In The
Court of=20
Appeals
For The
First =
District of=20
Texas
____________
NO. 01-08-00020-CV
____________
ODL SERVICES, INC.,=20
Appellant
V.
CONOCOPHILLIPS COMPANY,=20
Appellee
On Appeal from the 295th District Court
Harris County, =
Texas
Trial Court Cause No. 2007-71919
* * *
____________
NO. =
01-08-00039-CV
____________
IN RE ODL SERVICES, INC.,=20
Relator
Original Proceeding on Petition for Writ =
of=20
Mandamus
O P I N I O N
<=
/SPAN>By=20
interlocutory appeal and petition for writ of mandamus, appellant =
and=20
relator, ODL Services, Inc. (=E2=80=9CODL=E2=80=9D), challenges =
the trial court=E2=80=99s order=20
denying its motion to compel arbitration and granting the =
application to=20
stay arbitration of appellee and real party in interest, =
ConocoPhillips=20
Company (=E2=80=9CConoco=E2=80=9D). We determine (1) whether the =
Federal Arbitration=20
Act ![3DFootnote](3D"")
(=E2=80=9CFAA=E2=80=9D) applies and =
whether review is proper by=20
mandamus or interlocutory appeal, given that the motion invoked =
the FAA=20
and the application invoked the Texas General Arbitration=20
Act
(=E2=80=9CTAA=E2=80=9D); (2) whether the =
threshold issue of the=20
existence of a written arbitration agreement between ODL and =
Conoco was=20
for the trial court or for the arbitrator to determine; (3) =
whether the=20
trial court erred in determining that there was no written =
agreement to=20
arbitrate and, thus, in refusing to compel arbitration and in =
staying the=20
arbitration proceeding that ODL had begun; and (4) whether the =
trial court=20
abused its discretion in entering certain findings of fact. In the =
interlocutory appeal, we affirm that portion of the order that =
granted=20
Conoco=E2=80=99s application to stay arbitration that was made =
under the TAA. In=20
the mandamus proceeding, we deny the petition for writ of mandamus =
(1)=20
complaining of that portion of the interlocutory order that denied =
ODL=E2=80=99s=20
motion to compel arbitration that was asserted under the FAA and =
(2)=20
complaining of the entry of certain findings of =
fact.
Background
<=
/SPAN>The=20
disputed issues in this case arise out of (1) a master agreement =
between=20
the predecessors of ODL and Conoco and (2) events occurring during =
the=20
installation of a floating storage and off-loading vessel in the =
Gulf of=20
Paria, Venezuela (=E2=80=9Cthe FSO =
project=E2=80=9D).
A. The=20
Master Agreement Between Conoco and ODL
<=
/SPAN>In=20
March 1998, Conoco, Inc., the predecessor of Conoco, and Noble =
Denton=20
& Associates, Inc., the predecessor of ODL, executed a =
=E2=80=9CMaster=20
Agreement.=E2=80=9D The Master Agreement provided in pertinent=20
part:
WHEREAS, [Conoco] and its affiliated and =
subsidiary companies are engaged in drilling and production =
operations in=20
various countries around the world; and
WHEREAS, from time to time, =
[Conoco=E2=80=99s] affiliated=20
and subsidiary companies may request certain support services in=20
connection with their drilling and production operations in one or =
more=20
such countries (other than the United States); and =
WHEREAS [Conoco] wishes to enter into a =
Master=20
contract with [ODL] setting forth the general terms and conditions =
to=20
apply should [Conoco] request [ODL] to provide such services to =
any of=20
its subsidiary or affiliated companies; and
WHEREAS, [ODL] is in the business of =
providing=20
such services . . . .
1.THE=20
MASTER CONTRACT
[Conoco] and [ODL] agree that, =
commencing with the=20
effective date of this Agreement, the general terms and conditions =
entitled =E2=80=9CMaster Support Services Contract Terms and =
Conditions=E2=80=9D and=20
attached to this Agreement (hereinafter =E2=80=9CMaster =
Terms=E2=80=9D) shall apply to=20
all services which [ODL] . . . provide[s] for =
[Conoco]=20
or any of its parent, subsidiary and affiliated companies =
. . .=20
, pursuant to a =E2=80=9CRequest for Services=E2=80=9D issued and =
accepted as set forth in=20
Section 1.1 of the Master Terms.
. . . .
6.MISCELLANEOUS
. . . This Master Contract is =
the entire=20
agreement between the Parties as to the Services =
. . . .=20
This Master Contract may only be amended by a clear statement in =
writing=20
signed by a duly authorized representative of each of the=20
Parties.
(Emphasis added.)
<=
/SPAN>The=20
=E2=80=9CMaster Support Services Contract Terms and =
Conditions=E2=80=9D that were=20
expressly incorporated into the Master Agreement provided, in =
turn, as=20
follows:
The following Master Support Services =
Contract=20
Terms and Conditions (hereinafter =E2=80=9CMaster Terms and =
Conditions=E2=80=9D) shall=20
apply upon [Conoco=E2=80=99s] issuance and [ODL=E2=80=99s] =
acceptance of a Request for=20
Services as set forth below. The term =
=E2=80=9CContract=E2=80=9D as used below=20
shall mean a Request for Services and the Master Terms and=20
Conditions.
ARTICLE 1. THE =
SERVICES
1.1The=20
Services. When [Conoco] desires [ODL] to perform technical =
and=20
support services for it, [Conoco] shall send [ODL] a Request =
for=20
Services in the form set forth in Exhibit =E2=80=9C1.=E2=80=9D =
The Request for=20
Services shall name the contracting entity, describe in detail the =
services to be performed (hereinafter referred to as =E2=80=9Cthe =
Services=E2=80=9D) and=20
shall specify the country in which the Services are to be =
performed=20
(hereinafter referred to as =E2=80=9CCountry of =
Operation=E2=80=9D). If [ODL] is willing=20
to perform the Services under the terms set forth in the Request =
for=20
Services, duly authorized representatives of [ODL] and [Conoco] =
shall sign=20
the Request for Services and return it to [Conoco]. [ODL] shall =
perform=20
the Services in accordance with the Request for Services and the =
terms of=20
this Contract. In the event of any conflict between the Request =
for=20
Services and these Terms and Conditions, the terms of the Request =
for=20
Services shall prevail.
[ODL] shall arrange for its personnel, =
material=20
and equipment as defined in the Request for Services to be =
available and=20
ready for the commencement of Work at the designated location in =
the=20
Country of Operations specified in the Request for=20
Services.
. . .
(Emphasis added.) The =E2=80=9CMaster =
Support Services=20
Contract Terms and Conditions=E2=80=9D repeatedly referred to =
various terms of the=20
Request for Services (=E2=80=9CRFS=E2=80=9D) that was required for =
each job. Finally, the=20
=E2=80=9CMaster Support Services Contract Terms and =
Conditions=E2=80=9D included the=20
following article concerning choice of law and=20
arbitration:
ARTICLE 17.GOVERNING LAW AND=20
ARBITRATION
17.1Governing Law. This =
Contract,=20
and any matter arising out of or in connection with this Contract =
or the=20
Services, shall be governed by and construed in accordance with =
the laws=20
of the State of New York, U.S.A., except for any law, rule or =
court=20
opinion that would apply the laws of another=20
jurisdiction.
17.2Arbitration. =
Any dispute,=20
controversy or claim arising out of or in connection with this=20
Contract, or the breach, termination or validity =
thereof, shall=20
be settled by final and binding arbitration to be conducted in =
accordance=20
with the following provisions:
17.2.1 The arbitration shall be =
conducted in=20
accordance with the International Arbitration Rules of the =
American=20
Arbitration Association. =
. . . .
(Emphasis added.) It was upon article 17 =
that ODL=20
based its request for arbitration with Conoco.
<=
/SPAN>In=20
general, since the 1998 Master Agreement was executed, ODL worked =
for=20
Conoco about six or seven times. In ODL=E2=80=99s experience =
working under the=20
Master Agreement with Conoco, the timing of Conoco=E2=80=99s =
sending an RFS would=20
vary from =E2=80=9Cproject to project=E2=80=9D: sometimes, ODL =
would begin work, and=20
Conoco would later send the RFS.
