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APC Home Health Services, Inc. v. Martinez

Court of Appeals of Texas, Eighth District, El Paso

December 12, 2019


          Appeal from the County Court at Law Number Seven Of El Paso County, Texas (TC# 2017DCV4119)

          Before Rodriguez, J., Palafox J., and McClure, Senior Judge McClure, Senior Judge (Sitting by Assignment)



         This is an interlocutory appeal from the denial of a motion to compel arbitration. The trial court denied the motion without saying why. Consequently, there are a host of issues before us, including whether APC carried its burden to show the parties agreed to arbitrate the claim, s asserted here, and if so, whether Lucina Martinez carried her burden to substantiate any of the defensive theories she asserted below. Bound up with the later question is whether the agreement is governed by the Federal Arbitration Act (FAA), whether it is procedurally unconscionable, or whether certain provisions are substantively unconscionable. We reverse and remand with instructions.


         As its name suggests, APC Home Health Services, Inc. (APC) is a home health care provider. On May 1, 2016, and while employed by APC, Martinez was working at a patient's home. While transferring the patient from a bed to a wheel chair, Martinez claims she injured her neck, back, and other parts of her body. She filed suit against APC, alleging a common law negligence cause of action. APC is a non-subscriber under the Texas worker's compensation system. APC answered and then moved to compel arbitration.

         APC supported its motion to compel arbitration with the affidavit of Jovie Cantu, identified as APC's records custodian. Cantu's affidavit proved up as a business record an attached "Arbitration Agreement and Notice of Arbitration Policy." The agreement, dated April 20, 2016, bears the signature of a "Lucina Martinez"; the title and main body of the document are entirely in Spanish. APC attached another exhibit represented to be an English translation of the agreement. Its key terms include:

APC Home Health Service, Inc. . . . ("Company," "we" or "our") maintains a mandatory binding arbitration policy. It is a condition of your employment with us that you and we agree to arbitrate all arbitrable claims arising from or related to your employment with us (the "Claims," itemized below), save and except any benefit claims arising under our Occupational Injury Benefit Plan, and any claims made not arbitrable by governing statute or rule.
1.Effective Date: The effective date of this Arbitration Agreement and Notice of Arbitration Policy (this "Arbitration Agreement") is 5/16/12 (the "Effective Date"). . . .
If you are already working for Company when you receive notice of this Arbitration Agreement, and you continue working for us for more than three more days, you will be deemed to have accepted the terms of this Arbitration Agreement on the fourth day, and thereafter. In that event, the fourth day is your effective date to be governed by this Arbitration Agreement. IF YOU CONTINUE TO WORK FOR U.S. AFTER THE EFFECTIVE DATE, YOU AND WE WILL HAVE MUTUALLY AGREED TO ARBITRATE ALL COVERED CLAIMS BETWEEN US, APPLYING THE TERMS OF THIS ARBITRATION AGREEMENT.
2.Arbitration Is Mandatory, Binding, and Mutual: All Claims related to your employment with us arising in any part after the Effective Date, save and except any benefit claims under our Occupational Injury Benefit Plan and any claims made not arbitrable by governing statute or rule, will be resolved only through mandatory binding arbitration. You and we both agree to arbitrate all Claims, and you and we both waive all rights to a jury or non-jury trial in state and federal court as to the Claims. [bolding and capitalizations all original]

The agreement was signed on April 20, 2016. The date of the accident is alleged as May 1, 2016.[1]

The agreement further describes what claims are governed by arbitration:
4. The Claims: Claims covered under this Arbitration Agreement include, but are not limited to the following: (i) claims arising from any injury suffered by an Employee while in the Course and Scope of Employment with Company, including but not limited to claims for negligence, gross negligence, and all claims for personal injuries, physical impairment, disfigurement, pain and suffering, mental anguish, . . . .

And further relevant here, the agreement includes this provision:

6. How the Arbitration Will Be Conducted: You and we agree Company is engaged in interstate commerce, and that the Federal Arbitration Act ("FAA") will govern all aspects of this Arbitration Agreement.

         APC also provided its employees an occupational injury plan that provided defined medical and indemnity benefits. While the plan document has a space for the employee's signature, the plan in our record is unsigned. Nonetheless, APC included the affidavit of a claim's manager for Pan-American Life Insurance Company documenting that Martinez received $4, 977.55 in indemnity benefits and $645.16 in medical payments under the terms of APC's Occupation Injury Benefit Plan.

         Martinez opposed the motion to compel arbitration on several grounds: (1) the attached agreement was only a copy, and Martinez questioned its authenticity; (2) the FAA does not apply because there was no transaction involving commerce; (3) Congress never intended the FAA to supplant a state worker's compensation scheme; (4) enforcing the arbitration agreement through the FAA would violate the 10th Amendment; (5) the agreement is unconscionable; (6) pre-injury waivers for non-subscribers are void; (7) the agreement is illusory for lack of mutuality of obligation; and alternatively, (8) the court should reform the agreement to remove any unconscionable provisions.

         In support of its opposition, Martinez included her own affidavit that in relevant part attested:

• That she has "limited ability in reading, writing or understanding English."
• That all her work "was performed locally in El Paso, Texas."
• That she does "not remember signing" the arbitration agreement attached to APC's Motion to Compel Arbitration, nor does she "remember anything about this document."

