Faust Distrib. Co. v. Verano
| Decision Date | 23 August 2022 |
| Docket Number | 01-21-00460-CV |
| Parties | FAUST DISTRIBUTING CO. INC., LLC, Appellant v. VICTOR VERANO, Appellee |
| Court | Texas Court of Appeals |
On Appeal from the 113th District Court Harris County, Texas Trial Court Case No. 2020-08330
Panel consists of Justices Kelly, Countiss, and Rivas-Molloy.
In this interlocutory appeal,[1] appellant, Faust Distributing Co. Inc LLC ("Faust"), challenges the trial court's order denying its amended motion to compel arbitration in the suit of appellee, Victor Verano, against Faust for negligence and gross negligence. In its sole issue Faust contends that the trial court erred in denying its amended motion to compel arbitration.
We reverse, render, and remand.
In his petition, filed in February 2020, Verano alleged that on April 30, 2019, he was an employee of Faust. His job required him to "operate[] a large Peterbilt commercial truck and deliver[] alcoholic beverages" to Faust's customers. On that day and while in the course and scope of his employment, Verano's "footing was displaced" as he stood on the side of the truck and tended to its maintenance before beginning his delivery route. He "fell from the side" of the truck and "suffered severe physical injuries."
Verano brought claims against Faust for negligence and gross negligence, alleging that Faust's negligence and gross negligence proximately caused Verano's injuries. According to Verano, Faust was negligent in failing to provide "a safe premises and working environment" failing "to properly hire, train, retain, and supervise" Verano and its other employees; failing to provide Verano and its other employees with "proper notice or warning"; and failing to provide Verano and its other employees with "proper equipment to perform [their] required duties." Verano also alleged that Faust's "actions/omissions, including those of its employees and . . . agents, when viewed objectively from the standpoint of [Faust] at the time of their occurrence, involved an extreme degree of risk, considering the probability and magnitude of the potential harm to others" and Faust "had actual, subjective awareness of the risk involved but nevertheless proceeded with conscious indifference to the rights, safety, or welfare of others, including [Verano]." Further, Faust was vicariously liable for the negligent or grossly negligent acts or omissions of its employees and agents. Verano sought damages for his past and future physical and mental pain and anguish, his past and future disfigurement and impairment, his past and future medical expenses, lost wages, and lost earning capacity as well as exemplary damages.[2]
In late February 2020, Faust answered, generally denying the allegations in Verano's petition and asserting certain affirmative defenses, including that Verano's own negligence was the sole proximate cause of his injuries, Faust was "entitled to an offset for the medical and wage indemnity [it had] paid" to Verano and for payments it had paid on his behalf "to the medical providers for the injuries which [Verano] claim[ed] arose from the April 30, 2019 incident," and "an arbitration agreement [was] applicable" to Verano's claims and "th[e] matter should be referred to arbitration."
In March 2021, Verano and Faust filed an agreed motion for continuance, seeking to extend the discovery deadline, which had expired the previous month, and to postpone the trial date until the winter of 2021. In their motion, the parties noted the impact that the COVID-19 pandemic[3] had on "the orderly flow of civil litigation." They also informed the trial court that they had "exchanged written discovery in th[e] matter and [were] continuing to work through issues with th[e] [discovery] responses" but they had not been able to schedule the in-person depositions sought by Faust because of the COVID-19 pandemic.[4]
Faust deposed Verano in person on June 12, 2021. It then filed its motion to compel arbitration two days after the deposition and amended its motion to compel a few weeks later. In its amended motion to compel arbitration, Faust stated that Verano began working at Faust on June 3, 2013. On his first day of employment with Faust, Verano signed a "Receipt and Arbitration Acknowledgement" (the "arbitration acknowledgment")[5] in which he acknowledged that he had "received and read (or had the opportunity to read) the Benefits Schedule, Summary Plan Description (the 'SPD') for the Employee Injury Benefit Plan" and that the "SPD include[d] a mandatory company policy requiring that certain claims or disputes (that c[ould not] otherwise be resolved between [Faust] and [Verano]) must be submitted to an arbitrator, rather than a judge and jury in court" (the "arbitration agreement"). Verano also acknowledged that he understood "that by receiving th[e] SPD and becoming employed (or continuing [his] employment) with [Faust] at any time on or after the Effective Date," he was "accepting and agreeing to comply with the[] arbitration requirements," and Faust was "also accepting and agreeing to comply with the[] arbitration requirements."
