Court Opinion

ID: 4076532
Source: CourtListenerOpinion
Date Created: 2016-09-30 17:40:33.933499+00
Date Added: 2024-06-11T14:33:05.782242
License: Public Domain

ACCEPTED
                                                                            13-15-00278-CV
                                                            THIRTEENTH COURT OF APPEALS
                                                                   CORPUS CHRISTI, TEXAS
                                                                       7/20/2015 1:54:35 PM
                                                                     CECILE FOY GSANGER
                                                                                     CLERK

                        NO. 13-15-00278-CV
__________________________________________________________________
                                                   FILED IN
                                         13th COURT OF APPEALS
                            IN THE    CORPUS  CHRISTI/EDINBURG, TEXAS
                                          7/20/2015 1:54:35 PM
                 THIRTEENTH COURT OF APPEALS
                                           CECILE FOY GSANGER
                       EDINBURG, TEXAS            Clerk
                       th
                      13 JUDICIAL DISTRICT
__________________________________________________________________

                        ADOLFO MORALES
                                    v.
           OPHTHALMIC CONSULTANTS OF TEXAS, P.A.
__________________________________________________________________
                           On Appeal from the
                 th
              444 District Court of Cameron County, Texas

                 INTERLOCUTORY APPEAL
__________________________________________________________________

                              JACKSON LEWIS P.C.

                                Victor N. Corpuz, Esq.
                                corpuzv@jacksonlewis.com
                                Texas Bar No. 04838450
                                Allyson L. Johnson, Esq.
                                johnsona@jacksonlewis.com
                                Texas Bar No. 24054005

                                500 N. Akard, Suite 2500
                                Dallas, Texas 75201
                                Phone: (214) 520-2400
                                Fax:     (214) 520-2008

                              LEAD ATTORNEYS FOR APPELLANT

ORAL ARGUMENT REQUESTED
             IDENTITY OF PARTIES AND COUNSEL
      The following is a complete list of all parties, as well as the names,
addresses, and telephone numbers of all counsel of record.

           APPELLANT:                  COUNSEL FOR APPELLANT:
 Ophthalmic Consultants of Texas,      Victor N. Corpuz, Esq.
 P.A.                                  corpuzv@jacksonlewis.com
                                       Texas Bar No. 04838450
                                       Allyson L. Johnson, Esq.
                                       johnsona@jacksonlewis.com
                                       Texas Bar No. 24054005
                                       JACKSON LEWIS PC
                                       500 N. Akard, Suite 2500
                                       Dallas, Texas 75201
                                       Phone: (214) 520-2400
                                       Fax:      (214) 520-2008

            APPELLEE:                  COUNSEL FOR APPELLEE:
 Adolfo Morales, M.D.                 Larry Warner
                                      Larrywarner1945@gmail.com
                                      Texas Bar No. 20871500
                                      3109 Banyan Circle
                                      Harlingen, TX 78550
                                      Phone: (956) 454-4994
                                      Fax: (956) 230-0361

                                       John Shergold
                                       hodgeshergold@aol.com
                                       Texas Bar No. 00794624
                                       HODGE & SHERGOLD, LLP
                                       1534 East 6th Street, Suite 103
                                       Brownsville, Texas 78520
                                       Phone: (956) 548-9100
                                       Fax:     (956) 548-9102

INTERLOCUTORY APPEAL BRIEF                                               PAGE i
     TRIAL COURT JUDGE:
The Honorable David Sanchez
444th District Court, Cameron County
974 E. Harrison, First Floor #5
Brownsville, Texas 78520
Phone:       (956) 547-7034

INTERLOCUTORY APPEAL BRIEF             PAGE ii
                                      TABLE OF CONTENTS
HEADING                                                                                                           PAGE
IDENTITY OF PARTIES AND COUNSEL ............................................................ i

TABLE OF CONTENTS.....................................................................................iii-iv

TABLE OF AUTHORITIES ..............................................................................v-viii

STATEMENT OF THE CASE..................................................................................1

ISSUES PRESENTED...............................................................................................3

STATEMENT OF FACTS ........................................................................................3

I. ARGUMENT AND AUTHORITIES ....................................................................5

   A.     Summary of Argument..................................................................................5

   B.     Standard of Review .......................................................................................6

   C.     The trial court erred by not submitting the dispute concerning
          enforceability of the Agreement to the Arbitrator. .......................................8

   D.     The Agreement constitutes a valid agreement to arbitrate between the
          Parties..........................................................................................................10

   E.     Dr. Morales’s claims fall within the Agreement’s scope............................12

   F.     OCT Has Not Waived Its Right to Compel Arbitration..............................13

           1.    OCT Has Not Substantially Invoked the Judicial Process..................14

           2.    Dr. Morales Cannot Show Prejudice...................................................16

II. CONCLUSION ...................................................................................................18

III. PRAYER FOR RELIEF ....................................................................................19

INTERLOCUTORY APPEAL BRIEF                                                                                         PAGE iii
                                    TABLE OF AUTHORITIES

                                                                                                          Page(s)
CASES
AT&T Techs., Inc. v. Commc’ns Workers of Am. et al.,
  475 U.S. 643 (1986)..........................................................................................7, 9

Buckeye Check Cashing Inc. v. Cardegna,
  546 U.S. 440 (2006)..................................................................................3, 6, 7, 9

Circuit City Stores, Inc. v. Adams,
   532 U.S. 105 (2001)..............................................................................................7

Dallas Cardiology Assocs., P.A. v. Mallick,
  978 S.W.2d 209 (Tex. App.—Texarkana 1998, writ denied) ..............................7

EZ Pawn Corporation v. Mancias,
  934 S.W.2d 87 (Tex. 1996)..........................................................................passim

First Community Insurance Company and Boyd Construction v. F-Con
   Contractors, Inc.,
   2000 Tex. App. Lexis 1655 (Tex. App.—Dallas March 14, 2000)..............13, 14

Forest Oil Corp. v. McAllen,
  268 S.W.3d 51 (Tex. 2008).................................................................................12

Granite Constr. Co. v. Beaty,
  130 S.W.3d 362 (Tex. App.—Beaumont 2004) .................................................18

Henry v. Gonzalez,
  18 S.W.3d 684 (Tex. App.—San Antonio 2000, no writ)................................7, 8

Home Club, Inc. v. Barlow,
  818 S.W.2d 192 (Tex. App.—San Antonio 1991, orig. proceeding).................17

In re 24R, Inc.,
    324 S.W.3d 564 (Tex. 2010) ........................................................................11, 12

In re AdvancePCS Health L.P.,
    172 S.W.3d 603 (Tex. 2005) (per curiam) .........................................................11

INTERLOCUTORY APPEAL BRIEF                                                                                  PAGE iv
In re Delta Homes, Inc.,
    5 S.W.3d 237 (Tex. App.—Tyler 1999, orig. proceeding).................................18

In re FirstMerit Bank,
    52 S.W.3d 749 (Tex. 2001)...............................................................................7, 9

In re Fleetwood Homes of Texas, L.P.,
    257 S.W.3d 692 (Tex. 2008) ..............................................................................15

In re Halliburton Co.,
    80 S.W.3d 566 (Tex. 2002)...........................................................................10, 11

In re Hornbeck Offshore Corp.,
    981 F.2d 752 (5th Cir. 1993) ..............................................................................12

In re Merrill Lynch Trust Co. FSB,
    235 S.W.3d 185 (Tex. 2007) ....................................................................3, 6, 7, 9

In re Multifuels, L.P.,
    2010 Tex. App. LEXIS 3576 (Tex. App.—Houston [1st Dist.] May 7,
    2010) ...................................................................................................................18

In re Next Fin. Group, Inc.,
    271 S.W.3d 263 (Tex. 2008) (per curiam) ...........................................................7

In re Oakwood Mobile Homes, Inc.,
    987 S.W.2d 571 (Tex. 1999) ....................................................................8, 16, 17

In re Odyssey Healthcare, Inc.,
    310 S.W.3d 419 (Tex. 2010) ..............................................................................11

In re Permian Tank & MFG, Inc.,
    306 S.W.3d 338 (Tex. App.—Eastland 2010, no pet.).........................................9

In re Poly-America, L.P.,
    262 S.W.3d 337 (Tex. 2008) ................................................................................7

In re Serv. Corp. Int’l,
    85 S.W.3d 171 (Tex. 2002)...........................................................................15, 16

INTERLOCUTORY APPEAL BRIEF                                                                                            PAGE v
In re Tenet Healthcare, Ltd.,
    84 S.W.3d 760 (Tex. App.—Houston [1st Dist.] 2002, no pet.)......................7, 8

Interconex, Inc. v. Ugarov,
   224 S.W.3d 523 (Tex. App.—Houston [1st Dist.] 2007)....................................13

Interconex, Inc. v. Ugarov,
   S.W.3d 2006 WL 2506562 (Tex. App.—Houston [1st Dist.] 2006, n.p.h.) .......13

J.M. Davidson, Inc. v. Webster,
   128 S.W.3d 223 (Tex. 2003) ..........................................................................7, 10

Jernigan v. Langley,
   111 S.W.3d 153 (Tex. 2003) ..............................................................................13

Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding,
  289 S.W.3d 844 (Tex. 2009) ..............................................................................11

Mouton v. Metropolitan Life Ins. Co.,
  147 F.3d 453 (5th Cir. 1998) ................................................................................7

Pennzoil Co. v. Arnold Oil Co., Inc.,
  30 S.W.3d 494 (Tex. App.—San Antonio [4th Dist.] 2000)..................15, 16, 18

Pepe Intern. Dev. Co. v. Pub Brewing Co.,
  915 S.W.2d 925 (Tex. App.—Houston [1st Dist.] 1996, no writ) .......................6

Schroeder v. Texas Iron Works, Inc.,
   813 S.W.2d 483 (Tex. 1991) ..............................................................................14

Steelworkers v. American Mfg. Co.,
   363 U.S. 564 (1960)..............................................................................................7

Steelworkers v. Warrior & Gulf Navigation Co.,
   363 U.S. 574 (1960)..............................................................................................7

Sun Exploration & Prod. Co. v. Benton,
   728 S.W.2d 35 (Tex. 1987).................................................................................13

United Parcel Serv., Inc. v. McFall,
  940 S.W.2d 716 (Tex. App.—Amarillo 1997, orig. proceeding).......................18

INTERLOCUTORY APPEAL BRIEF                                                                                  PAGE vi
Walker v. J.C. Bradford & Co.,
  938 F.2d 575 (5th Cir. 1991) ..............................................................................15

Williams Indus., Inc. v. Earth Dev. Sys. Corp.,
   110 S.W.3d 131 (Tex. App.—Houston [1st Dist.] 2002, no pet.).................14, 15

STATUTES
TEX. LAB. CODE ANN. § 21.202 (Vernon Pamph. 1996) .........................................14

Texas Commission on Human Rights Act, TEX. LAB. CODE ANN. § 21.001,
  et seq. ................................................................................................................1, 4

INTERLOCUTORY APPEAL BRIEF                                                                                          PAGE vii
                                STATEMENT OF CASE

        This is an employment discrimination and retaliation lawsuit filed by

Appellee, Dr. Adolfo Morales (“Dr. Morales”) in the 444th District Court for

Cameron County, Texas.1 Dr. Morales seeks to recover damages from his former

employer, Ophthalmic Consultants of Texas, P.A. (“Appellant” or “OCT”) under

the Texas Commission on Human Rights Act, TEX. LAB. CODE ANN. § 21.001, et

seq. for alleged age discrimination and retaliation.    Specifically, Dr. Morales

alleges that OCT terminated his employment after he opposed and/or complained

about alleged discrimination in the workplace.2

       During his employment as an ophthalmology specialist with OCT, Dr.

