Court Opinion

ID: 3075318
Source: CourtListenerOpinion
Date Created: 2015-10-16 01:08:33.318041+00
Date Added: 2024-06-11T09:48:49.547384
License: Public Domain

COURT OF APPEALS
                                       EIGHTH DISTRICT OF TEXAS
                                            EL PASO, TEXAS

    VISTA QUALITY MARKETS,                              §
                                                                       No. 08-13-00163-CV
                                    Appellant,          §
                                                                         Appeal from the
    v.                                                  §
                                                                        210th District Court
                                                        §
    JORGE LIZALDE,                                                   of El Paso County, Texas
                                                        §
                                    Appellee.                         (TC#2012-DCV02425)
                                                         §

                                                  OPINION

          Vista Quality Markets (“Vista”) appeals the trial court’s order denying its motion to

compel arbitration.        We reverse and remand to the trial court with instructions to enter an order

compelling arbitration.

                          FACTUAL AND PROCEDURAL BACKGROUND

          Vista is engaged in the business of operating grocery stores in El Paso, Texas, and is a

non-subscriber to workers’ compensation.               In February 2012, after sustaining an on-the-job

injury, Appellee Jorge Lizalde sued Vista, his employer, for gross negligence and retaliation

under the Employee Retirement Income Security Act of 1974 (“ERISA”).1                   Vista moved to

1
    Vista removed the ERISA claims to federal court.
compel arbitration based on the existence of an arbitration agreement between the parties.     In

support of its motion, Vista attached the affidavit of its Director of Human Resources Joe Pina.

Attached to Pina’s affidavit was: (1) a copy of Vista’s Mutual Agreement to Arbitrate; and (2) a

document titled “Receipt of Policy and Arbitration Acknowledgment” signed by Lizalde on July

1, 2009.

       In response Lizalde argued, in part, that the motion should be denied because he was

fraudulently induced into signing the agreement, that there was no meeting of the minds, that the

agreement was illusory due to lack of mutuality of obligation and unenforceable because it was

unconscionable.   After a hearing, the trial court denied Vista’s motion to compel arbitration.

This appeal followed.

                                         DISCUSSION

                             Standard of Review & Applicable Law

       We review a trial court’s denial on a motion to compel arbitration for an abuse of

discretion. Sidley Austin Brown & Wood, LLP v. J.A. Green Dev. Corp., 327 S.W.3d 859, 862-63

(Tex.App. – Dallas 2010, no pet.). A trial court’s determination regarding the validity of an

arbitration agreement is subject to de novo review. J.M. Davidson, Inc. v. Webster, 128 S.W.3d
223, 227 (Tex. 2003). In evaluating a motion to compel arbitration, we must first determine

whether a valid arbitration agreement exists between the parties. In re D. Wilson Constr. Co., 196
S.W.3d 774, 781 (Tex. 2006). When a trial court refuses to compel arbitration pursuant to a valid

and enforceable arbitration agreement it abuses its discretion. In re Halliburton Co., 80 S.W.3d
566, 573 (Tex. 2002).

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

                                                2
agreement and show that the claims presented fall within the scope of that agreement. In re

Dillard Dept. Stores, Inc., 186 S.W.3d 514, 515 (Tex. 2006); In re AdvancePCS Health L.P., 172
S.W.3d 603, 605 (Tex. 2005); Budd v. Max International, LLC, 339 S.W.3d 915, 918 (Tex.App. –

Dallas 2011, no pet.). While there is a strong presumption in favor of arbitration, it arises only

after a valid arbitration agreement is proven to exist. J.M. Davidson, 128 S.W.3d at 227.

                 EXISTENCE OF VALID ARBITRATION AGREEMENT

       In Issue One, Vista challenges the trial court’s denial of its motion to compel arbitration

and requests that we reverse and remand this case instructing the trial court to compel arbitration.

In pertinent part, Vista asserts the trial court erred in applying the doctrine of incorporation by

reference in this case and simultaneously concluding the arbitration agreement was illusory.

Lizalde contends the trial court did not abuse its discretion in denying Vista’s motion because the

arbitration agreement was illusory and unenforceable under Texas law.

