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Medinet Investments, LLC v. Jay English And English Law Group, PLLC

Court of Appeals of Texas, Fifth District, Dallas

April 3, 2018

MEDINET INVESTMENTS, LLC, Appellant
v.
JAY ENGLISH AND ENGLISH LAW GROUP, PLLC, Appellees

          On Appeal from the 193rd Judicial District Court [1] Dallas County, Texas Trial Court Cause No. DC-16-07743

          Before Justices Francis, Evans, and Boatright

          MEMORANDUM OPINION

          DAVID EVANS JUSTICE

         Appellant Medinet Investments, LLC asserts in a single issue that the trial court erred by denying its motion to compel arbitration as to all defendants who are appellees. We affirm in part and reverse and render in part.

         BACKGROUND

         A. Subrogation Agreement

         On March 6, 2012, Bobby Walker, appellee English & Associates, PLLC, [2] and A/RNet, PLLC signed a Subrogation and Distribution Agreement (Agreement) in which A/RNet agreed to cover Walker's medical expenses for personal injuries he suffered. English Law Group represented Walker in regard to Walker's injury and advised him regarding the Agreement. Appellee Jay English signed the Agreement on behalf of English Law Group. English Law Group and Walker agreed that A/RNet would be repaid the full amount of the healthcare bills within fifteen days of any recovery. The following provisions from the agreement are relevant to this appeal:

Arbitration. In the event of a breach of the obligations hereunder or other dispute arising out of or related to this Agreement, the matter shall be submitted to the Judicial Arbitration and Mediation Services ("JAMS") in Texas.
***
Assignability. This Subrogation and Distribution Agreement may be assigned, in whole or in part. However, any third party to whom such an assignment is made shall be bound to all duties and obligations set forth in this Agreement.
***
Successors and Assigns. This Agreement binds and is for the benefit of the successors and permitted assigns of each Party. [Walker] may not assign this Agreement or any rights or obligations under it without the [A/RNet's] prior written consent which may be granted or withheld in [A/RNet's] discretion. [A/RNet] has the right, without the consent of or notice to [Walker], to sell, transfer, negotiate, or grant participation in all or any party of, or any interest in, this Agreement.

         In a series of Agreements of Sale, Transfer and Assignment of Accounts Receivable between March 8 and December 7, 2012, A/RNet assigned $492, 453.40 of Walker's medical invoices to Medinet. Upon settlement of Walker's medical claims, Medinet alleged that Walker, Jay English, and English Law Group failed to reimburse the amounts owed to A/RNet under the Agreement.

         B. 116th District Court Litigation

         Walker filed a lawsuit against Pardue Management Company, Pardue Falltree Apartments, Ltd., and Pardue Falltree Apartments, GP relating to his personal injury claims. On December 10, 2014, A/RNet intervened in the litigation alleging it had purchased the account receivables of the medical providers who rendered medical services to Walker. A/RNet also asserted claims against Jay English, English Law Group, and Walker for fraud, fraudulent transfer and constructive fraud. Jay English, English Law Group, and Walker filed a motion for summary judgment asserting that A/RNet was not the proper party to intervene in the lawsuit because it had assigned its rights in the invoices to Medinet. The trial court entered an order rendering summary judgment "that A/RNet take nothing in its claims against Bobby Walker and English and Associates, PLLC." The trial court further ordered that Walker and his counsel were "authorized to withdraw and distribute settlement funds previously held in trust." A/RNet did not appeal this summary judgment decision.

         C. 193rd District Court Litigation

         On June 27, 2016, Medinet filed a petition against Jay English, English Law Group, and Walker alleging claims for theft, fraud, and fraudulent transfer. The caption of the petition referenced Medinet's request for disclosures, admissions, and production, but these discovery requests are not part of the filed petition or included elsewhere in the clerk's record.

         Jay English and English Law Group filed an answer and Medinet filed motions to compel arbitration and to stay mediation and all state court litigation until the motion to compel was heard by the court. Medinet also filed a motion to strike or set aside deemed admissions and a first supplemental petition. Jay English and English Law Group filed a motion for partial summary judgment asserting the doctrines of attorney immunity and res judicata.

         Jay English and English Law Group filed a response to the motion to compel arbitration in which they argued that (1) English and English Law Group were not signatories to the Agreement, (2) the Agreement was unconscionable, and (3) the claims are not subject to arbitration. At the hearing on the motion to compel arbitration, the trial court sua sponte raised the issue of whether Medinet had waived its right to arbitration. The trial court then asked Medinet how filing a lawsuit which requested monetary relief did not substantially invoke the authority of the courts. Medinet responded that the litigation simply had not "gone that far" because "substantial litigation ha[d] not occurred" and argued that Texas law favors arbitration. The ...


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