Court Opinion

ID: 7799363
Source: CourtListenerOpinion
Date Created: 2022-08-10 06:11:10.763429+00
Date Added: 2024-06-11T16:28:56.512203
License: Public Domain

DISSENT; and Opinion Filed August 5, 2022

                             S  In The
                         Court of Appeals
                  Fifth District of Texas at Dallas
                          No. 05-20-00380-CV
                          No. 05-20-00387-CV
                          No. 05-20-00388-CV
                          No. 05-20-00389-CV
                          No. 05-20-00390-CV

PRESTONWOOD TRADITION, LP; TRADITION MANAGEMENT, LLC;
PRESTONWOOD TSL, LP; PRESTONWOOD TSL GP, LLC; TRADITION
          SENIOR LIVING, L.P.; TRADITION SL, LLC; AND
                   JONATHAN S. PERLMAN,
                       Appellants / Relators
                                 V.
 MARY JO JENNINGS, INDIVIDUALLY AND AS THE INDEPENDENT
  EXECUTRIX AND REPRESENTATIVE OF THE BENEFICIARIES OF
       THE ESTATE OF LEAH ALICE CORKEN; LISA CULLEN,
     INDIVIDUALLY; MATT CORKEN, INDIVIDUALLY; DIANNE
TANNERY, INDIVIDUALLY AND AS THE INDEPENDENT EXECUTRIX
 AND REPRESENTATIVE OF THE BENEFICIARIES OF THE ESTATE
OF JUANITA PURDY; THOMAS DUCKER, INDIVIDUALLY; SHERRIL
  KERR, INDIVIDUALLY AND AS THE INDEPENDENT EXECUTRIX
 AND REPRESENTATIVE OF THE BENEFICIARIES OF THE ESTATE
   OF GLENNA DAY; GREGORY B. DAY, INDIVIDUALLY; MARSHA
 SPRING REPP AND STEPHEN SPRING, INDIVIDUALLY AND AS THE
CO-EXECUTORS AND REPRESENTATIVES OF THE BENEFICIARIES
  OF THE ESTATE OF SOLOMON H. SPRING; MICHAEL SOLOMON,
       MATTHEW ABRAMOWITZ, AND PAUL ABRAMOWITZ,
        INDIVIDUALLY AND AS THE CO-EXECUTORS AND
  REPRESENTATIVES OF THE BENEFICIARIES OF THE ESTATE OF
JOYCE ABRAMOWITZ; AND MARC ABRAMOWITZ, INDIVIDUALLY,
                 Appellees / Real Parties in Interest
   On Appeal from the County Court at Law No. 2, Dallas County, Texas
  Trial Court Cause Nos. CC-19-03747-B, CC-19-03737-B, CC-19-03754-B,
                   CC-19-03757-B, and CC-19-03745-B

                            DISSENTING OPINION
                              Before the En Banc Court
                    Dissenting Opinion by Justice Partida-Kipness
       In what feels like a bad case of déjà vu, I must again dissent in this matter.

The opinion issued today by a seven-member majority of this Court erroneously

determined that the trial court abused its discretion by deciding gateway issues of

arbitrability. The majority’s en banc opinion makes the same errors as were made in

the original panel opinion. The opinion conflicts with binding precedent and

impermissibly extends the ability of corporations to bind non-signatories to

arbitration agreements without court review of threshold issues. The holding further

disregards the AAA’s own determination that the trial court should decide gateway

issues of arbitrability in this case.

       This decision deprives multiple mourning families of their right to have a trial

court decide threshold questions of arbitrability. And by granting en banc

reconsideration, this Court has continued to further delay each party from moving

past the preliminary stage of litigation. The end result is not resolution or justice, but

further delay and denial of the families’ constitutional right to a trial by jury to obtain

civil compensation for the death of their loved ones. Simply put, the en banc majority

opinion is wrong, and I adamantly dissent.

                                           –2–
                                              BACKGROUND

           In 2016, Leah Corken, Juanita Purdy, Glenna Day, Solomon Spring, and

Joyce Abramowitz were residents of The Tradition-Prestonwood (The Tradition), a

senior living community owned and operated by the Prestonwood Entities.1 During

a four-month span that year, those seniors died at The Tradition. In 2018, the Estate

Representatives—representatives of the estates of Leah, Juanita, Glenna, Solomon,

and Joyce—contacted the Prestonwood Entities regarding settlement of claims

arising from the deaths. The parties began a mediation and, shortly thereafter, the

Prestonwood Entities filed arbitration proceedings with the American Arbitration

Association (AAA).

I.         AAA Proceedings

           The Prestonwood Entities pursued arbitration based on arbitration provisions

contained in the decedents’ leases2 with The Tradition, which provided in pertinent

part:

           7.       YOUR RIGHTS AND RESPONSIBILITIES

                    ....

                    E.   Waiver of Jury Trial. Pursuant to the Arbitration
                    Agreement set forth in Section 8 below, EACH PARTY

     1
         I refer to Appellants / Relators collectively as the Prestonwood Entities.
     2
     The record includes two, distinct leases signed by each of the decedents except for Leah Alice Corken.
The “Former Leases” were executed when each decedent first moved to The Tradition. The “Operative
Leases” were executed by each decedent after each decedent had resided at The Tradition for at least two
years. We base our decision on the Operative Leases because they explicitly superseded the Former Leases
and any differences between the leases are irrelevant to the issues presented here. The parties submitted
only a 2015 lease signed by Corken, which includes the same arbitration provisions as those in the Operative
Leases signed by the other decedents.
                                                       –3–
     HERETO WAIVES ITS RIGHT TO A TRIAL BY JURY AND
     AGREES TO SUBMIT TO BINDING ARBITRATION in any
     action, proceeding or counterclaim brought by any party against
     any other party.

8.   ARBITRATION AGREEMENT

     A.    Agreement To Arbitrate. Should a dispute arise between
     us, we desire to avoid costly and time-consuming litigation.
     Landlord and You agree that any claims, controversies, or
     disputes arising between us and in any way related to or arising
     out of the relationship created by this Agreement shall be
     resolved exclusively by binding arbitration. The arbitration shall
     be conducted in the county where the Community is located.
     Accordingly, neither Landlord nor You will be permitted to
     pursue court action regarding these claims, controversies or
     disputes.

     B.     Conduct Of The Arbitration. The arbitration shall be
     conducted by a panel of either one or three neutral arbitrators (the
     “Panel”), said number being chosen by You. The member(s) of
     the Panel shall be chosen by the American Arbitration
     Association (“AAA”) or by mutual agreement between the
     parties. Where a medical issue may more likely than not come
     before the Panel, and the Panel is three in number, one member
     of the Panel shall be a physician. The Panel shall follow the
     current Commercial Arbitration Rules of the AAA. The Panel
     shall have the authority to set a timetable for the arbitration and
     to direct discovery in all controversies. The Panel shall obey the
     law. The Panel shall have the authority to grant equitable relief
     that could be ordered by a court. The Panel shall have authority
     to award economic and non-economic damages (including,
     damages for pain and suffering and mental anguish); but shall
     have no authority to award punitive or exemplary damages. The
     Panel’s award may not exceed any award that could be granted
     by a court. The decision of the Panel shall be final, binding upon
     the Parties, not subject to appeal, and any court having
     jurisdiction may enter a judgment on the award.

     ....

     E.    Waiver Of Jury Trial. Any claim, controversy, or
     dispute between the parties for which arbitration is not allowed
                                –4–
             by law shall be brought in an appropriate court before a judge.
             Both You and Landlord waive your rights to a trial by jury.

             ....

