No. 03-14-00782-CV 

____________________________ 

IN THE THIRD COURT OF APPEALS 

AT AUSTIN, TEXAS 

____________________________ 

SANTANDER CONSUMER USA, INC. 

Appellant, 

V. 

MARIO A. MATA, CENTROPLEX AUTOMOBILE RECOVERY, INC.,

BLAKE THORNTON VANDUSEN, JOHN F. THOMPSON D/B/A 

CENTROPLEX AUTOMOBILE RECOVERY, INC., AND REDSHIFT

INVESTIGATION, INC. 

Appellees. 

____________________________ 

Appealed from the 

353rd Judicial District Court 

Travis County, Texas 

Cause No. D-1-GN-13-000677 

____________________________ 

JOINT BRIEF OF APPELLEES

____________________________ 

 

ACCEPTED

03-14-00782-CV

3837772

THIRD COURT OF APPEALS

AUSTIN, TEXAS

1/21/2015 9:02:50 AM

JEFFREY D. KYLE

CLERK

 FILED IN 3rd COURT OF APPEALS AUSTIN, TEXAS 1/21/2015 9:02:50 AM JEFFREY D. KYLE Clerk
ii 

KAREN C. BURGESS 

State Bar No. 00796276 

STACY ROGERS SHARP 

State Bar No. 24052109 

Email: kburgess@richardsonburgess.com 

Email: ssharp@richardsonburgess.com 

Richardson + Burgess LLP 

221 West 6th Street, Suite 900 

Austin, Texas 78701-3445 

Telephone: (512) 482-8808 

Facsimile: (512) 499-8886 

ATTORNEYS FOR APPELLEES 

CENTROPLEX AUTOMOBILE 

RECOVERY, INC. AND JOHN F. 

THOMPSON 

JOHN S. KENEFICK 

State Bar No. 24006294 

Email: jkenefick@macdonalddevin.com 

JOHN R. SIGETY 

State Bar No. 24083853 

Email: jsigety@macdonalddevin.com 

Macdonald Devin, PC 

1201 Elm Street, Suite 3800 

Dallas, Texas 75270-2130 

Telephone: (214) 744-3300 

Facsimile: (214) 747-0942 

ATTORNEYS FOR APPELLEE 

BLAKE THORNTON VANDUSEN 
iii 

CHRISTOPHER A. LOTZ 

State Bar No. 24031630 

Email: clotz@lstlaw.com 

DAVID L. TREAT 

State Bar No. 20205300 

Email: dlt@lstlaw.com 

Lindow ▪ Stephens ▪ Treat LLP 

One Riverwalk Place 

700 North St. Mary’s Street, Suite 1700 

San Antonio, Texas 78205 

Telephone: (210) 227-2200 

Facsimile: (210) 227-4602 

ATTORNEYS FOR APPELLEE 

REDSHIFT INVESTIGATION INC. 

 
iv 

TABLE OF CONTENTS 

 

TABLE OF CONTENTS ...................................................................................... iv 

INDEX OF AUTHORITIES ................................................................................... v 

STATEMENT OF THE CASE ............................................................................... 1 

ISSUE PRESENTED ............................................................................................... 2 

STATEMENT OF FACTS ...................................................................................... 2 

SUMMARY OF THE ARGUMENT ..................................................................... 4 

ARGUMENT ............................................................................................................ 5 

I. Santander and Cross-Defendants have executed no arbitration 

agreement. ................................................................................................ 5 

II. Cross-Defendants cannot be compelled to arbitrate under the agreement 

between Mata and Santander. .................................................................. 7 

A. Arbitration cannot be compelled because Cross-Defendants 

are not parties to the Sale Contract. .......................................... 7 

B. None of the exceptions that would allow nonsignatories to be 

compelled to arbitration applies here. ...................................... 9 

III. Plaintiff never served the Centroplex Defendants, so only cross-claims 

exist against them, and Santander agrees those are not arbitrable. ....... 15 

IV. The Court Should Award Reasonable Fees to Cross-Defendants. ........ 16 

PRAYER ................................................................................................................. 18 

CERTIFICATE OF COMPLIANCE .................................................................. 22 

CERTIFICATE OF SERVICE ............................................................................ 22 

APPENDIX ............................................................................................................. vi

 
v 

INDEX OF AUTHORITIES 

Cases

Bob Montgomery Chevrolet, Inc. v. Dent Zone Co., 409 S.W.3d 181 (Tex. App.—

Dallas 2013, no pet.). ............................................................................................ 12 

Bridas S.A.P.I.C. v. Gov’t of Turkm., 345 F.3d 347 (5th Cir. 2003) .......... 10, 11, 14 

Carr v. Main Carr Dev., LLC, 337 S.W.3d 489 (Tex. App.—Dallas 2011, pet. 

denied). .................................................................................................................. 11 

E. Tex. Med. Ctr. Reg’l Healthcare Sys. v. Slack, 916 F. Supp. 2d 719 (E.D. Tex. 

2013) ..................................................................................................................... 14 

Gililland v. Taylor Inv., No. 11-03-00175-CV, 2004 WL 2126755 (Tex. App.—

Eastland Sep. 23, 2004, pet. denied). ............................................................. 16, 17 

Hunt v. CIT Grp./Consumer Fin., Inc., 03-09-00046-CV, 2010 WL 1508082 (Tex. 

App.—Austin Apr. 15, 2010, pet. denied) (mem. op.) ............................ 19, 20, 21 

In re Kellogg Brown & Root, Inc., 166 S.W.3d 732 (Tex. 2005) (orig. proceeding)

 .......................................................................................................................... 6, 10 

In re Merrill Lynch Trust Co. FSB, 235 S.W.3d 185 (Tex. 2007) ........... 6, 8, 14, 15 

Jenkens & Gilchrist, P.C. v. Riggs, 87 S.W.3d 198 (Tex. App.—Dallas 2002, no 

pet.) ....................................................................................................................... 16 

Keytrade USA, Inc. v. AIN Temouchent M/V, 404 F.3d 891 (5th Cir. 2005) .......... 13 

Kvaerner ASA v. Bank of Tokyo-Mitsubishi, Ltd., 210 F.3d 262 (4th Cir. 2000). ... 13 

McMillan Comp. Translation Sys., 66 S.W.3d 477 (Tex. App.—Dallas 2001, no 

pet.) ....................................................................................................................... 16 

One Beacon Ins. Co. v. Crowley Marine Servs., Inc., 648 F.3d 258 (5th Cir. 2011)

 ........................................................................................................................ 11, 12 
vi 

SEB Inc. v. Campbell, No. 03-10-00375-CV, 2011 WL 749292 (Tex. App.—

Austin Mar. 2, 2011, no pet.)(mem. op). ....................................................... 16, 17 

Smith v. Brown, 51 S.W.3d 376 (Tex. App.—Houston [1st Dist.] 2001, pet. denied)

 ............................................................................................................................... 20 

Volt Info. Scis., Inc. v. Bd. of Trs. of Leland Stanford Junior Univ., 489 U.S. 468 

(1989). ..................................................................................................................... 6

Statutes

TEX. CIV. PRAC. & REM. CODE ANN. § 16.003(a). ................................................... 17 
1 

STATEMENT OF THE CASE

Mario Mata claims he was injured during the repossession of his 

Chevrolet Suburban when he grasped hold of the rear bumper of the vehicle. (See

CR 6 at ¶11.) Mata brings tort, contract, and DTPA claims, alleging the 

repossession should not have occurred because he paid off the Suburban in full. 

(Id. ¶¶ 10–11.) Mata financed his purchase of the Suburban through a Sale 

Contract he executed with Appellant–Defendant Santander’s predecessor. (See CR 

71-72.) The Sale Contract had an arbitration agreement. (CR 76-80.)

Mata filed suit against and served Santander, Redshift Investigation, 

Inc. (“Redshift”), and repossession agent Blake Vandusen. Mata did not serve the 

remaining named Defendants. After the limitations period expired on Mata’s 

claims, Santander brought Centroplex Automobile Recovery, Inc. (“Centroplex”) 

and Centroplex’s president, John Thompson, into the case by asserting crossclaims for contribution and indemnification against Centroplex, Thompson, 

Redshift, and Vandusen (collectively, “Cross-Defendants”). (CR 47-54.) 

Santander then moved to compel both Plaintiff and Cross-Defendants to 

arbitration. (CR 65.) The Cross-Defendants opposed the motion on the grounds 

that they had not signed an arbitration agreement with any party to the case. The 

trial court granted Santander’s motion to compel as to Mata and ruled that the 

Cross-Defendants could not be forced to arbitrate. (CR 251-55.) 
2 

ISSUE PRESENTED 

Under the Federal Arbitration Act as applied in Texas, arbitration requires 

consent of all parties. An auto-finance company contracted with independent 

repossession agents without an arbitration provision. Years later, it added an 

arbitration clause to its contracts with car buyers. The repossession agents never 

signed or saw the consumer contracts. In a car buyer’s suit against the auto 

company and repossession agents, can the auto-finance company compel the 

repossession agents to arbitration? 