B. The=20
Events Leading to the Parties=E2=80=99 =
Dispute
<=
/SPAN>In=20
2006, ODL, a Texas corporation, signed a =E2=80=9CServices =
Agreement=E2=80=9D with Conar=20
Construcciones C.A. (=E2=80=9CConar=E2=80=9D), a Venezuelan =
corporation, to provide=20
engineering services as Conar=E2=80=99s subcontractor on the FSO =
project. Some of=20
ODL=E2=80=99s services for Conar occurred in Venezuelan waters, =
and some occurred=20
in Houston, Texas. Conar, in turn, had a contract with Conoco =
Venezuela=20
C.A. (=E2=80=9CCVCA=E2=80=9D) that covered work on the FSO =
Project. CVCA was an affiliate=20
of, and a separate company from, Conoco.
<=
/SPAN>Problems=20
arose with Conar=E2=80=99s work on the FSO project, and ODL was =
having difficulty=20
getting Conar to pay ODL. On December 7, 2006, CVCA=E2=80=99s =
Installation and=20
Technical Services Manager, Alister McIntosh, advised Conar in =
writing=20
that Conar had defaulted under the parties=E2=80=99 =
contract.
<=
/SPAN>On=20
December 14, 2006, a monthly conference call was held at =
ODL=E2=80=99s offices in=20
Texas concerning the FSO project. At least one of the attendees =
was in=20
Venezuela at the time. Those attending were Saaid Zaltash, Chris =
Haffner,=20
Robert Sokoll, Weida Chen, Alister McIntosh, Mark Bacon, Larry =
Belcher,=20
Magda Canas, Claudia Andrade, Max Grobe, Guy Noble, Tom Visentin, =
Reidar=20
Eliassen, Karol Horne, and Roque Muracciole.
<=
/SPAN>The=20
parties disputed both what was decided at the December 14 meeting =
and=20
which attendees represented which corporate entities. For example, =
the=20
minutes from the December 14 meeting=E2=80=94to which no attendees =
objected=E2=80=94indicated that =E2=80=9CCoP=E2=80=9D (which =
Horne=E2=80=99s testimony indicated was=20
Conoco) would pay subcontractors directly and would make all =
further=20
decisions. However, Sokoll recalled that it was CVCA, not Conoco, =
that=20
would step into the payment and supervisory role mentioned by the =
minutes.=20
Likewise, the parties disputed whether certain individuals at the =
December=20
14 meeting represented Conoco or, instead, CVCA. For example, the =
record=20
indicates that Haffner, Chen, and Sokoll were Conoco employees =
being paid=20
by Conoco. Yet there was also testimony that these three =
individuals were=20
working under a =E2=80=9Ctechnical work agreement=E2=80=9D with =
CVCA at the time of the=20
meeting, under which they were =E2=80=9Ctechnically working for =
CVCA and CVCA was=20
reimbursing=E2=80=9D their time =E2=80=9Cback to Conoco=E2=80=9D =
for what Conoco paid them, and=20
that Sokoll also reported to CVCA employees.
<=
/SPAN>The=20
parties=E2=80=99 dispute on these matters continued into the =
hearing on the=20
application to stay and the motion to compel arbitration, with =
each party=20
eliciting evidence in support of its position on (1) whether =
Conoco=20
entered into a contract with ODL at the December 14 meeting and, =
if so,=20
(2) whether that contract incorporated or invoked the Master =
Agreement and=20
its arbitration clause.
What was undisputed is that a written =
RFS in the=20
form required by the Master Agreement was never executed for the =
FSO=20
project. It was further undisputed that no one at the December 14=20
conference-call meeting referenced the Master Agreement or =
indicated that=20
its terms were incorporated by reference, amended the terms of the =
Master=20
Agreement, or entered into a separate arbitration agreement =
covering the=20
contract that was allegedly reached on December 14. Neither do the =
written=20
minutes of the December 14 meeting mention arbitration or the =
Master=20
Agreement.
<=
/SPAN>ODL=E2=80=99s=20
corporate representative, David Rowan, testified that after the =
December=20
14, 2006 conference-call meeting, the scope of ODL=E2=80=99s work =
on the FSO=20
project continued under the terms of its Services Agreement with =
Conar.=20
However, Rowan also testified that ODL followed certain procedures =
required by the Master Agreement, including keeping daily logs, =
monthly=20
reports, and completion documentation, although he explained that =
doing=20
these things was =E2=80=9Calso under [ODL=E2=80=99s] agreement =
with=20
Conar.=E2=80=9D
C. The=20
Procedural Background
<=
/SPAN>On=20
October 29, 2007, ODL made an arbitration demand on Conoco based =
on the=20
arbitration provision of the Master Agreement. ODL sought =
$6,839,443.90=20
for goods and services that it had furnished and performed on the =
FSO=20
project since December 14, 2006. ODL filed a notice of arbitration =
with=20
the International Centre for Dispute Resolution of the American=20
Arbitration Association (=E2=80=9CAAA=E2=80=9D), describing its =
claims against Conoco as=20
=E2=80=9Cbreach of contract and quasi-contract.=E2=80=9D =
<=
/SPAN>On=20
November 26, 2007, Conoco filed a petition for declaratory and =
injunctive=20
relief. In that suit, Conoco sought (1) declarations of =
=E2=80=9Cits rights=20
regarding the claim sought by ODL . . . in the pending=20
arbitration proceeding and the application of the [Master =
Agreement] to=20
ODL[=E2=80=99s] . . . claim=E2=80=9D; (2) a temporary =
and permanent injunction=20
to prevent ODL from proceeding with arbitration and from =
=E2=80=9Cinvoking the=20
[Master Agreement] and the arbitration provision therein against =
[Conoco]=20
for recovery of services on the FSO [Project] provided by ODL=20
. . .=E2=80=9D; and (3) attorney=E2=80=99s fees. Within =
the same pleading,=20
Conoco also included an application to stay arbitration that =
invoked the=20
TAA. See Tex. Civ. =
Prac.=20
& Rem. Code Ann. =C2=A7 171.023 (Vernon=20
2005).
<=
/SPAN>Shortly=20
thereafter, ODL filed a motion to compel arbitration that invoked =
the FAA,=20
along with an answer conditional upon the motion=E2=80=99s =
disposition. The motion=20
and memorandum of law in support urged (1) that the FAA applied; =
(2) that,=20
in the Master Agreement, the parties had agreed that threshold =
matters of=20
arbitrability, including whether an arbitration clause existed =
(and=20
whether Conoco had waived the RFS requirement of the Master =
Agreement),=20
were to be decided by the arbitrator, not the trial court; and =
(apparently=20
alternatively) (3) that the Master Agreement covered all =
international=20
work that ODL did for Conoco, even when no formal RFS had been =
executed,=20
and, in any event, Conoco had waived the Master =
Agreement=E2=80=99s requirement of=20
a formal RFS by accepting ODL=E2=80=99s services without issuing =
an RFS. ODL also=20
described the threshold issue as follows:
Conoco argues that no arbitration =
agreement exists=20
between the parties because the Master Agreement does not exist =
without an RFS. To the contrary, whether Conoco waived the =
issuance of=20
an RFS, raises the question of the Master Agreement=E2=80=99s =
applicability, not its =
existence. =
. . .=20
Conoco is attempting to transform the issues regarding the =
Arbitration=20
Clause=E2=80=99s =E2=80=9Capplicability=E2=80=9D into one of its =
legal =E2=80=9Cexistence=E2=80=9D to avoid the=20
case law which requires the arbitrator to determine arbitrability, =
and not=20
this Court.
