Zars v. Brownlow
| Decision Date | 28 June 2013 |
| Docket Number | No. 07-07-00303-CV,07-07-00303-CV |
| Parties | GARY ZARS D/B/A GARY'S POOL & PATIO STORE, APPELLANT v. JEREMY AND BRANDI BROWNLOW, APPELLEES |
| Court | Texas Court of Appeals |
On Appeal from the County Court at Law No. 1
Hays County, Texas
Trial Court No. 8877-C, Honorable Howard Warner, Presiding
Before QUINN, C.J., and CAMPBELL and PIRTLE, JJ.
Appellees Jeremy Brownlow and Brandi Brownlow sued appellant Gary Zars d/b/a Gary's Pool and Patio Store for damages allegedly arising from the installation of a residential swimming pool and patio. After denying Zars' motion to compel arbitration the trial court entered a "death-penalty" sanction against Zars in the form of a default judgment. We will reverse the judgment and remand the case with instructions to the trial court to refer the case to arbitration and abate further case proceedings during the pendency of arbitration.
In their petition, the Brownlows allege during May 2004 they reached an agreement with Zars for the installation of a home swimming pool and construction of a patio. Zars installed a pool at the Brownlows' home, but they contend the work was not performed according to the agreement and Zars' representations. They accordingly brought suit against Zars in March 2005 alleging breach of contract, negligence, violations of the Deceptive Trade Practices Act, and fraud.
Zars answered and moved to compel arbitration based on a clause in a document entitled "swimming pool agreement." The trial court denied Zars' motion.
The subsequent pretrial period was punctuated by discovery disputes. Twice the trial court issued monetary sanctions against Zars. Then, on a motion for death-penalty sanctions, the trial court rendered judgment by default in favor of the Brownlows.
Zars filed a notice of appeal in June 2007. On a suggestion of Zars' bankruptcy filed in September 2007 we suspended the case.1 In August 2012, Zars' case in bankruptcy was dismissed without a discharge. Later that month we reinstated this appeal.
In his second issue, Zars complains the trial court erred by not referring the case to arbitration.
On May 10, 2004, Zars' employee and both the Brownlows signed the swimming pool agreement. The document identifies the Brownlows by name and address and refers to them as "owner." The following section is headed "swimming pool specifications." As completed it names the type ("FiberGlass Pools of Texas"), color and size of the pool. It lists other specifications and identifies by name various options and equipment with which the pool was to be equipped. Other entries merely refer to undescribed "plans," such as those reading "equipment run per plan" and "electric per plan." The space for "special job instructions" contains an entry reading "possible rock excavation 300.00 (sic) move on 150.00 hr after." The section ends with a statement of the total price and payment terms.
The next section of the agreement, headed "assignment of responsibility," lists eleven separate project tasks, and allocates the tasks between "Gary's" and the "owner." The tasks include "delivery, job supervision, excavation, sand, crane, set & level, set equipment, plumbing lines, complete backfill, electrical connections, [and] fill & start up." As completed, this agreement allocated all the listed tasks to Gary's. Immediately following the list of tasks is the statement, "See attached general conditions for details."
The agreement also contains a section entitled "Notes," in which the cost of the project is itemized. Its hand-written entries read: "Deposit 100% refundable contingent on financing before O.S.I.[2 ] Pool Price $17,495.00 Decking $2000.00 Baby Lock $2500.00 Total Pool Budget $21.995 (sic) Deposit Check #4547 Financing-". Printedacross the bottom of the page is the statement, Immediately following, beneath the heading "accepted by owner" appear the signatures of the Brownlows. To the right is the signature of Zars' employee.
The "General Conditions" are printed on the reverse of the one-page swimming pool agreement, and consist of eighteen numbered paragraphs. As an example of the conditions, the first paragraph provides that "work called for in this agreement shall be performed in a good and workmanlike manner and shall carry Gary's guarantee against defects in material and workmanship for one year from delivery." Other paragraphs elaborate on the responsibilities of the parties. As another example, one paragraph states, "Owner is responsible for any permits required." Another reads, "Pool equipment shall be located within twenty feet . . . of pool." The paragraph numbered seventeen is the arbitration clause:
Any controversy or claim arising out of or relating to this contract or breach thereof or any claim whatsoever with Gary's including claims under the DTPA shall be settled by Arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association, and Judgment on the award rendered by the Arbitrator may be entered in any Court having jurisdiction thereof. Any Arbitration between the parties shall be in Bexar County, Texas.
