Appeal from the 270th District Court Harris County, Texas
Trial Court Case No. 2018-23155
consists of Chief Justice Radack and Justices Landau and
RICHARD HIGHTOWER JUSTICE
Inc. sued Gracepoint Holding Company, LLC for breaching the
terms of a written contract between the parties. Based on an
arbitration agreement in the contract, Gracepoint moved to
compel arbitration of FJR's claims under the Federal
Arbitration Act ("FAA"). FJR responded, asserting
that Gracepoint had waived arbitration by substantially
invoking the judicial process. The trial court denied
Gracepoint's motion to compel arbitration.
issue, Gracepoint appeals the trial court's order denying
its motion.Because FJR did not meet its heavy burden
to show that Gracepoint impliedly waived its right to
arbitrate under a valid arbitration agreement, we reverse the
trial court's denial of the motion to compel arbitration
and remand to the trial court.
is a residential homebuilder. On July 12, 2012, Gracepoint
and FJR signed an Independent Contractor Agreement
("ICA"). Under the ICA's terms, FJR agreed to
provide grading services and materials to Gracepoint, and
Gracepoint agreed to pay FJR for its services and materials.
The ICA also contains an arbitration agreement, requiring any
claim, controversy, or dispute of any kind among the parties,
now existing or arising in the future, whether relating to
the interpretation of any provision of this agreement, the
rights and obligations of the parties under this agreement,
any other agreement relating to, or arising from, the
business of Gracepoint or the Work, shall be submitted to
binding arbitration under the Federal Arbitration Act, 9
U.S.C 1 et seq. The arbitration shall be conducted by the
American Arbitration Association ("AAA").
January 2015, FJR filed suit against Gracepoint. FJR alleged
that Gracepoint breached the ICA by failing to pay for $27,
138 worth of services provided to Gracepoint during the
period of April 2010 to March 2014.
months later, in September 2015, Gracepoint filed a motion to
arbitrate FJR's claims pursuant to the ICA's
arbitration agreement. FJR agreed to arbitrate its claims.
trial court signed an agreed order to arbitrate in October
2015. The court noted that FJR had agreed to arbitrate
"as evidenced by the signature of [F]R's] counsel on
this Agreed Order." The agreed order required the
parties to "institute arbitration." The parties,
however, never engaged in arbitration. In November 2017, two
years after the agreed order was signed, FJR nonsuited its
April 2018, FJR filed the instant suit, asserting the same
causes of action against Gracepoint that it had asserted in
its January 2015 petition in the first suit. As in the first
action, FJR claimed that Gracepoint breached the ICA and owed
it $27, 138 for services it had provided to Gracepoint. There
was, however, a difference in FJR's factual allegations.
In the earlier 2015 suit, FJR had alleged that it provided
the services between April 2010 and March 2014. In the
instant suit, FJR initially alleged that it provided the
services between April 2010 and April 2014.
answered the suit two weeks after suit was filed, generally
denying FJR's claims, asserting the affirmative defense
of limitations, and asserting that FJR's claims were
subject to the ICA's binding arbitration agreement. To
its answer, Gracepoint attached the affidavit of Randall
Birdwell, its company representative. In the affidavit,
Birdwell testified, "The ICA mandates arbitration as the
avenue by which the parties will resolve any disputes."
He specifically quoted the ICA's arbitration language.
Birdwell concluded his affidavit by stating, "Gracepoint
disputes that FJR is owed any additional money, but there is
no question that this controversy arises from the contract,
and therefore should be arbitrated."
20, 2018, two months after it answered the suit, Gracepoint
filed a motion for summary judgment, asserting that FJR's
claims were barred by limitations. Gracepoint pointed out
that, in the original 2015 suit, FJR had alleged that it last
provided services to Gracepoint in March 2014, but in the
instant suit, it alleged that it had last provided services
to Gracepoint in April 2014. Gracepoint claimed that FJR was
attempting to avoid the four-year-statute of limitations by
changing the date of when it last provided services to
month later-on July 30, 2018-FJR filed its First Amended
Petition. FJR changed the date that it last provided services
to Gracepoint from April 2014 back to March 2014. FJR
asserted a new factual allegation, claiming that Gracepoint
had breached the ICA in May 2014 by failing to pay the full
amount of FJR's invoices. FJR attached the ICA to its
First Amended Petition and incorporated it by reference.
same day, FJR also responded to Gracepoint's motion for
summary judgment. FJR asserted that its suit was not
time-barred because its claims did not accrue until
Gracepoint breached its contractual obligation in May 2014 by
failing to pay the invoices in full. Gracepoint passed on
submission of the motion, and the trial court never ruled on
filed a motion to arbitrate in March 2019 and an amended
motion to arbitrate in June 2019. Gracepoint relied on the
arbitration agreement in the ICA, asserting that the parties
had agreed to arbitrate disputes arising out of or relating
to the ICA under the FAA. Gracepoint also pointed out that
FJR had agreed to arbitrate its claims in the 2015 suit,
which involved the same claims brought in the instant suit.
Gracepoint attached the trial court's October 2015 agreed
order from the earlier suit, which had ordered the parties to
institute arbitration. Gracepoint averred that FJR
"never instituted [the] arbitration proceeding,"
but instead nonsuited its claims two years after the agreed
order, in November 2017, when the trial court set the case
for dismissal for want of prosecution.
responded to the motion to compel arbitration, requesting
denial of the motion for four reasons. First, FJR claimed
that the FAA did not apply because the ICA "does not
relate to interstate commerce." Second, "it would
be inequitable to compel arbitration after the parties [had]
engaged in substantial discovery." Third, Gracepoint had
filed a motion for summary judgment, seeking relief on the
merits. Finally, FJR claimed that Gracepoint "failed to
take any affirmative steps to set up the arbitration [in the
2015 suit]" and that Gracepoint "refused to
communicate with [F]R's counsel] when he attempted to ...