See T EX
. R. A PP
. P

. 52. 8( d) ( “ W hen deny i ng r el i ef , t he cour t m ay han d do w n an opi ni on b ut 1 i s n o t r e q u i re d to d o s o .”) ; T EX
. R. A PP
. P . 4 7 .4 (d i s ti n g u i s h i n g o p i n i o n s a n d m e m o ra n d u m o p i n i o n s ). 

### NU M BER 13- 07- 0074 8-C V 

## COURT OF A PP EA LS T H I R T E E N T H D I S T R I C T O F T E X AS CORPUS CHRI ST I - E DI NBURG
IN RE: FROST NA

TIONA L BA NK
On Petit ion fo r Writ of M an da mus . 

### MEM ORA NDU M OPI NI ON Be fo re C hie f J us tice Vald ez an d Ju stice s Y añ ez an d Be na v ide s

M emo rand um Opin ion b y Ju stice Ya ñe z 1 Rel ator , F ro st Nat ion al Bank( “F ro st” ), br ing s t his peti ti on for w ri t of mandamus cont est ing the tr ial co urt’ s d eni al of i ts moti on to c ompel ar bit ra ti on. W e c ondi ti onal ly g ra nt the p eti ti on for w ri t of mandamus as st ated her ein

. I. Bac kg ro und Rea l par ti es in in terest , Goldb loo m Dev elo pment, Ltd., and Car los Al mag uer , M .D ., plan ned to const ruct an o f f ice buildin g i n H id a lgo C oun ty for Dr. Almaguer’s use in his medic al pr act ic e. Theyobta ine d a c onst ru ct ion l oan from Frost

. In c onj unct ion w it h the2

loan , the y

ex ecut ed a n arbitrat ion agreem entw hich provided, in part, as follows: Upon w ritten request of eithe r Len der or Borrower, anycontroversy or claim betw een or among the par ti es her eto inc lud ing but n ot l imi ted t o tho se ar is ing out of or r e l a t i n g t o t h e L o a n , a n y o f t h e l o a n d o c u me n t s o r a n y r e l ated ag re ements or

i nst ru ments ex ecut ed i n c onnec ti on w it h the Loan (t he “ Loan Doc uments ”) , i ncl udi ng any c la im b ased on or ar is ing from an all eg ed to rt , shal l be det er mined by bindi ng ar bit ra ti on i n ac cordance w it h the F ederal Ar bit ra ti on Ac t .

. . . An y p a rt y t o thi s A g re ement may br ing an a cti on, inc lud ing a s ummary

or ex pedi ted proceed ing , t o c ompel ar bit ra ti on of any cont ro v ersy

or cl aim to w hic h thi s a g ree m e n t app li es in any co urt hav ing jur is dic ti on ov er

su ch act ion

. . . . Rea l par ti es re tai ned an ar chi tec t and c ontract or and commenc ed c onst ru cti on. Di sput es arose regarding the co nstruct ion project , and ultima tely, real pa rties brought suit a gainst thei r cont ra cto r, ar chi tec t, and s ubcon tract ors. This di sp u te w as ult imat ely order ed to
ar bit ra ti on. W hile the disput e w as on going, real pa rties m a d e m ont hly payme nts to Frost p u rsu a n t to thei r loa n ag re ement. They al so re new ed th eir

ar bit ra ti on ag re ement w it h Fro st

. Nev erthel ess , t hey ul ti matel y

broug ht s uitag ain st Frostfor n eg li g ent misrep resen tatio n, brea ch of f iduciary du ty, an d f raud relating to the co nstruct ion proje ct at i ss ue herein

. II. St andard of Re v iew A w rit of man dam us w ill issue to correct a clear abu se of discretion when the re is
no adeq uate re medy by appeal

. See Walk er v. Packer

, 827 S.W .2d 833 , 840 (Tex. 1992 ). A tr ial co urt abu ses i ts dis creti on i f it re aches a de ci si on s o ar bit ra ry and unr eason abl e as to amoun t to a cl ear and pr eju dic ial er ro r of l aw or if it cl ear ly fails to c or re ctl y anal y z e or appl y the law

