Court Opinion

ID: 4649585
Source: CourtListenerOpinion
Date Created: 2021-01-07 07:15:04.480194+00
Date Added: 2024-06-11T08:01:26.103559
License: Public Domain

COURT OF APPEALS
                                 EIGHTH DISTRICT OF TEXAS
                                      EL PASO, TEXAS

  IN RE                                            §
                                                                    No. 08-19-00180-CV
  WHATABURGER RESTAURANTS,                         §
  L.L.C.,                                                     AN ORIGINAL PROCEEDING
                                                   §
                                  Relator.                            IN MANDAMUS
                                                   §

                                    DISSENTING OPINION

       Today we summarily deny Whataburger Restaurants, L.L.C.’s mandamus petition without

meaningful explanation. That seems a disservice to a litigant who has now appeared before this

Court three times, once before the Texas Supreme Court, and who seeks only to enforce an

arbitration clause as an ostensibly more efficient system for resolving disputes. For the readers

benefit, this case arises out of a workplace injury on December 23, 2012, by Yvonne Cardwell;

Whataburger is a non-subscriber under the Texas Worker’s Compensation Act but had in place a

workplace injury plan and arbitration agreement with its employees. When Cardwell sued over

her injury, Whataburger moved to compel arbitration. At the risk of understatement, the denial of

Whataburger’s motion to compel arbitration has had a tortured course through the court system.

       Whataburger’s motion to compel arbitration was initially denied based on a rationale

advanced by the trial judge, and not by Cardwell. After a first appeal of that decision to this Court,

we rejected the trial court’s rationale, but failed to address the alternative arguments for affirmance

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that Cardwell had astutely raised. Whataburger Restaurants LLC v. Cardwell, 446 S.W.3d 897

(Tex.App.--El Paso 2014), review granted, judgment rev’d, 484 S.W.3d 426 (Tex. 2016). The

Texas Supreme Court said we should have resolved those alternative arguments and remanded the

case for us to do so. 484 S.W.3d at 427. We then issued a second published opinion that rejected

those alternative grounds save one. We remanded the case to the trial court for resolution of a

claim that the arbitration agreement was unenforceable as an illusory contract. Whataburger

Restaurants LLC v. Cardwell, 545 S.W.3d 73 (Tex.App.--El Paso 2017, no pet.). Our rationale

for the remand was that our record only contained an excerpt of a contract document and that the

entire document might be necessary to correctly evaluate the illusory contract claim. Id. at 83-84.

       On remand, the trial court heard and ruled on the illusory contract issue, but Whataburger

did not receive notice of the adverse ruling against it in time to perfect a second interlocutory

appeal. See TEX.CIV.PRAC. & REM.CODE ANN. § 51.016 (authority for filing interlocutory appeal);

CMH Homes v. Perez, 340 S.W.3d 444, 453 (Tex. 2011) (“Appeals from interlocutory orders are

accelerated, and an accelerated appeal is perfected by filing a notice of appeal within twenty days

of the order.”). The relevant timeline of events is as follows: After remand from this Court,

Whataburger on April 9, 2018 filed a supplemental motion to compel arbitration. The trial court

heard that motion on June 26, 2018 and took the matter under advisement. The trial court ruled

against Whataburger on August 23, 2018 in an order that was filed of record, but apparently never

served on the parties. Whataburger did not acquire notice of the signed order until January 23,

2019, during an email exchange with one of Cardwell’s attorneys. Eight days later, it filed a

motion to reconsider and a companion motion under Rule 306a(4). See TEX.R.CIV.P. 306a(4)

(allowing for extended appellate deadlines when a party first receives notice or knowledge of

appealable order between the 20th and 90th day following signing of the order). A new trial judge

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had taken the bench in the interim, and that judge denied the motion to reconsider on May 7, 2019.

On June 4, 2019, the trial court disposed of Whataburger’s 306a(4) motion by making a single

finding that Whataburger received notice or acquired actual knowledge of the August 2018 order

more than 90 days after it was signed (which would preclude application of Rule 306a).

Whataburger filed its mandamus petition with this Court on June 28, 2019.

       The Court’s opinion does not give any detailed explanation for its disposition, but

Cardwell’s briefing in this case suggests two reasons why she urged we deny the petition. First,

Cardwell urged that Whataburger procedurally defaulted the ability to challenge the order because

it did not timely file an appeal from the order, and no extraordinary circumstances justify its delay

and resort to the mandamus remedy. Undoubtedly, Whataburger did not file an interlocutory

appeal within twenty days of the trial court’s order. It later filed a motion to reconsider which the

trial court overruled, but a motion to reconsider is not one of the limited orders that can be appealed

as an interlocutory order. See Nazareth Hall Nursing Ctr. v. Castro, 374 S.W.3d 590, 594

(Tex.App.--El Paso 2012, no pet.).        Accordingly, Whataburger raised its claims through a

mandamus. Cardwell, however, contends that mandamus is unavailable based on this Court’s prior

precedent. See In re H.D. Vest, Inc., 334 S.W.3d 333 (Tex.App.--El Paso 2010) (original

proceeding). The rationale from our precedent was that if a party had an opportunity to bring an

interlocutory appeal, that party did not truly lack an adequate remedy at law, which is one of the

prerequisites of a mandamus action. Id. The In re H.D. Vest, Inc., case, however, is a one

paragraph denial of mandamus relief. The case does not address an exception to the requirement

of an adequate remedy on appeal: the existence of “extraordinary circumstances.” See In re Van

Waters & Rogers, Inc., 145 S.W.3d 203, 210-11 (Tex. 2004) (“Absent extraordinary

circumstances, mandamus will not issue unless defendants lack an adequate appellate remedy.”).

