1 

## In The Court of Appeals Seventh District of Texas at Amarillo

No. 07

- 14

- 00100

- CV

IN RE WYATT SERVICES , L.P., RELATOR

ORIGINAL PROCEEDING April 4 , 201 4 

### ON PETITION FOR WRIT OF MANDAMUS
Before QUINN, C.J., and CAMPBELL and HANCOCK , JJ. Wyatt Services, L.P . (Wyatt) has filed for a writ of mandamus wherein it asks that we “issue a writ of mandamus directing the Honorable Ana Estevez, [251 st ] District Court, [Potter] County, Texas, to vacate the order staying this case and compell ing arbitration.” Wyatt also requests that we instruct the trial court to “finally deci de [it’s] claims for equitable relief prior to any referral order.” We conditionally grant the writ of mandamus in part and deny it in part

. Background Wyatt entered into a contract with Northwest Texas Healthcare System (Nor thwest) on April 1, 2004, under which agreement Wyatt provided services for indigent healthcare. The initial contract term was five years , and at the expiration of that2

period, the parties could r enegotiate and extend the acco rd for an additional three
years. 1 Among the many provisions of the accord there also appeared several pertaining to the resolution of contractual disputes . Th ey provided that:
7.18. 1 Co nci l i at i on and Med ia tion

. If a dispute among the Parties relating to this Agreement is not resolved within 10 business days from the date that any Party to this Agreement has notified the others that such disput e exists, such dispute shall be submitted jointly for mediation according to the mediation rules of th e America n Health L a wyers Association Dispute Resolution Co mmittee using a qualified mediator familiar with health ca re matters. If such r e presenta t ives are unable t o resolve the dispute within 15 days from th e date that it is first presented to them, then such dis pute shall be referred to binding arbitration. The parties will share the cost of mediation equally.
7. 18.2 B in ding Arbitration

. A n y dispute under this Agreement that remains unresolved following efforts to reconc ile the dispute shall be submitted to arb itration according to the Arbitration Rules of the American Health Lawyers Association ("A H LA"). Any decision made by the Arbitrator or the Board of Arbitration (as applicable ) (either prior to or after the expiration of such 30

- day period) shall be f in al, binding and conclusive on the parties to the arbitration, and each Party to the arbitration shall be entitled to e nforce such decision t o the fullest extent permitted by law and entered in any court of competent jurisdiction. The fees and expense s of t he arbitration process shall be bo rn e by the unsuccessful Party.
7.18.3 Equitable Relief

. Nothing in this paragraph is intended to preclude either Party from seeking a claim or claims for equitable relief, including, without limitation, claims for specif ic performance , a preliminary injunction,

1 The provisions specifying the term and its extension state:
5.1 Term . This Agreement shall be effective as of the Effective Date and shall continue in effect for an initial Term of five (5) years. Upon mutual agreement, this Agreement shall be renewed for three (3) year Subsequent Terms until and through the expiration of the Indigent Care Agreement between [Northwest] and the Amarillo Hospital District, unless earlier terminated as provided in Section 5.2.

an d
5.3 Termination After Initial or Subsequent Terms . Notwithstanding termination provisions as outlined in Paragraph 5.2, the intent of the parties is to have an Agreement that continues through the term of the ICA, allowing for annual renegotia tion of f inancial terms . . . . [T] he Party seeking termination will provide notification to the other Party no less than one hundred and eighty (180) days in advance. In the event the Termination Event involves the Parties' inability to reach agreement related to financial matters, termination will not occur until the Parties have exhausted the Dispute Resolution process described in this Agreement.3

or a temporary restraining order. Once th e claims for equitable relief are finally decided, any and all remaining claims shall be submitted to arbitration pursuant to the t erms of this agreement, and the Arbitrator shall be bound by the findings and rulings of the court on the claims for equitable relief.
According to the record before us, t he agreement was amended on April 1, 2008 , and extended to March 31, 2014. As the latter date approached, Wyatt dis covered that Northwest intended to forego renewal of the accord. This discovery led it to sue Northwest for breach of contract, specific per formance , and injunctive relief. Thereafter, Northwest moved to abate the proceedings and compel arbitration. The trial court convened a hearing upon the motion on February 18, 2014 , and, subsequently, signed

an order granting the motion to “stay proceedings and compel arbitration.” It also “enjoin[ed] [ sua sponte ] the expiration of the . . . Agreement until the ear lier of 180 days from November 18, 2013, or a final decision in the . . . Arbitration. ” The decision caused Wyatt to petition this court for a writ of mandamus directing the trial court to set