             THIS   AGREEMENT    CONTAINS    BOTH    AN
             ARBITRATION PROVISION AND A WAIVER OF JURY
             TRIAL, WHICH MAY BE ENFORCED BY THE
             PARTIES.

      9.     MISCELLANEOUS

             ....

             G.     Governing Law. Except as noted above, this Agreement
             shall be governed by and construed under the laws of the State
             of Texas.

(Emphasis in original).

      The Estate Representatives submitted to the AAA a consolidated answering

statement, objections to the arbitrator’s jurisdiction, and objections to the

arbitrability of their personal injury claims. The Estate Representatives specifically

objected that the TAA, not the FAA, applied to the arbitration provisions and that

their claims were not arbitrable under the TAA. They also informed the AAA that

they had filed declaratory judgment actions in state court seeking various

declarations, including declarations that the TAA applies to the arbitration

provisions, that their claims are not arbitrable, and various other declarations

regarding the validity and enforceability of the arbitration provisions. The Estate

Representatives asked the AAA to stay arbitration until a court had determined the

proper jurisdiction and forum for their claims. Subject to their objections to the

                                         –5–
arbitrator’s jurisdiction, the Estate Representatives filed counterclaims for negligent

undertaking, premises liability, general negligence, and negligent hiring.

      After the Estate Representatives submitted their objections and answering

statements to the AAA and filed their petitions in the instant cases, the AAA notified

the parties that it had “made an administrative determination that it will not proceed

with the administration of the submissions unless the parties mutually agree, or until

the issue of arbitrability is decided by the Dallas County, Texas Court.” The

Prestonwood Entities asked the AAA to reconsider its ruling. The AAA rejected the

Prestonwood Entities’ request for reconsideration and affirmed that it would “not

proceed until a determination by the courts [sic] is rendered as to arbitrability.”

II.   Trial Court Proceedings

      On the same day that they filed their answering statements, objections, and

counterclaims with the AAA, the Estate Representatives filed their petitions in the

underlying cases. In each case, the Estate Representatives brought a declaratory

judgment action and asserted the same counterclaims filed with the AAA, which

included claims of negligent undertaking, premises liability, general negligence,

negligent hiring, training, and supervision, and gross negligence. The Estate

Representatives sought wrongful death and survival damages and exemplary

damages.

      The Estate Representatives also filed motions to stay the arbitration in which

they challenged the validity, enforceability, and scope of the “alleged arbitration

                                         –6–
agreement”3 as to their personal injury claims. In the motions to stay arbitration, the

Estate Representatives asserted the following bases for staying the AAA

proceedings:

          1.      The TAA, not the FAA, applies to the arbitration agreement
                  because the leases provide they are governed by Texas law and
                  do not involve interstate commerce;

          2.      The arbitration agreement is invalid and unenforceable under the
                  TAA as to their personal injury claims because it does not meet
                  the requirements of section 171.002(c) of the civil practice and
                  remedies code. TEX. CIV. PRAC. & REM. CODE § 171.002(c) (“A
                  claim described by Subsection (a)(3) is subject to this chapter if:
                  (1) each party to the claim, on the advice of counsel, agrees in
                  writing to arbitrate; and (2) the agreement is signed by each party
                  and each party’s attorney”);

          3.      The arbitration agreement is illusory and, therefore, invalid and
                  unenforceable, because the leases permit the Landlord4 to
                  unilaterally amend the arbitration agreement;

          4.      The punitive damages provision of the arbitration agreement is
                  unconscionable;

          5.      If the arbitration agreement is deemed valid and enforceable, it
                  is limited to claims against Tradition Management, LLC, the
                  Landlord as defined in the leases; and

          6.      The arbitration agreement does not apply to the Estate
                  Representatives declaratory judgment action.

    3
     In their trial court pleadings, the Estate Representatives refer to the arbitration provisions found in the
leases as the “alleged arbitration agreement.” For ease of reference, we will refer to paragraphs 7.E, 8.A,
8.B, and 8.E as “the arbitration agreement.” By doing so, however, we do not make any findings or
conclusions concerning whether the Estate Representatives are parties to the leases or otherwise bound by
those provisions because those questions are not presented in these proceedings.
    4
        Tradition Management, LLC is defined as the Landlord in the leases.

                                                     –7–
Before the AAA resolved the Prestonwood Entities’ request for reconsideration, the

Prestonwood Entities filed pleas in abatement in the trial court seeking abatement of

the cases “until the [AAA] determines whether or not to proceed with administration

of the arbitration proceedings” and, if the AAA decided to proceed, abatement of the

trial court proceedings to allow the arbitration to proceed. Alternatively, if the trial

court determined that it “should hear the arbitrability issues,” the Prestonwood

Entities asked the trial court to “abate all other matters in this proceeding until such

determination is made.” In support of their pleas and in response to the Estate

Representatives’ motions, the Prestonwood Entities offered the affidavit of Richard

Campos, controller of Tradition Management, LLC and Prestonwood Tradition,

LLC, copies of the leases, copies of the various pleadings filed in the AAA

proceeding, and copies of communications from the AAA concerning that

proceeding. The Estate Representatives objected to and moved to strike portions of

the Campos Affidavit.

      In their pleas, the Prestonwood Entities asserted the following bases for

abating the trial court proceedings and allowing the cases to proceed to arbitration:

      1.     The arbitration agreement is binding on the Estate
             Representatives asserting wrongful death and survival claims
             under Texas law and the plain terms of the leases;

      2.     The FAA, not the TAA, applies to the arbitration agreement;

      3.     The claims asserted by the Estate Representatives fall within the
             scope of the arbitration agreement; and

                                          –8–
      4.     Alternatively, arbitration is permitted under the Texas common
             law.

      The Prestonwood Entities supplemented their pleas in abatement after the

AAA rejected the Prestonwood Entities’ request for reconsideration. In the

supplemental pleas, the Prestonwood Entities stated that the supplements were “not

intended to replace” the original pleas “or to serve as a response” to the motions to

stay arbitration. Rather, the Prestonwood Entities asserted additional arguments in

support of their pleas that (1) the FAA and the TAA require that the AAA panel, not

the trial court, decide whether the claims are arbitrable, and (2) the arbitration

agreements are valid and enforceable under Texas common law, regardless of

whether they would be enforceable under the TAA or the FAA. The Prestonwood

Entities did, however, amend their original requests for relief and prayed for the

following:

      a.     An order referring “all matters concerning whether and to what
             extent the claims are arbitrable” to an AAA arbitration panel duly
             appointed by the AAA, and abating all discovery and other
             proceedings in the trial court until the AAA determines the
             question of arbitrability. This relief was sought pursuant to 9
             U.S.C. §§ 3, 4 and TEX. CIV. PRAC. & REM. CODE § 51.016,
             principals of comity, and Texas common law.

      b.     An order staying all proceedings in the trial court other than the
             question of arbitrability if the trial court decides to resolve that
             issue rather than referring it to the AAA.

      c.     If the trial court resolves the question of arbitrability, the
             Prestonwood Entities requested a determination that the TAA
             does not apply to this case because of the explicit exclusion in
             TEX. CIV. PRAC. & REM. CODE § 171.002(a)(3), and that the

                                         –9–
             claims at issue are arbitrable under either the FAA or Texas
             common law.

      d.     If the trial court or the AAA determines that the claims are
             arbitrable under the FAA or the Texas common law, the
             Prestonwood Entities requested a stay of all trial court
             proceedings pending the rendition of a final award in the
             arbitration proceeding and an order compelling the parties to
             proceed with binding arbitration before the AAA under the CAR
             and the terms of the Operative Lease.

      e.     Such other and further relief of any nature to which they may be
             justly entitled.

