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Super Starr International, LLC v. Fresh Tex Produce, LLC

Court of Appeals of Texas, Thirteenth District, Corpus Christi-Edinburg

September 14, 2017

SUPER STARR INTERNATIONAL, LLC, LANCE PETERSON, AND RED STARR, SPR DE RL DE CV, Appellants,
v.
FRESH TEX PRODUCE, LLC, INDIVIDUALLY AND DERIVATIVELY ON BEHALF OF TEX STARR DISTRIBUTING, LLC, AND KEMAL MERT GUMUS, Appellees.

         On appeal from the 92nd District Court of Hidalgo County, Texas.

          Before Justices Rodriguez, Benavides, and Hinojosa

          MEMORANDUM OPINION

          NELDA V. RODRIGUEZ Justice

         This appeal concerns an arbitration agreement. Appellants Lance Peterson and his two companies Super Starr International, LLC (the Importer) and Red Starr, SPR de RL de CV (the Grower) grow papayas. Appellants collaborated with appellee Fresh Tex Produce, LLC (Fresh Tex) to distribute the papayas in the United States. Together, appellants and Fresh Tex formed a separate company for distribution: Tex Starr Distributing, LLC (the LLC). However, the relationship between the parties soured, and Fresh Tex filed suit, individually and derivatively on behalf of the LLC.

         Appellants moved to compel arbitration. Fresh Tex responded with a motion to enjoin arbitration, which the trial court granted. Further, the court denied appellants' motion to stay litigation, and it set the case for trial.

         By two issues, appellants contend that the agreement required the trial court to defer the question of arbitrability to the arbitrator. We reverse and remand.

         I. Background

         This is our second occasion to consider an interlocutory appeal from the suit between Fresh Tex and appellants. In our prior opinion, we detailed the development of the papaya distribution business that was founded by Fresh Tex and appellants, the breakdown of their relationship, and the subsequent suit and temporary injunction. Super Starr Int'l, LLC v. Fresh Tex Produce, LLC, S.W.3d,, No. 13-16-00663-CV, 2017 WL 3084294, at *1 (Tex. App.-Corpus Christi July 20, 2017, no pet. h.) [hereinafter "Super Starr I"].

         Kenneth Alford owns and manages Fresh Tex, a produce distribution business based in Texas. On October 18, 2016, Fresh Tex filed suit individually and derivatively on behalf of the LLC. Named as defendants were: (1) the Importer, a Texas entity that imports produce into the United States; (2) the Grower, a Mexican entity that grows produce in Mexico and exports it into the United States through the Importer; (3) Lance Peterson, the current president and owner of the Importer and the Grower; and (4) Kemal Mert Gumus, an employee of the Importer.

         The crux of Fresh Tex's suit is that the appellants committed various torts[1] when they started a competing produce-distribution operation and took customers away from Fresh Tex and the LLC. Fresh Tex requested a temporary injunction to compel appellants to continue distributing papayas exclusively through the LLC, among other things. After hearing the evidence, the trial court granted Fresh Tex's request and entered a temporary injunction which was the subject of our opinion in Super Starr I. See id. This appeal concerns a second temporary injunction which enjoins appellants from pursuing arbitration.

         A. Origins of the Underlying Suit

         The record reveals that in 2010, Alford was approached by David Peterson, the father of appellant Lance Peterson. David was also the founder and co-owner of the Importer and the Grower. David proposed that Fresh Tex and the Importer work together to market a new hybrid papaya and, to that end, form a new limited liability company. Alford agreed. On January 1, 2011, the LLC was formed with two members, Fresh Tex and the Importer, and two managers, Alford and David Peterson.

         Alford, David, and Lance executed an operating agreement (the First Agreement) to govern the LLC. Section 14.7 of the First Agreement provided that the parties would submit any disputes to binding arbitration.

         David passed away in September 2013. Lance assumed ownership of the Importer and the Grower, and by extension, assumed control over half of the LLC. At some point, the parties executed a revised version of the agreement, effective January 1, 2014 (the Second Agreement). The Second Agreement contained the ...


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