Court Opinion

ID: 4096290
Source: CourtListenerOpinion
Date Created: 2016-11-08 08:16:12.136626+00
Date Added: 2024-06-11T14:20:07.912671
License: Public Domain

COURT OF APPEALS
                                EIGHTH DISTRICT OF TEXAS
                                     EL PASO, TEXAS

 CORRINE DUARTE, VISITING NURSE               §
                                                              No. 08-14-00074-CV
 ASSOCIATION OF EL PASO A/K/A
 VNA HOME HEALTHCARE OF EL                    §
                                                                Appeal from the
 PASO, AND JOE WARDY,
                                              §
                                                          384th Judicial District Court
                  Appellants,
                                              §
                                                            of El Paso County, Texas
 v.
                                              §
                                                             (TC# 2013DCV2498)
 MAYAMAX REHABILITATION
 SERVICES, L.L.P. AND CANDACE                 §
 BAIRD,
                                              §
                  Appellees.
                                        OPINION

       This is an interlocutory appeal from the denial of a motion to compel arbitration.

TEX.CIV.PRAC.&REM.CODE ANN. § 51.016 (West 2015)(permitting an interlocutory appeal from

the denial of a motion to compel arbitration under the Federal Arbitration Act). Appellants,

(Duarte, VNA, and Joe Wardy) in one issue contend the trial court erred in denying their motion

to compel arbitration against Appellees (Mayamax and Baird). We affirm.

                                         Background

       On October 1, 2004, sisters, Candace Baird and Corrine Duarte, entered into a written

partnership agreement establishing Mayamax Rehabilitation Services, L.L.P. (“Mayamax”). The

written partnership agreement provided that any dispute between the sisters/partners would
initially proceed to mediation, and, if unsuccessful, then to arbitration. Mayamax provided

therapy services.

       Appellees, in their original petition, allege that after the formation of their partnership,

Visiting Nursing Association of El Paso (“VNA”) and Mayamax entered into and executed an

agreement for the provision of therapy services. According to Appellees, a subsequent customer

service agreement was executed with VNA in January 2013. In that customer service agreement

signed by Joe Wardy, VNA covenanted to “not solicit or attempt to hire, on a regular, full-time,

temporary or contractual basis, any healthcare professional until after one year (1) from the date

of when the healthcare professional last worked for Mayamax.”

       Appellees further alleged that Duarte, as vice-president of Mayamax, executed

employment agreements with several Mayamax employees. These employment agreements

restricted employees of Mayamax from:

       (1) engaging in any activity harmful to Mayamax;

       (2) discussing future employment in a professional capacity with Mayamax’s
           clients;

       (3) prohibited them from engaging in discussions with a competitor regarding the
           taking over of Mayamax’s client contracts.

       According to Appellees, “[t]oward the end of 2012[,] Corrine Duarte expressed an

interest in terminating the partnership because she represented she was going to seek other

employment in an unrelated industry.”        Appellees assert Duarte prepared the release of

partnership agreement and mutual release of all claims and compromise settlement agreement.

       On December 17, 2012, Baird and Duarte executed a “Release of Partnership Agreement

and Mutual Release of All Claims and Compromise Settlement Agreement (“Settlement

                                                2
Agreement”),” which expressly terminated the October 1, 2004 partnership agreement. The

Settlement Agreement provides:

               That [Duarte and Baird] . . . do hereby mutually compromise, settle and
      fully release, acquit and forever discharge EACH OTHER, and their past and
      future . . . agents, servants, representatives, employees, employers, successors,
      assigns, parents, partners, affiliates and subsidiary corporations, and any and all
      persons or entities in privity with them, whether named herein or not, of and from
      any and all claims, demands, controversies, actions, or causes of action of
      whatever kind or character, whether known or unknown, whether extant or
      inchoate, which they have held or may now or in the future hold for alleged
      damages or losses or relief of any kind arising from the formation, administration,
      operation, negotiation or dissolution of the partnership agreement between
      Candace Portillo [Baird] and Corrine Baird [Duarte] that formed [Mayamax] on
      or about October 1, 2004, and any business owned or operated by Mayamax or
      based upon any acts, conduct, representations, omissions, contracts, claims,
      events, causes, matters related to same. This Release includes, encompasses and
      extinguishes without limitation all matters arising out of business operations of
      Mayamax and any grievances or claims for . . . breach of contract, breach of
      fiduciary duty, . . negligence, fraud, fraudulent inducement, negligent
      misrepresentation,, conversion, injunctive relief, violations of the Texas
      Deceptive Trade Practices-Consumer Protection Act, or any other federal, state,
      or local law, regulation or ordinance, or based on public policy, contract, or tort
      law. This Release also includes, encompasses and extinguishes any and all claims
      for statutory damages, statutory penalties, exemplary or punitive damages, treble
      damages, attorney’s fees, costs of court and interest, declaratory judgment, civil
      conspiracy, theft, misrepresentation and infliction of emotional distress.
               As part of the consideration conveyed herein, the parties agree that the
      [Mayamax partnership agreement], which is dated October 1, 2004, is hereby
      terminated. The parties agree all rights, duties and obligations created or arising
      from the [partnership agreement] are hereby released, extinguished and declared
      void, including any noncompetition, clauses, non-solicitation clauses, and non-
      disclosure clauses in the [partnership agreement], and the [partnership
      agreement] shall have no applicability to any parties to this agreement after the
      date it is executed.
               The parties represent that the claim herein released have not been assigned
      or encumbered in any way. The parties to this Agreement understand and agree
      that his Agreement shall be interpreted and construed according to the laws of the
      State of Texas that are in effect on this date. This Agreement contains the entire
      agreement among the parties hereto and the terms of this Agreement are
      contractual and not a mere recital. This Agreement shall be and is binding upon
      the heirs, successors and assigns of the parties hereto. [Emphasis added].

      According to Appellees after the execution of the settlement agreement in December,

                                               3
Duarte continued her employment with Mayamax until March 8, 2013. Shortly after receiving

her last paycheck from Mayamax, Appellees allege Duarte admitted to Baird that she was

employed by VNA.        Subsequently, four employees along with one independent contractor

terminated their employment contracts with Mayamax and began working for VNA.

       Appellees, approximately three months later, filed suit against Appellants. Mayamax and

Baird allege Appellants tortiously interfered with Mayamax’s contracts with the employees and

independent contractor by offering higher compensation and hiring them to work for VNA.

Further, Appellees contends Appellants: (1) induced the employees to breach the fiduciary duty

they owed to Mayamax; (2) VNA breached the customer service agreement contact with

Mayamax; and (3) Duarte breached her fiduciary duty owed to Mayamax as an employee after

the termination of the sisters’ partnership. Appellees ground their petition in the allegations that

Appellants hired Mayamax’s employees in order to “strip Mayamax of VNA’s therapy business”

and “to take away the revenues those employees earned for Mayamax.”

       Appellants, in November 2013, filed a motion to compel arbitration and stay proceedings

pending arbitration asserting the partnership agreement required Baird and Duarte to submit all

claims arising from the lawsuit to binding arbitration, including those claims asserted against

Duarte’s agents and employees. The motion also asserted that Appellees’ claims are based on

the assumption that a valid partnership agreement between Baird and Duarte was still in place

during the time the alleged acts that give rise to the suit. As such, Appellants argued that the

partnership agreement’s arbitration provision “controls all parties under the doctrine of equitable

estoppel.”

       In response, Appellees asserted that no arbitration agreement exists because the

December 17, 2012, Settlement Agreement terminated the partnership agreement which

                                                 4
contained the arbitration provision and had released, extinguished, and declared void all rights,

duties, and obligations under the partnership agreement, including any non-competition clauses,

non-solicitation clauses, and non-disclosure clauses.      Appellees also argued that even if

Appellants could show the existence of a valid arbitration agreement, they were still unable to

show that Appellees’ causes of action fell within the scope of that agreement.

       During the hearing on the motion to compel arbitration, Appellants informed the trial

court that they were not disputing the Settlement Agreement but, rather, expressed concern that

Appellees had referenced events and issues “prior to the date of the release” of the partnership.

Appellants contended that if Appellees were raising claims arising from the time when the

partnership agreement was valid, the trial court must order arbitration because the arbitration

agreement remains valid “going backwards.”