      The trial court heard the pleas and motions and issued a global order in all

cases. In the order, the trial court granted the Estate Representatives’ motions to stay

arbitration, denied the Prestonwood Entities’ pleas in abatement, sustained the Estate

Representatives’ objections to the Campos Affidavit and struck the corresponding

affidavit testimony, and stayed the AAA arbitration proceeding. The order did not

include an explanation of the trial court’s reasoning, and the trial court did not issue

findings of fact or conclusions of law.

                 PROCEDURAL HISTORY IN THIS COURT

      On March 17, 2020, the Prestonwood Entities filed a separate notice of

interlocutory appeal in each underlying trial court proceeding. On March 31, 2020,

this Court designated the interlocutory appeals as companion cases and permitted

the parties to file consolidated briefs in those proceedings. On June 18, 2020, the

Prestonwood Entities filed a petition for writ of mandamus as to each underlying

trial court proceeding in which they argue the claims are subject to arbitration

                                          –10–
pursuant to Texas common law. On July 30, 2020, this Court consolidated each

original proceeding into the corresponding interlocutory appeal and ordered the

Estate Representatives to file a response to the petitions for writ of mandamus. The

cases were submitted without oral argument on March 2, 2021.

      Justice Pedersen, with Justice Goldstein participating and Justice Partida-

Kipness dissenting, issued a panel opinion on October 22, 2021. See Prestonwood

Tradition, LP v. Jennings, 636 S.W.3d 68 (Tex. App.—Dallas 2021, no pet.). On

November 8, 2021, the Estate Representatives filed a motion for en banc

reconsideration. The Court granted the Estate Representatives’ motion for en banc

reconsideration on December 14, 2021, heard oral argument en banc on January 19,

2022, and requested additional jurisdictional briefing from the parties on January 24,

2022. Upon issuance of the en banc majority opinion, the Court withdraws the

October 22, 2021 panel opinion and vacates the judgment of that date.

                         APPELLATE JURISDICTION

      “Unless a statute authorizes an interlocutory appeal, appellate courts generally

only have jurisdiction over final judgments.” CMH Homes v. Perez, 340 S.W.3d

444, 447 (Tex. 2011). Under the TAA, a trial court’s order denying an application

to compel arbitration made under section 171.021 or an order granting an application

to stay arbitration made under section 171.023 may be challenged by interlocutory

appeal. TEX. CIV. PRAC. & REM. CODE § 171.098(a)(1)–(2). Here, by granting the

motions to stay and denying the pleas in abatement, the trial court concluded that the

                                        –11–
TAA, not the FAA or Texas common law, applies to the arbitration agreement and

determined that the arbitration agreement is invalid and unenforceable under the

TAA. We, therefore, have jurisdiction to review the trial court’s interlocutory order.

See, e.g., Citizens Nat’l Bank v. Bryce, 271 S.W.3d 347, 353 (Tex. App.—Tyler

2008, no pet.) (when a trial court’s denial of a motion to compel arbitration is based

on the TAA, the order is subject to interlocutory appeal under TEX. CIV. PRAC. &

REM. CODE § 171.098).5

                                    STANDARD OF REVIEW

        Arbitration agreements can be enforced under either statutory provisions or

the common law. Royston, Rayzor, Vickery, & Williams, LLP, 467 S.W.3d at 499.

We review a trial court’s ruling on a motion to stay arbitration for an abuse of

discretion, reviewing questions of law de novo and factual determinations under a

no-evidence standard of review. Henry v. Cash Biz, LP, 551 S.W.3d 111, 115 (Tex.

2018); Sidley Austin Brown & Wood, L.L.P. v. J.A. Green Dev. Corp., 327 S.W.3d

859, 863 (Tex. App.—Dallas 2010, no pet.); Trafigura Pte. Ltd. v. CNA Metals Ltd.,

526 S.W.3d 612, 615 (Tex. App.—Houston [14th Dist.] 2017, no pet.). Because the

    5
      As discussed below, I would conclude the trial court was correct in determining that the TAA applies
here. A determination that either the FAA or the Texas common law applied, however, would not deprive
this Court of jurisdiction over these consolidated proceedings. For purposes of the Prestonwood Entities’
arguments under the FAA, section 51.016 provides a court of appeals jurisdiction over an interlocutory
appeal challenging an order refusing to stay trial court proceedings subject to arbitration or an order denying
a motion to compel arbitration. TEX. CIV. PRAC. & REM. CODE § 51.016; 9 U.S.C. § 16(a)(1)(A)–(B); W.
Dairy Transp., LLC v. Vasquez, 457 S.W.3d 458, 462–63 (Tex. App.—El Paso 2014, no pet.). Under
common law standards, the trial court’s ruling could be challenged by means of an original proceeding
seeking mandamus relief. Royston, Rayzor, Vickery, & Williams, LLP v. Lopez, 467 S.W.3d 494, 499 (Tex.
2015).
                                                    –12–
trial court did not enter findings of fact or conclusions of law to explain its ruling on

the parties’ pleas and motions, we must uphold the trial court’s decision on any

appropriate legal theory urged below. Bonded Builders Home Warranty Ass’n. of

Tex. v. Rockoff, 509 S.W.3d 523, 531–32 (Tex. App.—El Paso 2016, no pet.);

Lakeway Homes, Inc. v. White, No. 05-15-01455-CV, 2016 WL 3453559, at *3 (Tex.

App.—Dallas June 23, 2016, no pet.); Ridge Nat. Res. LLC v. Double Eagle Royalty,

L.P., 564 S.W.3d 105, 118 (Tex. App.—El Paso 2018, no pet).

      As the parties seeking arbitration, the Prestonwood Entities were required to

establish the existence of a valid arbitration agreement and claims falling within the

scope of the agreement. ALLCAPCORP, Ltd. Co. v. Sloan, No. 05-20-00200-CV,

2020 WL 6054339, at *2–3 (Tex. App.—Dallas Oct. 14, 2020, no pet.) (mem. op.)

(citing In re Kellogg Brown & Root, Inc., 166 S.W.3d 732, 737 (Tex. 2005) (orig.

proceeding)); J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 227 (Tex. 2003) (“A

party attempting to compel arbitration must first establish that the dispute in question

falls within the scope of a valid arbitration agreement.”). “If the other party resists

arbitration, the trial court must determine whether a valid agreement to arbitrate

exists.” J.M. Davidson, 128 S.W.3d at 227. “If the trial court finds a valid agreement,

the burden shifts to the party opposing arbitration to raise an affirmative defense to

enforcing arbitration.” Id. A court has no discretion and must compel arbitration if

it is established that there is a valid arbitration agreement and the claims raised fall

within the scope of that agreement. ACE Cash Express, Inc. v. Cox, No. 05-15-

                                         –13–
01425-CV, 2016 WL 4205850, at *6 (Tex. App.—Dallas Aug. 9, 2016, no pet.)

(mem. op.) (citing Pilot Travel Ctrs., LLC v. McCray, 416 S.W.3d 168, 177 (Tex.

App.—Dallas 2013, no pet.)); Seven Hills Commercial, LLC v. Mirabal Custom

Homes, Inc., 442 S.W.3d 706, 714–16 (Tex. App.—Dallas 2014, pet. denied).

                                    ANALYSIS

      In four appellate issues, the Prestonwood Entities contend the trial court erred

in staying arbitration and denying their request to order the parties to arbitration.