STATEMENT OF FACTS 

I. The Service and Recovery Agreements 

Santander, under the assumed name of Drive Financial (collectively, 

“Santander”) contracted with Redshift’s predecessor, Bay City, (collectively, 

“Redshift”) to handle repossession of vehicles Santander financed. (CR 70.) This 

Service Agreement was executed in early December 2002 and expressly 

designated Redshift an independent contractor of Santander. (CR 81 at ¶ 2.) 

Redshift later executed a Collateral Recovery Agreement to outsource 

some of its repossession assignments to Centroplex. (CR 140-52.) When 

Santander ordered repossession of Mata’s Suburban, Redshift tasked Centroplex 

with the job, and Centroplex sent Mr. Vandusen to pick it up. (CR 119 at ¶ 6.) 
3 

It is undisputed that neither the Service Agreement nor the Recovery 

Agreement contains an arbitration provision. (1 RR 10; see CR 81-85; 140-52.) 

II. The Sale Contract between Mata and Santander 

Mata financed the purchase of his Chevrolet Suburban through a Sale 

Contract with Capitol Chevrolet (now Santander). The two parties executed the 

agreement for sale and financing of the vehicle on December 28, 2002. (CR 71-

72.) They amended the Sale Contract in June 2009, adding an arbitration 

agreement governed by the Federal Arbitration Act (“FAA”). (CR 75-80.) 

It is undisputed that no Cross-Defendant was party to the original or 

amended Sale Contract, or even saw it. (See Appellant’s Br. at 8; 1 RR 15.) 

III. The Arbitration Provision 

The Sale Contract is the only contract between any of the parties that 

includes an arbitration provision, and it is undisputed that none of the CrossDefendants were party to the Sale Contract. (See Appellant’s Br. at 8.) Indeed, 

Santander has stipulated that the Cross-Defendants had never seen the Sale 

Contract before Santander brought them into this suit. (1 RR 15 (“I can stipulate 

that these co-defendants had never seen the contract between my client and Mr. 

Mata.”).) 

Neither the Service Agreement nor the Recovery Agreement contains 

a reference to the Sale Contract. (CR 81-85; 140-52.) 
4 

SUMMARY OF THE ARGUMENT

The right to trial by jury requires that arbitration not be ordered 

against a litigant without the litigant’s consent. The Cross-Defendants have never 

waived this right, so the trial court correctly denied Santander’s motion to compel 

arbitration as to the Cross-Defendants. The relevant facts in this appeal are 

undisputed: The only contracts signed by any Cross-Defendant in this case contain 

no arbitration provision, and the Cross-Defendants neither saw nor consented to 

the Sale Contract between Mata and Santander that did contain an arbitration 

provision. 

Settled law requires that a party sign an arbitration agreement in order 

to be compelled to arbitrate, and the Cross-Defendants were not signatories to the 

Sale Contract. Santander seeks to circumvent this rule by citing two of the rule’s 

narrow exceptions—but even the case law Santander cites proves that neither 

exception applies. First, the “incorporation by reference” exception requires 

language incorporating the arbitration contract. Santander cites no provision in 

either the Service Agreement or Recovery Agreement that makes any reference to 

the Sale Contract, original or amended. Second, the “agency” exception applies 

only when an agent signs an arbitration agreement on behalf of a principal, and 

Santander does not claim that it is an agent for the Cross-Defendants. It instead 
5 

tries to avoid this problem by relying on a body of cases that do not involve 

compelling a nonsignatory to arbitration. 

Santander executed no arbitration agreement with the CrossDefendants. When contracting for the outsourcing of repossession services, 

Santander did not even include an arbitration provision in that contract. Indeed, 

Santander conceded to the trial court that it could not compel arbitration as to the 

cross-claims in this case. Yet, after losing at the trial court, Santander now renews 

its meritless attempt to compel the Cross-Defendants to arbitrate. Like its trial 

brief, its appellate brief is void of any support in the facts or law that would allow, 

much less persuade, a court to order arbitration against nonparties to an arbitration 

agreement. 

The trial court correctly applied the law and facts and declined to 

order the Cross-Defendants to arbitrate. The holding should be affirmed, and fees 

should be assessed against Santander. 

ARGUMENT 

I. Santander and Cross-Defendants have executed no arbitration 

agreement. 

 Because Santander and Cross-Defendants have never entered into an 

arbitration agreement, Santander cannot compel them to arbitration. A party 

seeking to compel arbitration under the FAA bears the burden of proving that: “(1) 
6 

there is a valid arbitration agreement, and (2) the claims raised fall within that 

agreement’s scope.” In re Kellogg Brown & Root, Inc., 166 S.W.3d 732, 737 

(Tex. 2005) (orig. proceeding). “However, the presumption arises only after the 

party seeking to compel arbitration proves that a valid arbitration agreement 

exists[.]” Id. at 737 (internal quotations omitted). Under the FAA, ordinary 

principles of state contract law determine whether there is a valid agreement to 

arbitrate, and the Texas Supreme Court has clarified that these principles mean that 

the FAA generally “does not require parties to arbitrate when they have not agreed 

to do so.” Id. at 738 (quoting Volt Info. Scis., Inc. v. Bd. of Trs. of Leland Stanford 

Junior Univ., 489 U.S. 468, 478 (1989)). 

This rule protects litigants’ constitutional right to trial by jury, which 

is shared by plaintiffs and defendants alike. TEX. CONST. art. V, § 10 (“In the trial 

of all causes in the District Courts, the plaintiff or defendant shall, upon application 

made in open court, have the right of trial by jury”). Cross-Defendants intend to 

try this case before a jury, and have at no point waived their right to do so. 

Santander seeks to compel Cross-Defendants to arbitration simply 

because it contracted with the Plaintiff to arbitrate. “But the right to a jury trial is 

not discretionary. . . . If the parties have not agreed to arbitration, no trial court has 

discretion to make them go. . . .” In re Merrill Lynch Trust Co. FSB, 235 S.W.3d 

185, 193 (Tex. 2007). There is no arbitration agreement between Santander and 
7 

Cross-Defendants. Only one contract between Santander and any Cross-Defendant 

is in the record—the Service Agreement—and it contains no arbitration provision. 

If Santander sought to arbitrate suits involving repossession with its repossession 

contractors, it could have contracted for arbitration rights in the Service 

Agreement—or it could have included language expressly incorporating its sale 

and financing contracts. When given the opportunity, Santander chose not to 

include or incorporate an arbitration provision in the Service Agreement. 

Without an agreement to arbitrate between Santander and the CrossDefendants, binding contract principles prevent Santander from compelling CrossDefendants to arbitrate this suit. 

II. Cross-Defendants cannot be compelled to arbitrate under the 

agreement between Mata and Santander. 

Lacking an agreement to arbitrate with Cross-Defendants, Santander 

attempts to compel arbitration based on the Sale Contract it executed with Plaintiff. 

The Sale Contract is the sole document in the record that contains an arbitration 

agreement, but Cross-Defendants are not signatories to it. And no exception to the 

rule against compelling nonsignatories to arbitration applies here. 

A. Arbitration cannot be compelled because Cross-Defendants are 

not parties to the Sale Contract. 

Cross-Defendants cannot be bound by the arbitration agreement in the 

Sale Contract between Plaintiff and Santander because they did not agree to it. 
8 

Under the FAA, the United States Supreme Court “has repeatedly emphasized that 

arbitration is a matter of consent, not coercion.” In re Merrill Lynch Trust, 235 

S.W.3d at 187 (internal citations omitted). The FAA “does not require parties to 

arbitrate when they have not agreed to do so.” Id. 

The mere fact that some parties must arbitrate has never permitted the 

court to steer the remaining parties into arbitration, too. See id. Where a plaintiff 

asserted claims against both a company’s employees and its corporate affiliates and 

all defendants moved to compel arbitration, the Texas Supreme Court held that 

claims against the former could be compelled, but that the claims against the 

affiliates could not. Id. at 187. Recognizing the inefficiency that is “inherent in 

resolving these related issues in two different places,” the Court nonetheless ruled 

that “interdependent” conduct of corporate defendants was not sufficient for 

compelling arbitration. Id. at 192. Despite their relationship, “a contract with one 

corporation—including a contract to arbitrate disputes—is generally not a contract 

with any other corporate affiliates.” Id. at 191.1

 

The Texas Supreme Court has thus refused to create an exception 

simply for convenience’s sake. See id. at 192 (“efficiency and convenience cannot 

override either a signatory’s arbitration agreement or a nonsignatory’s right to a 

 

1 As described in Section B(2), the case at bar lacks an additional key requirement for arbitration: 

consent. Cross-Defendants are not nonsignatories seeking to enforce an arbitration agreement; 

they are nonsignatories that Santander seeks to compel to arbitration without their consent.
9 

jury trial.”). Santander has now conceded that the Cross-Defendants were not 

parties to the Sale Contract. (Appellant’s Br. at 8.) It has even stipulated that 

Cross-Defendants had never seen the Sale Contract before this lawsuit 

commenced. (1 RR 15.) The Cross-Defendants cannot be forced to arbitrate based 

on an agreement between two outside parties,	 especially when Cross-Defendants 

did not even know that agreement existed. 

