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Santander Consumer USA, Inc. v. Mata

Court of Appeals of Texas, Third District, Austin

March 29, 2017

Santander Consumer USA, Inc., Appellant
v.
Mario A. Mata; Centroplex Automobile Recovery, Inc.; Blake Thornton Vandusen; John F. Thompson d/b/a Centroplex Automobile Recovery, Inc.; and Redshift Investigation, Inc., Appellees

         FROM THE DISTRICT COURT OF TRAVIS COUNTY, 353RD JUDICIAL DISTRICT NO. D-1-GN-13-000677, HONORABLE TIM SULAK, JUDGE PRESIDING

          Before Justices Puryear, Goodwin, and Bourland.

          MEMORANDUM OPINION

          Cindy Olson Bourland, Justice.

         This is an appeal from the trial court's denial of a motion to compel arbitration and stay proceedings filed by appellant Santander Consumer USA, Inc. The trial court granted the motion as to appellee Mario A. Mata and denied it as to the remaining appellees, Centroplex Automobile Recovery, Inc.; Blake Thornton Vandusen; John F. Thompson d/b/a Centroplex Automobile Recovery, Inc.; and Redshift Investigation, Inc. Santander appeals from the trial court's order. For the reasons that follow, we will affirm.

         BACKGROUND[1]

         In December 2002, Mata financed the purchase of a Chevrolet Suburban pursuant to a motor-vehicle retail installment contract (Sale Contract).[2] As part of the purchase transaction, Mata pledged the vehicle as collateral to secure the debt. Mata and a predecessor of Santander amended the Sale Contract in January 2009, dropping the interest rate from 12.82% to 4% per year and adding an arbitration provision governed by the Federal Arbitration Act. It is undisputed that no other party saw or signed the original or amended Sale Contract.

         Appellees Redshift and Centroplex are in the collateral-recovery business. Redshift contracts with financial institutions like Santander to recover secured collateral. Relevant to this case, Redshift has a December 2002 Service Agreement (Service Agreement) with Santander relating to the recovery of secured collateral. There is no arbitration provision in the Service Agreement. In turn, Redshift entered into a contract with Centroplex for Centroplex to carry out repossession assignments requested by Redshift pursuant to the terms of a June 2010 Collateral Recovery Agreement between Redshift and Centroplex.

         In 2011, Santander ordered repossession of the vehicle purchased by Mata. Redshift tasked Centroplex with the collateral-recovery assignment, and Centroplex sent one of its employees, Vandusen, to repossess the vehicle. Mata allegedly sustained physical injuries during the course of the repossession attempt, and he sued Santander for breach of contract and all of the other parties for conversion, common-law fraud, trespass, gross negligence, and violations of the Texas Deceptive Trade Practices Act.

         Santander asserted cross-claims against Redshift, Centroplex, Thompson, and Vandusen for indemnification, contribution, and proportionate responsibility. Vandusen asserted a counter-claim against Santander and a cross-claim against Redshift for indemnity and contribution. Redshift asserted cross-claims against Centroplex for contribution, indemnity, and breach of contract.

         Santander filed a motion to compel arbitration and stay proceedings, requesting an order that Mata's claims against all defendants be submitted to arbitration because, Santander argues, all of Mata's claims arise out of or are related to the Sale Contract containing the arbitration clause. After an evidentiary hearing, the trial court granted the motion with regard to the claims between Mata and Santander and denied the motion as to the other claims and parties. This appeal followed.[3]

         DISCUSSION

         In its sole issue on appeal, Santander contends that the trial court erred by denying the motion to compel arbitration and stay of proceedings as to Centroplex, Vandusen, Thompson, and Redshift. In reviewing the denial of a motion to compel arbitration, we use an abuse-of- discretion standard, and within that standard, we defer to the trial court's factual determinations if they are supported by the evidence and review the trial court's legal determinations de novo. See In re Labatt Food Servs., L.P., 279 S.W.3d 640, 642-43 (Tex. 2009) (orig. proceeding); Oak Crest Manor Nursing Home, LLC v. Barba, No. 03-16-00514-CV, 2016 WL 7046844, at *2 (Tex. App.-Austin Dec. 1, 2016, no pet.) (mem. op.); 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). Whether the parties agreed to be bound to an arbitration agreement is a contract-formation question that we review de novo, deferring to the trial court's findings of historical fact as between the parties as long as those determinations are supported by the evidence. See Oak Crest, 2016 WL 7046844, at *2. A party seeking to compel arbitration under the Federal Arbitration Act (FAA) must establish that (1) there is a valid agreement to arbitrate, and (2) the claims raised are within the agreement's scope. In re Kellogg Brown & Root, Inc., 166 S.W.3d 732, 737 (Tex. 2005) (orig. proceeding).

         Here, there is no dispute (other than Mata's unpreserved claim) that there was a valid agreement to arbitrate between Santander and Mata, and there is no dispute that Centroplex, Vandusen, Thompson, and Redshift (the nonsignatory defendants) were not parties to the Sale Contract containing the arbitration provision, did not agree to it, and did not sign it. Thus, the issue here is whether Santander is entitled to compel non-signatories to participate in arbitration on the basis of the agreement between Mata and Santander.

         We apply Texas procedural rules and substantive law in determining whether nonsignatories are bound by an arbitration agreement. See In re Labatt Food Servs., 279 S.W.3d at 643. Whether an arbitration agreement binds a nonsignatory is a gateway matter to be determined by the court rather than the arbitrator. See In re Weekley Homes, L.P., 180 S.W.3d 127, 130 (Tex. 2005) (orig. proceeding). The party seeking arbitration bears the burden of establishing that the arbitration agreement binds a nonsignatory. See Glassell Producing Co. v. Jared Res., Ltd., 422 S.W.3d 68, 81 (Tex. App.-Texarkana 2014, no pet.); In re Citgo Petroleum Corp., 248 S.W.3d 769, 776 (Tex. App.-Beaumont 2008, orig. proceeding). Nonsignatories to an agreement subject to the FAA may be bound to an arbitration clause when rules of law or equity would bind them to the contract generally. In re Labatt Food Servs., 279 S.W.3d at 643. According to principles of contract and agency law, arbitration agreements may bind nonsignatories under any of six theories: (1) incorporation by reference, (2) assumption, (3) agency, (4) alter ego, (5) equitable estoppel, and (6) ...


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