In re Bunzl Usa, Inc.

• Citation: 155 S.W.3d 202
• Decision Date: 08 January 2004
• Docket Number: No. 08-03-00306-CV.,08-03-00306-CV.
• Parties: In re BUNZL USA, INC., Relator.
• Court: Court of Appeals of Texas

155 S.W.3d 202

In re BUNZL USA, INC., Relator.

No. 08-03-00306-CV.

Court of Appeals of Texas, El Paso.

January 8, 2004.

Steven J. Blanco, Delgado, Acosta, Braden & Jones, P.C., El Paso, for Relator.

Yvonne Rangel, El Paso, for Respondent.

Before Panel No. 1 LARSEN, McCLURE, and CHEW, JJ.

OPINION

SUSAN LARSEN, Justice.

In this mandamus proceeding, Bunzl USA, Inc. argues that the trial court abused its discretion by refusing to compel arbitration. We deny the requested writ.

PROCEDURAL BACKGROUND

Manuel Avila filed suit against Bunzl USA, Inc., Bunzl Distribution, Inc., Bunzl Distribution USA, Inc., Bunzl Dallas, Inc., Paul Lorenzini, and Elizabeth Isam. He alleged that he was employed by the defendants as a sales representative between June 26, 1993 and November 29, 2001 and that he was terminated because of his race or ethnicity. He asserted causes of action for violations of the Texas Commission on Human Rights Act and for intentional infliction of emotional distress. Lorenzini, the president of Bunzl USA, Inc., filed a special appearance, which the court granted.

The remaining defendants filed a motion seeking to compel Avila to arbitrate his claims pursuant to the Federal Arbitration Act (FAA). They also filed a memorandum in support of their motion. Attached to the memorandum was a copy of a "Salesperson Employment Agreement," dated December 6, 1993, between Bunzl USA and Avila.

The Salesperson Employment Agreement recites that Avila desires to be employed or continue employment and that Bunzl desires to employ or continue to employ him. It further recites that Avila's position with Bunzl will provide him with access to Bunzl's customers and confidential or proprietary business information. The Agreement then sets out provisions common to a non-compete contract.

The Agreement also includes a paragraph labeled "Arbitration and Governing Law." This paragraph states:

[A]ny dispute arising out of, pursuant to, or relating to this Agreement, or to the employment or the termination of Employee by Company, shall be resolved by binding arbitration in St. Louis County, Missouri before one (1) arbitrator pursuant to the rules of the American Arbitration Association for commercial arbitration. This Agreement shall be interpreted in accordance with and governed by the law of Missouri. The sole function of the arbitrator is to interpret and enforce the Agreement under Missouri law, and ... the arbitrator shall have no authority to alter, amend, modify or change the Agreement.....

The next paragraph provides, "No modification or amendment of any provision of this Agreement is effective unless it is in writing and signed by the parties to this Agreement."

The Agreement concludes with a signature block that has three lines. The first line is blank. The second line has "By:" in typewriting at the beginning of the line and the word "COMPANY" in typewriting beneath the line. "Bunzl/Papercraft" is printed by hand on the line. The third line has "EMPLOYEE" in typewriting beneath it. On the line is an illegible signature dated "12-6-93." No affidavit accompanied the copy of the Agreement that was attached to the memorandum.

At the hearing on the defendants' motion to compel arbitration, Avila's counsel maintained that the Agreement was not valid because, among other things, it was not properly signed by Bunzl. Counsel argued that the lack of a signature called into question whether the parties ever reached an agreement. The court also expressed concern over the missing signature, stating that the existence of an agreement to arbitrate was the defendants'"weakest point." The defendants' counsel responded to this argument by asserting that an arbitration agreement does not have to be signed to be valid. Neither side presented any evidence at this hearing or requested an evidentiary hearing. The court denied the motion to compel arbitration.

The defendants filed a motion to reconsider. They also filed a memorandum in support of this motion. The defendants argued in the memorandum that the missing signature does not render the Agreement unenforceable. They attached several documents to the memorandum, including a copy of the Salesperson Employment Agreement and the affidavit of Elizabeth Isam.¹ Isam averred that she is the regional human resources manager for Bunzl Distribution Southwest, L.P., which Avila wrongly named in this suit as Bunzl Dallas, Inc. She further stated that she is the custodian of records for Bunzl Southwest, that she maintains the personnel jackets of Bunzl employees within her region of authority, that the attached copy of the Salesperson Employment Agreement is "a true and accurate copy of Mr. Avila's Employment Agreement," that the Agreement was kept in his employment jacket so it could be reviewed if questions arose regarding the parties' rights and obligations under the Agreement, and that she personally reviewed the Agreement before Avila was terminated to ensure that Bunzl acted in accordance with its obligations under the Agreement.