B. None of the exceptions that would allow nonsignatories to be 

compelled to arbitration applies here. 

There are six exceptions to the rule that nonsignatories cannot be 

bound to an arbitration agreement—none of which apply here. These exceptions 

are: (1) incorporation by reference, (2) assumption, (3) agency, (4) alter ego, (5) 

equitable estoppel, and (6) third-party beneficiary. Kellogg Brown & Root, 166 

S.W.3d at 739 (citing Bridas S.A.P.I.C. v. Gov’t of Turkm., 345 F.3d 347, 356 (5th 

Cir. 2003)). On appeal, Santander argues that two of these exceptions apply. But 

the Cross-Defendants did not sign a contract incorporating the Sale Contract by 

reference, and the agency exception to compelling nonsignatory arbitration is 

inapposite. 

1. Santander waived the incorporation-by-reference exception and, 

in any event, the exception does not apply to the Agreements here. 

Santander raises the “incorporation by reference” doctrine for the first 

time on appeal. Despite Cross-Defendants’ briefing enumerating the six 
10 

exceptions above, Santander never invoked the incorporation exception to the trial 

court, either in its briefing or at the hearing. Accordingly, the trial court had no 

opportunity to rule on this basis, and the ground for appeal is waived. See TEX. R.

APP. P. 33.1(a)(1); e.g. Bridas, 345 F.3d at 356 (holding party failed to preserve 

incorporation-by-reference and assumption arguments); Carr v. Main Carr Dev., 

LLC, 337 S.W.3d 489, 494 (Tex. App.—Dallas 2011, pet. denied)(when 

considering nonsignatory exception to arbitration, holding that “[b]ecause Carr did 

not raise the agency issue in the court below, it has not been preserved for our 

review.”) 

The incorporation-by-reference exception, even if preserved, would 

not apply. Cross-Defendants executed no agreement that incorporated the Sale 

Contract between Plaintiff and Santander, or that incorporated any other arbitration 

agreement. Terms are incorporated by reference only if “it is clear that the parties 

to the agreement had knowledge of and assented to the incorporated terms.” One 

Beacon Ins. Co. v. Crowley Marine Servs., Inc., 648 F.3d 258, 268 (5th Cir. 2011). 

“The language in the signed document must show the parties intended for the other 

document to become part of the agreement.” Bob Montgomery Chevrolet, Inc. v. 

Dent Zone Cos., 409 S.W.3d 181, 189 (Tex. App.—Dallas 2013, no pet.). But 

Santander stipulates that the Cross-Defendants had never seen the Sale Contract. 

(1 RR 15.) They could not possibly have “ha[d] knowledge of” or “assent[ed]” to 
11 

the Sale’s Contract terms, see One Beacon Ins. Co., 648 F.3d at 268, and Santander 

has not argued that they did. (Cf. 1 RR 17) (describing Cross-Defendant’s 

knowledge as “irrelevant”). Neither the Service Agreement nor the Recovery 

Agreement contains the barest mention of the Sale Contract, so the Agreements’ 

“language” cannot even arguably “show the parties intended for the [Sale Contract] 

to become part of” those Agreements. See Bob Montgomery Chevrolet, Inc., 409 

S.W.3d at 189. 

The provisions Santander quotes from the Service and Recovery 

Agreements do not, explicitly or implicitly, incorporate or even reference the Sale 

Contract. The Service Agreement’s quoted provisions specify an intent to perform 

recovery services for Santander’s accounts, and the Recovery Agreement’s quoted 

provisions state the intent for Centroplex to receive recovery assignments from 

Redshift. (See Appellant’s Br. at 15.) In stark contrast, the agreements in the two 

cases Santander relies upon do contain incorporation provisions. In the first case, 

the nonsignatory’s contract specified that “all terms and conditions, liberties and 

exceptions . . . including the Law and Arbitration Clause, are herewith 

incorporated.” Keytrade USA, Inc. v. AIN Temouchent M/V, 404 F.3d 891, 896–

97 (5th Cir. 2005) (emphasis added). In the second case, the nonsignatory’s 

contract explicitly “guaranteed . . . each and every obligation” and adopted “the 

same rights and remedies” as under the specific contract containing the arbitration 
12 

provision. See Kvaerner ASA v. Bank of Tokyo-Mitsubishi, Ltd., 210 F.3d 262, 

264–65 (4th Cir. 2000). In both cases, the nonsignatory’s contract explicitly 

incorporated the contract containing the arbitration provision by name.

The Agreements Cross-Defendants signed are not even arguably 

analogous to the contracts in Keytrade or Kvaerner. No intent to incorporate the 

Sale Contract is reflected in this record. The incorporation-by-reference exception 

was not preserved for appeal and, in any event, is inapplicable here. 

2. Santander’s use of the agency exception has no basis in law or 

fact. 

Santander cannot—and does not—argue that it was an agent of CrossDefendants, so the agency exception does not apply. And none of the authority 

cited by Santander involved compelling a nonsignatory to arbitration, so its novel 

reverse-agency theory, even if adopted, would not change the result here. 

a. The agency exception would only apply if Santander were an 

agent of Cross-Defendants, which it has not alleged to be. 

The agency exception binds a nonsignatory only when a party to the 

arbitration agreement signed as the agent of the nonsignatory. See Bridas, 345 

F.3d at 356–57. The authority to bind the nonsignatory must exist at the time of 

signing. See id. at 358. An ongoing relationship is not sufficient; Santander “has 

the burden of proving [the signatory] signed the Agreement as an agent of [the 

nonsignatory] and not for themselves alone.” See, e.g., E. Tex. Med. Ctr. Reg’l 
13 

Healthcare Sys. v. Slack, 916 F. Supp. 2d 719, 722 (E.D. Tex. 2013) (“Defendants 

. . . argue that [the nonsignatory] has an agency relationship [because it is] a 

wholly owned subsidiary [of the signatory]. A corporate relationship alone, 

however, is generally not sufficient to bind a non-signatory to an arbitration 

agreement.”) 

To satisfy the agency exception, Santander would have to show that, 

while executing the sale and financing of Mata’s vehicle, Santander signed the Sale 

Contract as an agent of one of the past or future entities handling repossession 

services for Santander’s vehicles. Santander had no authority to bind any of the 

Cross-Defendants while financing Mata’s vehicle.	 	Accordingly, even Santander

does not argue that it acted as an agent for Cross-Defendants. 

b. Santander’s authority is inapposite. 

Instead, in an attempt to shoehorn this case into the one doctrine that it 

preserved for appeal, Santander makes a mirror-image agency argument. 

Santander’s inverted logic urges that its vicarious liability for Cross-Defendants’ 

conduct made Cross-Defendants “agents” of Santander for purposes of the 

nonsignatory arbitration exception. But agency law has never overridden the 

constitutional requirement that all parties consent to arbitration. Whether CrossDefendants acted as agents of Santander when repossessing the Suburban in 2011 

cannot retroactively and forcibly make Cross-Defendants parties to an arbitration 
14 

agreement executed two years earlier. “If the parties have not agreed to arbitration, 

no trial court has discretion to make them go.” Merrill Lynch Trust, 235 S.W.3d at 

192. 

Santander cites several nonbinding cases in an attempt to advance its 

agency argument. But none of these cases even involves compelling a 

nonsignatory to arbitration. Instead, Santander’s cases all involve the reverse—a 

nonsignatory who seeks to invoke an arbitration agreement.2

 SEB and Gililland, 

for example, both held a nonsignatory employee of its signatory employer could 

compel arbitration against the other signatory to the agreement. SEB, 2011 WL 

749292 at *4; Gililland, 2004 WL 2126755 at *3–4. They did not hold that the 

employee could be forced to arbitrate against his will. See id. 

“Arbitration agreements apply to nonsignatories only in rare 

circumstances.” Bridas, 345 F.3d at 358. If an arbitration agreement applied to 

every nonsignatory who contracted to perform services for a signatory company, 

the exception would swallow the rule. And it plainly would not satisfy the basic 

 

2 See SEB Inc. v. Campbell, No. 03-10-00375-CV, 2011 WL 749292, *4 (Tex. App.—Austin 

Mar. 2, 2011, no pet.)(mem. op); Jenkens & Gilchrist, P.C. v. Riggs, 87 S.W.3d 198, 202–03 

(Tex. App.—Dallas 2002, no pet.); McMillan Comp. Translation Sys., 66 S.W.3d 477, 481 (Tex. 

App.—Dallas 2001, no pet.) (holding agents of signatory “were entitled to the benefit of the 

arbitration agreement for these claims”); Gililland v. Taylor Inv., No. 11-03-00175-CV, 2004 

WL 2126755, *3–4 (Tex. App.—Eastland Sep. 23, 2004, pet. denied). Moreover, Jenkens & 

Gilchrist held the law firm seeking to enforce its client’s agreement was not an “agent” of its 

client because the firm was an independent contractor. 87 S.W.3d at 202. Similarly, in the case 

at bar, the sole contract Santander executed with any of the Cross-Defendants expressly 

designated Redshift an independent contractor. (CR 81.)
15 

consent requirement of an arbitration agreement. See In re Merrill Lynch Trust, 

235 S.W.3d at 187. No case has so curtailed the right to jury trial. 

The agency exception only operates to compel a party to arbitration 

when the signatory was acting, at the time of signing, as an agent of a principal. 