Faust then asserted that Verano's claims for negligence or gross negligence as alleged in his petition fell within the scope of the arbitration agreement. It attached to its amended motion to compel arbitration a copy of Appendix A to its Employee Injury Benefit Plan, entitled "Arbitration of Certain Injury-Related Disputes," which required the "following claims or disputes" to be "submitted to final and binding arbitration":
(A) any legal or equitable claim or dispute relating to enforcement or interpretation of the arbitration provisions in a Receipt and Arbitration Acknowledgement form or th[e] Appendix; and (B) any legal or equitable claim by or with respect to an employee for any form of physical or psychological damage, harm or death which relates to an accident, occupational disease, or cumulative trauma (including, but not limited to, claims of negligence or gross negligence or discrimination; claims for intentional acts, assault, battery, negligent hiring/training/supervision/retention, emotional distress, retaliatory discharge, or violation of any other noncriminal federal, state or other governmental common law, statute, regulation or ordinance in connection with a job-related injury, regardless of whether the common law doctrine was recognized or whether the statute, regulation or ordinance was enacted before or after the effective date of this Appendix). This includes all claims listed above that an employee has now or in the future against an Employer, its officers, directors, owners, employees, representatives, agents, subsidiaries, affiliates, successors, or assigns.
And Faust asserted that Verano had ratified the arbitration agreement by accepting "$3,403.65 in medical benefits and wage indemnity" from Faust's Employee Injury Benefit Plan following the April 30, 2019 incident.
In his amended response to Faust's amended motion to compel arbitration, Verano described himself as "a predominantly Spanish-speaking and Spanish-reading individual," who "enjoy[ed] challenging himself in attempting to be bilingual." He argued that because he was not provided a Spanish-language version of the arbitration agreement and "an explanation of its contents, he could not have had a meeting of the minds" with Faust about arbitrating his claims. Verano also argued that the arbitration agreement was "substantively and procedurally unconscionable" because it "was not translated or explained to him, he had no access to translators" while reviewing it, and he "was instructed to sign the document by a Faust employee who knew [that Verano] did not know what it said." Finally, Verano argued that Faust had waived its right to invoke the arbitration clause because Faust had "substantially participated in the litigation process since February 24, 2020," when it filed its answer.
Verano attached to his amended response an excerpt from his June 12, 2021 deposition in which he testified as follows:
Verano also attached his affidavit to his amended response, in which he described his interactions with the then-district manager of Faust, Ron Anderson. In his affidavit, Verano testified:
Anderson brought me the job application for Faust . . . and instructed me how to fill it out, including what boxes to check regarding my ability to speak and read English. . . . Anderson was aware I did not speak or read English well, but instructed me to fill out the application indicating otherwise. [7]
Faust filed a motion for leave to file its reply to Verano's amended response in excess of the five-page limit permitted under the trial court's prescribed procedures.[8] Faust attached to the motion for leave a "condensed" version of its reply, in which it argued that Verano could not avoid the arbitration agreement simply by claiming that he could not read English well enough to understand it because he had not shown that he was prevented from having read and understood the agreement by trick or artifice. Faust pointed out that according to Verano's deposition testimony, Anderson had Verano fill out the employment application at a Subway restaurant on May 8, 2013, but Verano did not sign the arbitration acknowledgment until June 3, 2013 his first day of employment with Faust, and no evidence showed that Anderson had anything to do "with the presentation of the arbitration agreement or the acknowledgment" on that date. Nor did any...
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