Specifically, they assert the trial court abused its discretion by (1) deciding whether

the Estate Representatives’ claims are arbitrable; (2) determining the TAA applied

to the arbitration agreements; (3) disregarding the “uncontroverted evidence”

establishing that the Estate Representatives’ claims are arbitrable under the FAA;

and (4) striking the affidavit offered in support of their pleas in abatement. In their

petitions for writ of mandamus, the Prestonwood Entities argue in the alternative

that the trial court abused its discretion in denying arbitration under the common

law, and that they have no adequate remedy by appeal because they will be forced

to defend five separate lawsuits instead of one arbitration proceeding.

I.    Determination of Arbitrability

      In their first issue, the Prestonwood Entities assert that the trial court

impermissibly determined questions of arbitrability by staying the AAA proceedings

and denying their pleas in abatement rather than submitting those questions to the

                                        –14–
AAA. The en banc majority agrees with the Prestonwood Entities on this point. I do

not.

       Arbitration is “simply a matter of contract between the parties; it is a way to

resolve those disputes—but only those disputes—that the parties have agreed to

submit to arbitration.” Robinson v. Home Owners Mgmt. Enters., Inc., 590 S.W.3d

518, 525–26 (Tex. 2019) (quoting First Options of Chicago, Inc. v. Kaplan, 514 U.S.

938, 943 (1995)). Arbitration is governed by two fundamental principles: arbitration

agreements are contracts that must be enforced according to their terms, and a party

cannot be compelled to arbitrate any dispute absent an agreement to do so. Id.

       Although arbitration is favored under both state and federal law, “arbitrators

wield only the authority they are [contractually] given.” Lamps Plus, Inc. v. Varela,

– U.S. –, 139 S. Ct. 1407, 1416 (2019). Indeed, the federal policy favoring arbitration

“is about treating arbitration contracts like all others, not about fostering arbitration.”

Morgan v. Sundance, Inc., 142 S. Ct. 1708, 1713 (2022). To ensure parties are not

forced to arbitrate matters outside their agreement, a substantive question of

arbitrability—i.e., whether the parties have actually agreed to submit a particular

dispute to arbitration—“is an issue for judicial determination [u]nless the parties

clearly and unmistakably provide otherwise.” Howsam v. Dean Witter Reynolds, 537

U.S. 79, 83-84 (2002) (quoting AT & T Techs. Inc. v. Commc’ns Workers of Am.,

475 U.S. 643, 649 (1986)); Jody James Farms, JV v. Altman Grp., Inc., 547 S.W.3d

                                          –15–
624, 632 (Tex. 2018) (recognizing presumption favoring judicial determination of

arbitrability).

       The phrase “question of arbitrability” refers to the “narrow circumstance

where contracting parties would likely have expected a court to have decided the

gateway matter.” Howsam, 537 U.S. at 83. Referring gateway matters to the court

“avoids the risk of forcing parties to arbitrate a matter they may well not have agreed

to arbitrate.” Id. These “gateway matters” include whether the parties agreed to

arbitrate and whether a claim or dispute is encompassed in the agreement to arbitrate.

G.T. Leach Builders, LLC v. Sapphire V.P., LP, 458 S.W.3d 502, 520–21 (Tex.

2015) (questions of substantive arbitrability, which concern the existence,

enforceability, and scope of an agreement to arbitrate, are usually decided by the

trial court.); McGehee v. Bowman, 339 S.W.3d 820, 824 (Tex. App.—Dallas 2011,

no pet.); Saxa Inc. v. DFD Architecture, Inc., 312 S.W.3d 224, 229 (Tex. App.—

Dallas 2010, pet. denied) (whether the parties agreed to arbitrate is generally an issue

decided by the courts rather than an arbitrator).

       The parties may, however, agree to submit arbitrability issues to arbitration.

Saxa, 312 S.W.3d at 229 (citing Howsam, 537 U.S. at 83). But courts do not assume

the parties “agreed to arbitrate arbitrability unless there is ‘clea[r] and

unmistakabl[e]’ evidence that they did so.” Roe v. Ladymon, 318 S.W.3d 502, 513

(Tex. App.—Dallas 2010, no pet.) (quoting First Options, 514 U.S. at 944);

McGehee, 339 S.W.3d at 825–26 (if the parties clearly and unmistakably provide

                                         –16–
that the arbitrator is to decide the questions of substantive arbitrability, then the trial

court must permit the arbitrator to decide those issues). A “court must examine the

arbitration agreement to decide if, when construed under the relevant state law, the

agreement evidences a clear and unmistakable intention that the arbitrators will have

the authority to determine the scope of arbitration.” Saxa, 312 S.W.3d at 229 (citing

ODL Servs. Inc. v. ConocoPhillips Co., 264 S.W.3d 399, 413 (Tex. App.—Houston

[1st Dist.] 2008, no pet.)). For example, the parties’ agreement to a broad arbitration

clause that expressly incorporates rules empowering the arbitrator to decide

substantive arbitrability may provide clear and unmistakable evidence of the parties’

intent to delegate the issues of substantive arbitrability to the arbitrator. See Saxa,

312 S.W.3d at 230; see also Swearingen v. Swearingen, No. 05-15-01199-CV, 2016

WL 3902747, at *3–4 (Tex. App.—Dallas July 14, 2016, no pet.) (mem. op.);

Schlumberger Tech. Corp. v. Baker Hughes Inc., 355 S.W.3d 791, 802–03 (Tex.

App.—Houston [1st Dist.] 2011, no pet.).

       Here, Paragraph 8.B of the Operative Leases provides that “The Panel shall

follow the current Commercial Arbitration Rules of the AAA.” Rule R–7(a) of the

AAA’s Commercial Arbitration Rules (the Commercial Rules) gives an arbitrator

“the power to rule on his or her own jurisdiction, including any objections with

respect to the existence, scope, or validity of the Arbitration Agreement.” The

Prestonwood Entities argue that by invoking the AAA and its Commercial Rules in

                                          –17–
the arbitration agreements, the parties clearly and unmistakably agreed to submit

arbitrability issues to the arbitrator.

        I agree that under ordinary circumstances, incorporation of the Commercial

Rules in an arbitration agreement signifies that the agreement calls for the arbitrator

to determine arbitrability. See, e.g., Holifield v. Barclay Props., Ltd., No. 05-21-

00239-CV, 2021 WL 4549498, at *3 (Tex. App.—Dallas Oct. 5, 2021, pet. filed)

(mem. op.) (stating general rule that “a bilateral agreement to arbitrate under the

AAA rules constitutes clear and unmistakable evidence of the parties’ intent to

delegate the issue of arbitrability to the arbitrator.”).6 This general rule and the cases

following it are not dispositive here, however, because they are distinguishable in at

least two ways. First, none of these cases involved a situation such as here where the

AAA deferred the arbitrability determination to the state court. Second, these cases

did not involve parties disputing arbitration who were non-signatories to the

agreement.