       Therefore, the dispute is not whether an arbitration agreement between the parties exists,

but whether the arbitration agreement was valid based on the defenses Lizalde raised. See In re

AdvancePCS Health, 172 S.W.3d at 607 (once party seeking to compel arbitration establishes

existence of an agreement to arbitrate, the burden shifts to nonmovant to raise an affirmative

defense); J.M. Davidson, 128 S.W.3d at 227 (same).

                                       Illusory Agreement

       Lizalde argued the arbitration agreement was illusory because Vista could unilaterally

modify or amend the agreement at any time. Vista maintains the arbitration agreement is not

illusory and that the trial court erred in concluding the termination and modification clause

contained in Vista’s benefit plan was incorporated by reference into the arbitration agreement.

                                                 3
       Mutual promises to arbitrate employment constitute sufficient consideration for such

agreements. D.R. Horton, Inc. v. Brooks, 207 S.W.3d 862, 868 (Tex.App. – Houston [14th Dist.]

2006, no pet.). An arbitration agreement is illusory if one party is able to “avoid its promise to

arbitrate by amending the provision or terminating it altogether.” In re 24R, Inc., 324 S.W.3d 564,

567 (Tex. 2010); In re Lucchese Boot Co., 324 S.W.3d 211, 213 (Tex.App. – El Paso 2010, orig.

proceeding) (promise to arbitrate not illusory where it cannot be avoided by change or

termination); see also Carey v. 24 Hour Fitness, USA, Inc., 669 F.3d 202, 206-09 (5th Cir. 2012)

(finding arbitration agreement illusory because employer could unilaterally modify or terminate

provision at any time); Morrison v. Amway Corp., 517 F.3d 248, 254 (5th Cir. 2008) (same).

       “When illusory promises are all that support a purported bilateral contract, there is no

mutuality of obligation, and therefore, no contract.” In re 24R, Inc., 324 S.W.3d at 567. In the

context of a stand-alone arbitration agreement, binding promises from both parties are needed

because they are the only consideration exchanged to create a contract. In re AdvancePCS

Health, 172 S.W.3d at 607. However, when an arbitration clause is part of an underlying

contract, the remainder of the parties’ agreement provides the required consideration. See id.

       Lizalde argued Vista’s work-related injury plan became part of the arbitration agreement

based on the following language within the mutual agreement to arbitrate:

       7. Consideration
       In addition to any other consideration that may exist for the agreement to arbitrate,
       Company’s and Claimant’s mutual promise to resolve claims and controversies by
       arbitration in accordance with the provisions of this Agreement constitutes
       consideration for this Agreement. Claimant’s continued employment with
       Company after receiving notice of the institution of the Agreement also constitutes
       consideration for this Agreement. Finally, this Agreement is presented in
       connection with Company’s Employee Injury Benefit Plan. Payments made under
       that Plan also constitute consideration for this Agreement.

                                                4
(Emphasis added). Based on this language, Lizalde argues the trial court could have determined

Vista’s work-related injury plan was intended to be part of the arbitration agreement between the

parties. Accordingly, he contends the arbitration agreement is illusory because the “Amendment

and Termination” provisions of Vista’s work-related injury plan allows Vista to unilaterally

amend the arbitration agreement without notice. The “Amendment and Termination” provisions

of Vista’s work-related injury plan provide:2

         ARTICLE VI
         AMENDMENT AND TERMINATION
         A. Amendment. The Company has the sole right to amend this Plan. An
            amendment may be made by (i) a certified resolution or consent of the Board of
            Directors, or (ii) by an instrument in writing executed by the appropriate officer
            of the Company. The amendment must describe the nature of the amendment
            and its effective date.
         B. Termination. The Sponsor may terminate this Plan by executing and
            delivering to the Plan Administrator a notice of termination specifying the date
            of termination. Likewise, this Plan shall automatically terminate if there is a
            general assignment to or for the benefit of the creditors of the Sponsor. This
            Plan shall also terminate upon any action by the Company or an insurance
            carrier to cancel, non-renew, or otherwise fail to renew an occupational injury
            insurance policy that was purchased in conjunction with the adoption of this
            Plan document.

(Emphasis in original).

         In support of his argument, Lizalde relies on and adopts the reasoning in the memorandum

opinion and order of the United States District Court Judge for the Western District of Texas, El

Paso Division, on his ERISA claims, in Jorge Lizalde v. Vista Quality Markets, Civil Action No.