       Appellees informed the trial court that all of the conduct from which their causes of

action arose occurred after December 17, 2012, when Duarte was an employee, and expressly

stated that no claims were made against Duarte in her role as a partner. Appellees stated during

the hearing that “[e]verything that she did--[Duarte] did--was after the fact when she started

taking the employees and taking them over to VNA and competing against her sister with her

sister’s own employees . . . [and that] all occurred in the March, April, June time frame of 2013,

well after the [Settlement Agreement].” The trial court requested an opportunity to study the

issue further and later denied Appellants’ motion to compel arbitration.

                                      Standard of Review

       The parties do not dispute that the Federal Arbitration Act (“FAA”) applies to this

proceeding. In a matter subject to the FAA, Section 51.016 of the Texas Civil Practice and

Remedies Code allows for an interlocutory appeal of an order denying arbitration.

                                                5
TEX.CIV.PRAC.&REM.CODE ANN. § 51.016. We review a trial court’s order denying arbitration

under an abuse of discretion standard. Jack B. Anglin Co., Inc. v. Tipps, 842 S.W.2d 266, 272-73

(Tex. 1992)(orig. proceeding). A trial court abuses its discretion when it refuses to compel

arbitration pursuant to a valid and enforceable arbitration agreement. In re Halliburton Co., 80
S.W.3d 566, 573 (Tex. 2002)(orig. proceeding). Further, “we apply a no-evidence standard to

the trial court’s factual determinations and a de novo standard to legal determinations.” Sidley

Austin Brown & Wood, L.L.P. v. J.A. Green Dev. Corp., 327 S.W.3d 859, 863 (Tex.App.--Dallas

2010, no pet.)(describing this standard as the “same as the abuse of discretion standard of review

. . .”); see also Delfingen US-Tex., L.P. v. Valenzuela, 407 S.W.3d 791, 798 (Tex.App.--El Paso

2013, no pet.)(party seeking to compel arbitration must establish both the existence of an

agreement and that an arbitrable dispute exists within that agreement’s scope).

       A party seeking to compel arbitration must (1) establish the existence of a valid

arbitration agreement; and (2) show that the claims asserted are within the scope of the

agreement. In re AdvancePCS Health L.P., 172 S.W.3d 603, 605 (Tex. 2005); Delfingen US-

Texas, L.P., 407 S.W.3d at 797.      We review the first inquiry--whether a valid arbitration

agreement exists--de novo. See In re Labatt Food Serv., L.P., 279 S.W.3d 640, 643 (Tex.

2009)(orig.proceeding); J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 227 (Tex. 2003). “The

burden of establishing an arbitration agreement’s existence is evidentiary and runs with the party

seeking to compel arbitration.” United Rentals, Inc. v. Smith, 445 S.W.3d 808, 812 (Tex.App.--

El Paso 2014, no pet.). A court cannot order arbitration in the absence of an agreement to

arbitrate. Freis v. Canales, 877 S.W.2d 283, 284 (Tex. 1994).

       The second inquiry--whether a particular claim is subject to the arbitration clause--is

decided in light of the federal policy and presumption favoring arbitration under the FAA.

                                                6
Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25, 103 S. Ct. 927, 941,

74 L. Ed. 2d 765 (1983); Ellis v. Schlimmer, 337 S.W.3d 860, 861-62 (Tex. 2011). “[D]espite

strong presumptions that favor arbitration, a valid agreement to arbitrate is a settled, threshold

requirement to compel arbitration.” In the Estate of Guerrero, 465 S.W.3d 693 (Tex.App.--

Houston [14th Dist.] 2015, pet. filed). “[W]hen we are called upon to decide whether the parties

have agreed to arbitrate, we do not resolve doubts or indulge a presumption in favor of

arbitration, because no party may be forced to submit to arbitration in the absence of sufficient

showing that the parties entered into a valid and binding arbitration agreement.” Wright v.

Hernandez, 469 S.W.3d 744, 751 (Tex.App.--El Paso 2015, no pet.).

