Baby Dolls Topless Saloons, Inc. v. Sotero
| Decision Date | 21 August 2020 |
| Docket Number | 05-19-01443-CV |
| Citation | 649 S.W.3d 206 |
| Parties | BABY DOLLS TOPLESS SALOONS, INC., Burch Management Company, Inc., BDS Restaurant, Inc., and TTNA, Inc., Appellants v. Gilbert SOTERO, as Representative of the Estate of Stephanie Sotero Hernandez, Eduviges Chapa III as Next Friend of A.C.C., a Minor, and Ivan Hernandez, Individually and as Representative of the Estate of Stephanie Sotero Hernandez, Appellees |
| Court | Texas Court of Appeals |
Brian S. Rawson, Roy McKay, Stephanie Roark, Hartline Barger LLP, Dallas, Darrell L. Barger, Hartline Barger, LLP, Houston, for Appellants.
Kurt B. Arnold, Adam Lewis, J. Kyle Findley, Kala Sellers, Arnold & Itkin LLP, Houston, for Appellees.
Before Justices Whitehill, Osborne, and Carlyle
Appellants appeal the trial court's orders denying their two separate motions to compel arbitration.1 We affirm both orders in this memorandum opinion. See TEX. R. APP. P. 47.7.
On March 24, 2017, Stephanie Sotero Hernandez (Ms. Sotero or Licensee) signed a "License and Lease Agreement" (the contract) with Baby Dolls Saloon–Dallas (the Club or Licensor). In the contract, the Club granted Ms. Sotero a "temporary, revocable license (the ‘License ’)"2 and a "non-exclusive right to use and occupy the designated portions of the Premises (the ‘Temporary Space Lease’ or the ‘Lease’)" for "the performing of live erotic dance entertainment and related activities."3
In January 2019, appellees4 filed this wrongful death and survival action against appellants and Mayra Naomi Salazar.5 The petition alleged (1) on January 4, 2019, Ms. Sotero and Ms. Salazar were working as entertainers at the Club, which was owned, operated, and managed by appellants; (2) late that evening and in the early hours of January 5, 2019, appellants served Ms. Salazar "excessive amounts of alcohol" and continued to serve her even after they were aware she was "clearly intoxicated"; (3) Ms. Sotero left the Club with Ms. Salazar and was a passenger in a car being driven by Ms. Salazar when a high-speed crash occurred on a public road; and (4) Ms. Sotero died at the crash scene. The petition asserted causes of action against appellants for negligence, gross negligence, and violation of the Texas Dram Shop Act.
Appellants filed separate general denial answers subject to their two substantially similar motions to compel arbitration and dismiss all claims. In their motions to compel arbitration, appellants contended (1) because the claims in this lawsuit "arise out of a ‘dispute’ under the Agreement and/or during the relationship between the parties," "the plain language of the Arbitration Provisions and the law require that this dispute be resolved in arbitration," and (2) "[a]ny challenges to the Arbitration Provisions must be submitted to the arbitrator." A copy of the contract was attached to each motion.6
In their responses and sur-reply to the motions to compel arbitration, appellees asserted, among other things, (1) "an employer attempting to enforce an arbitration agreement must show the agreement meets all requisite contract elements"; (2) "Defendants’ argument ignores the fact that Plaintiffs are not disputing the terms of the agreement per se, rather, Plaintiffs argue that the agreement is irrelevant to their claims and thus, they are not subject to arbitration for them"; (3) pursuant to the contract's plain language, the "Lease" portion of the contract terminated on December 31, 2017, and thus was not in effect on the date of the accident, "thereby rendering the arbitration provisions ineffective"; and (4) "in the event that [the trial court] is inclined to consider the Agreement to be valid and enforceable, (which Plaintiffs deny), the language in the agreement did not clearly and unmistakably delegate the matter of the provision's scope to the arbitrator."
At the respective hearings on the motions to compel arbitration, appellants’ counsel argued, (1) "I disagree that the agreement and the license are different"; (2) "to the extent it is different, the license, the relationship of the parties continues automatically"; (3) "[i]f the license extends, then the relationship continues to exist after the termination of the agreement"; (4) "[a]ll that matters is the language of the arbitration agreement, which says any dispute between the parties of any type while the relationship is ongoing ..., it goes to arbitration"; (5) "they've raised a meeting of the mind objection; however, those ... relate to and are making claims based on, well, this term means X or could have meant this" and thus "are not meeting of the mind objections; those are ambiguity objections"; and (6) "there's no question of the meeting of the minds because she signed the agreement and the agreement has the terms it has."
Appellees’ counsel argued, among other things, (1) "there's no valid agreement in place, period"; (2) the contract "distinguishes between the agreement and the License"; (3) "different words in the contract are, obviously, given different meanings"; and (4) under "the rules of contract law," "the intent of the parties is determined from the [contract's] plain language," which has to be capable of being "given a definite and certain legal meaning."7
The trial court denied both motions to compel arbitration without stating the basis for its rulings.
