Court Opinion

ID: 3073313
Source: CourtListenerOpinion
Date Created: 2015-10-16 00:54:20.370999+00
Date Added: 2024-06-11T11:41:47.551580
License: Public Domain

In The
                             Court of Appeals
                    Seventh District of Texas at Amarillo
                             ________________________

                                  No. 07-13-00321-CV
                             ________________________

                          KENNY SCHUETTE, APPELLANT

                                           V.

              CORY COLTHARP AND TAMIE COLTHARP, APPELLEES

                           On Appeal from the 99TH District Court
                                  Lubbock County, Texas
           Trial Court No. 2013-505,846; Honorable William C. Sowder, Presiding

                                      May 21, 2014

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

      This is an interlocutory appeal, brought pursuant to the provisions of the Texas

Civil Practice and Remedies Code, from the denial of a Plea in Abatement. See TEX.

CIV. PRAC. & REM. CODE ANN. § 171.098 (West 2011). In the underlying lawsuit the

Appellees, Cory Coltharp and Tamie Coltharp, sued Appellant, Kenny Schuette, for

breach of a written contract. Appellant sought the dismissal of that lawsuit based upon
the argument that the dispute was subject to arbitration. When the trial court disagreed,

Appellant brought this appeal. We affirm.

         On March 8, 2012, Appellees and Appellant entered into a contract for the

construction of a home in Slaton, Texas.            The agreement of the parties was

memorialized on a three-sheet, pre-printed no-carbon-required form contract furnished

by Appellant. The first sheet was white, the second sheet was yellow and the third

sheet was pink. The parties signed the top white sheet, and their signatures were

reproduced on the yellow and pink sheets via the no carbon process. The front of each

sheet was identical; however, the back of the white sheet included the phrase, “All

disputes hereunder shall be resolved by binding arbitration in accordance with the rules

of the American Arbitration Association.” The backs of the yellow and pink sheets were

blank.

         After the parties executed the contract, Appellant allowed Appellees to retain all

three sheets so that Appellees could take the contract to their bank to secure financing.

Despite considerable efforts to locate the original white sheet, the parties have been

unable to locate it. Appellant sought to establish the contents of the back of the white

sheet by producing a blank specimen of the form used. While Appellees maintain there

is a dispute concerning whether the white sheet actually contained the printed provision

in question, our disposition of this appeal renders that question inconsequential.

Therefore, for purposes of our analysis, we will assume the white sheet did include the

provisions printed on the specimen form admitted into evidence.

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         After a dispute arose concerning performance of the contract and the underlying

lawsuit was filed, Appellant sought to enforce the arbitration clause printed on the back

of the white sheet.     Following a hearing where the parties testified concerning the

circumstances surrounding the execution of the contract and the present whereabouts

of the white sheet, the trial court denied Appellant’s Plea in Abatement. By the single

issue raised in this appeal Appellant posits that the trial court erred by failing to abate

the lawsuit and compel arbitration.

                                          ANALYSIS

         An appellate court reviews an interlocutory appeal of an order denying a plea in

abatement and motion to compel arbitration under an abuse of discretion standard.

Sidley Austin Brown & Wood LLP v. J.A. Green Dev. Corp., 327 S.W.3d 859, 863 (Tex.

App.—Dallas 2010, no pet.). The test for abuse of discretion is whether the trial court

acted without reference to any guiding rules and principles, or alternatively, whether the

trial court’s actions were arbitrary and unreasonable based on the circumstances of the

individual case. Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex.

1985).

         Arbitration agreements are interpreted under traditional contract principles, In re

Olshan Foundation Repair Co., 328 S.W.3d 883, 889 (Tex. 2010), and parties to a

contract cannot circumvent arbitration provisions simply because they fail to read the

details of the contract. See In re Education Mgmt. Corp., 14 S.W.3d 418, 426 (Tex.

App.—Houston [14th Dist.] 2000, no pet.); Shearson Lehman Bros. v. Kilgore, 871
S.W.2d 925, 928-29 (Tex. App.—Corpus Christi 1994, no pet.)              When a contract

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includes an arbitration agreement and one party files suit in lieu of seeking arbitration,

the appropriate remedy is for the party favoring arbitration to file a plea in abatement

and seek to have the trial court compel arbitration. TEX. CIV. PRAC. & REM. CODE ANN. §

171.025(a) (West 2011). If the trial court finds the claim falls within the scope of the

arbitration agreement, the court has no discretion but to stay its own proceedings and

compel arbitration.    Forest Oil Corp. v. McAllen, 268 S.W.3d 51, 56 (Tex. 2008).

Therefore, because it is undisputed the clause in question in this case provides for

mandatory arbitration and that the trial court denied arbitration, the question becomes

“Did the trial court err in determining that the arbitration provision in question was not a

part of the contract between the parties?” In that regard, whether or not a particular

provision is a part of the agreement between the parties is a question of the intent of the

parties.    Domingo v. Mitchell, 257 S.W.3d 34, 40 (Tex. App.—Amarillo 2008, pet.

denied).

         For an enforceable contract to exist there must be an offer, an acceptance, and

the exchange of consideration. Id. at 39. The essential details of the proposed contract

must be included in the agreement, and the parties must actually agree to those details.

Id. Where a dispute arises as to the details of the agreement, a fact issue is created as

to the intent of the parties. J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex.

2003).

         Here, Appellant contends the white copy of the agreement (including the

arbitration agreement as established by the unsigned specimen of the document used)

is the agreement of the parties; whereas Appellees contend the yellow and pink copies

of the agreement (not including such a provision) reflects the true agreement of the

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parties.   Because it is undisputed that the yellow and pink copies, the only signed

copies actually produced, do not contain the arbitration provision, a factual dispute

exists between the parties as to the essential details of the contract, i.e., whether there

was a meeting of the minds of the parties that the arbitration provision was a part of the

agreement.

       A review of the front page of the white, yellow and pink copies of the contract

reveals that Appellant offered to “furnish material and labor - complete in accordance

with the above specifications . . . .” (Emphasis added.) At the same time the contract

provides “[t]he above prices, specifications and conditions are satisfactory and hereby

accepted.” (Emphasis added.) No reference is ever made to the back of the white

sheet and in the absence of any testimony concerning the parties being directed to look

between the individual sheets, the trial court did not abuse its discretion in determining

that Appellees did not agree to provisions that were otherwise hidden. In other words,

because the back of the last page of the form (the pink sheet) contained no other terms,

it is reasonable to assume the parties did not reach an agreement containing any terms

other than those contained on the front of each page.

       Here the trial court found that the intent of the parties did not include the

arbitration provision in question and that, as a result, the provision was not a part of the

contract between the parties. Under the facts of this case, we find the trial court did not

abuse its discretion in reaching that conclusion and consequently, in denying

Appellant’s motion to abate. Appellant’s issue is overruled.

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                               CONCLUSION

The order of the trial court denying Appellant’s Plea in Abatement is affirmed.

                                                Patrick A. Pirtle
                                                    Justice

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