Court of Appeals of Texas, Third District, Austin
THE 345TH DISTRICT COURT OF TRAVIS COUNTY NO.
D-1-GN-18-002579, THE HONORABLE DUSTIN M. HOWELL, JUDGE
Justices Goodwin, Baker, and Triana
D. TRIANA, JUSTICE
Hi Tech Luxury Imports, LLC (Hi Tech), appeals from the
district court's order denying its motion to compel
arbitration under the Federal Arbitration Act (FAA). We will
affirm the district court's order.
Townsend L. Morgan, Jr., filed suit against Hi Tech, his
former employer, alleging wrongful termination and age
discrimination in violation of Chapter 21 of the Texas Labor
Code. See Tex. Lab. Code § 21.051. After the
case had been set for a jury trial, Hi Tech filed a motion to
compel arbitration. In the motion, Hi Tech asserted that the
parties had executed an agreement to arbitrate, and that
Morgan's claims fell within the scope of that agreement.
Morgan filed a response in opposition, arguing that the
arbitration agreement was invalid because Hi Tech had failed
to sign it. Following a hearing on the matter, the district
court denied the motion to compel arbitration. This
interlocutory appeal followed. See Tex. Civ. Prac.
& Rem. Code § 51.016.
review a trial court's order denying a motion to compel
arbitration for abuse of discretion." Henry v. Cash
Biz, LP, 551 S.W.3d 111, 115 (Tex. 2018) (citing In
re Labatt Food Serv., L.P., 279 S.W.3d 640, 642-43 (Tex.
2009)). "We defer to the trial court's factual
determinations if they are supported by evidence but review
its legal determinations de novo." Id. A party
seeking to compel arbitration under the FAA must establish
that (1) there is a valid arbitration agreement, and (2) the
claims in dispute fall within that agreement's scope.
In re Rubiola, 334 S.W.3d 220, 223 (Tex. 2011).
"Whether parties have agreed to arbitrate is a gateway
matter ordinarily committed to the trial court and controlled
by state law governing 'the validity, revocability, and
enforceability of contracts generally.'" Jody
James Farms, JV v. Altman Grp., Inc., 547 S.W.3d 624,
631 (Tex. 2018) (quoting Arthur Andersen LLP v.
Carlisle, 556 U.S. 624, 631 (2009)). No presumption of
arbitration exists until "after the party seeking to
compel arbitration proves that a valid arbitration agreement
exists." J.M. Davidson, Inc. v. Webster, 128
S.W.3d 223, 227 (Tex. 2003). "The burden of establishing
the existence of an arbitration agreement is evidentiary and
runs with the party seeking to compel arbitration."
Fitness Entm't Ltd v. Hurst, 527 S.W.3d 699, 703
(Tex. App.-El Paso 2017, pet. denied).
Texas law, a binding contract requires: '(1) an offer;
(2) an acceptance in strict compliance with the terms of the
offer; (3) a meeting of the minds; (4) each party's
consent to the terms; and (5) execution and delivery of the
contract with intent that it be mutual and
binding.'" Huckaba v. Ref-Chem, L.P., 892
F.3d 686, 689 (5th Cir. 2018) (quoting In re Capco
Energy, Inc., 669 F.3d 274, 279-80 (5th Cir. 2012)). The
only question in this case is whether the parties intended
that the arbitration agreement be mutual and binding, despite
Hi Tech's failure to sign the agreement.
require mutual assent to be enforceable." Baylor
Univ. v. Sonnichsen, 221 S.W.3d 632, 635 (Tex. 2007).
"Evidence of mutual assent in written contracts
generally consists of signatures of the parties and delivery
with the intent to bind." Id.; New York
Party Shuttle, LLC v. Bilello, 414 S.W.3d 206, 214 (Tex.
