f AFFIRMED; Opinion filed April 28,1999

In The 

### Court of Appeals Jfiftfj IHstrttt nf tttexas at Uallas
No. 05-97-00674-CV


### BOB THOMPSON HOMES, INC., Appellant
V. 

### RICK PETERS ANDANNE PETERS, Appellees
On Appeal from the 199th District Court Collin County, Texas Trial Court Cause No. 199-139-97
OPINION 

### Before Justices Lagarde, Moseley, and Bridges Opinion By Justice Lagarde 

### Bob Thompson Homes, Inc. (Thompson) appeals an interlocutory order denying its motion 

### to compel arbitration. In one point oferror, itasserts that the trial court erred in denying arbitration 

### because its contract with appellees Rick and Anne Peters (collectively Peters) requires arbitration of any dispute arising out of the contract. We affirm the trial court's order. 

### On March 3, 1994, Thompson and Peters signed acontract, underwhich Thompson would construct asingle-family residence for Peters. The contract designated Caperton/Johnson as the architect. The contract was aform contract, provided by Thompson. The form contained the following provision:All claims or disputes between the Contractor [Thompson] and the Owner [Peters] arising out ofor relating to the Contract Documents, or the breach thereof, shall be decided by arbitration in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association currently in effectunless the parties mutually agreeotherwise andsubjectto an initial presentation of the claim or dispute to theArchitect as required under Paragraph 15.5. Notice ofthe demand for arbitration shall be filed in writing with the other party to this Agreement and with the American Arbitration Association and shall be made within a reasonable time after the dispute has arisen. The award rendered by the arbitrator or arbitrators shall be final andjudgment may be enteredupon it in accordance with applicable law in any court having jurisdiction thereof. . . . The agreement herein among the parties to the Agreement and any other written agreement to arbitrate referred to herein shall be specifically enforceable under applicable law in any court havingjurisdiction thereof. Before Peters signed the form contract, however, Thompson crossed this provision out and Rick Peters initialed the strike-out to indicate his assent. In an affidavit later filed with the court, Thompson explained that the deletions "represent changes that [Thompson] has made to this standard form and incorporated in essentially all contracts with its customers through the date ofthe Peters contract. These standard changes were made by [Thompson] in the initial draft submitted to Peters and represent [Thompson's] changes."1 As construction progressed, Peters became dissatisfied with Thompson's performance. Peters complained of major plumbing leaks, faulty electrical wiring, improper and defective installation of fixtures, appliances, and carpeting, and the like. When Thompson did not remedy the defects to Peters's satisfaction, Peters stopped making the contracted installment payments. Thompson sued Peters for payment. Peters counterclaimed for various claims in contract and in tort.

Neitherpartyarguedin itsbriefthatthe contractat issuecontainedanyambiguity. Afteroralargument.Thompson submitteda letterbrief arguingthat ifthere is any ambiguity,it must be resolvedin favorofarbitration becauseof the publicpolicyfavoringarbitration. It analogizesthe argumentto the principlethat,when the languageof an insurance policy is ambiguous, the construction that affordscoverage willbe adopted. We donotagreewithThompson'sconclusion. Where anambiguity existsinacontract, thecontract language willbeconstrued strictly againstthe party who drafted it.since the drafter is responsible for the language used. Gonzalez v.X fissionAm, Ins. Co.,795 S.W.2d734,737 (Tex. 1990). Because insurersare almostinvariably, if not always,the draftersof their policies,the specificruleabout insurancepoliciesissimplya corollaryof the more generalrule. Inthiscase,Thompsondraftedthe formcontract,andThompson,not Peters,struckoutthe generalarbitration clause. Thereisno reason we should not apply the general contract principle and construe the effect of striking out the general arbitration clause againstThompson.

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### Thompson moved the trial court to compel arbitration; Peters objected to arbitration. Despite the deletion ofthe arbitration clause, Thompson contended that other provisions, taken 

### together, meant that, in the event ofadispute between the parties, the architect, Caperton/Johnson, would serve as arbitrator. Itrelied principally onthree provisions: 

### In case of a dispute between Owner and Contractor as to whether any part ofan application for payment should be paid, Architect shall make the final decision on the amount that should be paid. 

