Court of Appeals of Texas, Thirteenth District, Corpus Christi-Edinburg
GARY ZARS HOLDING, LLC AND GARY ZARS POOLS & PATIO, LLC, Appellants,
DAREN WILDER AND DIANNE WILDER, Appellees.
appeal from the 343rd District Court of Live Oak County,
Chief Justice Valdez and Justices Rodriguez and Benavides
V. RODRIGUEZ Justice
Gary Zars Holding, LLC and Gary Zars Pools & Patio, LLC
(collectively, "Gary") appeal the denial of their
motion to compel arbitration. By one issue, Gary asserts that
appellees Daren and Dianne Wilder's fraud defense is not
a valid basis to avoid arbitration. We reverse and remand.
2015, the parties entered a written contract whereby Gary
agreed to build an in-ground pool for the Wilders in exchange
for the total price of $37, 000. In 2016, the Wilders filed
suit against Gary for breach of contract, fraudulent
inducement, violation of the DTPA, and attorney's fees.
filed a general denial and a motion to compel arbitration.
Attached to Gary's motion was a copy of the parties'
agreement ("the contract"). On the front, the
contract recited the specifications for the Wilders'
swimming pool, as well as various services necessary to
complete construction. The front page of the contract also
stated, "The general conditions to this agreement are on
the back." On the back, the contract provided a list of
twenty "General Conditions, " one of which stated
the following: "Any controversy or claim arising out of
or relating to this contract or breach thereof or any claim
whatsoever with Gary's including claims under the DTPA
shall be settled by an onsite, binding Arbitration in
accordance with the BBB Arbitration Rules."
Wilders filed a response resisting arbitration. They asserted
that Gary had fraudulently induced them to agree to the
arbitration clause, along with other grounds for resisting
arbitration which are not at issue on appeal.
hearing, both parties proffered the contract to the trial
court as a two-sided document. However, the trial court heard
testimony from Daren that, throughout the process of
negotiating the contract, Gary's sales representative
consistently referred him to a one-sided document that was
"blank on the back, " which Daren reviewed with his
wife Dianne. Daren testified that as the salesman walked him
through the contract, he only discussed the terms listed on
the front, and he "kept emphasizing that whatever was on
the front of this document was the contract." Daren
explained that when the negotiation was complete, the
salesman then transcribed various specifications from the
one-sided document onto another document, but he never
disclosed that this second document had two sides. Instead,
the salesman simply "put his finger on the document
above where the signature line is and told me to sign."
After Daren signed, Gary's salesman gave him a duplicate
copy of the contract, but Daren testified that he did not
notice the terms on the back, including the arbitration
clause. Instead, Daren testified that he first became aware
of the arbitration clause when Gary filed its motion to
compel arbitration. On cross-examination, however, Daren
conceded that just inches above his signature on the first
page of the contract was a notice that the "general
conditions to this agreement are on the back."
conclusion of the hearing, the trial court denied Gary's
motion to compel. Gary appeals.
sole issue, Gary argues that it met its initial burden to
establish the existence of a valid arbitration agreement and
that the Wilders' fraud defense does not offer valid
grounds for avoiding arbitration.
Standard of Review and General Applicable
review an order denying a motion to compel arbitration under
an abuse of discretion standard. In re Labatt Food Serv.,
LP, 279 S.W.3d 640, 642-43 (Tex. 2009) (orig.
proceeding). Under that standard, we defer to the trial
court's factual determinations if they are supported by
the record, but we review the trial court's legal
determinations de novo. Id. at ...