(Emphasis in original.)=20
<=
/SPAN>In=20
response to ODL=E2=80=99s motion to compel arbitration, and in =
support of its=20
application to stay arbitration, Conoco argued (1) that the =
existence of=20
an arbitration agreement was for the court to determine, not the=20
arbitrator; (2) that the alleged December 14 agreement could not =
support=20
compelling arbitration because it was oral, not written; (3) that =
in any=20
event, the participants at the December 14 meeting did not discuss =
the=20
Master Agreement or incorporate its terms by reference, so that =
they did=20
not agree at that meeting to arbitrate anything; and (4) that an =
RFS was a=20
=E2=80=9Ccondition precedent to a future contract for services =
that would=20
incorporate the [Master Agreement=E2=80=99s] written terms, =
including the=20
arbitration provision.=E2=80=9D
<=
/SPAN>On=20
December 21, 2007, the trial court entered an interlocutory order =
reciting=20
that, after having considered the parties=E2=80=99 motion and =
application, the=20
trial court was =E2=80=9Cof the opinion that no valid and =
enforceable agreement to=20
arbitrate exists governing the claims which are the subject of=20
arbitration.=E2=80=9D The trial court thus granted =
Conoco=E2=80=99s application to stay=20
arbitration and denied ODL=E2=80=99s motion to compel=20
arbitration.
<=
/SPAN>The=20
trial court simultaneously entered the following findings of fact =
and=20
conclusions of law:
Findings of=20
Fact:
1.ODL entered into a contract with =
[Conar] to=20
provide services for a floating storage and offloading vessel in=20
Venezuela.
2.ODL knew that Conar had a contract =
with [CVCA]=20
to provide services and that ODL was a subcontractor to Conar on =
that=20
project.
3.CVCA and [Conoco] are separate legal =
entities.=20
CVCA is a subsidiary or affiliate of [Conoco].
4.ODL sent invoices to Conar and Conar =
has not=20
paid all of the invoices.
5.ODL=E2=80=99s predecessor and =
[Conoco=E2=80=99s] predecessor=20
entered into a Master Agreement in 1998. That agreement contains a =
written=20
agreement to arbitrate.
6.The Master Agreement provides that the =
agreement=20
applies to all services provided pursuant to a =
[RFS].
7.The Master Agreement covers a =
subsidiary or=20
affiliate of [Conoco] if identified in the =
[RFS].
8.In the event of a conflict between the =
Master=20
Agreement and the [RFS], the terms of the [RFS] shall=20
prevail.
9.The agreement provides a written =
format for the=20
[RFS] that outlines the details of the services to be performed =
and the=20
parties to the request.
10.No written [RFS] was entered into =
between ODL=20
and [Conoco].
11.No written [RFS] was entered into =
between ODL=20
and CVCA.
12.Because of a default by Conar, on =
December 14,=20
2006 CVCA orally agreed to begin paying Conar=E2=80=99s =
subcontractors directly,=20
subject to paperwork.
13.CVCA did make some payments to Conar=20
directly.
14.ODL acknowledged that it had no =
direct contract=20
with [Conoco] on February 1, 2007.
15.ODL=E2=80=99s services benefitted=20
CVCA.
16.On December 14, 2006, [Conoco] did =
not orally=20
agree to begin paying Conar=E2=80=99s subcontractors =
directly.
17.No oral contract incorporating the =
Master=20
Agreement was entered into between ODL and =
[Conoco].
18.ODL did not operate under the Master =
Agreement=20
after December 14, 2006. All of its work was done under the terms =
of the=20
Conar/ODL agreement.
19.[Conoco] did not waive its right to =
have a=20
signed [RFS] between the parties.
Conclusions of=20
Law:
1.There is no signed written agreement =
between ODL=20
and [Conoco] for arbitration of the claim by ODL that [Conoco] =
orally=20
agreed to pay Conar=E2=80=99s subcontractors directly after Dec. =
14,=20
2006.
2.ODL is not entitled to arbitrate this=20
dispute.
3.[Conoco] is entitled to a stay of=20
arbitration.
The trial court did not enter a =
conclusion of law=20
as to whether the FAA or the TAA applied or under which of these =
statutes=20
its two rulings were made.
<=
/SPAN>ODL=20
filed a request for amended findings of fact and conclusions of =
law, which=20
objected to certain findings and conclusions on various bases, =
including=20
that the trial court did not conclude which arbitration law =
applied, the=20
trial court adjudicated the merits of ODL=E2=80=99s claims that =
were pending=20
before the AAA, some of the findings were incomplete, some =
findings=20
conflicted with each other, and some findings were unsupported by =
the=20
evidence or were vague. The trial court then entered a =
supplemental=20
conclusion of law that =E2=80=9C[t]he findings made by the court =
in connection=20
with the arbitration motion are not binding on the parties except =
in=20
connection with the arbitration motion and are not rulings on the =
merits=20
of the case.=E2=80=9D
Whether the FAA=20
Applies
<=
/SPAN>ODL=20
contends, as it did below, that the FAA applies. The trial court =
did not=20
enter a conclusion of law as to whether the FAA or the TAA =
applied.=20
<=
/SPAN>=E2=80=9CThe=20
FAA =E2=80=98extends to any contract affecting commerce, as far as =
the Commerce=20
Clause of the United States Constitution will =
reach.=E2=80=99=E2=80=9D In re Nexion=20
Health at Humble, 173 S.W.3d 67, 69 (Tex. 2005) (quoting In =
re L=20
& L Kempwood Assocs., L.P., 9 S.W.3d 125, 127 (Tex. =
1999)). In=20
this context, the term =E2=80=9Ccommerce=E2=80=9D is broadly =
construed. Id. Here,=20
ODL contends that the alleged December 14 agreement between ODL =
and Conoco=20
came into being by conference call among employees of corporations =
in=20
different states and countries; additionally, that alleged =
agreement=20
concerned which corporate entity (Conoco or CVCA) would pay ODL on =
behalf=20
of Conar, a Venezuelan entity, for ODL=E2=80=99s work for Conar =
under a services=20
agreement between Conar and ODL in the Gulf of Paria, Venezuela. =
We this=20
hold that the alleged December 14 agreement was a contract =
affecting=20
international commerce, to which the FAA would apply. See Palm =
Harbor=20
Homes, Inc. v. McCoy, 944 S.W.2d 716, 721 (Tex. =
App.=E2=80=94Fort Worth 1997,=20
no pet.) (=E2=80=9CIt cannot be seriously argued that such a =
transaction, which is=20
the product of national and even international commerce, does not =
affect=20
interstate commerce.=E2=80=9D).
Whether We Will=20
Review the Rulings in the Trial Court=E2=80=99s Order =
by
Mandamus or=20
Interlocutory Appeal
<=
/SPAN>The=20
fact that the alleged contract affected interstate commerce, and =
the=20
application of the FAA, do not, in themselves, resolve whether an=20
arbitration agreement may be enforced by the TAA or whether =
interlocutory=20
appeal or mandamus is the proper means of reviewing a trial =
court=E2=80=99s order=20
denying arbitration in such a case.
<=
/SPAN>=E2=80=9CThe=20
FAA =E2=80=98preempts state statutes to the extent they are =
inconsistent with that=20
Act.=E2=80=99=E2=80=9D In re D. Wilson Constr. Co., 196 =
S.W.3d 774, 780 (Tex. 2006)=20
(quoting Jack B. Anglin Co. v. Tipps, 842 S.W.2d 266, 271 =
(Tex.=20
1992)). =E2=80=9CThe factors that determine whether the FAA =
preempts the TAA are=20
whether (1) the agreement is in writing, (2) it involves =
interstate=20
commerce, (3) it can withstand scrutiny under traditional contract =
defenses, and (4) state law affects the enforceability of the =
agreement.=E2=80=9D=20
In re Nexion Health at Humble, 173 S.W.3d at 69. =
Accordingly,=20
=E2=80=9C[t]he mere fact that a contract affects interstate =
commerce, thus=20
triggering the FAA, does not preclude enforcement [of an =
arbitration=20
agreement in that contract] under the TAA as well.=E2=80=9D In =
re D. Wilson=20
Constr. Co., 196 S.W.3d at 780. Rather, =E2=80=9C[f]or the FAA =
to preempt the=20
TAA, state law must refuse to enforce an arbitration agreement =
that the=20
FAA would enforce, either because (1) the TAA has expressly =
exempted the=20
agreement from coverage . . . or (2) the TAA has imposed =
an=20
enforceability requirement not found in the FAA =
. . . .=E2=80=9D=20
Id.
