Motion to Dismiss Denied; Reversed and Remanded and Me morandum Majority O pinion and Conc urring and Dissenting Memorandum Opinion filed July 6 , 2023.

In The 

## Fourteenth Court of Appeals

NO. 14

- 22

- 00499

- CV

PEARLAND URBAN AIR, LLC , Appellant

V.

ROCKWOO D ALLIANCES, INC. , Appellee

On Appeal from the 151st Distr ict Court Harris County, T exas Trial Court Cause No. 2021

- 39466

MEMORANDUM MAJORITY OPINION

A general contractor sued the owner of a construction project for breach of

contract

. The owner moved to compel arbitration , which the trial c ourt denied.
The sole , dis p ositive issue on appeal is whether the owner impliedly waived its

contractu al arbit ration rights by sub stantially invoking the judicial process. We
conclude it has not. W e reverse the tr ial court ’ s order and remand for further

proc eeding s consistent wit h this opinion

.2 Background Appellant Pe arland Urban Air , LLC owns a trampoline and adventure facility . Urban Air contracted with appellee Rockwood Alliances, Inc., a general
contractor, to build the facilit y . The parties ’ writ t en co ntract include d an

ar b i tratio n provision , which provided in relevant part :
ARTICLE 21 CLAIM S AND DISPUTES
§ 21.1 Claims, disputes and other matters in question arising out of or relating to this Contract, inclu ding those allegin g an error or omission by t he arc hitect but ex cl u d ing tho se arising under Section 16.2, shall be referred initially to the Owner for decision

. Such matters, except those waived as provided for in Section 21.8 and Sections 15.5.3 and 15.5 .4, shall, after i n itial decision by the Owne r or 3 0 days after

s u b m ission of the matter to the Owner, be subject to mediation as a condi tion precedent to binding dispute resolution

. . . . § 21.3 The parties shall endeavor to resolve their disputes by medi ation which, unles s the parties mutually agre e othe rwise, shall be

a dministered by the American Arbi tration Association in accordance with their Construction Indus try Mediation Procedures in effect on the date of the Agreement. A request for mediation sha ll be made in writ i ng, delivered to the other pa r t y to this Agreem e n t, and filed with the person or entity administering the mediation. The request may be made co ncurrently with the binding dispute resolution but, in such event, mediation shall proceed in advance of bindin g dispute resolution p rocee ding s, which shall be s tayed pending mediation for a pe riod of 60 days from the date of filing, unless stayed for a lo nger period by agreement of the parties or court order. If an arbitration is stayed pursuant to this Section, t he parties may noneth eless proc e ed to the selec t i on of the arbitrator(s) and agre e upon a schedule for later proceedings. § 21.4 If the parties have selected arbitration as the method for binding dispute resolution in the Agreement , any claim, subject to, but not resolved by, media tion s hall be subject t o arbitration which, unless the parties mutually agree otherwise, shall be administered by the American Arbitration Association, in accordance with the Construction Industry Arbitration Ru les in effect on t h e date of this3 Agreem ent. Deman d for arbitrati o n shall be made in writing, deliv ered to the other par t y to the Contract, and filed with the per son or entity administering the arbitration. The award rendered by the arbitrator or arbitra tors shall be fina l , and judgment may be ente red up o n it in accord a n ce with applicable law in any co urt having jurisdiction thereof.

I n section 5.1 , th e parties selected ar bitration as the metho d for binding dispute resolution

. 0F 1 Further, the parties agree d that the Federal Arbitration Act
would govern arbitration under Se ctio n 21.4

. A dispute arose between the parties. Rockwo od sued Urban Air , alleging
Urb an Air did not pay all amounts due and owing under the cont ract. U rban Air

answere d, general ly den yi ng liability.