EP-12-CV-156-DB, dated December 11, 2012, in which the United States District Court denied

Vista’s motion to compel arbitration finding that the same arbitration agreement at issue here was

illusory because it allowed Vista to unilaterally terminate the agreement. However, as correctly

2
  The Summary Plan Description of Vista’s work-related injury plan (SPD) which generally explains and gives an
overview of the benefits of the work-related injury plan and the terms and conditions under which benefits are payable
recites the same language contained in the “Amendment and Termination” provisions of the work-related injury plan.
                                                          5
pointed out by Vista in its letter brief, the Fifth Circuit recently reversed the district court’s ruling,

holding the arbitration agreement was not illusory under Texas law and remanded the case for the

entry of an order compelling arbitration. See Lizalde v. Vista Quality Markets, 746 F.3d 222, 224

(5th Cir. 2014).

        We do not agree with Lizalde that the arbitration agreement is illusory because it

incorporated by reference, Vista’s work-related injury plan or SPD thereby expressly allowing

Vista to unilaterally amend the arbitration agreement at any time without notice. The fact that

paragraph 7 of the arbitration agreement reads that the arbitration agreement “is presented in

connection with” Vista’s work-related injury plan does not establish that the agreement to arbitrate

and the work related-injury plan are one and the same. See Sun Fab Industrial Contracting, Inc.

v. Lujan, 361 S.W.3d 147, 152-53 (Tex.App. – El Paso 2011, no pet.) (concluding that although an

employee handbook was mentioned in the arbitration agreement, it did not mean the handbook was

incorporated in the arbitration agreement or that the arbitration agreement incorporated the

handbook). Rather, paragraph 5(b) of the arbitration agreement clearly sets out that “[c]laims for

benefits under the Company’s Employee Injury Benefit Plan” are not covered by the agreement.

        Moreover, paragraph 12 of the arbitration agreement specifies that the agreement

“constitutes the parties’ complete agreement and supersedes any prior agreement regarding

arbitration of Covered Claims ….” Likewise, we are not convinced the recitation in paragraph 7

stating that “Payments made under that Plan also constitute consideration for this Agreement,”

means that the work-related injury plan is incorporated by reference. In fact, paragraph 7

specifically states in addition to any other consideration that may exist, the parties’ mutual promise

to arbitrate in accordance with the arbitration agreement constitutes consideration for the

                                                    6
agreement to arbitrate.        Accordingly, Vista’s ability to unilaterally amend or modify its

work-related injury plan pursuant to the “Amendment and Termination” provisions found in the

plan and SPD do not pertain to or affect the enforceability of Vista’s promise to submit all covered

claims to arbitration as required by the agreement to arbitrate.

                                         Ambiguous Agreement

        Alternatively, Lizalde argues the trial court did not abuse its discretion in denying Vista’s

motion to compel arbitration because: (1) the phrase “This Program Agreement” in paragraph 12

of the arbitration agreement is ambiguous; and (2) the trial court in its discretion resolved the

ambiguity by concluding that Vista’s work-related injury plan and SPD were part of the arbitration

agreement, which rendered the arbitration agreement illusory. It appears Lizalde’s argument

attempts to develop the obiter dictum contained in our opinion in In re ReadyOne Indus., Inc., 400
S.W.3d 164 (Tex.App. – El Paso 2013, orig. proceeding).3 Although we agree the phrase “This

Program Agreement” in paragraph 12 of the arbitration agreement may be confusing, we are not

convinced by Lizalde’s argument.

        Even assuming, as Lizalde contends that due to the ambiguous language in the arbitration

agreement and other evidence presented, the trial court could have resolved the ambiguity to

conclude the agreement to arbitration, plan documents, and SPD were part of the same contract, in

light of the Fifth Circuit’s recent holding in Lizalde, we find no merit in Lizalde’s arguments and

3
  In footnote 4 of the opinion, this Court expressed, “We note that the language contained in the MAA generally
comports with ReadyOne’s argument. For example, throughout the MAA it identifies itself as this ‘Agreement’
while specifically naming the Company’s ‘Employee Injury Benefit Plan.’ However, a potential ambiguity may exist
within the MAA’s provision titled ‘Sole and Entire Agreement,’ which provides in part: ‘This Program Agreement
constitutes the parties’ complete agreement and supersedes any prior agreement regarding arbitration of Covered
Claims which occur during the Term of this Agreement.’ The significance of ‘This Program Agreement’ is
ambiguous.” In re ReadyOne Indus., Inc., 400 S.W.3d at 170 n.4.

