COURT OF APPEALS

EIGHTH DISTRICT OF TEXAS

EL PASO, TEXAS

LUCCHESE BOOT COMPANY,

 Appellant,

v.

ARTURO LICON,

 Appellee.

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No. 08-14-00228-CV

Appeal from the

34th District Court

of El Paso County, Texas

(TC# 2005-7388)

O P I N I O N

Appellant Lucchese Boot Company seeks reversal of the trial court’s order denying its 

motion to compel arbitration against former employee Arturo Licon. We reverse and remand.

BACKGROUND

In 2005, Licon suffered work-related injuries and filed a non-subscriber negligence suit 

against Lucchese. Lucchese initially sought to compel arbitration against Licon under the terms 

of its Area Brands Texas Injury Benefit Plan (the Benefit Plan). The trial court granted 

Lucchese’s motion and issued an order compelling Licon to arbitrate. While Licon’s case was 

pending in the trial court, this Court struck down two orders compelling arbitration against other 

Lucchese employees under the same Benefit Plan, holding that the Plan’s arbitration agreement 

was illusory because Lucchese retained a unilateral right to terminate the agreement at any time 
2

that was not adequately bracketed by a Halliburton1savings clause. See In re Lucchese Boot 

Co., 324 S.W.3d 211, 213-14 (Tex.App.--El Paso 2010, orig. proceeding); In re Lucchese, Inc., 

324 S.W.3d 214, 217 (Tex.App.--El Paso 2010, orig. proceeding). Based on these cases, Licon 

moved for reconsideration of the trial court’s order, and in light of our opinions holding that the 

Benefit Plan’s arbitration agreement was illusory, the trial court vacated its prior order and 

denied Lucchese’s motion to compel.

Lucchese next sought to compel arbitration based on a different agreement contained in 

its Problem Resolution Program (the Program). The trial court struck Lucchese’s motion on the 

basis that Lucchese had either waived, or was estopped from asserting, its right to seek 

arbitration after initially seeking it under the Benefit Plan. Lucchese appealed, and we reversed 

the trial court’s strike order and reinstated Lucchese’s motion, holding that Lucchese did not 

waive its right to seek arbitration and that it was not estopped from offering alternate bases for its 

arbitration request. Lucchese Boot Co. v. Licon, 388 S.W.3d 365, 373-75 (Tex.App.--El Paso 

2012, no pet.). On remand, the trial court denied Lucchese’s motion to compel arbitration under 

the Program. Lucchese appealed. We have interlocutory jurisdiction to entertain this appeal 

under TEX.CIV.PRAC.&REM.CODE ANN. § 51.016 (West 2015).

DISCUSSION

In one issue, Appellant maintains the trial court erred by failing to compel arbitration, 

either because questions of the Program’s enforceability were reserved for the arbitrator alone or 

because Licon cannot present any valid contractual defenses against enforcement.2

 

1

In re Halliburton Co., 80 S.W.3d 566 (Tex. 2002).

2 Appellant’s brief also addresses the applicability of the FAA to this dispute and Licon’s constitutional challenge to 

the FAA under the Tenth Amendment to the United States Constitution. Licon’s brief raises neither of these points. 

We agree that the FAA applies to this case because there is evidence in the record to show that Lucchese engages in 

interstate commerce. See Vista Quality Mkts. v. Lizalde, 438 S.W.3d 114, 121-22 (Tex.App.--El Paso 2014, no pet.).

We decline to address any Tenth Amendment challenges to the FAA since Licon failed to raise them in his brief on 
3

Standard of Review 

We review mixed questions of fact and law in arbitration cases such as this for abuse of 

discretion, deferring to the trial court’s factual determinations and reviewing pure questions of 

law de novo. Delfingen US-Tex., L.P., v. Valenzuela, 407 S.W.3d 791, 797 (Tex.App.--El Paso 

2013, no pet.). We review the enforceability of an arbitration agreement de novo as a question of 

law. In re 24R, Inc., 324 S.W.3d 564, 566 (Tex. 2010)(orig. proceeding).

