Solis v. Evins

• Decision Date: 22 May 1997
• Docket Number: No. 13-97-147-CV,13-97-147-CV
• Citation: 951 S.W.2d 44
• Parties: Yolanda G. SOLIS, Relator, v. The Honorable Joe B. EVINS, Presiding Judge of the 206th Judicial District Court, Hidalgo County, Texas, Respondent.
• Court: Texas Court of Appeals

Page 44

951 S.W.2d 44

Yolanda G. SOLIS, Relator, v. The Honorable Joe B. EVINS, Presiding Judge of the 206th Judicial District Court, Hidalgo County, Texas, Respondent.

No. 13-97-147-CV.

Court of Appeals of Texas Corpus Christi.

May 22, 1997.

Rehearing Overruled July 3, 1997 .

Brian A. DeVaney, Law Offices of Christa Samaniego, San Antonio, for Relator.

Joe B. Evins, Edinburg, for Respondent.

Andy A. Tschoepe, II, San Antonio, Ramon Garcia, Edinburg, John R. Griffith, McAllen, Gilberto Hinojosa, J. A. Magallanes, Magallanes, Sokat & Hinojosa, Brownsville, for Real Parties in Interest.

Before SEERDEN, C.J., and YANEZ and CHAVEZ, JJ.

OPINION

CHAVEZ, Justice.

In this original proceeding, the relator seeks a writ of mandamus to correct the trial court's order compelling arbitration of relator's underlying lawsuit. We will conditionally grant the writ.

Facts

The underlying defamation lawsuit involves relator, as plaintiff and the real party in interest, David Guerra, as defendant. Guerra is the president of International Bank of Commerce--McAllen ("IBC"), and relator is a former IBC teller.

IBC apparently requires that its employees open an IBC account, so that the employee's salary can be electronically deposited. IBC also apparently requires its depositors to sign a "depositor's contract," although IBC has never produced a depositor's contract signed by relator. Nevertheless, IBC has tendered a copy of its standard depositor's contract, which, IBC maintains, must have been signed by relator. The depositor's contract produced by IBC contains a section requiring arbitration.

During 1991, relator was involved in various transactions in the course of her IBC employment which were viewed suspiciously by her employers. IBC's suspicions were reported to federal authorities, and relator was criminally prosecuted for banking offenses. Relator was, however, acquitted.

On August 20, 1993, relator filed a defamation suit ("first suit") against IBC and Guerra, based on the incidents leading to her prosecution and subsequent acquittal. IBC and Guerra filed a motion to compel arbitration, based on the provisions of the depositor's contract, and were successful in obtaining an order compelling arbitration. Prior to arbitration, the case settled.

According to the allegations of relator, Guerra continued to defame relator in social contexts around McAllen, Texas, after the conclusion of the first suit. On July 5, 1996, relator filed another defamation suit ("second suit"), wherein Guerra is the only defendant, based on the allegedly continuing defamation of relator. Guerra filed a motion to compel arbitration, based on the depositor's contract. ¹ On February 14, 1997, the Honorable Joe B. Evins, respondent, signed an "Order Granting Motion to Compel Arbitration and to Stay Civil Proceeding" in the second suit, providing as follows:

IT IS THEREFORE ORDERED that:

A. Plaintiff Yolanda Solis is compelled to submit all claims on file herein and all other claims that she may have against David Guerra to arbitration ...; and

B. This matter is stayed and abated pending the filing herein [sic] the final award rendered in the arbitration proceeding,

It is further ordered that Plaintiff's oral motion made in open court to instruct the arbitration panel to rehear the issue of arbitrability is in all things denied.

Solis commenced the instant mandamus proceeding, complaining that respondent clearly abused his discretion by compelling her case to arbitration.

In support of his motion to compel arbitration in the second suit, as well as in the instant mandamus proceeding, Guerra has, principally, based his arguments on the Federal Arbitration Act ("Act"), 9 U.S.C., section 1, et seq., and case law applying the statute. ² The Act provides that

a written provision in any ... contract evidencing a transaction involving commerce to settle by arbitration a controversy arising out of such contract or transaction, ... shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract. [emphasis added].

9 U.S.C.A. § 2 (West 1970).

We are thus called on to decide whether Judge Evins clearly abused his discretion in applying the Act to the facts of relator's defamation suit.

Standard of Review

Mandamus will issue only to correct a clear abuse of discretion when the abuse cannot be remedied by appeal. Prudential Securities, Inc. v. Marshall, 909 S.W.2d 896, 900 (Tex.1995) (considering whether the trial court misapplied the Act); Walker v. Packer, 827 S.W.2d 833, 840 (Tex.1992).

