Human Biostar, Inc. v. Celltex Therapeutics Corp.

• Decision Date: 19 January 2017
• Docket Number: NO. 14–15–00234–CV,14–15–00234–CV
• Parties: HUMAN BIOSTAR, INC. and RNL Bio, Ltd. n/k/a K–Stemcell Co., Ltd., Appellants v. CELLTEX THERAPEUTICS CORPORATION, Appellee
• Court: Texas Court of Appeals

514 S.W.3d 844

HUMAN BIOSTAR, INC. and RNL Bio, Ltd. n/k/a K–Stemcell Co., Ltd., Appellants

v.CELLTEX THERAPEUTICS CORPORATION, Appellee

NO. 14–15–00234–CV

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

Majority and Concurring Opinions filed January 19, 2017

Rehearing Overruled February 28, 2017

Paula E. Hughes, Whitehouse, TX, Bruce C. Tough, Spring, TX, for Appellant.

Grant Cook, Houston, TX, Richard L. Tate, Richmond, TX, for Appellee.

Panel consists of Justices Jamison, Donovan and Brown.

OPINION

John Donovan, Justice

Following mediation of the underlying dispute in this case, a Rule 11 settlement agreement ("the Agreement"), containing a provision to arbitrate "any disagreement result[ing] from negotiation and completion of this documentation," was entered into between Celltex Therapeutics Corporation ("Celltex"), RNL Bio, Ltd. n/k/a K–Stemcell Co., Ltd. ("K–Stemcell"), Human Biostar, Inc. ("Biostar"), and Hyeonggeun Park.¹ Subsequently, Celltex moved to compel arbitration, as the parties had been unable to "resolve the differences between [their] drafts" of "the documents necessary to consummate [the Agreement]." According to Celltex's motion to compel arbitration, the Agreement was made pursuant to Rule 11 of the Texas Rules of Civil Procedure and a true and correct copy of the Agreement was filed with the clerk of the 434th District Court of Fort Bend County, Texas, on June 26, 2014. Neither K–Stemcell nor Biostar contest Celltex's assertion that the Agreement satisfies the requirements of Rule 11.

Celltex's motion to compel arbitration was granted by the trial court's order signed September 22, 2014. On February 12, 2015, the trial court entered an order confirming the arbitration award. On March 16, 2015, Biostar filed a notice of restricted appeal and K–Stemcell filed a notice of appeal from that order.² Because both appeals were filed from Trial Court Cause No. 12–DCV–202563, of the 434th District Court of Fort Bend County, Texas, they were assigned Appeal No. 14–15–00234–CV. On appeal, Biostar and K–Stemcell both complain of the order compelling arbitration and the order confirming the arbitration award.

JURISDICTION

We initially address Celltex's arguments that we lack jurisdiction to entertain any appeal from the order compelling arbitration. Celltex first contends we lack jurisdiction because K–Stemcell's and Biostar's notices of appeal state they are taken from the trial court's order signed February 12, 2015, not the September 22, 2014, order compelling arbitration. Rule 25.1 provides that a notice of appeal must state the date of the judgment or order appealed from. Tex. R. App. P 25.1(d)(2). However, the rules do not require an appellant to list in the notice of appeal every interlocutory ruling that he desires to challenge on appeal. See Ostrovitz & Gwinn, LLC v. First Specialty Ins. Co ., 393 S.W.3d 379, 386 (Tex. App.–Dallas 2012, no pet.)(citing Gunnerman v. Basic Capital Mgmt., Inc ., 106 S.W.3d 821, 824 (Tex. App.–Dallas 2003, pet. denied) (holding that notice of appeal from final judgment "brought forward the entire case, including earlier interlocutory orders that were not independently appealable")); Vazquez v. Vazquez , 292 S.W.3d 80, 82–83 (Tex. App.–Houston [14th Dist.] 2007, no pet.) (holding that appellant did not limit his issues on appeal by "gratuitously listing only some of those issues in his notice of appeal"); Anderson v. Long , 118 S.W.3d 806, 809–10 (Tex. App.–Fort Worth 2003, no pet.) (holding that appellant could challenge interlocutory partial summary judgment even though notice of appeal stated that appeal was from order sustaining subsequent plea to the jurisdiction); Tex. Sting, Ltd. v. R.B. Foods, Inc ., 82 S.W.3d 644, 647–48 (Tex. App.–San Antonio 2002, pet. denied) (holding that notice of appeal from default judgment that was the final order in the case also allowed appellant to raise appellate issues challenging prior interlocutory order dismissing part of case for want of prosecution)). We therefore reject Cellex's argument that we lack jurisdiction to consider the order compelling arbitration because the notices of appeal do not state they are taken from the trial court's order signed September 22, 2014.