Because Santander plainly—and undisputedly—did not sign the Sale Contract on 

behalf of the Cross-Defendants, the exception does not apply. There is nothing in 

the record showing that Cross-Defendants intended to consent to arbitration. They 

cannot now be compelled to arbitrate this suit under either of the two proffered 

exceptions.

III. Plaintiff never served the Centroplex Defendants, so only cross-claims 

exist against them, and Santander agrees those are not arbitrable. 

 Centroplex and Thompson (collectively, “the Centroplex 

Defendants”) cannot be compelled to arbitration because, even if the Court 

accepted Santander’s novel arguments, there are no arbitrable claims against them. 

Santander concedes that the cross-claims in this case cannot be compelled to 

arbitration. (1 RR 7 (“I don’t believe that my client can compel arbitration as to 

the cross-claims. It’s only those claims that are asserted by the plaintiff against all 

of the defendants.”).) Its motion to compel therefore never sought to compel the 

cross-claims to arbitration. (CR 65 (moving to compel only Plaintiff’s claims 

against the Defendants); 1 RR 34 (“If we were seeking to have the cross-claims 

arbitrated, yes, then that would be at issue today.”).) 
16 

As to the Centroplex Defendants, though, cross-claims are the only

claims pending because Plaintiff has never served the Centroplex Defendants with 

any claims against them. The limitations period has passed in this case. The 

repossession Plaintiff complains of occurred on February 23, 2011, (CR 6 at ¶ 11,) 

so the two-year statute of limitations for personal injury expired on February 23, 

2013. See TEX. CIV. PRAC. & REM. CODE ANN. § 16.003(a). The record reflects 

that Plaintiff has never served the Centroplex Defendants with any claims, and 

Santander waited until after limitations expired to serve the Centroplex Defendants 

with its claims.		There are not now, and never will be, claims by Plaintiff against 

the Centroplex Defendants in this case. 

The cross-claims are the only live claims against the Centroplex 

Defendants, and Santander correctly chose not move to compel the cross-claims to 

arbitration because of the lack of any arbitration agreement between Santander and 

the Cross-Defendants. For all the reasons above, and specifically because there are 

no arbitrable claims by or against the Centroplex Defendants, the trial court’s 

ruling as to the Centroplex Defendants should be affirmed. 

IV. The Court Should Award Reasonable Fees to Cross-Defendants. 

The frivolous nature of this appeal warrants, at a minimum, a fee 

award. The rules provide for damages when “the court of appeals determines that 

an appeal is frivolous.” TEX. R. APP. P. 45. To determine whether to award 
17 

damages, this Court considers whether the appellant has “reasonable grounds to 

believe the case could be reversed.” Hunt v. CIT Grp./Consumer Fin., Inc., 03-09-

00046-CV, 2010 WL 1508082, at *8 (Tex. App.—Austin Apr. 15, 2010, pet. 

denied) (mem. op.) (citing Smith v. Brown, 51 S.W.3d 376, 381 (Tex. App.—

Houston [1st Dist.] 2001, pet. denied)). 

Santander has no reasonable basis for curtailing the CrossDefendants’ federal Seventh Amendment and state constitutional rights to jury in 

this case, particularly as to the Centroplex Defendants. Santander’s appeal lacks a 

single basis in law or fact for overturning the trial court’s decision. The relevant 

facts are undisputed and only one of two briefed issues was preserved for appeal. 

The sole preserved issue is whether Cross-Defendants, though nonsignatories, can 

be compelled to arbitrate on the basis of agency. On this issue, Santander fails to 

cite a single case that involves compelling a nonsignatory to arbitration, and cites 

no binding authority at all. See Hunt, 2010 WL 1508082 at *8 (awarding fees as 

damages because of appellant’s “unsupported factual statements (and 

misstatements), repeated failures to preserve error for appeal, and the absence of 

legal merit in his arguments.”). 

A reasonable attorney could not fail to conclude that the trial court’s 

ruling would be upheld. See id; Smith, 51 S.W.3d at 381 (awarding $5000 in fees 

because “[n]o reasonable attorney could fail to conclude this court would uphold 
18 

the trial court’s summary judgment”). Indeed, Santander’s counsel conceded on 

the record to the trial court that it could not compel the cross-claims to arbitration, 

(1 RR 7), yet it persisted in arguing the motion to the trial court and then pursuing 

the issue on appeal. Cross-Defendants have had to spend unnecessary time and 

expense defending against, first, Santander’s groundless motion, and now its 

meritless appeal. Santander has thus unnecessarily forced the Cross-Defendants to 

expend considerable resources—all to simply defend their constitutional right to be 

heard in court. 

Consequently, Cross-Defendants seek as damages an award of 

attorneys’ fees and costs associated with those efforts, and have attached an 

affidavit establishing the amount of reasonable and necessary fees. See TEX. R.

APP. P. 45; Hunt, 2010 WL 1508082, at *9 (identifying attorneys’ fees as the 

typical damages award and noting that “proof by affidavit is a proper method of 

establishing the appropriate sanction for the filing of a frivolous appeal”). A fee 

award is appropriate as damages in this case because of the objectively groundless 

nature of this appeal. 

PRAYER 

 For the foregoing reasons, Cross-Defendants Centroplex Automobile 

Recovery, Inc., John F. Thompson, Redshift Investigation, Inc., and Blake 
19 

Vandusen respectfully request that this Court affirm the trial court’s holding that 

denied Santander’s Motion to Compel Arbitration and Stay of Case. CrossDefendants further ask this Court to impose damages upon Santander for this 

frivolous appeal based on the attached affidavit for reasonable attorneys’ fees, and 

grant the Cross-Defendants any additional relief, at law or in equity, to which they 

are entitled. 

 
20 

Respectfully submitted, 

RICHARDSON + BURGESS LLP 

221 West 6th Street, Suite 900 

Austin, Texas 78701-3445 

Telephone: (512) 482-8808 

Facsimile: (512) 499-8886 

Email: kburgess@richardsonburgess.com 

Email: ssharp@richardsonburgess.com 

 

 /s/ Stacy Rogers Sharp 

By: ______________________________ 

 Karen C. Burgess 

 State Bar No. 00796276 

 Stacy Rogers Sharp 

 State Bar No. 24052109 

 

ATTORNEYS FOR APPELLEES 

CENTROPLEX AUTOMOBILE 

RECOVERY, INC. AND JOHN F. 

THOMPSON 

MACDONALD DEVIN, PC 

1201 Elm Street, Suite 3800 

Dallas, Texas 75270-2130 

Telephone: (214) 744-3300 

Facsimile: (214) 747-0942 

Email: jkenefick@macdonalddevin.com 

Email: jsigety@macdonalddevin.com 

 

 /s/ John S. Kenefick 

By: ______________________________ 

 John S. Kenefick 

 State Bar No. 24006294 

 John R. Sigety 

 State Bar No. 24083853 

ATTORNEYS FOR APPELLEE 

BLAKE THORNTON VANDUSEN 
21 

 LINDOW ▪ STEPHENS ▪ TREAT LLP 

One Riverwalk Place 

700 North St. Mary’s Street, Suite 1700 

San Antonio, Texas 78205 

Telephone: (210) 227-2200 

Facsimile: (210) 227-4602 

Email: clotz@lstlaw.com 

Email: dlt@lstlaw.com 

 /s/ Christopher A. Lotz 

By: ______________________________ 

 Christopher A. Lotz 

 State Bar No. 24031630 

 David L. Treat 

 State Bar No. 20205300 

ATTORNEYS FOR APPELLEE 

REDSHIFT INVESTIGATION INC.
22 

CERTIFICATE OF COMPLIANCE 

 I certify that this document was produced on a computer using Microsoft 

Word 2010 and contains 3,670 words, as determined by the computer software’s 

word-count function, excluding the sections of the document listed in TEX. R. APP.

P. 9.4(i)(1). 

 /s/ Stacy Rogers Sharp 

_________________________________ 

 Stacy Rogers Sharp 

CERTIFICATE OF SERVICE 

I hereby certify that a true and correct copy of the foregoing instrument has 

been served upon the following parties either electronically through an electronic 

filing manager or in the alternative served by fax prior to 5:00 p.m., in person, by 

mail, commercial delivery service, or email, on this 20th day of January, 2015, as 

follows: 

Donald L. Turbyfill 

Deborah C. S. Riherd 

Vicki W. Hart 

Devlin, Naylor & Turbyfill, PLLC 

4801 Woodway Drive, Suite 420-West 

Houston, Texas 77056-1884 

Facsimile: (713) 586-7053 

ATTORNEYS FOR APPELLANT 

SANTANDER CONSUMER USA, INC. 