<=
/SPAN>The=20
parties dispute whether they entered into an agreement on December =
14; if=20
they did, whether that agreement was in writing; and if so, =
whether their=20
agreement triggered application of the Master Agreement, which was =
the=20
only agreement containing an arbitration clause between ODL and =
Conoco.=20
Putting aside the significance of these matters for the moment, we =
see no=20
basis on which the TAA would exempt from coverage, or would impose =
different enforceability requirements on, any arbitration =
agreement that=20
might exist. Accordingly, the FAA would not preempt the =
enforcement under=20
the TAA of any arbitration agreement that might exist. =
<=
/SPAN>The=20
trial court did not enter a conclusion of law concerning whether =
any=20
arbitration agreement that might exist could be enforced by, or =
was=20
enforced by, the FAA or the TAA in this case. Conoco moved to stay =
arbitration under the TAA, whereas ODL moved to compel arbitration =
under=20
the FAA. The trial court granted the application to stay that was =
asserted=20
under the TAA and denied the motion to compel that was asserted =
under the=20
FAA. In In re D. Wilson Construction Co., the =
relators-defendants=20
moved to compel arbitration under both the TAA and the FAA, which =
requests=20
the trial court denied. 196 S.W.3d at 778. The contracts involved=20
interstate commerce, thus triggering the FAA, and referenced =
neither the=20
TAA nor the FAA. Id. at 778=E2=80=9379. The supreme court =
held that =E2=80=9C[t]he=20
mere fact that a contract affects interstate commerce, thus =
triggering the=20
FAA, does not preclude enforcement under the TAA as well,=E2=80=9D =
as long as the=20
FAA does not preempt the TAA. Id. at 780. Because the FAA =
did not=20
preempt the TAA in that case, the supreme court held that the =
court of=20
appeals had jurisdiction over both an interlocutory appeal =
taken=20
under the TAA=E2=80=99s provisions and a mandamus =
proceeding. Id.=20
The supreme court then proceeded to consider the matter in the =
original=20
proceeding, dismissing the related interlocutory appeal as moot =
after=20
having granted full relief in the former proceeding. Id. at =
783=E2=80=9384.
<=
/SPAN>Here,=20
unlike in In re D. Wilson Construction Co., there are two =
separate=20
motions on which the trial court ruled in a single order: each =
motion=20
sought enforcement of the alleged arbitration agreement, or a stay =
of=20
arbitration, under a different arbitration act. Conoco applied to =
stay=20
arbitration only under the TAA. Interlocutory appeal lies over an =
order=20
granting an application to stay arbitration when the application =
is=20
asserted under the TAA. See Tex. Civ. Prac. & Rem. Code =
Ann. =C2=A7 171.098(a)(1) (Vernon 2005) (=E2=80=9CA =
party may appeal=20
. . . an order . . . denying an application to =
compel=20
arbitration made under Section 171.021 [of the TAA].=E2=80=9D). =
When there is an=20
adequate remedy by appeal, such as for this ruling, mandamus will=20
generally not lie. See Walker v. Packer, 827 S.W.2d 833, =
839 (Tex.=20
1992). We thus review the trial court=E2=80=99s ruling granting =
Conoco=E2=80=99s motion to=20
stay arbitration in the interlocutory appeal.
<=
/SPAN>In=20
contrast, ODL invoked only the FAA to enforce the alleged =
arbitration=20
agreement, although ODL could also have sought enforcement under =
the TAA.=20
See In re D. Wilson Constr. Co., 196 S.W.3d at 780. Appeal =
lies=20
over =E2=80=9Can order . . . denying an application =
to compel=20
arbitration made under Section 171.021 [of the =
TAA].=E2=80=9D=20
Tex. Civ.=20
Prac. & Rem. Code Ann. =C2=A7 171.098(a)(1) =
(Vernon 2005)=20
(emphasis added). Under the plain language of section =
171.098(a)(1), if=20
the application to compel arbitration is not =E2=80=9Cmade under =
[TAA] Section=20
171.021,=E2=80=9D then no interlocutory appeal lies from a ruling =
denying that=20
motion. ODL=E2=80=99s motion was not made under TAA section =
171.021. Accordingly,=20
the trial court=E2=80=99s order denying that motion could not have =
been one=20
=E2=80=9Cdenying an application to compel arbitration made under =
Section 171.021=20
[of the TAA].=E2=80=9D See id. In this circumstance, we =
review the order=20
denying ODL=E2=80=99s motion to compel arbitration by =
mandamus.
Whether the Trial=20
Judge Abused Her Discretion in Denying
ODL=E2=80=99s Motion to=20
Compel Arbitration (Mandamus)
<=
/SPAN>In=20
issue one of its petition for writ of mandamus, ODL contends that =
the=20
trial judge erred in denying its motion to compel arbitration that =
invoked=20
the FAA.
A. What=20
the Standard for Mandamus Relief Is
<=
/SPAN>=E2=80=9CMandamus=20
is proper to correct a clear abuse of discretion when there is no =
adequate=20
remedy by appeal, . . . as when a party is erroneously =
denied=20
its contracted-for arbitration rights under the FAA.=E2=80=9D =
In re D. Wilson=20
Constr. Co., 196 S.W.3d at 780=E2=80=9381 (citations omitted). =
=E2=80=9CA trial court=20
abuses its discretion if it acts in an arbitrary or unreasonable =
manner,=20
without reference to any guiding rules or principles.=E2=80=9D =
In re Nitla S.A.=20
de C.V., 92 S.W.3d 419, 422 (Tex. 2002). Additionally, a trial =
court=20
=E2=80=9C=E2=80=98has no =E2=80=9Cdiscretion=E2=80=9D in =
determining what the law is or applying the law=20
to the facts.=E2=80=99=E2=80=9D In re D. Wilson Constr. =
Co., 196 S.W.3d at 781=20
(citations omitted) (quoting Walker, 827 S.W.2d at 840).=20
B. Who=20
Decides Substantive Arbitrability
<=
/SPAN>In=20
its first argument under issue one, ODL asserts that the trial =
judge=20
abused her discretion in determining that no valid arbitration =
agreement=20
existed between the parties because the issue is one of =
substantive=20
arbitrability and the Master Agreement requires that such issues =
be=20
determined by the arbitrator.
<=
/SPAN>1. ODL=E2=80=99=
s=20
Arguments
<=
/SPAN>In=20
support of this portion of its issue, ODL =
argues:
15.. . . ODL recognizes it is =
typically=20
the role of the court to initially determine only the issue of=20
arbitrability. However, based on the freedom of contract, courts,=20
including this one, have recognized an exception which allows the =
parties=20
the freedom to agree that the arbitrators have sole jurisdiction =
over the=20
issue of arbitrability. This dispute should be referred to an =
arbitrator=20
in its entirety.
. . . .
16.Under the [FAA] a court shall refer =
the=20
question of arbitrability to the arbitrator where there is =
=E2=80=9Cclear and=20
unmistakable=E2=80=9D evidence that the parties intended to have =
the arbitrator=20
decide this question. Many courts have found =E2=80=9Cclear and =
unmistakable=E2=80=9D=20
evidence in two situations both of which are applicable here. =
First, the=20
courts have recognized that =E2=80=9Ca =E2=80=98broadly worded =
arbitration clause=20
committing resolution of all disputes to arbitration=E2=80=99 =
would satisfy the=20
clear and unmistakable standard.=E2=80=9D Second, =E2=80=9Cmost =
courts have held that,=20
=E2=80=98when . . . parties explicitly incorporate rules =
that empower an=20
arbitrator to decide issues of arbitrability, the incorporation =
serves as=20
clear and unmistakable evidence of the parties=E2=80=99 intent to =
delegate such=20
issues to an arbitrator.=E2=80=9D Here, the arbitration clause =
includes both of these=20
features.
. . . .
