Readyone Indus., Inc. v. Lopez
| Decision Date | 25 April 2018 |
| Docket Number | No. 08-15-00157-CV,08-15-00157-CV |
| Citation | 551 S.W.3d 305 |
| Parties | READYONE INDUSTRIES, INC., Appellant, v. Iveth Rodriguez LOPEZ, Appellee. |
| Court | Texas Court of Appeals |
ATTORNEY FOR APPELLANT: Hon. S. Anthony Safi, Mounce, Green, Myers, Safi & Galatzan, P. O. Box 1977, El Paso, TX 79950-1977.
ATTORNEY FOR APPELLEE: Hon. Jeffrey B. Pownell, Scherr & Legate, PLLC, 109 N. Oregon, 12th Floor, El Paso, TX 79901.
Before McClure, C.J., Rodriguez, J., and Larsen, J. (Senior Judge)
This is an interlocutory appeal from the denial of a motion to compel arbitration pursuant to Section 51.016 of the Texas Civil Practice and Remedies Code. TEX.CIV.PRAC.&REM.CODE ANN. § 51.016 (West 2015) (). ReadyOne Industries, Inc. raises one issue contending the trial court abused its discretion in denying its motion to compel arbitration and stay proceedings pending arbitration. For the reasons that follow, we reverse and remand with instructions to enter an order compelling arbitration.
ReadyOne is a garment manufacturer located in El Paso, Texas. Pursuant to a contract with the United States Government, ReadyOne manufactures and supplies apparel for the United States Military. ReadyOne’s involvement in interstate commerce includes purchasing goods and services from out-of-state that are shipped to it in Texas, and manufacturing goods that are then shipped and used out of state.
ReadyOne employed Iveth Rodriguez Lopez in May 2011 as a sewing machine operator. On May 31, 2011, she signed a document entitled "Receipt and Arbitration Acknowledgment." Her signature acknowledged that she received and read, or had the opportunity to read, the following documents: the Mutual Agreement to Arbitrate (MAA), the Benefits Schedule, and the Summary Plan Description (SPD) for the Employee Injury Benefit Plan. She further acknowledged by her signature that claims and disputes covered under the MAA "must be submitted to an arbitrator, rather than a judge and jury in court;" that she and ReadyOne were mutually "agreeing to comply with [the] arbitration requirements;" that all covered claims would be subject to the MAA; and that "any decision of an arbitrator will be final and binding."
The MAA signed by the parties provided that all covered claims would be exclusively resolved by binding arbitration under the Federal Arbitration Act (FAA). The MAA set out all arbitration procedures, contained an integration clause providing that it constituted the complete agreement and superseded any prior agreement regarding arbitration; and indicated that any oral representations made before or after Lopez was hired did not alter the MAA.
In October 2013, Lopez claimed that she suffered injuries resulting from "repetitive sewing tasks." In her affidavit submitted to the trial court, Lopez did not deny signing the MAA, but rather, insisted that she did not remember signing the document. She stated that she signed numerous documents related to her employment and hiring, but ultimately did not know why she was signing them. According to her affidavit, ReadyOne told her that the documents were for benefits if she got hurt on the job. She further claimed to have been misled into believing that the documents were not important and were only routine documents that ReadyOne needed to complete its paperwork for her employment. She did not know that: (1) she was signing an arbitration agreement; (2) she was waiving her rights; (3) she could seek the advice of counsel before signing the documents; or (4) she was permitted to decline to sign the documents. She also claimed that ReadyOne never told her that the arbitration agreement was a "stand-alone" document and she was not given any time to review the documents before signing them. Finally, Lopez contended that ReadyOne never told her that she was signing an arbitration agreement or what that meant, no one ever explained to her the contents of the documents or their effect, she was never provided with an orientation session, and no one ever translated the documents for her. She insisted that she never would have signed the arbitration agreement had she been advised that it meant she was waiving her right to a jury trial.
In addition to her claims concerning the MAA, Lopez’s affidavit also provided the trial court with a description of several learning disorders from which she suffers, including: a dysthymic disorder, reading disorder, disorder of written expression, and a language disorder. She further related to the trial court that she had a reading ability below the second grade level and experienced difficulties with her memory.