       Normally hearings on motions to compel arbitration are decided in summary proceedings

“on the basis of affidavits, pleadings, discovery, and stipulations.” Jack B. Anglin Co., Inc., 842
S.W.2d at 269. A motion to compel arbitration is akin to a motion for partial summary judgment

and “subject to the same evidentiary standards.” In re Bunzl USA, Inc., 155 S.W.3d 202, 208

(Tex.App.--El Paso 2004, orig. proceeding). “In a nonjury proceeding, when no findings of fact

or conclusions of law are filed or requested, we infer that the trial court made all the necessary

findings to support its judgment.” Paragon Indus. Applications, Inc. v. Stan Excavating, L.L.C.,

432 S.W.3d 542, 548 (Tex.App.--Texarkana 2014, no pet.). “When the inferred findings of fact

are supported by the evidence, the appellate court must uphold the judgment on any theory of

law applicable to the case.” Id. at 549.

       Given the trial court did not enter specific findings of fact or conclusions of law to

explain its denial of the motion to compel arbitration, we must uphold the trial court decision on

any appropriate legal theory urged below. Shamrock Foods Co. v. Munn & Assocs., Ltd., 392
S.W.3d 839, 844 (Tex.App.--Texarkana 2013, no pet.); Inland Sea, Inc. v. Castro, 420 S.W.3d
7
55, 57-59 (Tex.App.--El Paso 2012, pet. denied)(affirming denial of motion to compel arbitration

on alternative ground where order did not specify the basis for the ruling); In re Weeks Marine,

Inc., 242 S.W.3d 849, 854 (Tex.App.--Houston [14th Dist.] 2007)(orig. proceeding).

       “While a strong presumption favoring arbitration exists, the presumption arises only after

the party seeking to compel arbitration proves that a valid arbitration agreement exists.” IHS

Acquisition No. 131, Inc. v. Iturralde, 387 S.W.3d 785, 790 (Tex.App.--El Paso 2012, no pet.),

citing J.M. Davidson, Inc., 128 S.W.3d at 227.          We do not resolve doubts or indulge a

presumption in favor of arbitration in deciding whether a party has met its initial burden. J.M.

Davidson, Inc., 128 S.W.3d at 227. Rather, the party attempting to compel arbitration must show

that the arbitration agreement meets all requisite contract requirements. Id. at 228. If the trial

court determines that a valid agreement exists, the burden shifts to the party opposing arbitration

to raise an affirmative defense to enforcement of the arbitration agreement. Id. at 227-28.

                                             ISSUES

       In a single issue, Appellants complain the trial court abused its discretion in denying their

motion to compel arbitration. Appellants assert that: (1) Texas law requires the arbitrator, not

the trial court to decide the validity of the arbitration agreement when the contract as a whole is

challenged; (2) the agreement to arbitrate survived the termination of the partnership agreement;

and (3) Appellees’ claims fall within the scope of the arbitration agreement. We disagree.

                                    Arbitrator vs. Trial Court

       First, Appellants posit that it is the role of an arbitrator, not the trial court, to determine

whether an arbitration agreement is valid when the contract as a whole is challenged. Appellants

base their argument on the fact that Appellees at trial contended that the arbitration provision

was no longer controlling because the Partnership Agreement in which it was contained was

                                                 8
terminated on December 17, 2012, extinguishing and releasing all rights, duties and obligations

under it.     Therefore, Appellants assert, because Appellees challenged the validity of the

Partnership Agreement in its entirety, rather than the specific arbitration provision itself, the

parties were improperly before the trial court. Appellants rely on the following cases for the

proposition that absent an attack on the arbitration provision itself, a challenge to the Partnership

Agreement as a whole is a question for the arbitrator, not the court. In re Koch Industries, Inc.,

49 S.W.3d 439, 445 (Tex.App.--San Antonio 2001,orig. proceeding); Pepe Int’l Dev. Co. v. Pub

Brewing Co., 915 S.W.2d 925, 932 (Tex.App.--Houston [1st Dist.] 1996, no pet.); Prima Paint

Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 404, 87 S. Ct. 1801, 1806, 18 L. Ed. 2d 1270