Mario A. Mata 

Mario A. Mata, PLLC 

111 Congress Avenue, Suite 400 

Austin, Texas 78701-4143 

Facsimile: (214) 276-7305 

APPELLEE, pro se 

 /s/ Stacy Rogers Sharp 

_________________________________ 

 Stacy Rogers Sharp 
vi 

No. 03-14-00782-CV 

____________________________ 

IN THE THIRD COURT OF APPEALS 

AT AUSTIN, TEXAS 

____________________________ 

SANTANDER CONSUMER USA, INC. 

Appellant, 

V. 

MARIO A. MATA, CENTROPLEX AUTOMOBILE RECOVERY, INC.,

BLAKE THORNTON VANDUSEN, JOHN F. THOMPSON D/B/A 

CENTROPLEX AUTOMOBILE RECOVERY, INC., AND REDSHIFT

INVESTIGATION, INC. 

Appellees. 

____________________________ 

Appealed from the 

353rd Judicial District Court 

Travis County, Texas 

Cause No. D-1-GN-13-000677 

____________________________ 

APPELLEES’ APPENDIX

____________________________ 

LIST OF DOCUMENTS 

TEX. CIV. PRAC. & REM. CODE ANN. § 16.003(a) ............................................. TAB 1 

Service Agreement ............................................................................................ TAB 2 

Collateral Recovery Agreement ........................................................................ TAB 3 

Affidavit of Karen C. Burgess .......................................................................... TAB 4
TAB 1 

 
§ 16.003. Two-Year Limitations Period, TX CIV PRAC & REM § 16.003

 © 2015 Thomson Reuters. No claim to original U.S. Government Works. 1

Vernon's Texas Statutes and Codes Annotated

Civil Practice and Remedies Code (Refs & Annos)

Title 2. Trial, Judgment, and Appeal

Subtitle B. Trial Matters

Chapter 16. Limitations

Subchapter A. Limitations of Personal Actions (Refs & Annos)

V.T.C.A., Civil Practice & Remedies Code § 16.003

§ 16.003. Two-Year Limitations Period

Effective: September 1, 2005

Currentness

(a) Except as provided by Sections 16.010, 16.0031, and 16.0045, a person must bring suit for trespass for injury to the estate

or to the property of another, conversion of personal property, taking or detaining the personal property of another, personal

injury, forcible entry and detainer, and forcible detainer not later than two years after the day the cause of action accrues.

(b) A person must bring suit not later than two years after the day the cause of action accrues in an action for injury resulting

in death. The cause of action accrues on the death of the injured person.

Credits

Acts 1985, 69th Leg., ch. 959, § 1, eff. Sept. 1, 1985. Amended by Acts 1995, 74th Leg., ch. 739, § 2, eff. June 15, 1995; Acts

1997, 75th Leg., ch. 26, § 2, eff. May 1, 1997; Acts 2005, 79th Leg., ch. 97, § 3, eff. Sept. 1, 2005.

Editors' Notes

REVISOR'S NOTE

2002 Main Volume

(1) The revised law omits the reference to firms and public and private corporations in the source law. The

Code Construction Act (V.A.C.S. Article 5429b-2) includes business entities and governmental entities within the

definition of “person.”

(2) The revised law omits the source law material that provides for suits to be brought within two years of the

effective date of V.A.C.S. Article 5526a (March 7, 1934) because the two-year period has expired.

Notes of Decisions (2559)

V. T. C. A., Civil Practice & Remedies Code § 16.003, TX CIV PRAC & REM § 16.003

Current through the end of the 2013 Third Called Session of the 83rd Legislature

End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.
TAB 2 

 
81

,·~vv.J.uh.m..li.'"n"'' • Agerioy .a·J ~re~~s.~~?:?<U:U< 

·the coUe6~ion 0t,aH ·inJQ'&unt$ decides to· place withAgencyandJu$e:· 

due diligence and employ such means, methods, and procedures as in its 

judgment, discretion, and experience it believes will best effect the r~qovexyqf 

such accounts, provided such means, methods, and procedures are lawful and 

conducted by persons qualified to make such said judgment. 

2. Independent. This agreement shall not be deemed a joint venture or partnership 

between Client and Agency. Agency shall only act in the capacity of an 

independent contractor of Client. 

3. Invoicing. Agency wilJ remit invoice within 24 hours of repossession, or the 

following business day if repossession occurs on holiday or weekend. Invoice 

should detail by individual account: service provided, agency fee, and all 

applicable taxes. Repossession agents will invoice Client directly, at no cost to 

. the Agency. 

4. Compliance. Agency agrees their services herein shall be provided in accordance 

with all applicable laws, ordinances, regulations, the Fair Debt Collections 

Practices Act, Graham-Leach-Bliley Act- 15 USC 6802-6827, similar state debt 

collection laws, and rules of federal, state, and local authorities and in a manner 

so as not to reflect unfavorably upon Client, and S"!JCh services will be provided in 

a professional and workmanlike matmer. 

5. Legal Accounts. In the event Client or Agency requests legal action on an 

account, Client will advance all court costs, attorney's fees, mediation feesjmd 

other costs ~ricurred during the legal process. Agency is required to submit 

request for legal action in writing and Client will submit such authorization in 

writing. 
82

accoutit is. · ,.., ... V;f.'"""" 

·enforceable, ·client will immediately notify Agency. On6e 

·Agency of a bankruptcy filing, Agency will cease all investli$iH~ri a.l\(Jiif,el~lM~~if~~,, 

efforts, and Client will pull the loan back in~hous.e to se~t.~e · 

1

action. In the event the Agency receives notification krt~pt)iiy'fiUr!;g;·~1~:~t~~y 

. will obtain bankruptcy information: case numoer) chapt~t filed; 

attorney name and phone number; and immediately carieel acco.unt.:-and ·l'.I."''"P•'V''P· 

Client of cancellation in writing. 

11. Indemnity Obligations. Agency will indemnify and hold the Client and its 

employees, officers, directors, agents, and affiliates harmless from and against 

any and all costs, losses, damages (including court costs and reasonable attomey's 

fees), or other liabilities or expenses by reason of or in consequence of any claim 

arising out of any breach or violation by Agency of any provision oftf.li~ 

Agreement and/or applicable law, or by reason of the acts 0r omissions ofAgf:lncy 

in connection with the services perfonned by Agency pursuant to this Agr~ef11e.Q.t .. 

Client will indemnify and hold Agency and its employees, officers; dir~C,t9rs., ·: · 

agents, and affiliates harmless from any and all· costs, J:asS'es; damllg~s~t.i~~ci,~iJgt · 

court costs arid reasonable attomey's fees), or other liabilities Agency may S.U:ffer 

by reason of the acts or omissions of Client or any other collection agency with 

respect to any account. These indemnity obligations shaH survive the terminat'i'on 

ofthis Agreement. 
83

~· 

. ~-·;~·. ~_., 

14. Use of Cli~nt's Df~m~. A:gerroy,agr¢eslt wtlt·nt~l~tis~~;''t%Mi'i1 

promotiJnal material or media, Client,s name or logo. or the 

affiliate of Client, or otherwise identify Client as 3;·cli¢nt ef A;gen~y1 ~W:i!CljW:l(E~ 

Client's prior written consent. · , · . '~:.'" 

·1s. Non-Exclusive Agreement. It is agreed that nothing herein.c;ontainec.t~hli1.Lbe 

construed as obligating Client to place accounts with Agency f~r in¥estt~g~tft;li.1:cu: 

recovery or as an exclusive arrangement between Agency and·CUerit. · 

16. Insurance. Agency shall maintain commercial general public liability and 

professional liability insurance in minimum amounts of $1 ,000;000 for any ().ne 

occurrence and in the aggregate. Upon client's request, Agency shalkprovide 

appropriate certificates showing such insurance coverage is in effect. Agency 

shaH name Drive Financial Services, LLP, and Drive Servicing, I;;LC, as · 

Certificate Holder on General Liability Policy. A $1,000,000 Errors and 

Omissions Policy will be required, inclusive of Third Pm,y :Q.}.sclq~y.r.,e, .. 

Misrepresentation, and Wrongful Repossession. Agency shall...nam~.. · .. ::, . 

Financi-al Services, LLP, and DriveBervieing;LLC, as~.Ue'rB!ft&dt&;;i_·: .. ~~jj;;;f~·' · 

Errors and Qmissions Policy. Agency shall be required to (;)btain $TQ;trqo sijt"¢:ty 

bond per Texas Finance Code for Debt Collection, Subchapter B., Section 

392.101. 

...... ..., ··-· ~ ·v= •.. . ... 

\• 
84

· 23. Approved R~poss~ssi2n Agent. Agency shall expressly use Client-appr.e:v.¢(1 

repossession agents. Client shall provide agent list upon signing Agreetnt1P.t 

Client will provide Agency with any and all revisions to the repossession ag~nt 

list. Agency shall notify Client of any additional charge& to be. ~Sl?~St?ed qn . . 

repossession; Client must authorize any additional charges in wr'iting; prlnr"to 

Repossession Agent taking action. 

