United States District Court, W.D. Texas, El Paso Division
INTERNATIONAL CORRUGATED AND PACKING SUPPLIES, INC., Plaintiff,
LEAR CORPORATION and LEAR MEXICAN SEATING CORPORATION, formerly known as LEAR TRIM, L.P., Defendants.
C. GUADERRAMA, UNITED STATES DISTRICT JUDGE
3, 2019, the Fifth Circuit issued a limited remand in the
instant action for this Court to make findings as to whether,
when, and under what terms the parties entered into the
agreements at issue in this case. See ECF No. 94. On
June 6, 2019, the Court held a hearing, and the parties
presented their witnesses and evidence. See ECF No.
99. Having duly considered the parties' pleadings,
witness testimony, and exhibits, the Court now enters its
Findings of Fact.
adjudicating a motion to compel arbitration, the Court is
directed to engage in a two-step analysis. Washington
Mut. Fin. Grp., LLC v. Bailey, 364 F.3d 260, 263 (5th
Cir. 2004). The Court must first "determine whether
parties agreed to arbitrate the dispute." Klein v.
Nabors Drilling USA L.P., 710 F.3d 234, 236 (5th Cir.
2013). This determination is guided by two questions:
"(1) is there a valid agreement to arbitrate the claims
and (2) does the dispute in question fall within the scope of
that arbitration agreement?" Id. (quoting
Sherer v. Green Tree Servicing LLC, 548
F.3d 378, 381 (5th Cir. 2008)). Federal courts adopt
state-law contract principles when determining the validity
of an agreement to arbitrate. Webb v. Investacorp,
Inc., 89 F.3d 252, 258 (5th Cir. 1996) (per
curiam) (citing First Options of Chicago, Inc. v.
Kaplan, 514 U.S. 938, 944 (1995)). Thus, "the
strong federal policy favoring arbitration does not apply to
the initial determination of whether there is a valid
agreement to arbitrate." Klein, 710 F.3d at
266. Once the Court determines that the parties agreed to
arbitrate their dispute, the Court must "consider
whether any federal statute or policy renders [Plaintiffs]
claims nonarbitrable." Bailey, 364 F.3d at 263.
Texas law, the party seeking to compel arbitration bears the
burden to establish the existence of an agreement to
arbitrate. Ffrench v. PricewaterhouseCoopers Corp. Fin.,
LLC, Civ. A. No. H-12-0291, 2012 WL 1900930, at *2 (S.D.
Tex. May 24, 2012) (citing Henry v. Gonzalez, 18
S.W.3d 684, 688 (Tex. App.-San Antonio 2000, pet. dism'd
by agr.)); Weiner v. Citigroup, Civ. A. No.
3:01CV2246-M, 2002 WL 655531, at *2 (N.D. Tex. Apr. 19, 2002)
(citing Henry, 18 S.W.3d at 688-89). The party
seeking to compel arbitration must prove by a preponderance
of the evidence that such an agreement exists. See
Ffrench, 2012 WL 1900930, at *2 (citing Banks v.
Mitsubishi Motors Credit of Am., Inc., 435 F.3d 538, 540
(5th Cir. 2005)).
FINDINGS OF FACT
Plaintiff International Corrugated and Packing Supplies, Inc.
("International Corrugated"), a Texas corporation,
sells packaging materials that its customers use to ship
Defendants Lear Corporation and Lear Mexican Seating
Corporation are Delaware corporations with their principal
places of business in Michigan and are suppliers of seats and
electrical components to automobile manufacturers.
Plaintiff provided shipping materials to Defendants from
April 2007 until Defendants terminated their relationship in
2014. Ray Hernandez, the President of International
Corrugated, testified that Plaintiff filed suit to seek
compensation for 198 unpaid transactions. Hr'g Tr.
parties' business relationship began with Plaintiff
submitting its quote or price book to Defendants. Defendants
used the quotes they received to create a blanket purchase
order ("blanket PO") on April 19, 2007.
See Hr'g Ex. D-l at 000025. The blanket PO had a
delivery date of February 2008. Id. Ricardo Perez,
Accounting Director for Defendants, testified that the
delivery date is the date by which goods must be delivered
under the blanket PO, but he also said that a blanket PO can
remain open after the delivery date. Hr'g Tr.
11:22:47-23:29. The April 2007 blanket PO had Lear's
terms and conditions incorporated by reference in it.
Hr'g Ex. D-l at 000026.
Defendants failed to prove that Plaintiff ever received the
April 2007 blanket PO. Defendants could not show any emails
containing the April 2007 blanket PO being sent to Plaintiff
at that time nor could they offer a witness who could testify
to Plaintiff receiving the April 2007 blanket PO. Ray
Hernandez testified that Defendants never sent the April 2007
blanket PO to him. Hr'g Tr. 11:34:30-59. Further,
Defendants could not show that Plaintiff signed any purchase
order, including the April 2007 blanket PO, during the time
they transacted business. Moreover, Defendants failed to
prove that there was a meeting of the minds that the terms
and conditions in the April 2007 blanket PO would govern all
subsequent transactions between the parties.
Josue Olivas, a manager in Defendants' Materials
Department, explained that to place an order, he would make a
call or send an email to Plaintiff that included the
purchasing order number ("PO#") from the April 2007
blanket PO and the quantity of the packing supplies needed.
Hr'g Tr. 10:59:03-11:00:06. From there, Olivas would wait
for Plaintiff to accept the offer and deliver the materials
with a packing slip that included the PO#. Id.
11:11:55-13:52. Defendants would not accept the delivery if
the packing slip did not have the PO# on it Id.
11:03:18-27. Olivas further testified that the most common
method of making an offer to Plaintiff was via a phone call.
Id. 11:11:53-55. Olivas also specified that he
received from Defendants' Purchasing Department the
vendor and PO# to use when making orders. Id.
describing the process for the parties' transactions, Ray
Hernandez' testimony was generally consistent with Josue
Olivas'. Hernandez testified that Defendants would make
orders via phone call or email, with the phone being the most
typical method. Id. 11:37:33-38:01. Defendants would
tell Plaintiff the products and quantities needed, and
Plaintiff could choose to accept or deny the offer; Hernandez
noted that Plaintiff did deny some orders. Id.
11:38:01-15. Further, Hernandez explained that Defendants
would sometimes send a filled-out purchase order after
Plaintiff accepted Defendants' offer over the phone.
Id. 11:41:27-58, 11:50:27-53.
Hernandez testified that the course of dealing between the
parties varied from transaction to transaction. See
Id. 11:37:00-58. However, the typical form a transaction
took was Defendants calling to make an offer, Plaintiff
accepting the offer over the phone, Defendants following up
with paperwork at a later time, Plaintiff delivering the
products requested, and Defendants paying Plaintiff
thereafter. Id. 11:37:33-39:04, 11:41:27-58.