23.Conoco argues that no valid =
arbitration=20
agreement exists between the parties because the [Master =
Agreement]=20
does not exist without an RFS form. To the contrary, =
whether Conoco=20
waived the use of its traditional RFS form, is grounded in =
contract=20
principals and touches on the question of the [Master =
Agreement=E2=80=99s] applicability, not its =
existence. In reading =
cases cited=20
by Conoco, it becomes clear that in the context of arbitration =
agreements,=20
=E2=80=9Cexistence=E2=80=9D refers to when a party alleges =
forgery, unauthorized=20
signature, or some other reason why an agreement between the =
parties never existed. Here, the =
arbitration agreement clearly exists. The [Master Agreement] was =
fully=20
executed by both companies. . . . Conoco instead is =
relying on a=20
repackaged version of an arbitrability argument to attempt to =
establish=20
its point. This strained effort to transform the issue of the =
Arbitration=20
Clause=E2=80=99s =E2=80=9Capplicability=E2=80=9D into one of its =
legal =E2=80=9Cexistence=E2=80=9D is a=20
transparent attempt to avoid the case law requiring the arbitrator =
to=20
determine arbitrability rather than the court.=20
. . .
24.ODL maintains that Conoco=E2=80=99s =
argument with=20
respect to =E2=80=9Cexistence=E2=80=9D is in effect an argument =
regarding arbitrability.=20
However, ODL and Conoco have already agreed to refer all disputes =
with=20
respect to the [Master Agreement] and Arbitration Clause=E2=80=99s =
existence or=20
validity to the arbitrator. As with arbitrability, the Arbitration =
Clause=E2=80=99s broad language and incorporation of the AAA =
International=20
Arbitration Rules clearly evidences the parties=E2=80=99 intent to =
refer all=20
disputes with respect to the existence to the arbitrator.=20
. . .
25.In addition, the parties explicitly =
granted to=20
the arbitrator the exclusive power to determine all disputes =
involving the=20
=E2=80=9Cvalidity=E2=80=9D of the agreement =
. . . .
<=
/SPAN>2. The=20
Law
<=
/SPAN>=E2=80=9C=E2=80=98[A]rbitration=20
is a matter of contract and a party cannot be required to submit =
to=20
arbitration any dispute which he has not agreed so to =
submit.=E2=80=99=E2=80=9D Howsam=20
v. Dean Witter Reynolds, Inc., 537 U.S. 79, 83, 123 S. Ct. =
588, 591=20
(2002) (quoting Steelworkers v. Warrior & Gulf Navigation =
Co.,=20
363 U.S. 574, 582, 80 S. Ct. 1347, 1353 (1960)). =
<=
/SPAN>=E2=80=9CIn=20
Howsam . . . , the United States Supreme Court=20
. . . concluded that, unless an arbitration agreement =
provides=20
otherwise, a court may determine only matters of substantive =
arbitrability=20
. . . .=E2=80=9D W. Dow Hamm III Corp. v. =
Millennium Income=20
Fund, L.L.C., 237 S.W.3d 745, 753 (Tex. App.=E2=80=94Houston =
[1st Dist.] 2007,=20
orig. proceeding & no pet.) (combined mandamus and =
interlocutory=20
appeal) (citing Howsam at 84, 123 S. Ct. at 592). =
=E2=80=9CThe question of=20
[substantive] arbitrability has two aspects: first, whether the =
parties=20
agreed to arbitration (or are bound by another=E2=80=99s agreement =
to arbitrate=20
. . . ); and second, whether a particular claim or =
dispute is=20
within the scope of the agreement.=E2=80=9D P. McGregor =
Enters., Inc. v. Denman=20
Bldg. Prods., Ltd., No. 07-05-0385-CV, 2007 WL 1201545, at *3 =
n.9=20
(Tex. App.=E2=80=94Amarillo May 25, 2007, pet. denied); see =
First Options of=20
Chicago, Inc. v. Kaplan, 514 U.S. 938, 942, 115 S. Ct. 1920, =
1923=20
(1995) (describing arbitrability as whether the parties =
=E2=80=9Cagreed to=20
arbitrate the merits=E2=80=9D of their dispute); In re Weekley =
Homes, 180=20
S.W.3d 127, 130 (Tex. 2005) (describing =E2=80=9Cgateway =
matters=E2=80=9D as including=20
=E2=80=9Cwhether a valid arbitration agreement exists=E2=80=9D and =
whether =E2=80=9Can arbitration=20
agreement is binding on a nonparty=E2=80=9D). =E2=80=9CIn =
contrast, the [Howsam]=20
Court also determined that the arbitrator, rather than the court, =
should=20
determine matters of procedural arbitrability, i.e., those =
matters=20
that =E2=80=98grow out of the dispute and bear on its final =
disposition.=E2=80=99=E2=80=9D W.=20
Dow Hamm III Corp., 237 S.W.3d at 754 (quoting Howsam, =
at 84,=20
123 S. Ct. at 592)).
<=
/SPAN>Parties=20
may generally agree, however, to send even matters of substantive=20
arbitrability to arbitration. See Howsam at 84=E2=80=9385, =
123 S. Ct. at=20
592. =E2=80=9CJust as the arbitrability of the merits of a dispute =
depends upon=20
whether the parties agreed to arbitrate that dispute, =
. . . so=20
the question of =E2=80=98who has the primary power to decide =
arbitrability=E2=80=99 turns=20
upon what the parties agreed about that matter.=E2=80=9D =
First=20
Options at 943, 115 S. Ct. at 1923 (emphasis in original). If =
the=20
parties did not agree to submit the substantive arbitrability =
question=20
itself to arbitration, then =E2=80=9Cthe court should decide that =
question just as=20
it would decide any other question that the parties did not submit =
to=20
arbitration, namely, independently.=E2=80=9D Id. at 943, =
115 S. Ct. at=20
1924. =E2=80=9CWhen deciding whether the parties agreed to =
arbitrate a certain=20
matter (including arbitrability), courts generally . . . =
should=20
apply ordinary state-law principles that govern the formation of=20
contracts,=E2=80=9D with the qualification that, =E2=80=9Cwhen =
courts decide whether a=20
party has agreed that arbitrators should decide =
arbitrability,=E2=80=9D courts=20
=E2=80=9Cshould not assume that the parties agreed to arbitrate =
arbitrability=20
unless there is =E2=80=98clea[r] and unmistakabl[e]=E2=80=99 =
evidence that they did so.=E2=80=9D=20
Burlington Res. Oil & Gas Co. v. San Juan Basin Royalty =
Trust,=20
249 S.W.3d 34, 39 (Tex. App.=E2=80=94Houston [1st Dist.] 2007, =
pet. denied)=20
(quoting First Options, 514 U.S. at 944, 115 S. Ct. at =
1924). In=20
First Options, =E2=80=9C[t]he Supreme Court noted that =
=E2=80=98the law treats silence=20
or ambiguity about the question =E2=80=9Cwho (primarily) should =
decide=20
arbitrability=E2=80=9D differently from the way it treats silence =
or ambiguity=20
about the question =E2=80=9Cwhether a particular merits-related =
dispute is=20
arbitrable because it is within the scope of a valid arbitration=20
agreement=E2=80=9D=E2=80=99 so as to not =E2=80=98force unwilling =
parties to arbitrate a matter=20
they reasonably would have thought a judge, not an arbitrator, =
would=20
decide.=E2=80=99=E2=80=9D Burlington Res. Oil & Gas =
Co., 249 S.W.3d at 39=E2=80=9340=20
(quoting First Options, 514 U.S. at 944=E2=80=9345, 115 S. =
Ct. at=20
1924=E2=80=9325).
<=
/SPAN>3. Analysis
<=
/SPAN>Here,=20
the Master Agreement=E2=80=99s arbitration clause =
provides:
Any dispute, controversy or claim =
arising out of or in connection with this Contract, or the =
breach,=20
termination or validity thereof, shall be settled by final =
and=20
binding arbitration to be conducted in accordance with the =
following=20
provisions: . . . .