“A party seeking to compel arbitration must (1) establish the existence of a valid 

arbitration agreement; and (2) show that the claims asserted are within the scope of the 

agreement.” Delfingen, 407 S.W.3d at 797. A trial court abuses its discretion when it “refuses to 

compel arbitration under a valid and enforceable arbitration agreement[.]” In re 24R, Inc., 324 

S.W.3d at 566.

Relevant Contract Language

To better ground our analysis, we set out the following relevant excerpts of the Problem 

Resolution Program below:

Agreement to Submit Disputes to Arbitration. The Company and the 

Employee . . . recognize that differences of opinion can, from time-to-time, arise 

among individuals, including between an employee and his employer, and that, 

ultimately, some such disagreements can only be fairly resolved by a neutral 

decision-maker. The Company believes, however, that resort to a neutral 

Arbitrator is a legally-sanctioned alternative to the judicial system which is fairer 

to the parties, yields a speedier final resolution, and is less expensive to both the 

Employee and the Company. The Company therefore establishes this Problem 

Resolution Program (the ‘Program’), waives its right to a trial before a judge or a 

jury in the event of any Covered Employment Dispute as defined below 

(hereinafter, ‘Covered Dispute’), and agrees to submit any such dispute to final 

and binding arbitration. In exchange for this waiver of its rights, the Company 

requires, as a condition of employment/continued employment, that each of its 

Employees waive his right to a trial before a judge or a jury in the event of any 

Covered Dispute and agree to submit such dispute to final and binding arbitration. 

In other words, in the case of a Covered Dispute, the Company and the Employee 

 

appeal. But see In re Odyssey Healthcare, Inc., 310 S.W.3d 419, 423-24 (Tex. 2010)(orig. proceeding)(holding that 

the FAA does not violate the Tenth Amendment).
4

agree to submit the Dispute to binding arbitration, unless both the Employee and 

the Company waive such a right in writing prior to the initiation of any litigation 

arising out of said Covered Dispute.

. . .

Covered Disputes. Covered Disputes which are subject to the exclusive 

provisions of the Program include only those which involve legally-protected 

rights which the Employee may now or in the future have against the Company or 

its officers, directors, shareholders, employees, or agents in their personal or 

official capacities, as well as any claims which the Company may now or in the 

future have against the Employee, including, but not limited to, matters arising 

out of the application for employment or an employment termination, except as 

expressly excluded under the heading of “Claims Not Covered” below:

The disputes covered by the Program include, but are not limited to:

 claims for wrongful failure to hire;

 claims or breach of any contract, covenant, or warranty (express or 

implied);

 tort claims (including, but not limited to, claims for physical, 

mental or psychological injury, without regard to whether such 

injury was allegedly sustained in the course and scope of 

employment, and claims for defamation);

 claims for wrongful termination (including, but not limited to, 

retaliatory discharge claims under chapter 451 of the Texas Labor 

Code);

 claims for harassment, including, but not limited to, sexual 

harassment;

 claims for discrimination (including, but not limited to, claims 

based on race or color, national origin, religion, sex, age, medical 

condition or disability);

 claims for benefits under any employee benefit plans sponsored by 

the Company (after exhausting administrative remedies under the 

terms of such plans); and

 claims for violations of any other noncriminal federal, state, or 

other governmental law, statute, regulation or ordinance.

This includes claims which are brought by or against Employee or his 

representatives, successors, spouse or heirs.

Claims Not Covered. The only claims or disputes not covered by the Program 

are as follows:

1. any claim by Employee for benefits under a plan or program which 

provides its own arbitration procedure;
5

2. any criminal complaint or proceeding;

3. restitution by an employee for a criminal act for which he has been 

found guilty, has pleaded guilty or no contest or nolo contendere, 

or for which he has been subject to any kind of deferred 

adjudication program;

4. any claim by the Company for injunctive or other equitable relief 

for Employee’s alleged violation of contract, covenant against 

competition, unfair competition or the use or disclosure of trade 

secrets or other confidential information;

5. any claim for benefits arising under the workers’ compensation 

laws of any state;

6. any claim for unemployment compensation; and

7. any dispute involving Employee’s work schedule, vacation, sick 

days, work assignments, or shift assignments, and any 

disagreement with co-workers other than those involving Covered 

Disputes as described above.

