Court Opinion

ID: 4042425
Source: CourtListenerOpinion
Date Created: 2016-09-28 23:04:59.815582+00
Date Added: 2024-06-11T14:29:39.639679
License: Public Domain

ACCEPTED
                                                                    03-14-00782-CV
                                                                            3837772
                                                           THIRD COURT OF APPEALS
                                                                     AUSTIN, TEXAS
                                                               1/21/2015 9:02:50 AM
                                                                   JEFFREY D. KYLE
                                                                              CLERK
                     No. 03-14-00782-CV
                ____________________________
                                                    FILED IN
                                             3rd COURT OF APPEALS
           IN   THE THIRD COURT OF APPEALS AUSTIN, TEXAS
                     AT AUSTIN, TEXAS        1/21/2015 9:02:50 AM
                ____________________________   JEFFREY D. KYLE
                                                     Clerk
           SANTANDER CONSUMER USA, INC.
                    Appellant,

                             V.

MARIO A. MATA, CENTROPLEX AUTOMOBILE RECOVERY, INC.,
  BLAKE THORNTON VANDUSEN, JOHN F. THOMPSON D/B/A
 CENTROPLEX AUTOMOBILE RECOVERY, INC., AND REDSHIFT
                  INVESTIGATION, INC.
                         Appellees.
               ____________________________

                      Appealed from the
                      rd
                  353 Judicial District Court
                     Travis County, Texas
                 Cause No. D-1-GN-13-000677
                ____________________________

                JOINT BRIEF OF APPELLEES
                ____________________________
KAREN C. BURGESS
State Bar No. 00796276
STACY ROGERS SHARP
State Bar No. 24052109
Email: kburgess@richardsonburgess.com
Email: ssharp@richardsonburgess.com
Richardson + Burgess LLP
221 West 6th Street, Suite 900
Austin, Texas 78701-3445
Telephone: (512) 482-8808
Facsimile: (512) 499-8886
ATTORNEYS FOR APPELLEES
CENTROPLEX AUTOMOBILE
RECOVERY, INC. AND JOHN F.
THOMPSON

JOHN S. KENEFICK
State Bar No. 24006294
Email: jkenefick@macdonalddevin.com
JOHN R. SIGETY
State Bar No. 24083853
Email: jsigety@macdonalddevin.com
Macdonald Devin, PC
1201 Elm Street, Suite 3800
Dallas, Texas 75270-2130
Telephone: (214) 744-3300
Facsimile: (214) 747-0942
ATTORNEYS FOR APPELLEE
BLAKE THORNTON VANDUSEN

  ii
CHRISTOPHER A. LOTZ
State Bar No. 24031630
Email: clotz@lstlaw.com
DAVID L. TREAT
State Bar No. 20205300
Email: dlt@lstlaw.com
Lindow ▪ Stephens ▪ Treat LLP
One Riverwalk Place
700 North St. Mary’s Street, Suite 1700
San Antonio, Texas 78205
Telephone: (210) 227-2200
Facsimile: (210) 227-4602
ATTORNEYS FOR APPELLEE
REDSHIFT INVESTIGATION INC.

  iii
                                         TABLE OF CONTENTS

 
TABLE OF CONTENTS ...................................................................................... iv
INDEX OF AUTHORITIES ...................................................................................v
STATEMENT OF THE CASE ...............................................................................1
ISSUE PRESENTED ...............................................................................................2
STATEMENT OF FACTS ......................................................................................2
SUMMARY OF THE ARGUMENT .....................................................................4
ARGUMENT ............................................................................................................5
         I.     Santander and Cross-Defendants have executed no arbitration
                agreement. ................................................................................................5
         II.    Cross-Defendants cannot be compelled to arbitrate under the agreement
                between Mata and Santander. ..................................................................7
                         A. Arbitration cannot be compelled because Cross-Defendants
                            are not parties to the Sale Contract...........................................7
                         B. None of the exceptions that would allow nonsignatories to be
                            compelled to arbitration applies here. ......................................9
         III. Plaintiff never served the Centroplex Defendants, so only cross-claims
              exist against them, and Santander agrees those are not arbitrable. .......15
         IV. The Court Should Award Reasonable Fees to Cross-Defendants. ........16
PRAYER .................................................................................................................18
CERTIFICATE OF COMPLIANCE ..................................................................22
CERTIFICATE OF SERVICE ............................................................................22
APPENDIX .............................................................................................................vi

                                                            iv
                                         INDEX OF AUTHORITIES

Cases 
Bob Montgomery Chevrolet, Inc. v. Dent Zone Co., 409 S.W.3d 181 (Tex. App.—
 Dallas 2013, no pet.). ............................................................................................12

Bridas S.A.P.I.C. v. Gov’t of Turkm., 345 F.3d 347 (5th Cir. 2003) .......... 10, 11, 14

Carr v. Main Carr Dev., LLC, 337 S.W.3d 489 (Tex. App.—Dallas 2011, pet.
 denied). ..................................................................................................................11

E. Tex. Med. Ctr. Reg’l Healthcare Sys. v. Slack, 916 F. Supp. 2d 719 (E.D. Tex.
  2013) .....................................................................................................................14

Gililland v. Taylor Inv., No. 11-03-00175-CV, 2004 WL 2126755 (Tex. App.—
 Eastland Sep. 23, 2004, pet. denied). ............................................................. 16, 17

Hunt v. CIT Grp./Consumer Fin., Inc., 03-09-00046-CV, 2010 WL 1508082 (Tex.
 App.—Austin Apr. 15, 2010, pet. denied) (mem. op.) ............................ 19, 20, 21