. In r

e F or d Motor C o. , 165 S.W .3d 3 15, 3 17 ( Tex . 200 5). T he rela tor has the b urden t o es tablish t h a t th e tr ial co urt abu sed it s d is creti on. See i d. If a trial court
errone ously denies a party' s mot ion to comp el arbitratio n un der the Federa l Arbitration Act (“FAA”), the mo v ant has no a dequa te reme dy at law a nd is e ntitled t o a w rit of man dam us.3

In r e Nexi on Health at

H um ble , Inc ., 173 S.W .3d 67, 69 (T ex. 2005 ); Service Corp. Int 'l v. Lopez ( In r e Ser v C or p.) , 162 S.W .3d 8 01, 808 (Tex . App.–C or pus Chr is ti 2005, no p et.) (conso lidate d ap pea l and original procee ding).

III

. Val idi ty

and Scop e of the Ar bit ra ti on Ag re ement A part y s e e k i n g t o c o mp e l a r b i t r a t i o n b y a w r i to f m a n d a mu s m u s te s t a b l i s h t he existence of

a v alid agreem ent to arbitr a t e u n d e r the FAA and show tha t the claims in dis pute ar e w it hin the sc ope of the ag re ement. In re Bank One, N .A. , 216 S.W .3d 8 25, 8 26 (T e x . 200 7) ( per

cu ri am); In r

e Kel logg Br own & R oot, Inc ., 166 S.W .3d 732 , 7 3 7 (T e x. 200 5) (orig . procee ding). In dete rmining the v alidity of agreeme nts to a rbitrate w hich are subj ectto the F AA, w e g enerall y appl y st ate- law

pr inc ipl es g ov er nin g the form ati on of cont ra cts

. In r

e Pal mHar bor Hom es, Inc ., 1 9 5 S. W .3 d 67 2 , 6 7 6 (T e x. 20 0 6 ) (ci ti n g First Opti ons of Chic ago, Inc . v

. Ka pla n , 514 U .S. 938, 944 ( 1995) ). W hether a v ali d ar bit ra ti on a gr e e m e n te xis t s is a le ga l q u e s t io n su bje c tt o d e n o vo re vie w. In r e D

. Wil s on Constr. Co. , 196 S.W .3d 774 , 781 (Te x . 200 6) (orig

. proce edin g)

. If the trial court find s there is a
v alid agreem ent t o arbitrate , the b urde n shif ts to the party opp osing arbitration to prove his defenses. J.M. D avi

dson, Inc . v

. Webster

, 128 S.W .3d 2 23, 2 27 ( Tex . 200 3)

. Onc e a v ali d ag re ement t o ar bit ra te ha s b een es tabl is hed, the c our t mus t t hen deter mine w hether

the nonmov ants ’ cl aims fall w it hin the sc ope of the ar bit ra ti on c lau se. In r e F ir stMer it Bank , N.A. , 52 S.W .3d 7 49, 7 53 ( Tex . 200 1)

. To deter m in e wh e th er an ex is ti n g a r b i t r a t i o n a g r e e me n t c o v e rs a p a rt y ’ s c l a i ms , a c o u rt mu s t “ fo c u s o n the
com plaint ’s fa ctua l allegations rath er than the legal cause s of action asserte d.” Id. at 754. Fede ral policy

emb odie d in the FAA favors ag reem e n t s to arbitrate , and courts mu st
re sol v e any

doubt s a bout an ar bit ra ti on ag re ement' s s cop e i n f a vor of ar bit ra ti on. Id. at 753. If the ar bit ra ti on ag re ement en compas ses the cl aims and the p arty oppos ing4

ar bit ra ti on has fail ed to prov e i ts defenses, the tr ial co urt has no d is creti on butto compel
ar bit ra ti on and sta y

i ts ow n proceed ing s. Id . at753- 54; D.R. Ho rton, I nc. v. Broo ks , 207 S

. W

. 3 d 8 6 2 , 8 6 6
- 6 7 ( Te x . A p p . – H o u s t o n [ 1 4 t h D i s t

. ] 2 0 0 6 , n o p e t.) ; Feldm an/M atz Interests, L .L .P. v. Sett lem ent C apital