Neither Employee nor the Company may submit items 1 through 7 

above to arbitration under this Program.

Procedures for Conduct of Arbitrations. Except to the extent that any 

provision of said Rules is inconsistent with the Program provisions set forth in 

this document or except where a provision of said Rules is waived in a writing 

signed by representatives of both the Company and the Employee, arbitrations 

under this Program shall be conducted pursuant to the TAMS Employment 

Arbitration Rules.

I.

ARBITRABILITY 

Who Decides If an Arbitration Agreement Exists?

In its first sub-issue, Appellant argues that the trial court erred by not compelling 

arbitration because the agreement itself strips away the trial court’s ability to decide whether the 

agreement’s terms are valid. We disagree.

Ordinarily, the trial court retains the power to rule on so-called “gateway” issues such as 

whether an arbitration agreement exists or is enforceable. IHS Acquisition No. 131, Inc. v. 

Iturralde, 387 S.W.3d 785, 793 (Tex.App.--El Paso 2012, no pet.). However, through the use of 

binding covenants in an agreement, parties may agree to submit even fundamental gateway 

issues to arbitration. Id. We apply ordinary contract law principles in interpreting these 
6

agreements. Iturralde, 387 S.W.3d at 791. In conducting the gateway inquiry, we do not 

ordinarily pass on any issues relating to the underlying arbitration agreement; rather, we look at 

how broadly the scope of the arbitration clause sweeps to see if subsumes even gateway issues, 

or is limited only to certain classes of disputes between the parties. If the arbitration clause 

sweeps broadly enough to subsume gateway issues into an arbitral dispute, and there is evidence 

that both parties agreed to the covenants, then the trial court should compel arbitration and leave 

issues of validity and enforceability to the arbitrator. Id. at 793.

Lucchese maintains that the Program’s incorporation by reference of the TAMS’ 

procedural rules—which allow an arbitrator to rule on the issue of his own jurisdiction3—

definitively establishes the parties’ intent to submit even gateway issues to arbitration. Our sister 

courts have found that a broadly-worded arbitration clause, coupled with incorporation by 

reference of rules giving an arbitrator power to rule on his own jurisdiction, is enough to 

demonstrate the parties’ intent to strip the trial court of all power and submit even gateway issues 

of arbitrability to an arbitrator. See Schlumberger Tech. Corp. v. Baker Hughes Inc., 355 S.W.3d 

791, 802-03 (Tex.App.--Houston [1st Dist.] 2011, no pet.); Saxa Inc. v. DFD Architecture Inc., 

312 S.W.3d 224, 228-29 (Tex.App.--Dallas 2010, pet. denied); In re Rio Grande Xarin II, Ltd., 

No. 13-10-00115-CV, 2010 WL 2697145, at *8-*9 (Tex.App.--Corpus Christi July 6, 2010, pet. 

dism’d)(mem. op.).

Even so, the “majority view does not mandate that arbitrators decide arbitrability in all 

 

3 TAMS Rule A-8 provides in part:

A-8 Jurisdiction

(a) The arbitrator shall have the power to rule on the issue of jurisdiction, 

including any objection with respect to the existence, scope or validity of the 

arbitration agreement.

(b) The arbitrator shall have the power to determine the existence or validity of a 

contract which contains an arbitration clause.
7

cases where an arbitration clause incorporates” an arbitration organization’s procedural rules by 

reference. Haddock v. Quinn, 287 S.W.3d 158, 173 (Tex.App.--Fort Worth 2009, orig. 

proceeding)[Internal citations and quotation marks omitted]. This case is distinguishable from 

the other incorporation cases Appellant cites. In those cases, the arbitration agreements either 

applied specifically to gateway issues or otherwise purported to apply to all disputes between an 

employer and employee, meaning that procedural rules giving an arbitrator the power to rule on 

whether a claim is even subject to arbitration were consistent with the parties’ intent to 

completely exclude the courts from the dispute-resolution process. See Saxa, Inc., 312 S.W.3d at 