In re Kellogg Brown & Root, Inc., 166 S.W.3d 732 (Tex. 2005) (orig. proceeding)
  .......................................................................................................................... 6, 10

In re Merrill Lynch Trust Co. FSB, 235 S.W.3d 185 (Tex. 2007) ........... 6, 8, 14, 15

Jenkens & Gilchrist, P.C. v. Riggs, 87 S.W.3d 198 (Tex. App.—Dallas 2002, no
  pet.) .......................................................................................................................16

Keytrade USA, Inc. v. AIN Temouchent M/V, 404 F.3d 891 (5th Cir. 2005) ..........13

Kvaerner ASA v. Bank of Tokyo-Mitsubishi, Ltd., 210 F.3d 262 (4th Cir. 2000)....13

McMillan Comp. Translation Sys., 66 S.W.3d 477 (Tex. App.—Dallas 2001, no
 pet.) .......................................................................................................................16

One Beacon Ins. Co. v. Crowley Marine Servs., Inc., 648 F.3d 258 (5th Cir. 2011)
 ........................................................................................................................ 11, 12

                                                                v
SEB Inc. v. Campbell, No. 03-10-00375-CV, 2011 WL 749292 (Tex. App.—
 Austin Mar. 2, 2011, no pet.)(mem. op). ....................................................... 16, 17

Smith v. Brown, 51 S.W.3d 376 (Tex. App.—Houston [1st Dist.] 2001, pet. denied)
 ...............................................................................................................................20

Volt Info. Scis., Inc. v. Bd. of Trs. of Leland Stanford Junior Univ., 489 U.S. 468
 (1989). .....................................................................................................................6

Statutes 
TEX. CIV. PRAC. & REM. CODE ANN. § 16.003(a). ...................................................17

                                                               vi
                        STATEMENT OF THE CASE

            Mario Mata claims he was injured during the repossession of his

Chevrolet Suburban when he grasped hold of the rear bumper of the vehicle. (See

CR 6 at ¶11.)     Mata brings tort, contract, and DTPA claims, alleging the

repossession should not have occurred because he paid off the Suburban in full.

(Id. ¶¶ 10–11.)   Mata financed his purchase of the Suburban through a Sale

Contract he executed with Appellant–Defendant Santander’s predecessor. (See CR

71-72.) The Sale Contract had an arbitration agreement. (CR 76-80.)

            Mata filed suit against and served Santander, Redshift Investigation,

Inc. (“Redshift”), and repossession agent Blake Vandusen. Mata did not serve the

remaining named Defendants. After the limitations period expired on Mata’s

claims, Santander brought Centroplex Automobile Recovery, Inc. (“Centroplex”)

and Centroplex’s president, John Thompson, into the case by asserting cross-

claims for contribution and indemnification against Centroplex, Thompson,

Redshift, and Vandusen (collectively, “Cross-Defendants”).            (CR 47-54.)

Santander then moved to compel both Plaintiff and Cross-Defendants to

arbitration. (CR 65.) The Cross-Defendants opposed the motion on the grounds

that they had not signed an arbitration agreement with any party to the case. The

trial court granted Santander’s motion to compel as to Mata and ruled that the

Cross-Defendants could not be forced to arbitrate. (CR 251-55.)

                                        1
                              ISSUE PRESENTED

      Under the Federal Arbitration Act as applied in Texas, arbitration requires

consent of all parties. An auto-finance company contracted with independent

repossession agents without an arbitration provision. Years later, it added an

arbitration clause to its contracts with car buyers. The repossession agents never

signed or saw the consumer contracts. In a car buyer’s suit against the auto

company and repossession agents, can the auto-finance company compel the

repossession agents to arbitration?

                           STATEMENT OF FACTS

      I.     The Service and Recovery Agreements

             Santander, under the assumed name of Drive Financial (collectively,

“Santander”) contracted with Redshift’s predecessor, Bay City, (collectively,

“Redshift”) to handle repossession of vehicles Santander financed. (CR 70.) This

Service Agreement was executed in early December 2002 and expressly

designated Redshift an independent contractor of Santander. (CR 81 at ¶ 2.)

             Redshift later executed a Collateral Recovery Agreement to outsource

some of its repossession assignments to Centroplex.        (CR 140-52.)       When

Santander ordered repossession of Mata’s Suburban, Redshift tasked Centroplex

with the job, and Centroplex sent Mr. Vandusen to pick it up. (CR 119 at ¶ 6.)

                                        2
             It is undisputed that neither the Service Agreement nor the Recovery

Agreement contains an arbitration provision. (1 RR 10; see CR 81-85; 140-52.)

      II.    The Sale Contract between Mata and Santander

             Mata financed the purchase of his Chevrolet Suburban through a Sale

Contract with Capitol Chevrolet (now Santander). The two parties executed the

agreement for sale and financing of the vehicle on December 28, 2002. (CR 71-

72.) They amended the Sale Contract in June 2009, adding an arbitration

agreement governed by the Federal Arbitration Act (“FAA”). (CR 75-80.)

             It is undisputed that no Cross-Defendant was party to the original or

amended Sale Contract, or even saw it. (See Appellant’s Br. at 8; 1 RR 15.)

      III.   The Arbitration Provision

             The Sale Contract is the only contract between any of the parties that

includes an arbitration provision, and it is undisputed that none of the Cross-

Defendants were party to the Sale Contract. (See Appellant’s Br. at 8.) Indeed,

Santander has stipulated that the Cross-Defendants had never seen the Sale

Contract before Santander brought them into this suit. (1 RR 15 (“I can stipulate

that these co-defendants had never seen the contract between my client and Mr.

Mata.”).)

             Neither the Service Agreement nor the Recovery Agreement contains

a reference to the Sale Contract. (CR 81-85; 140-52.)