The court ordered the pa rties to mediation , which wa s unsuccessful. One
month before trial was sc heduled to commen ce, Urban Air ’ s counsel moved t o withdraw . T he trial court granted the mot io n

. On t he day trial was to begin , Urban
Ai r , re prese nted by new attorneys, file d :

• an un opposed motion for continu an ce of the trial setting ;

• a n amended p leading asserting c ounterclaims against Rockwood for breach of contract, breach of warra nty, negligence , n egli gent misr epresentation , and fraud ;

• a pe t ition asserting a fraud claim against S aleem Fernandez, Rock wood ’ s p resident , as a thir d

- party defendant ; and

• a motion to compel arbitration , arguing that t he contract had a valid arbitration agreement and that all claims a t issue fell within its sc ope.
R ockwood opposed arbitration , arguing that Urban Air impliedly w ai v ed its
arbitratio n right by substantially invoking t he litigation process

. Fernan dez did not

1 “ For any claim subject to , but not resolved by, mediation pursuant to Section 21.3, the met hod of binding dis pute resolution shall be as follows

. . . Arbitration pursu ant t o Se ction 21.4 of this Agreement

. ”4 jo in Rock wood ’ s opposition or o therwise file a respon se to Urban Air ’ s motion to

comp el arbit ration

. 1F 2

T he trial court denied Urban Ai r ’ s motion to compel arbit ra t ion and denied
Urban Air ’ s motion for leave to file amended and additional plea dings ; but the court nonetheless granted Urban Air ’ s motion for a tr ial continuance

. Urban Air challeng es t he order denying the motion to compel ar bitration

. Standard of R ev iew

We review interlocut o ry appeal s of orders denying motion s to compel
arbi tration for abuse of discretio n, deferrin g to the trial court ’ s factual
determinat ions if they are supported by the evidence a nd reviewing questions of
law de novo. See Henry v. C ash Biz , LP , 551 S.W.3d 111, 115 (Tex. 2018).
Under this standard, we will reverse the trial court ’ s ruling only when “it acts in an arbitrary or unreasonable manner, without reference to any guiding r ules or principles.” In r e Nitla S .A. de C.V. , 92 S .W .3d 419 , 422 (Tex. 2002) ( per curiam ).

The Fe deral Ar bitration Act ( “ FAA ” ) govern s any arbitrat ion under the parties ’ contract

. See 9 U.S.C. §§ 1

- 402

. A party seeking to c ompel arbitrati on under the F AA must establish that (1) there i s a valid arbitrat io n clause and (2) the
claims in dispu te fall within th at agr eement ’ s scope

. See In re Rubiola , 334 S.W.3d 220, 223 (Tex. 2011 ); 9 U.S.C. § § 2, 4

. W e apply ordinary principl es of

state con tract law to d etermine whether the parti es agreed t o submit disput es to arbitrati on. Se e In re Kellogg Brown & Root, Inc

. , 166 S.W.3d 732, 738 (Tex. 2005) (citing First Options of Chi., Inc. v. Kaplan , 514 U.S. 938, 944 (1995)).

Even when a valid arbitr ation agreemen t exists and the claims at i ssue are within that agr ee ment ’ s scope, a party may waive its right to re ly on arbitration

2 It does not appea r from t he record that Fernandez was served or has appeared

.5 rig hts. When the facts are undispute d , we review de novo whether a party waiv ed its right to ar bitration by litigation con du ct

. Kennedy Hodges, L.L.P. v. Gobellan , 433 S.W.3d 542, 54 5 (Tex

. 2014) (per curiam); Perry Homes v . Cull , 258 S.W .3d 580, 598 (Tex. 200 8)

. B ecause public policy favors arbitration, there is a strong presumption against waiver. In re Bruce Terminix Co. , 988 S.W.2d 7 02, 704 (Tex. 1998) (per c uriam). Any waiver of the r ight to arbitrate must be intentional , Sed illo v. Campbell , 5 S.W.3d 824, 826 (Tex. Ap p.

— Houston [14 th Dist.] 1999, no pet.) , and t he party opposing arbitration on waiver grounds faces a “ high
hurdle .” Kennedy Hodges , 433 S.W.3 d at 543 ; see also In re B ru ce Terminix Co. , 988 S.W.2d at 705 (noting th e “heavy burden of pro of” required to establish waiver of the right to arbitration). “[A]ny doubts concerning the scope of
arbitrable issues s hould be r es ol ved in favor of arbitratio n, whether the problem at
ha nd is the construction of the contract lan guage itself or an allegation of waiver, delay, or a li ke defe nse to arbitrability.” In re Serv. Corp. Int ’ l , 85 S.W.3d 171, 174 (Tex. 2002)

