A-1 Freeman Moving & Storage LLC v. Galindo
| Docket Number | 08-23-00001-CV |
| Decision Date | 23 August 2023 |
| Parties | A-1 FREEMAN MOVING & STORAGE LLC AND A-1 FREEMAN NORTH AMERICA INC., Appellants, v. ARACELI ORTIZ GALINDO, Appellee. |
| Court | Texas Court of Appeals |
Appeal from the 448th Judicial District Court of El Paso County Texas (TC# 2022DCV1753)
Before Rodriguez, C.J., Palafox, Soto, JJ.
This is an interlocutory appeal from an order denying a motion to compel arbitration filed by Appellants A-1 Freeman Moving & Storage LLC and A-1 Freeman North America Inc. (collectively, the A-1 Freeman Entities) seeking to compel Appellee Araceli Ortiz Galindo to arbitrate her negligence claim against them. For the reasons set forth below, we reverse in part and affirm in part.
Ortiz Galindo began working for Appellant A-1 Freeman Moving & Storage, LLC (A-1 Freeman Moving) in May of 2019 and was involved in a work-place accident in January of 2022.
In June 2022, Ortiz Galindo filed a petition in the trial court, which she subsequently amended in July 2022, seeking damages for bodily injury and lost wages, naming both of the A-1 Freeman Entities.[1]
In her amended petition, Ortiz Galindo alleged that while employed by Appellant A-1 Freeman Moving, she was attempting to lower herself from a ladder on a truck she believed was owned by Appellant A-1 Freeman North America, Inc. (A-1 Freeman NA) and fell backwards, causing her injuries. Ortiz Galindo alleged the truck did not have a ramp and its back door did not work, which led to her fall. She further claimed she had previously reported the truck issues to both A-1 Freeman Entities, and they therefore knew or should have known of this allegedly "dangerous condition" but failed to take any action to correct it. Ortiz Galindo sought to hold both entities jointly responsible for their alleged negligence, contending, among other things, that they failed to provide her with a safe working environment and/or proper equipment, failed to correct a known dangerous condition, and failed to establish adequate safety procedures in the workplace.
After filing their initial responses to Ortiz Galindo's petition, the A-1 Freeman Entities filed a joint motion to compel arbitration, alleging A-1 Freeman Moving had an arbitration agreement in place, referred to as the "Mutual Agreement to Arbitrate" (the MAA), which provided for mandatory arbitration of any claims its employees might have against it, including those for job-related injuries suffered in the scope of their employment. The MAA stated that the agreement to arbitrate applied to A-1 Freeman Moving as well as its affiliated companies but, as discussed in more detail below, the MAA failed to name any such companies.
The A-1 Freeman Entities submitted an affidavit from Cary Davis, A-1 Freeman Moving's Safety Director and Records Custodian, averring that he was attaching true and correct copies of three documents Ortiz Galindo signed both before and after her injury in which she acknowledged she was aware of the arbitration agreement and agreed to its terms. These documents included: (1) a "Notice of Employment Application" Ortiz Galindo hand-signed on the day she was hired, stating she aware of A-1 Freeman Moving's "Mandatory Arbitration Plan" and had been given a copy of it; (2) a "Receipt and Arbitration Acknowledgment" form she allegedly electronically signed on her first day at work, again acknowledging the existence of the Mandatory Arbitration Plan and stating she had been given a copy of the MAA; and (3) an "Acknowledgment" form she signed the week after she was injured, acknowledging the MAA's existence and that it covered her injury, and stating that an employee's acceptance of benefits under A-1 Freeman Moving's injury-benefit plan constitutes an irrevocable acceptance of its arbitration agreement.
Ortiz Galindo opposed the motion, supported by her own affidavit, arguing: (1) the MAA was illusory because it gave A-1 Freeman Moving the unilateral right to alter or terminate the agreement at any time; (2) the record did not conclusively establish that she received a copy of the MAA at any time during or after her employment or that she agreed to its terms; (3) she did not recall electronically signing the acknowledgment form on her first day of work; and (4) the third document she signed was procedurally unconscionable because it was given to her in English and she only spoke Spanish, and because she was taking pain medication when she signed it. And finally, Ortiz Galindo argued that even if she agreed to arbitrate her negligence claims with A-1 Freeman Moving, she entered into no such agreement with A-1 Freeman NA, and she therefore could not be required to arbitrate her claims with the latter entity.