(Emphasis added.) Such language is =
broad. See,=20
e.g., Hou-Scape, Inc. v. Lloyd, 945 S.W.2d 202, =
205=E2=80=9306 (Tex.=20
App.=E2=80=94Houston [1st Dist.] 1997, orig. proceeding) =
(=E2=80=9CThe words used in these=20
particular contracts, =E2=80=98arising out of or relating =
to,=E2=80=99 have been held to=20
be very broad language favoring arbitration.=E2=80=9D). =
Additionally, the Master=20
Agreement requires that arbitration be =E2=80=9Cconducted in =
accordance with the=20
International Arbitration Rules of the American Arbitration =
Association.=E2=80=9D=20
These rules provide in relevant part:
The tribunal shall have the power to =
rule on=20
its own jurisdiction, including any objections with respect to =
the=20
existence, scope or validity of the arbitration=20
agreement.
International Dispute Resolution=20
Procedures, http://www.adr.org/sp.asp?id=3D=20
33994#INTERNATIONAL%20ARBITRATION%20RULES (last visited Aug. 4, =
2008)=20
(emphasis added). It is on both the breadth of the arbitration =
provision=E2=80=99s=20
language, and on the fact that the provision incorporates article =
15(a) of=20
the pertinent AAA rules, that ODL relies to argue that the parties =
clearly=20
and unmistakably agreed to submit substantive arbitrability=20
matters=E2=80=94whether they be phrased as the agreement=E2=80=99s =
existence or its=20
applicability=E2=80=94to the arbitrator, rather than to the trial=20
court.
<=
/SPAN>ODL=E2=80=99s=20
position reverses the proper inquiry. ODL starts by invoking the =
Master=20
Agreement=E2=80=99s arbitration clause, then asks if the Master =
Agreement was=20
incorporated into the parties=E2=80=99 alleged oral contract. =
Instead, the initial=20
inquiry is whether the parties entered into any kind of agreement =
that=20
could trigger the Master Agreement; only if the answer to this =
inquiry is=20
=E2=80=9Cyes=E2=80=9D do we then consider what the Master =
Agreement=E2=80=99s arbitration clause=20
provides. We reach this conclusion because of the Master =
Agreement=E2=80=99s terms=20
specifying how it would be triggered and because of ODL=E2=80=99s =
arguments below.=20
<=
/SPAN>The=20
Master Agreement indicated that it was not self-effectuating, but =
instead=20
required a request by Conoco for ODL=E2=80=99s services. For =
example, the Master=20
Agreement recited that the parties desired to establish, by =
entering into=20
it, =E2=80=9Cthe general terms and conditions to apply should =
[Conoco] request=20
[ODL] to provide . . . services to any of its =
subsidiary or=20
affiliated companies,=E2=80=9D and it provides that the agreement =
applies =E2=80=9Cto all=20
services which [ODL] . . . provide[s] for =
[Conoco] or any=20
of its parent, subsidiary and affiliated companies=E2=80=9D =
pursuant to Conoco=E2=80=99s=20
request. (Emphasis added.) In sum, the Master Agreement did not =
apply in=20
the abstract, but instead applied only if Conoco requested =
ODL=E2=80=99s services.=20
The Master Agreement (and its arbitration clause) was not a =
binding=20
contract until the parties entered into some kind of future =
agreement for=20
ODL=E2=80=99s services. See Moser v. Aminoil, USA, Inc., =
618 F. Supp. 774,=20
779 (W. Dist. La. 1985) (=E2=80=9CThe [master] agreement does not =
bind either=20
party to perform any services. It merely sets forth their =
agreement to=20
abide by certain terms should they enter into contractual =
relations in the=20
future. . . . In short, no valid obligation arises until =
the=20
platform operator . . . requests the services of the=20
subcontractor . . . and, at that point, the terms of the =
master=20
service agreement are incorporated automatically into the written =
or=20
verbal contract to perform the specified services.=E2=80=9D) =
(citations omitted).=20
Simply put, the Master Agreement was an agreement as to what terms =
would=20
apply if the parties later contracted for ODL=E2=80=99s=20
services.
<=
/SPAN>ODL=E2=80=99s=20
arguments to the trial court reflected an understanding that some =
kind of=20
agreement between ODL and Conoco for the former=E2=80=99s services =
was needed to=20
trigger the Master Agreement and to make Conoco subject to its =
arbitration=20
provision. For example, although the parties disputed whether the =
request=20
for ODL=E2=80=99s services that could trigger the Master Agreement =
could be made=20
in ways other than by issuing and executing a formal RFS, they did =
not=20
dispute that some kind of request by Conoco, and acceptance =
by ODL,=20
was required to make the Master Agreement apply and for its =
arbitration=20
clause to bind Conoco. ODL argued to the trial court that the =
Master=20
Agreement=E2=80=99s clause providing that it applied to all =
services made pursuant=20
to an RFS =E2=80=9Cdoes not exclude other agreements=E2=80=9D or =
=E2=80=9Cany other request for=20
services=E2=80=9D from =E2=80=9Cbeing within the scope of the =
Master Agreement=E2=80=9D; that=20
=E2=80=9CConoco requested ODL=E2=80=99s services on the [FSO =
Project]=E2=80=9D; and that,=20
alternatively, Conoco waived any requirement for an RFS by, at the =
December 14 meeting, =E2=80=9Crequest[ing] [that] ODL=E2=80=99s =
services . . .=20
be performed directly to Conoco on the [FSO Project]=E2=80=9D =
based on =E2=80=9Can=20
existing scope of work.=E2=80=9D All of these arguments reflect an =
understanding=20
that the Master Agreement could not apply absent some form of =
request for=20
ODL=E2=80=99s services by Conoco. Additionally, it is undisputed =
that no one at=20
the December 14 meeting discussed arbitration or incorporated the =
Master=20
Agreement by reference.
<=
/SPAN>The=20
proper focus is thus on whether Conoco requested, in some way, =
ODL=E2=80=99s=20
services at the December 14 meeting. If no underlying request for =
ODL=E2=80=99s=20
services existed to trigger the contractually separate arbitration =
agreement, or that itself contained its own arbitration agreement, =
then=20
there is no issue of substantive arbitrability to send to an =
arbitrator.=20
In these circumstances, it was for the trial court in the first =
instance=20
to determine this threshold matter. Cf. Will-Drill Res., Inc. =
v. Samson=20
Res., Inc., 352 F.3d 211, 219 (5th Cir. 2003) =
(=E2=80=9C[W]here the very=20
existence of an agreement is challenged, ordering arbitration =
could result=20
in an arbitrator deciding that no agreement was ever formed. Such =
an=20
outcome would be a statement that the arbitrator never had any =
authority=20
to decide the issue. A presumption that a signed document =
represents an=20
agreement could lead to this untenable result. We therefore =
conclude that=20
where a party attacks the very existence of an agreement, as =
opposed to=20
its continued validity or enforcement, the courts must first =
resolve that=20
dispute.=E2=80=9D). If the parties did not contract, then they =
could not have=20
invoked the Master Agreement under either ODL=E2=80=99s theory or =
Conoco=E2=80=99s theory=20
of how that agreement could be triggered. And if the Master =
Agreement was=20
not triggered, then whether its arbitration provision required =
matters of=20
substantive arbitrability to be arbitrated is=20
irrelevant.
<=
/SPAN>We=20
overrule ODL=E2=80=99s argument under issue one in the mandamus =
proceeding based=20
on substantive arbitrability.
C. Whether=20
the Trial Judge Abused Her Discretion in Concluding that the =
Parties Did=20
Not Enter into a Written Agreement to =
Arbitrate
<=
/SPAN>Also=20
under issue one, ODL alternatively argues that the trial judge =
abused her=20
discretion in concluding that there was no signed, written =
agreement=20
between ODL and Conoco for arbitration of the claim that Conoco =
orally=20
agreed to pay Conar=E2=80=99s subcontractors after December 14, =
2006. In support,=20
ODL argues (1) that Conoco and ODL agreed on December 14 for ODL =
to=20
provide services to Conoco (and for Conoco to pay and to assume =
direction=20
of the FSO Project) and that that agreement was memorialized in =
writing by=20
e-mail; (2) that the Master Agreement applied whether or not a =
formal RFS=20
was issued because, by its terms, the agreement applied to all=20
international services that ODL provided to Conoco; and (3) that =
Conoco=20
waived the requirement for execution of a formal =
RFS.