226 (arbitration clause stated that “[a]ny claim, dispute or other matter in question arising out of 

or related to the contract shall be subject to arbitration.”)[Internal quotation marks omitted]; 

Schlumberger Tech. Corp., 355 S.W.3d at 802 (Resolution Agreement setting out arbitration 

terms specifically stated that “disputes relating to the interpretation, construction, alleged breach 

of this [Resolution] Agreement, [and] the Procedure Agreement” would be solved by process set 

out in Resolution Agreement; Resolution Agreement pointed to Procedure Agreement process; 

Procedure Agreement process incorporated AAA Commercial Arbitration Rules by reference); 

In re Rio Grande Xarin II, Ltd., 2010 WL 2697145, at *1 (arbitration agreement stated that “[i]f 

a controversy arises out of this Agreement . . . or the transaction contemplated herein, Buyer, 

Seller[,] and Agent agree that such controversy shall be settled by final, binding arbitration in 

accordance with the Commercial Arbitration Rules of the American Arbitration 

Association . . .”)

4

[Emphasis added].

 

4 We recognize that the Fifth Circuit, in interpreting a contract under Texas law, appears to have held that under this 

State’s law, mere incorporation by reference of arbitration rules “presents clear and unmistakable evidence that the 

parties agreed to arbitrate arbitrability.” Petrofac, Inc. v. DynMcDermott Petroleum Operations Co., 687 F.3d 671, 

675 (5th Cir. 2012). We respectfully disagree. Incorporation of an arbitration organization’s jurisdictional rules is 

one factor to consider in determining the parties’ intent, but it is by no means dispositive. Haddock, 287 S.W.3d at 

172. To the extent other federal circuits have also determined that incorporation of arbitration rules clearly shows 

the parties’ intent to delegate gateway issues to an arbitrator, see, e.g., Fallo v. High–Tech Inst., 559 F.3d 874, 878 
8

By contrast, here, the agreement establishes the scope of arbitrable issues as consisting of 

a certain class of “Covered Disputes” which “include only those [disputes] which involve 

legally-protected rights which the Employee may now or in the future have against the Company 

or its officers, directors, shareholders, employees, or agents in their personal or official 

capacities, as well as any claims which the Company may now or in the future have against the 

Employee[.]” Further, while the agreement purports that a list of disputes contained in the 

Covered Disputes section is purely illustrative, the agreement also goes on to explicitly exclude 

a large class of “Claims Not Covered” that “[n]either Employee nor the Company may submit . . 

. to arbitration under this Program[,]” including inter alia restitution for an employee’s criminal 

acts, “any claim by the Company for injunctive or other equitable relief for Employee’s alleged 

violation of contract . . . [,]” or “any dispute involving Employee’s work schedule, vacation, sick 

days, work assignments, or shift assignments[.]”

In light of the arbitration agreement’s narrow application, incorporation of the TAMS 

rules giving an arbitrator the ability to review his own jurisdiction or reassess an agreement’s 

validity is not dispositive. Appellant placed substantive restraints on the arbitrator’s power by 

limiting the scope of the arbitration agreement to include only certain enumerated disputes and 

explicitly precluding submission of other disputes to arbitration. We presume as a matter of law 

that the trial court retained the power to decide gateway issues absent clear, explicit evidence to 

the contrary. Iturralde, 387 S.W.3d at 793. Given that the agreement’s plain language purports 

to restrict the arbitrator’s power to hear only certain classes of disputes, we will not read an 

unwritten clause into the agreement that enlarges the arbitrator’s ability to rule on unenumerated 

 

(8th Cir. 2009); Qualcomm Inc. v. Nokia Corp., 466 F.3d 1366, 1372–73 (Fed.Cir. 2006), we note that even under 

the FAA, the threshold question of what a contract says is a matter of state interpretational law. See First Options of 

Chicago, Inc. v. Kaplan, 514 U.S. 938, 944, 115 S.Ct. 1920, 1924, 131 L.Ed.2d 985 (1995); ReadyOne Indus., Inc. 