    6
      Each of the following cases cites the general rule that express incorporation of rules empowering the
arbitrator to decide arbitrability constitutes clear and unmistakable evidence of the parties’ intent to delegate
issues of arbitrability to the arbitrator. See also HomeAdvisor, Inc. v. Waddell, No. 05-19-00669-CV, 2020
WL 2988565, at *5 (Tex. App.—Dallas June 4, 2020, no pet.) (mem. op.); Trafigura Pte. Ltd. v. CNA
Metals Ltd., 526 S.W.3d 612, 616–18 (Tex. App.—Houston [14th Dist.] 2017, no pet.); Gilbert v. Rain &
Hail Ins., No. 02-16-00277-CV, 2017 WL 710702, at *4 (Tex. App.—Fort Worth Feb. 23, 2017, pet.
denied) (mem. op.); Schlumberger Tech. Corp. v. Baker Hughes Inc., 355 S.W.3d 791, 803 (Tex. App.—
Houston [1st Dist.] 2011, no pet.); Saxa Inc. v. DFD Architecture Inc., 312 S.W.3d 224, 229–31 (Tex.
App.—Dallas 2010, pet. denied) Petrofac, Inc. v. DynMcDermott Petroleum Operations Co., 687 F.3d 671,
675 (5th Cir. 2012); Crawford Prof’l Drugs, Inc. v. CVS Caremark Corp., 748 F.3d 249, 262-63 (5th Cir.
2014).
                                                     –18–
      A.     AAA’s refusal to determine arbitrability

      This case is unique because the AAA refused to determine the question of

arbitrability. While the parties were attempting to informally resolve their disputes,

the Prestonwood Entities filed arbitration actions with the AAA under its

Commercial Rules as provided in the leases. During this process, the Estate

Representatives requested that the AAA stay all proceedings pending a

determination of proper jurisdiction for all claims and counterclaims in this dispute

by a court of competent jurisdiction. Over the Prestonwood Entities’ objections, the

AAA granted the Estate Representatives’ request and stayed the proceedings. The

Prestonwood Entities challenged that administrative stay under the AAA’s

administrative processes but were unsuccessful in having the stay lifted.

      In fact, the record before us indicates that the AAA declined three times to

proceed with administration, writing each time that in order to proceed, it required

either mutual agreement by the parties or adjudication of arbitrability by a Dallas

County Texas Court. First, on June 28, 2019, the AAA through Rod Toben wrote:

      The AAA is in receipt of the parties’ communications submitted in
      response to the AAA’s June 19, 2019 request for clarification regarding
      separate submissions for dispute resolution regarding prospective
      Claimants . . . and prospective Respondents . . . .

      Upon review of the parties’ contentions, the AAA has made an
      administrative determination that it will not proceed with the
      administration of the submissions unless the parties mutually agree, or
      until the issue of arbitrability is decided by the Dallas County, Texas
      Court (“Court”).

Then, on August 8, 2019, the AAA re-asserted its position:
                                        –19–
      The AAA is in receipt of the parties’ communications submitted in
      response to the attached email dated June 28, 2019. After review of the
      filings, the AAA has determined the administration of these matters will
      not proceed until determination by the courts is rendered as to
      arbitrability.

Finally, on August 28, 2019, the AAA again chose not to change its decision:

      The AAA has reviewed the latest filing from Mr. Macdonald dated
      August 14, 2019 (sic) and August 15, 2019, as well as, the email
      response from Mr. Crawford dated August 19, 2019. The determination
      of the AAA, as communicated to counsel on June 28, 2019 (sic) and
      August 8, 2019, remains as stated.

Despite the AAA’s unwavering decision, the Prestonwood Entities assert that the

AAA did not make a substantive decision that the AAA does not have jurisdiction

or that the claims are not arbitrable because Rule R–7 of the Commercial Rules

“expressly provides that such issues can be only decided by a properly constituted

Panel.” A plain reading of Rule 7 and other applicable rules renders this argument

unavailing.

      Rule R–7, titled “Jurisdiction,” provides:

      (a) The arbitrator shall have the power to rule on his or her own
      jurisdiction, including any objections with respect to the existence,
      scope, or validity of the arbitration agreement or to the arbitrability of
      any claim or counterclaim.

      (b) The arbitrator shall have the power to determine the existence or
      validity of a contract of which an arbitration clause forms a part. Such
      an arbitration clause shall be treated as an agreement independent of the
      other terms of the contract. A decision by the arbitrator that the contract
      is null and void shall not for that reason alone render invalid the
      arbitration clause.

      (c) A party must object to the jurisdiction of the arbitrator or to the
      arbitrability of a claim or counterclaim no later than the filing of the

                                        –20–
      answering statement to the claim or counterclaim that gives rise to the
      objection. The arbitrator may rule on such objections as a preliminary
      matter or as part of the final award.

Am. Arbitration Ass’n, Commercial Arbitration Rules & Mediation Procedures,

R– 7: Jurisdiction (eff. Oct. 1, 2013), available at adr.org/commercial.

      Rule R–7 provides the arbitrator with the power to determine his or her own

jurisdiction. Id.; see also Super Starr Int’l, LLC v. Fresh Tex Produce, LLC, No. 13-

17-00184-CV, 2017 WL 4054395, at *4 (Tex. App.—Corpus Christi–Edinburg

Sept. 14, 2017, no pet.) (mem. op.). The rule further gives the arbitrator the power

to consider and determine any objections with respect to the existence, scope, or

validity of the arbitration agreement or to the arbitrability of any claim or

counterclaim. Rule R–7 does not, however, provide that issues of jurisdiction or

arbitrability can be decided “only” by a properly constituted panel. On the contrary,

the only exclusive grant of authority regarding administration under the commercial

rules is given to the AAA under Rule R–1(A) and Rule R–2. Rule R–1(A) provides

in part that “Any disputes regarding which AAA rules shall apply shall be decided

by the AAA.” Am. Arbitration Ass’n, Commercial Arbitration Rules & Mediation

Procedures, R– 1: Agreement of Parties (eff. Oct. 1, 2013), available at

adr.org/commercial. Similarly, Rule R–2 provides that “Arbitrations administered

under these rules shall only be administered by the AAA or by an individual or

organization authorized by the AAA to do so.” Id. at R-2: AAA and Delegation of

Duties. Under these rules, I would conclude the AAA has the sole authority to

                                       –21–
determine which of its rules apply to a given dispute and who shall administer a

particular proceeding.

       Here, under the authority granted in Commercial Rules R–1 and R–2, the

AAA declined to administer the cases until either the parties agreed to proceed in

the AAA, or a court of competent jurisdiction ruled on the issue of arbitrability. The

AAA, in other words, authorized the state court to make preliminary decisions of

arbitrability. Nothing in the plain language of Rule R–7 prohibits the AAA from

doing this, and Rules R–1 and R–2 authorize it. The AAA made a choice not to

decide arbitrability. But it was still a choice, and we should respect it. E.g.¸Jean–

Paul Sartre, Existentialism Is a Humanism 44 (Carol Macomber trans., Yale

University Press 2007) (“[W]hat is impossible is not to choose. I can always choose,

but I must also realize that, if I decide not to choose, that still constitutes a choice.”);

cf. Hubbard v. Hollywood Park Realty Enters., Inc., 1991 WL 3151, at *10 (Del.

Ch. Jan. 14, 1991) (“From a semantic and even legal viewpoint, ‘inaction’ and

‘action’ may be substantive equivalents, different only in form.”).

       By asking us to compel the AAA to assign an arbitration panel to determine

arbitrability despite the AAA’s decision that, unless and until certain conditions are

met, none of its rules will apply in this case, the Prestonwood Entities impliedly

request that we divest the AAA of its authority to interpret its own rules and

determine its own jurisdiction. This we cannot do. Indeed, the guiding principles of

law provided in Schein, Saxa, Home Advisor, and Phillips require us to decline the

                                           –22–
Prestonwood Entities’ request. By concluding otherwise, the en banc majority

violates the well-established principle that a court cannot imply contract terms to

favor arbitration. See, e.g., Morgan, 142 S.Ct. at 1713–14.

      Accordingly, I would conclude that, in the face of the AAA declining to

proceed until certain conditions are met and deferring to Dallas County courts to

determine the issue of arbitrability, the trial court properly moved to decide the

question of arbitrability.