                                         3
                      SUMMARY OF THE ARGUMENT

             The right to trial by jury requires that arbitration not be ordered

against a litigant without the litigant’s consent. The Cross-Defendants have never

waived this right, so the trial court correctly denied Santander’s motion to compel

arbitration as to the Cross-Defendants.      The relevant facts in this appeal are

undisputed: The only contracts signed by any Cross-Defendant in this case contain

no arbitration provision, and the Cross-Defendants neither saw nor consented to

the Sale Contract between Mata and Santander that did contain an arbitration

provision.

             Settled law requires that a party sign an arbitration agreement in order

to be compelled to arbitrate, and the Cross-Defendants were not signatories to the

Sale Contract. Santander seeks to circumvent this rule by citing two of the rule’s

narrow exceptions—but even the case law Santander cites proves that neither

exception applies.   First, the “incorporation by reference” exception requires

language incorporating the arbitration contract. Santander cites no provision in

either the Service Agreement or Recovery Agreement that makes any reference to

the Sale Contract, original or amended. Second, the “agency” exception applies

only when an agent signs an arbitration agreement on behalf of a principal, and

Santander does not claim that it is an agent for the Cross-Defendants. It instead

                                         4
tries to avoid this problem by relying on a body of cases that do not involve

compelling a nonsignatory to arbitration.

              Santander executed no arbitration agreement with the Cross-

Defendants.    When contracting for the outsourcing of repossession services,

Santander did not even include an arbitration provision in that contract. Indeed,

Santander conceded to the trial court that it could not compel arbitration as to the

cross-claims in this case. Yet, after losing at the trial court, Santander now renews

its meritless attempt to compel the Cross-Defendants to arbitrate. Like its trial

brief, its appellate brief is void of any support in the facts or law that would allow,

much less persuade, a court to order arbitration against nonparties to an arbitration

agreement.

              The trial court correctly applied the law and facts and declined to

order the Cross-Defendants to arbitrate. The holding should be affirmed, and fees

should be assessed against Santander.

                                   ARGUMENT

I.    Santander and Cross-Defendants have executed no arbitration
      agreement.

              Because Santander and Cross-Defendants have never entered into an

arbitration agreement, Santander cannot compel them to arbitration.           A party

seeking to compel arbitration under the FAA bears the burden of proving that: “(1)

                                          5
there is a valid arbitration agreement, and (2) the claims raised fall within that

agreement’s scope.” In re Kellogg Brown & Root, Inc., 166 S.W.3d 732, 737

(Tex. 2005) (orig. proceeding). “However, the presumption arises only after the

party seeking to compel arbitration proves that a valid arbitration agreement

exists[.]” Id. at 737 (internal quotations omitted). Under the FAA, ordinary

principles of state contract law determine whether there is a valid agreement to

arbitrate, and the Texas Supreme Court has clarified that these principles mean that

the FAA generally “does not require parties to arbitrate when they have not agreed

to do so.” Id. at 738 (quoting Volt Info. Scis., Inc. v. Bd. of Trs. of Leland Stanford

Junior Univ., 489 U.S. 468, 478 (1989)).

             This rule protects litigants’ constitutional right to trial by jury, which

is shared by plaintiffs and defendants alike. TEX. CONST. art. V, § 10 (“In the trial

of all causes in the District Courts, the plaintiff or defendant shall, upon application

made in open court, have the right of trial by jury”). Cross-Defendants intend to

try this case before a jury, and have at no point waived their right to do so.

             Santander seeks to compel Cross-Defendants to arbitration simply

because it contracted with the Plaintiff to arbitrate. “But the right to a jury trial is

not discretionary. . . . If the parties have not agreed to arbitration, no trial court has

discretion to make them go. . . .” In re Merrill Lynch Trust Co. FSB, 235 S.W.3d
185, 193 (Tex. 2007). There is no arbitration agreement between Santander and

                                            6
Cross-Defendants. Only one contract between Santander and any Cross-Defendant

is in the record—the Service Agreement—and it contains no arbitration provision.

If Santander sought to arbitrate suits involving repossession with its repossession

contractors, it could have contracted for arbitration rights in the Service

Agreement—or it could have included language expressly incorporating its sale

and financing contracts. When given the opportunity, Santander chose not to

include or incorporate an arbitration provision in the Service Agreement.

             Without an agreement to arbitrate between Santander and the Cross-

Defendants, binding contract principles prevent Santander from compelling Cross-

Defendants to arbitrate this suit.

II.   Cross-Defendants cannot be compelled to arbitrate under the
      agreement between Mata and Santander.

             Lacking an agreement to arbitrate with Cross-Defendants, Santander

attempts to compel arbitration based on the Sale Contract it executed with Plaintiff.

The Sale Contract is the sole document in the record that contains an arbitration

agreement, but Cross-Defendants are not signatories to it. And no exception to the

rule against compelling nonsignatories to arbitration applies here.

      A.     Arbitration cannot be compelled because Cross-Defendants are
             not parties to the Sale Contract.

             Cross-Defendants cannot be bound by the arbitration agreement in the

Sale Contract between Plaintiff and Santander because they did not agree to it.

                                          7
Under the FAA, the United States Supreme Court “has repeatedly emphasized that

arbitration is a matter of consent, not coercion.” In re Merrill Lynch Trust, 235
S.W.3d at 187 (internal citations omitted). The FAA “does not require parties to

arbitrate when they have not agreed to do so.” Id.