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       Cardwell anticipated this exception and further claims that Whataburger fails to advance

any extraordinary circumstances justifying mandamus. She notes its counsel did not check the

trial court’s docket sheet to see if an order had been signed, nor otherwise explain the five-month

delay between the date the trial court ruled and when Whataburger filed its post-ruling motions.

       In my view, the failure of the trial court or the district clerk to notify Whataburger of the

ruling on the motion constitutes an extraordinary circumstance. Rule 306a requires the clerk to

notify the parties when an “original judgment or other appealable order is signed[.]” (emphasis

added). TEX.R.CIV.P. 306a. Counsel should have some right to rely on the text of that rule.

Otherwise, we would impose a duty on trial counsel to check-in with a trial court (here, at least

every 19 days to meet the 20-day deadline for filing a notice of appeal) to see if an order on an

argued motion has been issued. Texas has an efficient electronic notification system for a reason,

and the apparent failure to notify the parties of the signing of an appealable order cannot be laid at

the feet of Whataburger. I could agree that when a party offers no reason for not filing a timely

interlocutory appeal, mandamus is an inappropriate alternative pathway to the appellate courts.

See In re Santander Consumer USA, Inc., 445 S.W.3d 216, 219 (Tex.App.--Houston [1st Dist.]

2013) (original proceeding) (declining, however, to establish a bright line rule that failing to pursue

a statutory interlocutory appeal always precludes mandamus); In re Fontaine, No. 12-17-00400-

CV, 2018 WL 720802, at *4 (Tex.App.--Tyler Feb. 6, 2018, no pet.) (mem. op.) (denying

mandamus relief where the plaintiff petitioned 52 days after the trial court signed the order granting

the defendant’s special appearance even though notice of the order was served timely); In re

Federal Corp., No. 13-18-00060-CV, 2018 WL 549307, at *1 (Tex.App.--Corpus Christi Jan. 25,

2018, no pet.) (mem. op.) (denying mandamus relief following the relator’s failure to file a timely

appeal though capable of doing so); see also In re Hart of Tex. Cattle Feeders, LLC, No. 07-16-

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00194-CV, 2016 WL 3180436, at *1-2 (Tex.App.--Amarillo June 2, 2016, no pet.) (mem. op.). 1

But here, Whataburger filed a Rule 306a(4) motion that included an affidavit and exhibits

documenting when it received late notice of the signed order.

         Cardwell also challenged Whataburger’s argument on the merits. After the litany of

appeals in this case, the trial court had a single issue before it: whether the arbitration clause was

invalid because it was part of an illusory contract. Cardwell urges that the contract documents

here unambiguously show that Whataburger reserved the right to unilaterally alter or amend the

arbitration agreement which renders it an illusory contract. See J.M. Davidson, Inc. v. Webster,

128 S.W.3d 223 (Tex. 2003).

         Two documents are relevant to this discussion--the “Employee Handbook” and an

“Acknowledgment Sheet.”            The Employee Handbook is some 55 pages long and contains

separately titled sections addressing a variety of topics (i.e. “Employment,” “Compensation,” and

“Standards of Conduct”). Relevant here, the handbook contains a separately titled section for

“Arbitration Policies,” and “Employee Quality Protection Plan.” The opening page of the

handbook contains this statement:

         This handbook, with the exception of the mutual binding obligations of Company
         and Employee in the mandatory Arbitration Policy herein, is not a contract,
         expressed or implied, and does not guarantee employment for any specific
         duration. (emphasis original)
Along a similar vein, the opening page also states:
         Without advance notice, the Company reserves the right to change or modify its
         policies from time to time, unless expressly stated otherwise herein. While every
         effort will be made to inform you of such changes, the Company may institute
         changes with or without notice. However, the mandatory Arbitration Policy herein
         will not be changed except in accordance with paragraph 2.01 therein.

1
  After the mandamus petition was denied by the Amarillo Court of Appeals, the case went to trial and the verdict was
then appealed. The Texas Supreme Court ultimately held that the arbitration clause was enforceable and that even
after a trial on the merits, a court could enforce an arbitration agreement. Bonsmara Nat. Beef Co., LLC v. Hart of
Texas Cattle Feeders, LLC, 603 S.W.3d 385 (Tex. 2020).