(1967); In re FirstMeritBank, N.A., 52 S.W.3d 749, 756 (Tex. 2001). Initially, however, we

must answer the question whether Appellants have preserved this issue for our review. As a

general rule, a party is required to present a complaint to the trial court before being allowed to

raise the issue on appeal. See TEX.R.APP.P. 33.1; Gumble v. Grand Homes 2000, L.P., 334
S.W.3d 1, 3-4 (Tex.App.--Dallas 2007, no pet.); Pierce v. Tex. Racing Comm’n, 212 S.W.3d
745, 760 (Tex.App.--Austin 2006, pet. denied)(appellant waived complaint because he did not,

orally or in writing, bring to administrative law judge’s attention his complaint that burden of

proof had been improperly placed on him); In re L.M.I., 119 S.W.3d 707, 711 (Tex. 2003);

Cojocar v. Cojocar, No. 03-14-00422-CV, 2016 WL 3390893, at *5 (Tex.App.--Austin Jun. 16,

2016, no pet.)(mem. op.); All American Excavation, Inc. v. Austin Materials, LLC, Nos. 04-15-

00779-CV, 04-15-00780-CV, 04-15-00781-CV, 04-15-00782-CV, 2016 WL 1464409, at *4

(Tex.App.--San Antonio Apr. 13, 2016, no pet.)(mem. op.)(because appellant failed to present

argument to the trial court, argument was waived and could not be considered for the first time

on appeal).

                                                 9
       The final order denying the motion to compel was signed on February 11, 2014. In a

letter brief filed on February 12th, Appellants, for the very first time, raise the issue that the

arbitrator, not the trial court, determines whether an arbitration agreement is valid when the

entire contract is challenged. Closely examining the record, we find that the motion to compel

arbitration does not assert this issue nor was it raised in the hearing in December 2013. Thus,

Appellants’ point of whether an arbitrator or a trial court determines the validity of an arbitration

agreement contained in a challenged contract was first raised only after the trial court entered its

final order denying the motion to compel. Accordingly, because Appellants failed to timely raise

this argument to the trial court, and there is no evidence in the record for our review nor any

indicia the trial court considered the issue, Appellants have thus waived error on their first

argument. TEX.R.APP.P. 33.1; Cojocar, 2016 WL 3390893, at *5; All American Excavation,

Inc., 2016 WL 1464409, at *4.

      Did the arbitration agreement survive the termination of the Partnership contract?

       Under the FAA, absent unmistakable evidence that the parties intended the contrary, it is

the courts rather than arbitrators that must decide “gateway matters” such as whether a valid

arbitration agreement exists. In re Weekley Homes, L.P., 180 S.W.3d 127, 130 (Tex. 2005)(orig.

proceeding). In In re Morgan Stanley & Co., Inc., the Texas Supreme Court concluded that

“where a party attacks the very existence of an agreement, as opposed to its continued validity or

enforcement, the courts must first resolve that dispute.” 293 S.W.3d 182, 189 (Tex. 2009), citing

Will-Drill Res., Inc. v. Samson Res. Co., 352 F.3d 211, 219 (5th Cir. 2003); see also Banc One

Acceptance Corp. v. Hill, 367 F.3d 426, 429 (5th Cir. 2004)(where the very existence of a

contract containing an arbitration provision is at issue, federal courts have the authority and

                                                 10
responsibility to decide the matter, and where no valid arbitration agreement exists, arbitrator is

without authority to decide anything).

       As in this case, the court of appeals in TransCore Holdings, Inc., v. Rayner, 104 S.W.3d
317, 319 (Tex.App.--Dallas 2003, pet. denied), similarly addressed the effect that a subsequent

termination agreement had on the parties’ original contract. The parties, TransCore and Rayner,

initially executed a stock purchase agreement (“SPA”) which contained an arbitration clause. Id.

