Nationwide Coin & Bullion Reserve, Inc. v. Thomas

• Decision Date: 17 November 2020
• Docket Number: NO. 14-19-00633-CV,NO. 14-19-00632-CV,14-19-00632-CV
• Citation: 625 S.W.3d 498
• Court: Texas Court of Appeals
• Parties: NATIONWIDE COIN AND BULLION RESERVE, INC., Turner M. Jones, Lawrence Kuykendall, Larry Andrews, Donald Fogo, and Melida Jones, Appellants v. June THOMAS, Appellee

625 S.W.3d 498

NATIONWIDE COIN AND BULLION RESERVE, INC., Turner M. Jones, Lawrence Kuykendall, Larry Andrews, Donald Fogo, and Melida Jones, Appellants

v.June THOMAS, Appellee

NO. 14-19-00632-CV

NO. 14-19-00633-CV

Court of Appeals of Texas, Houston (14th Dist.).

Opinion filed November 17, 2020

Rehearing En Banc Denied for No. 14-19-00632-CV July 8, 2021

Dylan Benjamen Russell, Houston, for Appellants.

Joseph Melugin, Houston, for Appellee.

Panel consists of Justices Christopher, Jewell, and Hassan.

Tracy Christopher, Justice

In this suit under the Texas Deceptive Trade Practices–Consumer Protection Act ("the DTPA"),¹ Plaintiff June Thomas sued Nationwide Coin and Bullion Reserve, Inc. and four individuals associated with the company, alleging that the defendants violated the DTPA in connection with her purchase of collectible coins from Nationwide for investment purposes. Nationwide and the individual defendants appeal the denial of their motion to compel arbitration, and in addition, Nationwide appeals the denial of the summary judgment rendered against it. We conclude that the appellants failed to establish, or to raise a fact question regarding, the existence of an arbitration agreement, but Thomas failed to conclusively establish that Nationwide violated the DTPA. We accordingly (1) affirm the trial court's denial of the motion to compel arbitration, (2) deny the appellants' motion to abate the appeal for an evidentiary hearing on the existence of an arbitration agreement, (3) reverse the summary judgment against Nationwide, and (4) remand the case for further proceedings.

I. BACKGROUND

In early 2017, Texas corporation Nationwide Coin & Bullion Reserve, Inc. mailed Tennessee resident June Thomas a brochure advertising its collectible coins as an investment opportunity. Thomas called the telephone number on the brochure, and after speaking with Nationwide's Texas agents, agreed to purchase some coins. Between March and July of 2017, Thomas made nine purchases from Nationwide at a total cost of $167,300. She also made three additional purchases of coins that she resold to Nationwide for the amount she paid for them.

A year after her first purchase, Thomas called Nationwide to ask the company to repurchase a "1987 Chinese Gold Panda Coin" she had bought from Nationwide for $30,000. She spoke with Lawrence Kuykendall, who said he could not help her with the sale of the coin. She found Kuykendall's behavior suspicious and had her friend Greg Marnane call the company. Marnane allegedly spoke with Nationwide's "compliance director" Donald Fogo. The day after Marnane's call, Turner M. Jones of Nationwide phoned Thomas and told her not to have Marnane call again. Jones offered to buy back the Gold Panda Coin for $31,500 but told Thomas the deal would be off if "any authorities" became involved.

About two weeks later, Thomas had her coin collection appraised by James Miller. Miller concluded that, as of April 3, 2018, the collection's wholesale value was about $27,633 and its retail price would be somewhere between $35,295 and $43,970.

Later that month, Nationwide's attorney Todd Collins wrote to Thomas, "[Nationwide] is ready and willing to purchase the [Chinese Gold Panda] coin, but we will need you to sign the Purchase Agreement and return the coin in order to conclude the sale." The document enclosed with the letter was not a purchase agreement, but a copy of an invoice showing that Thomas purchased and paid for the coin on the same date. According to Nationwide's chief financial officer Gina Wells, the terms and conditions of the sale were printed on the back of the invoice. These terms included an arbitration provision and a caution that Nationwide "does not guarantee that any client buying for investment purposes will be able to sell for a profit in the future."

Thomas refused to sign the invoice and instead asserted claims under the DTPA against Nationwide and its agents Turner M. Jones, Lawrence Kuykendall (whom Thomas sued both under that name and under Kuykendall's assumed name of "Larry Andrews"), Donald Fogo, and Melida Ramirez a/k/a Melida Jones. We refer to the individual defendants collectively as "the Jones Parties."

Thomas moved for traditional summary judgment, and Nationwide and the Jones Parties combined their response to the summary-judgment motion with their own motion to compel arbitration. The parties disputed whether a valid arbitration agreement existed, and without holding an evidentiary hearing, the trial court denied the motion.