Morales agreed to arbitrate any claims arising from his employment or the

termination of his employment pursuant to an Agreement to Arbitrate

(“Agreement”), which he signed on October 20, 2009.3 Notably, in this stand-

alone Agreement both OCT and Dr. Morales agreed to substitute arbitration for

litigation, and waived the right to have disputes resolved in court.4 Dr. Morales

has presented no evidence to contest his signature on the Agreement.

1
    Court Record (“C.R.”) at 4-9.
2
    Id.
3
    C.R. at 25-27.
4
    Id.
INTERLOCUTORY APPEAL BRIEF                                                 PAGE 1
       OCT moved the trial court to compel Dr. Morales to arbitrate his claims

pursuant to the Agreement and stay its proceedings pending arbitration.5 After a

hearing on May 20, 2015, the trial court denied OCT’s Motion to Compel

Arbitration.6 No discovery has been conducted by either party and other than

seeking to compel arbitration, OCT has not sought any other relief from the

District Court.7

       OCT now seeks to overturn the trial court’s ruling because Dr. Morales’s

challenge to the validity and enforceability of the Agreement is a dispute that

should be decided by the arbitrator based on applicable United States Supreme

Court and Texas Supreme Court decisions. Regardless of who determines the

issue, Dr. Morales’s dispute relates exclusively and entirely to his employment

and/or the termination of his employment with OCT and, therefore, falls squarely

within the scope of the valid, mutually-binding Agreement which Dr. Morales

acknowledged and accepted as a matter of law. Finally, OCT has not waived its

right to enforce the Agreement as it has not substantially invoked the judicial

5
    C.R. at 17-28.
6
    C.R. at 67. The court originally set OCT’s motion to compel arbitration for hearing on
November 19, 2014; however, OCT inadvertently did not receive notice of the hearing, and did
not receive a copy of Dr. Morales’s response to the motion to compel until it requested a copy
directly from Dr. Morales’s counsel. (Appendix Exhibit E, Reporter’s Record (“R.R.”) Hearing
Transcript 5/20/15 at 7:1-8:1). The Court agreed to reschedule the hearing for May 20, 2015.
(C.R. at 64.)
7
    Exhibit E, R.R. (Hearing Transcript 5/20/15) at 8:9-16.
INTERLOCUTORY APPEAL BRIEF                                                             PAGE 2
process and there has been no prejudice to Dr. Morales. There is no evidence to

support the trial court’s denial of OCT’s Motion to Compel Arbitration.

                                ISSUES PRESENTED

             1.    Whether the trial court erred when it denied OCT’s Motion to

Compel Arbitration and to Stay Proceedings Pending Arbitration of Dr. Morales’s

employment-related claims under the Agreement.

             2.    Whether the trial court erred by ruling on Dr. Morales’s

defenses to the Agreement as a whole, when Buckeye Check Cashing Inc. v.

Cardegna, 546 U.S. 440, 449 (2006) and In re Merrill Lynch Trust Co. FSB, 235
S.W.3d 185, 190 (Tex. 2007) mandate that challenges to agreements as a whole,

such as Dr. Morales’s argument that the Agreement is illusory, are to be

determined by the arbitrator.

             3.    Whether the trial court erred by ruling that the Agreement is

illusory and unenforceable.

             4.    Whether the trial court erred by ruling that OCT had waived its

right to enforce the Agreement.

                              STATEMENT OF FACTS

      This lawsuit stems from Dr. Morales’s employment as an ophthalmology

specialist with OCT, and the non-renewal of his contract of employment with

INTERLOCUTORY APPEAL BRIEF                                                  PAGE 3
OCT. Dr. Morales contends that OCT discriminated against him on the basis of

his age and retaliated against him for opposing workplace discrimination, in

violation of various provisions of the Texas Commission on Human Rights Act of

1983, TEX. LAB. CODE ANN. § 21.001 et seq.8

        Dr. Morales was hired by OCT as an ophthalmology specialist in 2009.9 In

conjunction with his hire, OCT presented Dr. Morales with an Agreement to

Arbitrate (“Agreement”) which he executed on October 20, 2009.10                  This

Agreement is a stand-alone Agreement which does not incorporate language from

any other policy.11 This Agreement does not contain any language which reserves

OCT’s right to modify the Agreement, thus the Agreement cannot be modified

unilaterally by OCT in any way.12

        By signing this Agreement, Dr. Morales agreed to the following language:

        I acknowledge and agree that I have carefully read this Arbitration
        Agreement, that I understand its terms, and that I have entered into
        this Arbitration Agreement voluntarily and without duress, pressure or
        coercion from any person and without relying on any promises or
        representations by the Company other than those contained in this
        Arbitration Agreement itself.13

8
     C.R. at 4-9.
9
     C.R. at 5, 18.
10
     C.R. at 25-27.
11
     Id.
12
     Id.
13
     C.R. at 27.
INTERLOCUTORY APPEAL BRIEF                                                       PAGE 4
        Dr. Morales’s voluntary signature on the Agreement expressly and implicitly

evidences his consent to arbitrate all disputes related to his employment, including,

but not limited to, the following:

        wrongful discharge under statutory law and common law;
        employment discrimination based on federal, state or local statute,
        ordinance, or governmental regulations; retaliatory discharge;
        compensation disputes; tortuous conduct; contractual violations,
        ERISA violations; FLSA (wage and hour) violations; and other
        statutory and common law claims and disputes.14

        In this proceeding, Dr. Morales seeks relief exclusively under the Texas

Labor Code for alleged age discrimination in employment, and for retaliation,

claiming that OCT terminated his employment after he complained of

discrimination.15 Therefore, Dr. Morales’s entire dispute is employment-related

and falls squarely within the scope of the Agreement. In fact, Dr. Morales’s claims

are of the exact type listed as an example of disputes explicitly covered by the

Agreement.

                                  I.
                       ARGUMENT AND AUTHORITIES

        A.      Summary of Argument
        The trial court erred by not submitting Dr. Morales’s defense concerning the

enforceability of the Agreement as a whole to the arbitrator, as required under

14
     C.R. at 27.
15
     C.R. at 5-7.
INTERLOCUTORY APPEAL BRIEF                                                     PAGE 5
Buckeye Check Cashing Inc., 546 U.S. 440 (2006) and In re. Merrill Lynch Trust

Co. FSB, 235 S.W.3d 185 (Tex. 2007). Alternatively, the trial court erred when it

denied OCT’s Motion to Compel Arbitration because a valid, mutually binding

agreement to arbitrate all employment-related disputes exits between OCT and Dr.

Morales that explicitly covers the subject matter of the present litigation. In

conjunction with his hire, OCT presented Dr. Morales with an Agreement to

Arbitrate which he executed on October 20, 2009.16 Dr. Morales’s voluntary

signature on the Agreement expressly and implicitly evidences his consent to

arbitrate all disputes relating to his employment. This Agreement does not contain

any provision which allows OCT to unilaterally modify or change the Agreement

in any way.17 For this reason, the Agreement is not illusory as it cannot be

modified. Finally, the trial court erred in finding that OCT waived its right to

enforce the Agreement.

      B.     Standard of Review
      The “no evidence” standard of review applies to an interlocutory appeal

from the denial of a motion to compel arbitration.18 On appeal, a trial court’s

determination as to the validity and enforceability of an arbitration agreement is a

16
    C.R. at 27.
17
    C.R. at 25-27.
18
    See Pepe Intern. Dev. Co. v. Pub Brewing Co., 915 S.W.2d 925, 929 (Tex. App.—Houston
[1st Dist.] 1996, no writ).
INTERLOCUTORY APPEAL BRIEF                                                        PAGE 6
legal question subject to de novo review.19 Notably, courts strongly favor the

resolution of employment disputes through arbitration, rather than formal

litigation,20 and any “[d]oubts should be resolved in favor of arbitration.”21

       Under established precedent, when a dispute or defense addresses the entire

agreement between the parties – such as Dr. Morales’s argument that the

Agreement is illusory and thus unconscionable – this defense is properly raised

before an arbitrator during arbitration proceedings.22 Here, as a preliminary matter,

the trial court, erred by not referring Dr. Morales’s dispute concerning the validity

and/or enforceability of the Agreement as a whole to arbitration.

       Alternatively, to the extent the Court is the proper entity to determine

arbitrability in this context, the Court must first decide: “(1) whether there is a

valid agreement to arbitrate between the parties; and (2) whether the dispute in

19
    J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 227 (Tex. 2003).
20
    Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 123 (2001); Mouton v. Metropolitan Life
Ins. Co., 147 F.3d 453, 456 (5th Cir. 1998); In re Next Fin. Group, Inc., 271 S.W.3d 263, 267
(Tex. 2008) (per curiam); In re Poly-America, L.P., 262 S.W.3d 337, 348 (Tex. 2008); In re
Tenet Healthcare, Ltd., 84 S.W.3d 760, 765-66 (Tex. App.—Houston [1st Dist.] 2002, no pet.);
Henry v. Gonzalez, 18 S.W.3d 684, 689 (Tex. App.—San Antonio 2000, no writ); Dallas
Cardiology Assocs., P.A. v. Mallick, 978 S.W.2d 209, 212 (Tex. App.—Texarkana 1998, writ
denied).
21
    AT&T Techs., Inc. v. Commc’ns Workers of Am. et al., 475 U.S. 643, 650 (1986) (emphasis
added); see also Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574 (1960), and
Steelworkers v. American Mfg. Co., 363 U.S. 564 (1960).
22
    See In re Merrill Lynch Trust Co. FSB, 235 S.W.3d 185, 190 (Tex. 2007) (citing Buckeye
Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 449 (2006) (“We reaffirm today that . . . a
challenge to the validity of the contract as a whole, and not specifically to the arbitration clause,
must go to the arbitrator.”); In re FirstMerit Bank, 52 S.W.3d 749, 756 (Tex. 2001).
INTERLOCUTORY APPEAL BRIEF                                                                    PAGE 7
question falls within the scope of that arbitration agreement.”23 “A court has no

discretion and must compel arbitration if the answer to both questions is

affirmative.”24

       The trial court should have compelled arbitration and stayed its proceedings

pending arbitration under the two-prong test because: (1) the Agreement mutually

obligates both Dr. Morales and OCT to submit employment-related disputes

between them to arbitration; and (2) the Agreement expressly covers all “legal or

equitable claims arising out of or in connection with [his] employment, and all

other claims between [Dr. Morales] and the company,”25 such as those raised by

Dr. Morales.

