Court Opinion

ID: 3100168
Source: CourtListenerOpinion
Date Created: 2015-10-16 05:03:00.23201+00
Date Added: 2024-06-11T12:46:55.841317
License: Public Domain

IN THE
                           TENTH COURT OF APPEALS

                                    No. 10-09-00361-CV

ENERGY TRANSFER FUEL, LP,
                                                         Appellant
v.

THE ESTATE OF ROBBIE LOU SOUTER
AND TOMMY ROSSA,
                                                         Appellees

                             From the 40th District Court
                                 Ellis County, Texas
                                Trial Court No. 79169

                            MEMORANDUM OPINION

       In this interlocutory appeal, Energy Transfer Fuel, LP (ETF) complains that the

trial court erred in denying ETF’s motion to compel arbitration. We agree and will

reverse the trial court’s ruling.

       ETF has a pipeline easement on agricultural property owned by the Estate of

Robbie Lou Souter (Souter) and by Tommy Rossa. In 2008, ETF was going to install an

additional pipeline in the easement and needed to acquire temporary work space from

Souter and Rossa. ETF entered into a “Temporary Work Space and Access Agreement”
with Souter that granted ETF a temporary work space easement and access to their

properties to install the pipeline. Thereafter, Souter and Rossa’s representative, Keith

Miltberger, negotiated a twenty-four paragraph addendum to the agreement relating to

restoration of their properties. The addendum contains the following provision:

          6.     GRANTEE [ETF] agrees to pay for any damages, relating to
          Grantee’s activities on the property owned by Grantor, incurred after the
          completion of the initial construction and installation which may arise but
          are not limited to crops, trees found outside the Easement and
          [Temporary Work Space]. Said damages, if not mutually agreed upon[,]
          to be ascertained and determined by three disinterested persons, one
          thereof to be appointed by the said GRANTOR, one by the said
          GRANTEE, and the third by the two so appointed, and the written award
          of such three persons shall be final and conclusive.

          Souter and Rossa have sued ETF for breach of the agreement and the

addendum,1 complaining that ETF did not restore their properties to the condition

required by the agreement and addendum.2                        ETF moved to compel arbitration,

asserting that paragraph 6 is an arbitration agreement.3 The trial court denied the

motion, and in its sole issue, ETF asserts that the trial court erred.

                In evaluating a motion to compel arbitration, a court must first
          determine whether a valid arbitration agreement exists, and then whether

1 Souter and Rossa also sue for specific performance under the agreement and for declaratory judgment
relating to disputes on interpretation of the agreement.

2   In their petition, Souter and Rossa assert that ETF breached the agreement by:
           Failing to restore the low water crossings;
           Rendering the existing low water crossings unusable;
           Creating ridges on the properties that divert water flow and cause erosion;
           Failing to re-seed the properties with native grasses;
           Failing to restore proper gating;
           Failing to accurately and properly mark the pipelines; and
           Failing to perform proper erosion control.

3ETF asserts that the Federal Arbitration Act applies because the pipeline involves interstate commerce.
See 9 U.S.C. § 2. Souter and Rossa do not disagree.

Energy Transfer Fuel, LP v. The Estate of Robbie Lou Souter and Tommy Rossa                      Page 2
       the agreement encompasses the claims raised. Am. Std. v. Brownsville
       Indep. Sch. Dist. (In re D. Wilson Constr. Co.), 196 S.W.3d 774, 781 (Tex.
       2006); see In re Dillard Dep't Stores, Inc., 186 S.W.3d 514, 515 (Tex. 2006) (per
       curiam). Whether a valid arbitration agreement exists is a legal question
       subject to de novo review. Id. Although the Texas Supreme Court has
       repeatedly expressed a strong presumption favoring arbitration, the
       presumption arises only after the party seeking to compel arbitration
       proves that a valid arbitration agreement exists. J.M. Davidson, Inc. v.
       Webster, 128 S.W.3d 223, 227 (Tex. 2003) (emphasis added). Courts must
       resolve any doubts about an arbitration agreement’s scope in favor of
       arbitration. In re FirstMerit Bank, N.A., 52 S.W.3d 749, 753 (Tex. 2001).

              Arbitration agreements are interpreted under traditional contract
       principles. J.M. Davidson, 128 S.W.3d at 227. If the trial court finds a valid
       agreement, the burden shifts to the party opposing arbitration to raise an
       affirmative defense to enforcing arbitration. Id. Absent a defense to
       enforcing the arbitration agreement, the trial court has no discretion but to
       compel arbitration and stay its own proceedings. In re J.D. Edwards World
       Solutions Co., 87 S.W.3d 546, 549 (Tex. 2002) (per curiam).