The parties later executed a “termination agreement.”         Id.   TransCore sought to compel

arbitration under the SPA and Rayner opposed arguing that he was no longer required to arbitrate

because the termination agreement released him of his obligation to arbitrate.           Id.   The

termination agreement at issue in TransCore Holdings, Inc. provided in relevant part:

       Except as to the promises made in this letter and except as otherwise provided for
       in this letter, Viastar and TransCore, on the one hand, and you [Rayner] on the
       other hand, hereby fully, forever, irrevocably and unconditionally release, remise,
       settle and discharge one another from any and all manner of claims, charges,
       complaints, debts, liabilities, demands, actions, causes of action, suits, rights,
       covenants, contracts, controversies, agreements, promises, omissions, damages,
       obligations and expenses of any kind, including attorneys’ fees, whether known or
       unknown, which they had, now have, or hereafter may have against each other
       arising prior to the date of this letter whether or not pursuant to the terms and
       conditions set forth in any prior agreements between yourself, Viastar, affiliated
       companies and its parent, provided however that nothing contained in this letter
       shall release or discharge you from any obligations with respect to claims [the]
       Viastar and/or TransCore has, now have, or hereafter may have against you under
       or pursuant to Sections 7, 8, and 9 of the Employment Agreement date May 12,
       2000.

Id. at 320-21.

       The court reasoned that before it could compel arbitration, it was first required to

determine whether a subsequent agreement between the parties released them from their previous

agreement to arbitrate. Id. at 322-323; see also Texas La Fiesta Auto Sale, LLC v. Belk, 349
S.W.3d 872, 881 (Tex.App.--Houston [14th Dist.] 2011, no pet.)(also holding that the

determination of whether a later agreement between the parties revokes an arbitration clause
                                                11
properly belongs to the trial court because the court must determine the threshold issue of

whether a valid arbitration agreement exists). The TransCore Holdings, Inc., court ultimately

held that the termination agreement at issue contained such broad, sweeping language that

“unconditionally released the parties from all previous obligations.” Id. at 323.

          Similarly, the court of appeals in Valero Energy Corp. v. Teco Pipeline Co., 2 S.W.3d
576, 586 (Tex.App.--Houston [14th Dist.] 1999, no pet.), addressed the issue of whether a

subsequent settlement agreement between the parties revoked an arbitration clause. The Valero

Energy Corp. court also held that it was proper for the court to decide whether a later agreement

between the parties revoked an arbitration clause because “[w]ithout an agreement to arbitrate,

arbitration cannot be compelled.” Id., quoting Freis, 877 S.W.2d 283, 284 (Tex. 1994). After

considering the subsequent settlement agreement between the parties, the court ultimately held

that the settlement agreement only modified certain provisions in the parties’ original contract

and that the arbitration clause was not one of those provisions. Valero Energy Corp., 2 S.W.3d

at 589.

          Valero Energy Corp. and TransCore Holdings, Inc. are dispositive of Appellants’

arguments.     Before compelling arbitration, the trial court must first determine whether the

parties’ subsequent Settlement Agreement extinguished their previous agreement to arbitrate

contained in the original partnership agreement. TransCore Holdings, Inc., 104 S.W.3d at 322-

23.   The Settlement Agreement at issue here, executed on December 17, 2012, expressly

provided that the parties agreed that the October 1, 2004, partnership agreement was terminated;

that all rights, duties, and obligations created or arising from the partnership agreement were

released, extinguished, and declared void; and that the partnership agreement “shall have no

applicability to any parties to this agreement after the date it is executed.” [Emphasis added].

                                                12
       Moreover, the parties’ Settlement Agreement, in much stronger terms than the

termination agreement at issue in TransCore Holdings, Inc., unconditionally released the parties

from all previous obligations without any restriction of the release or discharge of obligations to

any provision contained in the prior partnership agreement. 104 S.W.3d at 320-21. Appellant,

Baird, drafted and presented the Settlement Agreement to Duarte and now must abide by the

language she so meticulously crafted. The terms of the Settlement Agreement unequivocally

terminated the agreement to arbitrate on December 17, 2012.

            Do Appellees’ claims fall within the scope of the arbitration agreement?

       Last, Appellants argue the arbitration agreement is enforceable and can be applied

retroactively to events and causes of action prior to the execution of the Settlement Agreement

on December 17, 2012.         Appellants point to Appellees’ original petition to support their

argument that the factual allegations supporting Appellees’ causes of actions occurred prior to

December 17, 2012 and, so, therefore are subject to the arbitration agreement. The underlying

assumption of this point is that the arbitration agreement is enforceable to events and or causes of

actions arising prior to the execution of the Settlement Agreement.            We have decided the

arbitration agreement did not survive after the date of execution of the Settlement Agreement.