- aside the February 18th order and allow the equitable claims t o be tr ied before arbitration

occurs. Authority
W hether a writ of mandamus should issue depends upon whether 1) the trial
court clear ly abuse d its discretion in issuing the order and 2) the petitioner lacks an adequate legal remedy by appeal. In re Columbia Med. Ctr. of Las Colinas , 290 S.W.3d 204, 207 (Tex. 2009) (orig. proceeding). Additionally , a trial court abuses its discretion if
it misinterprets or misapplies the law. In re Dep't of Family & Protective Servs

. , 273 S.W.3d 637, 642

- 43 (Tex. 20 09) (orig. proceeding); Walker v. Packer , 827 S.W.2d 833
840 (Tex. 1992)

.4

Next, wh ile the law favors arbitration, E. Tex. Salt Water Disposal Co. v. Werline, 307 S.W.3d 267, 271 (Tex. 2010) , its availability depends upon the existence of a contract manda ting it. J.M. Davidson, Inc. v. Webster , 128 S.W.3d 223, 227 (Tex. 2003). That is, arbitration is a creature o f contract. In re Brown , No. 07

- 13

- 00025, 2013 Tex. App. LEXIS 13816 , at * 9 (Tex. App.

— A marillo November 7, 2013 orig. proceeding ). So, its existence of one’s right to pursue the extra
- judicial procedure is governed by the terms of the contract purporting to mandate it. More importantly, the party seeking to compel arbitration must establish that the claim involved comes within the scope of the agreement. See VSR Fin. Serv. v . McLendon , 409 S.W.3d 817, 827 (Tex. App.

— D allas 2013, no pet. ) (stating that a party seeking to compel arbitration must establish the existence of a valid, enforceable arbitration agreement and that the claims at issue fall within that agreement's scope )

. With the foregoing rules in mind, we return to the contract at issue. That it provided for arbitration is beyond question. Yet, the parties to it expressed that the duty to arbitrate was not " intended to pr eclude either

. . . from seeking a claim or claims for equitable relief, including, without limitation, claims for specific performance, a preliminary injunction, or a temporary restraining order. " (Emphasis added). A cc ording the words within this quotati on their plain meaning, see In re Green Tree Servicing , LLC , 275 S.W.3d 592, 598 (Tex. App.

— Texarkana 2008, orig. proceeding) (stating that the rules applicable to construing contracts apply to construing arbitration clauses; so,

we a cc or d the words of the clause their plain meaning), leads us to conclude that despite the arbitration clause , the parties remained free to pursue equitable claims and remedies through the court system. And, when we consider the remaining verbiage5

contained in paragraph 7.18.3 of the contract at bar, we further conclude that the demands for equitable relief , irrespective of their facial merit, must be "finally decided" first and only then may arbitration proceed. Wyatt clearly sought equitable relief here. Again, it prayed f or specific performance of the contract and injunctive help. So, under the terms of the parties' very own contract they had to be "finally decided" before any other claims could be sent to arbitration. Yet, they were not. 2 Instead, the trial court order ed the parties to go to arbitration while the equitable claims remained unadjudicated. This decision deviated from the law applicable to enforcing the parties' agreement and constituted a clear abuse of discretion. Next, our Texas Supreme Court has stated that " the balance will generally tilt toward revi ewing orders compelling arbitration only on final appeal" rather than through a mandamus proceeding. In re Gulf Exploration, LLC, 289 S.W.3d 836, 843 (Tex. 2009) ; In re J.W. Res. Exploration & Dev., Inc., No. 07

- 09

- 00189

- CV, 2009 Tex. App. LEXIS 6676 , at *6 (Tex. App.

