In re Provine, 01-09-00769-CV

• Decision Date: 10 December 2009
• Docket Number: No. 01-09-00769-CV,01-09-00770-CV.,01-09-00769-CV
• Parties: In re Mark Cecil PROVINE, Relator Mark Cecil Provine, Appellant, v. Kelly Geis Provine, Appellee.
• Court: Texas Court of Appeals

312 S.W.3d 824

In re Mark Cecil PROVINE, Relator

Mark Cecil Provine, Appellant, v. Kelly Geis Provine, Appellee.

Nos. 01-09-00769-CV, 01-09-00770-CV.

Court of Appeals of Texas, Houston (1st Dist.).

December 10, 2009.

COPYRIGHT MATERIAL OMITTED

Adam Joel Morris, Houston, TX, Sallee S. Smyth, Richmond, TX, for Appellant.

Walter P. Mahoney, The Mahoney Law Firm, Pasadena, TX, for Appellee.

Panel consists of Chief Justice RADACK and Justices BLAND and MASSENGALE.

OPINION

JANE BLAND, Justice.

In this dispute arising out of a divorce decree, Mark Cecil Provine seeks relief from the trial court's denial of his motion to compel arbitration via an interlocutory appeal and a petition for writ of mandamus.¹ Mark contends that the trial court abused its discretion by denying his motion. We conclude that the trial court erred by denying the motion to compel arbitration pursuant to the arbitration agreement in the final divorce decree. Accordingly, we reverse the trial court's order. We dismiss the petition for writ of mandamus as moot.

Background

Mark and Kelly divorced on January 20, 2009. The divorce decree provides,

Division of Marital Estate

The Court finds that the parties have entered into a written agreement for the division of their community estate, which is set out in a Mediated Settlement Agreement which is attached hereto as Exhibit "A" and incorporated herein by reference. The Court finds that this agreement is a just and right division of the community estate.

The partial mediated settlement agreement establishes a procedure for the resolution of the parties' disputes concerning the divorce decree. It states:

If one or more disputes arise with regard to the drafting of the decree, closing documents, the interpretation, omitted issues, and/or performance of this agreement or any of its provisions, the party's attorneys agree to attempt to resolve same by phone conference with the Mediator who facilitated this settlement. If their differences cannot resolve by phone conference, then the disputed issues shall be resolved by arbitration as set forth below.

ANY DISPUTES ARISING FROM THE DRAFTING OF THE DECREE, CLOSING DOCUMENTS, THE INTERPRETATION, OMITTED ISSUES, AND/OR PERFORMANCE OF THIS AGREEMENT OR ANY OF ITS PROVISIONS, WHICH CANNOT BE RESOLVED BY PHONE CONFERENCE AS SET FORTH ABOVE, SHALL BE DECIDED BY BINDING ARBITRATION WITH WARREN COLE SERVING AS ARBITRATOR. Parties and/or counsel agree to notify Mr. Cole, in writing, of their request for his services at least seven days prior to a Court entry date and shall deposit an additional $450.00 per party toward the cost of said services before any arbitration services are rendered.

. . . .

This agreement is made and performable in Harris County, Texas, and shall be construed in accordance with the laws of the State of Texas.

Thereafter, disputes arose over the division of property. On March 25, 2009, Kelly petitioned for enforcement of the agreement, contending that Mark had not properly performed his obligations pursuant to the property division set forth in the agreement.

Specifically, Kelly contended that,

Mark has failed to surrender assets owned by Kelly in the possession of Mark. While in possession of those assets, Mark has converted portions of same to his own use and benefit all to the damage of Kelly and for which Kelly requests this Court order restored and turned over to her....

Kelly requests this Court immediately order the turn over of all property in possession of Mark that rightfully belongs to her pursuant to all of the agreements of the parties and the Orders of this Court.

If the items belonging to Kelly are not immediately surrendered Kelly requests that this Court enter an order placing all of the assets the subject of this lawsuit placed within custodies legis and distributed to the rightful owner pursuant to the lawful order of this court.

. . . .

Mark has failed to file an Inventory....

Mark has failed to pay Attorney and Expert fees....

Mark ... has failed to surrender to Kelly the proceeds from assets he has converted to his own use and benefit and he should be ordered to pay to Kelly all the proceeds from any assets, he has sold or disposed of, that form the basis of the security under the specific terms of the Mediated Settlement Agreement.

Mark has failed to pay community on going bills and expenses he was obligated to pay under the agreement of the parties.

On June 25, 2009, Mark moved to compel arbitration according to the arbitration clause in the agreement. At the hearing the trial court stated,

It would be my ruling that this is post divorce and post mediation and post arbitration.... I am ruling that the mediation and the arbitration provisions are deemed merged into the decree of divorce and that post divorce matters will be determined by the Court, so the Court denies the motion to compel arbitration.

On September 3, 2009, the trial court signed an order denying Mark's motion to compel arbitration. In the order, the trial court noted that "the Court finds that it has no plenary power to compel arbitration at this time."

