Court Opinion

ID: 4392527
Source: CourtListenerOpinion
Date Created: 2019-05-01 12:39:20.83459+00
Date Added: 2024-06-11T14:51:57.487339
License: Public Domain

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

                                       NO. 03-19-00021-CV

                           Hi Tech Luxury Imports, LLC, Appellant

                                               v.

                               Townsend L. Morgan, Jr., Appellee

              FROM THE 345TH DISTRICT COURT OF TRAVIS COUNTY
                             NO. D-1-GN-18-002579,
             THE HONORABLE DUSTIN M. HOWELL, JUDGE PRESIDING

                             MEMORANDUM OPINION

               Appellant Hi Tech Luxury Imports, LLC (Hi Tech), appeals from the district

court’s order denying its motion to compel arbitration under the Federal Arbitration Act (FAA).

We will affirm the district court’s order.

                                         BACKGROUND

               Appellee Townsend L. Morgan, Jr., filed suit against Hi Tech, his former

employer, alleging wrongful termination and age discrimination in violation of Chapter 21 of the

Texas Labor Code. See Tex. Lab. Code § 21.051. After the case had been set for a jury trial, Hi

Tech filed a motion to compel arbitration. In the motion, Hi Tech asserted that the parties had

executed an agreement to arbitrate, and that Morgan’s claims fell within the scope of that

agreement. Morgan filed a response in opposition, arguing that the arbitration agreement was
invalid because Hi Tech had failed to sign it. Following a hearing on the matter, the district

court denied the motion to compel arbitration. This interlocutory appeal followed. See Tex. Civ.

Prac. & Rem. Code § 51.016.

                                  STANDARD OF REVIEW

               “We review a trial court’s order denying a motion to compel arbitration for abuse

of discretion.” Henry v. Cash Biz, LP, 551 S.W.3d 111, 115 (Tex. 2018) (citing In re Labatt

Food Serv., L.P., 279 S.W.3d 640, 642–43 (Tex. 2009)). “We defer to the trial court’s factual

determinations if they are supported by evidence but review its legal determinations de novo.”

Id. A party seeking to compel arbitration under the FAA must establish that (1) there is a valid

arbitration agreement, and (2) the claims in dispute fall within that agreement’s scope. In re

Rubiola, 334 S.W.3d 220, 223 (Tex. 2011). “Whether parties have agreed to arbitrate is a

gateway matter ordinarily committed to the trial court and controlled by state law governing ‘the

validity, revocability, and enforceability of contracts generally.’” Jody James Farms, JV v.

Altman Grp., Inc., 547 S.W.3d 624, 631 (Tex. 2018) (quoting Arthur Andersen LLP v. Carlisle,

556 U.S. 624, 631 (2009)). No presumption of arbitration exists until “after the party seeking to

compel arbitration proves that a valid arbitration agreement exists.” J.M. Davidson, Inc. v.

Webster, 128 S.W.3d 223, 227 (Tex. 2003). “The burden of establishing the existence of an

arbitration agreement is evidentiary and runs with the party seeking to compel arbitration.”

Fitness Entm’t Ltd v. Hurst, 527 S.W.3d 699, 703 (Tex. App.—El Paso 2017, pet. denied).

                                         DISCUSSION

               “Under Texas law, a binding contract requires: ‘(1) an offer; (2) an acceptance in

strict compliance with the terms of the offer; (3) a meeting of the minds; (4) each party’s consent

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to the terms; and (5) execution and delivery of the contract with intent that it be mutual and

binding.’” Huckaba v. Ref-Chem, L.P., 892 F.3d 686, 689 (5th Cir. 2018) (quoting In re Capco

Energy, Inc., 669 F.3d 274, 279-80 (5th Cir. 2012)). The only question in this case is whether

the parties intended that the arbitration agreement be mutual and binding, despite Hi Tech’s

failure to sign the agreement.

               “Contracts require mutual assent to be enforceable.” Baylor Univ. v. Sonnichsen,

221 S.W.3d 632, 635 (Tex. 2007). “Evidence of mutual assent in written contracts generally

consists of signatures of the parties and delivery with the intent to bind.” Id.; New York Party

Shuttle, LLC v. Bilello, 414 S.W.3d 206, 214 (Tex. App.—Houston [1st Dist.] 2013, pet. denied).

