Court Opinion

ID: 4571090
Source: CourtListenerOpinion
Date Created: 2020-09-30 06:12:28.872999+00
Date Added: 2024-06-11T09:28:01.294703
License: Public Domain

Affirmed and Opinion Filed September 23, 2020

                                      In the
                            Court of Appeals
                     Fifth District of Texas at Dallas
                               No. 05-20-00169-CV

  WORLDVENTURES MARKETING, LLC D/B/A WORLDVENTURES,
                      Appellant
                         V.
           TRAVEL TO FREEDOM, LLC, Appellee

               On Appeal from the 471st Judicial District Court
                            Collin County, Texas
                   Trial Court Cause No. 471-04088-2019

                        MEMORANDUM OPINION
                 Before Justices Molberg, Carlyle, and Browning
                           Opinion by Justice Carlyle

      In this interlocutory appeal, WorldVentures Marketing, LLC d/b/a

WorldVentures contends the trial court erred by denying its motion to compel

arbitration of claims brought against it by Travel to Freedom, LLC (TTF). We affirm

the trial court’s order in this memorandum opinion. See TEX. R. APP. P. 47.7.

                                   Background

      WorldVentures is a multilevel marketing company based in Plano, Texas. TTF

is a limited liability company formed in about 2012 by then-spouses Adelina Morton

and Donald Lee Morton, Jr. to act as a WorldVentures “Independent Representative.”
      Following their 2017 divorce, the Mortons disputed TTF’s right to

commissions from WorldVentures. In connection with that dispute, TTF filed this

July 2019 lawsuit against WorldVentures and Mr. Morton, asserting claims for

breach of contract, money had and received/unjust enrichment, declaratory relief,

conversion/theft, breach of fiduciary duty, and conspiracy/aiding and abetting.

      In its petition, TTF asserted (1) it “is the legal and rightful owner of the

business center associated with WorldVentures Representative Agreement No.

870603 (hereinafter the ‘TTF Agreement’) [and] has the right to receipt of all

commissions due and owing for products and services sold thereunder” and

(2) “WorldVentures’ actions grossly violate the TTF Agreement and accompanying

policies and procedures related to treatment of representative agreements owned by

spouses and changes related to same following separation or divorce,” including

section “7.1 Separation, Divorce, and Dissolution or Change of Ownership of a

Business Entity.” The petition also quoted several paragraphs from that described

section.

      WorldVentures filed a motion to abate and compel arbitration, contending

(1) TTF’s “Representative Agreement” with WorldVentures includes a provision

requiring mandatory arbitration of “[a]ll disputes and claims relating to” the

Representative Agreement and (2) TTF’s claims fall within the scope of that

provision. Attached to WorldVentures’ motion was a declaration of its chief legal

officer, Eric Haynes, in which he stated (1) “WorldVentures representatives based in

                                        –2–
the United States generally complete their Representative Agreement through an

electronic form, which requires the Representative to ‘clickthrough’ to accept the

Representative Agreement and Representative Terms and Conditions”; (2) “[a] true

and correct copy of a blank form of the Representative Agreement executed by

Plaintiff with the attached Representative Terms and Conditions are attached

hereto”; (3) “Plaintiff agreed to be bound by all such covenants and obligations

found in the Representative Agreement, Representative Terms and Conditions, and

WorldVentures Policies & Procedures”; and (4) “[a]ttached hereto as ‘Exhibit A-

3’. . . is a true and correct screenshot showing Plaintiff’s Representative Number

(870603) and confirming that Plaintiff did assent to all such covenants and

obligations, including the arbitration provision(s) contained therein.”

      The attachments to Mr. Haynes’ affidavit included a blank “WorldVentures

Representative Agreement” form that contained “Representative Terms and

Conditions” and stated “Revised January 26, 2019,” and a copy of “WorldVentures

Policies & Procedures” that stated “Effective February 21, 2019.” Both of those

documents contained arbitration provisions. The 2019 Policies & Procedures also

contained a section 7.1 identical to the quotation in TTF’s petition. The Exhibit A-3

screenshot stated, among other things, “ID #: 870603” and “TermsAndConditions:

Dismissed=true|LastActionDate=7/18/2012.”