.;.-. 
85

By: --------~~~----
TAB 3 

 
140

COLLATERAL RECOVERY AGREEMENT 

This COLLATERAL RECOVERY AGREEMENT (this "Agreement") is hereby 

entered into effective as of the date set .forth below, by and between REDSHIFT 

INVEST GATION, a artornia Corporation . ("Redshift lnvP.::tim=ttinn"L and 

" l..:-"7 .ll?...::7. • ~ , t .J Cc,ll!.putrA(-;Y'v' . ( Recove Agency') (collectively referred (o as the "Partie.-s,:::-)-. -~'-'-'-~""-----

RECITALS: 

A. Redshift Investigation contracts with various financial institutions ("Client" or 

".Clients") to recover secured collateral ("Property") on behalf of the Client. Due to the 

location of the Property to be recovered, Redshift Investigation subcontracts physical 

recovery of the Property to third party recovery agencies; 

B. Recovery Agency is in the busine.ss of recovering personal property and wishes 

to establish a relationship with Redshift Investigation in order to receive recovery 

assignments ("Assignments") from Redshiftlnvestigation; 

C. For good and valuable consideration, receipt of which is hereby acknowledged, 

Redshift Investigation and Recovery Agency hereby enter into the following nonexclusive Agreement: 

AGREEMENT: 

I. Term and Termination. 

l.l. This Agreement shall continue in full force and effect until terminated by 

either of the Parties as set forth below. 

1.2. This Agreement may be terminated without cause by Recovery Agency 

upon thirty (30) days prior written notice to Redshift Investigation. 

1.3. Redshift Investigation may cancel this Agreement and/or any Assignment 

at any given time for any reason. Redshift Investigation will provide notification of a 

cancelled Assignment to Recovery Agency via telephone or other method as designated 

by Redshift Investigation. An Assignment shall be deemed cancelled as of the date of 

such notice. Recovery Agency will cease performance of services on the Assignment(s) 

as soon as possible, but no greater than twenty-four (24) hours after notification has 

been given; provided, however, if cancellation is due to breach by Recovery Agency of 

this Agreement as determined in Redshift Investigation's sole discretion, then such 

cessation of services must occur within one (1) hour of such notice. Redshift 

Investigation will determine the appropriate fees and costs to be paid to Recovery 

Agency on a case-by-case basis, depending on the services performed at the time of 

cancellation. 

I .4. Upon termination of this Agreement, Recovery Agency shall return all 

Property, account data .and all Client information in its possession, or in the possession 

45868417.3 09803765 

Redshift 075 

Exhibit D 
141

of its subcontractors, to Redshift Investigation within seven (7) days after the effective 

date of t~e termi~ati~n o~ this Agreement .. Recovery Agency shall return such Property 

to Redsh1ft lnvest1gat1on tn the same cond1t1on as when such Property was recovered by 

or delivered to Recovery Agency. 

2. Policies And Procedures. 

Redshift Investigation's policies and procedures are attached hereto as Exhibit A 

and are hereby incorporated into this Agreement. From time to time, Redshift 

Investigation may amend its policies and procedures, which, when initialed by Redshift 

Investigation and Recovery Agency, will become a part of this Agreement. 

3. Damaged Property. 

3.1. Recovery Agency will obtain the prior approval of Redshift Investigation 

before securing any Property with major, visible, or known damage that may result in a 

significantly reduced sale price at Auction ("Damaged Property"). Visible damage will 

include, but not be limited to, the following: 

(a) Major collision or comprehensive damage; 

(b) Missing mechanical or body parts; 

(c) Altered Property; 

(d) Property that requires repairs (i.e. no tires, motor, windshields, etc.); 

or 

(e) Property that appears to be worth less than $2,000. 

3.2. If Recovery Agency disc.overs Damaged Property during an Assignment 

and Redshift Investigation advises Recovery Agency not to arrange for the recovery of 

such Damaged Property, Redshift Investigation will decide on a case-by-case basis 

whether payment of fees and costs for the Assignment is appropriate ("Attempted 

· Recovery"), based on services performed. 

3.3. Recovery Agency is required to submit pictures to Redshift Investigation 

that clearly demonstrate damage ("Substantiating Pictures") in order for Attempted 

Recovery fee to be approved. 

3.4. Redshift Investigation, in its sole and absolute discretion, will determine on 

a ease-by-case basis whether payment is appropriate if Recovery Agency arranges for 

the recovery of Damaged Property without the prior approval of Redshift Investigation or 

without submitting Substantiating Pictures for Damaged Property. 

45868417.3 09803765 2 

Redshlft 076 
142

4. Liability for Loss or Damage. 

4.1. Recovery Agency has full responsibility for the Property while it is in 

Recovery Agency's possession and will exercise commercially reasonable caution to 

prevent the Property from being damaged, lost or stolen. · · 

4.2. If the Property is damaged, lost or stolen While under Recovery Agency's 

control, Recovery Agency will notify Redshift Investigation within twenty-four (24) hours 

and will pay for all costs of repair or replacement. 

5. Notification of Repossession. 

5.1. Time for Reporting. 

(a) Recovery Agency will report all repossessions that occur during 

normal business hours to Redshift Investigation within six (6) hours of repossession. 

Normal business hours are Monday through Friday, 9 a.m. to 5 p.m., Pacific Standard 

Time ("PST"). 

(b) If the repossession occurs outside of normal business hours, 

Recovery Agency will submit a Notification of Repossession via facsimile, via email or 

online to Redshift Investigation before 10:00 a.m. PST on the next calendar day. 

5.2. Procedure for Reporting. Reporting shall be by a Notification of 

Repossession, in the form attached hereto as Exhibit B, and shall be sent to Redshift 

Investigation online (see Policies and Procedures attached hereto as Exhibit A) or by 

facsimile or email.· Redshift Investigation wil.l fax or email Recovery Agency a 

confirmation of Notification of Repossession within six· (6) business hours of Redshift 

Investigation's receipt of Notification of Repossession. 

5.3. Liability for Late Reporting. Recovery Agency acknowledges that some of 

Redshift Investigation's Clients have default insurance which will pay the unpaid 

balance of a contract upon repossession, but only if the fact of repossession is reported 

to the insurance company within fifteen (15) days of repossession. If Recovery Agency 

fails to timely report a repossession, and therefore causes Redshift Investigation's 

Client(s) to lose any default insurance coverage, Recovery Agency shall be liable for the 

amount which such default insurance would have paid if the repossession had been 

timely reported. 

6. Relationshig Between the Parties. 

6.1. Recovery_ Agency is an independent contractor, and nothing contained 

herein shall be construed as creating any relationship between Redshift Investigation 

and Recovery Agency other than that of independent contractor. Without limiting the 

generality of the foregoing, Recovery Agency shall have no authority to enter into any 

contract on behalf of Redshift Investigation or to otherwise make any representations, 

agreements or covenants on its behalf. Recovery Agency has the exclusive right to 

establish the work hours of its personnel providing the services and to control and di~ect 

45868417J 09803765 3 

Redshift 077 
143

the methods, means, manner and details of performing its obligations under this 

Agreement. Recovery Agency also agrees to inform debtors, consumers, . its 

employees, agents, representatives and subcontractors, and all other persons and 

entities involved in the performance of the services under this Agreement, that it is an 

independent business with no affiliations to Redshift Investigation. 

6.2. If any c9urt or administrative tribunal or agency with appropriate 

jurisdiction determinations that any employment relationship has been or will be 

established by the performance of this Agreement, notwithstanding anything to the 

contrary set forth in this Agreement, Recovery Agency will reimburse and indemnify 

Redshift Investigation for costs and expenses of any nature arising out of or relating to 

such a determination and/or Redshift Investigation's defense of such a determination, 

including, but not limited to, tax withholding and insurance claims in the nature of 

unemployment compensation and/or workers' compensation imposed by any level of 

government and reasonable attorneys' fees and costs of suit. 

7. Confidential Information: Recovery Agency Obligations. 

Recovery Agency will maintain the confidentiality of all of the information 

disclosed by Redshift Investigation ("Confidential Information") and· agrees to use 

Confidential Information solely for the tasks and purposes for which it is disclosed. 

Recovery Agency must use a closed computer operating system that does not allow 

third parties to access Confidential Information on any account referred to Recovery 

Agency by Redshift Investigation. Redshift Investigation may examine and audit 

Recovery Agency's records and processes pertaining to this Section 8 at any 

reasonable time and upon advance notice. 

8. Insurance. 

8.l. Recovery Agency must maintain at all times the following minimum 

insurance requirements; provided, however that such minimum insurance requirements 

shall in no way limit the liability assumed elsewhere in this Agreement: 

(a) Commercial General Liability 

(1) Commercial · General Liability Form. Including 

Premises/Operations, Independent Contractors, Products/Completed Operations, 

Personal Injury, Broad Form Property Damage (including Completed Operations). 

(2) Contractual Liability: Blanket basis insuring the liability 

assumed under this Agreement. 

(3) Limits of Liability: $1,000,000 Each Occurrence for Bodily 

Injury and/or Property Damage and $2,000,000 General Policy Aggregate. 