C or p. , 140 S.W .3d 8 79, 8 83 ( Tex . Ap p.–H oust on [14 th Dist.] 20 04, no pe t.). Rea l par ti es in int er est do not deny the ex is tenc e of the ar bit ra ti on ag re ements at is sue her ein . W e concl ude t hat F ro st has est abl is hed a v ali d ag re ement t o ar bit ra te w it h the real parties in inte rest. W e also con clude thatthe real partie s’ claims against Frost fall sq uar ely w it hin the broad , “ca tch-al l” sc ope of the ar bit ra ti on prov is ion , w hic h appl ies to “any controversy

or claim bet w een or amo ng the partie s,” including but no t limited to tho se ar is ing out of or re lat ing to the l oan, any of the loa n documents or rel ated ag re ements or ins tr uments ex ecut ed in connec ti on w it h the loan, a nd any cl aim based on o r ar is ing from
an a lleged tort.” See D . Wil son Con str

. C o.. , 196 S.W .3d a t 783

. Beca use a n orde r de n ying arbitration m ust be uph eld if it is prop er on an y

basis
cons ide re d by

t h e t r i a l c o u rt , w e w i l l n e xtc o n s i d e r re a l p a rt i e s ’ a l l e g e d d e fe n s e s t o t he ag re ement. See In r

e H .E. Butt

Gr ocer y C o. , 17 S.W .3d 3 60, 3 67 ( Tex . Ap p.–H oust on [14th D is t.] 2000, or ig . proceed in g) ; City of Alam o v. Garcia , 8 7 8 S

. W

. 2 d 6 6 4 , 6 6 5 (T e x. App .–Corp us Christi 1994 , no wr it). IV. D efenses Rea l par ti es in int er estco ntend that the tr ial courtdid not err in refusing to compel
ar bit ra ti on bec ause the a g re eme n t to arbi trate w as not e nforce abl e. S peci fical ly , real partie s argue thatFrost w aived the right to arbitrate beca u s e i t failed to comm ence ar bit ra ti on w it hin si xty

day s o f f il ing i ts m o ti o n t o c ompel ar bit ra ti on. The ar bit ra ti on ag re ement ati ss ue prov ide s t hat:5

Al l ar bit ra ti on hear ing s w il l be c ommenced w it hin si xty ( 60) day s o f the w ri tten re q uest for ar bit ra ti on, and if the a rb it ra ti on hear ing i s n ot c ommenced w it hin si xty

( 60) day s, the p arty

thatreq uest ed ar bit ra ti on s hal l hav e w aiv ed it s e lec ti on to ar bit ra te. Issue s related to the m eet ing of co nditio ns prece den t to arbitrat ion, inclu ding time limits, noti ce, and lac hes, are matters per tai nin g to procedu ra l ar bit ra bil it y . See In r e Pi sc es Foods, L.L .C. , 228 S.W .3d 349 , 352 (Te x . App .–A ustin 2007 , orig. proceed ing); In re R & R Per s. Specialis tsof Ty

ler , Inc ., 14 6 S. W .3 d 69 9 , 7 0 4 (T e x. Ap p .– T yler 20 0 4 , o rig. proceed ing ); In r

e Neutr al Postur

e, Inc ., 13 5 S

. W

. 3 d 725 , 728 (Tex. App. –Hou ston [1st Di st. ] 200 3, or ig . proceeding ); see als o Howsamv. D ean Witte r Rey nolds , 537 U .S. 79, 84- 86 ( 2002)

. Ma tters o f proc edural ar bit ra bil it y are to be det er mined at ar bit ra ti on. W

. Dow Ham mIII Corp. v. Millennium Inco m e Fund , L.L .C. , 2 3 7 S

. W

. 3 d 7 4 5 , 7 5 4 (T e x. App.–H oust on [1s t D is t.] 2007, or ig . proceed ing & n o pet .) ; Pi sc es , 228 S.W .3d a t 352 ; R & R Per s. Special

is ts , 146 S.W .3d a t 704

. In t h i s c a s e , r e a l p a rt i e s c o n t e n d t h a t F ro s t fa i l e d t o t i me l y i n s t i t u t e a d e ma nd for
ar bit ra ti on and thus w aiv ed i ts ri g ht t o do so. This arg ument fail s becaus e, as di sc uss ed abo v e, w het her the cond ition prece den t has bee n satisf ied is n ot a question for the co urt to de ci de; i t i s a q uest ion for t he ar bit ra tor

