Court Opinion

ID: 4517710
Source: CourtListenerOpinion
Date Created: 2020-03-19 09:14:40.417722+00
Date Added: 2024-06-11T11:30:11.441742
License: Public Domain

Fourth Court of Appeals
                                     San Antonio, Texas
                                 MEMORANDUM OPINION

                                          No. 04-19-00797-CV

                              EWING CONSTRUCTION CO., INC.,
                                        Appellant

                                                  v.

                       BENAVIDES INDEPENDENT SCHOOL DISTRICT,
                                       Appellee

                     From the 229th Judicial District Court, Duval County, Texas
                                     Trial Court No. DC-18-122
                            Honorable Baldemar Garza, Judge Presiding

Opinion by:       Beth Watkins, Justice

Sitting:          Sandee Bryan Marion, Chief Justice
                  Patricia O. Alvarez, Justice
                  Beth Watkins, Justice

Delivered and Filed: March 18, 2020

AFFIRMED

           Appellant Ewing Construction Co., Inc. (“Ewing”) files this interlocutory appeal from the

trial court’s order denying its motion to compel arbitration of appellee’s negligence and breach of

contract claims. We affirm the trial court’s order.

                                             Background

           On February 26, 2007, Ewing and appellee Benavides Independent School District (“the

School District”) entered into a “Standard Form Agreement” in which the parties agreed Ewing

would be the general contractor for a project to construct a new elementary school in Benavides.
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The Standard Form Agreement expressly incorporates several documents, including the “General

Conditions,” and provides these documents “form the Contract, and are as fully a part of the

Contract as if attached to this Agreement or repeated herein.”

        The General Conditions contain a broad arbitration clause providing, in relevant part: “Any

Claim arising out of or related to the Contract,” with certain exceptions not at issue here, “shall

. . . be subject to arbitration.” “Claim” is defined in the General Conditions as “a demand or

assertion by one of the parties seeking, as a matter of right, adjustment or interpretation of Contract

terms, payment of money, extension of time or other relief with respect to the terms of the

Contract,” as well as “other disputes and matters in question between [the School District] and

[Ewing] arising out of or relating to the Contract.”

        The Standard Form Agreement does not reference arbitration except in Article 6, entitled

“Termination or Suspension.” Section 6.1 provides: “The Contract may be terminated by [the

School District] or [Ewing] as provided in Article 14 of [the General Conditions]. Save and except

that the arbitration clause is deleted.” Notably, the “save and except” clause is indented and typed

in a distinct font.

        The School District sued Ewing for negligence and breach of contract, alleging Ewing’s

negligent work and supervision of subcontractors resulted in substantial problems with the

elementary school’s foundation and HVAC system, among other things. Relying on the arbitration

provision in the General Conditions, Ewing filed a motion to compel arbitration and stay

proceedings in the trial court. After holding a hearing, the trial court denied Ewing’s motion to

compel arbitration. At the hearing on the motion to reconsider, Ewing asked the trial court to vacate

the order denying the motion to compel arbitration. The record does not reflect the trial court ruled

on Ewing’s motion to reconsider. Ewing filed this interlocutory appeal.

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                                        Standard of Review

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

discretion. Amateur Athletic Union of the U.S., Inc. v. Bray, 499 S.W.3d 96, 102 (Tex. App.—San

Antonio 2016, no pet.) (citing In re Labatt Food Serv., L.P., 279 S.W.3d 640, 643 (Tex. 2009)).

Although we defer to the trial court’s factual determinations supported by the record, we review

de novo the trial court’s legal determinations. Id. Whether a valid and enforceable arbitration

agreement exists is a question of law we review de novo. Id. Where, as here, the trial court does

not make specific findings of fact or conclusions of law in support of its ruling, we will uphold the

ruling if it is supported by any legal theory asserted in the trial court. Id. (citing In re W.E.R., 669
S.W.2d 716, 717 (Tex. 1984) (per curiam)).

                                              Discussion

        The dispute in this case is whether a valid and enforceable arbitration agreement exists. In

its sole issue on appeal, Ewing argues that because the broad arbitration provision in the General

Conditions encompasses the School District’s claims, the trial court abused its discretion by

denying the motion to compel arbitration. In response, the School District argues the provision in

the Standard Form Agreement stating “the arbitration clause is deleted” nullifies the arbitration

provision in the General Conditions. Ewing, however, contends “the arbitration clause is deleted”

language only applies in the context of termination or suspension of the contract and, therefore,

does not apply to this dispute.

