag g b l om also asked the trial court to declare that Sinclair’s complaints about the appraiser’s method was not arbitrable and that the appraiser’s “award” was final. In May 2017, when Sinclair responded to Haggblom’s suit , it filed a motion to compel a rbitration

. Additionally, Sinclair asked the trial court to stay all judicial proceedings , pending the arbitrat ion of i ts claim alleging the appraiser had not followed the method of appraisal required by the parties’ written agreements

. Sinclair ’s motion to compel arbitration alleges that the appraiser the parties selected
to appraise the value of Haggblom’s partnership interest “failed to follow the instructions contained in the controlling agreements.” According to Sinclair , its6

dispute regarding whethe r the appraiser followed the correct method when he appraised Haggblom’s partnership interest is an arbitrable claim , given the broad scope of the arbitration agreements in the Company Agreement and the Employment Agreement. In early June 2017, Haggblom filed his respon se to Sinclair ’s motion to compel arbitration

. I n his response , Haggblom argued that his written agreements with Sinclair provide “ for a separate, binding mechanism by which to determine the value of [his] interest in the Sinclair Group [ , ] ” and he suggested the “parties intended and agreed to except the valuation process from arbitration.”
A fter conducting a non

- evidentiary hearing on Sinclair’s motion, the trial court took the case under advisement

. A pproximately one week later, t he court den ied Sinclair’s motion. The trial court did not explain in the hearing or in its order the basis for its ruling. Subsequently, Sinclair pursued an interlocutory appeal and seeks an order to compel the parties to arbitrate their dispute. Standar d of Review Under Texas law, a written agreement to arbitrate is valid and enforceable if an arbitration agreement exists and the claims a party seeks to have arbitrated are claims that fall within the scope of parties’ arbitration agreement. Tex. Civ. Prac. & Rem. Code Ann . §§ 171.001 , 171.021 (West 2011 ). “ To determine whether a party ’ s7

claims fall within an arbitration agreement ’ s scope, we focus on the complaint ’ s factual allegations rather than the legal causes of action asserted. ” In re FirstMerit Bank , N.A. , 52 S.W.3d 749, 754 (Tex. 2001 ) ( orig. proceeding ). Because the public policy of the State strongly favors arbitration, a court should not deny a request to order the parties to arbitrate when a valid agreement to arbitrate exists unless the arb itration clau se is not susceptible to being interpreted in a manner that would require the parties to arbitrate their dispute. See Williams Indus., Inc. v. Earth Dev. Sys. Corp. , 110 S.W.3d 131, 137 (Tex. App.

— Houston [1st Dist.] 2003, no pet.) (applying t he Texas Arbitration Act). A party seeking to compel arbitration must show that “(1) there is a valid arbitration agreement and (2) the claims raised fall within th at agreement’s scope.” Granite Re Inc. v. Jay Mills Contr. Inc , No. 02

- 14

- 00357

- CV , 2015 Tex

. App. LEXIS 4182 , *7 (Tex. App.

— Fort Worth 2015, no. pet.) (mem. op.) (citing In re Kellogg, Brown & Root, Inc. , 166 S

. W.3d 732, 737 (Tex. 2005 ) (orig. proceeding) );

s ee also Valero Energy Corp

. v. Teco Pipeline Co. , 2 S.W.3d 576, 581 (Tex. App.

— Houston [14th Dist.] 1999 , no pet

. ) ; Tex. Civ. Prac. & Rem. Code Ann. § 171.001(a )

. Once the party moving for arbitration establishe s that a valid arbitrat ion agreement exists , the burden of showing that the dispute is one that is not arbitrable falls on the party oppos ed to referring the matter to arbitrat ion

. Prudential Sec. Inc. v. Marshall ,8

909 S.W.2d 896, 900 (Tex. 1995) (orig. p roceeding) ( applying the Federal Arbitration Act ); McReynolds v. Elston , 222 S.W.3d 731 , 740 (Tex. App.

— Houston [14th Dist.] 2007, or ig. proceeding) ( applying the Texas Arbitration Act ). To determi ne whether the dispute at issue falls within the scope of arbitration , court s are required to focus on the fact s that are alleged in the pleadings, not the legal causes of action that have been pleaded

. McReynolds , 222 S.W.3d at 740

. A strong presumption exists favoring arbitration, so courts are required to resolve doubts regarding arbitrability in favor of referring the dispute to arbitrat ion

. Ellis v. Schlimmer , 337 S.W.3d 8 60, 862 (Tex. 2011) (per curiam)

. When reviewing a trial court’s decision on a motion to compel arbitration, the ruling is reviewed under a de novo standard. Lexington Ins. Co. v. Exxon Mobil Corp. , No

. 09

- 16

- 00357

- CV , 2017 Tex. App. LEXIS 3819, *11 (Tex. App.

— Beaumont 2017, no pet.) (mem. op

. ) ( citing Tex. Petrochemicals LP v. ISP Water Mgmt. Servs. LLC , 301 S.W.3d 879, 884 (Tex. App.