       C.      The trial court erred by not submitting the dispute concerning
               enforceability of the Agreement to the Arbitrator.
       Even if the trial court’s conclusion that the Agreement was unenforceable is

correct, the trial court erred by not submitting this determination to the arbitrator,

as mandated by applicable case law regarding defenses raised to agreements as a

whole. “Whether the parties have submitted a particular dispute to arbitration, i.e.,

the ‘question of arbitrability,’ is an issue for judicial determination unless the

23
    In re Tenet Healthcare, Ltd., 84 S.W.3d 760, 765-66 (Tex. App.—Houston [1st Dist.] 2002,
no pet.) (citing In re Oakwood Mobile Homes, Inc., 987 S.W.2d 571, 573 (Tex. 1999)).
24
    See In re Tenet, 84 S.W.3d at 755-766 (emphasis added); In re. Oakwood Mobile Homes, 987
S.W.2d at 573; Henry, 18. S.W.3d at 688.
25
   C.R. at 25.
INTERLOCUTORY APPEAL BRIEF                                                           PAGE 8
parties clearly and unmistakably provide otherwise.”26 The defenses raised by Dr.

Morales in his Response to OCT’s Motion to Compel, and at the hearing on OCT’s

motion, namely that the Agreement is unconscionable and illusory, apply to the

Agreement between the parties as a whole.27                    Morales’s argument that the

Agreement is illusory because it is silent with regard to how the Agreement can be

modified or amended by OCT is a defense to the parties’ agreement as a whole.28

The United States and Texas Supreme Courts have made abundantly clear that

when the defense raised addresses the entire agreement between the parties, such

as here, that defense is properly brought before an arbitrator during the arbitration

proceedings.29 As such, the enforceability of the Agreement is a question for the

arbitrator, and not the Court, to decide; and the dispute over enforceability should

be compelled to arbitration. The trial court erred in not submitting Dr. Morales’s

dispute concerning the enforceability of the Agreement as a whole to the arbitrator.

26
   AT&T Techs., Inc. v. Commc’ns Workers, 475 U.S. at 649.
27
   C.R. at 35-41; Appendix Exhibit D, R.R. (Hearing Transcript 11/19/14) at 7:11-8:25.
28
   Exhibit D, R.R. (Hearing Transcript 11/19/14) at 7:11-8:25.
29
   See In re Merrill Lynch Trust Co. FSB, 235 S.W.3d 185, 190 (Tex. 2007) (citing Buckeye
Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 449 (2006) (“We reaffirm today that . . . a
challenge to the validity of the contract as a whole, and not specifically to the arbitration clause,
must go to the arbitrator.”); In re FirstMerit Bank, 52 S.W.3d 749, 756 (Tex. 2001)); In re
Permian Tank & MFG, Inc., 306 S.W.3d 338, 340 (Tex. App.—Eastland 2010, no pet.)
INTERLOCUTORY APPEAL BRIEF                                                                    PAGE 9
        D.     The Agreement constitutes a valid agreement to arbitrate between
               the Parties.
        An employer attempting to enforce an arbitration agreement must show that

the agreement meets all requisite contract elements – offer, acceptance,

consideration, and mutuality of obligation.30 Arbitration should be compelled if

the promises to arbitrate disputes are mutual and the parties seeking to compel

arbitration have the right to compel arbitration against the other party.31 Here, all

of these elements have been established. Dr. Morales does not dispute that he was

offered the Agreement, and voluntarily executed it on October 20, 2009 in

acceptance of the offer.32 Rather, he claims only that as written the Agreement is

illusory, but as set forth below this is not the case.

        Under Texas law, a court should compel arbitration if the promises to

arbitrate disputes are mutually-binding and non-illusory, and the parties seeking to

compel arbitration have the right to compel arbitration against the other party.33

"In the context of stand-alone arbitration agreements, binding promises are

required on both sides as they are the only consideration rendered to create a

30
     J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 228 (Tex. 2003).
31
     Id. at 288; In re Halliburton Co., 80 S.W.3d 566, 569-70 (Tex. 2002).
32
     C.R. at 27; 32-46.
33
     See J.M. Davidson, Inc., 128 S.W.3d at 228; In re Halliburton Co., 80 S.W.3d at 569-70.
INTERLOCUTORY APPEAL BRIEF                                                               PAGE 10
contract."34    A party’s inability to unilaterally modify the provisions of an

arbitration provision indicates its intent to be mutually bound by its terms, which in

turn constitutes adequate consideration between the parties for the agreement.35

       Dr. Morales argued before the District Court that the Agreement is illusory

because OCT allegedly has the right to modify, amend or change the Agreement in

its sole and exclusive discretion.36 This is not correct. In fact, Dr. Morales failed

to cite any provision of the Agreement which supports this proposition in both his

response to OCT’s motion to compel arbitration or at the hearing on the motion.37

Rather, Dr. Morales admits that the Agreement is silent as to the modification or

alteration of the terms and conditions.38 A promise is illusory only if it does not

bind the promisor, such as when the promisor retains the option to discontinue

performance.39 There is no language in the Agreement whereby OCT reserved the

34
    In re AdvancePCS Health L.P., 172 S.W.3d 603, 607 (Tex. 2005) (per curiam); In re Odyssey
Healthcare, Inc., 310 S.W.3d 419, 422 (Tex. 2010).
35
    See e.g., Halliburton, 80 S.W.3d at 570 (noting that an arbitration provision in an
employment context was not illusory where the employer could not retroactively avoid its
promise to arbitrate an existing dispute by unilateral modification).
36
    See Exhibit D, R.R. (Hearing Transcript 11/19/14) at 7:10-8:25; Exhibit E, (Hearing
Transcript 5/20/15) at 13:1-15:2)
37
    Id.; C.R. 32-46.
38
    See Exhibit D, R.R. (Hearing Transcript 11/19/14) at 7:10-8:8)
39
    In re 24R, Inc., 324 S.W.3d 564 (Tex. 2010); Mann Frankfort Stein & Lipp Advisors, Inc. v.
Fielding, 289 S.W.3d 844, 849 (Tex. 2009).
INTERLOCUTORY APPEAL BRIEF                                                            PAGE 11
right to modify the Agreement, either prospectively or retroactively. Accordingly,

the Agreement is not illusory or unenforceable.40

       Both OCT and Dr. Morales are mutually bound by the Agreement’s non-

illusory terms, and they both have the right to enforce it against the other.41

Indeed, the Agreement specifically provides that OCT is bound by the terms of the

Agreement to Arbitrate.42 Accordingly, the Agreement is not illusory, is supported

by adequate consideration, and constitutes an enforceable, binding agreement to

arbitrate between OCT and Dr. Morales. A signed, written agreement to arbitrate

may be revoked by a party only on any ground that exists at law or in equity for the

revocation of a contract.43 Dr. Morales identifies so such ground for revocation

and thus the Agreement must be enforced.

       E.      Dr. Morales’s claims fall within the Agreement’s scope.
       Federal and state law strongly favor arbitration, and any doubts concerning

the scope of arbitral issues should be resolved in favor of arbitration.44 Here, the

40
    In re 24R, Inc., 324 S.W.3d at 564 (The company did not retain any right within the
arbitration agreement to modify or abolish its terms.)
41
    See C.R. at 25-27.
42
    See C.R. at 26 (“Both [Dr. Morales] and [OCT] understand that, by agreeing to arbitration,
[Dr. Morales and OCT] are agreeing to substitute one legitimate dispute resolution forum
(arbitration) for another (litigation), and thereby are waiving the right to have disputes resolved
in court.”)
43
    See Forest Oil Corp. v. McAllen, 268 S.W.3d 51, 56-61 (Tex. 2008).
44
    See, e.g., In re Hornbeck Offshore Corp., 981 F.2d 752, 755 (5th Cir. 1993) (stating
“whenever the scope of an arbitration clause is fairly debatable or reasonably in doubt, the court
should decide the question of construction in favor of arbitration”).
INTERLOCUTORY APPEAL BRIEF                                                                 PAGE 12
Agreement lists several examples of the types of disputes which, if they arose,

would fall within the Agreement’s scope, including claims for wrongful discharge,

employment discrimination and retaliatory discharge.45 Accordingly, this Court

should give effect to the Agreement’s specific scope by ordering the trial court to

compel arbitration of Dr. Morales’s claims, all of which fall within the scope of the

Agreement.

       F.       OCT Has Not Waived Its Right to Compel Arbitration.
       Dr. Morales’s additional argument, that OCT waived its right to compel

arbitration is also without basis.46 Waiver is the intentional relinquishment of a

known right or intentional conduct inconsistent with claiming that right.47 There is

a strong presumption against waiver of arbitration rights, and waiver is

disfavored.48     It must be intentional.49      Any doubts are resolved in favor of

45
    See C.R. at 25 (“The Agreement states: “Both I and the Company, …, agree that, …, any
legal or equitable claims arising out of or in connection with my employment, the terms and
conditions of my employment, or the termination of my employment, and all other claims
between me and the Company, even if not related to my employment, will be settled by binding
arbitration.”)
46
    Exhibit D, R.R. (Hearing Transcript 11/19/14) at 8:21-11:4; Exhibit E, (Hearing Transcript
5/20/15) at 15:3-16:13); Indeed, in support, Dr. Morales relies only upon a single case,
Interconex, Inc. v. Ugarov, S.W.3d 2006 WL 2506562 (Tex. App.—Houston [1st Dist.] 2006,
n.p.h.). However, the Texas Court of Appeals has vacated the 2006 ruling on which Morales
relied in both his response to OCT’s motion to compel arbitration and during the hearing on the
motion. See Interconex, Inc. v. Ugarov, 224 S.W.3d 523 (Tex. App.—Houston [1st Dist.] 2007).
47
    Jernigan v. Langley, 111 S.W.3d 153, 156 (Tex. 2003); Sun Exploration & Prod. Co. v.
Benton, 728 S.W.2d 35, 37 (Tex. 1987).
48
    First Community Insurance Company and Boyd Construction v. F-Con Contractors, Inc.,
2000 Tex. App. Lexis 1655 (Tex. App.—Dallas March 14, 2000); EZ Pawn Corporation v.
Mancias, 934 S.W.2d 87, 89-90 (Tex. 1996); Interconex, 224 S.W.3d at 533.
INTERLOCUTORY APPEAL BRIEF                                                             PAGE 13
arbitration. The party claiming waiver has a heavy burden to prove the opposing

party substantially invoked the judicial process to the other's detriment or

prejudice.50 Waiver will be found only when (1) the party seeking arbitration has

substantially invoked the judicial process,51 and (2) the party opposing arbitration

suffers actual prejudice as a result.52 Here, OCT has not substantially invoked the

judicial process and Dr. Morales has not suffered any prejudice.53

               1.     OCT Has Not Substantially Invoked the Judicial Process
       OCT has not taken any position inconsistent with its Agreement, such that it

intentionally waived its ability to enforce this Agreement.54 Substantially invoking

the judicial process involves “taking specific and deliberate actions, after the suit’s