In affidavits filed with their response to Zars' motion to compel arbitration, the Brownlows each aver that an employee of Zars filled in the blanks on the swimming pool agreement and asked them to sign. They were not told of any terms on the reverse side of the document.
Texas procedure controls a trial court's determination of whether disputed claims fall within the scope of an arbitration clause. Jack B. Anglin Co. v. Tipps, 842 S.W.2d 266, 268 (Tex. 1992). Under our state's procedures, a trial court may decide a motion to compel arbitration based on summary judgment-type proof. Id. at 269. If the arbitrability determination cannot be made as a matter of law, "the trial court must conduct an evidentiary hearing to determine the disputed material facts." Id.
We review a trial court's ruling on a motion to compel arbitration under an abuse of discretion standard. Jack B. Anglin Co., 842 S.W.2d at 271; Teel v. Beldon Roofing & Remodeling Co., 281 S.W.3d 446, 448 (Tex.App.--San Antonio 2007, pet. denied); Cleveland Constr., Inc. v. Levco Constr., Inc., 359 S.W.3d 843, 851 (Tex.App.--Houston [1st Dist.] 2012, pet. dism'd). A trial court abuses its discretion when it acts arbitrarily or unreasonably and without reference to any guiding rules or principles. Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex. 1985). Review under this standard requires deference to the factual determinations of the trial court while legal determinations are reviewed de novo. In re Labatt Food Serv., 279 S.W.3d 640, 643 (Tex.2009) (orig. proceeding).
A party seeking to compel arbitration must establish the existence of a valid arbitration clause and that the disputed claims fall within the scope of the agreement. In re Kellogg Brown & Root, Inc., 166 S.W.3d 732, 737 (Tex. 2005) (orig. proceeding) (under Federal Arbitration Act). If a party establishes a valid arbitration agreement whose scope includes the claims asserted, the burden shifts to the party opposing arbitration to prove its defenses to arbitration. In re AdvancePCS Health L.P., 172 S.W.3d 603, 607 (Tex. 2005) (orig. proceeding) (per curiam).
The Brownlows argue the swimming pool agreement is not a contract because it fails to state with sufficient clarity the terms of any agreement among the parties and "is merely corroborating evidence of the existence of an oral contract, made on May 1, 2004 for a pool and patio." They focus on the sufficiency of the offer and point to a claimed absence of mutuality in the terms of the document.
A valid contract requires an offer, acceptance, and consideration. Burges v. Mosley, 304 S.W.3d 623, 629 (Tex.App.--Tyler 2010, no pet.). The terms of a legally binding contract must be of such definiteness that a court can understand the obligation the promisor undertook. T. O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 221 (Tex. 1992). For a contract to be judicially enforceable, the parties must agree on the material terms of the contract. Id. Domingo v. Mitchell, 257 S.W.3d 34, 40-41 (Tex.App.--Amarillo 2008, pet. denied) (citations omitted). On acceptance, an offer results in a binding contract but if an offer is so indefinite that a court is unable to interpret its meaning and fix the liability of the parties its acceptance does not create an enforceable agreement. Baldwin v. New, 736 S.W.2d 148, 152 (Tex.App.--Dallas 1987, writ denied). An enforceable contract requires the parties mutually agree to the subject matter of the contract and all its essential terms. Weynand v. Weynand, 990 S.W.2d 843, 846 (Tex.App.--Dallas 1999, pet. denied). Generally, a party manifests assent by signing an agreement. Rachal v. Reitz, No. 11-0708, 2013 Tex. Lexis 348, at *12-13 (citing Mid-Continent Cas. Co. v. Global Enercom Mgmt., Inc., 323 S.W.3d 151, 157 (Tex. 2010)).
As we have noted, the swimming pool agreement identifies the parties, describes the swimming pool to be installed along with equipment and accessories, assigns responsibility for the installation and related tasks, itemizes the project cost along with a grand total, specifies payment terms, conditions the Brownlows' obligation on obtaining financing "before O.S.I.," and expressly signifies the Brownlows' acceptance by their signatures. Zars' employee signed it also. Notwithstanding the Brownlows' complaints that the document is a pre-printed form with hand-written...
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