         Her affidavit also described the manner in which the agreement may have been executed:

• "When I began work for APC, I was required and told to sign things and I did not know why. I was told that the documents were routine paperwork or documents I needed to sign in order to work. I was misled into believing that the documents were not important and were just routine documents that the company needed to complete their paperwork on my employment. I did not know and I was never told by anyone at APC that what I was signing was an arbitration agreement or anything other than papers required to be signed for my job. I was never told that I could be waiving rights that I had or that I could seek the advice of an attorney before signing these documents. I was never told the documents contained an arbitration agreement. I was not given any time to review the documents prior to signing them. . . . No one from APC ever provided an orientation session or any other kind of meeting where any of the documents I was required to sign was explained. No one at APC ever explained or discussed any arbitration agreement to me. (CR 279-80)

         The trial court held two hearings on APC's motion. At the first hearing, APC's counsel represented that it had a witness ready to testify that Martinez signed the arbitration agreement. The trial judge asked Martinez's counsel if Martinez denied signing the document. Her counsel responded that Martinez did not recall signing the document. The trial court found that assertion insufficient to raise an issue as to her signature, and the trial court stated that there was no need to call the witness to testify.[2]

         The trial court was more concerned with some of Martinez's defenses to the agreement, and particularly whether arbitration would have truly been a more efficient and less costly alternative to litigation, and if not, why an employer would choose that forum.[3] The trial court desired a full evidentiary hearing on the cost issue and directed APC's counsel to submit evidence on the likely cost of arbitration in this case. APC did so through a subsequent filing that included several documents summarizing studies on arbitration's cost savings. Martinez offered no evidence of her own on that issue. Following that second hearing, the trial court denied the motion to compel arbitration without issuing any findings of fact or conclusions of law. APC then brought this interlocutory appeal.[4] It asserts three issues: (1) whether the trial court erred in failing to compel arbitration; (2) whether Martinez met her burden to substantiate a defense to the arbitration agreement; and (3) whether the undisputed evidence shows that arbitration is a more cost-effective forum.


         "[A]rbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit." United Steelworkers of America v. Warrior & Gulf Nav. Co., 363 U.S. 574, 582 (1960). Stated otherwise, arbitration "is a matter of consent, not coercion[.]" Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior Univ., 489 U.S. 468, 479 (1989). Accordingly, a party seeking to compel arbitration carries the burden to: (1) establish the existence of a valid arbitration agreement, and (2) demonstrate that the claims asserted are within the scope of the agreement. In re AdvancePCS Health L.P., 172 S.W.3d 603, 605 (Tex. 2005); Delfingen US-Texas, L.P. v. Valenzuela, 407 S.W.3d 791, 797 (Tex.App.--El Paso 2013, no pet.).

         If the proponent of arbitration has offered prima facia evidence for the existence of a valid agreement which covers the dispute, a presumption arises in favor of arbitrating the dispute, and the burden shifts to the resisting party to raise an affirmative defense to enforcing that agreement. Ridge Nat. Resources, L.L.C. v. Double Eagle Royalty, L.P., 564 S.W.3d 105, 118 (Tex.App.--El Paso 2018, no pet.); see also Royston, Rayzor, Vickery, & Williams, LLP v. Lopez, 467 S.W.3d 494, 499 (Tex. 2015); In re Poly-America, L.P., 262 S.W.3d 337, 348 (Tex. 2008) (orig. proceeding).

         Motions to compel arbitration are ordinarily decided in summary proceedings "on the basis of affidavits, pleadings, discovery, and stipulations." Jack B. Anglin Co., Inc. v. Tipps, 842 S.W.2d 266, 269 (Tex. 1992). "However, if the material facts necessary to determine the issue are controverted, by an opposing affidavit or otherwise admissible evidence, the trial court must conduct an evidentiary hearing to determine the disputed material facts." Id. And as this Court has recently noted, "arbitration cases also involve more than simply handing an arbitration agreement to the trial court and asking for enforcement, or filing a defensive pleading with the trial court asserting affirmative defenses to enforcement supported only by bare allegations." Ridge Nat. Resources, 564 S.W.3d at 132; see also Royston, Rayzor, 467 S.W.3d at 499 (rejecting unconscionability defense in part due to lack of evidence supporting same); United Rentals, Inc. v. Smith, 445 S.W.3d 808, 812 (Tex.App.--El Paso 2014, no pet.) (affirming denial of arbitration where employer failed to authenticate agreement).

         We review a trial court's order denying a motion to compel arbitration for abuse of discretion. In re Labatt Food Serv., L.P., 279 S.W.3d 640, 642-43 (Tex. 2009) (orig. proceeding). We defer to the trial court's factual determinations if they are supported by evidence but review its legal determinations de novo. Henry v. Cash Biz, LP, 551 S.W.3d 111, 115 (Tex. 2018), cert.denied, 139 S.Ct. 184 (2018). Because the trial court here did not enter findings of fact or conclusions of law to explain its denial of the motion to compel, we must uphold the trial court's decision on any appropriate legal theory urged below. Bonded Builders Home Warranty Assn. ofTexas v. Rockoff, 509 S.W.3d 523, 531-32 (Tex. App.--El Paso 2016, no pet.); Inland Sea, Inc. v.Castro, 420 S.W.3d 55, 57-59 (Tex.App.--El Paso 2012, pet. denied) (affirming denial of motion to compel arbitration on alternative ground where order did not specify the basis for the ruling). Yet ...

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