Applicable law

        As an initial matter, the parties appear to dispute whether arbitrability in this case is

governed by the Federal Arbitration Act (“FAA”) or the Texas Arbitration Act (“TAA”). The

contract documents do not reference either statute. Rather, the General Conditions state: “The

Contract shall be governed by the law of the place where the Project is located,” which, in this

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case, is Benavides, Texas. The supreme court has interpreted identical contractual language as

invoking both the FAA and the TAA to the extent they are not inconsistent. In re D. Wilson Constr.

Co., 196 S.W.3d 774, 778–79 (Tex. 2006).

       The party moving to compel arbitration bears the initial burden to establish a valid,

enforceable arbitration agreement exists. Garcia v. Huerta, 340 S.W.3d 864, 869 (Tex. App.—San

Antonio 2011, pet. denied) (citing In re AdvancePCS Health L.P., 172 S.W.3d 603, 607 (Tex.

2005) (per curiam)). Under both the FAA and the TAA, we apply ordinary state contract law

principles to determine whether the moving party has met this burden. Id. (citing D. Wilson Constr.

Co., 196 S.W.3d at 781). In construing an unambiguous contract as a matter of law, our primary

concern is to ascertain the parties’ true intentions as they are expressed in the instrument itself.

Springer Ranch, Ltd. v. Jones, 421 S.W.3d 273, 279 (Tex. App.—San Antonio 2013, no pet.)

(citing Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 662 (Tex. 2005)). We examine and

consider the entire contract to harmonize and give effect to all its provisions so that none will be

rendered meaningless. Id. Once the existence of an arbitration agreement is established, a

presumption in favor of arbitration arises and the burden shifts to the party resisting arbitration to

establish a defense to enforcement. Garcia, 340 S.W.3d at 869.

Analysis

       The provision at issue here is section 6.1 of the Standard Form Agreement, which provides:

“The Contract may be terminated by [the School District] or [Ewing] as provided in Article 14 of

[the General Conditions]. Save and except that the arbitration clause is deleted.” Although the

“save and except” clause’s placement immediately following reference to “Article 14 of [the

General Conditions]” might suggest it refers to an arbitration provision in that article, there is no

such provision. Rather, the parties agree there is only one “arbitration clause” in the contract

documents—the arbitration provision contained in section 4.6 of the General Conditions.

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Therefore, Standard Form Agreement section 6.1’s reference to “the arbitration clause” can only

be read as referring to that provision.

       Further, although the “save and except” clause is located in Standard Form Agreement

Article 6, which addresses “Termination or Suspension” of the contract, the arbitration provision

it “delete[s]” from the parties’ agreement is not limited to termination and suspension only. The

arbitration provision in section 4.6 of the General Conditions is broadly worded to encompass all

disputes “arising out of or relating to the Contract.” If the parties had intended to delete the

arbitration clause only with regard to claims for termination or suspension of the contract, they

could have used language making that limitation clear. Instead, they elected to “delete” the

provision altogether, indicating their intent not to be bound by it in any dispute arising out of or

relating to the contract, regardless of whether that dispute arose from termination or suspension of

the contract. Indeed, because Article 6 is the only section of the Standard Form Agreement

addressing potential disputes between the School District and Ewing, it is unsurprising that the

parties would choose this section to express their intent to delete the arbitration provision contained

in the General Conditions and instead agree to resolve any claims between them in court.

       Therefore, after examining and considering the entire contract to harmonize and give effect

to all its provisions, we conclude the contract unambiguously expresses the parties’ intent to delete

and not be bound by the arbitration provision contained in section 4.6 of the General Conditions.

See Springer Ranch, Ltd., 421 S.W.3d at 279. Because Ewing, as the party moving to compel

arbitration, failed to meet its initial burden to establish the existence of a valid, enforceable

arbitration agreement, we hold the trial court did not abuse its discretion in denying the motion to

compel arbitration. See Garcia, 340 S.W.3d at 869. Ewing’s sole issue on appeal is overruled.

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                                         Conclusion

       Having overruled Ewing’s sole issue on appeal, the trial court’s interlocutory order is

affirmed.

                                              Beth Watkins, Justice

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