Court of Appeals of Texas, Thirteenth District, Corpus Christi-Edinburg
VOSS ENGINEERING, INC. AND RONALD A. VOSS, Appellants,
MICHELLE BAUER AND JAVIER ALONSO, Appellees.
appeal from the 94th District Court of Nueces County, Texas.
Chief Justice Valdez and Justices Rodriguez and Benavides
ROGELIO VALDEZ CHIEF JUSTICE
an interlocutory appeal challenging the trial court's
denial of a motion to compel arbitration filed by appellants,
Voss Engineering, Inc. and Ronald A. Voss. Appellees,
Michelle Bauer and Javier Alonso, sued appellants for breach
of contract, negligence, malpractice, deceptive trade
practices, and negligent misrepresentation. By four issues,
appellants contend that the trial court improperly denied
their motion to compel arbitration. We affirm.
Standard of Review
apply an abuse of discretion standard to the trial
court's denial of appellants' motions to compel
arbitration. Okorafor v. Uncle Sam & Assocs.,
Inc., 295 S.W.3d 27, 38 (Tex. App.-Houston [1st Dist.]
2009, pet. denied). A trial court abuses its discretion when
it acts arbitrarily or unreasonably and without reference to
any guiding rules or principles. Id. If the ruling
under review depends on the resolution of underlying facts,
we must defer to the trial court on its resolution of those
facts and any credibility determinations that may have
affected those resolutions. Id. Furthermore, we may
not substitute our judgment for the trial court on those
matters. Id. However, we must apply a de novo
standard of review to legal conclusions because a trial court
has no discretion in determining what the law is, which law
governs, or how to apply the law. Id.
a valid arbitration agreement exists is a question of law and
is therefore reviewed de novo. In re C & H News
Co., 133 S.W.3d 642, 645 (Tex. App.-Corpus Christi 2003,
orig. proceeding); Tenet Healthcare Ltd. v. Cooper,
960 S.W.2d 386, 388 (Tex. App.-Houston [14th Dist.] 1998,
pet. dism'd w.o.j.). The party seeking arbitration has
the initial burden to prove, and the trial court must
initially decide whether there is a valid arbitration
agreement, and if so whether the claims fall within the scope
of the arbitration agreement. In re Kellogg Brown &
Root, 80 S.W.3d 611, 615 (Tex. App.- Houston [1st Dist.]
2002, orig. proceeding); Mohamed v. Auto Nation USA
Corp., 89 S.W.3d 830, 836 (Tex. App.-Houston [1st Dist.]
2002, no pet.) (combined appeal & orig. proceeding).
There is a strong presumption favoring arbitration; however,
that presumption does not apply to the initial determination
of whether a valid arbitration agreement exists. J.M.
Davidson, Inc. v. Webster, 128 S.W.3d 223, 227 (Tex.
2003). Arbitration agreements are interpreted under
traditional contract principles. Id.
parties must sign arbitration agreements before being bound
by them. In re Rubiola, 334 S.W.3d 220, 223 (Tex.
2011) (orig. proceeding); see Grigson v. Creative Artists
Agency, L.L.C., 210 F.3d 524, 528 (5th Cir. 2000)
(noting that "arbitration is a matter of contract and
cannot, in general, be required for a matter involving an
arbitration agreement non-signatory"). However, as set
out by the Texas Supreme Court in G.T. Leach Builders,
LLC v. Sapphire V.P., L.P., non-signatories may be
permitted to enforce an arbitration agreement under limited
circumstances including, among other things, equitable
estoppel. 458 S.W.3d 502, 524 (Tex. 2015) (citing and quoting
In re Kellogg Brown & Root, Inc., 166 S.W.3d
732, 739 (Tex. 2005)).
undisputed that appellants were not parties to the general
contract containing an arbitration clause. Nonetheless, by
their first issue, appellants contend that they are entitled
to compel arbitration pursuant to the doctrine of equitable
estoppel, which in limited circumstances allows non-parties
to compel arbitration despite not signing the contract
containing the arbitration clause. See id.
"an arbitration clause cannot be invoked by a non-party
to the arbitration contract." Id. (citing
Grigson, 210 F.3d at 532) (internal quotations
omitted). And although the "policy favoring arbitration
is strong . . . it alone cannot authorize a non-party to
invoke arbitration." Id. Under the doctrine of
equitable estoppel, "a litigant who sues based on a
contract subjects him or herself to the contract's terms
. . . including the Arbitration Addendum." Id.
at 527. "This equitable principle applies when a
claimant seeks 'direct benefits' under the contract
that contains the arbitration agreement."
Id. (emphasis added). However, the benefit must stem
directly from the contract and may not merely relate to the
contract which contains an arbitration agreement.
Id. Equitable estoppel applies if the
plaintiff's claim depends on the existence of the
contract meaning that "[t]he alleged liability must
'arise solely from the contract or must be determined
by reference to it.'" Id. at 528. Even if a
claim refers to or relates to the contract, equitable
estoppel does not apply "'when the substance of the
claim arises from general obligations imposed by state law,
including statutes, torts and other common law duties, or
federal law, ' rather than from the contract."
the general contract between Homes by Connie Graygor, Inc.
(the Builder) and appellees provided that the Builder agreed
to construct improvements to appellees' home. The general
contract provided that the improvements would be constructed
by the Builder and that appellees agreed to pay for such
services. The general contract states that appellees are
"advised that the Builder may have contracted with one
or more independent professional architects, engineers,
surveyors, designers, or other professional third parties
(Builder's Professionals) to perform services and/or
prepare certain documents or reports for completion of the
Construction Documents and/or ...