Robinson v. Home Owners Mgmt. Enters., Inc.

• Decision Date: 11 March 2021
• Docket Number: No. 02-20-00215-CV,02-20-00215-CV
• Parties: NATHAN ROBINSON AND MISTI ROBINSON, INDIVIDUALLY AND AS REPRESENTATIVES OF ALL PERSONS SIMILARLY SITUATED, Appellants v. HOME OWNERS MANAGEMENT ENTERPRISES, INC. D/B/A HOME OF TEXAS AND WARRANTY UNDERWRITERS INSURANCE COMPANY, Appellees
• Court: Texas Court of Appeals

NATHAN ROBINSON AND MISTI ROBINSON, INDIVIDUALLY ANDAS REPRESENTATIVES OF ALL PERSONS SIMILARLY SITUATED, Appellants v. HOME OWNERS MANAGEMENT ENTERPRISES, INC. D/B/A HOME OF TEXASAND WARRANTY UNDERWRITERS INSURANCE COMPANY, Appellees

No. 02-20-00215-CV

Court of Appeals Second Appellate District of Texas at Fort Worth

March 11, 2021

On Appeal from the 271st District Court Jack County, Texas

Trial Court No. 15-02-019

Before Kerr, Bassel, and Wallach, JJ.

Memorandum Opinion by Justice Bassel MEMORANDUM OPINION

I. Introduction

We address the current chapter of an ongoing saga between Appellants Nathan and Misti Robinson and the companies that provided warranty protection for construction defects in their home—Appellees Home Owners Management Enterprises, Inc. and Warranty Underwriters Insurance Company.¹ Years ago, the trial court enforced an arbitration provision in the warranty document issued by Home Owners and referred the Robinsons' claims to arbitration. During the arbitration, the Robinsons expanded their claims against Home Owners beyond a monetary recovery for defects in their home's construction to also include claims relating to a form of release that Home Owners allegedly required them to sign before it would pay their warranty claim.

This is the third appellate opinion generated from the release-related claims. Our court and the Texas Supreme Court have previously held that the Robinsons could not arbitrate the release-related claims as a class action because the arbitration agreement did not encompass class claims.

The present chapter involves a summary judgment in favor of Home Owners in which the trial court ordered that the Robinsons, individually and as class representatives, take nothing on the release-related claims. One summary-judgmentground asserted by Home Owners was that res judicata barred the Robinsons' further attempts to assert the release-related claims because those claims were or could have been previously asserted in the arbitration. The trial court decided the summary-judgment motion, but the Robinsons argue under their first issue, which is dispositive of this appeal, that the arbitrator should have initially decided whether res judicata barred the claim. We agree and hold that the question of res judicata presented an issue of procedural arbitrability that the arbitrator—not the trial court—should have decided. Thus, we reverse the trial court's grant of summary judgment, remand this case to the trial court, and order that the question of res judicata be referred to the arbitrator previously appointed to hear the Robinsons' individual claims.

II. Background

The prior opinions of this court and the Texas Supreme Court thoroughly outlined the underlying facts; we will give only a sparse summary of the facts that preface the present controversy. Though other parties were involved in the controversy, the focus of the controversy is Home Owners' obligations and actions under the warranty document that it issued. Litigation began when the Robinsons sued Home Owners for negligence and breach of warranty.

The warranty contained a broadly worded arbitration provision. Shortly after being sued, Home Owners moved to compel the Robinsons' claims to arbitration. The Robinsons resisted that effort. The trial court eventually abated the litigation and appointed an arbitrator.

A lengthy arbitration hearing ensued, and the arbitrator issued an award that gave the Robinsons a substantial monetary recovery. The Robinsons and other parties filed motions to confirm the award. The trial court lifted the abatement that it had imposed when it initially referred the claims to arbitration and confirmed the arbitrator's award by decreeing that it had granted "the Motion to Confirm the Arbitration Award and [had] enter[ed] judgment in accordance with the Arbitration Award, which [wa]s attached . . . as Exhibit '1' and incorporated . . . by reference as if fully set forth at length."

The action by the Robinsons that generated both the prior appeals and the present appeal was their attempt to add arbitration claims. Those claims allege misdeeds by Home Owners related to the form of a release that Home Owners purportedly sought to have the Robinsons sign before Home Owners would pay their warranty claim. Shortly before the arbitration hearing commenced, the Robinsons filed a statement of claims in which they asserted the release-related claims and stated that those claims were brought as a class action.