— Beaumont 2009, no pet.) ) ; McReynolds , 222 S.W.3d at 740

. Is Sinclair’s Claim Arbitrable?
In the trial court, Haggblom and Sinclair agree d the arbitration agreement s they signed were valid

. Given the agreement that a valid arbitration agreement exist ed , the trial court was required to resolve “any doubts as to the agreement’s9

scope, waiver, and other issues unrelated to [the arbitration agreement’s validity] in favor of arbitration.” Ellis , 337 S.W.3d at 862

. And, where the dispute d matter falls within the scope of the matters the parties agreed to arbitrate , a “‘ court has no d iscretion but to compel arbitration and stay its own proceedings. ’ ” Forest Oil Corp. v. McAll en, 268 S.W.3d 51, 56 (Tex. 2008) (quoting In re FirstMerit Bank , 52 S.W.3d at 753

- 54 ) (explaining the process that is required to resolve an appeal involving a co ntract governed by the Texas Arbitration Act) )

. With respect to the arbitration clause s in the written agreements before the trial court in this case , both agreements require d the parties to arbitrate “ [a]ny and all disputes, controversies, or claims arisi ng out of or relating ” to the A greements. B road arbitration provisions , like the arbitration provisions before us in this appeal , required the trial court to favor ordering the dispute , which concern s whether the appraiser followed the appraisal method in the agreements , into arbitration

. See Dewey v. Wegner , 138 S.W.3d 591, 60 2

- 603 & n.20 (Tex. App.

— Houston [14th Dist.] 2004, orig. proceeding) (citing AutoNation USA Corp

. v. Leroy, 105 S.W.3d 190, 196 (Tex. App.

— Houston [14 th Dist.] 2003, no pet.) ) ; s ee also In re Jim Walter Homes, Inc. , 207 S.W.3d 888, 895 (Tex. App.

— Houston [14th Dist.] 2006, orig

. proceeding)

.10

In Haggblom’s case, t he heart of the parties’ dispute concerns whether the appraiser complied with the appraisal method established in the parties’ written agreements. The written agreements specify the criteria the parties expected the appraiser to use in appraising the value of a partner’s interest , and bot h Haggblom and Sinclair , as a matter of contract law , had the right to expect the appraiser to comply with the method the parties outlined in their agreements

. Given the broad language in the arbitration agreements , the dispute falls clearly within the sco pe of the disputes the parties chose to arbitrate

. In his brief, Haggblom suggests the appraiser’s opinion was final and that it could not be attacked for the reason Sinclair suggests. To support this argument, Haggblom relies on a provision in the apprai sal provision that states the appraiser’s “determination of the [fair market value] . . . shall be binding upon the parties.” While the term “binding” indicates the parties intended the process to be one that could not be broken, th at same expectation exis ts whenever a party enters into a legal agreement . While the parties to contracts generally always intend their agreements to be binding , such agreements may prove not to be binding on the parties for numerous reasons, including when one of the parties bre aches a term that is material to the agreement

.11

In this case, the “ binding” nature of the appraisal process presumed that the appraiser would follow the appraisal method imposed on the apprais al process by the parties’ written agreements. And, this is the matter in dispute , since Sinclair alleges that the appraiser failed to comply with the method established by the parties in their written agreements

. Importantly, t he language the parties chose to use in the ir arbitration agreement s also c ontain s no langu age that expressly excludes this type of dispute from the express requirement that all disputes be arbitrated

. “Generally, if the facts alleged in a claim ‘touch matters ’ that are covered by, have a ‘ significant relationship ’ to, are ‘ inextricably enmeshe d ’ with, or are

‘ factually intertwined ’ with the contract that contains the arbitration agreement, the claims are arbitrable.” Tex. Petro c hemicals LP , 301 S.W.3d at 885 (citing In re Bath Junkie , 246 S.W.3d 356, 366 (Tex. App.

— Beaumont 2008, orig. proceeding) )

. While some tension exists between the “shall be binding” language that is in the appraisal provision and the “any and all disputes” language found in the arbitration agreements , Texas law requires that we reso lve all doubts about whether a dispute is arbitrable in favor of requiring the parties to arbitrate their dispute

. See Ellis , 337 S.W.3d at 862

. Given the scope of the arbitration agreement, whether the appraiser followed the method called for by the par ties’ written agreements is a dispute that must be12

decided in arbitration. Depending on the arbitrator’s resolution of that dispute, Sinclair might ask the arbitrator to require an appraisal that employs the method of appraisal found in the parties’ writte n agreements. Should Haggblom prevail, he might ask the arbitrator to accept the draft report. Regardless of the arbitrator’s resolution of that dispute, the parties’ claims are arbitrable in light of the broad and inclusive language that Sinclair and Hagg blom used in the arbitration provisions they chose to include in both their Employment and Company Agreements. Conclusion We conclude the trial court erred when it denied Sinclair’s motion to compel arbitration. See Hoskins v. Hoskins , 497 S.W.3d 490, 494 (Tex. 2016) (noting that Texas law favors arbitration); G.T. Leach Builders, LLC v. Sapphire V.P., LP , 458 S.W.3d 502, 521 (Tex. 2015) (noting that both Texas and federal law recognize a strong presumption favoring the arbitration of disputes). Considering the broad
scope of the language in the parties ’ arbitration agreements , we conclude that the dispute over whether the appraiser failed to follow the appraisal method established by the parties in their written agreements is an arbitra ble issue

. We reverse the trial court’s order denying Sinclair’s motion to compel arbitration, and we remand the cause to the trial court with instructions to render an order compelling Sinclair and Haggblom to arbitrat ion to resolve their d ispute about13

whether the apprais er failed to follow the appraisal method that the parties created under their written agreements. REVERSED AND REMANDED

.

_________________________ HOLLIS HORTON Justice

Submitted on December 20, 2017 Opinion Delivered April 12, 2018 Before Kreger, Horton and Johnson, JJ.