      B.     The Estate Representatives are non-signatories who did not
             agree to arbitration.

      The Prestonwood Entities also maintain that Paragraph 8.B constitutes clear

and unmistakable evidence that the Estate Representatives agreed to submit

questions of arbitrability to the arbitrator and, therefore, this Court should require

the trial court to abate its proceedings and send the case back to the AAA. The en

banc majority agrees with them. As discussed above, however, I conclude this

argument fails because such a holding requires this Court to disregard the AAA’s

unequivocal refusal to determine arbitrability. The conclusion is also faulty because

it overlooks that the Estate Representatives are non-signatories to the Operative

Leases. As such, the inclusion of Paragraph 8.B is not evidence that the Estate

Representatives agreed to arbitrate or to do so under AAA rules, much less clear and

unmistakable evidence that the Estate Representatives, as non-contracting parties,

authorized an arbitrator to decide those gateway matters. See Roe v. Ladymon, 318

S.W.3d 502 (Tex. App.—Dallas 2010, no pet.).
                                   –23–
      In Roe, Metro LLP and Roe were the parties to a construction contract with

an arbitration provision. 318 S.W.3d at 507. Ladymon signed the contract as Metro’s

partner but did not sign in his individual capacity. Id. The arbitration agreement

incorporated the AAA’s Construction Industry Arbitration Rules, which included

Rule R–8, a provision similar to Rule 7 of the Commercial Arbitration Rules. Id. at

507, 517. Roe was dissatisfied with Metro’s construction services and demanded

arbitration against both Metro and Ladymon. Id. at 508. Ladymon objected to

arbitration, asserting the arbitration provision did not apply to him because he did

not sign an agreement to arbitrate in his individual capacity. Id. Roe argued that Rule

R–8 required that the question of whether Ladymon was subject to the arbitration

provision be submitted to the arbitrator. Id. at 517.

      This Court disagreed, noting that “the entities who agreed to arbitrate under

the AAA rules are Metro LLP and Roe, not Ladymon” and, as such, “the terms of

the contracting parties’ agreement to arbitrate is not evidence that a non-contracting

party—here Ladymon—agreed to arbitrate or to do so under AAA rules, much less

clear and unmistakable evidence of such an agreement.” Roe, 318 S.W.3d at 517

(citing First Options, 514 U.S. at 946–47). We concluded that we could not “say that

Ladymon clearly and unmistakably agreed to submit gateway issues to an arbitrator

simply because Roe and Metro LLP agreed to arbitrate in accordance with rules

selected by the AAA.” Id.

                                         –24–
          I would apply the same analysis here. Just as in Roe, the parties seeking to

avoid arbitration—the Estate Representatives—are non-contracting parties because

they did not sign the leases. See Roe, 318 S.W.3d at 517. As such, the language in

the leases stating that the arbitration panel “shall follow the current Commercial

Arbitration Rules of the AAA” is not evidence that the Estate Representatives agreed

to arbitrate or to do so under AAA rules, much less clear and unmistakable evidence

that the Estate Representatives, as non-contracting parties, authorized an arbitrator

to decide those gateway matters. See, e.g., Elgohary v. Herrera, 405 S.W.3d 785,

791–92 (Tex. App.—Houston [1st Dist.] 2013, no pet.) (applying Roe and

concluding that agreement to arbitrate under AAA rules was not clear and

unmistakable evidence that a non-contracting party agreed to arbitrate under AAA

rules).

          Whether the arbitration agreement binds the Estate Representatives as non-

signatories is for the courts to decide, unless there is “clear and [un]mistakable

evidence” that the Estate Representatives agreed the arbitrator would make that

decision. See Roe, 318 S.W.3d at 518 (first citing Howsam, 537 U.S. at 84, and then

citing First Options, 514 U.S. at 944). On this record, the Prestonwood Entities have

not shown that the Estate Representatives “clearly agreed to have the arbitrator [ ]

decide (i.e., to arbitrate) the question of arbitrability.” See First Options, 514 U.S. at

946. Because the non-contracting parties (here the Estate Representatives) “did not

clearly agree to submit the question of arbitrability to arbitration, the [trial court]

                                          –25–
was correct in finding that the arbitrability of the dispute was subject to independent

review by the courts.” See id. at 947. Accordingly, the trial court correctly concluded

the arbitrability of the dispute was subject to its de novo determination. See Roe, 318

S.W.3d at 518; see also Jody James Farms, 547 S.W.3d at 633 (“Given the absence

of clear and unmistakable evidence that Jody James agreed to arbitrate arbitrability

in disputes with non-signatories, compelled arbitration cannot precede a judicial

determination that an agreement to arbitrate exists. The trial court was therefore

charged with determining whether a valid agreement to arbitrate exists between Jody

James and the Agency before any issue may be referred to arbitration.”).

      The facts of this case are unique because of the Estate Representatives’ status

as non-signatories and the AAA’s decision to defer the arbitrability determination to

the state court. And under these facts, the mere incorporation of the Commercial

Rules into the Agreement should not be considered clear and unmistakable evidence

of an agreement to arbitrate arbitrability for disputes between the Prestonwood

Entities and non-signatory, third parties. See, e.g., Jody James Farms, 547 S.W.3d

at 631–33; see also Roe, 318 S.W.3d at 518. The majority dismisses my analysis as

no more than “an interesting and creative argument” and exaggerates the potential

impact on future cases. The majority’s conclusion, however, directly conflicts with

Texas law. See Jody James Farms, 547 S.W.3d at 631–33. In Jody James Farms,

the Texas Supreme Court held “an arbitration agreement’s mere incorporation of the

AAA rules” does not show “clear intent to arbitrate arbitrability” when the dispute

                                        –26–
is “between a party to the arbitration agreement and a non-signatory.” Id. at 632.

Whereas the majority views the Estate Representatives’ non-signatory status as

irrelevant, in Jody James Farms the supreme court stated that non-signatory status

“is an important distinction” in this analysis:

      The involvement of a non-signatory is an important distinction because
      a party cannot be forced to arbitrate absent a binding agreement to do
      so. The question is not whether Jody James agreed to arbitrate with
      someone, but whether a binding arbitration agreement exists between
      Jody James and the Agency. What might seem like a chicken-and-egg
      problem is resolved by application of the presumption favoring a
      judicial determination. A contract that is silent on a matter cannot speak
      to that matter with unmistakable clarity, so an agreement silent about
      arbitrating claims against non-signatories does not unmistakably
      mandate arbitration of arbitrability in such cases.

Id. By dismissing these distinguishing factors as irrelevant, the en banc majority

opinion conflicts with binding authority and disregards the presumption favoring

judicial determination. Moreover, the opinion deprives non-signatories of the

opportunity to have a court determine threshold questions of arbitrability and

impermissibly subjects non-signatories to the presumptions generally applied to

signatories despite the non-signatories’ unique status under Texas law. For the

foregoing reasons, I would overrule the Prestonwood Entities’ first issue.

II.   Applicability of the TAA rather than the FAA

      Having concluded the trial court did not abuse its discretion by determining

gateway issues of arbitrability, I would move on to consider the Prestonwood

Entities’ remaining issues in which they argue the FAA, rather than the TAA, applies

to the arbitration agreement and requires the trial court to compel arbitration.
                                         –27–
      In the trial court and on appeal, the Estate Representatives maintain the

arbitration agreement is governed by the TAA, rather than the FAA. As a result, the

Estate Representatives contend the arbitration provision is not enforceable as to their

personal injury claims because they did not agree in writing to arbitrate and neither

they nor any party’s attorney signed the agreement. See TEX. CIV. PRAC. & REM.