<=
/SPAN>1. The=20
Standard of Review
<=
/SPAN>=E2=80=9CIt=20
is well established Texas law that an appellate court may not deal =
with=20
disputed areas of fact in an original mandamus =
proceeding.=E2=80=9D Brady v.=20
Fourteenth Court of Appeals, 795 S.W.2d 712, 714 (Tex. 1990).=20
Likewise, =E2=80=9C[i]n reviewing findings of fact in a mandamus =
proceeding, we=20
cannot substitute our judgment for that of the trial =
court.=E2=80=9D In re=20
Dillard Dep=E2=80=99t Stores, Inc., 198 S.W.3d 778, 780 (Tex. =
2006). =E2=80=9CInstead,=20
the relator =E2=80=98must establish that the trial court could =
reasonably have=20
reached only one decision,=E2=80=99 and that its finding to the =
contrary is=20
=E2=80=98arbitrary and unreasonable.=E2=80=99=E2=80=9D Id. =
(quoting Walker, 827=20
S.W.2d at 840). Under this standard, the relator must show that =
=E2=80=9Cthe=20
evidence compels a finding=E2=80=9D that the factual assertion on =
which it bases=20
its challenge is true. Id.
<=
/SPAN>2. Analysis
<=
/SPAN>The=20
Master Agreement provided that the =E2=80=9CMaster Support =
Services Contract Terms=20
and Conditions=E2=80=9D attached to the Master Agreement would =
apply to all=20
services that ODL provided for Conoco or any of its parent, =
subsidiary and affiliated companies (which, in the abstract, would =
include=20
CVCA) =E2=80=9Cpursuant to a =E2=80=98Request for =
Services=E2=80=99 issued and accepted as=20
set forth in Section 1.1 of the Master [Support Services Contract] =
Terms=20
[and Conditions].=E2=80=9D The Master Support Services Contract =
Terms and=20
Conditions, in turn, required that =E2=80=9CCOMPANY=E2=80=9D make =
the request for ODL=E2=80=99s=20
services. =E2=80=9CCOMPANY,=E2=80=9D with regard to an RFS, was =
defined for the Master=20
Support Services Contract Terms and Conditions as =E2=80=9Csuch =
parent or=20
affiliated or subsidiary company of COMPANY [defined as Conoco] =
entering=20
said [RFS].=E2=80=9D Under this contractual language, if CVCA =
entered into an RFS=20
with ODL, the Master Agreement would be incorporated into that =
contract,=20
but then that contract (and its arbitration agreement) would be =
with CVCA,=20
not Conoco, which the trial judge found was a separate legal =
entity from=20
Conoco. Therefore, under the Master Agreement=E2=80=99s terms, for =
Conoco to be=20
subject to its arbitration provision, Conoco had to request =
ODL=E2=80=99s=20
services. ODL=E2=80=99s arguments here and below reflect this=20
understanding.
<=
/SPAN>The=20
trial judge found that CVCA (not Conoco) agreed on December 14, =
2006 to=20
begin paying Conar=E2=80=99s subcontractors directly; that =
ODL=E2=80=99s services=20
benefitted CVCA; that Conoco did not agree to begin paying =
Conar=E2=80=99s=20
subcontractors directly at the December 14 meeting; and that ODL =
and=20
Conoco did not enter into an oral agreement incorporating the =
Master=20
Agreement. There was conflicting evidence as to whether the =
individuals at=20
the December 14 meeting who were not employees of ODL or Conar =
were acting=20
as CVCA or Conoco employees and whether they were representing =
CVCA or=20
Conoco in making any agreement that was reached. There was also=20
conflicting evidence as to which Conoco-related entity was billed =
for or=20
paid ODL for its services and which Conoco-related entity informed =
ODL=20
where its bills should be sent. The trial judge resolved this =
conflicting=20
evidence in favor of Conoco, finding that ODL and Conoco did not =
enter=20
into an agreement on December 14, 2006 that could invoke the =
Master=20
Agreement. The evidence does not conclusively establish something =
other=20
than what the trial judge found in this regard. See In re =
Dillard Dep=E2=80=99t=20
Stores, Inc., 198 S.W.3d at 781; see also Brady, 795 =
S.W.2d at=20
714 (recognizing that appellate court may not deal with disputed =
areas of=20
fact in mandamus proceeding). The trial judge thus did not abuse =
her=20
discretion in finding that ODL and Conoco had no contract that =
could=20
implicate the Master Agreement or its arbitration provision. =
Consequently,=20
the trial judge did not abuse her discretion in concluding that no =
arbitration agreement existed between the parties or in denying =
ODL=E2=80=99s=20
motion to compel arbitration.
<=
/SPAN>We=20
overrule the remainder of issue one in the mandamus proceeding, =
which=20
concerns the denial of ODL=E2=80=99s motion to compel=20
arbitration.
Whether the Trial=20
Court Erred in Granting Conoco=E2=80=99s
Application to=20
Stay Arbitration (Interlocutory =
Appeal)
<=
/SPAN>In=20
issue one in its interlocutory appeal, ODL raises the same =
challenges to=20
the trial court=E2=80=99s granting of Conoco=E2=80=99s application =
to stay arbitration=20
that invoked the TAA as it did in the mandamus proceeding to the =
trial=20
court=E2=80=99s denial of its motion to compel arbitration that =
invoked the=20
FAA.
A. What=20
the Standard of Review Is
<=
/SPAN>ODL=20
does not specify which findings of fact or conclusions of law it=20
challenges. We have nonetheless reviewed the substance of all of =
its=20
appellate arguments to determine which findings of fact and =
conclusions of=20
law ODL has implicitly challenged for each appellate argument. =
See City=20
of Pasadena v. Gennedy, 125 S.W.3d 687, 691 (Tex. =
App.=E2=80=94Houston [1st=20
Dist.] 2003, pet. denied) (construing appellant=E2=80=99s =
challenges, which did=20
not specify to which findings of fact or conclusions of law they =
related,=20
to attack pertinent findings and conclusions supporting =
complained-of=20
aspects of judgment); see also Tex. R. App. P. 38.1(e), =
38.9;=20
Sterner v. Marathon Oil Co., 767 S.W.2d 686, 690 (Tex.1989) =
(=E2=80=9C[I]t=20
is our practice to construe liberally points of error in order to =
obtain a=20
just, fair and equitable adjudication of the rights of the=20
litigants.=E2=80=9D).
<=
/SPAN>We=20
review legal conclusions de novo. Gennedy, 125 =
S.W.3d at=20
691. Regarding fact findings, =E2=80=9C[w]hen, as here, we have a =
complete=20
reporter=E2=80=99s record on appeal, we review the trial =
court=E2=80=99s fact findings=20
under the same standards for legal sufficiency as govern the =
review of=20
jury findings.=E2=80=9D Id. As with challenges to jury =
findings, =E2=80=9Cwhen the=20
complaining party challenges the legal sufficiency of the evidence =
underlying an adverse finding on which the party did not have the =
burden=20
of proof, the party must demonstrate on appeal that there is no =
evidence=20
to support the finding.=E2=80=9D
Id.
<=
/SPAN>To=20
determine whether there is some evidence to support a finding of =
fact, =E2=80=9Cwe=20
must view the evidence in a light that tends to support the =
finding of=20
disputed fact and disregard all evidence and inferences to the =
contrary.=E2=80=9D=20
Wal-Mart Stores, Inc. v. Miller, 102 S.W.3d 706, 709 (Tex. =
2003).=20
If more than a scintilla of evidence supports the finding of fact, =
we must=20
uphold it. See id. More than a scintilla of evidence exists =
if the=20
evidence =E2=80=9C=E2=80=98rises to a level that would enable =
reasonable and fair-minded=20
people to differ in their conclusions.=E2=80=99=E2=80=9D Ford =
Motor Co. v. Ridgway,=20
135 S.W.3d 598, 601 (Tex. 2004) (quoting Merrell Dow Pharm., =
Inc. v.=20
Havner, 953 S.W.2d 706, 711 (Tex. 1997)). Conversely, evidence =
that is=20
=E2=80=9C=E2=80=98so weak as to do no more than create a mere =
surmise=E2=80=99=E2=80=9D is no more than a=20
scintilla and, thus, no evidence. Id. (quoting Kindred =
v.=20
Con/Chem., Inc., 650 S.W.2d 61, 63 (Tex. 1983)). =E2=80=9CThe =
final test for=20
legal sufficiency must always be whether the evidence at trial =
would=20
enable reasonable and fair-minded people to reach the verdict =
under review=20
. . . . [L]egal-sufficiency review in the proper =
light must=20
credit favorable evidence if reasonable [fact finders] could, and=20
disregard contrary evidence unless reasonable [fact finders] could =
not.=E2=80=9D=20
City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. =
2005);=20
accord Chubb Lloyd=E2=80=99s Ins. Co. of Tex. v. H.C.B. Mech., =
Inc., 190=20
S.W.3d 89, 92 (Tex. App.=E2=80=94Houston [1st Dist.] 2005, no=20
pet.).
