Court Opinion

ID: 5099548
Source: CourtListenerOpinion
Date Created: 2021-10-01 20:20:55.842669+00
Date Added: 2024-06-11T08:20:58.395344
License: Public Domain

JOHN HILL, Justice (Assigned),
dissenting.
I respectfully dissent, because the trial court abused its discretion by not referring this dispute to arbitration in accordance with the arbitration clause of the Settlement Agreement.
The real parties in interest sought to enforce their claims against GAF, claims *654that arose while carrying out the terms and conditions of the Settlement Agreement. As noted by the majority, the Settlement Agreement contains an arbitration provision that applies to “any disputes that may arise while carrying out the terms and conditions of this Agreement.”
The majority recognizes that this action is subject to the Federal Arbitration Act. See 9 U.S.C. §§ 1-16. Once a party seeking to compel arbitration establishes that an agreement exists under the FAA, and that the claims raised are within the agreement’s scope, the trial court has no discretion but to compel arbitration and stay its proceedings pending arbitration. See Cantella & Co., Inc. v. Goodwin, 924 S.W.2d 943, 944 (Tex.1996) (orig.proceeding). A presumption exists in favor of agreements to arbitrate under the FAA and courts must resolve any doubts about an agreement to arbitrate in favor of arbitration. Id. Whether this agreement imposes a duty tó arbitrate this particular dispute is a matter of contract interpretation and a question of law for the court. See American Employers’ Ins. Co. v. Aiken, 942 S.W.2d 156, 159 (Tex.App.—Fort Worth 1997, no writ). We must decide whether the trial court’s rulings were arbitrary and unreasonable, i.e., made without reference to any guiding rules or principles. Id.
The dispute between the parties in this action involves whether GAF is required to pay the real parties in interest when the Center for Claims Resolution has assessed its share due to the claimants, or whether it is not required to pay its share until its dispute with the Center over the amount of the assessment has been arbitrated in accordance with the Producers Agreement, the agreement among the several entities that make up the Center. This dispute arose while carrying out the terms and conditions of the Settlement Agreement. The majority makes no contention that it did not. Therefore, because the arbitration provision of the Settlement Agreement is applicable to any dispute that may arise while carrying out the terms and conditions of the agreement, the dispute is within the scope of the arbitration clause. Id. at 160. Consequently, the trial court abused its discretion by not submitting this dispute to arbitration as required by the Settlement Agreement. Id.
In construing a written contract, the primary concern of the court is to ascertain the true intentions of the parties as expressed in the instrument. See Coker v. Coker, 650 S.W.2d 391, 393 (Tex.1983). Courts should examine and consider the entire writing in an effort to harmonize and give effect to all the provisions of the contract so that none will be rendered meaningless. Id. If paragraph 7 and paragraph 12 are not in conflict, then the arbitration clause in paragraph 12 must be applicable because it applies to any dispute that may arise while carrying out the terms and conditions of the agreement.
Despite the fact that paragraph 12 by its terms is applicable to this dispute, the majority declines to apply it, asserting that paragraph 7 contains an alternative procedure for the enforcement of a claim against one of the Center’s member companies when it is in default for not paying its assessment. Basically, paragraph 7 provides two options for Plaintiffs’ attorneys when a Center member company is in default in paying an assessment pursuant to the Producers Agreement. In the first option, the Plaintiffs’ attorney may either continue the settlement as to the non-defaulting companies or declare the Settlement Agreement void as to all of the member companies. In this case, counsel for the real parties in interest opted to continue the settlement as to the non-defaulting companies. That being the case, counsel for the real parties in interest had a second option, the option to elect to enforce the defaulting company’s obligation under the Settlement Agreement, or to pursue its claim against that company in the tort system. Counsel chose the option of electing to enforce the defaulting company’s obligation under the Settlement Agree*655ment. In order to do so, it must proceed through arbitration as required by the agreement.
The majority concludes that the application of section 12 to this dispute in accordance with its terms would render paragraph 7 meaningless. In reaching this conclusion, the majority must have adopted the argument made by the real parties in interest that the Settlement Agreement did not intend for paragraph 12 to be applicable to disputes discussed in paragraph 7 because claims cannot be enforced through arbitration. I disagree with that conclusion. In the case of Alexander v. Gardner-Denver Co., 415 U.S. 36, 50, 94 S.Ct. 1011, 39 L.Ed.2d 147 (1974), the United States Supreme Court spoke of a party alleging racial discrimination as being able to enforce his claim through arbitration under a collective bargaining agreement or through federal district court under Title VII. The Settlement Agreement in this case, entered into in 1999, provides that payments under the Settlement Agreement are to be funded by the Center’s member companies under the terms of the Producers Agreement, as amended in 1994. It is reasonable to infer, then, that the parties to the Settlement Agreement were familiar with the terms of the Producers Agreement. That agreement provides, in Section XIV, paragraph 4, for the enforcement of payments of a member company’s obligations under the agreement through ADR, which appears to be arbitration. It is also true that arbitral awards are enforceable through the courts. See 9 U.S.C. § 13. Therefore, use of the terminology of enforcing a claim does not preclude the use of arbitration, and is not in conflict with the contract’s provision requiring arbitration in any dispute arising while carrying out the terms and conditions of the Settlement Agreement.
The real party in interest, in making its argument that claims are not enforced through arbitration, relies upon 9 U.S.C. § 13. This is a portion of the FAA relating to the enforcement of an arbitral award in federal court. While it is true that an arbitration award is not self-enforcing, I believe that the authority I have set forth indicates that in common usage claims may be said to be enforced through arbitration. Consequently, there is no inconsistency between paragraph 7 and paragraph 12. Therefore, this construction of the Settlement Agreement does not render paragraph 7 meaningless. If one continues to enforce a claim under the Settlement Agreement where one alleges that one of the member companies is in default, one has the option to pursue the claim under the Settlement Agreement, and therefore through arbitration, or to proceed under the tort system. This is a reasonable interpretation of the agreement.
I agree with the majority that the Settlement Agreement is unambiguous. I believe that it unambiguously requires that any dispute that arises while carrying out the terms and conditions of the agreement is to be submitted to arbitration, and that, because this is such a dispute, it must be submitted to arbitration. In the event that the Settlement Agreement may be reasonably construed to preclude arbitration of such a dispute, despite the fact that the arbitration provision specifically refers to “any dispute,” I submit that the agreement is ambiguous. As previously noted, we must resolve any doubt about an agreement to arbitrate in favor of arbitration. Therefore, if the agreement is ambiguous, the trial court abused its discretion by not resolving the ambiguity in favor of arbitration. I would conditionally grant the writ of mandamus.