COURT OF APPEALS

SECOND DISTRICT OF TEXAS

FORT WORTH

NO. 02-15-00174-CV 

IN RE LENNAR HOMES OF

TEXAS SALES AND MARKETING, 

LTD. D/B/A LENNAR HOMES OF 

TEXAS; HOME OWNERS 

MANAGEMENT ENTERPRISES, 

INC. D/B/A HOME OF TEXAS; AND 

WARRANTY UNDERWRITERS 

INSURANCE COMPANY

RELATORS

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ORIGINAL PROCEEDING

TRIAL COURT NO. 14-09627-158

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MEMORANDUM OPINION1

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The court has considered relators’ petition for writ of mandamus and is of 

the opinion that relief should be granted regarding mediation and denied 

regarding arbitration. The trial court abused its discretion by appointing a 

 

1See Tex. R. App. P. 47.4, 52.8(d).
2

mediator and assessing mediation costs in a manner not authorized by the 

parties’ contract. The portions of the petition addressing arbitration are not yet 

ripe.

Background

The Parties and Their Agreements

Chess Derrick Dennis Jr. and Jana R. Dennis (the Dennises) entered into 

a purchase and sale agreement (the Purchase Agreement) with Lennar Homes 

of Texas Sales and Marketing, Ltd. d/b/a Lennar Homes of Texas (Lennar) to buy 

their home. 

The home carried a ten-year structural warranty (the Warranty). Home 

Owners Management Enterprises, Inc. d/b/a HOME of Texas (HOME)

administered the Warranty. Warranty Underwriters Insurance Company (WUIC) 

insured the Warranty. We refer to HOME and WUIC collectively as HOME. 

The Underlying Suit

The Dennises, alleging structural defects in their home, sued Lennar and 

HOME. Lennar and HOME jointly moved to compel mediation and arbitration. 

The Purchase Agreement required mediation first and, if that failed, then 

arbitration. In pertinent part, paragraph 16.1 provided: 

The parties to this Agreement specifically agree that this transaction 

involves interstate commerce and that any Dispute (as hereinafter 

defined) shall first be submitted to mediation and, if not settled 

during mediation, shall thereafter be submitted to binding arbitration 

as provided by the Federal Arbitration Act (9 U.S.C. §§ 1 et seq.) 

and not by or in a court of law or equity.
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The Mediation Provisions

The Dennises’ Purchase Agreement with Lennar required mediation and 

required using the American Arbitration Association (AAA) for mediation. 

Specifically, paragraph 16.2 provided, in pertinent part:

Any and all mediations commenced by any of the parties to this 

Agreement shall be filed with and administered by the American 

Arbitration Association or any successor thereto (“AAA”) in 

accordance with the AAA’s Home Construction Mediation 

Procedures in effect on the date of the request. If there are no 

Home Construction Mediation Procedures currently in effect, then 

the AAA’s Construction Industry Mediation Rules in effect on the 

date of such request shall be utilized.

The Dennises’ Warranty with HOME did not have a mediation clause. 

However, the Purchase Agreement allowed Lennar to bring HOME in under its 

mediation provision. Paragraph 16.4 of the Purchase Agreement provided:

The waiver or invalidity of any portion of this Section shall not affect 

the validity or enforceability of the remaining portions of this Section. 

Buyer and Seller further agree (1) that any Dispute involving Seller’s 

affiliates, directors, officers, employees and agents shall also be 

subject to mediation and arbitration as set forth herein, and shall not 

be pursued in a court of law or equity; (2) that Seller may, at its sole 

election, include Seller’s contractors, subcontractors and suppliers, 

as well as any warranty company and insurer as parties in the 

mediation and arbitration; and (3) that the mediation and arbitration 

will be limited to the parties specified herein.

The Purchase Agreement further provided that Lennar would pay for one 

day of mediation and, thereafter, that the Dennises and Lennar would share the 

mediation fees equally. Specifically, paragraph 16.8.2 provided: “Seller agrees 

to pay for one (1) day of mediation (mediator fees plus any administrative fees 
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relating to the mediation). Any mediator and associated administrative fees 

incurred thereafter shall be shared equally by the parties.”

The Arbitration Provisions

The Dennises’ Purchase Agreement with Lennar also required using AAA 

for arbitration. The Dennises’ Warranty with HOME did not require using AAA for 

arbitration but did require the Dennises and HOME to agree on the arbitrator. 

However, as with mediation, the Purchase Agreement allowed Lennar to bring 

HOME in under its contract for purposes of arbitration.

The Trial Court’s Order

The complained-of order provides:

1. Case is ordered to arbitration before Arbitrator _____________.

2. Case is to first proceed to mediation with a mediator agreed to by 

the parties. If the parties cannot agree on a Mediator, the 

mediator will be L. Dee Shipman.

3. The mediation fee is to be paid by Defendant LENNAR.

4. Defendant LENNAR HOMES OF TEXAS SALES AND 

MARKETING, LTD, d/b/a LENNAR HOMES OF TEXAS is 

ordered to pay the cost of arbitration.