(b) Business Automobile Liability 

45868417.3 09803765 4 

Redshift 078 
144

. (1) 8 usiness Automobile Liability Form covering physical 

damage of Redsh1ft Investigation's Property, including all owned, non-owned and hired 

vehicles, aircraft and other vehicles subject to repossession pursuant to this Agreement 

(2) Limits of Liability: $2,000,000 Combined Single Limit for 

Bodily Injury and Property Damage. . . 

(c) Garage Keepers Direct Primary Coverage $300,000 limit. 

(d) Drive-Away and On-Hook Physical Damage $100,000 limit. 

(e) In the event of repossession of Property that must be transported 

over water, Marine coverage of $1 ,000;000. Such insurance shall provide replacement 

cost coverage for physical damage to all Property traveling over water. Deductible may 

not exceed $1,000 per occurrence. . . · 

8.2. All insurance coverage required as herein set forth, including deductible 

requirements, shall be at the sole cost and expense of Recovery Agency. 

8.3. Except where prohibited by law, all insurance policies shall contain 

provisions that the insurance companies waive the rights of recovery or subrogation 

against Redshift Investigation, its agents, servants, invitees, employees, contractors, 

subcontractors and insurers. Such insurance must be primary and noncontributory to 

any insurance maintained by Redshift Investigation. 

8.4. A Certificate of Insurance evidencing all of the above (the "Certificate") 

must be presented to Redshift Investigation. The Certificate must name "Redshift 

Investigation, Inc., a California corporation" as an additional insured and must also show 

that Redshift Investigation must receive thirty (30) days notice pri9r to cancellation or 

material change. Recovery Agency must submit the Certificate to Redshift Investigation 

on the date this Agreement is signed and then on an annual basis based upon the 

renewal date. 

8.5. All of the insurance policies required to be obtained pursuant to this 

Agreement shall be with companies licensed to do business in the state and/or country 

where the Assignments will be performed and rated no less than Standard and Poor's 

AMato Claims Paying Ability or BBq to Qualified Solvency Rating as to financial rating 

and no less than A- as to Policy Holder's Rating in the current edition of Best's 

Insurance Guide (or with an association of companies each of the members of which are 

so rated).· 

9. Records. 

9.1. Recovery Agency shall maintain, for three (3) years, work or repair orders 

and billings in connection with the services performed by Recovery Agency, or its 

agents or subcontractors, under the terms of this Agreement. Recovery Agency shall 

make all such records available for audit and inspection by Redshift Investigation during 

45868417.3 09803765 5 

Redshift 079 
145

reasonable business hours, and any discrepancies found as a result of such inspection 

shall be promptly adjusted. . · 

9.2. Recovery Agency shall be responsible for maintaining an accurate 

inventory of . Property in its possession, and in the· possession of its agents or 

subcontractors, and shall report to Redshift Investigation, upon request from Redshift 

Investigation and at reasonable intervals, the status of said inventory by model and 

model year of such Property. 

IO. Audit. 

Redshift Investigation, or a third party acting .as agentfor Red shift Investigation, 

may, at any reasonable time and with advance notice, .examine· or audit Recovery 

Agency's records pertaining to work efforts, activities or transactions relating to services 

provided by Recovery Agency under this Agreem.ent as well as the security, protection 

and confidentiality of Redshift Investigation's ·Confidential Information, as that term is 

defined in this Agreement. .. In the event Redshift Investigation identifies a control 

weakness or risk that could adversely impact Recovery Agency's ability to perform 

under the terms and conditions of this Agreement, Redshift Investigation will promptly 

inform Recovery Agency in writing of such Weakness or risk. Recovery Agency will 

have ten (10) business days to respond to this written notice, and thirty (30) days to 

remedy the identified problem. · 

11. Representations And Warranties of Redshift Investigation: 

11.1. Redshift Investigation represents and warrants to Recovery Agency that: 

(a) To the best of its knowledge, Client has the legal right to repossess 

the Property described in the Assignments. · 

(b) The information provided regarding any account has been prepared 

in good faith based upon Redshift Investigation's books and records. 

(c) Redshift Investigation is authorized to enter into this Agreement. 

12. Representations And Warranties of Recovery Agenc~. · 

12.1. Recovery Agency represents and warrants to Redshift Investigation that: 

(a) It is operating as the business entity described under the signature 

line of Recovery Agency and that such business entity possesses all licenses and 

permits in the State, County or other jurisdiction in which Recovery Agency operates in 

order to allow Recovery Agency to repossess the Property described in the 

Assignments from Redshift Investigation to Recovery Agency. 

(b) Recovery Agency and its subcontractors are duly licensed, bonded, 

insured and qualified to do business as may be required in the jurisdiction(s) where the 

services hereunder will be performed and other applicable law. 

45868417.3 09803765 6 

Redshift 080 
146

. • (c) ~ecovery Ag~ncy Vfill comply with all !nstructions given by Redshift 

lnvestrgation and wtll comply With all laws and regulatrons applicable to Recovery 

Agency in recovering the Property. 

(d) To the best of Recovery Agency's knowledge, its computing 

environment(s), and the computing environmerit(s) of its subcontractors, used to provide 

services under this -Agreement, are free from all generally-known viruses, worms, 

Trojans and other "malware," and that Recovery Agency and its subcontractors have 

deployed antivirus software. · 

!3. lndem11ification. 

13.1. Recovery Agency hereby agrees to indemnify and hold Redshift 

Investigation, together with its agents, employees and clients, harmless from any and all 

damages, liability, cause.s of action, costs, expenses, contingent or liquidated damages 

(including attorney's fees), resulting directly or indirectly from the breach of any 

provision of this Agreement, or the acts, omissions, negligence, wrongful acts or 

repossession, or wrongful operation of Recovery Agency's business not in accordance 

with applicable laws and regulations, or errors by Recovery Agency, or any of its 

employees, agents, representatives, officers or subcontractors. This indemnification 

includes but is not limited to any liability Recovery Agency may incur due to the use of 

unlawful means of obtaining property. 

13.2. Recovery Agency expressly indemnifies Redshift Investigation against any 

third party claims arising out of its services under this Agreement, including wrongful 

repossession, wrongful operation of business not in accordance with laws and 

regulations and' all wrongful acts by repossession agents or investigators hired by or 

contracted to Recovery Agency. · 

13.3. Recovery Agency agrees to assume all liability, and indemnify Redshift 

Investigation, for any employee or independent contractor's failure to abide by state and 

federal laws and failure to maintain insurance as required pursuant to Section 8 of this 

Agreement. 

14. Prohibition On Assignment. 

14.1. Without Redshift Investigation's prior written consent, Recovery Agency 

will not assign or transfer to any other person or company this Agreement or" any 

Assignments made by Redshift Investigation hereunder. All persons used by Recovery 

Agency to carry out and perform the repossession, transport or storage with respect to 

any Assignment under this Agreement shall be insured under Recovery Agency's 

insurance policy described in Section 13. Without limiting the generality of the 

· foregoing, Recove1y Agency shall not use independent contractors who are not covered 

under Recovery Agency's insurance policy. 

14.2. Recovery Agency agrees and warrants that its subcontractors will not 

subcontract any of Redshift Investigation's Assignments to recovery agencies or 

subcontractors/agents without the prior written consent of Redshift Investigation. Any 

458634\7.3 09803765 7 

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such subcontracting by Recovery Agency's agents/subcontractors will be deemed a 

material breach of this Agreement. 

15. Prohibition on Pretexting 

Recovery Agency agrees that neither it nor its subcontractors or agents shall 

engage in the practice of pretexting. Broadly defined, without limitation, pretexting is an 

investigatory action that disguises the identity of a caller, the true nature of a 

communication, or the purpose of the contact in order to obtain personal information 

about another. It would also include-the use of false, fictitious, or fraudulent statements 

to obtain (or purchase) non-public information of an account debtor. 

16. Interpretation and Enforcement. 

16.1. This Agreement contains all· of the agreements, understandings, 

representation, conditions, warranties and covencmts made between the Parties, and all 

modifications and amendments must be in a writing signed by the Parties. 

16.2. This Agreement will be binding upon the Parties, their successors and 

assigns. 

16.3. This Agreement will be governed by the laws of the State of California. 

16.4. This Agreement may be executed in one or more counterparts which, 

when taken together, shall constitute the entire Agreement. 

16.5. In the event legal action is necessary to enforce or interpret the provisions 

of this Agreement, the Parties agree to be· subject to jurisdiction in Sacramento, 

California; any claim will be submitted and heard in Sacramento. The prevailing party 

will be entitled to recover reasonable attorneys' fees. 

458684 I 7.3 09803765 8 

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Exhibit A 

Polic~$ and ;Procedures 

I. Acceptance of Assignment 

a. Rec()gnize Redshift Investigation as its clienti.agent shall not contact legal owner 

in connection to assignments reeeived by RSI during or upon completion .of said 

assignment. 

b. Acknowledge receipt of assignment via first update either faxed or emailed within 

24 hours ofacceptance. 

c. Assignments will include: date of assignm~nt, client name, registered.ownerts 

name, complete vehicle infonnation, and paymenthist;ory. 

d. Fir$t update should .sive complete description of property checked, including 

other vehicles on the property, neighborhood description, whether able to check 

garage If present. · 

e. Subseq1,1er1t updates. should in.clude ability to make contact with residents or 

property owners. Ifcontact.isnot w~teci it \yill be defined in the assignment. 

f. Most clients require skip assignments to be accepted on a contingent basis only. 