               The mere fact that some parties must arbitrate has never permitted the

court to steer the remaining parties into arbitration, too. See id. Where a plaintiff

asserted claims against both a company’s employees and its corporate affiliates and

all defendants moved to compel arbitration, the Texas Supreme Court held that

claims against the former could be compelled, but that the claims against the

affiliates could not. Id. at 187. Recognizing the inefficiency that is “inherent in

resolving these related issues in two different places,” the Court nonetheless ruled

that “interdependent” conduct of corporate defendants was not sufficient for

compelling arbitration. Id. at 192. Despite their relationship, “a contract with one

corporation—including a contract to arbitrate disputes—is generally not a contract

with any other corporate affiliates.” Id. at 191.1

               The Texas Supreme Court has thus refused to create an exception

simply for convenience’s sake. See id. at 192 (“efficiency and convenience cannot

override either a signatory’s arbitration agreement or a nonsignatory’s right to a

1
 As described in Section B(2), the case at bar lacks an additional key requirement for arbitration:
consent. Cross-Defendants are not nonsignatories seeking to enforce an arbitration agreement;
they are nonsignatories that Santander seeks to compel to arbitration without their consent.

                                                8
jury trial.”). Santander has now conceded that the Cross-Defendants were not

parties to the Sale Contract. (Appellant’s Br. at 8.) It has even stipulated that

Cross-Defendants had never seen the Sale Contract before this lawsuit

commenced. (1 RR 15.) The Cross-Defendants cannot be forced to arbitrate based

on an agreement between two outside parties,	 especially when Cross-Defendants

did not even know that agreement existed.

      B.      None of the exceptions that would allow nonsignatories to be
              compelled to arbitration applies here.

              There are six exceptions to the rule that nonsignatories cannot be

bound to an arbitration agreement—none of which apply here. These exceptions

are: (1) incorporation by reference, (2) assumption, (3) agency, (4) alter ego, (5)

equitable estoppel, and (6) third-party beneficiary. Kellogg Brown & Root, 166
S.W.3d at 739 (citing Bridas S.A.P.I.C. v. Gov’t of Turkm., 345 F.3d 347, 356 (5th

Cir. 2003)). On appeal, Santander argues that two of these exceptions apply. But

the Cross-Defendants did not sign a contract incorporating the Sale Contract by

reference, and the agency exception to compelling nonsignatory arbitration is

inapposite.

           1. Santander waived the incorporation-by-reference exception and,
              in any event, the exception does not apply to the Agreements here.

              Santander raises the “incorporation by reference” doctrine for the first

time on appeal.       Despite Cross-Defendants’ briefing enumerating the six

                                          9
exceptions above, Santander never invoked the incorporation exception to the trial

court, either in its briefing or at the hearing. Accordingly, the trial court had no

opportunity to rule on this basis, and the ground for appeal is waived. See TEX. R.

APP. P. 33.1(a)(1); e.g. Bridas, 345 F.3d at 356 (holding party failed to preserve

incorporation-by-reference and assumption arguments); Carr v. Main Carr Dev.,

LLC, 337 S.W.3d 489, 494 (Tex. App.—Dallas 2011, pet. denied)(when

considering nonsignatory exception to arbitration, holding that “[b]ecause Carr did

not raise the agency issue in the court below, it has not been preserved for our

review.”)

            The incorporation-by-reference exception, even if preserved, would

not apply. Cross-Defendants executed no agreement that incorporated the Sale

Contract between Plaintiff and Santander,	or that incorporated any other arbitration

agreement. Terms are incorporated by reference only if “it is clear that the parties

to the agreement had knowledge of and assented to the incorporated terms.” One

Beacon Ins. Co. v. Crowley Marine Servs., Inc., 648 F.3d 258, 268 (5th Cir. 2011).

“The language in the signed document must show the parties intended for the other

document to become part of the agreement.” Bob Montgomery Chevrolet, Inc. v.

Dent Zone Cos., 409 S.W.3d 181, 189 (Tex. App.—Dallas 2013, no pet.). But

Santander stipulates that the Cross-Defendants had never seen the Sale Contract.

(1 RR 15.) They could not possibly have “ha[d] knowledge of” or “assent[ed]” to

                                        10
the Sale’s Contract terms, see One Beacon Ins. Co., 648 F.3d at 268, and Santander

has not argued that they did.     (Cf. 1 RR 17) (describing Cross-Defendant’s

knowledge as “irrelevant”). Neither the Service Agreement nor the Recovery

Agreement contains the barest mention of the Sale Contract, so the Agreements’

“language” cannot even arguably “show the parties intended for the [Sale Contract]

to become part of” those Agreements. See Bob Montgomery Chevrolet, Inc., 409
S.W.3d at 189.

            The provisions Santander quotes from the Service and Recovery

Agreements do not, explicitly or implicitly, incorporate or even reference the Sale

Contract. The Service Agreement’s quoted provisions specify an intent to perform

recovery services for Santander’s accounts, and the Recovery Agreement’s quoted

provisions state the intent for Centroplex to receive recovery assignments from

Redshift. (See Appellant’s Br. at 15.) In stark contrast, the agreements in the two

cases Santander relies upon do contain incorporation provisions. In the first case,

the nonsignatory’s contract specified that “all terms and conditions, liberties and

exceptions . . . including the Law and Arbitration Clause, are herewith

incorporated.” Keytrade USA, Inc. v. AIN Temouchent M/V, 404 F.3d 891, 896–

97 (5th Cir. 2005) (emphasis added). In the second case, the nonsignatory’s

contract explicitly “guaranteed . . . each and every obligation” and adopted “the

same rights and remedies” as under the specific contract containing the arbitration

                                        11
provision. See Kvaerner ASA v. Bank of Tokyo-Mitsubishi, Ltd., 210 F.3d 262,

264–65 (4th Cir. 2000).     In both cases, the nonsignatory’s contract explicitly

incorporated the contract containing the arbitration provision by name.