App.-Houston [1st Dist.] 2013, pet. denied). However,
"while signature and delivery are often evidence of the
mutual assent required for a contract, they are not
essential." Phillips v. Carlton Energy Grp.,
LLC, 475 S.W.3d 265, 277 (Tex. 2015); see also Perez
v. Lemarroy, 592 F.Supp.2d 924, 931 (S.D. Tex. 2008)
("The Federal Arbitration Act ('FAA') only
requires that an arbitration clause be in writing, without
any requirement that an arbitration clause must be signed,
thus, no signatures are necessary to bind parties to an
arbitration agreement."). "Signatures are not
required '[a]s long as the parties give their consent to
the terms of the contract, and there is no evidence of an
intent to require both signatures as a condition precedent to
it becoming effective as a contract.'"
Huckaba, 892 F.3d at 689 (quoting Perez,
592 F.Supp.2d at 930-31).
court can decide intent as a matter of law."
Id. (citing Tricon Energy Ltd. v. Vinmar
Int'l, Ltd., 718 F.3d 448, 454 (5th Cir. 2013)).
"In construing a contract, a court must ascertain the
true intentions of the parties as expressed in the writing
itself." Italian Cowboy Partners, Ltd. v. Prudential
Ins. Co. of Am., 341 S.W.3d 323, 333 (Tex. 2011).
"We begin this analysis with the contract's express
language." Id. Unless that language is
ambiguous, see id., "we end it there too,"
Huckaba, 892 F.3d at 689.
the language of the contract provides unambiguous evidence of
the parties' intent to require both signatures as a
condition precedent to enforcement of the agreement. Although
it is true, as Hi Tech observes, that the agreement is
written primarily from the employee's perspective, the
document repeatedly refers to both parties agreeing
to the terms of the contract. The agreement discusses the
"mutual benefits" that arbitration can provide to
"both the Company and [Morgan]," and the agreement
requires that "[Morgan] and the Company both agree"
that any disputes "between [Morgan] and the
Company" shall be submitted to arbitration. The
agreement further provides that "[b]oth the Company and
[Morgan] agree that any arbitration proceeding must move
forward under the Federal Arbitration Act" and that
"[t]his is the entire agreement between the Company and
the employee." The agreement also contains the following
statement, "I UNDERSTAND BY AGREEING TO THIS BINDING
ARBITRATION PROVISION, BOTH I AND THE COMPANY GIVE UP OUR
RIGHTS TO TRIAL BY JURY." This language indicates that,
by agreeing to arbitrate, both parties would be
giving up their rights to a jury trial, which suggests that
the signatures of both parties would be required for the
agreement to be enforceable. Additionally, in the signature
block at the bottom of the agreement, there are lines for two
signatures, one for the "Employee" and one for the
"Manager" of Hi Tech. There is also a line next to
the Manager's signature for the Manager to print his
name. Moreover, both signature lines appear below the
following statement, "MY SIGNATURE BELOW ATTESTS TO THE
FACT THAT I HAVE READ, UNDERSTAND, AND AGREE TO BE LEGALLY
BOUND TO ALL OF THE ABOVE TERMS." Thus, both parties
were to indicate their mutual assent to the terms of the
arbitration agreement by signing the document.
did not sign the arbitration agreement, and the above
language indicates that the signatures of both Hi Tech and
Townsend were required for the agreement to be enforceable.
The burden was on Hi Tech to prove the validity of the
agreement, see Henry, 551 S.W.3d at 115; Fitness
Entm't Ltd., 527 S.W.3d at 703-04, and it failed to
satisfy that burden here. Accordingly, we cannot conclude
that the district court abused its discretion in denying Hi
Tech's motion to compel arbitration. See
Huckaba, 892 F.3d at 691 (refusing to enforce
arbitration agreement in wrongful-termination case when
employer failed to sign agreement and concluding that
enforcement would allow employer to "have it both
ways-argue that it did not intend to be bound because it did
not sign the agreement or it did because it kept the
agreement and sought to compel arbitration"); see
also Simmons & Simmons Constr. Co. v. Rea, 286
S.W.2d 415, 416-17 (Tex. ...