. See P is ces , 228 S.W .3d a t 352

. Rea l par ti es further

arg ue that Frost w aiv ed it s ri g ht to ar bit ra ti on becau se iti ncl uded
a v enue prov is ion i n the ar bit ra ti on ag re ement an d mov ed to transf e r ven u e pursuantto that prov is ion : Bor ro w ers a gre e , t he mere filing of a M oti on to Tran sfer Venue does not w aiv e ar bit ra ti on. But th e i ss ue i n thi s c ase is not w hether the filing o f a Mo ti on to Tran sfer Venue w aiv es ar bit ra ti on. But, 1.) the fil ing for c hang e of and 2.) the inten tiona l w aiver of v enu e are two distinct issues an d the refore all of the R eal tor ’s [s ic ] aut hor it ies are di sti ng uis habl e from t he c ases broug ht before t his co urt. (E mphasi s i n the or ig ina l)

. W e di sag re e. A moti on to transfer v enue, w it hout more, does6

not w aiv e a mot ion to compel ar bit ra ti on. See Gra nite Const r. C o. v . Be aty , 130 S.W .3d 362, 367 ( Tex . Ap p.–Bea umont 20 04, n o pet .) ; see als o L & L Kem pwood I v. O me ga Builde rs, Inc. , No. 13- 99- 00522- CV , 2000 Tex

. App. LEX IS 476, at *5- 6 ( Tex . Ap p.–C or pus Chr is ti Ja n. 20 , 200 0, or ig . proceed ing ) (n ot de si g nated for publ ic ati on) ( “A defendant w ho conclu des th at a case has been f iled in an im prop er v enu e sho uld be entitle d to request transfer to a pro p e r venue and a sk for a rb it ra ti on from t he c our t i n the proper

v enue,
w it hout w aiv ing the ri g ht t o ar bit ra ti on i n the proces s.” ). Finally , real partie s cont end tha t Frost w aived its r ight to com pel arbitra tion b ecau se it requested a contin uan ce of real parties’ ap plication for a tem pora ry restraining order; agreed to an extension o f the te mp orary restraining order; de fend ed rea l parties’ request for a temporar

y i nju nct ion ; f ile d a n “ u n ti mely ” moti on to transfer v enue; filed a mot ion to quash a de positio n; respo nde d to request s for disclosure; and f iled a m otion to dism iss based on a forum s ele cti on c lau se in the c ontract

. A par ty w aiv es the ri g ht to ar bit ra te by subs tanti all y inv oki ng the j udi ci al proces s t o the other par ty ’s detr imentor

preju dic e. In re Fleetwood Hom es of T ex. , L. P. , 257 S.W .3d 692, 694 ( Tex . 200 8) ( or ig . proceed ing ). W aiv er i s a l eg al q uest ion for t he c our t based on the total it y of t he ci rc umstan ces , and ask s w hether a pa rty has su bst anti all y

i nv oked the judicial proce ss to an o ppo nen t’s detrim ent , the latter term mea ning inheren t unf ai rn ess caus ed by

“ a par ty ’s att empt t o hav e i t bot h w ay s b y sw it chin g betw een l it ig ati on and arbitratio n to its own advantage.” See i d. (quo ti n g Perry Hom es v. Cull , 258 S.W .3d 5 80, 597 ( Tex

. 20 08 ) )

. W ai v er mu s t be d ec i de d on a c as e- by
- c as e ba s i s , an d c ou rts shou ld loo k t o the tot ali ty

of the ci rc umstan ces inv olv ed. W e cons ide r factors s uch as w hen t he
mov ant k new

of t h e arbi trati on c lau se, how much dis cov er

y has been condu cte d, w ho initiate d it, w het her it related to the me rits rathe r tha n arbitrab ility or stan ding, how much7

of it w ould be use f ul in arbitration , and w het her the movant sought judgme nt on the merits. Per ry Hom es , 258 S.W .3d a t 592