. Jur isdiction

W e f irst address our jurisdict ion

. See M.O. Dental Lab v. Rape , 139 S.W.3d 671, 673 (Tex. 2004) (pe r curiam)

. At oral argument a nd in a subsequent motion
to di smiss , Rockwood contend e d that this court lac ks jurisdiction over t he appeal
because Urban Air iden tified the wrong authorizi ng statute in the notice o f appeal. In its notice, Urban Air asserted, “ T his inte rlocutory appeal i s an accelerated appeal under Texas Civil Practice and Remedies Code Section 171.098(a)(1). ”
Sect ion 171.098 auth or izes certain a ppeal s under the Texas Arb i tration Act ( “ TAA ” ) , not th e FAA. See Tex. Civ. Prac. & Rem. Code § 171.098. A different
statute in the Civil Practice and Remedies Code , section 51.016, authorizes interlocutory appeals under the FAA

. See Tex. C iv. Prac . & Re m. Code § 51.01 66 (authoriz ing appeal of order “under t he same circumstances that an appeal f rom a federal district court ’ s order or decision would be pe rmitted” by the FAA ); 9 U.S.C. § 16(a)(1)(B) (u nder the FAA, a party m ay immediately appea l an ord er den ying a motion to compel ar bitration )

. According to Ro ckwood, Urban Air ’ s citation to the T AA in the notice of appeal deprives this court of jurisdictio n. We disagree.

“ Insofar as our jurisdiction is concer ned, the distinction [between the T AA
and t he FAA ] is immaterial because in terlocutory orders denying m otions to compel arbitration are immediately appealable under both statutes. ” Bos ton Fin.
Institu tional Tax Credits XII v. Paseo Plaza Apartments, L.P. , No. 13

- 14

- 00295

- CV, 2015 WL 392787 , at *3 (Tex. Ap p.

— Corpus Christi Jan. 2 9, 2015 , no pet. ) (mem. op .) . Further, a tech nical defe ct in the notice of appeal does not depriv e this
court of jurisdiction

. See, e.g. , City of Houston v. Manning , No. 14

- 20

- 000 51

- CV,
202 1 WL 1257295, at *3 (Tex. App.

— Ho uston [1 4th D ist.] Apr. 6, 2021, pet. denied ) (mem. op.); Gr iggs v. Wood , No. 14

- 00

- 00226

- CV, 2001 WL 987906, at *1 n.1 (Tex. App.

— Houston [14th Dist.] Aug. 3 0, 2001, no pet.) (mem. op.) (citing
Tex. R. App. P. 25 .1(b)); see also GTECH Corp. v. Ste ele , 549 S.W.3 d 768, 773 n.6 (Tex. App.

— Austin 2018) (determining th at court possessed appellate jurisdiction under subsection (f) of section 51.014 of t he Civil Prac tice and
Remedies Code , and therefore did not need to d ecide whether it also possess ed jur isdictio n unde r subse ction (a)(8) , as as serted in appellant ’ s noti ce of appeal), aff ’ d sub nom. , Nettles v. GTECH Corp. , 606 S.W.3d 726 (Tex. 2020). A court of appeals has jurisd iction over any appeal in which the appellant files an instrument
in a bona f ide attempt to invoke the appellate cour t ’ s jurisdiction. Verburgt v

. Dorner , 959 S.W.2d 615, 616 (Tex. 1997). Ur ban Air ’ s notice of ap peal suffic es.7 Urban Air filed a timely notice of appeal complaining of the trial court ’ s denial of its motion to compe l arbitration

. We have appellate jurisd iction over
such interlocu to ry orders

. See Tex. Civ. P rac. & Rem. Code § 51.01 6

. We deny
Rockwood ’ s motion to dismiss the appeal.
Analysis Turning t o the merits, w e first address whether Urban Air , as t he pa rty

mov ing for arbitration, met its initial bur den

. See G.T. Leach Bu il der s, LLC v. Sapphire V.P., LP , 458 S.W.3d 502, 524 (Tex. 20 15)

. Ther e is no dispute that a valid arbitration agreement ex is ts and that it e ncompas ses Rockwood ’ s breach of

contra ct claim aga inst Urba n Air

. Rock wood did not disput e below that its claim
fe ll within the arbitration agre ement ’ s s cope

. Rockwood argues on appeal , how ever, that Urba n Air failed to show th a t all clai ms

— specifically Urban Air ’ s
tort claims agai nst Rockwo od and Ferna ndez

— fal l within the scope of the
arbi t r ation agreement.