In their reply, the A-1 Freeman Entities did not present any additional evidence to rebut Ortiz Galindo's claims that she did not receive a copy of the MAA or that the third document she signed was procedurally unconscionable. Instead, they argued the undisputed evidence demonstrated Ortiz Galindo signed all three documents and, by law, the court must presume she read and understood all three of them. They further argued that Ortiz Galindo's affidavit, in which she alleged she did not speak English and she was taking pain medication after her injury, was insufficient, standing alone, to sustain a finding of procedural unconscionability. In addition, they denied the MAA was illusory, asserting it contained a savings clause providing that the agreement would be in existence even after Ortiz Galindo's employment with the company terminated. And finally, they argued Ortiz Galindo ratified the agreement to arbitrate by accepting and retaining medical benefits under the company's Benefit Plan.
At the A-1 Freeman Entities' request, the trial court held a hearing via Zoom on the motion to compel arbitration, at which the attorneys for both sides appeared. However, none of the parties provided the court with any additional evidence at the hearing; instead, they relied on the affidavits they had previously filed. Following the hearing, the trial court denied the A-1 Freeman Entities' motion to compel arbitration without specifying its reasons. This appeal followed.
In four issues, the A-1 Freeman Entities contend the trial court erred by denying their motion to compel arbitration, arguing: (1) they established that a valid and enforceable arbitration agreement (the MAA) was in place to which Ortiz Galindo consented, and Ortiz Galindo's claims fall within the scope of the agreement; (2) Ortiz Galindo failed to meet her burden of establishing her affirmative defenses that the MAA was illusory and/or the documents she signed agreeing to its terms were procedurally unconscionable; (3) Ortiz Galindo ratified the MAA by accepting and retaining medical benefits under the Benefit Plan; and (4) A-1 Freeman NA was entitled to compel arbitration, as it was a related entity named in the MAA. In the alternative, the A-1 Freeman Entities urge that if the Court believes factual issues exist regarding whether Ortiz Galindo had notice of the Arbitration Agreement or the circumstances surrounding her receipt and signatures, we should remand the matter to the trial court for an evidentiary hearing.
Arbitration is a contractual proceeding by which the parties, in order to obtain a speedy and inexpensive final disposition of disputed matters, consent to submit the controversy to arbitrators for resolution. See In re Phelps Dodge Magnet Wire Co. 225 S.W.3d 599, 605 (Tex. App.-El Paso 2005, no pet.) (citing Jack B. Anglin Co., Inc. v. Tipps, 842 S.W.2d 266, 268 (Tex. 1992)). A party seeking to compel arbitration has the burden to prove a valid arbitration agreement exists and the claims raised fall within the agreement's scope. In re Rubiola, 334 S.W.3d 220, 223 (Tex. 2011). Courts determine whether an enforceable arbitration agreement exists by applying state contract law principles. See In re Halliburton Co., 80 S.W.3d 566, 568 (Tex. 2002); In re Kellogg Brown & Root, Inc., 166 S.W.3d 732, 738 (Tex. 2005). An employer attempting to enforce an arbitration agreement has the burden to show the agreement meets all requisite contract elements. See J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 228 (Tex. 2003). This includes establishing the employee consented to the agreement. See Aerotek, Inc. v. Boyd, 624 S.W.3d 199, 204 (Tex. 2021) (); see also Volt Info. Scis., Inc. v. Bd. of Trs. of Leland Stanford Junior Univ., 489 U.S. 468, 478, (1989) ().
Under standard contract principles, the fact that a party has signed an arbitration agreement creates a "strong presumption" that the party has consented to its terms. Wright v. Hernandez, 469 S.W.3d 744, 756-57 (Tex App.-El Paso 2015, no pet.) (citing In re Bunzl USA, Inc., 155 S.W.3d 202, 208-10 (Tex. App.-El Paso 2004, no pet.)); see also Rachal v. Reitz, 403 S.W.3d 840, 845 (Tex. 2013) (). If the moving party meets its burden of establishing a valid agreement, the burden shifts to the party opposing arbitration to raise a defense against its enforcement. See In re McKinney, 167 S.W.3d 833, 835 (Tex. 2005) (per curiam). As with any other contract, a party seeking to avoid being...
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