             The Agreements Cross-Defendants signed are not even arguably

analogous to the contracts in Keytrade or Kvaerner. No intent to incorporate the

Sale Contract is reflected in this record. The incorporation-by-reference exception

was not preserved for appeal and, in any event, is inapplicable here.

         2. Santander’s use of the agency exception has no basis in law or
            fact.

             Santander cannot—and does not—argue that it was an agent of Cross-

Defendants, so the agency exception does not apply. And none of the authority

cited by Santander involved compelling a nonsignatory to arbitration, so its novel

reverse-agency theory, even if adopted, would not change the result here.

             a. The agency exception would only apply if Santander were an
                agent of Cross-Defendants, which it has not alleged to be.

             The agency exception binds a nonsignatory only when a party to the

arbitration agreement signed as the agent of the nonsignatory. See Bridas, 345
F.3d at 356–57. The authority to bind the nonsignatory must exist at the time of

signing. See id. at 358. An ongoing relationship is not sufficient; Santander “has

the burden of proving [the signatory] signed the Agreement as an agent of [the

nonsignatory] and not for themselves alone.” See, e.g., E. Tex. Med. Ctr. Reg’l

                                         12
Healthcare Sys. v. Slack, 916 F. Supp. 2d 719, 722 (E.D. Tex. 2013) (“Defendants

. . . argue that [the nonsignatory] has an agency relationship [because it is] a

wholly owned subsidiary [of the signatory].         A corporate relationship alone,

however, is generally not sufficient to bind a non-signatory to an arbitration

agreement.”)

             To satisfy the agency exception, Santander would have to show that,

while executing the sale and financing of Mata’s vehicle, Santander signed the Sale

Contract as an agent of one of the past or future entities handling repossession

services for Santander’s vehicles. Santander had no authority to bind any of the

Cross-Defendants while financing Mata’s vehicle.	 	 Accordingly, even Santander

does not argue that it acted as an agent for Cross-Defendants.

             b. Santander’s authority is inapposite.
                	
             Instead, in an attempt to shoehorn this case into the one doctrine that it

preserved for appeal, Santander makes a mirror-image agency argument.

Santander’s inverted logic urges that its vicarious liability for Cross-Defendants’

conduct made Cross-Defendants “agents” of Santander for purposes of the

nonsignatory arbitration exception.     But agency law has never overridden the

constitutional requirement that all parties consent to arbitration. Whether Cross-

Defendants acted as agents of Santander when repossessing the Suburban in 2011

cannot retroactively and forcibly make Cross-Defendants parties to an arbitration

                                          13
agreement executed two years earlier. “If the parties have not agreed to arbitration,

no trial court has discretion to make them go.” Merrill Lynch Trust, 235 S.W.3d at

192.

              Santander cites several nonbinding cases in an attempt to advance its

agency argument.         But none of these cases even involves compelling a

nonsignatory to arbitration. Instead, Santander’s cases all involve the reverse—a

nonsignatory who seeks to invoke an arbitration agreement.2 SEB and Gililland,

for example, both held a nonsignatory employee of its signatory employer could

compel arbitration against the other signatory to the agreement. SEB, 2011 WL
749292 at *4; Gililland, 2004 WL 2126755 at *3–4. They did not hold that the

employee could be forced to arbitrate against his will. See id.

              “Arbitration agreements apply to nonsignatories only in rare

circumstances.” Bridas, 345 F.3d at 358. If an arbitration agreement applied to

every nonsignatory who contracted to perform services for a signatory company,

the exception would swallow the rule. And it plainly would not satisfy the basic

2
  See SEB Inc. v. Campbell, No. 03-10-00375-CV, 2011 WL 749292, *4 (Tex. App.—Austin
Mar. 2, 2011, no pet.)(mem. op); Jenkens & Gilchrist, P.C. v. Riggs, 87 S.W.3d 198, 202–03
(Tex. App.—Dallas 2002, no pet.); McMillan Comp. Translation Sys., 66 S.W.3d 477, 481 (Tex.
App.—Dallas 2001, no pet.) (holding agents of signatory “were entitled to the benefit of the
arbitration agreement for these claims”); Gililland v. Taylor Inv., No. 11-03-00175-CV, 2004
WL 2126755, *3–4 (Tex. App.—Eastland Sep. 23, 2004, pet. denied). Moreover, Jenkens &
Gilchrist held the law firm seeking to enforce its client’s agreement was not an “agent” of its
client because the firm was an independent contractor. 87 S.W.3d at 202. Similarly, in the case
at bar, the sole contract Santander executed with any of the Cross-Defendants expressly
designated Redshift an independent contractor. (CR 81.)

                                              14
consent requirement of an arbitration agreement. See In re Merrill Lynch Trust,
235 S.W.3d at 187. No case has so curtailed the right to jury trial.

              The agency exception only operates to compel a party to arbitration

when the signatory was acting, at the time of signing, as an agent of a principal.

Because Santander plainly—and undisputedly—did not sign the Sale Contract on

behalf of the Cross-Defendants, the exception does not apply. There is nothing in

the record showing that Cross-Defendants intended to consent to arbitration. They

cannot now be compelled to arbitrate this suit under either of the two proffered

exceptions.

III.   Plaintiff never served the Centroplex Defendants, so only cross-claims
       exist against them, and Santander agrees those are not arbitrable.

              Centroplex     and    Thompson       (collectively,   “the   Centroplex

Defendants”) cannot be compelled to arbitration because, even if the Court

accepted Santander’s novel arguments, there are no arbitrable claims against them.

