Court Opinion

ID: 3075954
Source: CourtListenerOpinion
Date Created: 2015-10-16 01:16:20.66098+00
Date Added: 2024-06-11T12:55:09.645126
License: Public Domain

In The
                               Court of Appeals
                      Seventh District of Texas at Amarillo

                                    No. 07-13-00025-CV

                      IN THE MATTER OF THE MARRIAGE OF
                   DEBBIE BROWN AND DAVID GABRIEL CHAVEZ

                            On Appeal from the 74th District Court
                                  McLennan County, Texas
               Trial Court No. 2011-3181-3, Honorable Gary R. Coley, Presiding

                                    November 7, 2013

                             MEMORANDUM OPINION
                   Before QUINN, C.J., and HANCOCK and PIRTLE, JJ.

       Appellant, David Gabriel Chavez, appeals from the judgment of the trial court

denying Chavez’s request for arbitration; finding a premarital agreement valid; and,

ultimately, awarding nearly all of the property to appellee, Debbie Brown. We will affirm

the judgment of the trial court.

                           Factual and Procedural Background

       The parties were married on July 29, 2006. According to Brown, the parties

executed a premarital agreement prior to marriage.              The parties subsequently

separated on July 29, 2011, and Brown filed for divorce on that day. Initially, Chavez
filed a simple general denial; however, on December 6, 2011, he filed a counter petition

for divorce. This was a generic filing that did not address the premarital agreement.

Later, on December 20, 2011, Chavez filed a verified and sworn supplemental answer

that denied the execution of the premarital agreement.

       At the same time she filed her original petition, Brown filed an application for a

protective order. After the original protective order was extended once, the trial court

entered a final protective order on October 21, 2011.

       Brown filed a request for a final hearing on the divorce and had a hearing set for

November 23, 2011; however, because the initial setting did not give the requisite

notice, the matter was not heard on that date.          Subsequently, Chavez hired new

counsel and the matter was again set for trial on January, 18, 2012. After Chavez hired

new counsel, there were attempts at settlement and, in lieu of settlement, a request was

made to invoke the arbitration agreement found in the premarital agreement. For a

period of several months, counsel for the parties exchanged letters attempting to name

an arbitrator.   Eventually, Brown hired new counsel who immediately requested

proposed dates for trial without any resolution of the arbitration question. Counsel for

Chavez responded to this request in a letter to counsel on June 13, 2012, that provided

information about the steps the parties had taken toward arbitration. Counsel for Brown

responded with a letter that advised of a September 19, 2012 trial setting but did not

mention arbitration.

       On August 2, 2012, Chavez filed a plea in abatement and motion to stay the final

hearing.   It is of note that the plea in abatement advised the trial court that the

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premarital agreement provided that any dispute should be decided by arbitration.

Further, the plea in abatement alleged that Chavez had met all prerequisites to invoke

arbitration to resolve the dispute. The trial court took up the issue of the abatement on

October 5, 2012, and denied the same by an order entered on October 11, 2012. The

order denying the plea in abatement simply denied the same without comment.

       The divorce proceeded to final hearing on October 11, 2012, and a written final

decree of divorce was entered on that day. Chavez gave notice of appeal and now

presents to this Court three issues. All of Chavez’s issues concern the failure of the trial

court to grant the abatement and allow this matter to proceed to arbitration.

Disagreeing with Chavez, we will affirm.

                             Preservation of Arbitration Issue

       As previously noted, Chavez presented the trial court with a plea in abatement

that sought arbitration. The hearing on this plea was conducted on October 5, 2012.

Brown’s initial position regarding Chavez’s contention that the trial court erred in not

abating the final hearing is that he never requested arbitration at the October 5, 2012

hearing and, therefore, the issue has not been properly preserved for appeal.             In

support of this proposition, Brown cites the Court to the Texas Rules of Appellate

Procedure. See TEX. R. APP. P. 33.1(a)(1)(A).1 The essence of Brown’s argument

seems to be that Chavez did not properly invoke section 171.021 of the Texas Civil

Practice & Remedies Code before the trial court. This section provides for a judicial

       1
         Further reference to the Texas Rules of Appellate Procedure will be by
reference to “Rule ___.”

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proceeding to compel arbitration. See TEX. CIV. PRAC. & REM. CODE ANN. § 171.021

(West 2011).2

       Our review of the record reveals that the plea in abatement filed by Chavez does

not cite the trial court to the applicable section of the Texas Civil Practice & Remedies

Code; however, in paragraph III of the motion, Chavez points out that the premarital

agreement calls for any dispute to be decided by arbitration. That paragraph further

alleges that Chavez has met all the prerequisites under the agreement regarding the

arbitration disputes.

       Additionally, during presentation of arguments before the trial judge, Chavez

specifically went through all the steps that he had taken seeking arbitration. In an

attempt to show that he had been requesting arbitration for a significant period of time,

Chavez introduced Exhibits 1-11, a series of correspondence with Brown’s prior

attorney and her current attorney that showed the steps that had been taken to invoke

the arbitration clause of the premarital agreement.3 When Brown’s arguments were

presented, these arguments centered not on the fact that Chavez had failed to request

arbitration but rather on the fact that Chavez had waived arbitration due to his

invocation of the judicial process.