                                                       7
conclude the arbitration agreement is not illusory. See Lizalde, 746 F.3d at 226-27. We find

Lizalde highly persuasive, especially considering it involves the identical agreement, Plan

documents, and parties in the case at bar. See id.

       In Lizalde, in challenging the district’s court determination that the arbitration agreement

was illusory, Vista argued: (1) that the arbitration agreement and work-related injury plan were

not properly read as a single contract such that the termination provision in the plan did not apply

to the arbitration agreement; and (2) that even if the two agreements were read as a single contract,

the work-related injury plan’s termination provision did not apply to the arbitration agreement

because the agreement had its own properly defined termination provision. Id. at 225. The Fifth

Circuit saw no need to address Vista’s first argument as it agreed that even if the plan documents

and the arbitration agreement were read as one contract the arbitration agreement was not illusory

because the agreement to arbitrate could not be terminated without following the agreement’s

established procedures. Id.

       For purposes of interpreting the arbitration agreement, the Fifth Circuit assumed the

district court correctly construed the plan documents and arbitration agreement as a single

contract. Id. at 225-26. In looking at the plan documents and the arbitration agreement, the Fifth

Circuit stated:

       Looking at the two agreements in this case, we see no indication that the parties
       intended the broader termination provision found in the Benefit Plan to also apply
       to the Arbitration Agreement. Here, the Arbitration Agreement is specifically
       crafted to provide a narrowly-tailored termination clause that ensures its
       enforceability; this deliberate wording makes it difficult to accept that the parties
       intended for the unconstrained termination provision found in the Benefit Plan to
       apply to the Arbitration Agreement. Additionally, applying the Benefit Plan
       termination provision to the Arbitration Agreement would render the termination
       provision found in the Arbitration Agreement superfluous, an outcome disfavored

                                                 8
           by Texas contract law. See J.M. Davidson Inc. v. Webster, 128 S.W.3d 223, 229
           (Tex. 2003) (“To [ascertain the intentions of the parties], we must 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. at 226-27. We agree with Lizalde that the parties included a termination provision in the

arbitration agreement circumscribing Vista’s power to terminate the agreement, the termination

provisions respectively found in the work-related injury plan, SPD, and arbitration agreement state

that they apply only to the agreement or document in which they are set forth, and applying the

termination provision of Vista’s work-related injury plan to its arbitration agreement would render

the termination provision of the arbitration agreement meaningless. See id. at 227. Therefore,

even though the one use of the phrase “This Program Agreement” may be confusing, based on the

foregoing considerations, we conclude that even when read as a single agreement, Vista’s

arbitration agreement is not ambiguous, illusory, or unenforceable.

                                               OTHER GROUNDS

           Next, Vista asserts the other defenses raised in Lizalde’s response to its motion to compel

arbitration are without merit.4          We briefly address each argument in turn.

                                                       The FAA

           First, Vista maintains that the Federal Arbitration Act (FAA) 5 governs the parties’

agreement to arbitrate.          Lizalde argued the FAA did not apply to the arbitration agreement

because there was no transaction involving commerce. However, Lizalde does not raise that

specific complaint on appeal or otherwise dispute that the FAA applies to the arbitration

agreement.

4
    Lizalde has not responded to these arguments in his appellate brief.
5
    See 9 U.S.C.A. §§ 1-16.
                                                            9
       The FAA applies to all suits in state or federal court, when the dispute concerns a

“contract evidencing a transaction involving commerce.”        Jack B. Anglin Co. v. Tipps, 842
S.W.2d 266, 269-70 (Tex. 1992) (orig. proceeding). The term “commerce” has been broadly

defined and includes contracts relating to interstate commerce.    In re Gardner Zemke Co., 978
S.W.2d 624, 626 (Tex.App. – El Paso 1998, orig. proceeding).         Under the FAA there is no

requirement that the effect on interstate commerce be substantial; however, it requires that

commerce be involved or affected.      In re L&L Kempwood Assocs., L.P., 9 S.W.3d 125, 127

(Tex. 1999) (orig. proceeding); In re Merrill Lynch Trust Company FSB, 123 S.W.3d 549, 553

(Tex.App. – San Antonio 2003, orig. proceeding).