— Am ari llo August 25, 2009) ( orig. proceeding ). Yet, it did not foreclose the av ailability of mandamus relief in all situations where arbitration is compelled . Indeed, it said that wheth er an appeal is adequate "depends on a careful balance of the case

- specific benefits and detriments of delaying or interrupting a particular proceeding." In re Gulf Exploration, LLC, 289 S.W.3d at 8 42

. And, though

2 At the hearing, the trial court indicated its doubt about the viability of the equitable claims by calling them " artfully

- pled claims of damages. " Yet, the trial judge said " I am not denying them, because I believe th at . . . you would have been entitled to the summary judgment date. But at the summar y judgment date, no matter what I did, I am g oing to do the same i njunction." Emphasis added. Nor does the record before us contain a final judgment indicating that the claims were "finally decided." And, if the equitable claims truly are meritless, as proposed by Northwest, they may be susceptible to actual and final disposition through appropriate summary proceedings; however, we are not in a position to so declare where the trial court did not first "finally decide" the matter.6

the situation before us does not risk the frustration of legislative policy, see id . at 842

- 43 (wherein the court noted that such a circumstance could authorize the use of review through a mandamus proceeding), it nonethe less implicates unordinary circumst ances involving more than the waste of time and money

. See id. (stating that the waste of time and money in purs u ing an appeal after final judgment does not render a final appeal inadequate). Here, the parties intended that the arbitrator be bound by the prior rulings of the trial court in addressing the claims within his bailiwick. In other words, and per the terms of the contract, the arbitrator’s discretion to resolve the dispute before him is rather fettered and dependent upon the manner in which the trial court first adjudicates the equitable claims before it

. So, a llowing the arbitrator to proceed first could frustrate the arbitration itself . It is not inconceivable that a final decision rendered by a trial court on the equitable claims could cont rol and potentially conflict with the arbitrator's decision on related legal (that is, non

- equitable) claims. 3 That , in turn , would present the need for further arbitration given that the arbitrator is obligated to abide by the trial court's ruling. And, if one is to add into the mix the time

- sensitive nature of the dispute 4 and the nature of the contract , 5 more than the mere risk of wasting time and money are implicated. Thus, it can be said that the decision jeopardizes the policy favoring arbitration since arbitration may not resolve the matter given the need for later, and ultimately controlling, judicial action . At the very least, the arbitrator would benefit

3 If the equitable claims are baseless and "final ly decided" to be such, then there is no potential for conflict. But, the trial court has not so held via any final ruling. So, we can only speculat e on the matter, which, in turn , leaves open the possibility of potential conflict.

4 B ut for the tempora ry injunction issued by the trial court, the contract was to expire by March 31, 2014 . Yet, the temporary inj unction itself expires on May 18 , 2014.

5 I t involves the provision of medical services to the poor by Wyatt.7

by knowing to what findings of fact and conclusions of law, if any, he would have to defer (given the contractual limitations on his authority) in rendering his decision. The totality of the unique circumstances at bar prevent us from holding that Wyatt has an adequate appellate remedy here. We do not attempt to impugn In re J.W. Res. Explo ration & Dev

., Inc

. (supra) or reject In re Gulf Exploration , LLC (supra) but rather endeavor to follow th eir actual principles. Both hold that orders compelling arbitration are seldom subject to review via a mandamus proceeding while neither foreclose the possibility given the presence of extraordinary circumstances. Extraordinary circumstances exist here. And, in view of our holding that the trial court abused its discretion in ordering arbitration to proceed without first adjudicating the equitable claims, W yatt has shown itself entitled to a writ of mandamus directing the trial court to withdraw the order to arbitrate until it has "finally decided" the pending equitable claims

. As for Wyatt's effort to have us review, through mandamus, the temporar y injunction issued by the trial court, we note that such can generally occur through an interlocutory appeal. See T EX

. C IV

. P RAC

. & R EM

. C ODE A NN

. § 51.014 (a) (4) (West Supp. 2013) (stating that “[a] person may appeal from an interlocutory order of a di strict
court . . . that . . . grants or refuses a temporary injunction. . . .” ). Wyatt need not wait for arbitration to occur or the trial court to finally adjudicate the equitable claims before it can cause the matter to be considered. Thus, the relator has an adequate legal remedy, which, in turn , vitiates the propriety of considering the matter through a proceeding for mandamus relief. We would note though that the trial court may care to revisit the matter given our disposition of the arbitration que stion, however.8

Accordingly, we conditionally grant Wyatt's petition for writ of mandamus directing the trial court to withdraw its order compelling arbitration. However, we trust that the trial court will act in accordance with this opinion. Thus, w e will issue the appropriate writ of mandamus only if the trial court fails to vacate the order within 15 days of the date of this opinion

. 6

Brian Quinn Chief Justice

6 We deny Wyatt’s Motion for Tempor ary Relief filed on March 30, 2014 , as moot.