v. Carreon, 458 S.W.3d 621, 623-24 (Tex.App.--El Paso 2014, no pet.). Thus, we are not bound by those court’s 

decisions interpreting other states’ laws in reaching our decision today.
9

gateway issue disputes based on silence or mere incorporation by reference of general arbitration 

rules. See Haddock, 287 S.W.3d at 172-73; In re Estate of Anderegg, 360 S.W.3d 677, 681 

(Tex.App.--El Paso 2012, no pet.)(under the maxim expressio unius est exclusio alterius, “the 

expression in a contract of one or more things of a class implies the exclusion of all not 

expressed”)[Internal quotation marks omitted]; Grimes v. Walsh & Watts, Inc., 649 S.W.2d 724, 

727 (Tex.App.--El Paso 1983, writ ref’d n.r.e.)(courts cannot read implied provisions into 

contracts absent evidence the covenant “so clearly within the contemplation of the parties that 

they deemed it unnecessary to express it”)[Internal citation omitted].

Simply put, the TAMS rules may give an arbitrator the ability to decide if an agreement 

is valid, but the terms of the agreement itself govern whether the arbitrator gets to decide this 

question in the first instance. Here, the parties did not express a clear intent to submit gateway 

issues to an arbitrator, and the trial court properly retained jurisdiction to rule on arbitrability.

II.

CONTRACT 

Having dealt with the gateway issues, we next turn to the substantive issues. In its 

second sub-issue, Lucchese asserts that it proved the existence of a valid arbitration agreement in 

the trial court, and that Licon failed to establish any meritorious contract defenses. As such, the 

trial court erred in failing to compel arbitration. We agree.

A.

Does An Agreement Exist?

In defense of the trial court’s judgment, Licon raises two alternate reasons why a binding 

arbitration contract never formed between the parties.5 First, Licon contends no contract formed 

 

5 As we stated previously, the trial court should compel arbitration where a movant establishes (1) the existence of a 

valid arbitration contract and (2) that a claim falls within the scope of that contract. Iturralde, 387 S.W.3d at 793. 

Licon does not argue that his injury falls outside the scope of the arbitration agreement. We thus assume that the 

parties do not dispute Prong #2 of the arbitration test, i.e., the fact that this type of injury is covered by the 
10

because the agreement rested on an illusory promise from Lucchese. Second, Licon maintains 

that the contract’s terms were not definite enough to show the parties had a meeting of the minds 

as to all essential terms. 

1.

Illusoriness

We first address Licon’s illusoriness point. Licon maintains that the language of the 

agreement gives Lucchese the unilateral right to terminate the agreement at any time, rendering 

Lucchese’s promise to arbitrate illusory and causing contract formation to fail for lack of 

consideration. However, Licon cites to and directs his argument entirely at the arbitration 

agreement from the Benefit Plan, which is not the subject of this appeal. Here, we review only 

the arbitration agreement set out in the Problem Resolution Program. Licon makes no reference 

to the Program’s arbitration language in his brief. Because Licon failed to explain how the 

language in the Program’s arbitration agreement rendered it illusory, we find that Licon has 

waived his illusoriness defense on appeal.

2.

Meeting of the Minds

Licon next maintains that the trial court’s judgment should be upheld because Appellant 

failed to establish that all parties had a “meeting of the minds” on all essential terms of the 

arbitration agreement. Tied in with this argument is his assertion that the terms of the arbitration 

agreement are ambiguous. We address these two points jointly.

“A meeting of the minds is necessary to form a binding contract.” David J. Sacks, P.C. v. 

Haden, 266 S.W.3d 447, 450 (Tex. 2008). “Parties form a binding contract when the following 

elements are present: (i) an offer; (ii) an acceptance in strict compliance with the terms of the 

offer; (iii) a meeting of the minds; (iv) each party’s consent to the terms; and (v) execution and 

 

arbitration agreement.
11

delivery of the contract with the intent that it be mutual and binding.” Karns v. Jalapeno Tree 

Holdings, L.L.C., 459 S.W.3d 683, 692 (Tex.App.--El Paso 2015, pet. denied). “Although often 

treated as a distinct element, meeting of the minds is a component of both offer and acceptance 

measured by what the parties said and did and not on their subjective state of mind.” Id.