       The arbitration agreement in question specifies that Vista is engaged in “commerce” as

defined by Section 1 of the FAA and that the FAA governs all aspects of the agreement.       In his

affidavit, Pina asserts Vista regularly receives goods and services from outside the State of Texas

in order to provide products to its customers, uses the United States Postal Service and other

interstate mail services to send and receive mail from outside of the State, and uses interstate

telephone services and the Internet to communicate with customers and suppliers located outside

of Texas.   Based on the foregoing, and because Lizalde does not dispute that Vista engaged in

interstate commerce on appeal, we conclude Vista was involved in interstate commerce and that

the FAA governs the arbitration agreement.      See In re Border Steel, 229 S.W.3d 825, 830-31

(Tex.App. – El Paso 2007, orig. proceeding) (holding FAA applied to arbitration agreement

because employer was involved in interstate commerce because it purchased goods and services

outside of Texas and it used interstate mail); In re Big 8 Food Stores, 166 S.W.3d 869, 879-80

(Tex.App. – El Paso 2005, orig. proceeding) (concluding FAA applied to arbitration agreement

                                                10
between employer and employee where employer purchased goods, served customers, and

advertised outside of Texas).

                 The FAA’s Effect on Texas’s Workers’ Compensation Scheme

       Lizalde argued Vista’s motion to compel arbitration should be denied and that the

arbitration agreement was unenforceable because Congress never intended the FAA to eviscerate

or preempt a State’s workers’ compensation scheme.       Vista responds that an application of the

FAA in the present case does not have the effect of eviscerating the workers’ compensation

scheme in Texas. We agree.       The Texas Supreme Court has held that statutory claims under

the Texas Workers’ Compensation Act can be arbitrated.        See In re Odyssey Healthcare, Inc.,

310 S.W.3d 419, 423 (Tex. 2010).       The Supreme Court has also observed that a party who

agrees to arbitration does not forgo any substantive rights afforded to him by statute, but rather

submits their resolution in an arbitral, rather than a judicial forum.   In re Poly-America, L.P.,

262 S.W.3d 337, 352 (Tex. 2008). Additionally, the Supreme Court has concluded that

compliance with the FAA does not “directly impair [Texas’s] ability to structure integral

operations in areas of traditional government functions.” In re Odyssey Healthcare, Inc., 310
S.W.3d at 424.    Because we agree with Vista that Lizalde has not waived any substantive rights

and has failed to point to any procedures under the arbitration agreement which prevent him

from effectively vindicating his rights, we conclude Lizalde’s argument is unpersuasive and

without merit.

                  Violation of the Tenth Amendment of the U.S. Constitution

       In arguing that the arbitration agreement was unenforceable, Lizalde also contended that

“any attempt by the FAA to trump the Texas Workers Compensation Act or the [TAA] is a

                                                11
violation of the 10th Amendment to the U.S. Constitution.” However, the Texas Supreme Court

has held that the FAA does not violate the Tenth Amendment by encroaching on a state power to

enact and regulate its workers’ compensation system.              In re Odyssey Healthcare, Inc., 310
S.W.3d at 423.       Accordingly, Lizalde’s argument is without merit.

                                        The Texas Arbitration Act

          Lizalde asserted the arbitration agreement was not enforceable because it violated Section

171.002(c) of the Texas Arbitration Act (TAA).               See TEX. CIV. PRAC. & REM. CODE ANN. §

171.002(c) (West 2011). Vista maintains Lizalde’s argument fails because the FAA preempts all

provisions of Texas law conflicting or imposing additional requirements.           In the instant case,

we have already determined the FAA applies to the arbitration agreement between the parties.