Next, Celltex asserts we lack jurisdiction over an appeal from the order compelling arbitration because such an order is not appealable. Celltex is correct that orders compelling arbitration are not entitled to interlocutory appeal; however, they can be reviewed after final judgment in the case. Chambers v. O'Quinn , 242 S.W.3d 30, 32 (Tex. 2007) (citing Green Tree Fin. Corp. v. Randolph, 531 U.S. 79, 89, 121 S.Ct. 513, 148 L.Ed.2d 373 (2000) ). A judgment confirming an arbitration award is final and enforceable like any other judgment. Hamm v. Millennium Income Fund, L.L.C. , 178 S.W.3d 256, 268 (Tex. App.–Houston [1st Dist.] 2005, pet. denied). Accordingly, we have jurisdiction to review the order compelling arbitration.

Celltex further claims we lack jurisdiction to consider the challenges to the order compelling arbitration because the notices of appeal were not filed within thirty days of entry of that order. Generally, a notice of appeal is due within thirty days after the judgment is signed. See Tex. R. App. P. 26.1. In this case, the appellate timetable ran from the date of the order confirming the arbitration award, as the final judgment, not the date of the order compelling arbitration. Because both notices of appeal were filed within thirty days of the order confirming the arbitration award, we do not lack jurisdiction due to untimeliness of the notices of appeal.

THE RESTRICTED APPEAL

Rule 30 of the Texas Rules of Appellate Procedure provides that "[a] party who did not participate—either in person or through counsel—in the hearing that resulted in the judgment complained of and who did not timely file a postjudgment motion or request for findings of fact and conclusions of law, or a notice of appeal within the time permitted by Rule 26.1(a) , may file a notice of appeal within the time permitted by Rule 26.1(c)." Tex. R. App. P. 30 (emphasis added). See also Alexander v. Lynda's Boutique , 134 S.W.3d 845, 848 (Tex. 2004) ; Watson v. Watson , 286 S.W.3d 519, 522 (Tex. App.–Fort Worth 2009, no pet.). As noted above, Biostar's notice of appeal was filed within thirty days of the order confirming the arbitration award. Accordingly, Biostar filed a notice of appeal within the time permitted by Rule 26.1(a) and therefore fails to meet the requirements of a restricted appeal. See Tex. R. App. P. 26.1 and 30. Accordingly, we consider Biostar's appeal without applying the strictures of a restricted appeal. Because Biostar did, however, timely file a notice of appeal that does not lack the requisite information, our jurisdiction has been invoked. See Rule 25.1(d).

THE ORDER COMPELLING ARBITRATION

Arbitration cannot be ordered in the absence of an agreement to arbitrate. Freis v. Canales , 877 S.W.2d 283, 284 (Tex. 1994). Thus, despite strong presumptions that favor arbitration, a valid agreement to arbitrate is a threshold requirement to compel arbitration. See In re Kellogg Brown & Root, Inc ., 166 S.W.3d 732, 737–38 (Tex. 2005) (orig. proceeding). Courts apply state contract law in determining whether there is a valid agreement to arbitrate. See In re Rubiola , 334 S.W.3d 220, 224 (Tex. 2011) (orig. proceeding). Once the arbitration movant establishes a valid arbitration agreement that encompasses the claims at issue, a trial court has no discretion to deny the motion to compel arbitration unless the opposing party proves a defense to arbitration. In re FirstMerit Bank , N.A. , 52 S.W.3d 749, 753–54 (Tex. 2001) (orig. proceeding).

The trial court conducts a summary proceeding to make the gateway determination of arbitrability. See In re Weekley Homes , L.P. , 180 S.W.3d 127, 130 (Tex. 2005) (orig. proceeding). The trial court's determination of the arbitration agreement's validity is a legal question that we review de novo. J.M. Davidson, Inc. v. Webster , 128 S.W.3d 223, 227 (Tex. 2003). If the court's factual findings are in dispute, we review the court's denial of the motion under a legal sufficiency or "no evidence" standard of review. Id. at 233.

In three issues, Biostar and K–Stemcell challenge the trial court's order compelling arbitration.³ In its first issue, Biostar claims the trial court erred by granting Celltex's motion to compel arbitration without first determining whether the Agreement was enforceable. Both Biostar and K–Stemcell argue the trial court erred in submitting the issue of arbitrability to the arbitrator.

In response to Celltex's motion to compel, K–Stemcell and Biostar argued, without citing legal authority, that the motion should be denied because Celltex had not yet determined, in a separate proceeding, whether the Agreement was enforceable. K–Stemcell and Biostar acknowledged in their response to the motion to compel that disagreements resulting from the negotiation and completion of the documents necessary to consummate the Agreement "are the only issues actually governed by the arbitration agreement" but asserted disputes regarding the enforceability of the Agreement "are not subject to the arbitration agreement." K–Stemcell and Biostar contended the trial court could not determine whether to compel arbitration "without first determining whether the Rule 11 Agreement is even enforceable."

On appeal, in two separate briefs, Biostar and K–Stemcell expand their argument to assert the trial court, not the arbitrator, had the authority to decide the issue of arbitrability, Biostar asserts approval of the Agreement is a condition precedent to the formation of the contract that required approval by Biostar's board of directors. Whether a contract was formed without that approval, Biostar argues, was an issue for the trial court rather than the arbitrator. K–Stemcell contends the trial court failed to decide the "gateway issue"...