CODE § 171.002(a)(3), (c) (the TAA does not apply to a claim for personal injury

unless: “(1) each party to the claim, on the advice of counsel, agrees in writing to

arbitrate; and (2) the agreement is signed by each party and each party’s attorney”).

The Prestonwood Entities, in contrast, urge that the FAA controls because the

transaction involves interstate commerce and TAA’s exclusion of personal injury

claims interferes with the enforceability of the arbitration agreement, thus precluding

application of the TAA and requiring application of the FAA. We disagree with this

notion, and we agree with the Estate Representatives.

      To compel arbitration, a party must prove that a valid arbitration agreement

exists. Henry, 551 S.W.3d at 115. Whether an agreement is valid and enforceable

necessarily requires the court to determine what law governs the agreement. The

FAA “preempts state statutes to the extent they are inconsistent with that Act.” In re

D. Wilson Constr. Co., 196 S.W.3d 774, 779–80 (Tex. 2006) (orig. proceeding); see

Royce Homes, L.P. v. Bates, 315 S.W.3d 77, 85 (Tex. App.—Houston [1st Dist.]

2010, no pet.) (FAA preempts all otherwise applicable inconsistent state laws,

including any inconsistent provisions of the TAA, under the Supremacy Clause of

                                        –28–
the United States Constitution). The FAA, however, is not triggered in every case.

“The FAA only preempts the TAA if: ‘(1) the agreement is in writing, (2) it involves

interstate commerce, (3) it can withstand scrutiny under traditional contract defenses

[under state law], and (4) state law affects the enforceability of the agreement.’” In

re D. Wilson Const. Co., 196 S.W.3d at 780 (quoting In re Nexion Health at Humble,

Inc., 173 S.W.3d 67, 69 (Tex. 2005) (orig. proceeding) (per curiam) (construing 9

U.S.C. § 2)). Here, if the FAA is triggered it preempts the TAA because the two

statutes are inconsistent. See In re Nexion Health at Humble, 173 S.W.3d at 69 (“The

TAA interferes with the enforceability of the arbitration agreement by adding an

additional requirement—the signature of a party's counsel—to arbitration

agreements in personal injury cases.”) (citing TEX. CIV. PRAC. & REM. CODE §

171.002(a)(3), (c)). With these rules in mind, we must first determine if the

agreement specifies what law applies.

      The arbitration agreements in question reference neither the FAA nor the

TAA. They merely note that the leases “shall be governed by and construed under

the laws of the State of Texas” and the arbitration “shall be conducted in the county

where the [The Tradition] is located.” In such cases, a choice-of-law clause will not

be construed to select the TAA to the exclusion of the FAA unless the clause

“specifically exclude[s] the application of federal law.” In re L & L Kempwood

Assocs., L.P., 9 S.W.3d 125, 127–28 (Tex. 1999) (orig. proceeding) (per curiam).

Although a general choice-of-law clause such as the one in the Leases does not

                                        –29–
specifically exclude the application of federal law, application of the FAA is not

automatic. See Roehrs v. FSI Holdings, Inc., 246 S.W.3d 796, 803 (Tex. App.—

Dallas 2008, pet. denied) (similar choice-of-law clause did not specifically exclude

application of FAA) (citing Dewey v. Wegner, 138 S.W.3d 591, 596 & n. 5 (Tex.

App.—Houston [14th Dist.] 2004, no pet.)). Rather, the FAA must be triggered to

apply and, even then, the TAA will also apply to the extent it is consistent with the

FAA. See Fredericksburg Care Co., L.P. v. Perez, 461 S.W.3d 513, 517 (Tex. 2015)

(“The FAA applies to arbitration clauses in contracts that affect interstate

commerce.”); see also In re D. Wilson Constr. Co., 196 S.W.3d at 779–80 (the FAA

“preempts state statutes to the extent they are inconsistent with that Act.”); see also

Royce Homes, L.P., 315 S.W.3d at 85 (applying FAA where contract involved

interstate commerce and recognizing TAA also applies to the extent it is consistent

with the FAA). As discussed below, however, I would conclude the FAA is not

triggered under the facts of this case because the agreement does not involve

interstate commerce and, therefore, the FAA does not apply.

      For the FAA to preempt the TAA, the agreement must involve interstate

commerce and “state law must refuse to enforce [the] arbitration agreement that the

FAA would enforce, either because (1) the TAA has expressly exempted the

agreement from coverage, or (2) the TAA has imposed an enforceability requirement

not found in the FAA.” In re D. Wilson Constr. Co., 196 S.W.3d at 780 (citations

omitted); see Nafta Traders, Inc. v. Quinn, 339 S.W.3d 84, 97–98 (Tex. 2011);

                                        –30–
Fredericksburg Care Co., 461 S.W.3d at 517; Jack B. Anglin Co., Inc. v. Tipps, 842

S.W.2d 266, 269–70 (Tex. 1992) (stating that the FAA “applies to all suits in state

and federal court when the dispute concerns a contract evidencing a transaction

involving commerce”) (citing Perry v. Thomas, 482 U.S. 483, 489 (1987)). The

parties disagree on whether the agreements involve interstate commerce, and that

issue is dispositive here.

      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 the transaction that is the subject

of the arbitration agreement. In re L & L Kempwood Assocs., 9 S.W.3d at 127; In re

Merrill Lynch Trust Co. FSB, 123 S.W.3d 549, 553 (Tex. App.—San Antonio 2003,

orig. proceeding).

      “Interstate commerce” in this context is not limited to the actual shipment of

goods across state lines but includes all contracts “relating to” interstate commerce.

In re First Merit Bank, 52 S.W.3d 749, 754 (Tex. 2001) (orig. proceeding). Interstate

commerce may be shown in a variety of ways, including: (1) location of headquarters

in another state; (2) transportation of materials across state lines; (3) manufacture of

parts in a different state; (4) billings prepared out of state; and (5) interstate mail and

phone calls in support of a contract. Lopez v. Casa Pontiac GMC Buick, Inc., No.

                                          –31–
14-11-00001-CV, 2011 WL 5926683, at *3 (Tex. App.—Houston [14th Dist.] Nov.

29, 2011, no pet.) (mem. op.) (citing Jack B. Anglin, 842 S.W.2d at 270).

      In support of their contention that the FAA controls, the Prestonwood Entities

produced the Campos affidavit. In his affidavit, Campos cited numerous alleged

facts to demonstrate that the general operation of The Tradition community involves

interstate commerce. Specifically, Campos alleged:

           The Tradition paid “almost $3 million . . . to out-of-state vendors
            of goods and services” from 2014 to 2018;

           Many vendors are “located from coast to coast and border to
            border,” and many in-state vendors sell goods “manufactured,
            grown, assembled or prepared outside the State of Texas”;

           The Prestonwood Entities use “telephone, mail, email and
            overnight delivery service” to contact “out-of-state vendors,
            potential residents and contact persons for . . . residents”;

           The Tradition advertises employment and residency openings on
            its website and online “job board[s]”;

           The Prestonwood Entities use interstate direct mail advertising
            and online advertising purchased through “third-party vendors”;

           Some of The Tradition’s residents relocated to the community
            from out of state, and some of the residents’ “designated family
            members” are located in other states; and

           Some of the items The Tradition uses in meal preparation “can
            only be obtained through interstate or foreign commerce.”

The Estate Representatives objected to and moved to strike these portions of the

Campos affidavit on multiple grounds. The trial court sustained the Estate

Representatives’ objections and struck the corresponding affidavit testimony. The

remaining evidence in the record does not address the Prestonwood Entities’
                                   –32–
purported interstate commerce activities at all, much less activities purportedly

conducted to fulfill the leases. Before addressing the applicability of the FAA, we

must, therefore, determine whether the trial court abused its discretion by sustaining

the objections to Campos’s affidavit testimony.