       2
        Further reference to the Texas Civil Practice & Remedies Code will be by
reference to “Section ____” or “§ ____.”
       3
         Although Exhibits 1-11 were offered at the time of the hearing on the motion to
abate, the record is not clear about whether or not the trial court admitted them at that
time. However, immediately before beginning the final hearing on the divorce, the trial
court admitted the exhibits into the record.

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       Brown points to the questions asked by the trial court regarding what Chavez

was requesting to buttress her point that Chavez failed to request arbitration.

Admittedly, Chavez’s response did not answer the trial court’s inquiry directly; however,

the last part of the answer is a request for arbitration. There Chavez says, “really what

we’re asking for is just to abate the proceedings until we can do the arbitration.”

       Rule 33.1(a)(1)(A) requires that, in order to preserve a complaint for appellate

review, the record must show that:

   (1) the complaint was made to the trial court by a timely request, objection, or
       motion that:

       (A) stated the grounds for the ruling that the complaining party sought from
           the trial court with sufficient specificity to make the trial court aware of
           the complaint, unless the specific grounds were apparent from the
           context;
Rule 33.1(a)(1)(A).    Based upon our review of the record, we hold that Chavez’s

complaint was made in the form of a plea and that the complaint made in the plea was

sufficiently specific to apprise the trial court of the relief requested. See id.

       However, even if Chavez failed to use language specific enough to meet the

initial requirements of Rule 33.1(a)(1)(A), the overall record supports that the trial court

was aware of the “specific grounds” from the context of the hearing. A fair reading of

the record leaves no impression except that the parties and the court were discussing a

stay in the proceedings in order for Chavez to pursue arbitration. See Tex. Comm’n on

Human Rights v. Morrison, 381 S.W.3d 533, 536-537 (Tex. 2012). (discussing jury

charge error and quoting Thota v. Young, 366 S.W.3d 678, 690 (Texas 2012), “We have

long favored a common sense application of our procedural rules that serves the

purpose of the rules, rather than a technical application that rigidly promotes form over

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substance.”). Similarly, we find that Chavez gave the required notice to the trial court to

allow him to complain about the denial of the stay on appeal.

                                    Denial of Arbitration

Standard of Review

       In order to ascertain the proper standard of review, we must look to the issues

and evidence presented to the trial court at the hearing on Chavez’s plea in abatement.

As we recited earlier in the opinion, the crux of Brown’s argument at the hearing was

that Chavez had waived his right to seek arbitration due to invocation of the judicial

process. The trial court heard extensive argument regarding the actions of each party

during the pendency of the case.            Additionally, each party submitted certain

correspondence tending to support their position. Finally, Brown affirmatively requested

the trial court to take judicial notice of its file and the contents thereof. Accordingly, we

have a situation where the facts at issue at the time of the hearing on the motion to

abate were significantly contested. Therefore, we must apply an abuse of discretion

standard of review.     See Perry Homes v. Cull, 258 S.W.3d 580, 598 (Tex. 2008)

(holding that waiver is a question of law for the courts, however, that the reviewing court

must defer to the trial court’s factual findings when supported by the record). A trial

court abuses its discretion when it acts without reference to any guiding rules and

principles.   Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 242-42 (Tex.

1985). Because neither party requested findings of fact and conclusions of law, we will

uphold the trial court’s judgment on any theory supported by the record and any

necessary findings of fact will be implied. See In re Alexis, No. 10-12-00393-CV, 2012

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Tex. App. LEXIS 10106, at *17 (Tex. App.—Waco Dec. 6, 2012, no pet.) (mem. op.)

(citing Rosemond v. Al-Lahiq, 331 S.W.3d 764, 766 (Tex. 2011) (per curiam)).

Law

       We start with the general proposition that the parties to an agreement may

contractually agree to enter into arbitration. See § 171.001(a) (West 2011) (stating that

a written agreement to arbitrate is valid and enforceable if the agreement is to arbitrate

a controversy existing at the time of the agreement or arising after the date of the

agreement). An agreement to arbitrate is a creature of contract. See First Options of

Chi., Inc. v. Kaplan, 514 U.S. 938, 943, 115 S. Ct. 1920, 131 L. Ed. 2d 985 (1995).

Accordingly, the rules applicable to the interpretation and enforcement of contract apply

in determining the propriety of arbitration under a particular arbitration clause. Id. at

944.   In other words, the rules applicable to interpreting and enforcing contracts

determine the propriety of arbitration per the terms of the particular contract. As in any

contractual provision, an agreement to arbitrate can be waived. See Perry Homes, 258
S.W.3d at 593.

       Waiver is the intentional relinquishment of a known right. See In re Universal

Underwriters of Tex. Ins. Co., 345 S.W.3d 404, 407 (Tex. 2011).                Any such

relinquishment may be either expressly or impliedly made. See id. at 407 n.2. When

dealing with an implied relinquishment of a right, we are viewing acts that would warrant

an inference of the relinquishment of the right in question. See id. (citing Rolison v.