Before the arbitration hearing commenced, Home Owners filed a motion with the arbitrator to strike the statement containing the release-related claims. The arbitrator denied that motion and entered an order that "bifurcated" the release-related claims from those he was about to hear. The arbitrator also documented the "bifurcation" in his final award.

After the entry of the arbitration award, the Robinsons filed additional statements of claims that re-urged the release-based claims. Home Owners filed motions contending that the class claims brought by the Robinsons were not arbitrable and that it was within the trial court's purview to decide whether they were arbitrable. The trial court entered an order finding that the question of arbitrability of class claims was one it decided, that the parties had not agreed that questions of arbitrability would be decided by the arbitrator, and that the warranty did not provide for class arbitration. We affirmed the trial court's judgment, and in turn, the Texas Supreme Court affirmed our judgment.

After the Texas Supreme Court issued its judgment, the focus in the trial court shifted to the controversy that we now review. Home Owners filed a motion for summary judgment that attacked the merits of the release-based claims. The Robinsons filed a response to Home Owners' motion that argued, among other things, that the Robinsons' individual claims had been compelled to arbitration. For this reason, the Robinsons argued that the trial court was not the proper forum to decide Home Owners' motion and that the trial court lacked the jurisdiction to hear it. The Robinsons also filed yet another statement of claims.

Home Owners countered with a second motion for summary judgment that added res judicata as a summary-judgment ground. The Robinsons responded to the second motion by asserting that the arbitrator should decide whether res judicatabarred their individual release-related claims and with arguments challenging Home Owners' merit-based attack on those claims.

The trial court granted Home Owners' motion for summary judgment and dismissed with prejudice all of the Robinsons' claims, whether individually or as a class representative.

III. Standard of Review

The Robinsons appeal from the grant of a summary judgment, and both sides cite to the summary-judgment standards of review to guide us in our resolution of the appeal. We will recite those standards but note below that the standards of review that apply to the referral of claims to arbitration may be more applicable to our review.

"A trial court's decision to grant summary judgment is subject to de novo review." Schlumberger Tech. Corp. v. Pasko, 544 S.W.3d 830, 833 (Tex. 2018). "Courts review the record in the light most favorable to the nonmovant, indulging every reasonable inference and resolving any doubts against the motion." Id. (internal quotation marks omitted). To be entitled to the grant of a summary judgment, a party must establish that "there is no genuine issue as to any material fact and [that] the moving party is entitled to judgment as a matter of law." Tex. R. Civ. P. 166a(c).

"A defendant who conclusively negates at least one of the essential elements of a cause of action or conclusively establishes an affirmative defense is entitled to summary judgment." Frost Nat'l Bank v. Fernandez, 315 S.W.3d 494, 508 (Tex. 2010).The burdens placed on a party relying on an affirmative defense to obtain a summary judgment are

the same . . . as [those placed on] a plaintiff urging summary judgment on a claim. This is because an affirmative defense is "an independent reason why the plaintiff should not recover," not an element of the plaintiff's cause of action. The party asserting an affirmative defense has the burden of pleading and proving it. Only when a party conclusively proves every element of its affirmative defense is it entitled to summary judgment. Thus, a defendant urging summary judgment on an affirmative defense must come forward with summary[-]judgment evidence for each element of the defense.

Nowak v. DAS Inv. Corp., 110 S.W.3d 677, 680 (Tex. App.—Houston [14th Dist.] 2003, no pet.) (citations omitted).

Should a defendant establish its affirmative defense as a matter of law, "the burden of production shifts to the non[]movant to defeat the defendant's affirmative defense." Cohen v. Tour Partners, Ltd., No. 01-15-00705-CV, 2017 WL 1528776, at *4 (Tex. App.—Houston [1st Dist.] Apr. 27, 2017, no pet.) (mem. op.). A nonmovant has three avenues available to defeat a summary-judgment motion when the affirmative defense is established as a matter of law; the nonmovant may "(1) demonstrate[] that the motion's legal position regarding the affirmative defense is unsound, (2) raise[] a fact issue on the elements of the affirmative defense, or (3) set[] forth a counter-affirmative defense to the affirmative defense." Id.

But we question whether the summary-judgment standard is the most apt for our review of this appeal. Though this appeal is not precisely the review of a motion to compel arbitration, the issues are analogous in that the trial court refused to refer aquestion to the arbitrator. When we review the refusal to refer a matter to arbitration, we apply an abuse-of-discretion standard that has the following parameters:

We review a trial court's denial of a motion to compel arbitration for an abuse of discretion, but we review whether there is a valid and enforceable arbitration agreement de novo. Brand FX,

...