                                         –3–
      In its response to WorldVentures’ motion to compel arbitration, TTF argued

in part (1) the Exhibit A-3 screenshot “does not on its face reflect that TTF agreed

to anything”; (2) “even if this screenshot somehow showed that TTF agreed to

WorldVentures’ Representative Agreement and Policies & Procedures on the date

indicated, July 18, 2012, the versions of WorldVentures’ Representative Agreement

and Policies & Procedures that it attached to its motion to compel arbitration, and

which form the basis of its motion, are both from 2019—a full seven years after TTF

purportedly agreed to the terms therein”; and (3) WorldVentures’ pre-2019

arbitration provisions are illusory and unenforceable under In re Halliburton Co., 80
S.W.3d 566 (Tex. 2002), because they do not state that WorldVentures’ right to

amend or modify the arbitration provision applies only retroactively and that some

form of notice must be given before a modification goes into effect.

      The attachments to TTF’s response included a blank WorldVentures

Representative Agreement form that stated “Ver. 5.1 Rev. 2011” and a copy of

WorldVentures Policies & Procedures that stated “Revised November 1, 2011,” both

of which contained arbitration provisions that, unlike the 2019 arbitration provisions,

did not include the clauses described in Halliburton. The 2011 Policies & Procedures

did not contain the section 7.1 quoted in TTF’s petition, but instead addressed

husband-wife partnerships and divorce in section 4.24, which was titled “Separation

of a WorldVentures Business” and contained terms that differed from the petition’s

quoted paragraphs.

                                         –4–
      TTF also attached an affidavit in which Ms. Morton testified (1) she has been

a manager and member in TTF since its formation, (2) TTF “did not sign” the 2019

Representative Agreement or Policies and Procedures, (3) she “do[es] not recall

agreeing electronically to be bound by all covenants and obligations found in

WorldVentures’ Representative Agreement, Representative Terms and Conditions

and Policies & Procedures,” and (4) “if TTF did in fact do so on July 18, 2012,” the

attached 2011 versions of those documents were the versions “in place” at that time.

      In a supplement to its motion to compel arbitration, WorldVentures asserted,

“Further substantiating Plaintiff’s continuous and repeated acceptance of the

mandate to arbitrate any claims it alleges to have against Defendant, Defendant

proffers relevant excerpts of its Policies & Procedures manuals in effect between

2011 and 2019, true and correct copies of which are attached hereto as Exhibit B.”

The attached Exhibit B consisted of arbitration provisions from six versions of

WorldVentures’ Policies & Procedures, revised, respectively, March 2013;

November 30, 2013; January 18, 2014; April 2014; October 2014; and June 2017.

All of those provisions were identical to the 2011 arbitration provisions.

      Following a hearing, the trial court signed an order denying WorldVentures’

motion to abate and compel arbitration without stating the basis for that ruling.

                                      Analysis

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

arbitration agreement and that the claims at issue fall within the scope of that

                                         –5–
agreement. See Henry v. Cash Biz, LP, 551 S.W.3d 111, 115 (Tex. 2018). We review

a trial court’s order denying a motion to compel arbitration for abuse of discretion.
Id. We defer to the trial court’s factual determinations if they are supported by

evidence but review its legal determinations de novo. Id.; Sidley Austin Brown &

Wood, LLP v. J.A. Green Dev. Corp., 327 S.W.3d 859, 863 (Tex. App.—Dallas 2010,

no pet.) (explaining that in reviewing denial of motion to compel arbitration, “we

apply a no-evidence standard to the trial court’s factual determinations and a de novo

standard to legal determinations”). A trial court abuses its discretion if it acts in an

arbitrary or unreasonable manner or without reference to any guiding rules or

principles. Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241–42 (Tex.

1985). There is no abuse of discretion when the court’s decision is based on

conflicting evidence, some of which reasonably supports the decision. RSR Corp. v.

