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Dow Roofing Systems, LLC v. Great Commission Baptist Church

Court of Appeals of Texas, Second District, Fort Worth

August 3, 2017

DOW ROOFING SYSTEMS, LLC APPELLANT
v.
GREAT COMMISSION BAPTIST CHURCH AND CHAMBERLIN DALLAS, LLC F/K/A CHAMBERLIN DALLAS, LTD. D/B/A CHAMBERLIN ROOFING AND WATERPROOFING F/K/A CHAMBERLIN ROOFING & WATERPROOFING, LTD. APPELLEES

         FROM THE 236TH DISTRICT COURT OF TARRANT COUNTY TRIAL COURT NO. 236-269529-13

          PANEL: MEIER, SUDDERTH, and PITTMAN, JJ.

          MEMORANDUM OPINION [1]

          MARK T. PITTMAN JUSTICE

         In two issues, Appellant Dow Roofing Systems, LLC appeals from the trial court's denial of its motion to compel arbitration against Appellee Great Commission Baptist Church (the Church) and Appellee Chamberlin Dallas, LLC f/k/a Chamberlin Dallas, Ltd. d/b/a Chamberlin Roofing And Waterproofing f/k/a Chamberlin Roofing & Waterproofing, Ltd. Although the Court is sympathetic to the arguments presented-particularly by the Church-that militate against arbitration, we are bound by precedent and must reverse under the circumstances presented.

         I. Background

         The parties' dispute arose from the construction of a building for the Church in Fort Worth. Construction began in early 2005 and was substantially completed by March 2006.

         The architect's project manual for the construction required the roof to be covered with a thermoplastic polyolefin elastomeric membrane (TPO membrane). Chamberlin installed the building's roof using a TPO membrane manufactured and supplied by Dow Roofing's predecessor, Stevens Roofing Systems, Inc. Several years before, Chamberlin had executed an applicator agreement with Stevens Roofing (the Applicator Agreement), which authorized Chamberlin to install Stevens Roofing products. The Applicator Agreement contained an arbitration provision.

         At the time of construction, Stevens Roofing was a division of JPS Elastomerics Corporation. JPS provided the Church with a limited warranty against leaks in the installed roofing system (the Limited Warranty). The Limited Warranty had a ten-year term starting with the date of substantial completion and the Church's acceptance of the roofing system. It included an arbitration provision covering "[a]ny controversy or claim arising out of or relating to this document, or the breach thereof." In December 2006, the facilities manager for the Church signed the Limited Warranty. After JPS issued the Limited Warranty, Dow Roofing bought Stevens Roofing from JPS.

         After the building's substantial completion, the roof consistently leaked during and after periods of rainfall, and over time the leaks became more frequent. Indeed, on at least five occasions, the Church requested repairs from Dow Roofing under the Limited Warranty. Dow Roofing responded to each request and each time assured the Church that the TPO membrane was in good condition. Eventually, after its insurer denied a claim for roof repair because of an alleged manufacturing deficiency in the TPO membrane, the Church was forced to sue Chamberlin, Dow Roofing, and the builder (not a party to this appeal).

         In response to the Church's lawsuit, Chamberlin filed cross-claims against Dow Roofing for contribution, indemnity, and fraud. In support of its claims, Chamberlin alleged that Stevens Roofing inspected and warranted the roofing system, that Dow Roofing made warranty repairs to the roof, and that any leaks resulted from a defect in the roofing system. Also, Chamberlin pointed out that in the Applicator Agreement, Stevens Roofing had provided a warranty against defects and had required Chamberlin to allow it to inspect and approve the installation of its roofing system.

         Dow Roofing moved to compel arbitration of the Church's and Chamberlin's claims based on the arbitration provisions in the Limited Warranty and the Applicator Agreement, respectively. Neither the Church nor Chamberlin filed a response to the motions.

         On March 16, 2015, the trial court granted the motions to compel arbitration. The parties took no action for a year. On March 16, 2016, the Church, having obtained new counsel, moved to set aside the trial court's arbitration order and to allow it to present arguments against arbitration. The trial court granted the motion and set aside its March 16, 2015 order compelling arbitration.

         The Church then filed a response to Dow Roofing's motion to compel arbitration. In its response, the Church asserted that Dow Roofing had recently declared the warranty to be "null and void, " and as a result, the warranty never came into existence-and, thus, neither did the arbitration provision. The Church further argued that: (1) the Limited Warranty was illusory; (2) the Church's claims arose before execution of the Limited Warranty, and the arbitration provision thus had no application; and (3) the arbitration provision was unconscionable.

         Dow Roofing then filed a consolidated amended motion to compel arbitration of the Church's and Chamberlin's claims against it, addressing the Church's contentions. Again, Chamberlin did not file a response to the renewed motion to compel arbitration.

         The trial court denied Dow Roofing's motion to compel arbitration. Dow Roofing now appeals.

         II. Standard of Review

         We review a trial court's denial of a motion to compel arbitration for an abuse of discretion, but we review whether there is a valid and enforceable arbitration agreement de novo. Brand FX, LLC v. Rhine, 458 S.W.3d 195, 203 (Tex. App.-Fort Worth 2015, no pet.). If the party seeking to compel arbitration proves that a valid arbitration agreement exists, "a strong presumption in favor of arbitration arises and the burden ...


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