49
     EZ Pawn Corp., 934 S.W.2d at 89 (“Implying waiver from a party's actions is appropriate
only if the facts demonstrate that the party seeking to enforce arbitration intended to waive its
arbitration right.”)
50
     First Community Insurance Company and Boyd Construction v. F-Con Contractors, Inc.,
2000 Tex. App. Lexis 1655 * 4-5.
51
     To invoke a trial court's subject matter jurisdiction to adjudicate a claim under the Texas
Commission on Human Rights Act, the complaining party must first file a charge of
discrimination to the Texas Commission on Human Rights. Schroeder v. Texas Iron Works, Inc.,
813 S.W.2d 483, 488 (Tex. 1991). If the claim is not presented to the commission, the litigant
does not have the right to have the claim adjudicated in a judicial court. Only after this is done
could Dr. Morales have participated in the judicial process, and OCT been able to move to
compel arbitration.
52
     Williams Indus., Inc. v. Earth Dev. Sys. Corp., 110 S.W.3d 131, 134 (Tex. App.—Houston
[1st Dist.] 2002, no pet.); see Schroeder, 813 S.W.2d at 488. A party must file a complaint with
the commission within 180 days after the date the alleged unlawful employment practice
occurred; the commission shall dismiss untimely complaints. TEX. LAB. CODE ANN. § 21.202
(Vernon Pamph. 1996).
53
     Id.
54
     Exhibit E, (R.R. (Hearing Transcript 5/20/15) at 17:8-18:3)
INTERLOCUTORY APPEAL BRIEF                                                                PAGE 14
filing, that are inconsistent with the right to arbitrate.”55 The Court has found that

participation in a docket control conference, sending interrogatories and requests

for production, noticing an oral deposition, and agreeing to re-set a trial date were

insufficient to prove prejudice.56 Engaging in written discovery, filing motions for

protective orders, amending scheduling orders, filing a motion to transfer venue,

conducting depositions and attending pre-trial conference hearings prior to filing a

motion to compel arbitration were also insufficient.57 Furthermore, generalized

protestations about the costs of delay are not enough to overcome the strong

presumption in favor of arbitration.58

       During the pendency of this case, other than its motion to compel arbitration,

OCT filed only an Answer subject to arbitration.59 OCT’s Answer included an

affirmative defense that a valid, enforceable, and binding arbitration provision
55
    Williams Indus., 110 S.W.3d at 135 (citing Sedillo v. Campbell, 5 S.W.3d 824, 827 (Tex.
App.—Houston [14th Dist.] 1999, no pet.).
56
    EZ Pawn Corporation, 934 S.W.2d at 90; see also Walker v. J.C. Bradford & Co., 938 F.2d
575, 578 (5th Cir. 1991) (holding no waiver even though parties engaged in discovery, attended
pretrial conference, amended scheduling order three times and moved to transfer case during
thirteen-month period before filing motion to compel arbitration).
57
    Id.; In re Fleetwood Homes of Texas, L.P., 257 S.W.3d 692, 694 (Tex. 2008) (discussing
potential trial setting and sending discovery one day before moving to compel arbitration did not
waive arbitration.)
58
    Pennzoil Co. v. Arnold Oil Co., Inc., 30 S.W.3d 494, 499 (Tex. App.—San Antonio [4th
Dist.] 2000).
59
    C.R. at 13; OCT’s Answer states as its second defense, “A valid, enforceable, and binding
arbitration provision governs all Plaintiff’s allegations and causes of action, so arbitration of this
matter should be compelled and all proceedings in this Court should be stayed pending final and
binding arbitration.”; See In re Serv. Corp. Int’l, 85 S.W.3d 171, 175 (Tex. 2002) (Motions to
dismiss and to stay discovery were sought to avoid litigation and not to participate in it, thus no
waiver occurred.)
INTERLOCUTORY APPEAL BRIEF                                                                    PAGE 15
governed Dr. Morales’s allegations, and that arbitration should be compelled;

therefore, OCT’s right and intent to arbitrate were clear since its appearance on

October 13, 2014.60 Emails from OCT on October 13, 2014, and on October 28,

2014, further reminded Dr. Morales that OCT intended to arbitrate this matter.61

Finally, on October 28, 2014, only 15 days after filing its Answer, OCT filed its

Motion to Compel Arbitration.62 During the hearing, counsel for Dr. Morales even

admitted that it was OCT’s position that all proceedings and discovery were stayed

until there was a decision made by the Court with regard to OCT’s motion to

compel arbitration.63 Accordingly, Dr. Morales has not shown any intent by OCT

during this lawsuit to waive its ability to invoke the arbitration process.

             2.     Dr. Morales Cannot Show Prejudice
      To prevail on a waiver defense, a party must prove that it has suffered

prejudice, and general allegations of harm will not suffice.64 Prejudice is defined

in terms of delay, expense, or damage to a party's legal position when it is forced to

litigate issues which will later be arbitrated.65 A delay in making a demand for

60
   Id.; Exhibit E, R.R. (Hearing Transcript 5/20/15) at 18:4-18.
61
   C.R. at 28.
62
   C.R. at 17-28.
63
   Exhibit E, R.R. (Hearing Transcript 5/20/15) at 8:9-19.
64
   Pennzoil Co. v. Arnold Oil Co., 30 S.W.3d 494 (Tex. App.—San Antonio 2000); See In re
Oakwood Mobile Homes, Inc., 987 S.W.2d 571, 573 (Tex. 1999).
65
   Id.; EZ Pawn Corp. v. Mancias, 934 S.W.2d at 91.
INTERLOCUTORY APPEAL BRIEF                                                       PAGE 16
arbitration does not constitute waiver in the absence of actual prejudice.66

Prejudice occurs when a party engages in discovery not available in arbitration,

makes motions going to the merits of an adversary's claims, or delays invoking

arbitration rights while the adversary incurs unnecessary delay or expense.67 As

stated above, none of these things have occurred in this case.68 Moreover, Dr.

Morales failed to provide any evidence of prejudice in his Response, or at the

hearings on the motion to compel arbitration.69 Indeed, Dr. Morales presented no

evidence that he was prejudiced by any action or delay by OCT. He did not

identify any discovery obtained by OCT through the judicial process that OCT

would not have been entitled to in arbitration. Furthermore, Dr. Morales made no

attempt to establish the time and expenses incurred in litigating his claim that

66
    EZ Pawn Corp., 934 S.W.2d at 91; see also Home Club, Inc. v. Barlow, 818 S.W.2d 192, 193
(Tex. App.—San Antonio 1991, orig. proceeding) (no waiver of right to arbitrate dispute despite
delay of almost 13 months from time suit was filed until motion for stay was filed.)
67
    In re Oakwood Mobile Homes, Inc., 987 S.W.2d at 573.
68
    Both Parties will have an opportunity to conduct written and oral discovery pursuant to the
rules and procedures agreed to by the Parties and pursuant to the American Arbitration
Association.
69
    C.R. at 44-45; Exhibit D, R.R. (Hearing Transcript 11/19/14) at 8:19-11:4; Exhibit E,
(Hearing Transcript 5/20/15) at 15:3-16:13.
INTERLOCUTORY APPEAL BRIEF                                                             PAGE 17
would not have been expended in arbitration.70 Without evidence of prejudice, Dr.

Morales’s waiver argument fails.71

                                           II.
                                       CONCLUSION
       The trial court erred by ruling on the enforceability of the Agreement when

such determination should have been made by the arbitrator under the law.

Alternatively, to the extent the trial court was the proper entity to adjudicate the

enforceability of the Agreement, it had no choice but to compel arbitration of Dr.

Morales’s claims. OCT presented evidence that Dr. Morales voluntarily

acknowledged and accepted OCT’s Agreement to Arbitrate. Additionally, OCT

established that the Agreement clearly and unambiguously includes Dr. Morales’s

claims, all of which are brought under the Texas Labor Code.                        Dr. Morales

presented no evidence to rebut these facts. This Court should, therefore, remand

this case with instructions to the trial court to refer the dispute concerning the

70
    Granite Constr. Co. v. Beaty, 130 S.W.3d 362 (Tex. App.—Beaumont 2004); See Pennzoil
Co. v. Arnold Oil Co., 30 S.W.3d 494, 499-500 (Tex. App.—San Antonio 2000, orig.
proceeding).
71
    In re Multifuels, L.P., 2010 Tex. App. LEXIS 3576 (Tex. App.—Houston [1st Dist.] May 7,
2010); In re Delta Homes, Inc., 5 S.W.3d 237, 240 (Tex. App.—Tyler 1999, orig. proceeding)
("Here, . . . [the opponents] . . . have set forth no evidence showing that they were actually
prejudiced as a result of the delay. Thus, they have failed to establish Delta's waiver of the right
to arbitrate."); United Parcel Serv., Inc. v. McFall, 940 S.W.2d 716, 720 (Tex. App.—Amarillo
1997, orig. proceeding) ("[The opponent] may have explained the extent of the delay, but he did
not illustrate, by argument or evidence, how it prejudiced him. Thus, he did not carry the burden
imposed by EZ Pawn or Prudential.").
INTERLOCUTORY APPEAL BRIEF                                                                  PAGE 18
Agreement’s enforceability to arbitration or, alternatively, compel Dr. Morales to

arbitrate his claims under the Agreement.

                                    III.
                             PRAYER FOR RELIEF
      Appellant Ophthalmic Consultants of Texas, P.A., respectfully requests that

this Court overrule the decision of the trial court and order Dr. Morales to arbitrate

his dispute over the enforceability of the Agreement or order Dr. Morales’s claims

to arbitration, and for such other relief, both at law and in equity, to which

Appellant OCT may be justly entitled.