[Internal quotation marks omitted]. “In order to be legally binding, a contract must be 

sufficiently definite in its terms so that a court can understand what the promisor undertook.” 

T.O. Stanley Boot Co., Inc. v. Bank of El Paso, 847 S.W.2d 218, 221 (Tex. 1992). “The material 

terms of the contract must be agreed upon before a court can enforce the contract.” Id. “Each 

contract should be considered separately to determine its material terms.” Id.

Licon avers that the essential terms of the arbitration agreement are too ambiguous to 

determine from the writings in the record; thus, no contract could have ever formed because the 

parties must not have mutually understood the other’s terms. In making this argument, Licon 

does not maintain that the Program’s arbitration agreement is ambiguous on its face. Rather, he 

contends that the Program’s arbitration agreement becomes ambiguous when read in light of the 

Benefit Plan’s arbitration agreement, since the two agreements irreconcilably conflict on material 

terms such as who will conduct an arbitration.

We first note that unless the Benefit Plan was incorporated by reference into the Program 

Agreement, it constitutes parol evidence that must be excluded in contradicting the Program 

Agreement’s terms unless the Program Agreement is ambiguous. In determining whether a 

contract is ambiguous, we first look only to the four corners of the document proffered and to 

other texts incorporated therein by reference. McDaniel Partners, Ltd. v. Apache Deepwater, 

L.L.C., 441 S.W.3d 530, 533-34 (Tex.App.--El Paso 2014, pet. filed); see also In re 24R, Inc., 

324 S.W.3d at 567 (“Documents incorporated into a contract by reference become part of that 
12

contract.”). Only if a contract’s fully integrated terms are ambiguous will we consider 

conflicting extrinsic evidence that shed lights on the parties’ intent. McDaniel Partners, 441 

S.W.3d at 533-34 “An unambiguous contract will be enforced as written, and parol evidence 

will not be received for the purpose of creating an ambiguity or to give the contract a meaning 

different from that which its language imports.” David J. Sacks, P.C., 266 S.W.3d at 450. This 

rule extends to other conflicting agreements. “If a contract is unambiguous, the parol evidence 

rule precludes consideration of evidence of prior or contemporaneous agreements unless an 

exception to the parol evidence rule applies.” Id. at 451. While a court may consider “a prior or 

contemporaneous agreement that is both collateral to and consistent with a binding agreement, 

and that does not vary or contradict the agreement’s express or implied terms or obligations[,]”

prior or contemporaneous agreements that conflict with that contract at issue are inadmissible. 

Id.

Here, the Program Agreement is not ambiguous on its face. Its terms are definite, 

ascertainable, and not subject to more than one reasonable interpretation. Per the terms of the 

Program Agreement at bar, “tort claims, (including, but not limited to, claims for physical, 

mental or psychological injury, without regard to whether such injury was allegedly sustained in

the course and scope of employment . . . )” are subject to arbitration under the terms set out in 

the Program Agreement. It is undisputed that Licon’s pleadings allege tort claims that would fall 

within the Program Agreement’s arbitral scope.

Further, the Program Agreement’s language never explicitly mentions or incorporates the 

Benefit Plan’s arbitration agreement by reference so as to create conflict on material terms. As 

such, the terms of the Program Agreement itself are those that govern here. However, the 

Program Agreement does apparently place the Benefit Plan in context when discussing scope, 
13

stating that “any claim by Employee for benefits under a plan or program which provides its own 

arbitration procedures” is excluded from the Program Agreement’s arbitration coverage. That 

would assumedly mean that the Program Agreement’s arbitration provisions would not apply to 

a claim arising under the Benefit Plan, which contains its own arbitration procedures. 

Nevertheless, this coverage exception is inapplicable here. Licon’s case here does not pertain to 

the administration of a claim filed within Lucchese’s internal worker’s compensation regime, but 

is only a standard tort claim covered by the Program.