B. How=20
We Rule on ODL=E2=80=99s Arguments
<=
/SPAN>ODL=20
raises the same arguments in its interlocutory appeal of the =
granting of=20
Conoco=E2=80=99s application to stay arbitration as it did in its =
mandamus=20
proceeding challenging the denial of its motion to compel =
arbitration. In=20
the mandamus proceeding, we have already explained why the =
relevant=20
threshold matter of substantive arbitrability was for the court, =
rather=20
than the arbitrator, to decide. Accordingly, we overrule the =
challenge=20
under issue one contending that the arbitrator should decide =
matters of=20
substantive arbitrability here. Likewise, we have also analyzed =
the=20
evidence and concluded that the trial court did not clearly abuse =
its=20
discretion in finding that ODL and Conoco had no agreement that =
would=20
trigger the Master Agreement and subject Conoco to arbitration. =
Although=20
the standard of review in this interlocutory appeal is =
no-evidence, rather=20
than abuse of discretion, the result is the same: the evidence =
outlined=20
above that the trial court had discretion to believe also is more =
than a=20
scintilla of evidence supporting the relevant findings. =
Accordingly, we=20
overrule issue one in ODL=E2=80=99s interlocutory =
appeal.
Whether the Trial=20
Judge Abused Her Discretion in
Entering Certain=20
Findings of Fact and Conclusions of =
Law
<=
/SPAN>In=20
issue two in both the mandamus proceeding and the interlocutory =
appeal,=20
ODL first complains that the trial court =E2=80=9Cabused its =
discretion in failing=20
to modify its finding[s] of facts on the merits of ODL=E2=80=99s =
claims which go=20
beyond the question of arbitrability,=E2=80=9D also alleging that =
=E2=80=9C[t]hese=20
premature findings are improper under Texas law and ODL labors =
under the=20
likelihood that ODL will never get a fair trial on the merits =
before [the=20
trial court].=E2=80=9D ODL also complains that certain of the =
findings are=20
=E2=80=9Ccompletely unsupported by the evidence.=E2=80=9D ODL =
raises both of these=20
complaints to the following findings: number 12 (=E2=80=9CBecause =
of a default by=20
Conar, on December 14, 2006 CVCA orally agreed to begin paying =
Conar=E2=80=99s=20
subcontractors directly, subject to paperwork.=E2=80=9D), number =
13 (=E2=80=9CCVCA did=20
make some payments to Conar directly.=E2=80=9D), number 15 =
(=E2=80=9CODL=E2=80=99s services=20
benefitted CVCA.=E2=80=9D), and number 16 (=E2=80=9COn December =
14, 2006, [Conoco] did not=20
orally agree to begin paying Conar=E2=80=99s subcontractors=20
directly.=E2=80=9D).
<=
/SPAN>Although=20
it includes this challenge under issue two in its brief in the=20
interlocutory appeal, ODL asks this Court to review the =
complained-of=20
findings of fact under our mandamus jurisdiction, citing In re =
H2O=20
Plumbing.
See 115 S.W.3d 79, 81=E2=80=9382 =
(Tex. App.=E2=80=94San=20
Antonio 2003, orig. proceeding) (holding (1) that mandamus would =
issue to=20
require trial judge to vacate entry of findings of fact on merits =
of=20
claims, in case in which trial judge had also entered =
interlocutory order=20
granting application to compel arbitration, and (2) that no =
interlocutory=20
appeal lay over entry of findings of fact relating to order =
compelling=20
arbitration, which was itself unappealable); see also H2O =
Plumbing,=20
Inc. v. Capital Indus., Inc., No. 04-03-00136-CV, 2003 WL =
21217455, at=20
*1 (Tex. App.=E2=80=94San Antonio May 28, 2003, no pet.) (memo. =
op.) (in companion=20
case to that discussed herein, holding that no appellate =
jurisdiction lay=20
over court=E2=80=99s entry of findings of fact relating to order =
compelling=20
arbitration, which was itself unappealable).
<=
/SPAN>In=20
In re H2O Plumbing, the interlocutory order to which the =
findings=20
of fact related was an unappealable order compelling arbitration, =
whereas=20
here, one of the underlying orders to which the findings relate is =
reviewable by interlocutory appeal, and the other is reviewable by =
mandamus. Additionally, in In re H2O Plumbing, nothing =
precluded=20
the findings from being used against the complaining party in =
arbitration,=20
which was one of the reasons that the court held that no adequate =
remedy=20
by appeal existed. See In re H2O Plumbing, 115 S.W.3d at =
81. Here,=20
in contrast, the trial judge has not compelled arbitration. =
Assuming=20
without deciding that no adequate remedy by appeal exists here, we =
hold=20
that the trial judge did not abuse her discretion in either way =
that ODL=20
contends.
<=
/SPAN>First,=20
as previously discussed, there is some evidence, when viewed in =
the=20
required light, that supports each of the complained-of findings. =
We thus=20
overrule this argument under issue two in the mandamus proceeding. =
Second,=20
one of the threshold issues raised by the parties=E2=80=99 =
arbitration motions was=20
whether a contract existed between Conoco and ODL that could =
trigger the=20
Master Agreement. Put another way, the trial judge could =
reasonably have=20
believed that she had to determine, as a preliminary matter, =
whether a=20
contract between these two parties that could invoke the Master =
Agreement=20
arose at the December 14 meeting. If it did not, then she could =
also=20
reasonably have determined that the Master Agreement=E2=80=94the =
sole agreement=20
between these parties containing an arbitration clause=E2=80=94was =
not triggered,=20
meaning that no arbitration agreement existed between these two =
parties to=20
be enforced. Because the complained-of findings addressed this =
threshold=20
issue at the arbitration-related hearing, it was not an abuse of=20
discretion for the trial judge to have entered them. Moreover, =
after ODL=20
voiced its opposition to the findings of fact, the trial judge =
entered a=20
supplemental conclusion of law that =E2=80=9C[t]he findings made =
by the court in=20
connection with the arbitration motion are not binding on the =
parties=20
except in connection with the arbitration motion and are not =
rulings on=20
the merits of the case.=E2=80=9D Nothing in the record indicates =
that the trial=20
judge will depart from this legal conclusion at trial or that ODL =
=E2=80=9Cwill=20
never get a fair trial on the merits=E2=80=9D with the trial judge =
because of her=20
complained-of findings of fact, which the judge, in effect, =
limited to her=20
arbitration ruling. We thus overrule the remainder of issue two in =
the=20
mandamus proceeding.
Conclusion
<=
/SPAN>In=20
the interlocutory appeal, we affirm that portion of the order that =
granted=20
Conoco=E2=80=99s application to stay arbitration that was asserted =
under the TAA.=20
In the mandamus proceeding, we deny the petition for writ of =
mandamus=20
complaining of (1) that portion of the interlocutory order that =
denied=20
ODL=E2=80=99s motion to compel arbitration under the FAA and (2) =
the trial judge=E2=80=99s=20
findings of fact.
Tim=20
Taft
Justice
Panel consists of Justices Taft, =
Jennings, and=20
Bland.
Justice Jennings, concurring in the=20
=
judgment. |