### The Architect will interpret and decide matters concerning performance under and requirements ofthe Contract Documents onwritten request ofeither the Owner or 

### Contractor. The Architectwill make initial decisions on all claims, disputes orother matters in question between the Owner and Contractor. The Architect's decisions in matters relating to aesthetic effect will be final if consistent with the intent expressed in the Contract Documents. The Architect will have authority to reject Work which does not conform to the Contract Documents. 

### Because the architect was given this authority, Thompson concludes thatthe contract contemplated Caperton/Johnson as arbitrator. 

### Peters responds that the striking ofthe formal arbitration clause means that he did not agree to the arbitration process. At most, he argues, the contract gave Caperton/Johnson the authority to decide the amount that should be paid ifthe parties disagreed whether any amount ofan application for payment shouldbepaid. Inquestions ofperformance underthe contract, Caperton/Johnson had 

### the authority to make "initial decisions on all claims, disputes orother matters in question"; Peters, stressing the word "initial," contends that Caperton/Johnson was explicitly given authority tomake 

### final decisions only in matters relatingto aesthetic effect. While Caperton/Johnsonhadthe authority 

### to reject work that did not conform to the contract between the parties, Peters asserts that nothing in the contract gave Caperton/Johnson theexclusive right to do so.Peters also arguedthatCaperton/Johnsonwould notbeanimpartial arbitrator, because itand Thompson enjoyed along professional relationship andThompson often used Caperton/Johnson as 

### its architect. Inresponse, Thompson cites authority for theproposition that anengineer, working
on aproject, may bedelegated theauthority toactasanarbitrator. City of SanAntonio v. McKenzie 

### Constr. Co., 150 S.W.2d 989, 995-96 (Tex. 1941). Butinthatcase thesupreme court emphasized the critical language: the engineer"shall determine all questions in relation to said work, and the construction thereof. He shall in all cases decide every question which may arise relative to the execution of this contract on the part of saidContractor." City of San Antonio, 150S.W.2dat 996. We do not dispute that parties to a contract can designate anotherpartyto the same contract as an arbitrator, if they chooseto do so. Caperton/Johnson is not disqualified from being an arbitrator in the Peters' home building contract simply because it is the architect on the project. The real issue is whether the contract in this case gave Caperton/Johnson the authority to make final, binding decisions in any matter except claims for payment or matters relating to aesthetic effect. Arbitration is a creature ofcontract, and a clause requiring arbitration will be interpreted under contract principles. BelmontContractors, Inc., v. LyondellPetrochemicalCo., 896 S.W.2d 352, 357 (Tex. App.-Houston [1st Dist] 1995, no writ). Thompson argued to the trial court that its "intent was to create an agreement whereby disputes such as the one between [Thompson] and [Peters] would be referred to the Architect for final resolution." Yet the parties' objective, not subjective, intent controls. Hasty, Inc., v. Inwood BuckhornJoint Venture, 908 S.W.2d 494, 499 (Tex. App.-Dallas 1995, writ denied). We do not ask about the subjective intent of the parties. Hasty, Inc., 908 S.W.2d at 499. Circumstances surrounding the execution of a contract should be considered, but the circumstances are merely an aid in the construction of the contract's language.