In short, Lucchese presented evidence of an unambiguous, presumptively valid 

arbitration agreement that explicitly embraces tort claims against the company. Licon, in turn, 

failed to provide evidence that the claims he presented would otherwise be excluded from 

coverage because they were subject to the Benefits Plan. As such, we find that both prongs of 

the arbitration test have been met: an arbitration agreement exists, and the dispute between the 

parties falls within its ambit. See Delfingen, 407 S.W.3d at 797. The trial court could not refuse 

to enforce the arbitration agreement on any defective formation grounds.

B.

Defenses Against Enforcement

Having determined that a valid arbitration contract formed, we next consider Licon’s 

arguments that the trial court was justified in denying Lucchese’s motion to compel because he 

presented valid affirmative defenses to enforcement.

1.

Unconscionability

In the trial court and on appeal, Licon argues the contract should not be enforced against 

him because its terms are unconscionable. Lucchese contends that Licon provided insufficient 

evidence to establish that arbitration agreement was unconscionable. Thus, the trial court’s 
14

summary judgment denial could not have properly rested on those grounds. We agree.

“Agreements to arbitrate disputes between employers and employees are generally 

enforceable under Texas law; there is nothing per se unconscionable about an agreement to 

arbitrate employment disputes[.]” In re Poly-America, L.P., 262 S.W.3d 337, 348 (Tex. 2008). 

The party seeking to invalidate the arbitration agreement bears the burden of proving 

unconscionability. Vista Quality Mkts., 438 S.W.3d at 124. 

“Unconscionability of an arbitration agreement may exist in one or both of two forms:

(1) procedural unconscionability, which refers to the circumstances surrounding the adoption of 

the arbitration provision, and (2) substantive unconscionability, which refers to the fairness of 

the arbitration provision itself.” ReadyOne Indus., Inc. v. Flores, 460 S.W.3d 656, 666-67 

(Tex.App.--El Paso 2014, pet. denied).

We measure unconscionability in light of the totality of the circumstances and from the 

point the contract formed. Delfingen, 407 S.W.3d at 798. “The grounds for substantive abuse 

must be sufficiently shocking or gross to compel the court to intercede, and the same is true for 

procedural abuse—the circumstances surrounding the negotiations must be shocking.” Id. In 

deciding whether a contract is procedurally unconscionable, “we must examine (1) the entire 

atmosphere in which the agreement was made; (2) the alternatives, if any, available to the parties 

at the time the contract was made; (3) the non-bargaining ability of one party; (4) whether the 

contract was illegal or against public policy; and (5) whether the contract is oppressive or 

unreasonable.” Id. [Internal quotation marks omitted]. The critical inquiry in reviewing an 

agreement for substantive unconscionability “is whether the arbitral forum in a particular case is 

an adequate and accessible substitute to litigation, a forum where the litigant can effectively 

vindicate his or her rights.” In re Olshan Found. Repair Co., L.L.C., 328 S.W.3d 883, 894 (Tex. 
15

2010)(orig. proceeding). “That inquiry is not satisfied by speculation but by specific proof in the 

particular case of the arbitral forum’s inadequacy.” Venture Cotton Co-op. v. Freeman, 435 

S.W.3d 222, 232 (Tex. 2014).

On appeal, Licon does not argue that the arbitral forum is somehow inadequate or unfair. 

Instead, he focuses exclusively on the process by which Lucchese obtained his consent to 

arbitration. As such, Licon presents only procedural unconscionability grounds in support of the 

trial court’s judgment and not substantive unconscionability grounds. We focus our analysis 

accordingly. 

Licon maintains that we should affirm the trial court’s judgment because Lucchese’s 

“unclean hands,” demonstrated by the fact it presented an alternate arbitration agreement after 

being unable to compel arbitration under another agreement, strongly insinuates wrongdoing that 

rises to the level of procedural unconscionability. But the fact that Lucchese may have later 

“discovered” another on-point arbitration agreement after we struck down the first agreement is 

irrelevant to the procedural unconscionability analysis. Our inquiry focuses solely on the 

surrounding circumstances at the time of contract formation. Delfingen, 407 S.W.3d at 801-03.