Appellate Jurisdiction

We have jurisdiction over this appeal under the Federal Arbitration Act ("FAA")² or the Texas Arbitration Act ("TAA").³ TEX. CIV. PRAC. & REM.CODE ANN. § 51.016 (Vernon Supp.2009);⁴ id. § 171.098 (Vernon 2005). The FAA preempts all otherwise applicable state laws, including the TAA, under the Supremacy Clause of the United States Constitution. U.S. CONST. art. VI; see Allied-Bruce Terminix Co. v. Dobson, 513 U.S. 265, 272, 115 S.Ct. 834, 838, 130 L.Ed.2d 753 (1995). But the FAA preempts the TAA only if "(1) the agreement is in writing, (2) it involves interstate commerce, (3) it can withstand scrutiny under traditional contract defenses under state law, and (4) state law affects the enforceability of the agreement." In re D. Wilson Constr. Co., 196 S.W.3d 774, 780 (Tex.2006) (orig. proceeding) (quoting In re Nexion Health at Humble, Inc., 173 S.W.3d 67, 69 (Tex. 2005)). "For the FAA to preempt the TAA, state law must refuse to enforce an arbitration agreement that the FAA would enforce." Id.

Here, the arbitration agreement provides that it is governed by the laws of Texas. It does not specifically exclude the FAA, but nothing in the agreement involves interstate commerce, and the property at issue is within Texas. Moreover, the parties have asserted nothing in the TAA that would subvert enforcement of the agreement, where the FAA would otherwise enforce it. Therefore, the FAA does not preempt the TAA in this case. Id. Because we have jurisdiction to hear the case via an appeal, we dismiss Mark's petition for writ of mandamus. Id.

The Interlocutory Appeal

In his sole issue, Mark contends that the trial court erred by denying the motion to compel arbitration.

A. Applicable Law

A party moving to compel arbitration must establish (1) the existence of a valid, enforceable arbitration agreement and (2) that the claims asserted fall within the scope of that agreement. Valero Energy Corp. v. Teco Pipeline Co., 2 S.W.3d 576, 581 (Tex.App.-Houston 14th Dist. 1999, no pet.). If the movant establishes that an arbitration agreement governs the dispute, the burden then shifts to the party opposing arbitration to establish a defense to the arbitration agreement. See In re Oakwood Mobile Homes, Inc., 987 S.W.2d 571, 573 (Tex.1999) (orig. proceeding). A party may revoke the agreement only on a ground that exists at law or in equity for the revocation of a contract. TEX. CIV. PRAC. & REM.CODE ANN. § 171.001 (Vernon 2005). "Once the trial court concludes that the arbitration agreement encompasses the claims, and that the party opposing arbitration has failed to prove its defenses, the trial court has no discretion but to compel arbitration and stay its own proceedings." In re FirstMerit Bank, N.A., 52 S.W.3d 749, 753-54 (Tex.2001).

Whether an agreement imposes a duty to arbitrate is a question of law which the appellate court reviews de novo. In re C & H News Co., 133 S.W.3d 642, 645 (Tex.App.-Corpus Christi 2003, orig. proceeding). In determining whether a claim falls within the scope of an arbitration agreement, the court must focus on the factual allegations of the underlying suit and resolve any doubts in favor of coverage. In re FirstMerit Bank, N.A., 52 S.W.3d at 753, 754. "Texas law favors arbitration." Kosty v. S. Shore Harbour Cmty. Ass'n, Inc., 226 S.W.3d 459, 463 (Tex.App.-Houston 1st Dist. 2006, pet. denied).

In First Options of Chicago, Inc. v. Kaplan, the United States Supreme Court stated that "when deciding whether the parties agreed to arbitrate a certain matter (including arbitrability), courts generally... should apply ordinary state-law principles that govern the formation of contracts," with the qualification that, "when courts decide whether a party has agreed that arbitrators should decide arbitrability," courts "should not assume that the parties agreed to arbitrate arbitrability unless there is `clear and unmistakable' evidence that they did so." 514 U.S. 938, 944, 115 S.Ct. 1920, 1924, 131 L.Ed.2d 985 (1995); accord In re Weekley Homes, L.P., 180 S.W.3d 127, 130 (Tex.2005) ("Absent unmistakable evidence that the parties intended to the contrary, it is the courts rather than the arbitrators that must decide `gateway matters'...."); Burlington Res. Oil & Gas Co., LP v. San Juan Basin Royalty Trust, 249 S.W.3d 34, 39-42 (Tex.App.-Houston 1st Dist. 2007, pet. denied). A mediator may also serve as an arbitrator if the parties consent. See In re Cartwright, 104 S.W.3d 706, 714 (Tex.App.-Houston 1st Dist. 2003, orig. proceeding) (noting mediator should not act as arbitrator in the same or a related dispute without the express consent of the parties).

A trial court's power to modify its judgment is virtually absolute during the period of its plenary power. See Stallworth v. Stallworth, 201 S.W.3d 338, 349 (Tex.App.-Dallas 2006, no pet.). The trial...