Santander concedes that the cross-claims in this case cannot be compelled to

arbitration. (1 RR 7 (“I don’t believe that my client can compel arbitration as to

the cross-claims. It’s only those claims that are asserted by the plaintiff against all

of the defendants.”).) Its motion to compel therefore never sought to compel the

cross-claims to arbitration. (CR 65 (moving to compel only Plaintiff’s claims

against the Defendants); 1 RR 34 (“If we were seeking to have the cross-claims

arbitrated, yes, then that would be at issue today.”).)

                                          15
            As to the Centroplex Defendants, though, cross-claims are the only

claims pending because Plaintiff has never served the Centroplex Defendants with

any claims against them. The limitations period has passed in this case. The

repossession Plaintiff complains of occurred on February 23, 2011, (CR 6 at ¶ 11,)

so the two-year statute of limitations for personal injury expired on February 23,

2013. See TEX. CIV. PRAC. & REM. CODE ANN. § 16.003(a). The record reflects

that Plaintiff has never served the Centroplex Defendants with any claims, and

Santander waited until after limitations expired to serve the Centroplex Defendants

with its claims.		There are not now, and never will be, claims by Plaintiff against

the Centroplex Defendants in this case.

            The cross-claims are the only live claims against the Centroplex

Defendants, and Santander correctly chose not move to compel the cross-claims to

arbitration because of the lack of any arbitration agreement between Santander and

the Cross-Defendants. For all the reasons above, and specifically because there are

no arbitrable claims by or against the Centroplex Defendants, the trial court’s

ruling as to the Centroplex Defendants should be affirmed.

IV.   The Court Should Award Reasonable Fees to Cross-Defendants.

            The frivolous nature of this appeal warrants, at a minimum, a fee

award. The rules provide for damages when “the court of appeals determines that

an appeal is frivolous.” TEX. R. APP. P. 45. To determine whether to award

                                          16
damages, this Court considers whether the appellant has “reasonable grounds to

believe the case could be reversed.” Hunt v. CIT Grp./Consumer Fin., Inc., 03-09-

00046-CV, 2010 WL 1508082, at *8 (Tex. App.—Austin Apr. 15, 2010, pet.

denied) (mem. op.) (citing Smith v. Brown, 51 S.W.3d 376, 381 (Tex. App.—

Houston [1st Dist.] 2001, pet. denied)).

             Santander has no reasonable basis for curtailing the Cross-

Defendants’ federal Seventh Amendment and state constitutional rights to jury in

this case,	particularly as to the Centroplex Defendants. Santander’s appeal lacks a

single basis in law or fact for overturning the trial court’s decision. The relevant

facts are undisputed and only one of two briefed issues was preserved for appeal.

The sole preserved issue is whether Cross-Defendants, though nonsignatories, can

be compelled to arbitrate on the basis of agency. On this issue, Santander fails to

cite a single case that involves compelling a nonsignatory to arbitration,	and cites

no binding authority at all. See Hunt, 2010 WL 1508082 at *8 (awarding fees as

damages    because    of   appellant’s     “unsupported   factual   statements   (and

misstatements), repeated failures to preserve error for appeal, and the absence of

legal merit in his arguments.”).

             A reasonable attorney could not fail to conclude that the trial court’s

ruling would be upheld. See id; Smith, 51 S.W.3d at 381 (awarding $5000 in fees

because “[n]o reasonable attorney could fail to conclude this court would uphold

                                           17
the trial court’s summary judgment”). Indeed, Santander’s counsel conceded on

the record to the trial court that it could not compel the cross-claims to arbitration,

(1 RR 7), yet it persisted in arguing the motion to the trial court and then pursuing

the issue on appeal. Cross-Defendants have had to spend unnecessary time and

expense defending against, first, Santander’s groundless motion, and now its

meritless appeal. Santander has thus unnecessarily forced the Cross-Defendants to

expend considerable resources—all to simply defend their constitutional right to be

heard in court.

             Consequently, Cross-Defendants seek as damages an award of

attorneys’ fees and costs associated with those efforts, and have attached an

affidavit establishing the amount of reasonable and necessary fees. See TEX. R.

APP. P. 45; Hunt, 2010 WL 1508082, at *9 (identifying attorneys’ fees as the

typical damages award and noting that “proof by affidavit is a proper method of

establishing the appropriate sanction for the filing of a frivolous appeal”). A fee

award is appropriate as damages in this case because of the objectively groundless

nature of this appeal.

                                      PRAYER

             For the foregoing reasons, Cross-Defendants Centroplex Automobile

Recovery, Inc., John F. Thompson, Redshift Investigation, Inc., and Blake

                                          18
Vandusen respectfully request that this Court affirm the trial court’s holding that

denied Santander’s Motion to Compel Arbitration and Stay of Case.            Cross-

Defendants further ask this Court to impose damages upon Santander for this

frivolous appeal based on the attached affidavit for reasonable attorneys’ fees, and

grant the Cross-Defendants any additional relief, at law or in equity, to which they

are entitled.