                                        Respectfully submitted,

                                         /s/ Victor N. Corpuz
                                           Victor N. Corpuz, Esq.
                                           corpuzv@jacksonlewis.com
                                           Texas Bar No. 04838450
                                           Allyson L. Johnson, Esq.
                                           johnsona@jacksonlewis.com
                                           Texas Bar No. 24054005

                                         JACKSON LEWIS P.C.
                                         500 N. Akard, Suite 2500
                                         Dallas, Texas 75201
                                         Phone: (214) 520-2400
                                         Fax:     (214) 520-2008

                                        LEAD ATTORNEYS FOR APPELLANT

INTERLOCUTORY APPEAL BRIEF                                                     PAGE 19
                     CERTIFICATE OF COMPLIANCE

      Pursuant to Texas Rule of Appellate Procedure 9.4(i)(3), I hereby certify that

this brief (including footnotes) contains 4,158 words (excluding the caption, table

of contents, table of authorities, signature, proof of service, certification, and

certificate of compliance). This is a computer-generated document created in

Microsoft Word, using 14-point typeface for all text, except for footnotes which

are in 12-point typeface. In making this certificate of compliance, I am relying on

the word count provided by the software used to prepare the document.

                                       /s/ Victor N. Corpuz
                                      ONE OF COUNSEL

INTERLOCUTORY APPEAL BRIEF                                                   PAGE 20
                            CERTIFICATE OF SERVICE

          I hereby certify that a true and correct copy of the corrected foregoing

document has been sent by electronic mail, and certified mail, return receipt

requested, on the following counsel of record on this 20th day of July, 2015:

                       Larry Warner
                       Larrywarner1945@gmail.com
                       3109 Banyan Circle
                       Harlingen, TX 78550
                       CMRR: 7013 2630 0002 1217 9695

                       John Shergold
                       hodgeshergold@aol.com
                       HODGE & SHERGOLD, LLP
                       1534 East 6th Street, Suite 103
                       Brownsville, Texas 78520
                       CMRR: 7013 2630 0002 1217 9688

                                         /s/ Victor N. Corpuz
                                        ONE OF COUNSEL
4824-9469-5205, V. 2

INTERLOCUTORY APPEAL BRIEF                                                      PAGE 21
                           NO. 13-15-00278-CV
__________________________________________________________________

                              IN THE
                 THIRTEENTH COURT OF APPEALS
                          EL PASO, TEXAS
                        TH
                      13 JUDICIAL DISTRICT
__________________________________________________________________

                       ADOLFO MORALES
                                v.
           OPHTHALMIC CONSULTANTS OF TEXAS, P.A.
__________________________________________________________________

                           On Appeal from the
                   th
              444 District Court of Cameron County, Texas
 ________________________________________________________________

   APPENDIX IN SUPPORT OF INTERLOCUTORY APPEAL
__________________________________________________________________

                                   JACKSON LEWIS P.C.

                                    Victor N. Corpuz, Esq.
                                    corpuzv@jacksonlewis.com
                                    Texas Bar No. 04838450
                                    Allyson L. Johnson, Esq.
                                    johnsona@jacksonlewis.com
                                    Texas Bar No. 24054005

                                    500 N. Akard, Suite 2500
                                    Dallas, Texas 75201
                                    Phone: (214) 520-2400
                                    Fax: (214) 520-2008

                                   LEAD ATTORNEYS FOR APPELLANT

ORAL ARGUMENT REQUESTED

APPENDIX IN SUPPORT OF INTERLOCUTORY APPEAL                     Page 1
          Pursuant to Rule 38.1 of the Texas Rules of Appellate Procedure, Appellant

Ophthalmic Consultants of Texas, P.A., files the following Appendix in support of

its Interlocutory Appeal on file:

                         APPENDIX OF EVIDENCE IN SUPPORT OF
                              INTERLOCUTORY APPEAL

       TAB                                      DESCRIPTION

         A             June 1, 2015 Order Denying Defendant’s Motion to Compel
                       Arbitration

         B             Ophthalmic Consultants of Texas Agreement to Arbitrate signed by
                       Dr. Morales (October 20, 2009)

         C             Excerpts from the Master Indexes to Reporter’s Record (Volume 1)

         D             Excerpts from the Certified Court Reporter’s Record/Hearing
                       Transcript from November 19, 2014 (Volume 2)

         E             Excerpts from the Certified Court Reporter’s Record/Hearing
                       Transcript from May 20, 2015 (Volume 3)

4824-9156-3557, v. 1

APPENDIX IN SUPPORT OF INTERLOCUTORY APPEAL                                          Page 2
                                                               A

PDF created with pdfFactory trial version www.pdffactory.com
FILED
2014-DCL-05833
10/28/2014 3:51:25 PM
Aurora De La Garza
Cameron County District Clerk
By Ezequiel Zepeda Deputy Clerk
2984536

                       B
                                                                1

 1                      REPORTER'S RECORD
 2                        VOLUME 1 OF 3
 3            TRIAL COURT CAUSE NO. 2014-DCL-05833-H
 4              APPELLATE CAUSE NO. 13-15-00278-CV
 5   - - - - - - - - - - - - - - - x
                                   :
 6   ADOLFO MORALES,               : IN THE DISTRICT COURT
             Plaintiff             :
 7                                 :
     VS.                           : 444TH JUDICIAL DISTRICT
 8                                 :
     OPHTHALMIC CONSULTANTS OF     :
 9   TEXAS, P.A.,                  :
             Defendant             : CAMERON COUNTY, TEXAS
10                                 :
     - - - - - - - - - - - - - - - x
11
12
     ********************************************************
13
14             MASTER INDEXES TO REPORTER'S RECORD
15   ********************************************************
16
17
18
19
20
21
22
23
24
25

                       CORINNA N. GARCIA, CSR
                                                         C
                                                                2

 1                           VOLUME 1
               MASTER INDEXES TO REPORTER'S RECORD
 2
 3
                              VOLUME 2
 4     HEARING ON DEFENDANT'S MOTION TO ENFORCE ARBITRATION
     NOVEMBER 19, 2014                               PAGE VOL
 5
     Argument by Mr. Shergold .....................    7   2
 6
     Court's Ruling taken under Advisement ........   11   2
 7
     Adjournment ..................................   11   2
 8
     Court Reporter's Certificate .................   12   2
 9
10
                           VOLUME 3 INDEX
11     HEARING ON DEFENDANT'S MOTION TO ENFORCE ARBITRATION
     MAY 20, 2015                                    PAGE VOL
12
     Discussion of Counsel Regarding Status of Case    6   3
13
     Argument by Mr. Corpuz........................   10   3
14
     Argument by Mr. Shergold .....................   13   3
15
     Court's Ruling taken under Advisement ........   17   3
16
     Adjournment ..................................   19   3
17
     Court Reporter's Certificate .................   20   3
18
19
20
21
22
23
24
25

                       CORINNA N. GARCIA, CSR
                                                                1

 1                        REPORTER'S RECORD
 2                          VOLUME 2 OF 3
 3            TRIAL COURT CAUSE NO. 2014-DCL-05833-H
 4              APPELLATE CAUSE NO. 13-15-00278-CV
 5   - - - - - - - - - - - - - - - x
                                   :
 6   ADOLFO MORALES,               : IN THE DISTRICT COURT
             Plaintiff             :
 7                                 :
     VS.                           : 444TH JUDICIAL DISTRICT
 8                                 :
     OPHTHALMIC CONSULTANTS OF     :
 9   TEXAS, P.A.,                  :
             Defendant             : CAMERON COUNTY, TEXAS
10                                 :
     - - - - - - - - - - - - - - - x
11
12
     ********************************************************
13
14                          HEARING ON
            DEFENDANT'S MOTION TO ENFORCE ARBITRATION
15
16   ********************************************************
17
18                On NOVEMBER 19, 2014, the following
19   proceedings came on to be heard in the above-entitled
20   and numbered cause before the Honorable DAVID A.
21   SANCHEZ, Judge Presiding, held in Brownsville, Cameron
22   County, Texas.
23               Proceedings reported by computerized
24   stenotype machine.
25

                          CORINNA N. GARCIA, CSR
                                                        D
                                             2

 1                 A P P E A R A N C E S
 2   APPEARING FOR THE PLAINTIFF:
 3        JOHN L. SHERGOLD
          State Bar No. 00794624
 4        HODGE & SHERGOLD, L.L.P.
          1534 E. 6th Street, Suite 103
 5        Brownsville, Texas 78520
          (956) 548-9100
 6
 7
 8
 9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

                    CORINNA N. GARCIA, CSR
                                                                3

 1                         VOLUME 2 INDEX
       HEARING ON DEFENDANT'S MOTION TO ENFORCE ARBITRATION
 2   NOVEMBER 19, 2014                               PAGE VOL
 3   Argument by Mr. Shergold .....................    7   2
 4   Court's Ruling taken under Advisement ........   11   2
 5   Adjournment ..................................   11   2
 6   Court Reporter's Certificate .................   12   2
 7
                        INDEX OF EXHIBITS
 8
     (NO EXHIBITS MARKED)
 9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

                       CORINNA N. GARCIA, CSR
                                                                    4

 1                       P R O C E E D I N G S
 2                      (Open court, 9:15 a.m.)
 3                   THE COURT:   Mr. Shergold, what are you here
 4   on?
 5                   MR. SHERGOLD:   Your Honor, I represent
 6   Dr. Adolfo Morales in Cause Number 2014-DCL-05833, and I
 7   believe I'm here -- I filed a document responding to
 8   Defendant's Motion to Enforce Arbitration and I'm ready
 9   to argue my case against enforcement of the arbitration
10   provision.
11                   THE COURT:   Who is on the other side?
12                   MR. SHERGOLD:   A gentleman by the name of
13   Victor Corpuz.
14                   THE COURT:   But he's not here today?
15                   THE ADMINISTRATOR:   Judge, Mr. David
16   Oliveira checked in.    I believe he may have checked in
17   on this case.
18                   THE COURT:   Do you know if he's --
19                   MR. SHERGOLD:   I was in a jury trial last
20   week and David Oliveira was representing the school
21   district at that time, but I don't have any information
22   as to whether he's representing Defendant Ophthalmic
23   Consultants of Texas.    But, Judge, I'll stand ready.
24   I'll go get a cup of coffee or something.
25                   THE COURT:   I'm assuming it's their motion,

                          CORINNA N. GARCIA, CSR
                                                                     5

 1   right?
 2                MR. SHERGOLD:   It's their motion and I
 3   filed a response, if the Court could check its file.        I
 4   have a file-stamped copy of the response I filed Monday.
 5   I don't know if the Court has it or not.
 6                THE COURT:   I haven't looked at the file
 7   yet, but, I mean, if they don't show up, you know.
 8                MR. SHERGOLD:   I understand.    We would ask
 9   that their motion be denied, Your Honor.     At this time
10   we ask that the defendant's motion be denied.
11                THE COURT:   Well, let's just wait to see if
12   that's the case Mr. Oliveira checked in on.     I believe
13   there is a little bit of uncertainly as to whether
14   that's the case he checked in on or not.
15                MR. SHERGOLD:   Sure.   I understand.   I'll
16   go get a cup of coffee and hang out for 15 to 20
17   minutes.
18                THE COURT:   We'll page you.
19                (Recess from 9:16 a.m. to 9:36 a.m.)
20                (David Oliveira present)
21                MR. SHERGOLD:   May I approach, Your Honor?
22                THE COURT:   Yes.
23                MR. SHERGOLD:   Your Honor, I approached
24   Mr. Oliveira and he -- we were in trial against each
25   other last week and --