      The Prestonwood Entities contend the trial court erred by striking the Campos

testimony because the objections were untimely filed just one business day before

the hearing, the trial court abused its discretion in ruling on the objections without a

hearing on the objections, and the objections were meritless, “scatter-shot

complaints.” The Prestonwood Entities failed to preserve error for review of this

issue, however, because they did not seek a continuance of the hearing or file a

response to the objections before the court ruled. See Cunningham v. Anglin, No. 05-

12-00039-CV, 2014 WL 3778907, at *3 (Tex. App.—Dallas July 31, 2014, pet.

denied) (mem. op.) (although a trial court should not sustain late-filed objections

without giving the other party an opportunity to amend, “the other party should ask

the trial court for a continuance for time to respond to the objections” and failing to

do so waives error on appeal); Webster v. Allstate Ins. Co., 833 S.W.2d 747, 750

(Tex. App.—Houston [1st Dist.] 1991, no writ.) (same). Further, the record reflects

that the Prestonwood Entities did not address the objections in the hearing. At the

opening of the hearing, counsel for the Prestonwood Entities indicated that they

would address the objections during the hearing. When the Prestonwood Entities

argued points addressed in the Campos affidavit during the hearing, counsel for the

                                         –33–
Estate Representatives reissued the objections. The Prestonwood Entities did not

respond or offer any argument in defense of the objections. Consequently, they have

failed to preserve error for review. I would overrule their fourth issue concerning the

striking of the Campos testimony.

      Without the Campos testimony, the remaining record will not support the

Prestonwood Entities’ contention that the FAA applies here because there is no

evidence that the leases evidence a transaction involving interstate commerce. See 9

U.S.C. § 2. Without such evidence, the Prestonwood Entities’ assertion that the FAA

controls the arbitration agreement fails as a matter of law. See Allied-Bruce Terminix

Cos., Inc. v. Dobson, 513 U.S. 265, 281 (1995) (the transaction evidenced by the

contract must in fact involve interstate commerce); Eastland v. Camp Mystic, Inc.,

Nos. 04-08-00675-CV, 04-08-00741-CV, 2009 WL 260523, at *3 (Tex. App.—San

Antonio Feb. 4, 2009, pet. denied) (mem. op.) (lease between two Texas entities for

real property on which one party operated a summer camp did not evidence a

transaction involving interstate commerce).

      Moreover, under this record I would conclude interstate commerce is not

implicated here. All parties involved in the suit are Texas residents, the leases were

signed in Texas, the leases were to be performed in Texas only, the leased premises

are located in Texas, the leases are governed by Texas law, and the underlying

dispute does not relate in any way to interstate commerce. The agreements,

therefore, cannot be governed by the FAA. Accordingly, we conclude the trial court

                                        –34–
did not abuse its discretion by denying the Prestonwood Entities’ motion to compel

arbitration under the FAA and by staying the AAA proceeding. I would overrule

their third issue.

III.   Enforceability of the Arbitration Agreements under the TAA

       As discussed above, by granting the motions to stay arbitration and denying

the pleas in abatement, the trial court necessarily determined that the TAA governed

the arbitration agreements but those agreements were nonetheless unenforceable

under the TAA. The Estate Representatives provided multiple bases in support of

their argument that the arbitration agreements were invalid and unenforceable,

including the agreements were illusory, unconscionable, and did not comply with

signature requirements set out in the Act related to personal injury claims. Because

the trial court did not enter findings of fact or conclusions of law to explain its ruling,

we must uphold the trial court’s decision on any appropriate legal theory urged

below. Rockoff, 509 S.W.3d at 531–32; Lakeway Homes, 2016 WL 3453559, at *3.

       A written agreement to arbitrate is valid and enforceable under the TAA if the

agreement is to arbitrate a controversy that: (1) exists at the time of the agreement;

or (2) arises between the parties after the date of the agreement. TEX. CIV. PRAC. &

REM. CODE § 171.001. The TAA controls the dispute where, as here, the contract

does not relate to interstate commerce and was executed between Texas residents in

Texas, to be performed in Texas. Therefore, I would hold that the TAA controls this

dispute. See, e.g., Chambers v. O’Quinn, 305 S.W.3d 141, 150 (Tex. App.—Houston

                                          –35–
[1st Dist.] 2009, pet. denied) (TAA controlled dispute despite contract’s references

to both FAA and TAA where contract did not relate to interstate commerce); see

also In re Godt, 28 S.W.3d 732, 738–39 (Tex. App.—Corpus Christi–Edinburg

2000, orig. proceeding) (same).

      However, when a party’s claim is for personal injury, an arbitration agreement

is unenforceable as to the personal injury claim unless: “(1) each party to the claim,

on the advice of counsel, agrees in writing to arbitrate; and (2) the agreement is

signed by each party and each party’s attorney.” TEX. CIV. PRAC. & REM. CODE

§ 171.002(a)(3), (c). It is undisputed that the leases at issue here are not signed by

the Estate Representatives in their individual capacities, or by the decedents’

attorneys, the Estate Representatives’ attorneys, or the Prestonwood Entities’

attorneys. As a result, the arbitration agreements are unenforceable. Accordingly, we

conclude the trial court could reasonably determine the TAA governs the arbitration

agreements but renders those agreements unenforceable to the personal injury claims

asserted here. See, e.g., In re Godt, 28 S.W.3d at 738–39 (concluding TAA

controlled dispute and holding that the arbitration agreement is unenforceable under

the TAA because it did not meet the requirements of section 171.002(c)). I would

overrule the Prestonwood Entities’ second issue.

IV.   The Original Proceedings

      Finally, I would address the Prestonwood Entities’ petitions for writ of

mandamus. To be entitled to mandamus relief, a relator must show the trial court has

                                        –36–
clearly abused its discretion and relator has no adequate appellate remedy. In re

Prudential Ins. Co., 148 S.W.3d 124, 135–36 (Tex. 2004) (orig. proceeding).

Mandamus is the appropriate procedure by which we may review a trial court’s

ruling on a motion to compel arbitration under the common law. In re Swift Transp.

Co., 311 S.W.3d 484, 491 (Tex. App.—El Paso 2009, orig. proceeding); In re Paris

Packaging, 136 S.W.3d at 727 & n. 7.

      The Prestonwood Entities contend the trial court abused its discretion in

staying arbitration “because the claims should be arbitrated under Texas common

law.” However, it is my conclusion that, under the TAA, the trial court did not err in

staying the AAA proceedings and denying the pleas in abatement. Therefore, no

discussion of whether the order was permissible under the common law is necessary.

See Miller v. Brewer, 118 S.W.3d 896, 899 (Tex. App.—Amarillo 2003, no pet.)

(discussion of whether order was permissible under the FAA or common law

unnecessary because court concluded order was permissible under the TAA). I

would deny the petitions for writ of mandamus.

                                  CONCLUSION

      For these reasons, and for the second time, I would conclude the trial court

did not abuse its discretion by granting the motions to stay arbitration and denying

the pleas in abatement.

                                        –37–
         Because the majority continues to reach the opposite conclusion, I dissent

again.

                                           /Robbie Partida-Kipness/
                                           ROBBIE PARTIDA-KIPNESS
                                           JUSTICE

Burns, C.J., and Molberg, Nowell, Carlyle, and Garcia, JJ., join this dissenting
opinion.

200380DF.P05

                                        –38–