Lopez filed her original petition in April 2014 and alleged that no valid MAA existed. She provided the following reasons, relevant to this appeal, as to why the MAA and Injury Benefit Plan were void and invalid:
In response, ReadyOne filed its original answer as well as a motion to compel arbitration. In support of its motion, ReadyOne submitted the affidavit of its Director of Human Resources and Compliance, Guadalupe Madrid, and the following five documents: (1) the MAA (Exhibit A); (2) the Receipt and Arbitration Acknowledgment (Exhibit B); (3) the Employee Injury Benefit Plan (Exhibit C); (4) the Summary Plan Description (SPD) (Exhibit D); and (5) the Employee Orientation PowerPoint Presentation (Exhibit E). Following a hearing in August 2014, the trial court denied the motion to compel. ReadyOne now appeals.
In its sole issue, ReadyOne challenges the order refusing to compel arbitration. Lopez raised several arguments in opposition to the motion to compel arbitration and the trial court denied the motion without specifying the basis for the ruling. ReadyOne has addressed each of these arguments and defenses on appeal.
We review a trial court’s decision to grant or deny a motion to compel arbitration for an abuse of discretion. Ellman v. JC General Contractors , 419 S.W.3d 516, 520 (Tex.App.—El Paso 2013, no pet.). Under this standard, we defer to a trial court’s factual determinations if they are supported by evidence, but we review a trial court’s legal determinations de novo. In re Labatt Food Serv., L.P. , 279 S.W.3d 640, 643 (Tex. 2009) ; Ellman , 419 S.W.3d at 520.
A party seeking to compel arbitration must (1) establish the existence of a valid arbitration agreement; and (2) show that the claims asserted are within the scope of the agreement. See In re AdvancePCS Health L.P. , 172 S.W.3d 603, 605 (Tex. 2005) ; Delfingen US-Texas, L.P. v. Valenzuela , 407 S.W.3d 791, 797 (Tex.App.—El Paso 2013, no pet.). We apply state contract principles to determine whether a valid arbitration agreement exists. J.M. Davidson, Inc. v. Webster , 128 S.W.3d 223, 227 (Tex. 2003) ; Delfingen , 407 S.W.3d at 797. Once the party seeking to compel arbitration proves that a valid arbitration agreement exists, a presumption attaches favoring arbitration and the burden shifts to the party resisting arbitration to establish a defense to enforcement. Delfingen , 407 S.W.3d at 797. In the context of enforcement, defenses refer to unconscionability, duress, fraudulent inducement, and revocation. In re FirstMerit Bank, N.A. , 52 S.W.3d 749, 756 (Tex. 2001) ; Delfingen , 407 S.W.3d at 797. Because the law favors arbitration, the burden of proving a defense to arbitration is on the party opposing it. IHS Acquisition No. 171, Inc. v. Beatty-Ortiz , 387 S.W.3d 799, 807 (Tex.App.—El Paso 2012, no pet.), citing J.M. Davidson , 128 S.W.3d at 227.
Because the trial court here did not enter specific findings of fact or conclusions of law to explain its denial of the motion to compel arbitration, we must uphold the trial court’s decision on any appropriate legal theory urged below. Shamrock Foods Co. v. Munn & Assocs., Ltd. , 392 S.W.3d 839, 844 (Tex.App.—Texarkana 2013, no pet.) ; Inland Sea, Inc. v. Castro , 420 S.W.3d 55, 57-59 (Tex.App.—El Paso 2012, pet. denied) (); In re Weeks Marine, Inc. , 242 S.W.3d 849, 854 (Tex. App.—Houston [14th Dist.] 2007) (orig. proceeding).
We begin our review by examining whether the FAA is applicable. Citing Bernhardt v. Polygraphic Company of America , 350 U.S. 198, 76 S.Ct. 273, 100 L.Ed. 199 (1956), Lopez argues that the FAA does not govern the MAA because there is no evidence she was personally engaged in interstate commerce. In Bernhardt , the plaintiff entered into an employment contract with Polygraphic to become superintendent of the company’s lithograph plant in Vermont. Bernhardt v. Polygraphic Company of America , 218 F.2d 948, 949 (2nd Cir. 1955). The employment contract contained an arbitration provision. Id. Following his discharge, Bernhardt sued Polygraphic in a Vermont state court for breach of contract. Id. The Second Circuit Court of Appeals held that the FAA applied to the employment contract, Bernhardt , 218 F.2d at 949-50, but the Supreme Court reversed because it concluded that the contract did not evidence a transaction involving commerce within the meaning of section 2 of the FAA, and...
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