. In t he i nst ant c ase, r eal par ti es broug ht s uitag ain st Froston J uly 13, 2007 an d obtai ned a temporar

y r est ra ini ng order

. Before answ er ing the law suit , Fro st ag re ed to extend th e tem pora ry

restraining order in exchange for a cont in u a n c e o n real parties’ moti on for a temporar

y i nju nct ion

. On A ug ust1, Frostthen ans w er ed th e sui t w it h a mot ion to di smi ss bas ed on a forum s ele cti on c lau se. Les s t han one w eek lat er , Frostamended it s mot ion to alt er nati v ely se ek a ve n u e t ra n sf er , and furth er fil ed i ts moti on to co mpel
ar bit ra ti on. W e resol v e any doubt s t hat w e hav e reg ardin g w aiv er i n fav or of ar bit ra ti on. Nw. Con str

. Co. v. Oak

Par tner s, L.P. , 248 S.W .3d 837, 847 (Tex

. App.–F ort W orth 20 08, p e t

. d e n ie d ). C o n s i d e r in g t h e a b o ve in a d d it io n t o t h e t o t a li t y o f t h e ci rc u m s t a n c e s , we disagree tha t Frost w aived its r ight to com pel arbitra tion b ecau se it has n o t subst ant ially inv oked the j udi ci al proces s. M or eov er , real par ti es hav e fail ed to al leg e a n d p ro ve that they hav e been pr eju dic ed by F ro st’ s a cti ons. Fleetwood Hom es of T ex. , L. P. , 257 S.W .3d at 69 4. Acc ordin g ly , w e c oncl ude t hat t he record does not p ro vide t h e tr ial co urt w it h dis creti on to find F ro st w aiv ed i ts ri g ht t o ar bit ra ti on. In t hei r re spons e to the peti ti on for w ri t of mandamus , real par

ti es als o c ontend that the arbitration clause was uncon sciona ble. Real pa rties argue thatthey w ere put in a dire financi al si tuati on by

the len der , t hen offered a “b ail out ” co n sist ing of a s ix -mont h morat or ium of i nterest -o nly pay ments “w hic h amounted to a Band- Ai d on a mor tal w ound.” Fi rs t, re al par

ti es’ arg ument ig nor es the fact th at t hey si g ned an ar bit ra ti on ag re ement at the i ncept ion of the p ro

jec t, pr ior

to the t ime that cons tr uct ion probl ems arose and l it ig ati on ensue d. Seco nd, t his arg ument w as not p re sent ed to the tr ial co urt and i s t hus w aiv ed h e re in. Se e Bi

ela m owicz

v. C edar

H il l Indep. Sch. D is t. , 1 3 6 S

. W

. 3 d 7 1 8 , 7 2 1 (T e x.8

App .–Dallas 2 004 , pet . den ied) (stating thatargumen ts notmad e t o t h e trial court are
w aived). In th eir respon se to th e pe tition for w rit of man dam us, real pa rt ie s a ls o referen ce “s ev er al other

defenses i ncl udi ng preju dic e to the e n fo rc ement of the ar bit ra ti on ag re ement it sel f.” These defenses w er e notpresent ed to the tr ial co urt and are notfurth er di sc uss ed or supp orted w ith argume nt an d au tho ri t y h erein, and accordingly , w e ne ed n ot ad dress them. See T EX
. R. A PP
. P. 33.1, 52.3 , 52. 4. V. Con cl usi on The tr ial co urt abu sed it s d is creti on i n refusing to compel the under ly ing proceed ing to ar bit ra ti o n . Acc ordin g ly , w e c ondi ti onal ly g ra nt t he pet it ion for w ri t of mandamus and direct the trial court to com pel arbitra tion in th is m atte r. W e are conf iden t tha t the trial court
w il l compl y

and our w ri t w il l is sue onl y

i f it does not.

LINDA REYNA Y

AÑEZ, J u s t i c e

Me moran dum Opi nio n del iv er ed and filed thi s 7 th da y

of Nov ember , 200 8.