In some cases weare able to get close f~ of$75.()0;.acceptance of.assignment 

will clearly adV:is.e either contingent. or close. fee $75;00 · 

g. All f~s are agreed upon by R~dshi.ft Investigation and Contractor as written in 

Fee.Schedule. Any additional funds or fees must be pre-approved. Deviation 

from this may resultin non~payment of unapproved activit}-. 

ll. ReportingRepossession 

a. Report repossession viafacsimileor email with. (24) hours of effecting 

repossession. Fax notice to 707~452 .. 8650 or email to 

info@redshiftinye§tigation.com;.we require. the following infonnation: 

i. Date. and .time of repossession 

ii. Address,collateral was.seoured from 

iii. Police Department notific::ation if required in your state 

iv. Mileage of vehicle ifava:ilable 

v, License: plate and tag expiration · 

vi. Storage address of collatend 

vii. Personal property (yes or no) 

b. Prepare and forward to R~I, within twenty..,four (24) hours ofrepossessing a 

condition report ofthe collateral recovered. The condition report should be an 

objective evaluation ofthephysical appearance of the recovered property and wilJ 

not be deemed an evaluation ofthe mechanical conditiQn. All collision .and 

comprehensive damage must be aocumented at the time of the report. 

c. Prepare andforward.to RSI a list of personal property in accordance. with 

applicable state Jaws. 

d. Store aU personal property found in or with recovered property in accordance with 

applicable state .laws. 

e. Dispose of all personal prc:>perty in accordancewithapplicable state. laws. 

4S8684!B. 09803765 

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149

III. Impounds 

a. Vehicles located at Tow Company with bailout fees must be approved before 

pickup. 

b. It is always appreciated if bailout fees can be fronted for prompt recovery, 

. however if agents policies do not comply then RSI will next day air bailout 

amount. 

c. All authorized fees are required to have a bailout receipt that matches the amount 

approved and billed. 

IV. Keys 

a. Regular keys are included in the standard repossession fee, unless agents key 

charge is pre~approved. Security keys are only made with client's approval. 

b. Keys charges of any kind will not be paid ifnot pre-approved. 

V. Mileage 

a. Mileage can only be paid if pre-approved with name and date or representative in 

writing; email is an acceptable fonnat. 

VI. Finders Fees 

a. Finders fees are sometimes an effective way to recover a vehicle however they 

can only be approved by the client. · 

b. Finders fee.s will not be paid if not pre-approved 

VII. Releasing Vehicles 

a. Agent can only release/redeem a vehicle to the debtor with written permission 

from RSI or its client. · 

VIII. Transport and Storage 

a. RSI will send transpoti instructions. {See line XL Fee Schedule for rates). 

b. If vehicle is on agent's lot for more than 30 days without instructions to trnnsport 

or hold then agent must notify RSI in an email of stored vehicle. Email address: 

info{a)Jedshi ftinvesti gation.com. 

c. Storage agent approves 1 0 free days of storage to all clients. 

d. Storage fee to client is $8.00 per day starting on the (11) eleventh day. 

i. Exception 

L VW Credit/ Audi Financial is $7.00 per day starting on the (11) 

eleventh day. 

IX. Closing Assignments 

a. Only when approved by RSl- most assignments are on a contingent basis 

however if close fee has been approved the amount is $75.00 unless pre-approved 

for a higher amount. 

b. If you have reached a dead end and want to close the assignment it still must be 

approved by RSI or client. · 

c. If not authorized then the assignment can only be suspended in your system and 

RSI will advise when the client has authorized the close for billing. 

d. Close fees of any kind will not be paid if not approved. 

X. Accounting Procedures 

a. Invoice RSI immediately following the repossession within 24 hours. Invoices 

should be sent either fax or scanned and emailed. DO NOT MAIL INVOICES. 

i. Fax number: 707-452-8650 

ii. Email address: info@redshiftinvestigation.com 

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150

b. lnyoices should. include: RSI.accountnwnber •. full debtor name; vehicle 

information, and last.six.ofVIN#. · · 

c. Subini.t Invoices :ih a tirtiely.m~~er. AnY invoice sent oyer 9.0 days from the time 

of~pqssession cannot and willnot be paid. 

XI. Fee Schedtile: 

a. Standar:tfRepossession F.ee .............................. $350.00 

L Exceptions · 

1. Carmax ................ ~ ........................ $·325.00 

2, VW Credit/Aqdi Finan,ciaJ., . : ~ .....•.. $325. .00 

b. Close Fee ......... "'" .............. ·.·.·~·~~.··· ....... ~ .. ~ ··11:·· '·~ ~ .... i •. :.:.~ '!;!';.• ~·~C<:>ntingent · i. Exceptions · 

L VW Credit/Audi Pinimqial .................. $75.00 

2. Pre-approved.Close·Fee .................. more than $75.00 

c. Transpe>I1!Delivery Fee ......... ~ ........ , ................. pre-approved only 

.i. Exceptions . 

I.. Carmax (within 50 miles) ............... up to $75.00 

2. Carmax (oyer 50 miles) ....•..... ~ .• 1 ..... ,pre~~pp:rQv~d only 

d.. Miletige Fee .................................... ;, ............. pre-approved only 

.e. Key_ Fee .. ".~· •:•· ".~ ......... a, .. ~ ..... •·.t: ~ -:;.,:., !' .. • olio, ................. ,.~ ~····" •• • ........ II' ........ • ·pre-approved Otily 

f.. Finders: Fee ............................................ ·~ . ~ ...... pre-approved only 

4S868417.3098Q3765 A:-3 

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Recovery Company: 

Exhibit B 

Notification Report 

Client: Debtor: 

Recovered by: _____ Recovery Address: ____ --"-_______ _ 

Recovery Date: Account#: W/0# ----~--------- --------

Year:_____ Make:_______ Model: _________ _ 

Color: _____ Runs: _______ ..,... Keys: __________ _ 

Tags: License: _______ Property in Vehicle: _____ _ 

Tow Dolly 

Agency: ______________ Phone: _________ _ 

Notification Date & Time: Badge#: _________ _ 

Storage ,_,v.._, .... ~'"·----------------···-----------

Notes: ____ ~-----------,---~-------------

458684173 09803765 B-1 

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152

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lN. WJTNESS WHEREOF, \he Parties hereto hava executed this .Agreement <m 

the date written ba'ow . 

.cREDSHIFr \NVEST!GAT10N" 

{EftecUve Date ot Agn:,.,Jment) 

9 

Redshift 087 

3/25/2013 5:24PM 
TAB 4 
AFFIDAVIT OF KAREN C. BURGESS 

 Before me, the undersigned notary, on this day personally appeared, Karen 

C. Burgess, the affiant, a person whose identity is known to me. After I 

administered an oath to affiant, affiant testified: 

 “My name is Karen C. Burgess. I am over 18 years of age, of sound mind, 

and capable of making this affidavit. The facts stated in this affidavit are within 

my personal knowledge and are true and correct. 

 I am an attorney licensed to practice in the State of Texas. I have practiced 

law for eighteen years. I am Board Certified in Civil Trial Law and I have an AV

Preeminent rating by Martindale-Hubbell. 

 I represent Appellees Centroplex Automobile Recovery, Inc. and John F. 

Thompson (“Appellees”) in this case and I have personal knowledge of the case 

and the work performed. 

 It was necessary for Appellees to retain an attorney to represent them in this 

matter. I have agreed to be compensated for my work based on an hourly rate plus 

costs. The other attorney and paralegal assigned to this case (1) are qualified by 

education, experience, and training to perform the services required, (2) have 

knowledge of the legal system, principles, and procedures, (3) performed tasks that 

are traditionally done by an attorney, (4) performed services that were reasonable 

and necessary, and (5) were under my supervision. 
Appellant Santander Consumer USA, Inc.'s ("Appellant") brief required 

approximately 44.4 hours of attorney time and 10.0 hours of paralegal time, for a 

total of$11,000.00, to defend. 

The attorney services and fees charged in this case were reasonable and 

necessary under Texas State Bar Rule of Professional Conduct, Rule 1.04(b ), and 

were incurred in defending Appellant's brief. The fees I have charged in this case 

are significantly lower than those customarily charged in this area for the same or 

similar services for an attorney with my experience, reputation, and ability, 

considering the type of controversy, the time limitations imposed, and the results 

obtained." 

Sworn to and subscribed before me by Karen C. Burgess on this the 20th day of 

January, 2015. 

\11111/ft 

~t~\~.v ef';~ ERIC JOHN BOUCHE RON f~i!:,{\:,::::.t'\ Notary Public, State of Texas 

'-~~~·:{.>/ My Commission Expires ~,.,~r,;;,\~~ ....:- September 22, 2015 

AFFIDAVIT OF KAREN C. BURGESS 

Notary Public in and for the State of Texas 

Page 2