Appeal from the 240th District Court Fort Bend County, Texas
Trial Court Cause No. 17-DCV-240581
consists of Justices Christopher, Zimmerer, and Hassan.
Edwin Rodriguez and Tonya Rodriguez,
("Rodriguezes") appeal the trial court's final
order and judgment, which granted an application to compel
arbitration and dismissed the suit. We affirm the trial
court's order, except that we reverse the order to the
extent that it dismisses and compels arbitration of the
Rodriguezes' claim for breach of the alleged loan
agreement, and remand for proceedings consistent with this
12, 2015, Texas Leaguer Brewing Company, LLC ("Texas
Leaguer") was formed, with Nathan Rees as manager. Texas
Leaguer's purpose is to engage in the business of owning
and operating a brewery.
about April 30, 2016, the Rodriguezes signed an Amended and
Restated Company Agreement ("First Agreement"),
under which they obtained ownership units (representing 7%
ownership) in Texas Leaguer and contributed capital of $150,
000. In section 9.4 of the First Agreement, the parties
agreed to arbitrate "disputes aris[ing] out of or
relat[ing] to this Agreement, or the breach thereof."
Leaguer decided to seek additional funding by applying for a
Small Business Administration ("SBA") loan. To
assist Texas Leaguer in obtaining such a loan and to increase
their ownership, the Rodriguezes signed a Second Amended and
Restated Company Agreement ("Second Agreement")
dated July 29, 2016. According to the Rodriguezes, the Second
Agreement modified the First Agreement in two ways. First,
the Second Agreement states that the Rodriguezes "agree
to co-sign for an initial SBA loan in a maximum amount of
$560, 000 to be taken on Company's behalf." Second,
and in exchange for this promise, the Second Agreement
increased the Rodriguezes' ownership to 14.5%. The Second
Agreement contains the same arbitration clause (section 9.4)
as the First Agreement.
December 22, 2016, Nathan Rees, on behalf of Texas Leaguer
sent a letter to the Rodriguezes stating that Texas Leaguer
was exercising its rights under section 11.3 of the Second
Agreement to terminate the Rodriguezes' membership or
ownership in Texas Leaguer because of the Rodriguezes'
refusal to co-sign a proposed SBA Loan of up to $556, 000 (as
the Rodriguezes promised to do in the Second Agreement).
March 29, 2017, the Rodriguezes filed suit against Texas
Leaguer and Nathan Rees ("Leaguer parties"),
alleging claims for securities fraud, breach of and specific
performance of the First Agreement to recognize their
membership in Texas Leaguer, conversion, and breach of a $20,
000 loan agreement.
Leaguer parties filed an application to compel arbitration.
The Rodriguezes filed a response in opposition, to which the
Leaguer parties filed a reply.
October 18, 2017, the trial court signed an order granting
the Leaguer parties' application to compel arbitration on
all claims and dismissing the Rodriguezes' suit without
Standard of Review
we review a trial court's decision to grant or deny a
motion to compel arbitration under an abuse of discretion
standard." Enter. Field Servs., LLC v. TOC-Rocky
Mountain, Inc., 405 S.W.3d 767, 773 (Tex. App.-Houston
[1st Dist.] 2013, pet. denied). Under this standard, we defer
to a trial court's factual determinations if they are
supported by evidence, but we review a trial court's
legal determinations de novo. In re Labatt Food
Serv., L.P., 279 S.W.3d 640, 643 (Tex. 2009) (orig.
proceeding). "Whether an arbitration agreement is
enforceable is subject to de novo review." Id.
The Texas Arbitration Act
their application to compel arbitration, the Leaguer parties
state the Second Agreement does not specify arbitration under
either the Federal Arbitration Act ("FAA") or the
Texas Arbitration Act ("TAA"), and the transactions
do not involve interstate commerce; thus, the Texas
Arbitration Act applies. The Rodriguezes did not contest this
assertion either in the trial court or on appeal and,
therefore, we assume this appeal is governed by the TAA.
However, the issue of arbitrability is subject to a virtually
identical analysis under either the FAA or the
When applying the TAA, Texas courts look to federal case law
construing the FAA for guidance because of the similarities
between the two acts. Collins v. Tex Mall, L.P., 297
S.W.3d 409, 417 (Tex. App.-Fort Worth 2009, no pet.).
a party seeking to compel arbitration must establish that a
valid arbitration agreement exists and that the claims at
issue fall within the scope of that agreement. G.T. Leach
Builders, LLC v. Sapphire V.P., LP, 458 S.W.3d 502, 524
(Tex. 2015). Unless the parties clearly and unmistakably
agree to submit threshold questions of arbitrability to
arbitration, these issues are to be resolved by courts.
In re Weekley Homes, L.P., 180 S.W.3d 127, 130 (Tex.
2005) (orig. proceeding). "The trial court conducts a
summary proceeding to make the gateway determination of
arbitrability." Human Biostar, Inc. v. Celltex
Therapeutics Corp., 514 S.W.3d 844, 848 (Tex.
App.-Houston [14th Dist.] 2017, pet. denied). "These
'gateway matters' include whether the parties agreed
to arbitrate and whether a claim or dispute is encompassed in
the agreement to arbitrate." Saxa Inc. v. DFD
Architecture Inc., 312 S.W.3d 224, 229 n.4 (Tex.
App.-Dallas 2010, pet. denied) (citing P. McGregor
Enters., Inc. v. Denman Bldg. Prods., Ltd., 279 S.W.3d
717, 722 n.9 (Tex. App.- Amarillo 2007, pet. denied)).
"Once the arbitration movant establishes a valid
arbitration agreement that encompasses the claims at issue, a
trial court has no discretion to deny the motion to compel
arbitration unless the opposing party proves a defense to
arbitration." Human Biostar, Inc., 514 S.W.3d
at 848 (citing In re FirstMerit Bank, N.A., 52
S.W.3d 749, 753-54 (Tex. 2001) (orig. proceeding)).