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The arbitration agreement found within the employee handbook also contains language precluding

the unilateral change of its terms:

       The duty imposed on both the Company and on employees to arbitrate all legally
       recognized claims or disputes arising from the employment relationship shall
       continue beyond, and not be affected by, the termination of an employee’s
       employment. Moreover the company shall have no right, once the facts giving rise
       to the legally recognized claim or dispute have occurred, to unilaterally amend or
       modify this Policy or otherwise avoid its obligation to proceed to arbitration if
       requested to do so in the absence of mutual consent of the Company and the
       Employee. Whataburger, Inc. will not alter, modify or amend this Policy without
       first providing all employees with 30 days advanced written notice. An Employee
       who chooses to continue employment for at least thirty (30) days after receiving
       written notice of an amendment or modification of the Policy shall be deemed to
       have consented.
       The parties also direct us to an Acknowledgment Sheet that Cardwell signed. That form is

a single page document which begins with a list of four items that have been provided to the

employee: (1) Whataburger’s Employee Handbook, (2) its Arbitration Policy, (3) the EQPP

[workplace injury plan], and (4) a Hazardous Materials Training Completion Record. The

Acknowledgment Sheet then contains four distinct sections addressing each of those items and

contains a place for the employee to initial their acknowledgment to each. Cardwell initialed each.

       Cardwell’s illusory contract argument hinges on this language in the part of the form

germane to the Employee Handbook:

       I understand that the information provided in the employee handbook is intended
       to be used as a guide only. Its provisions are not conditions of employment and
       may be modified, revoked, changed or deleted by Whataburger Restaurants LLC at
       any time with or without notice. Nothing in this manual is intended to create, nor
       is it to be construed to constitute, a contract between Whataburger and any of its
       employees.
She contends that provision must be taken literally to include the prospect that Whataburger could

unilaterally change the arbitration agreement because it is contained in the Employee Handbook.

       By contrast, Whataburger contends that the arbitration clause is a stand-alone provision

that cannot be altered once an employee suffers an on-the-job-injury. In addition to the provisions

                                                6
from the Employee Handbook set out above, Whataburger also calls our attention to the

Acknowledgment Sheet which has a specific place where Cardwell acknowledged the binding

nature of the arbitration policy:

       ARBITRATION: I understand that Whataburger Restaurants, LLC will submit any
       legally recognized claim or dispute related to employment, termination of
       employment, including workplace injury or disease claims except as specifically
       excluded in paragraph 3.02 of the Arbitration Policy to arbitration and by accepting
       or continuing employment I shall be required to submit any legally recognized
       claims or disputes to arbitration.

       The parties’ arguments call for us to construe the contractual documents. “In construing a

written contract, the primary concern of the court is to ascertain the true intentions of the parties

as expressed in the instrument.” Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983). If a written

instrument can be given a certain or definite legal meaning or interpretation, it is not ambiguous

and a court should construe it as matter of law. Id. “Whether a contract is ambiguous is [also] a

question of law for the court to decide by looking at the contract as a whole in light of the

circumstances present when the contract was entered.” Id. at 394.

       When a court construes a writing, it “consider[s] the entire writing in an effort to harmonize

and give effect to all the provisions of the contract so that none will be rendered meaningless.” Id.

at 393 (emphasis original). That way, “[n]o one phrase, sentence, or section [of a contract] should

be isolated from its setting and considered apart from the other provisions.” Guardian Trust Co.

v. Bauereisen, 121 S.W.2d 579, 583 (Tex. 1938); see also Pathfinder Oil & Gas, Inc. v. Great W.

Drilling, Ltd., 574 S.W.3d 882, 889 (Tex. 2019) (expressly adopting the same principle). And in

considering the entire writing, we are instructed that specific contract provisions control over

general ones. Pathfinder, 574 S.W.3d at 889; Forbau v. Aetna Life Ins. Co., 876 S.W.2d 132, 133-

34 (Tex. 1994); Young Mens Christian Ass’n of Greater El Paso v. Garcia, 361 S.W.3d 123, 127

(Tex.App.--El Paso 2011, no pet.).

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       Applying these principles, I would agree with Whataburger that the Acknowledgment

Sheet did not give it a right to unilaterally change the arbitration agreement, and the agreement is

not therefore illusory. Cardwell’s theory is anchored in the single section of the Acknowledgment

Sheet that is directed at the Employee Handbook generally. Yet specific provisions within the

Employee Handbook say that the arbitration agreement cannot be revised once an injury triggers

the clause. The Acknowledgment Sheet itself delineates the arbitration agreement as a distinct

term of employment, both in its initial description of the different items provided to Cardwell, and

in the section that separately describes the arbitration policy to her. In other words, Cardwell’s

argument contravenes three rules for construing contracts: (1) it is focused on a single provision

in isolation of the whole, (2) it reads the agreement in a way to render other terms meaningless,

and (3) it ignores the rule that the specific controls over the general. Accordingly, I would not

read the agreement to be either illusory or ambiguous.

       For these reasons, I respectfully dissent.

                                              JEFF ALLEY, Justice

January 6, 2021

Before Rodriguez, C.J., Palafox, and Alley, JJ.

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