Puckett, 198 S.W.2d 74, 78 (Tex. 1946)).

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       Next, we note that there is a strong presumption against waiver of arbitration but

it is not irrebuttable. See Perry Homes, 258 S.W.3d at 584. The Perry Homes court

noted that it is a high hurdle to overcome. See id. Thereafter, the court noted that

conduct that would support an implied waiver must be unequivocal. See id. at 593.

One method of implied waiver is to substantially invoke the judicial process to the other

party’s detriment or prejudice. See id. at 589-90. Next, the Perry Homes case teaches

us that we must determine this issue by applying a totality-of-the-circumstances test on

a case-by-case basis. See id. at 591. Finally, we are instructed that substantially

invoking the judicial process does not waive arbitration rights unless the opposing party

proves that it suffered prejudice as a result. See id. at 595.

       In making this case-by-case determination, we are instructed to look at a number

of factors, such as:

       1. when the movant knew of the arbitration clause;

       2. how much discovery has been conducted;

       3. who initiated it;

       4. whether it related to the merits rather than arbitrability or standing;

       5. how much of it would be useful in arbitration; and

       6. whether the movant sought judgment on the merits.

Id. at 591-92.

Analysis

       In the case before the Court, there is no issue presented that Chavez expressly

waived the right to proceed to arbitration; rather, we must determine whether he did so

                                              8
by implication from his invocation of the judicial process. Accordingly, we now review

the totality-of-the-circumstances in this case. We must keep in mind that, in this totality-

of-the-circumstances review, we are reviewing the action of the trial court for an abuse

of discretion. See id. at 598.

       Turning to the principles enunciated in Perry Homes, we first note that the

evidence seems to be fairly strong that Chavez has known of the arbitration clause in

the premarital agreement since the date of execution of the agreement. Although there

is some correspondence between trial counsels in the early stages of the divorce

proceeding that might indicate Chavez did not know of the existence of the premarital

agreement, Chavez’s subsequent correspondence and actions have abandoned that

position. Looking at the extent of discovery, the only discovery that exists seems to

have emanated from Chavez and was directed at the issue of the premarital agreement.

Chavez deposed Brown and issued a request for production of documents. The record

would support the proposition that the discovery was aimed at the merits of Brown’s

position regarding the property division. Although Chavez presented a number of letters

where the issue of arbitration was discussed with opposing counsel, this process started

in December 2011 and, by April 2012, there was no arbitrator named. Yet, during this

entire period of time, Chavez never filed a motion to compel arbitration, which would

have been his next logical step in the process. After Brown changed attorneys, the new

attorney advised that she and her client were looking for trial dates in August and

September of 2012. However, Chavez still did not file a motion to compel arbitration. It

was only after a trial date had been secured that Chavez finally took the step of

                                             9
requesting the trial court to abate the scheduled proceeding and enforce the arbitration

clause.

       Based upon this record, the totality-of-the-circumstances supports the implied

findings made by the trial court, specifically that Chavez has waived his right to

arbitration by his substantial invocation of the judicial process. See id. at 591, 598.

However, this does not end our inquiry, as we must next ascertain whether or not

Chavez’s invocation of the judicial process has caused Brown to suffer some prejudice.

See id. at 595. The failure of Chavez to request the trial court to compel arbitration until

shortly before a trial setting resulted in Brown having suffered the expense, through

attorney’s fees, of replying to discovery, preparing for trial, and having a fully contested

trial. To now order arbitration would be a needless additional expense to the detriment

of Brown. We are also cognizant of the emotional toll that a pending divorce takes on

the litigants and this further buttresses the argument that Brown would suffer prejudice

should we allow Chavez to demand arbitration at the eleventh hour. See id. at 597

(citing Republic Ins. Co. v. PAICO Receivables, LLC, 383 F.3d 341, 346 (5th Cir. 2004),

as holding prejudice refers to the inherent unfairness in terms of delay, expense, or

damage to a party’s legal position when an opponent first seeks to litigate and then

switches to arbitration). The record before us supports the conclusion that Brown would

suffer prejudice if Chavez is allowed to demand arbitration at the last moment.

       Accordingly, we find that the totality-of-the-circumstances support the trial court’s

denial of the plea in abatement. See id. at 591. The trial court had sufficient evidence

before it to support its implied findings. See In re Alexis, 2012 Tex. App. LEXIS 10106,

at *17. Therefore, the trial court did not abuse its discretion in denying Chavez’s plea in

                                            10
abatement. See Perry Homes, 258 S.W.3d at 598. Chavez’s issues one and two are

overruled.

                               Brown’s Waiver of Arbitration

       Chavez presents a third issue for consideration that contends that Brown should

not be allowed to pursue litigation because she had substantially invoked the arbitration

clause. The record supports the fact that Chavez never presented this argument to the

trial court, neither at the hearing on the motion to abate nor in his motion for new trial.

Accordingly, nothing has been preserved for appeal. See Rule 33.1(a)(1)(A). Chavez’s

third issue is overruled.

                                        Conclusion

       Having overruled all of Chavez’s issues, the ruling of the trial court is affirmed.

                                                  Mackey K. Hancock
                                                     Justice

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