                       CORINNA N. GARCIA, CSR
                                                                         6

 1                  MR. OLIVEIRA:        And he beat me.   For the
 2   record, he beat me.
 3                  THE COURT:     He's a very fine attorney.
 4                  MR. SHERGOLD:        I'll lose the next one to
 5   David, but he's not on the case of Ophthalmic
 6   Consultants.   I asked him upstairs.
 7                  MR. OLIVEIRA:        Does my name show up
 8   somewhere?
 9                  THE COURT:     No.     Priscilla just wasn't
10   sure.   She just --
11                  MR. OLIVEIRA:        Because I was here on the
12   other case, yes.      Okay.   No, I'm not on that case.
13                  THE COURT:     Okay.     Have a good day.    Okay.
14   So --
15                  MR. SHERGOLD:        I'm here appearing as
16   ordered by the Court, Your Honor.         It's 9:35 and I have
17   -- John Shergold, for the record.         I represent
18   Dr. Adolfo Morales, plaintiff in a wrongful termination
19   suit where we have alleged that he was terminated due to
20   discrimination.    I believe the defendant has filed a
21   motion to enforce arbitration.         And, obviously,
22   plaintiff is opposed.
23                  We filed a response in opposition and I'm
24   here as ordered, Judge, to argue against the motion to
25   enforce as filed by the defendant.

                           CORINNA N. GARCIA, CSR
                                                                     7

 1                 THE COURT:   All right.   Go ahead and give
 2   me your argument.
 3                 MR. SHERGOLD:   Your Honor, we're -- the
 4   plaintiff is --
 5                 THE COURT:   And excuse me for interrupting.
 6   I'm sorry.   But, Priscilla, the defendants didn't call
 7   or check in on this, did they?
 8                 THE ADMINISTRATOR:    They did not call or
 9   check in.
10                 THE COURT:   Okay.   All right.    Go ahead.
11                 MR. SHERGOLD:   Very well, Your Honor.
12   Several -- there's been several treatises written on
13   enforceability of arbitration provisions.       The plaintiff
14   has filed a response and we have summarized our position
15   as to why arbitration in this matter is not appropriate.
16   One of the main arguments that we have here, Your Honor,
17   is that it's an illusory -- the contract to arbitrate is
18   illusory.
19                 Dr. Morales was terminated by Ophthalmic
20   Consultants of Texas.   And after his termination, then
21   the defendant decided to enforce the arbitration
22   provision.
23                 We believe that since Dr. Morales is no
24   longer an employee of the employer -- and if you would
25   look at the -- we'd ask that you take judicial notice of

                         CORINNA N. GARCIA, CSR
                                                                  8

 1   the exhibit A that was filed by the defendant's
 2   representatives, which is the actual proposed
 3   arbitration agreement.     You'll see in that arbitration
 4   agreement no provision as to what the situation is where
 5   the employee or ex-employee files or is gaining access
 6   to the Court system.     In other words, the arbitration
 7   agreement is silent as to how do you modify, amend,
 8   change the agreement.
 9                   Now, when you're not working for a company
10   any longer, there ought to be some sort of provision in
11   the proposed agreement that says that in the event that
12   this could be amended, modified or changed, it should --
13   some sort of notice should go to the ex-employee.
14                   In other words, it doesn't give the
15   plaintiff in my case the opportunity to be notified or
16   have any sort of say on how or when or if this agreement
17   that is being enforced could be modified sometime in the
18   future, thus rendering this illusory.
19                   Your Honor, I wrote quite a lengthy paper
20   on this and I'd ask that basically that you read through
21   that as well.    Also waiver -- this is a very interesting
22   concept -- does the fact that the time that's gone by
23   from the point in which something occurred that
24   plaintiff did in ordered to tip off the defendant that
25   there was going to be some sort of litigation.

                          CORINNA N. GARCIA, CSR
                                                                     9

 1                 Well, back in December 2013 my client filed
 2   a complaint with the Texas Work Force Commission's
 3   Division of Civil Rights.    At that point that was --
 4   notice of that -- notification was sent to the
 5   defendant.   There was no trigger by the defendant at
 6   that time as to whether or not they wanted to initiate
 7   the arbitration provision.   Going forward, client
 8   filed -- got a right to sue letter in June of 2014.
 9                 Again, defendant did not trigger its
10   arbitration agreement.   Then we filed the lawsuit, if
11   you'll notice, in August of 2014 and there is still not
12   a trigger to the arbitration agreement.     And then we
13   march it down to 18 November, 2014 and we don't have --
14   we have this hearing.
15                 And so what I'm saying is that if you look
16   at the -- the whole file and look at the chronology of
17   the dates, we have right to sue letter issued in June,
18   lawsuit filed in August, answer filed by defendant.       But
19   when the defendant filed his answer, it stated that it
20   had an arbitration agreement in its answer but it didn't
21   say that it was -- it did not say or not filed at that
22   time contemporaneously that it was planning to enforce
23   the arbitration agreement.    That motion was filed
24   subsequent to the answer.
25                 So another argument we have here is waiver,

                        CORINNA N. GARCIA, CSR
                                                                      10

 1   that -- the provision that we always know is that if
 2   you're going to contest jurisdiction, it should be done
 3   at the time that you file an answer, contemporaneously.
 4   The answer was that there was an arbitration agreement
 5   but it did not state that the defendant was to file or
 6   to oppose or to force plaintiff into this arbitration
 7   agreement at that time.
 8                   So, in sum, Your Honor, we believe it's
 9   illusory.     We believe that there has been a waiver here.
10   Also, we believe there is -- substantial due process has
11   been violated, which basically the Haliburton Court goes
12   to the illusory aspect.     Also, it discusses the issue
13   regarding the enforceability of a substantial due
14   process problem.
15                   And also, finally, the waiver we indicated
16   a case that -- regarding the timeline that the
17   arbitration clause was not triggered.         And I cited that
18   -- if I could just have one second to cite that case,
19   Your Honor.     And that case was Interconex Incorporated
20   versus Ugarov, SW3d Reporter 2006, Westlaw 2506562, and
21   that's where the appellate court in Houston talked about
22   the time lapse as to how that would give rise to a
23   waiver.
24                   Your Honor, for all the reasons given that
25   I've stated, I would ask that the defendant's motion to

                          CORINNA N. GARCIA, CSR
                                                                        11

 1   enforce arbitration be denied.     I represent plaintiff,
 2   of course, and we have included an order attached to my
 3   response that we ask that you sign to deny defendant's
 4   motion.     Thank you.
 5                   THE COURT:   All right.    Thank you,
 6   Mr. Shergold.     I'll review your brief and then I'll make
 7   a ruling.
 8                   MR. SHERGOLD:   Thank you, Your Honor.       May
 9   I be excused, Judge?
10                   THE COURT:   Yes, sir.    Have a nice day.
11                   MR. SHERGOLD:   And, Your Honor, just for
12   the record, I'd just like to make note that the
13   defendant's counsel is not present.       Is that correct?
14                   THE COURT:   That's correct, didn't call or
15   check in with us, so thereby waiving any oral arguments
16   he may have wanted to make.
17                   MR. SHERGOLD:   Thank you, Your Honor.       Have
18   a nice day.
19                   (The hearing was concluded at 9:44 a.m.)
20
21
22
23
24
25

                          CORINNA N. GARCIA, CSR
                                                                  12

 1   THE STATE OF TEXAS:
 2   COUNTY OF CAMERON:
 3                CERTIFICATE OF COURT REPORTER
 4      I, CORINNA N. GARCIA, Official Court Reporter in and
 5   for the 444th District Court of Cameron County, Texas,
 6   do hereby certify that the above and foregoing contains
 7   a true and correct transcription of all portions of
 8   evidence and other proceedings requested in writing by
 9   counsel for the parties to be included in this volume of
10   Reporter's Record, in the above styled and numbered
11   cause, all of which occurred in open court or in
12   chambers and were reported by me.
13      I further certify that this transcription of the
14   record of the proceedings truly and correctly reflects
15   the exhibits, if any, offered by the respective parties.
16      WITNESS MY OFFICIAL HAND on this the 2nd day of July,
17   2015.
18
19                                /S/ Corinna N. Garcia
                                  CORINNA N. GARCIA, CSR
20                                Official Court Reporter
                                  444th Judicial District Court
21                                974 East Harrison Street
                                  Brownsville, Texas 78520
22                                Certificate No. 5210
                                  Expiration Date 12/31/15
23
24
25

                          CORINNA N. GARCIA, CSR
                                                                1

 1                        REPORTER'S RECORD
 2                          VOLUME 3 OF 3
 3            TRIAL COURT CAUSE NO. 2014-DCL-05833-H
 4              APPELLATE CAUSE NO. 13-15-00278-CV
 5   - - - - - - - - - - - - - - - x
                                   :
 6   ADOLFO MORALES,               : IN THE DISTRICT COURT
             Plaintiff             :
 7                                 :
     VS.                           : 444TH JUDICIAL DISTRICT
 8                                 :
     OPHTHALMIC CONSULTANTS OF     :
 9   TEXAS, P.A.,                  :
             Defendant             : CAMERON COUNTY, TEXAS
10                                 :
     - - - - - - - - - - - - - - - x
11
12
     ********************************************************
13
14                          HEARING ON
            DEFENDANT'S MOTION TO ENFORCE ARBITRATION
15
16   ********************************************************
17
18                On MAY 20, 2015, the following proceedings
19   came on to be heard in the above-entitled and numbered
20   cause before the Honorable DAVID A. SANCHEZ, Judge
21   Presiding, held in Brownsville, Cameron County, Texas.
22               Proceedings reported by computerized
23   stenotype machine.
24
25

                          CORINNA N. GARCIA, CSR

                                                          E
                                             2

 1                 A P P E A R A N C E S
 2   APPEARING FOR THE PLAINTIFF:
 3        JOHN L. SHERGOLD
          State Bar No. 00794624
 4        HODGE & SHERGOLD, L.L.P.
          1534 E. 6th Street, Suite 103
 5        Brownsville, Texas 78520
          (956) 548-9100
 6
     APPEARING FOR DEFENDANT:
 7
          VICTOR NAVASCA CORPUZ
 8        State Bar No. 04838450
          JACKSON LEWIS, P.C.
 9        500 North Akard, Suite 2500
          Dallas, Texas 75201
10        (214) 520-2400
11        EDUARDO G. "EDDIE" GARZA
          State Bar No. 00796609
12        ESPARZA & GARZA, L.L.P.
          964 E. Los Ebanos Boulevard
13        Brownsville, Texas 78520
          (956) 547-7775
14
15
16
17
18
19
20
21
22
23
24
25

