FD Frontier Drilling (Cyprus), Ltd. v. Didmon
| Decision Date | 01 May 2014 |
| Docket Number | NO. 01-12-01160-CV,01-12-01160-CV |
| Parties | FD FRONTIER DRILLING (CYPRUS), LTD.; FRONTIER DRILLING USA, INC.; FRONTIER DRILLING AS; AND NOBLE DRILLING (U.S.), L.L.C., Appellants v. STEVE DIDMON, Appellee |
| Court | Texas Court of Appeals |
In this interlocutory appeal, appellants FD Frontier Drilling (Cyprus), Ltd., Frontier Drilling USA, Inc., Frontier Drilling AS, and Noble Drilling (U.S.),L.L.C. [collectively, "the Frontier entities"] contend the trial court erred by denying their motion to compel arbitration and stay the trial court proceedings. See TEX. CIV. PRAC. & REM. CODE ANN. § 51.016 (Vernon Supp. 2011) (); 9 U.S.C. § 16(a)(1)(C) (2006) (); CMH Homes v. Perez, 340 S.W.3d 444, 448-49 (Tex. 2011) (). We reverse and remand.
Appellee, Steve Didmon,1 filed suit alleging that he sustained personal injuries while employed as a subsea engineer above the D/S Frontier Phoenix on Deecember 11, 2009, while the vessel was operating offshore Singapore.
Frontier Drilling AS ["Frontier AS"] is a foreign company based in Norway and was the owner of the D/S Frontier Phoenix at the time of the alleged accident.Frontier Drilling USA ["Frontier USA"] is a wholly owned subsidiary of Frontier AS and is based in Houston, Texas. Frontier Drilling (Cyprus), Ltd. ["Frontier Cyprus"] is a unit of Frontier US, and when a Frontier drilling vessel is in foreign waters, its crew is on Frontier Cyprus's payroll. At the time of the alleged accident, the D/S Frontier Phoenix was operating near Singapore, thus Didmon was being paid by Frontier Cyprus. After the incident made the basis of this suit, Noble Corporation, parent company to defendant Noble Drilling (U.S.), acquired the Frontier entities by way of merger.
As a new hire, Didmon signed an Expatriate Employment Agreement ["EEA"] with Frontier Cyprus, which contained the following arbitration clause:
Any dispute arising out of or in connection with this contract, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration in Singapore in accordance with the Arbitration Rule of the Singapore International Arbitration Centre ("SIAC Rules") for the time being in force, which rules are deemed to be incorporated by reference in this clause.
The EEA also provides, in part, "This Agreement constitutes the entire agreement between the EMPLOYEE [Didmon] and the COMPANY [Frontier Cyprus], contains all the terms and conditions of employment, and may not be amended except in writing, properly subscribed by both the COMPANY [Frontier Cyprus] and the EMPLOYEE [Didmon]." The EEA did not reference any of the other Frontier entities.
One day after he signed the EEA, Didmon signed an Alternative Resolution Agreement ["ADR"], along with several other "new hire" forms. The ADR recites that it is between Didmon and "Frontier Drilling and all related subsidiaries and companies." The ADR provides as follows:
The Company and I mutually consent to the [sic] resolve all controversies or claims ("claims"), whether or not arising out of my employment (or its termination), that the Company may have against me or that I may have against the Company or against its agents, employees, directors, or officers in their capacity as such or otherwise. The claims covered by the Agreement are not limited to but include, claims for compensation or wages due; claims for breach of any covenant or contract (expressed or implied); claims for discrimination (including, but not limited to, race, sex, religion, national original, age, marital status, or medical condition, handicap or disability); tort claims; claims for benefits (except where an employee benefit or pension plan specifies that its claims procedure shall culminate in an arbitration procedure different from this one), and claims for violation of any federal, state, or other governmental law, statute, regulation, or ordinance, except for claims excluded in the following paragraph. (Emphasis added).
The ADR then excluded claims for workers compensation benefits and claims by the company for injunction or other relief for unfair competition and/or the unauthorized use of trade secrets or confidential information.
