IN RE CRS INDUSTRIES, INC.
MACDONALD SYSTEMS, INC., Appellee CRS INDUSTRIES, INC., Appellant
Proceeding on Petition for Writ of Mandamus
Appeal from the 152nd District Court Harris County, Texas
Trial Court Case No. 2016-41521
consists of Chief Justice Radack and Justices Brown and
Industries, Inc. filed this interlocutory appeal and a
petition for writ of mandamus, both of which assert that the
trial court abused its discretion by denying CRS's motion
to compel arbitration. We agree and reverse the order denying
the motion, remand to the trial court so that it can enter an
order compelling arbitration and staying this suit, and
dismiss CRS's petition for writ of mandamus as moot.
manufactures air purification systems. It contractually
agreed to allow MacDonald Systems, Inc. to market and sell
its commercial products within a designated territory. The
two subsequently became embroiled in a dispute about the sale
of a residential product, and MacDonald filed this suit.
alleged that it designed a new air filtration system that
incorporated one of CRS's products and had identified a
customer for this new product, DuPure Water Filters.
MacDonald further alleged that the parties agreed to
compensate it for the new design by allowing it to purchase
the new product from CRS and sell it to DuPure at a profit of
$300 per unit. Instead, CRS fired MacDonald as its product
representative, and CRS and DuPure refused to pay MacDonald
for the new design. MacDonald alleged that CRS is selling or
has sold the new design to a company that bought DuPure. It
alleged three causes of action-promissory estoppel, quantum
meruit, and breach of contract-by which it sought recovery of
the $300-per-unit profit it allegedly was promised.
moved to compel arbitration of MacDonald's claims and to
stay the suit pending that arbitration based on a clause in
their contract requiring arbitration of all claims, disputes,
and other matters arising out of or relating to the contract.
MacDonald responded that the arbitration clause was
inapplicable because the parties' dispute concerned a
residential product rather than the commercial ones that were
the subject of their contract. It did not, however, otherwise
dispute the validity of the contract or its arbitration
trial court denied CRS's motion to compel arbitration
without making any fact findings or stating its reasons. By
way of interlocutory appeal and a petition for writ of
mandamus, CRS urges that the trial court abused its
a Florida company whose principal office is in that state,
and MacDonald is a Texas company whose principal office is in
this state. As they are located in different states, their
contract's arbitration clause involves interstate
commerce and is subject to the Federal Arbitration Act. 9
U.S.C. § 2; Rapid Settlements v. Green, 294
S.W.3d 701, 705 (Tex. App.-Houston [1st Dist.] 2009, no
pet.). The Act's applicability, in turn, gives this court
jurisdiction to hear CRS's appeal from the trial
court's order denying its motion to compel arbitration.
See Tex. Civ. Prac. & Rem. Code § 51.016;
see also 9 U.S.C. § 16(a)(1)(B).
to Compel Arbitration
posits that MacDonald's claims in this suit relate to
their contract and therefore are subject to the
contract's arbitration clause. On this basis, CRS
contends that the trial ...