                    CORINNA N. GARCIA, CSR
                                                                3

 1                         VOLUME 3 INDEX
       HEARING ON DEFENDANT'S MOTION TO ENFORCE ARBITRATION
 2   MAY 20, 2015                                    PAGE VOL
 3   Discussion of Counsel Regarding Status of Case    6   3
 4   Argument by Mr. Corpuz........................   10   3
 5   Argument by Mr. Shergold .....................   13   3
 6   Court's Ruling taken under Advisement ........   17   3
 7   Adjournment ..................................   19   3
 8   Court Reporter's Certificate .................   20   3
 9
                        INDEX OF EXHIBITS
10
     (NO EXHIBITS MARKED)
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

                       CORINNA N. GARCIA, CSR
                                                                    4

 1                      P R O C E E D I N G S
 2                     (Open court, 9:27 a.m.)
 3                  THE COURT:    2014-DCL-5833, Adolfo Morales
 4   versus Ophthalmic Consultants of Texas.
 5                  MR. CORPUZ:    Victor Corpuz and Eddie Garza
 6   on behalf of Defendant Ophthalmic Consultants of Texas,
 7   Your Honor.
 8                  MR. GARZA:    Good morning, Your Honor.
 9                  THE COURT:    Good morning.
10                  THE ADMINISTRATOR:     Judge, Mr. Shergold
11   did check in and he said he would be here at about
12   10:30.    They said it wouldn't take maybe more than
13   10 minutes because one of the attorneys has a flight.
14                  MR. CORPUZ:    10 to 15 minutes, Your Honor.
15                  THE COURT:    Okay.   Where is Mr. Shergold?
16                  MR. GARZA:    At an administrative hearing at
17   BISD.    He came in this morning.
18                  THE COURT:    Okay.   All right.   Well, as
19   soon as he comes in, we'll stop whatever we're doing so
20   that we can take yours up so you can catch your flight.
21   All right?
22                  MR. CORPUZ:    Very good.
23                  MR. GARZA:    Thank you, Your Honor.
24                  (Recess from 9:27 a.m. to 10:34 a.m.)
25                  THE COURT:    Okay.   Mr. Shergold,

                         CORINNA N. GARCIA, CSR
                                                                        5

 1   2014-DCL-5833, Adolfo Morales and Ophthalmic Consultants
 2   of Texas, P.A.
 3                   MR. SHERGOLD:     Good morning, Your Honor.
 4                   THE COURT:     Good morning.
 5                   MR. SHERGOLD:     Your Honor, this is
 6   defendant's motion to compel arbitration on an
 7   employment matter dispute.       Back on 18 November of 2014,
 8   I appeared.    I was ordered to appear on this matter.         I
 9   was here.     I made an argument to the Court.       The defense
10   counsel was not present at that time.          Then at this
11   point we've been given a reset notice for today in order
12   to, I suppose, reargue the same argument I made back on
13   18 November.
14                   I'm here.     The defense counsel is here.     I
15   believe another attorney is here now for defendant.
16   Thank you for allowing me to be here at 10:30.          I
17   submitted a continuance for a couple of hours.          I was at
18   the Brownsville ISD with a huge administration issue
19   that I had to be part of with a client, and the
20   gentlemen graciously waited until 10:30.          So I thank
21   them for their professional courtesy today.
22                   THE COURT:     All right.
23                   MR. CORPUZ:     Your Honor, Victor Corpuz on
24   behalf of Ophthalmic Consultants of Texas, along with my
25   co-counsel Eddie Garza.       Your Honor, we did receive --

                          CORINNA N. GARCIA, CSR
                                                                    6

 1   and it's all my fault.       We did receive the order by
 2   e-mail.     I was out of town the week that the order did
 3   come in.     I missed it.    It was not calendared.
 4                   We didn't receive a response or a copy of
 5   Mr. Shergold's response until we actually requested it.
 6   That would have certainly triggered in our mind that an
 7   order had been set, or at least a hearing had been set.
 8   We were actually exploring a couple of dates in early
 9   December to set it.     So that's when I was anticipating
10   that it would be set.
11                   So I'm going to fall on my sword today and
12   also point out the fact that we're here now to argue the
13   merits of the motion to compel arbitration.
14                   MR. SHERGOLD:    Your Honor, I object to the
15   fact that the gentleman was given the opportunity to
16   come back, you know, five months later.        This case has
17   been in abatement.     I at this point would state that
18   I've already made my argument.        The judge said he was
19   going to make a decision.       Then I find out he's back
20   again today in May, which, you know, we're seven months
21   later.     And so, you know, I really don't have anything
22   else to say, Your Honor, except that I object.
23                   MR. GARZA:    May I address the Court, Your
24   Honor?
25                   THE COURT:    Sure.

                          CORINNA N. GARCIA, CSR
                                                                    7

 1                   MR. GARZA:    The original notice that was
 2   sent out to my co-counsel was sent out in the customary
 3   fashion that we do here in Cameron County.       Those of us
 4   from the local bar are very accustomed to that.       It's
 5   all electronic data that comes through e-mail.       So we
 6   know what we're looking out for.
 7                   Up in Dallas sometimes it goes through the
 8   ECDF system or the electronic system where it comes in a
 9   whole different kind of fashion with all kind of notices
10   and whatnot.
11                   And what happened here is that particular
12   order was received by the firm but      it wasn't recognized
13   as an official correspondence from the court.       That's
14   why it was not put down or anticipated.       I've seen that
15   happen a couple of times in our office, but my staff is
16   used to it, so they're accustomed.
17                   It's not -- the Court did exactly what it
18   was supposed to do in sending out that notice, but it
19   was a complete inadvertent oversight with no disrespect
20   to the Court, Your Honor.
21                   MR. CORPUZ:   And, Your Honor, if I might
22   add this too.    Had we received a copy of the response
23   before the hearing, that certainly would have alerted us
24   to a hearing actually set.      But it wasn't until we
25   actually called Mr. Shergold's office and requested a

                          CORINNA N. GARCIA, CSR
                                                                      8

 1   copy that we actually had a copy of their response.
 2                 MR. SHERGOLD:     Your Honor, I e-mailed a
 3   copy the same day that I filed it in U.S. regular mail,
 4   for whatever matter it is.     If I'm going to be blamed
 5   for defense counsel not being here, I guess I've heard a
 6   lot of arguments in my career, but I just heard another
 7   one.   I sent him a copy.    Whether it got there five days
 8   after the hearing or not -- I was here.      I was here.
 9                 THE COURT:    Let me ask you all this.      With
10   regard to the case, I mean, I know it was filed in 2014.
11   Has very little been done in the way of discovery and
12   working the case up?
13                 MR. SHERGOLD:     Your Honor, the defense
14   position is that the -- all proceedings and discovery
15   are stayed until there is a decision made by the Court.
16   That's been my --
17                 THE COURT:    I was just wondering if sending
18   you all to mediation before I take this up might be
19   fruitful for everybody.
20                 MR. SHERGOLD:    I have no objection being
21   sent to mediation, Your Honor.
22                 MR. CORPUZ:     Your Honor, there is a
23   mediation component in that arbitration agreement.
24   Mr. Shergold approached us about mediation and I said --
25   and I told him as well that there is a component in the

                         CORINNA N. GARCIA, CSR
                                                                      9

 1   arbitration agreement to an early mediation.     And I've
 2   invited him to agree to the arbitration agreement.        But
 3   he didn't agree to it, and so my client did not want to
 4   go to mediation until we at least have a decision on the
 5   arbitration agreement.
 6                MR. SHERGOLD:   And, Your Honor, the
 7   condition of mediation was for me to waive any arguments
 8   I have in front of you, which I was not going to do.
 9   I've been in this business too many years.     But I'll
10   tell you, I will do this, Judge.   I'm willing to go to
11   mediation tomorrow but I'm not going to waive my
12   client's right to bust this arbitration agreement.        And,
13   obviously, that's what the defense counsel wants, he
14   wants me to agree to mediation and then go to
15   arbitration as a condition of dismissing this motion,
16   and I'm not going to agree to that, Judge.
17                THE COURT:   Would you all be willing to go
18   to mediation before I make a ruling here to see if maybe
19   it will settle?
20                MR. GARZA:   One of the reasons, Your Honor,
21   behind the actual motion itself and why it's done at the
22   preliminary stages of litigation is to avoid any
23   particular ancillary cost or any judicial economy being
24   preserved here for this Court as well.     The component
25   for mediation we're talking about is, obviously, the

                       CORINNA N. GARCIA, CSR
                                                                   10

 1   issue of arbitration is paramount and is a viable
 2   motion.    That's why we're here.     It's not a long
 3   argument that we're here to present for you.        But, at
 4   the same time, assuming that the arbitration agreement
 5   is enforced or the motion to compel is granted, one of
 6   the first things that has to be done in that capacity is
 7   to mediate, which is nonbinding, it's an opportunity to
 8   sit down and try to work it out.
 9                   But just from a procedural standpoint,
10   before we take any steps further with respect to this
11   litigation, we'd like to get that motion addressed if we
12   could, Your Honor.
13                   MR. SHERGOLD:     Again, Your Honor, I have no
14   objection to being sent to mediation prior to this
15   hearing.     I've been waiting seven or eight months for
16   this proceeding to go forward.
17                   THE COURT:    All right.   And I know you said
18   really the only thing you want to say is you object to
19   this.     So let me hear -- other than what you stated is
20   the reason you missed, do you have anything else you
21   want to argue with regard to your motion for
22   arbitration?
23                   MR. CORPUZ:     Sure, Your Honor.   On the
24   merits, Dr. Adolfo Morales, the plaintiff in this case,
25   filed a petition alleging age discrimination and

                          CORINNA N. GARCIA, CSR
                                                                     11

 1   retaliation.     So this case is really an employment law
 2   case.     Dr. Morales in October of 2009, when he first
 3   started his employment with Ophthalmic Consultants of
 4   Texas, signed an arbitration agreement.        It's a
 5   stand-alone separate document from any handbook or any
 6   other documents as part of his employment.
 7                   He signed it in October of 2009.        He
 8   understood it based on his level of education and
 9   understanding of the fact that he was waiving a right to
10   a jury trial.     He, after he signed it, he continued to
11   work as an ophthalmic specialist for OCT, Ophthalmic
12   Consultants of Texas.     The arbitration agreement is
13   valid because it was signed at the beginning of
14   Dr. Morales's employment.
15                   He agreed to the arbitration clause based
16   on any allegations of workplace misconduct, including
17   employment discrimination and retaliatory discharge.
18   All such claims would be arbitrated in an arbitration
19   setting.
20                   The arbitration agreement also specifies
21   that it would be conducted in the city where Dr. Morales
22   worked.    It would be conducted in accordance with the
23   employment dispute resolution rules of the American
24   Arbitration Association.     The arbitrator would also have
25   the right to coordinate all discovery.        The arbitration

                          CORINNA N. GARCIA, CSR
                                                                  12

 1   agreement also specifies that it would be final and
 2   binding on both Dr. Morales and Ophthalmic Consultants
 3   of Texas and perhaps, most importantly, the arbitration
 4   agreement specifies that the cost and expenses would be
 5   borne by OCT.
 6                   Certainly, because Dr. Morales is alleging
 7   age discrimination and retaliation, those are the types
 8   of claims that fall within the scope of the arbitration
 9   agreement that it's our position that the arbitration
10   agreement is valid and enforceable and Dr. Morales's
11   claims of age discrimination and retaliation fall within
12   the scope of the arbitration agreement.       And based on
13   those two elements, it's our position that the Court
14   must compel arbitration in this matter.
15                   THE COURT:   Mr. Shergold, would you like to
16   respond to anything?
17                   MR. SHERGOLD:   Yes, before I do, I would
18   just like to state that I would like the opportunity to
19   have the transcript that was created on 18 November,
20   2014 produced.    I'll make the request to your court
21   staff.   I'd like to have that transcribed and attached
22   as part of my response, please.     In other words, Your
23   Honor, the argument I made on November --
24                   THE COURT:   You just want to reiterate it
25   as part of today's record, correct?

