Court Opinion

ID: 4080251
Source: CourtListenerOpinion
Date Created: 2016-10-06 14:12:40.907454+00
Date Added: 2024-06-11T14:33:20.718657
License: Public Domain

NUMBER 13-16-00204-CV

                             COURT OF APPEALS

                   THIRTEENTH DISTRICT OF TEXAS

                     CORPUS CHRISTI - EDINBURG

HENRY & SONS CONSTRUCTION CO., INC.,                                         Appellant,

                                            v.

PABLO CAMPOS,                                                                Appellee.

               On appeal from the County Court at Law No. 2
                        of Nueces County, Texas.

                            DISSENTING OPINION
            Before Justices Rodriguez, Benavides, and Perkes
                  Dissenting Opinion by Justice Perkes
       I respectfully dissent from the majority. I believe the arbitration agreement is not

illusory and is therefore valid and enforceable.

                                      I. ARBITRATION

       The majority correctly recites the facts of this case and correctly states the

standard of review and applicable law.           However, I disagree with the majority’s
interpretation and application of the controlling precedent. I would conclude that the

arbitration agreement is valid and that the trial court erred by denying HSC’s motion to

compel arbitration.

A.     Arbitration Agreements

       The majority correctly states that where an arbitration clause is subject to unilateral

modification or termination, such agreements are upheld as binding when they feature

guarantees to prior notice and no retroactive application. See In re Halliburton Co., 80
S.W.3d 566, 569–70 (Tex. 2002). However, the majority concludes that because HSC’s

arbitration agreement did not provide for advance notice of modification, the agreement

is illusory and not mutually binding.

       In Halliburton, the Texas Supreme Court analyzed language from an arbitration

agreement and concluded that the agreement was not illusory. Id. at 570. Halliburton’s

employee alleged that because the company was able to modify or terminate its

arbitration agreement, the promise to arbitrate was illusory and therefore unenforceable.

Id. at 569–70. The Halliburton agreement stated, however, that “no amendment shall

apply to a Dispute of which the Sponsor [Halliburton] had actual notice on the date of

amendment.” Id. Further, the termination provision stated that “termination shall not be

effective until 10 days after reasonable notice of termination is given to Employees or as

to Disputes which arose prior to the date of termination.” Id. Because Halliburton could

not avoid its promise to arbitrate by amending or terminating the dispute resolution

program, the Supreme Court held the arbitration agreement was not illusory. Id. at 570.

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       Since Halliburton, the Supreme Court has addressed the requirements of

arbitration agreements on several occasions.          In AdvancePCS Health, the court

considered whether an arbitration agreement was illusory where the management

company retained the right to terminate the agreement with contemporaneous notice to

the member pharmacies. See In re AdvancePCS Health LP, 172 S.W.3d 603, 607 (Tex.

2005). The agreement provided a 30-day window during which the arbitration clause

could not be cancelled and included a “savings clause” preventing any cancellation from

applying retroactively. See id. The court concluded that the agreement was not illusory

because had the pharmacies invoked arbitration rather than filing suit, the company could

not have avoided arbitration by terminating the agreement. See id. at 608–09. Likewise

in Polymerica, the Supreme Court again rejected an illusory-agreement argument. See

In re Polymerica, LLC, 296 S.W.3d 74, 76 (Tex. 2009). There, the termination provision

required notice to employees and applied prospectively only. See id. The court applied

the same logic, explaining that the company could not avoid its promise to arbitrate by

amending the provision or terminating it altogether. See id. (citing In re Halliburton, 80
S.W.3d at 570.)

B.     Analysis

       In the present case, HSC’s arbitration agreement expressly states that “revisions

to this Policy shall only apply prospectively . . . revisions will apply only to those claims

based upon actions or events that occur following the effective date of the revisions.”

Regarding termination, the agreement states that “HSC shall provide at least thirty days’

notice of any termination of the Policy. Any claim . . . that was initiated prior to the

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effective date . . . shall not be affected by such termination.” While the agreement does

not explicitly require HSC to provide the employee with advance notice of any modification

of the agreement, I do not believe such notice is required. Rather, the crux of the matter

is whether HSC or Campos can unilaterally avoid their mutual promises to arbitrate. See

In re AdvancePCS Health LP, 172 S.W.3d at 607. They cannot.

       The arbitration agreement, based on its prospective application and advance

notice of termination, prevents HSC from avoiding its promise to arbitrate by amending

the agreement or cancelling it altogether. Had HSC initiated a suit against Campos, he

would have retained his right to compel HSC to arbitrate and HSC would have been

unable to avoid its obligation to do so. See In re Polymerica, LLC, 296 S.W.3d at 76.

The arbitration agreement is similar to the agreement in Halliburton and, if anything, it

provides more protection by giving thirty days’ notice of termination rather than ten days.

See In re Halliburton, 80 S.W.3d at 570. Thus, I would conclude that the arbitration

agreement is not illusory, and I would sustain HSC’s first issue.

                                   II.    CONCLUSION

       Because the arbitration agreement applies prospectively and provides for notice

of termination, it is not illusory. Therefore, I would reverse the order of the trial court

denying HSC’s motion to compel arbitration. For the foregoing reasons, I respectfully

dissent.

                                                   GREGORY T. PERKES
                                                   Justice

Delivered and filed the
6th day of October, 2016.

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