-4-

### Moreover, the circumstances to be considered are not the parties' statements ofwhatthey intended the contractto mean. KMContinentalOffshoreProd Co. v. ACFPetroleum Co., 746 S.W.2d 23 8, 241 (Tex. App.-Houston [1st Dist] 1987, writ denied). We may consider all the circumstances 

### before and contemporaneous with the execution ofa contract, "other than oral statements by the parties ofwhat they intended it to mean." City ofPinehurst v. Spooner Addition Water Co., 432 S.W.2d 515, 518 (Tex. 1968) (emphasis added). Thompson's subjective intent, therefore, isof no
assistance. Finally, Thompson points outthatstate lawstrongly favors arbitration. Courts mustresolve anydoubts about anagreement to arbitrate infavor ofarbitration. Cantella &Co. v. Goodwin, 924 S.W.2d 943, 944 (Tex. 1996) (percuriam). Once a party seeking to compel arbitration establishes 

### that an agreement toarbitrate exists and that the claims raised are within the agreement's scope, the trial court has no discretion but to compel arbitration. Goodwin, 924 S.W.2d at 944. We do not disagree with these principles. Yet"[although doubts regarding thescope of anarbitration clause


### are to be resolved in favor ofarbitration, there must be an initial showing by the party seeking arbitration that the parties agreed to arbitration." Solis v. Evans, 951 S.W.2d 44, 51 (Tex. App.-Corpus Christi 1997, orig. proceeding). Arbitration cannot be ordered in the absence ofsuch
an agreement. Freisv. Canales, 877 S.W.2d 283, 284 (Tex. 1994) (percuriam). 

### Turning tothecontract inthis case, we see thatCaperton/Johnson did not have theauthority to make final decisions concerning Thompson's performance; therefore, Caperton/Johnson could 

### not resolve the dispute that arose between the parties in this case through the process ofbinding arbitration. Inmatters ofperformance, Caperton/Johnson was explicitly given authority to make only initial decisions; the contract is completely silent on who will make the final decisions.

### Therefore, the contract does not prevent Peters from seeking afinal, and binding, decision from a court of law. To the contrary, ifthe contract itselfdoes not give anyone the authority to make a final and binding decision, acourt isthe only entity left that can make afinal decision and enforce
it. 

### We conclude that Thompson did not meet its burden ofinitially showing that the parties agreed to arbitration. Accordingly, we affirm the trial court's order denying Thompson's motion
to compel arbitration.

Do Not Publish Tex. R. App. P. 47 970674F.U05 

### OjlS

## 3-aiaciU

(Baurt at Appeals JTfftl| jBtstrtrt of Gkxas at lallas

No. 05-97-00674-CV BOB THOMPSON HOMES, INC., Appellant

RICK PETERS AND ANNE PETERS, Appellees Appeal from the 199th District Court of Collin County, Texas. (Tr.Ct.No. 199-139- 97). Opinion delivered by Justice Lagarde, Justices Moseley and Bridges participating.

JUDGMENT In accordance with this Court's opinion of this date, the judgment of the trial court is AFFIRMED. It is ORDERED that appellees Rick Peters and Anne Peters recover their costs of this appeal from appellant Bob Thompson Homes, Inc. and from the cash deposit in lieu of cost bond. After all costs have been paid, the clerk of the district court is directed to release the balance, if any, of the cash deposit to McManemin & Smith, P.C., as counsel for appellant Bob Thompson Homes, Inc. Judgment entered April 28, 1999.

SUE LAGARDE JUSTICEFifth Court ofAppeals Case Party & Attorney Address List Page: 1 Date Printed: 04/28/1999 Case Number: 05-97-00674-CV Date Filed: 04/24/1997 Style: Bob Thompson Homes, Inc.

v. Peters, Rick & Anne Peters Trial Judge: Roach, John R. Trial Court Reporter: 

### Trial Court: 199TH DISTRICT COURT Trial County: COLLIN
ANT Daniel P. Callahan ATT 003648700 Godwin & Carlton, SMITH, PC. 1600 PLAZA OF THE AMERICAS 600 N. PEARL STREET, LB. 175 Dallas, TX 75201 Phone 214/953-1321 Fax 214/953-0695
APE Bruce H. White ATT 021288850 Dixon Dixon & Jessup Ltd, Lip 1445 Ross Ave Ste 5500 Dallas, Tx 75202-2801 Phone 214/754-0155 Fax / - Author ofopinion Justice Lagarde Trial Court Judge Roach Rehear denied **THIS OPINION IS RELEASED FOR PUBLICATION YES / NO