We n ee d n ot address the collateral question r aised by Rockwood on appeal

. The only claim properly before the trial court for purpo ses of the motion to compel
arbitration was R ockw oo d ’ s breac h of c ontract c laim against Urban Air

. Th e tr ial
court denied Urban Ai r l eave to assert addi tional claims aga inst Rockwood or to

assert a third

- party claim against Fer na ndez , and Urban Air agrees that only
Rockwood’s breach of contract claim is at i ssue

. Becaus e Ur ban Air met its ini tial burden as to Rock wood ’ s breach of

con tra ct claim , the burden then shifted to R o ckwood to raise a ny valid defense s. Rockwood oppo sed arbitration on waiver grounds

. A party may waive its r ight to arbitration expressl y or impli ed ly. See id. at 511

- 12. When, as here, i m pl ied
waiver is at issu e, the party trying to establish the defense must show that: (1) the
oth er party has substan tially invoked the judicial pro cess in a manner inconsistent8 with the right to c ompel a rbitration ; and (2) this inconsistent conduct has ca u s ed
the party oppos ing a rbi tration t o suffer detriment or prejudice. Id.

The first prong

— substa ntially invoking the judicial process

— turns on the

tota l ity of the circumstan ces. Id. at 512

. Courts cons ider a m ulti tude of fa ctors, including:
(1) how lon g t he m ovant waited to try to co mpel a rbitration; (2) any explanation that the movant may o ffer fo r delay; (3) if and when the movant knew of the arbitra t ion agreement during the period of delay; (4) how m uch disc over y the mova nt conducted before trying to

co mpel arbitration and wh eth er that d iscovery related to the merits; (5) whether the movan t tried to dispose of the c laims on the merits; (6) whether th e movant asserted affi rmative claims for relief; (7) the ext ent of the mov ant ’ s pretrial activities rel a ti ng t o the merits; (8) t he amount of time and money the parties have spent in litigation; (9) if discovery conducted would be unavailable or useful in

a rbitration; (10) whet her litigation activity wou ld be dupli cate d in arbit ration; and (11) whether and w he n th e case had been set fo r trial.

Id. In general, no single factor is di spositi ve. RSL Funding , LLC v. Pippins , 499
S.W.3d 423, 430 ( Tex . 2016) (per curiam)

. Nor must all or most of these fact ors b e present to support waiver. S ee Perr y H omes , 258 S. W.3 d at 591. The specifi cs of each c ase matter. See Henry , 551 S.W.3d at 1 16; Per ry Homes , 258 S.W.3d at 591, 593. “Merely taking part in litigation i s not enough unless a party ‘has
substantiall y inv o ked the judi cial process to its o ppon ent ’ s d etriment .’ ” I n re Vesta Ins. Grp
., Inc. , 192 S.W.3d 759, 763 (Tex. 2006) (per curia m) (quo ting In re Serv. Corp. Int ’ l , 85 S .W.3d at 174 ). But a party may not substantially invoke the litigation process a nd the n switch to arbitrat ion on the eve of tr ial. Perry Homes ,9 258 S.W.3d at 584. I n determi ning implied waiver, the “precise quest ion is not so much when waiver occurs as when a party can no l onger take it b ack.” Id. at 595.