                                        19
Respectfully submitted,

RICHARDSON + BURGESS LLP
221 West 6th Street, Suite 900
Austin, Texas 78701-3445
Telephone: (512) 482-8808
Facsimile: (512) 499-8886
Email: kburgess@richardsonburgess.com
Email: ssharp@richardsonburgess.com

      /s/ Stacy Rogers Sharp
By: ______________________________
      Karen C. Burgess
      State Bar No. 00796276
      Stacy Rogers Sharp
      State Bar No. 24052109

ATTORNEYS FOR APPELLEES
CENTROPLEX AUTOMOBILE
RECOVERY, INC. AND JOHN F.
THOMPSON

MACDONALD DEVIN, PC
1201 Elm Street, Suite 3800
Dallas, Texas 75270-2130
Telephone: (214) 744-3300
Facsimile: (214) 747-0942
Email: jkenefick@macdonalddevin.com
Email: jsigety@macdonalddevin.com

      /s/ John S. Kenefick
By: ______________________________
      John S. Kenefick
      State Bar No. 24006294
      John R. Sigety
      State Bar No. 24083853

ATTORNEYS FOR APPELLEE
BLAKE THORNTON VANDUSEN

  20
LINDOW ▪ STEPHENS ▪ TREAT LLP
One Riverwalk Place
700 North St. Mary’s Street, Suite 1700
San Antonio, Texas 78205
Telephone: (210) 227-2200
Facsimile: (210) 227-4602
Email: clotz@lstlaw.com
Email: dlt@lstlaw.com

      /s/ Christopher A. Lotz
By: ______________________________
      Christopher A. Lotz
      State Bar No. 24031630
      David L. Treat
      State Bar No. 20205300

ATTORNEYS FOR APPELLEE
REDSHIFT INVESTIGATION INC.

 21
                      CERTIFICATE OF COMPLIANCE

       I certify that this document was produced on a computer using Microsoft
Word 2010 and contains 3,670 words, as determined by the computer software’s
word-count function, excluding the sections of the document listed in TEX. R. APP.
P. 9.4(i)(1).
                                      /s/ Stacy Rogers Sharp
                                      _________________________________
                                      Stacy Rogers Sharp

                         CERTIFICATE OF SERVICE

       I hereby certify that a true and correct copy of the foregoing instrument has
been served upon the following parties either electronically through an electronic
filing manager or in the alternative served by fax prior to 5:00 p.m., in person, by
mail, commercial delivery service, or email, on this 20th day of January, 2015, as
follows:

Donald L. Turbyfill
Deborah C. S. Riherd
Vicki W. Hart
Devlin, Naylor & Turbyfill, PLLC
4801 Woodway Drive, Suite 420-West
Houston, Texas 77056-1884
Facsimile: (713) 586-7053

ATTORNEYS FOR APPELLANT
SANTANDER CONSUMER USA, INC.

Mario A. Mata
Mario A. Mata, PLLC
111 Congress Avenue, Suite 400
Austin, Texas 78701-4143
Facsimile: (214) 276-7305

APPELLEE, pro se
                                      /s/ Stacy Rogers Sharp
                                      _________________________________
                                      Stacy Rogers Sharp

                                        22
                                      No. 03-14-00782-CV
                                 ____________________________

                           IN THE THIRD COURT OF APPEALS
                                   AT AUSTIN, TEXAS
                              ____________________________

                            SANTANDER CONSUMER USA, INC.
                                     Appellant,

                                                        V.

   MARIO A. MATA, CENTROPLEX AUTOMOBILE RECOVERY, INC.,
     BLAKE THORNTON VANDUSEN, JOHN F. THOMPSON D/B/A
    CENTROPLEX AUTOMOBILE RECOVERY, INC., AND REDSHIFT
                     INVESTIGATION, INC.
                            Appellees.
                  ____________________________

                                       Appealed from the
                                          rd
                                   353 Judicial District Court
                                      Travis County, Texas
                                  Cause No. D-1-GN-13-000677
                                 ____________________________

                                   APPELLEES’ APPENDIX
                                 ____________________________

                                       LIST OF DOCUMENTS

TEX. CIV. PRAC. & REM. CODE ANN. § 16.003(a) .............................................TAB 1

Service Agreement ............................................................................................TAB 2

Collateral Recovery Agreement ........................................................................TAB 3

Affidavit of Karen C. Burgess ..........................................................................TAB 4

                                                        vi
TAB 1
§ 16.003. Two-Year Limitations Period, TX CIV PRAC & REM § 16.003

  Vernon's Texas Statutes and Codes Annotated
    Civil Practice and Remedies Code (Refs & Annos)
      Title 2. Trial, Judgment, and Appeal
         Subtitle B. Trial Matters
           Chapter 16. Limitations
              Subchapter A. Limitations of Personal Actions (Refs & Annos)

                                    V.T.C.A., Civil Practice & Remedies Code § 16.003

                                          § 16.003. Two-Year Limitations Period

                                                Effective: September 1, 2005
                                                         Currentness

(a) Except as provided by Sections 16.010, 16.0031, and 16.0045, a person must bring suit for trespass for injury to the estate
or to the property of another, conversion of personal property, taking or detaining the personal property of another, personal
injury, forcible entry and detainer, and forcible detainer not later than two years after the day the cause of action accrues.

(b) A person must bring suit not later than two years after the day the cause of action accrues in an action for injury resulting
in death. The cause of action accrues on the death of the injured person.

Credits
Acts 1985, 69th Leg., ch. 959, § 1, eff. Sept. 1, 1985. Amended by Acts 1995, 74th Leg., ch. 739, § 2, eff. June 15, 1995; Acts
1997, 75th Leg., ch. 26, § 2, eff. May 1, 1997; Acts 2005, 79th Leg., ch. 97, § 3, eff. Sept. 1, 2005.

Editors' Notes

                                                     REVISOR'S NOTE

                                                      2002 Main Volume

       (1) The revised law omits the reference to firms and public and private corporations in the source law. The
       Code Construction Act (V.A.C.S. Article 5429b-2) includes business entities and governmental entities within the
       definition of “person.”

       (2) The revised law omits the source law material that provides for suits to be brought within two years of the
       effective date of V.A.C.S. Article 5526a (March 7, 1934) because the two-year period has expired.

Notes of Decisions (2559)

V. T. C. A., Civil Practice & Remedies Code § 16.003, TX CIV PRAC & REM § 16.003
Current through the end of the 2013 Third Called Session of the 83rd Legislature

End of Document                                                    © 2015 Thomson Reuters. No claim to original U.S. Government Works.