On January 3, 2011, Didmon filed suit against the Frontier entities in the 334th District Court of Harris County, Texas, asserting claims under the Jones Act and general maritime law for his personal injuries. Specifically, he alleged negligence, gross negligence, and claims for maintenance and cure against all thedefendants, referring to them globally as "the Frontier Defendants." He also alleged alter ego and agency liability.
The defendants, minus Frontier AS, who had not yet been served, answered the state court suit and asserted a right to arbitration in their answer. Didmon filed an amended petition, adding identical claims against Frontier AS.
The defendants then removed the case to federal court, claiming their right to arbitration pursuant to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards. In their motion the defendants alleged that arbitration was required under the terms of the ADR Agreement. See Didmon v. Frontier Drilling (USA), Inc., No. H-11-2051, 2012 WL 951544 (S.D. Tex. Mar. 19, 2012). Accordingly, the defendants filed a motion to dismiss, or alternatively stay, the proceedings pending resolution by arbitration. After briefing from the parties, the federal district court denied the defendants' motion to dismiss, and remanded the case to state court.
In its opinion, the federal district court held that under the EEA, any amendments had to be in writing and "subscribed" by both parties. Id. at *1. The court further held that "subscribed" meant signed, and, because the ADR agreement was signed only by Didmon, and not by any Frontier entity, it did not validly amend the EEA. Id. at *3. In so holding, the Court further stated:
Both Didmon and Frontier Cyprus signed the Employment Agreement. That Agreement only requires disputes about its "existence, validity or termination" to be arbitrated in Singapore. (Docket Entry No. 6, Ex. C, ¶ XX(B)). Neither party argues—and rightly so—that this arbitration provision applies to this personal injury dispute.
Id. at *2. The federal district court, having found that the ADR Agreement was not enforceable, remanded the case to state court because no federal question was presented and diversity of parties is not a ground for removal for Jones Act claims. Id. at *4.
After the federal district court held the ADR agreement to be unenforceable and remanded the case to state court, the Frontier entities filed motions to dismiss or stay for arbitration in the 334th District Court, based this time on the arbitration clause in the EEA. The trial court denied the motions, and this interlocutory appeal followed.
On appeal, the Frontier entities contend the trial court erred in denying their motions to stay pending arbitration. As stated in Didmon's brief to the trial court, "the sole issue for [the trial court to determine was] whether the EEA's arbitration clause extends to Didmon's tort claims." Both parties agree that this case is governed by the Convention on the Recognition and Enforcement of Foreign Arbitral Awards. See 9 U.S.C. § 202 (1999). The Convention applies to seaman's employment contracts and incorporates the provisions of the FAA to the extentthey do not conflict with the Convention. See Francisco v. STOLT ACHIEVEMENT MT, 293 F.3d 270, 272-76 (5th Cir. 2002); 9 U.S.C. § 208.
In a matter subject to the FAA, section 51.016 of the Texas Civil Practice and Remedies Code allows for an interlocutory appeal of an order denying arbitration. See TEX. CIV. PRAC. & REM. CODE ANN. § 51.016. We apply an abuse of discretion standard of review respecting interlocutory appeals under this section. Sidley Austin Brown & Wood, LLP v. J.A. Green Dev. Corp., 327 S.W.3d 859, 862-63 (Tex. App.—Dallas 2010, no pet.). Under this standard, we defer to the trial court's factual determinations if they are supported by evidence, but we review the trial court's legal determinations de novo. In re Labatt Food Serv., L.P., 279 S.W.3d 640, 643 (Tex. 2009) (orig. proceeding); Weekley Homes, L.P. v. Rao, 336 S.W.3d 413, 418 (Tex. App.—Dallas 2011, pet. denied). Determining whether a claim falls within the scope of an arbitration agreement involves the trial court's legal interpretation of the agreement, and we review such interpretations de novo. See McReynolds v. Elston, 222 S.W.3d 731, 740 (Tex. App.—Houston [14th Dist.] 2007, no pet.) (reviewing scope of arbitration clause under de novo standard of review).
A party seeking to compel arbitration under the FAA must establish: (1) a valid arbitration agreement exists; and (2) the claims at issue fall within that agreement's scope. In re Dillard Dep't Stores, Inc., 186...
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