Because the FAA preempts inconsistent state law including the TAA provision Lizalde relies

upon, we conclude that Vista’s failure to comply with Section 171.002(c) does not render the

arbitration agreement unenforceable, as Lizalde claims.           See In re Olshan Found. Repair Co.,

LLC, 328 S.W.3d 883, 887, 891 (Tex. 2010) (orig. proceeding) (rejecting argument that

arbitration agreements were unenforceable for failure to comply with TAA requirements because

the FAA preempted Section 171.002(a)(2) of the TAA); In re Nexion Health at Humble, Inc.,

173 S.W.3d 67, 69 (Tex. 2005) (discussing FAA’s preemption of TAA provisions); see also

Royce Homes, L.P. v. Bates, 315 S.W.3d 77, 85 (Tex.App. – Houston [1st Dist.] 2010, no pet.)

(FAA preempts inconsistent state laws, including provisions of the TAA).

                             Section 406.033(e) of the Texas Labor Code6

          Vista claims Lizalde’s contention that the non-waiver provision of the Texas Workers’

Compensation Act renders the arbitration agreement void has no merit. We agree.              It is well
6
    See TEX. LAB. CODE ANN. § 406.033(e) (West 2006).
                                                        12
established in Texas that Section 406.033(e) does not render an arbitration agreement void.      See

In re Odyssey Healthcare, Inc., 310 S.W.3d at 423; In re Golden Peanut Co., LLC, 298 S.W.3d
629, 631 (Tex. 2009) (orig. proceeding); In re Border Steel, Inc., 229 S.W.3d at 832.      As such,

we reject Lizalde’s Section 406.033(e) defense to the agreement to arbitrate.

                         Meeting of the Minds/Fraudulent Inducement

       Vista argues Lizalde failed to show fraudulent inducement or no meeting of the minds.

Lizalde claimed he was fraudulently induced into signing the arbitration agreement because: (1) he

did not know what he was signing, (2) he was not told that what he was signing would waive his

right to a jury trial, and (3) he was never informed he could refuse to sign the agreement or that he

had the right not to sign the agreement. As to whether there was a meeting of the minds between

the parties, Lizalde argued he was not told he was signing an arbitration agreement and was not

given an explanation as to what constitutes an arbitration agreement. Lizalde contends his

ignorance of the fact that he signed an arbitration agreement signifies that he may not have

consented to the agreement and that a meeting of the minds did not exist.

       Fraudulent inducement claims have the same elements as fraud claims, plus an additional

element that the fraud related to an agreement between the parties.     In re VNA Inc., 403 S.W.3d
483, 487 (Tex.App. – El Paso 2013, orig. proceeding).      The elements of fraud are (1) a material

misrepresentation, (2) made with knowledge of its falsity or without any knowledge of the truth

and as a positive assertion, (3) made with the intention that it should be acted on by the other

party, and (4) the other party acts in reliance on the misrepresentation and thereby suffers injury.

McLernon v. Dynegy, Inc., 347 S.W.3d 315, 328 (Tex.App. – Houston [14th Dist.] 2011, no pet.)

(citing Formosa Plastics Corp. USA v. Presidio Eng’rs & Contractors, Inc., 960 S.W.2d 41,

                                                 13
47-48 (Tex. 1998)); see also In re VNA, 403 S.W.3d at 487.

        Lizalde’s affidavit stated that the documents were never explained to him and that the

first time he ever heard of an arbitration agreement was after a motion to compel was filed.         He

stated that he may have unknowingly signed the arbitration agreement as it was located

“somewhere within a stack of documents” given to him by Vista.                 However, nothing in his

affidavit indicates Vista made any false representations regarding the arbitration agreement.

Moreover, the arbitration agreement states, in plain language, that the parties agree to arbitrate

their disputes and that they waive their right to a jury trial.

        The presence or absence of signatures on a written contract is relevant to determining

whether the parties are bound by the contract.          In re Bunzl USA, Inc., 155 S.W.3d 202, 209

(Tex.App. – El Paso 2004, orig. proceeding).            A party’s signature on a contract is strong

evidence the party unconditionally assented to its terms.         Id.   Absent fraud, misrepresentation,

or deceit, a party is bound by the terms of the contract he signed, regardless of whether he reads

it or believed it had different terms.      In re McKinney, 167 S.W.3d 833, 835 (Tex. 2005).