                 © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                                1
TAB 2
                                        ,·~vv.J.uh.m..li.'"n"'' •
                                                       Agerioy .a·J~re~~s.~~?:?perty in accordancewithapplicable state. laws.

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                                                                                                        148
     III.      Impounds
           a. Vehicles located at Tow Company with bailout fees must be approved before
                pickup.
           b. It is always appreciated if bailout fees can be fronted for prompt recovery,
             . however if agents policies do not comply then RSI will next day air bailout
                amount.
           c. All authorized fees are required to have a bailout receipt that matches the amount
               approved and billed.
     IV.   Keys
           a. Regular keys are included in the standard repossession fee, unless agents key
               charge is pre~approved. Security keys are only made with client's approval.
           b. Keys charges of any kind will not be paid ifnot pre-approved.
    V.    Mileage
          a. Mileage can only be paid if pre-approved with name and date or representative in
               writing; email is an acceptable fonnat.
    VI.   Finders Fees
          a. Finders fees are sometimes an effective way to recover a vehicle however they
               can only be approved by the client.                 ·
          b. Finders fee.s will not be paid if not pre-approved
    VII. Releasing Vehicles
          a. Agent can only release/redeem a vehicle to the debtor with written permission
               from RSI or its client.                  ·
    VIII. Transport and Storage
          a. RSI will send transpoti instructions. {See line XL Fee Schedule for rates).
          b. If vehicle is on agent's lot for more than 30 days without instructions to trnnsport
              or hold then agent must notify RSI in an email of stored vehicle. Email address:
               info{a)Jedshi ftinvesti gation.com.
          c. Storage agent approves 10 free days of storage to all clients.
          d. Storage fee to client is $8.00 per day starting on the (11) eleventh day.
                    i. Exception
                           L VW Credit/Audi Financial is $7.00 per day starting on the (11)
                                eleventh day.
    IX.   Closing Assignments
          a. Only when approved by RSl- most assignments are on a contingent basis
              however if close fee has been approved the amount is $75.00 unless pre-approved
              for a higher amount.
          b. If you have reached a dead end and want to close the assignment it still must be
              approved by RSI or client.               ·
          c. If not authorized then the assignment can only be suspended in your system and
              RSI will advise when the client has authorized the close for billing.
          d. Close fees of any kind will not be paid if not approved.
    X.    Accounting Procedures
          a. Invoice RSI immediately following the repossession within 24 hours. Invoices
              should be sent either fax or scanned and emailed. DO NOT MAIL INVOICES.
                    i. Fax number: 707-452-8650
                   ii. Email address: info@redshiftinvestigation.com

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                                                                                                     149
              b. lnyoices should. include: RSI.accountnwnber•. full debtor name; vehicle
                 information, and last.six.ofVIN#.                                                  ·                        ·
             c. Subini.t Invoices :ih a tirtiely.m~~er. AnY invoice sent oyer 9.0 days from the time
                 of~pqssession cannot and willnot be paid.
    XI.      Fee Schedtile:
             a. Standar:tfRepossession F.ee .............................. $350.00
                      L Exceptions                                                ·
                                 1. Carmax ................ ~ ........................ $·325.00
                                 2, VW Credit/Aqdi Finan,ciaJ., .:~ .....•..$325. .00
             b. Close Fee ......... "'" .............. ·.·.·~·~~.··· .......~ . ~ ··11:·· '·~ ~ .... :.:.~ ~·~C<:>ntingent ·
                                                                                                        i •.       '!;!';.•

                      i. Exceptions                                                            ·
                                 L VW Credit/Audi Pinimqial .................. $75.00
                                2. Pre-approved.Close·Fee..................more than $75.00
             c. Transpe>I1!Delivery Fee......... ~ ........ , .................pre-approved only
                     .i. Exceptions                                                          .
                                 I.. Carmax (within 50 miles) ...............up to $75.00
                                2. Carmax (oyer 50 miles)....•.....~ .• 1 ..... ,pre~~pp:rQv~d only
            d.. Miletige Fee.................................... ;, ............. pre-approved only
            .e. Key_ Fee . ".~· •:•· ".~ ......... a, .. ~ ..... •·.t: ~ -:;.,:.,
                                                      !' ..•                        ,.~ ~····"
                                                               olio, .................                        ·pre-approved Otily
                                                                                         ••• . . . . . . . . II' . . . . . . . . •

             f.. Finders: Fee ............................................ ·~ .~ ......pre-approved only

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                                                                                                                                            150
                                       Exhibit B
                                 Notification Report

Recovery Company:           Client:                 Debtor:

Recovered by: _ _ _ _ _ Recovery Address: _ _ _ _--"-_ _ _ _ _ _ __
Recovery Date:              Account#: ----~--------- W/0# --------

Year:_____ Make:_______ Model:_ _ _ _ _ _ _ _ __
Color: _ _ _ _ _ Runs:_ _ _ _ _ _ _..,... Keys:_ _ _ _ _ _ _ _ _ __
Tags:                License:_ _ _ _ _ _ _ Property in Vehicle: _ _ _ _ __
Tow Dolly

Agency:_ _ _ _ _ _ _ _ _ _ _ _ _ _ Phone: _ _ _ _ _ _ _ _ __
Notification Date & Time:                      Badge#:_ _ _ _ _ _ _ _ __

Storage ,_,v.._,.... ~'"·----------------···-----------

Notes:_ _ _ _~-----------,---~-------------

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                                                                                     151
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AFFIDAVIT OF KAREN C. BURGESS                                                                     Page 2