We review a trial court's order granting or denying a motion to compel arbitration for abuse of discretion, deferring to the trial court's factual determinations if they are supported by evidence but reviewing its legal determinations de novo. In re Labatt Food Serv., L.P. , 279 S.W.3d 640, 642–43 (Tex. 2009) (orig. proceeding). A trial court abuses its discretion if it acts in an arbitrary or unreasonable manner or without reference to any guiding rules or principles. Downer v. Aquamarine Operators, Inc. , 701 S.W.2d 238, 241–42 (Tex. 1985). Where, as here, the trial court does not make specific findings of fact or conclusions of law in support of its ruling, we will uphold the ruling if it is supported by any legal theory asserted in the trial court. See, e.g., Redi-Mix, LLC v. Martinez , No. 05-17-01347-CV, 2018 WL 3569612, at *2 (Tex. App.—Dallas July 25, 2018, no pet.) (mem. op.) ; Kmart Stores of Tex., L.L.C. v. Ramirez , 510 S.W.3d 559, 565 (Tex. App.—El Paso 2016, pet. denied).
"In general, a party seeking to compel arbitration under the FAA must establish (1) the existence of a valid, enforceable arbitration agreement and (2) that the claims at issue fall within that agreement's scope." VSR Fin. Servs., Inc. v. McLendon , 409 S.W.3d 817, 827 (Tex. App.—Dallas 2013, no pet.). "The issue of the contract's validity is different from the issue whether any agreement between the alleged obligor and obligee was ever concluded." In re Morgan Stanley & Co., Inc. , 293 S.W.3d 182, 186 (Tex. 2009) (orig. proceeding) (discussing Prima Paint Corp. v. Flood & Conklin Mfg. Co. , 388 U.S. 395, 87 S.Ct. 1801, 18 L.Ed.2d 1270 (1967) ). "[W]hen the very existence of an agreement is disputed, a court, not an arbitrator, must decide at the outset whether an agreement was reached, applying state-law principles of contract." Am. Med. Tech., Inc. v. Miller , 149 S.W.3d 265, 273 (Tex. App.—Houston [14th Dist.] 2004, no pet.) ; accord Morgan Stanley , 293 S.W.3d at 189 ; see also TEX. CIV. PRAC. & REM. CODE § 171.021 (). We review de novo whether an enforceable agreement to arbitrate exists. J.M. Davidson, Inc. v. Webster , 128 S.W.3d 223, 227 (Tex. 2003).
"[A]n employer attempting to enforce an arbitration agreement must show the agreement meets all requisite contract elements." Id. at 228. To prove contract formation, a party must prove, among other elements, an offer and acceptance and a meeting of the minds on all essential elements. Lanier v. E. Found., Inc. , 401 S.W.3d 445, 459 (Tex. App.—Dallas 2013, no pet.) ; see also McCalla v. Baker's Campground, Inc. , 416 S.W.3d 416, 418 (Tex. 2013) (). "For there to be an offer which may ripen into a contract by simple acceptance, the offer must be reasonably definite in its terms and must sufficiently cover the essentials of the proposed transaction that, with an expression of assent, there will be a complete and definite agreement on all essential details." Lanier , 401 S.W.3d at 459 (citing Principal Life Ins. Co. v. Revalen Dev., LLC , 358 S.W.3d 451, 455 (Tex. App.—Dallas 2012, pet. denied) ). The term "meeting of the minds" refers to the parties’ mutual understanding and assent to the expression of their agreement. Id. ; Weynand v. Weynand , 990 S.W.2d 843, 846 (Tex. App.—Dallas 1999, pet. denied).
"Although often treated as a distinct element, meeting of the minds is a component of both offer and acceptance measured by what the parties said and did and not on their subjective state of mind." Karns v. Jalapeno Tree Holdings, L.L.C. , 459 S.W.3d 683, 692 (Tex. App.—El Paso 2015, pet. denied). To create an enforceable contract, the minds of the parties must meet with respect to the subject matter of the agreement and all its essential terms. Weynand , 990 S.W.2d at 846. "The parties must assent to the same thing, in the same sense, at the same time." Citibank (S.D.), N.A. v. Tran , No. 05-11-01423-CV, 2013 WL 3205878, at *4 (Tex. App.—Dallas June 21, 2013, pet. denied) (mem. op.) (quoting Principal Life Ins. , 358 S.W.3d at 455 ). Whether there is a meeting of the minds is generally a question of fact. Franco v. Ysleta Indep. Sch. Dist. , 346 S.W.3d 605, 608 (Tex. App.—El Paso 2009, no pet.).
In their sole issue, appellants assert the trial court "erred by denying Appellant's Motion to Compel Arbitration and Stay or Dismiss All Claims, in violation of the [FAA]." According to appellants, "In the underlying...
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