Siegmund, 309 S.W.3d 686, 709 (Tex. App.—Dallas 2010, no pet.).

        In a nonjury proceeding where, as here, no findings of fact or conclusions of

law were filed or requested,1 we imply “all facts necessary to support the judgment

and supported by the evidence.” Retamco Operating, Inc. v. Republic Drilling Co.,

278 S.W.3d 333, 337 (Tex. 2009) (quoting BMC Software Belg., N.V. v. Marchand,

    1
      Though the parties’ appellate arguments describe oral “findings” recited by the trial court, a trial
court’s oral statements from the bench do not generally constitute findings of fact. See Intec Sys., Inc. v.
Lowrey, 230 S.W.3d 913, 918 (Tex. App.—Dallas 2007, no pet.) (“A court’s oral statements ‘cannot
substitute’ for findings and conclusions.”); Ifiesimama v. Haile, 522 S.W.3d 675, 684 (Tex. App.—Houston
[1st Dist.] 2017, pet. denied) (same). “Statements made by a trial court outside of properly filed written
findings and conclusions do not limit an appellate court’s review.” Larry F. Smith, Inc. v. The Weber Co.,
110 S.W.3d 611, 615 (Tex. App.—Dallas 2003, pet. denied).
                                                   –6–
83 S.W.3d 789, 795 (Tex. 2002)). If the implied findings are supported by the

evidence, we uphold the trial court’s judgment on any theory of law applicable to

the case. See Worford v. Stamper, 801 S.W.2d 108, 109 (Tex. 1990) (per curiam).

      “Assertions of fact, not pled in the alternative, in the live pleadings of a party

are regarded as formal judicial admissions.” Houston First Am. Savs. v. Musick, 650
S.W.2d 764, 767 (Tex. 1983). The consequence of a judicial admission is that the

admitted fact is conclusively established and the party is barred from later disputing

it. Id.; Horizon/CMS Healthcare Corp. v. Auld, 34 S.W.3d 887, 905 (Tex. 2000). To

constitute a judicial admission, there must be a “clear, deliberate, and unequivocal”

statement of fact. Horizon/CMS Healthcare, 34 S.W.3d at 905. A party waives the

right to rely upon an opponent’s judicial admissions unless the party objects to the

introduction of evidence contrary to those admissions. Marshall v. Vise, 767 S.W.2d
699, 700 (Tex. 1989).

      WorldVentures contends in four issues that the trial court committed reversible

error by denying its motion to abate and compel arbitration because there was a valid

agreement to arbitrate, TTF’s claims were within the scope of that agreement, and

the arbitration provision was not illusory. According to WorldVentures, (1) TTF’s

efforts “to artfully manufacture an evidentiary issue” fail, “as they ignore wholly

WorldVentures’ undisputed testimony that these agreements were electronic,

‘clickthrough’ agreements, and that the parties agreed to be bound by all the terms

of the 2019 documents”; (2) “TTF’s own pleadings also implicitly concede (and

                                         –7–
judicially admit) TTF’s consent to the so-called ‘2019 version’ of the agreements”

because “the language quoted in TTF’s Petition is only in the 2019 agreements, and

not in the 2012 agreements”; and (3) Halliburton should be limited to “employer–

employee disputes,” but even if its requirements apply here, “the ‘savings clauses’

set forth in the arbitration agreement in this case render the clause fully enforceable

nonetheless.”

      First, to the extent WorldVentures seeks to rely on a “judicial admission” that

TTF “consented to the 2019 agreements,” the record does not show that the section

7.1 quoted in TTF’s petition necessarily came from the 2019 documents. The

petition is silent as to what version of WorldVentures’ Policies & Procedures the

quotation is from. Although the quoted section does not appear in the 2011 version,

there were at least six additional versions in effect between 2012 and 2019. The

record includes only the arbitration provision portions of those documents and does

not show whether the quoted section 7.1 was unique to the 2019 version. Thus, the

petition does not contain a “clear, deliberate, and unequivocal” statement of fact

regarding consent to the 2019 agreements. See Horizon/CMS Healthcare, 34 S.W.3d

at 905. Moreover, the record shows WorldVentures asserted no objection to TTF’s

evidence that it did not consent to those agreements. Therefore, WorldVentures has

waived the right to rely on TTF’s purported judicial admission. See Marshall, 767
S.W.2d at 700.