Appellants correctly point out that Appellees argued that the facts underpinning their causes of

actions did not occurred until after the Settlement Agreement was executed. Both parties argued

to the trial court that the application of the arbitration agreement retroactively is permitted.

       For the purpose of our analysis, we assume without deciding that the arbitration

agreement is enforceable retroactively until the execution of the Settlement Agreement. Given

the global language of the Settlement Agreement, the question of whether the arbitration

agreement can be enforced retroactively is tenuous at best. However, if the parties are correct in

                                                  13
that assumption, we examine whether the Appellees’ factual allegations support Appellants’

assertion that Appellees’ claims arose prior to the December 17th and, therefore, are subject to

the arbitration agreement.

       In determining whether a claim falls within the scope of an arbitration agreement, we

review the trial court’s ruling de novo because it involves the trial court’s legal interpretation of

the agreement. See Ikon Office Solutions, Inc. v. Eifert, 2 S.W.3d 688, 694 (Tex.App.--Houston

[14th Dist.] 1999, no pet.)(orig. proceeding).        We focus on the factual allegations of the

complaint rather than the legal causes of action asserted. Prudential Sec. Inc. v. Marshall, 909
S.W.2d 896, 900 (Tex. 1995)(orig. proceeding).          The burden lies with the party opposing

arbitration to show that the claims fall outside the scope of the arbitration agreement. Id.

       The petition alleges that Duarte ceased to be a partner on December 17, 2012, but

continued to work as a regular employee for Mayamax until February 1, 2013, and was paid as

an employee until March 8, 2013. Appellees contend that they reasonably believed that toward

the end of 2012, Duarte had already contacted or had been contacted by Joe Wardy or VNA.

Appellees further asserted in part that “during [Duarte’s] last three months of employment at

Mayamax, Corrine Duarte, Joe Wardy, and VNA, behind Candace Baird’s back, and without

disclosure to Candance Baird and Mayamax conspired to arrive at a plan to take Mayamax’s

employees and independent contractors and to strip Mayamax of VNA’s therapy business.”

       During the hearing on the motion to compel arbitration, the trial court addressed

Appellants’ counsel, “[i]f [Appellees are] suing [Appellants] on things that occurred prior to [the

termination of the partnership agreement,] then I may see a legitimacy to your argument, but if

[they are] saying that somehow [they are] suing for actions that occurred afterwards and

somehow they’re tied to what occurred before--[,]” Appellants’ counsel interrupted and stated, “I

                                                 14
think that has to be arbitrated . . . .” This exchange reflects the trial court’s acknowledgment that

claims arising from conduct occurring during the existence of the partnership agreement may be

subject to the arbitration agreement despite the subsequent termination of the partnership

agreement. However, Appellees’ counsel explicitly and repeatedly represented to the trial court

and opposing counsel that all of Appellees’ claims and causes of action asserted in this instance

arose after the parties terminated their partnership agreement and signed the Settlement

Agreement and that no claims were being asserted in relation to Duarte’s conduct as a partner.

       Accordingly, the trial court could have reasonably concluded that Appellees were not

asserting any claims or causes of action arising from the period before the parties mutually

terminated the partnership agreement. Such a conclusion supports both a finding that Appellees’

claims do not fall within the scope of the arbitration agreement as well as the trial court’s denial

of Appellants’ motion to compel arbitration.

                                            Conclusion

       We hold that the trial court did not abuse its discretion in denying Appellants’ motion to

compel arbitration. The partnership agreement contained a broad arbitration clause requiring the

parties to submit any dispute to arbitration. Subsequently, sisters Baird and Duarte “returned to

the bargaining table and began negotiations to terminate their business relationship.” TransCore

Holdings, Inc., 104 S.W.3d at 323. Their negotiations led to a new agreement, the Settlement

Agreement. That agreement, in very broad and unequivocal language, unconditionally released

the parties from all previous obligations. For these reasons, we affirm the trial court’s judgment.

November 4, 2016
                                               YVONNE T. RODRIGUEZ, Justice

Before Rodriguez, J., Barajas, C.J. (Senior Judge), and Larsen, J. (Senior Judge)
Barajas, C.J. (Senior Judge) and Larsen, J. (Senior Judge)(Sitting by assignment)

                                                 15