5. If the case is not settled at mediation, the Arbitrator is to 

determine if and in what percentage / monies Plaintiffs are to 

reimburse LENNAR for the cost of Arbitration.

The Issues

Lennar and HOME present three issues:

1. Did the trial court abuse its discretion in failing and refusing to 

enforce the parties’ agreement concerning the selection of a 

mediator and an arbitrator?
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2. Did the trial court abuse its discretion in refusing to enforce the 

parties’ agreement concerning the allocation of mediation costs?

3. Did the trial court abuse its discretion in refusing to enforce the 

parties’ agreement concerning the allocation of arbitration costs?

Discussion

The Dennises’ Preservation and Waiver Arguments

The Dennises assert Lennar and HOME did not preserve error because 

they failed to object to the trial court’s ruling at the hearing. We disagree. 

Lennar and HOME’s motion to compel mediation and arbitration specifically 

prayed that AAA be appointed for both mediation and arbitration. The trial judge, 

at the hearing, said he was going to appoint someone other than AAA. The order 

did not designate AAA. We hold that was an adverse ruling. See Tex. R. App. 

P. 33.1(a)(2)(A) (requiring either express or implicit ruling). To the extent the 

Dennises argue that Lennar and HOME had to object to an adverse ruling, rule 

33.1(c) specifically states that a formal exception to a trial court’s ruling is not 

required to preserve a complaint. Tex. R. App. P. 33.1(c). We hold that Lennar 

and HOME preserved their complaints.

The Dennises also argue Lennar and HOME waived their complaints 

because counsel for Lennar and HOME, after the trial court ruled, then 

cooperated with the trial court and opposing counsel on the appointment of 

someone other than AAA. Lennar and HOME’s counsel said, “We could 

probably agree [on a mediator]. If not, a list tomorrow is not a problem.” We 
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disagree. Waiver is ordinarily a question of fact, but when the surrounding facts 

and circumstances are undisputed, the question becomes one of law. Jernigan 

v. Langley, 111 S.W.3d 153, 156–57 (Tex. 2003). An implied waiver must be 

clearly shown by the surrounding facts and circumstances. Id. at 156. Lennar 

and HOME had already filed a motion to have, among other requests, AAA 

appointed as mediator; they had already had a contested hearing on their 

motion; and the trial court had already ruled adversely to their request. In the 

context of the surrounding facts and circumstances, counsel’s comments—

coming only moments after the adverse ruling—were attempts to comply with the 

trial court’s ruling without necessarily agreeing to the ruling itself. There was no 

express waiver. The surrounding facts and circumstances must clearly show an 

implied waiver. Id. The surrounding facts and circumstances here do not. See 

id. We hold Lennar and HOME did not waive their complaints.

Mandamus Standard of Review

“To show itself entitled to mandamus, a relator must show that (1) the trial 

court clearly abused its discretion, and (2) the relator has no adequate remedy by 

appeal.” Austin Commercial Contractors, L.P. v. Carter & Burgess, Inc., 347 

S.W.3d 897, 901 (Tex. App.—Dallas 2011, pet. denied) (citing In re Gulf 

Exploration, LLC, 289 S.W.3d 836, 842 (Tex. 2009) (orig. proceeding)).

Mandamus will not issue where there is “a clear and adequate remedy at law, 

such as a normal appeal.” Walker v. Packer, 827 S.W.2d 833, 840 (Tex. 1992) 
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(orig. proceeding); State v. Walker, 679 S.W.2d 484, 485 (Tex. 1984) (orig. 

proceeding).

“A trial court clearly abuses its discretion if ‘it reaches a decision so 

arbitrary and unreasonable as to amount to a clear and prejudicial error of law.’” 

In re Nat’l Health Ins. Co., 109 S.W.3d 552, 554–55 (Tex. App.—Tyler 2002, orig. 

proceeding) (quoting Packer, 827 S.W.2d at 839). “A trial court has no discretion 

in determining what the law is or applying the law to the facts.” Id. at 555. 

“Consequently, a clear failure by the trial court to analyze or apply the law 

correctly constitutes an abuse of discretion.” Id.

Discussion Regarding Arbitration Rulings

The arbitration complaints are not ripe until after mediation fails. If 

mediation succeeds, the arbitration complaints are moot. Any resolution now 

would be advisory. See In re Fort Worth Star-Telegram, 441 S.W.3d 847, 857–

58 (Tex. App.—Fort Worth 2014, orig. proceeding). Additionally, the trial court’s 

order left blank the identity of the arbitrator. For that reason too, any complaints 

as to the selection or cost of an arbitrator are premature. The portion of Lennar 

and HOME’s first issue regarding the selection of an arbitrator and their third 

issue regarding the allocation of arbitration costs are, therefore, overruled as not 

ripe.