                                         –8–
      Second, we address WorldVentures’ argument that the trial court’s ruling is

unsupported by the record “[b]ecause [Mr. Haynes’] testimony was undisputed, and

because TTF’s own Pleadings . . . expressly quoted from the 2019 documents as the

basis for TTF’s breach of contract claim.” As described above, the record does not

show TTF’s petition “expressly quoted from the 2019 documents.” As to Mr.

Haynes’ testimony, WorldVentures contends (1) “TTF’s affidavit averring that it did

not ‘sign’ the agreement, and that TTF’s sole witness, in her individual capacity

‘does not recall’ agreeing to the terms of the 2019 agreement, wholly ignores that

agreements can be reached without an actual ‘wet-signature’ on a paper document”

and (2) “the testimony of WorldVentures’ witness in this regard was undisputed—

the agreement was reached electronically, by ‘clickthrough,’ and the parties agreed

to all the terms and conditions of the 2019 documents.” Though Mr. Haynes testified

WorldVentures    representatives   “generally”   complete    their   Representative

Agreements “through an electronic form, which requires the Representative to

‘clickthrough’” to accept the agreement, his testimony did not address whether TTF

did so.

      We cannot agree Mr. Haynes’ statements constitute “undisputed” testimony

that “the agreement was reached electronically, by ‘clickthrough.’” Rather, Mr.

Haynes attached a blank copy of the 2019 version to his affidavit and stated TTF

“executed” that version. TTF disputed that contention with evidence that it “did not

sign” the 2019 version. Mr. Haynes also stated TTF “agreed to be bound by all such

                                        –9–
covenants and obligations found in the Representative Agreement, Representative

Terms and Conditions, and WorldVentures Policies & Procedures,” but that

statement did not specify which versions were agreed to and thus does not

conclusively demonstrate agreement to the 2019 versions.

      Finally, it is undisputed that none of WorldVentures’ pre-2019 arbitration

provisions in the record comply with Halliburton’s requirements. Though

WorldVentures contends Halliburton should be limited to the employer–employee

context and thus is inapplicable here, it cites no authority for that position and we

have found none. See Morrison v. Amway Corp., 517 F.3d 248, 257 (5th Cir. 2008)

(applying Halliburton requirements in lawsuit by distributors against multilevel

marketing corporation). We conclude WorldVentures’ pre-2019 arbitration clauses in

the record are illusory and unenforceable. See Halliburton, 80 S.W.3d at 569–70.

      Because the record reasonably supports a determination that there was no

enforceable arbitration agreement between TTF and WorldVentures, we conclude

the trial court did not abuse its discretion by denying the motion to abate and compel

arbitration. See RSR Corp., 309 S.W.3d at 709. We affirm the trial court’s order.

                                                    /Cory L. Carlyle/
                                                    CORY L. CARLYLE
                                                    JUSTICE
200169F.P05

                                        –10–
                            Court of Appeals
                     Fifth District of Texas at Dallas
                                   JUDGMENT

WORLDVENTURES                                  On Appeal from the 471st Judicial
MARKETING, LLC D/B/A                           District Court, Collin County, Texas
WORLDVENTURES, Appellant                       Trial Court Cause No. 471-04088-
                                               2019.
No. 05-20-00169-CV           V.                Opinion delivered by Justice Carlyle.
                                               Justices Molberg and Browning
TRAVEL TO FREEDOM, LLC,                        participating.
Appellee

       In accordance with this Court’s opinion of this date, the judgment of the trial
court is AFFIRMED.

       It is ORDERED that appellee TRAVEL TO FREEDOM, LLC recover its
costs of this appeal from appellant WORLDVENTURES MARKETING, LLC
D/B/A WORLDVENTURES.

Judgment entered this 23rd day of September, 2020.

                                        –11–