LDF Constr., Inc. v. Bryan, No. 10-08-00315-CV, 2010 WL 1052863, at *2 (Tex. App.—

Waco Mar. 10, 2010, no pet. h.).

       Souter and Rossa assert that the provision is not an arbitration provision because

it is not specifically identified as an “arbitration” agreement.              We disagree.     An

arbitration agreement does not have to be in any particular form. Manes v. Dallas Baptist

College, 638 S.W.2d 143, 145 (Tex. App.—Dallas 1982, writ ref’d n.r.e.). An agreement in

any form is only arbitration if it meets the definition of “arbitration.” In re Anaheim

Angels Baseball Club, Inc., 993 S.W.2d 875, 879-80 (Tex. App.—El Paso 1999, orig.

proceeding). Arbitration has been defined as

       a contractual proceeding by which the parties to a controversy or dispute,
       in order to obtain a speedy and inexpensive final disposition of matters
       involved, voluntarily select arbitrators or judges of their own choice, and
       by consent submit the controversy to such tribunal for determination in

Energy Transfer Fuel, LP v. The Estate of Robbie Lou Souter and Tommy Rossa                  Page 3
       substitution for the tribunals provided by the ordinary processes of the
       law.

Jack B. Anglin Co. v. Tipps, 842 S.W.2d 266, 268 (Tex. 1992). Another definition is:

       A method of dispute resolution involving one or more neutral third
       parties who are usu. agreed to by the disputing parties and whose
       decision is binding.

BLACK’S LAW DICTIONARY 119 (9th ed. 2009).

       The provision at issue is an arbitration agreement.

       Souter and Rossa next assert that the provision only covers the issue of damages

and that therefore liability can be litigated. We disagree.

       To determine whether an arbitration agreement covers a party’s claims, a court

must focus on the complaint’s factual allegations, not the legal causes of action asserted.

FirstMerit Bank, 52 S.W.3d at 754. We are to construe arbitration clauses broadly, and

when a contract contains an arbitration clause, there is a presumption of arbitrability.

See AT & T Tech., Inc. v. Communications Workers of Am., 475 U.S. 643, 650, 106 S. Ct. 1415,

1419, 89 L. Ed. 2d 648 (1986). Any doubts as to arbitrability are to be resolved in favor of

coverage. FirstMerit Bank, 52 S.W.3d at 754. Likewise, we resolve any doubts about the

scope of the arbitration agreement in favor of coverage. Id. In fact, the policy in favor

of enforcing arbitration agreements is so compelling that a court should not deny

arbitration unless it can be said with positive assurance that an arbitration clause is not

susceptible of an interpretation covering the dispute at issue. Prudential Sec., Inc. v.

Marshall, 909 S.W.2d 896, 899 (Tex. 1995).

       Generally, if the facts alleged “touch matters” that are covered by, have a

Energy Transfer Fuel, LP v. The Estate of Robbie Lou Souter and Tommy Rossa            Page 4
“significant relationship” to, are “inextricably enmeshed” with, or are “factually

intertwined” with the contract that contains the arbitration agreement, the claims are

arbitrable. Pennzoil Co. v. Arnold Oil Co., 30 S.W.3d 494, 498 (Tex. App.—San Antonio

2000, orig. proceeding). In other words, to come within the scope of the arbitration

provision, a party’s allegations need only be factually intertwined with arbitrable claims

or otherwise touch upon the subject matter of the agreement containing the arbitration

provision. See Prudential, 909 S.W.2d at 900; Jack B. Anglin Co., 842 S.W.2d at 271.

       In their petition, Souter and Rossa plead that the whole purpose of the

addendum was to add requirements governing ETF’s actions on the properties and the

restoration of the properties’ surface.         Their factual allegations regarding surface

damage caused and not remediated by ETF pertain to both liability and damages,

which are factually intertwined. Therefore, we hold that all the claims against ETF are

within the scope of the arbitration agreement and sustain ETF’s sole issue. We reverse

the trial court’s order denying ETF’s motion to compel arbitration and remand this case

for the entry of an order compelling the parties to arbitration and for further

proceedings consistent with this opinion.

                                                     REX D. DAVIS
                                                     Justice

Energy Transfer Fuel, LP v. The Estate of Robbie Lou Souter and Tommy Rossa            Page 5
Before Chief Justice Gray,
       Justice Reyna, and
       Justice Davis
Reversed and remanded
Opinion delivered and filed April 21, 2010
[CV06]

Energy Transfer Fuel, LP v. The Estate of Robbie Lou Souter and Tommy Rossa   Page 6