The same day that Nationwide and the Jones Parties filed their interlocutory appeal of the order denying arbitration, the trial court granted Thomas's summary-judgment motion as to Nationwide, awarding Thomas $202,600 in actual damages² and $405,200 as treble damages under the DTPA, together with interest and costs. In the same order, the trial court severed Thomas's claims against the Jones Parties into a separate suit so that the summary judgment against Nationwide became final. The record does not show that the trial court ruled on the summary-judgment motion as it pertains to the Jones Parties.

Nationwide appealed the judgment against it, and we granted the parties' motion to consolidate the two appeals. The Jones Parties joined Nationwide in asking us to reverse the trial court's denial of the motion to compel arbitration, and Nationwide additionally argues that the trial court erred in granting Thomas summary judgment and ordering Nationwide to pay her damages.

After the case was submitted on the briefs, Nationwide and the Jones Parties moved to abate the appeal and remand the cases to the trial court for an evidentiary hearing on the motion to compel arbitration. We ordered the motion taken with the case.

II. DENIAL OF MOTION TO COMPEL ARBITRATION

In the trial court, a party seeking to compel arbitration bears the burden to establish that an arbitration agreement exists and that the claims presented fall within its scope. In re Oakwood Mobile Homes, Inc. , 987 S.W.2d 571, 573 (Tex. 1999) (per curiam) (orig. proceeding), abrogated on other grounds by In re Halliburton Co. , 80 S.W.3d 566 (Tex. 2002) (orig. proceeding). If there is conflicting evidence as to the material facts necessary to determine the issue, the trial court is to conduct an evidentiary hearing to resolve the dispute. In re Poly-Am., L.P. , 262 S.W.3d 337, 354 (Tex. 2008) (orig. proceeding) ; Jack B. Anglin Co., Inc. v. Tipps , 842 S.W.2d 266, 269 (Tex. 1992). In an appeal from the denial of a motion to compel arbitration, we apply the abuse-of-discretion standard, deferring to the trial court's factual determinations if they are supported by evidence and reviewing legal determinations de novo. Henry v. Cash Biz, LP , 551 S.W.3d 111, 115 (Tex. 2018), cert. denied , ––– U.S. ––––, 139 S. Ct. 184, 202 L. Ed. 2d 40 (2018). Before addressing the evidence, however, we first must address Thomas's arguments that the evidence cannot be considered.

A. Thomas's Objections

The motion to compel arbitration rested entirely on the affidavit of Gina Wells, to which were attached copies of invoices and of the "Terms and Conditions," which Wells attested appeared on the reverse of each invoice. The Terms & Conditions include a section entitled "Arbitration Forum," and provides that "All claims and disputes arising under or relating to this Agreement are to be settled by binding arbitration in the State of Texas, County of Harris." In the opening paragraph of the affidavit, the notary public states, "After being duly sworn, [Wells] stated that that she has read this affidavit, has personal knowledge of the factual statements contained herein, and that such factual statements are true and correct."

Thomas objected to the following paragraphs of Wells's affidavit:

5. There were numerous communications between Plaintiff and Nationwide Coin regarding sales transactions. These communications took place by telephone. These communications took place over interstate phone lines. For each transaction, there was one or more telephone communications by the sales person with Plaintiff, and then a separate telephone communication by personnel in the Verification Department with Plaintiff.

6. Prior to completing any of the sales transactions with Plaintiff, Nationwide's Verification Department contacted Plaintiff to review Nationwide's [Terms & Conditions]. More specifically, for each sales transaction, Plaintiff was contacted by the Verification Department at Nationwide via telephone. For each sales transaction, the Verification Department specifically advised Plaintiff as to the location of the [Terms & Conditions] on the reverse of the invoice, advised that the transaction would only be made pursuant to the [Terms & Conditions], and that if Plaintiff failed to agree to the [Terms & Conditions], the transactions would not go forward. During each of these verification calls, Plaintiff was specifically informed of the arbitration provision of the [Terms & Conditions], as well as the risk involved. And, during each of these verification calls, Plaintiff specifically agreed that the transactions would be subject to Nationwide's [Terms & Conditions].

8. Plaintiff never objected to the [Terms & Conditions] associated with any of the transactions. Moreover, Plaintiff continued to purchase coins subject to the [Terms & Conditions] on multiple occasions. In total, Plaintiff entered into twelve (12) separate sales transactions with Nationwide, each of which included the very same [Terms & Conditions].

On appeal, Thomas re-urges her trial objections to Wells's affidavit on the grounds that Wells's testimony (1) is not based on personal knowledge of the facts recited, (2) is hearsay, (3) lacks a predicate, and (4) is conclusory. She also re-urges her objection that the Terms & Conditions attached to the affidavit is unauthenticated.

But, to preserve error for formal defects, one must both object and obtain a ruling, or except to the trial court...