Federal Arbitration Act

Enacted pursuant to the Commerce Clause of the United States Constitution, the Act is a body of substantive law enforceable in both state and federal courts. Perry v. Thomas, 482 U.S. 483, 489, 107 S.Ct. 2520, 2525, 96 L.Ed.2d 426 (1987) (citing Southland Corp. v. Keating, 465 U.S. 1, 11-12, 104 S.Ct. 852, 858-59, 79 L.Ed.2d 1 (1984)). Under the Supremacy Clause of the United States Constitution, the Act preempts all otherwise applicable state laws (i.e., state arbitration statutes). BWI Companies, Inc. v. Beck, 910 S.W.2d 620, 621 (Tex.App.--Austin 1995). The Act was created to reverse the judiciary's longstanding refusal to enforce arbitration agreements, thus elevating arbitration agreements to the same status as other contracts. Volt Info. Sciences v. Board of Trustees, 489 U.S. 468, 474, 109 S.Ct. 1248, 1253, 103 L.Ed.2d 488 (1989) (citing Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 219-20, 105 S.Ct. 1238, 1241-42, 84 L.Ed.2d 158 (1985), and Scherk v. Alberto-Culver Co., 417 U.S. 506, 511, 94 S.Ct. 2449, 2453, 41 L.Ed.2d 270 (1974)). However, the liberal federal policy favoring arbitration under the Act does not mean that all guiding principles are to be abandoned in slavish deference to an arguably applicable arbitration provision. See, e.g., Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52, 56, 115 S.Ct. 1212, 1216, 131 L.Ed.2d 76 (1995) ("[T]he [Act]'s pro-arbitration policy does not operate without regard to the wishes of the contracting parties."). Clearly, there are limits to the Act's applicability. See, e.g., Volt Info. Sciences, 489 U.S. at 474, 109 S.Ct. at 1253 ("[Section] 4 of the [Act] does not confer a right to compel arbitration of any dispute at any time....").

In the broader arbitration context (outside of the narrow confines of the Act), the Supreme Court of the United States has been abundantly clear: Arbitration is a matter of contract, and a party cannot be required to submit to arbitration any dispute which she has not agreed to so submit. AT & T Tech., Inc. v. Communications Workers, 475 U.S. 643, 648, 106 S.Ct. 1415, 1418, 89 L.Ed.2d 648 (1986); Atkinson v. Sinclair Refining Co., 370 U.S. 238, 241, 82 S.Ct. 1318, 1320-21, 8 L.Ed.2d 462 (1962); Drake Bakeries, Inc. v. Local 50, American Bakery, 370 U.S. 254, 257, 82 S.Ct. 1346, 1348, 8 L.Ed.2d 474 (1962); United Steelworkers of Am. v. Warrior & Gulf Nav. Co., 363 U.S. 574, 582, 80 S.Ct. 1347, 1353, 4 L.Ed.2d 1409 (1960).

A court may not, in assessing the right of litigants to enforce an arbitration agreement, construe that agreement in a manner different from that in which it otherwise construes nonarbitration agreements under state law. First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 945, 115 S.Ct. 1920, 1924, 131 L.Ed.2d 985 (1995) ("When deciding whether the parties agreed to arbitrate a certain matter ..., courts generally ... should apply ordinary state-law principles that govern formation of contracts."); Perry, 482 U.S. at 492 n. 9, 107 S.Ct. at 2527 n. 9; Porter & Clements, L.L.P. v. Stone, 935 S.W.2d 217, 220 (Tex.App.--Houston [1 Dist.] 1996, n.w.h.) ("A clause requiring arbitration is interpreted under contract principles, and the language contained within will be enforced according to its plain meaning unless this would defeat the intention of the parties."). Accordingly, we will employ state substantive law in applying the Act to the instant facts. See 4 AM.JUR.2D Alternative Dispute Resolution § 73 (1995) ("The same rules of construction and interpretation apply to arbitration agreements as apply to contracts generally. [footnote omitted].").

Depository relationship

The arbitration agreement upon which Guerra relies is contained by the depositor's contract allegedly existing between relator and IBC, of which institution Guerra is president. Axiomatically, a debtor/creditor relationship is created when a customer opens a general depository account with a bank. Such a bank account constitutes a debt where the bank is the debtor and the customer is the creditor. See Bandy v. First State Bank, Overton, Tex., 835 S.W.2d 609, 618-19 (Tex.1992). A deposit agreement should be construed against the bank, as the preparer of the agreement, in the case of questionable or doubtful construction. See, e.g., 9 C.J.S. Banks and Banking § 271 (1996).

Meeting of the minds

The essence of a contract involves the meeting of the minds between the parties to the agreement. See, e.g., Sonne v. Federal Deposit Ins. Corp., 881 S.W.2d 789, 791 (Tex.App.--Houston [14th Dist.] 1994, writ denied); Zurich Ins. Co. v. Bass, 443 S.W.2d 371, 374 (Tex.Civ.App.--Dallas 1969, no writ). A promise or obligation tantamount to a contract must be free and voluntary, and each of the parties must communicate their reason to the other so that both may know that their minds have met. Finley v. Hundley, 252 S.W.2d 958, 962 (Tex.Civ.App.--Dallas 1952, no writ). There can be no agreement when one party has an intention to make it, but the other has not. Charlie Thomas Courtesy Ford, Inc. v. Sid Murray Agency, 517 S.W.2d 869, 875 (Tex.Civ.App.--Corpus Christi 1974, writ ref'd n.r.e.).

To constitute a contract the minds of the parties must meet with respect to the subject matter of the agreement, and as to all of its essential terms; and all of them must assent to the same thing in the same sense...