                          CORINNA N. GARCIA, CSR
                                                                    13

 1                MR. SHERGOLD:    Yes, that's correct, and
 2   that way I'll be very brief in my response, Your Honor.
 3   The arbitration agreement is illusory.       The document
 4   that I responded to was stamped November 17, 2014.          What
 5   I'm basically arguing on behalf of this worker, Your
 6   Honor, is that -- I know it's a fad now.       I think that
 7   the courts have struggled with the issue of enforcing
 8   arbitration agreements.
 9                Of course, we believe and the plaintiff
10   believes it's a violation of the ultimate court's
11   doctrine, the fact that people have a constitutional
12   right to be able to have a jury of their peers basically
13   hear the case.   It's a matter of first impression on
14   this issue if this case is appealed or places a plea to
15   the jurisdiction.   I plan to make the argument that this
16   is a constitutional violation of the Texas constitution
17   to prohibit or to somehow impede a citizen's right to
18   have his day in court based upon that.       And that would
19   be something I would use as an appeal.
20                But getting to the nuts and bolts of what
21   we have to deal with right now as far as the current law
22   in the arbitration enforceability, we claim it's
23   illusory and void because in the agreement -- in the
24   agreement to arbitrate, there is nothing in there that
25   talks about what happens if the person, or the employee,

                         CORINNA N. GARCIA, CSR
                                                                 14

 1   I should state, becomes an ex-employee.     And if the
 2   person becomes an ex-employee, like Dr. Morales, is
 3   there any sort of notice provision that's in this
 4   arbitration agreement that states specifically that that
 5   ex-employee is to be notified of any specific changes in
 6   the arbitration agreement.    No, there isn't.
 7                And if the defense counsel can point out
 8   what happens in that scenario in that document, where a
 9   person becomes an ex-employee and if there is any
10   documentation in that agreement, it says that notice
11   shall be provided to the ex-employee of any changes or
12   any revisions or cancelations in the policy, then I
13   would like to see that.    Because I haven't been able to
14   find it in the paperwork that was sent to me.
15                We claim on behalf of the worker ipso facto
16   that that would make the arbitration agreement void
17   because it's illusory.    In other words, he who pays the
18   piper plays the tune, Your Honor.    He who pays the piper
19   plays the tune.   So if the arbitration agreement that
20   exists doesn't have any notification provisions or any
21   discussion regarding the situation when an employee
22   becomes an ex-employee and he moves off to Alaska or
23   California or maybe to Mexico or whatever, maybe across
24   the street, there is nothing there that says that if we
25   change the agreement you become part of the change and

                        CORINNA N. GARCIA, CSR
                                                                     15

 1   you shall be notified.   That's my argument in a nutshell
 2   on that issue.
 3                 The second component of my argument is even
 4   more simple, since I'm a country boy.       The other
 5   argument is that the defendant waived his right to
 6   enforce this arbitration agreement.     It waited almost
 7   over a year from the time that the EEOC was contacted in
 8   order to invoke or to have a provision enforced.        And I
 9   can point out in my response to the enforceability
10   agreement of this arbitration.    I can point out the
11   page -- if I can get to that, please.
12                 Page 14, item 3, waiver of arbitration
13   agreement.   Defendant has waived its right to compel
14   arbitration from the fact that the latest request is
15   nearly a year after plaintiff submitted a discrimination
16   complaint with the Texas Work Force Commission, Division
17   of Civil Rights.
18                 I cited a case.    It was the Interconex
19   case, Your Honor, that comes out of the First District
20   of Houston, Texas Appeals, where it actually talks about
21   the fact that in that situation defendant had acted
22   inconsistently with the right to arbitrate by failing to
23   answer before the default judgment was taken.
24                 In this situation the analogy clearly is
25   equivalent because of the fact that the defendant here

                        CORINNA N. GARCIA, CSR
                                                                    16

 1   knew that my client was filing a complaint with the
 2   Equal Employment Opportunity Commission, Civil Rights
 3   Division and Workforce Division of the state, and they
 4   waited over a year to invoke the provision, Your Honor.
 5   So we say that the defendant has waived the arbitration
 6   agreement by waiver.
 7                 So those are our two main points, Judge.
 8   I'm going to stop talking and, again, for the record,
 9   indicate that I will be requesting that the transcript
10   that I basically made on 18 November, 2014 be
11   incorporated as part of my response arguing against the
12   arbitration enforceability, Your Honor.       And with that,
13   I thank you very much.
14                 THE COURT:    All right.     Do you all have
15   proposed orders?
16                 MR. SHERGOLD:     Your Honor, I do have a
17   proposed order that was submitted by paper back in 18
18   November.   I don't know if it stood the test of time.
19                 THE COURT:    Yes.
20                 MR. CORPUZ:     We have a proposed order, Your
21   Honor, other than the fact that --
22                 THE COURT:    I do have them both.
23                 MR. CORPUZ:     -- 2014 needs to be changed to
24   2015.
25                 THE COURT:    That's fine.     Let me --

                        CORINNA N. GARCIA, CSR
                                                                    17

 1                 MR. SHERGOLD:     That's a very salient point,
 2   Your Honor.
 3                 THE COURT:    Let me look at that transcript
 4   and then I'll get you an answer here.       I'll try to have
 5   an order out before the end of the day.       I think Corinna
 6   can probably pull it up and I can read it on the
 7   computer.
 8                 MR. SHERGOLD:     Your Honor, I'll make an
 9   official request to pay the transcription fee because I
10   do know your employees do a lot of good work and we'll
11   be happy to request that in writing and pay whatever it
12   costs.
13                 MR. CORPUZ:     And, Your Honor, if I could
14   respond to the waiver argument very briefly.        The case
15   law on arbitration agreement and waiver of arbitration
16   agreements that Dr. Morales signed is pretty clear.        The
17   only time that the courts have found waiver is when a
18   party has done something inconsistent, significantly
19   inconsistent with the arbitration agreement, such as
20   seeking affirmative relief from the Court, filing any
21   kind of discovery motions with the Court, filing a
22   counterclaim, conducting discovery for over a year and a
23   half before triggering the arbitration agreement.
24                 So in this instance there has not been a
25   waiver of the arbitration agreement.     In fact,

                        CORINNA N. GARCIA, CSR
                                                                    18

 1   Dr. Morales's signature at the beginning of his
 2   employment demonstrates that he agreed to the
 3   arbitration agreement.
 4                   THE COURT:    Okay.   Mr. Corpuz, your firm
 5   filed the original -- beginning with the original answer
 6   and subsequent documents electronically; is that
 7   correct?
 8                   MR. CORPUZ:     That's correct, Your Honor.
 9                   THE COURT:    Okay.   Because I was looking
10   for all that in the file and it seems to be actually in
11   the electronic file and not in the physical file.
12                   MR. GARZA:    I have a courtesy copy for the
13   Court, if you'd like, Your Honor.
14                   THE COURT:    No, that's fine.   I just wanted
15   to make sure that electronic is the way you all were
16   filing from the get-go.
17                   MR. CORPUZ:     Yes, Your Honor, and our
18   answer does refer to the arbitration agreement as well.
19                   MR. SHERGOLD:    May I respond to that, Your
20   Honor?     The answer refers to the arbitration agreement,
21   but does not -- was not -- an arbitration enforcement of
22   that agreement was not filed until several weeks after
23   that.    So I think that also constitutes a waiver as
24   well, Your Honor.
25                   THE COURT:    Okay.   Well, I'll look at the

                          CORINNA N. GARCIA, CSR
                                                                  19

 1   transcript and I'll try to get you all a ruling on this
 2   before the end of the day.
 3                 MR. SHERGOLD:     And can I get the court
 4   reporter's card, please?
 5                 THE COURT:    Sure.
 6                 MR. SHERGOLD:     May I approach?
 7                 THE COURT:    Yes, sir.   Thank you.     All
 8   right.   Good luck catching your flight, Mr. Corpuz.
 9                 MR. CORPUS:     Thank you, Your Honor.
10                 (The hearing was concluded at 10:53 a.m.)
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                        CORINNA N. GARCIA, CSR
                                                               20

 1   THE STATE OF TEXAS:
 2   COUNTY OF CAMERON:
 3                CERTIFICATE OF COURT REPORTER
 4      I, CORINNA N. GARCIA, Official Court Reporter in and
 5   for the 444th District Court of Cameron County, Texas,
 6   do hereby certify that the above and foregoing contains
 7   a true and correct transcription of all portions of
 8   evidence and other proceedings requested in writing by
 9   counsel for the parties to be included in this volume of
10   Reporter's Record, in the above styled and numbered
11   cause, all of which occurred in open court or in
12   chambers and were reported by me.
13      I further certify that this transcription of the
14   record of the proceedings truly and correctly reflects
15   the exhibits, if any, offered by the respective parties.
16      I further certify that the total cost for the
17   preparation of this Reporter's Record is $112.20 and was
18   paid/will be paid by Appellant Ophthalmic Consultants of
19   Texas.
20      WITNESS MY OFFICIAL HAND on this the 2nd day of July,
21   2015.
22                                /S/ Corinna N. Garcia
                                  CORINNA N. GARCIA, CSR
23                                Official Court Reporter
                                  974 East Harrison Street
24                                Brownsville, Texas 78520
                                  Certificate No. 5210
25                                Expiration Date 12/31/15
                                  (956) 547-7061
                          CORINNA N. GARCIA, CSR