The court conducted a hearing on the motion. Again, with the exception of the documents attached to the motion, neither party presented any evidence or requested an evidentiary hearing. The court denied the motion to reconsider.

THE PARTIES' ARGUMENTS

Bunzl asserts that the trial court abused its discretion in refusing to compel arbitration. It argues that it presented overwhelming evidence that its employment relationship with Avila affected interstate commerce and that Avila's claims fall within the scope of the arbitration provision. Bunzl also argues, although it is the only relator in this proceeding, that all the defendants are entitled to invoke the arbitration provision under the doctrine of equitable estoppel. Finally, Bunzl argues that Missouri is the proper venue for the arbitration proceeding. Curiously, despite the trial court's statement that the absence of Bunzl's signature on the Agreement is the weakest part of its case, Bunzl's petition does not address this issue.

In his response, Avila argues that Bunzl failed to establish that the parties assented to the Agreement because Bunzl did not sign it, there was no evidence that the employee signature on the Agreement was his, and there was no other evidence to show that the parties assented to the Agreement's terms. Avila also argues that his claims do not fall within the scope of the arbitration provision.

In its reply brief, Bunzl again fails to offer any argument regarding the absence of its signature. The only reference to this issue is an assertion that Avila did not "claim or argue to the Trial Court that the agreement presented was not the Parties' Agreement." Appended to this assertion is a footnote, which acknowledges that Avila argued below that the Agreement "was unenforceable because Bunzl had not signed the agreement." Bunzl then points out, without citation to the record, that it responded to this "specious argument" in its motion for reconsideration.²³

STANDARD OF REVIEW

A writ of mandamus will issue to correct a clear abuse of discretion when there is no other adequate remedy at law. Walker v. Packer, 827 S.W.2d 833, 839 (Tex.1992) (orig.proceeding). There is no other adequate remedy at law when a trial court improperly denies a motion to compel arbitration under the FAA. In re Halliburton Co., 80 S.W.3d 566, 573 (Tex.2002); Jack B. Anglin Co. v. Tipps, 842 S.W.2d 266, 272-73 (Tex.1992).

A trial court clearly abuses its discretion if it reaches a decision so arbitrary and unreasonable as to amount to a clear and prejudicial error of law. Walker, 827 S.W.2d at 839. With respect to the resolution of factual issues, this means that we may not substitute our judgment for that of the trial court, even if we would have decided the issue differently. Id. at 839-40. Instead, we may not overturn the trial court's decision unless that court could reasonably have reached only the opposite decision. See id. at 840. The relator has the burden of establishing that the trial court abused its discretion. Id.

With respect to the resolution of legal issues, our review is much less deferential. Id. The trial court has no discretion in determining what the law is or in applying the law to the facts. Id. Therefore, a clear failure by the trial court to analyze or apply the law correctly constitutes an abuse of discretion. Id.

THE PROCEDURE TO BE FOLLOWED ON A MOTION TO COMPEL ARBITRATION

In Tipps, the Texas Supreme Court set out the procedure to be followed when a motion to compel arbitration has been filed:

[T]he trial court may summarily decide whether to compel arbitration on the basis of affidavits, pleadings, discovery, and stipulations. However, if the material facts necessary to determine the issue are controverted, by an opposing affidavit or otherwise admissible evidence, the trial court must conduct an evidentiary hearing to determine the disputed material facts.

Tipps, 842 S.W.2d at 269. In arriving at this procedure, the supreme court drew from established summary judgment procedure. See id.; see also In re Jebbia, 26 S.W.3d 753, 756-57 (Tex. App.-Houston [14th Dist.] 2000, orig. proceeding) ("A summary motion to compel arbitration is essentially a motion for partial summary judgment, subject to the same evidentiary standards.").

Our sister appellate courts have elaborated on the procedure set out in Tipps. See, e.g., Jebbia, 26 S.W.3d at 756-57; Jennings, 936 S.W.2d at 18-19; Prudential Sec. Inc. v. Banales, 860 S.W.2d 594, 597 (Tex.App.-Corpus Christi 1993, orig. proceeding). The Fourteenth Court of Appeals explained the correct procedure this way:

The party alleging an arbitration agreement must present complete summary proof of his "case in chief" that an agreement to arbitrate requires arbitration of the issues in dispute. If that summary proof intrinsically raises issues about the procedural enforceability of the agreement, the movant's summary proof should...