Here, Licon provided no independent evidence regarding the circumstances of the 

contract formation process. Instead, he points to inconsistencies in Hilda Matthews’ deposition 

testimony regarding her understanding of which arbitration agreement applied in the event of a 

workplace injury—the Benefits Plan or the Problem Resolution Program—as proof that 

Lucchese lured him into entering into the Program’s arbitration agreement by having Matthews 

purportedly misrepresent the nature of the agreement and tell him it was an unimportant 

document. These testimonial inconsistencies are not enough to establish procedural 

unconscionability beyond mere conjecture, particularly when viewed in light of the fact that a 
16

signed, Spanish-language version of the Program Agreement bearing Licon’s signature appears 

in the record. This suggests that even if Matthews misrepresented the terms of the agreement, 

Licon presumably had the opportunity to review the actual agreement and verify its subject 

matter before assenting. “We presume a party, like [Licon], who has the opportunity to read an 

arbitration agreement and signs it, knows its contents.” EZ Pawn Corp. v. Mancias, 934 S.W.2d 

87, 90 (Tex. 1996). Absent any other evidence, we cannot say the circumstances surrounding 

Licon’s signing of the Spanish-language translation of the Program Agreement indicated 

procedural unconscionability. Compare Delfingen, 407 S.W.3d at 801-03 (procedural 

unconscionability found where company affirmatively misrepresented contents of Englishlanguage arbitration agreement to Spanish-speaking employee, obtained his signature on the 

English-language agreement based on those misrepresentations, then never provided employee 

with copy of agreement in either English or Spanish). In sum, there is insufficient evidence to 

uphold the trial court’s judgment on the basis of unconscionability. 

2.

Waiver and Estoppel

Finally, Licon maintains that we can uphold the trial court’s judgment on the basis that 

Lucchese waived its ability to compel arbitration under the Program when it already attempted to 

unsuccessfully compel arbitration under the Benefit Plan. We have already rejected Licon’s 

waiver and estoppel points in a previous appeal, and decline to further address these merits of 

these issues under law of the case.

The law of the case doctrine holds that questions of law decided in one appeal govern the 

case throughout subsequent stages of litigation, including later appeals. Justice Bail Bonds v. 

Samaniego, 68 S.W.3d 811, 813 (Tex.App.--El Paso 2001, pet. denied). Application of this 

doctrine is discretionary and is “merely a practice to ensure consistency in court decisions” and 
17

“not a limit to the power of courts.” Telles v. Samaniego, No. 08-02-00234-CV, 2003 WL 

22254711, at *4 (Tex.App.--El Paso Sept. 30, 2003, no pet.)(mem. op.). “Although appellate 

courts have discretion to depart from the doctrine in exceptional or urgent situations, we must be 

mindful of the public policy underlying law of the case; to prevent useless relitigation of issues 

already decided, to insure consistency, and promote judicial economy.” Tomaszewicz v. Wiman, 

No. 08-00-00034-CV, 2002 WL 397003, at *2 (Tex.App.--El Paso Mar. 14, 2002, no pet.)(not 

designated for publication). The doctrine does not apply “if the issues or facts presented in 

successive appeals are not substantially the same as those involved in the first decision” or if “the 

prior appellate ruling is clearly erroneous.” Id.

We previously decided that neither waiver nor estoppel precluded Lucchese from moving 

to compel arbitration when we reversed the trial court’s strike order. See Licon, 388 S.W.3d at 

373-75. Nothing in the record indicates that the parties’ respective positions changed 

meaningfully on remand. As such, law of the case will apply here. The trial court’s judgment 

cannot be upheld on waiver or estoppel grounds. 

CONCLUSION

Appellant established the existence of a binding arbitration agreement not subject to any 

valid defenses. The trial court erred by failing to enforce this agreement. 

We reverse the trial court’s judgment and remand for further proceedings.

July 29, 2015

YVONNE T. RODRIGUEZ, Justice

Before McClure, C.J., Rodriguez, J., and Barajas, Senior Judge

Barajas, Senior Judge (Sitting by Assignment)