However, “while signature and delivery are often evidence of the mutual assent required for a

contract, they are not essential.” Phillips v. Carlton Energy Grp., LLC, 475 S.W.3d 265, 277

(Tex. 2015); see also Perez v. Lemarroy, 592 F. Supp. 2d 924, 931 (S.D. Tex. 2008) (“The

Federal Arbitration Act (‘FAA’) only requires that an arbitration clause be in writing, without

any requirement that an arbitration clause must be signed, thus, no signatures are necessary to

bind parties to an arbitration agreement.”). “Signatures are not required ‘[a]s long as the parties

give their consent to the terms of the contract, and there is no evidence of an intent to require

both signatures as a condition precedent to it becoming effective as a contract.’” Huckaba,
892 F.3d at 689 (quoting Perez, 592 F. Supp. 2d at 930–31).

               “A court can decide intent as a matter of law.” Id. (citing Tricon Energy Ltd. v.

Vinmar Int’l, Ltd., 718 F.3d 448, 454 (5th Cir. 2013)). “In construing a contract, a court must

ascertain the true intentions of the parties as expressed in the writing itself.” Italian Cowboy

Partners, Ltd. v. Prudential Ins. Co. of Am., 341 S.W.3d 323, 333 (Tex. 2011). “We begin this

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analysis with the contract’s express language.” Id. Unless that language is ambiguous, see id.,

“we end it there too,” Huckaba, 892 F.3d at 689.

               Here, the language of the contract provides unambiguous evidence of the parties’

intent to require both signatures as a condition precedent to enforcement of the agreement.

Although it is true, as Hi Tech observes, that the agreement is written primarily from the

employee’s perspective, the document repeatedly refers to both parties agreeing to the terms of

the contract. The agreement discusses the “mutual benefits” that arbitration can provide to “both

the Company and [Morgan],” and the agreement requires that “[Morgan] and the Company both

agree” that any disputes “between [Morgan] and the Company” shall be submitted to arbitration.

The agreement further provides that “[b]oth the Company and [Morgan] agree that any

arbitration proceeding must move forward under the Federal Arbitration Act” and that “[t]his is

the entire agreement between the Company and the employee.” The agreement also contains the

following statement, “I UNDERSTAND BY AGREEING TO THIS BINDING ARBITRATION

PROVISION, BOTH I AND THE COMPANY GIVE UP OUR RIGHTS TO TRIAL BY

JURY.” This language indicates that, by agreeing to arbitrate, both parties would be giving up

their rights to a jury trial, which suggests that the signatures of both parties would be required for

the agreement to be enforceable. Additionally, in the signature block at the bottom of the

agreement, there are lines for two signatures, one for the “Employee” and one for the “Manager”

of Hi Tech. There is also a line next to the Manager’s signature for the Manager to print his

name. Moreover, both signature lines appear below the following statement, “MY SIGNATURE

BELOW ATTESTS TO THE FACT THAT I HAVE READ, UNDERSTAND, AND AGREE

TO BE LEGALLY BOUND TO ALL OF THE ABOVE TERMS.” Thus, both parties were to

indicate their mutual assent to the terms of the arbitration agreement by signing the document.

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               Hi Tech did not sign the arbitration agreement, and the above language indicates

that the signatures of both Hi Tech and Townsend were required for the agreement to be

enforceable. The burden was on Hi Tech to prove the validity of the agreement, see Henry,
551 S.W.3d at 115; Fitness Entm’t Ltd., 527 S.W.3d at 703–04, and it failed to satisfy that

burden here. Accordingly, we cannot conclude that the district court abused its discretion in

denying Hi Tech’s motion to compel arbitration. See Huckaba, 892 F.3d at 691 (refusing to

enforce arbitration agreement in wrongful-termination case when employer failed to sign

agreement and concluding that enforcement would allow employer to “have it both ways—argue

that it did not intend to be bound because it did not sign the agreement or it did because it kept

the agreement and sought to compel arbitration”); see also Simmons & Simmons Constr. Co. v.

Rea, 286 S.W.2d 415, 416–17 (Tex. 1955) (concluding that signature block on contract and other

language in agreement was evidence that signatures of both parties were required); In re Bunzl

USA, Inc., 155 S.W.3d 202, 210–11 (Tex. App.—El Paso 2004, orig. proceeding) (same).

                                         CONCLUSION

               We affirm the district court’s order.

                                              __________________________________________
                                              Gisela D. Triana, Justice

Before Justices Goodwin, Baker, and Triana

Affirmed

Filed: April 30, 2019

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