Discussion Regarding Mediation Rulings

At trial, the Dennises filed a response objecting to AAA. “Plaintiffs object 

to the AAA [because it] has a conflict of interest, is incompetent, is biased, and 
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fails to provide fair and appropriate arbitration panels. Additionally, the AAA 

requires payment of excessive fees before arbitration will be scheduled.” The 

Dennises then went on for numerous pages identifying instances where its 

counsel had either threatened to sue or had sued AAA and other instances 

where courts had removed AAA. However, the Dennises did not point to any 

malfeasance in this case. Additionally, the Dennises’ response was limited to 

appointing AAA as an arbitrator, not as a mediator.

A trial court has no discretion to modify or contravene specified rules set 

out in a contract. See Nat’l Health Ins. Co., 109 S.W.3d at 556. Courts do not 

rewrite contracts. See Gamma Grp., Inc. v. Transatlantic Reinsurance Co., 242 

S.W.3d 203, 212 (Tex. App.—Dallas 2007, pet. denied). “No adequate remedy 

by appeal exists when a trial court erroneously appoints an arbitrator . . . .” In re 

Serv. Corp. Int’l, 355 S.W.3d 655, 658 (Tex. 2011) (orig. proceeding); see CMH 

Homes v. Perez, 340 S.W.3d 444, 452–54 (Tex. 2011) (holding that a trial court’s 

order appointing an arbitrator could be reviewed by mandamus). In National 

Health Insurance, the trial court indicated that other litigants had voiced many 

objections to AAA because it was too expensive, too cumbersome, and had too 

many close ties to insurance companies. Nat’l Health Ins. Co., 109 S.W.3d at 

554. The court of appeals nevertheless granted mandamus relief and directed 

the trial court to compel arbitration with AAA. Id. at 556–57. “Because the 

parties agreed that the AAA rules govern the administration of the arbitration, 

they are bound by the procedure for appointing an arbitrator [in the AAA rules].” 
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Id. at 556. “A court cannot change such an agreement merely because it or one 

of the parties comes to dislike its provisions or thinks that something else is 

needed in it.” Id. Although the contractual right before us at this time is the 

appointment of AAA as mediator instead of the appointment of AAA as arbitrator, 

the underlying principle that courts are not to rewrite contracts remains the same. 

See Gamma Grp, Inc., 242 S.W.3d at 212. We hold that the trial court abused its 

discretion by not complying with paragraph 16.2 of the Purchase Agreement. 

See id. We sustain that portion of Lennar and HOME’s first issue.

We turn next to the portion of the trial court order’s requiring Lennar to pay 

the mediation fees addressed in Lennar and HOME’s second issue. The 

Purchase Agreement provided that Lennar was to pay for one day of mediation 

and thereafter the parties were to share the fees equally. The trial court rewrote 

the parties’ contract. Courts do not make new contracts between the parties; 

courts must enforce contracts as written. Royal Indem. Co. v. Marshall, 388 

S.W.2d 176, 181 (Tex. 1965).

Courts have no discretion to modify or contravene specified rules set out in 

a contract. See Nat’l Health Ins. Co., 109 S.W.3d at 556. Mandamus relief is 

appropriate where a trial court’s order regarding payment of fees can “radically 

skew the procedural dynamics of the case.” Travelers Indem. Co. of Conn. v. 

Mayfield, 923 S.W.2d 590, 595 (Tex. 1996). Lennar acknowledges “this situation 

is admittedly less egregious than the fee ruling in Travelers Indemnity Co., [but] it 

still skews the procedural dynamics of the case and encourages inefficient 
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litigation behavior.” There is no adequate remedy by appeal when a party is 

erroneously denied its contracted-for rights. See Austin Commercial Contractors, 

347 S.W.3d at 901. We hold that the trial court abused its discretion by not 

following the parties’ contract and thereby skewed the procedural dynamics of 

the case in a manner inconsistent with the contract. See Travelers Indem. Co. of 

Conn., 923 S.W.2d at 595. We sustain Lennar and HOME’s second issue.

Conclusion

Accordingly, without hearing oral argument, we sustain part of Lennar and 

HOME’s first issue and their second issue in its entirety; conditionally grant part 

of the mandamus relief requested by Lennar and HOME; direct the trial court to 

vacate its prior order appointing a mediator and ordering Lennar to pay the costs 

of mediation; and direct the trial court to appoint a mediator in accordance with 

paragraph 16.2 of the Purchase Agreement and to assess mediation fees in 

accordance with paragraph 16.8.2 of the Purchase Agreement. We are confident 

the trial court will comply, and the writ will issue only if it fails to do so. Lennar 

and HOME’s petition is otherwise denied. 

Lennar and HOME filed a motion for an emergency stay, which we deny

without prejudice.

/s/ Anne Gardner

ANNE GARDNER

JUSTICE

PANEL: LIVINGSTON, C.J.; GARDNER and SUDDERTH, JJ.

DELIVERED: July 15, 2015