Because there is no evidence Vista made any false representations to Lizalde about the

arbitration agreement, and that by having signed the arbitration agreement Lizalde is presumed to

know its contents, we conclude there is no evidence in the record from which the trial court

could have determined Lizalde was fraudulently induced into signing the arbitration agreement.

See In re Border Steel, Inc., 229 S.W.3d at 834-35 (concluding arbitration agreement was not

fraudulently induced where plaintiff claimed all employees were given a stack of employment

documents which included the employee’s benefit plan, and was expected to sign them without

sufficient time for review, and without explanation because nothing in the record showed

                                                   14
plaintiff relied on employer’s statement when plaintiff entered into the benefit plan); see also In

re ReadyOne Industries Inc., 420 S.W.3d 179, 186-87 (Tex.App. – El Paso 2012, orig.

proceeding) (concluding plaintiff’s affidavit testimony stating that she was provided with a few

documents to sign during orientation, and was only given signature pages with no explanation as

to what those documents related to, and that she assumed the document related to her W-2 tax

forms did not constitute evidence of fraud in connection with existence of arbitration agreement

and did not establish a colorable basis or reason to believe pre-arbitration discovery would be

material in showing she was fraudulently induced into signing the agreement and that,

consequently there was no meeting of the minds).

                                  Unconscionable Agreement

       Vista argues Lizalde failed to establish the arbitration agreement was unconscionable.

Unconscionability involves two aspects: (1) procedural unconscionability, which refers to the

circumstances surrounding the adoption of the arbitration provision; and (2) substantive

unconscionability, which refers to the fairness of the arbitration provision itself. In re Peoples

Choice Home Loan Inc., 225 S.W.3d 35, 44 (Tex.App. – El Paso 2005, orig. proceeding). As the

party seeking to invalidate the arbitration agreement, Lizalde bears the burden of proving

unconscionability. See id.

       Lizalde argued the arbitration agreement was substantively unconscionable because: (1)

the arbitration agreement did not mention the amount of discovery allotted to him, if any; and (2)

the agreement required him to participate in arbitration that sought to substantively modify his

rights and remedies under Texas law and failed to “provide for all the remedies…[he] would have

in court.” The arbitration agreement expressly provides:

                                                15
               d. Discovery and Pre-Arbitration Motions
               All parties are entitled to pre-arbitration discovery under the Texas Rules of
               Civil Procedure. The same discovery devices and scope of discovery as set
               forth in those rules shall apply. All parties are entitled to file any motions,
               including dispositive motions, set forth in the Texas Rules of Civil
               Procedure.

               e. Remedies and Defenses
               All parties are entitled to allege any claim, obtain any remedy and assert any
               legal or equitable defense that the party could allege, obtain or assert in a
               Texas state or federal court.

Nothing in the arbitration agreement indicates the parties are not entitled to discovery and in fact,

the agreement provides for pre-arbitration discovery under the Texas Rules of Civil Procedure.

Similarly, nothing in the arbitration agreement attempts to substantively modify Lizalde’s rights

and remedies under Texas law, but rather permits the parties to claim and obtain any remedy or

defense available to them in a Texas state or federal court. As such, we conclude Lizalde has

failed to satisfy his burden of proving the arbitration agreement is unconscionable. See In re

Fleetwood Homes of Texas L.P., 257 S.W.3d 692, 695 (Tex. 2008) (orig. proceeding) (holding that

an arbitration’s limitation on discovery does not render agreement unconscionable); In re

Halliburton Co., 80 S.W.3d at 572 (concluding plaintiff failed to carry burden to show arbitration

program was unconscionable where program had several terms that provided protection to the

employee in process).

       Because Vista’s arbitration agreement is not illusory and unenforceable and Lizalde did

not establish any valid defenses to the arbitration agreement, the trial court erred by denying

Vista’s motion to compel arbitration. Issue One is sustained.

                                         CONCLUSION

       The trial court’s judgment is reversed and the case is remanded for entry of an order

                                                 16
compelling arbitration and abating the proceedings in the trial court.

                                              GUADALUPE RIVERA, Justice
June 6, 2014

Before Rivera, J., Rodriguez, J., and Barajas, C.J. (Senior Judge)
Barajas, C.J. (Senior Judge), sitting by assignment

                                                17