In its opposition below, R ockwoo d asserted t he following in sup port of its position that Urban Air sub stan tia lly invoked the judicial process inconsistently with the right to arbitrate:
Here, while [ Urban Air] is not the ‘ plaintiff, ’ [Urban Air] has: (1) waited for over a year (while l itigating) t o s eek arb itration; (2) Discovery and pr etrial activity has been und ertaken for at least a year; (3) [Urban Air] agr eed witho ut objection to go to mediation to try to r eso lve the claims and (4 ) all parties have expended time an [d] expense of th e year long lit igation

. This is the ext ent of Rock wood ’ s substantive argume nt , and Rock wood attached no evidence to its response

. Urban Air filed i ts motion to compel arbitration a l itt le l ess than one year after Rockwood file d its original petition

. Wh ile the year

- long delay is a consideration, courts h ave determined that “mer e de lay in moving to compel
arbitration i s not eno ugh for waiver.” Richmont Holdings, Inc. v . S uper ior Recharge Sys., L.L.C. , 4 55 S.W.3d 573, 576 (Tex. 2014) ( ninet een
- month delay );

s ee also In re Fleetwood Homes of Tex., L.P. , 257 S.W.3d 692, 6 94 (Tex. 20 08) (eight

- month delay); In re Vesta Ins. Gr p. , 1 92 S.W.3d at 763 (two

- year delay).
As cases like Richmont Holdings, I nc. and In re Vesta Ins urance Group i llustrate, delays of l o nger than on e year have be en held not to result in w aiver.

Urban Ai r ’ s pa r ti c ipa tion in mediati on also doe s no t support a find ing of
waiver becaus e mediation is a contractual condition precedent to arbitration and i s not inconsistent with a desire to arb it rate

. “Sett lement negotiations and mediation
do not substantially invok e the ju dicial process, nor ar e they inconsistent wi th a10 desire to arbitrate.” Cooper Indus., LLC v. Pepsi

- Cola Metro. Bottling Co. , 475
S.W.3d 436, 451 (Tex. App.

— Houston [14th Dist. ] 2015, no p et. ).

Rock wood ’ s remaining complaint s

— “ D iscovery and pr etria l act ivi ty has
been undertaken for at least a yea r ” an d “ all parties have expended time an[d] expense of the year long litigation ”

— are insufficient to satisfy Rock wood ’ s “ heavy
burden ” to establis h waiver. See RSL Funding , 499 S.W.3d a t 430

. Roc kwoo d d id

not spe cify, m u ch less substantiate with evidence , the extent of d is covery undertaken or the costs incurred. When determining whether a par ty substantially
invoked the judicia l proce ss, we consi der (1) how much discovery the party

see king arbitratio n conducte d b efore moving to co mpel arbitration and (2) w hether
the disc overy conducted would be unavail able or useful in arbitratio n. G.T. Leach
Builders , 458 S.W.3d at 512. Here, we can not evaluate these factors because
Rockwood did not offer the disco very propo und ed by Urba n Air into the recor d

. W e simi larly lack any evid ence of the time and expense s incurred

. See Gracepoint
Hold ing Co., LLC v. FJR Sand , Inc. , No. 0 1

- 19

- 00574

- CV , 2020 WL 61594, a t *6 (Tex. App.

— Hou ston [1st Dist.] Jan. 7, 2020 , no pe t. ) (mem. o p. ) (reversing order denying m otion to comp el because , among o ther reasons, record did not establish
extent or cost of dis covery)

. Give n the present record , w e conclude that Rock wood fa i led to show that Urban Air impliedly waived its right to ar bitration by substantially invok ing the judicial pro cess in a manner inconsistent with the right to c ompel arbitration

. 2F 3 We
sustain Urban Air ’ s sole issue on app eal.

3 We need not decide whether Urban Air ’ s iden tified litigation c onduct also prejudic ed Rockwood

. See Henry , 551 S.W.3d at 118 (concluding that opponent did not establish that proponent substantially i nvoked judicial process under first pron g and thus declining to reach prej udic e under seco nd prong)

. Th us, we have no c ause to ad d ress whe ther the prejudice component of arbitration waiver subs ists in Texas juris prudence af ter Morgan v. Sundance, Inc. , 14 2 S. Ct. 1708, 1714 (2022).11 Conclusion

We reverse the trial co urt ’ s order denying Urban Air ’ s motion t o compel
arbi tr ation and rem and the c a se to the tr ial court for entry of order s com pelling
Urban Air and Rockwood to arbitration and staying the litigation proceedings pending completion of the arbitratio n

.

/ s/ Ke v in Jewell Justic e

Panel consists of Chie f Justice Christopher and Justices Jewell and Spain

. (Spain, J., conc ur ring and dissenting)