Justia Arbitration & Mediation Opinion Summaries

The case involves a dispute between the San Jacinto River Authority (SJRA) and the cities of Conroe and Magnolia, Texas. The SJRA and the cities had entered into contracts obligating the cities to buy surface water from the SJRA. When a disagreement over fees and rates arose, the cities stopped paying their full balances, leading the SJRA to sue the cities for recovery of those amounts. The cities claimed immunity from the suit as government entities.Previously, the trial court had granted the cities' plea to the jurisdiction, and the court of appeals affirmed this decision. The court of appeals held that the SJRA had not engaged in pre-suit mediation as required by the contracts, and therefore, the cities' immunity was not waived.The Supreme Court of Texas disagreed with the lower courts' decisions. The court held that contractual procedures for alternative dispute resolution, such as pre-suit mediation, do not limit the statutory waiver of immunity for contractual claims against local government entities. The court also found that the mediation requirement did not apply to the SJRA's claims. Furthermore, the court rejected the cities' argument that the agreements did not fall within the waiver because they failed to state their essential terms.Consequently, the Supreme Court of Texas reversed the lower courts' decisions and remanded the case back to the trial court for further proceedings to resolve the SJRA's claims on the merits. View "San Jacinto River Authority v. City of Conroe" on Justia Law

A homeowner, Mohammad Rafiei, sued his builder, Lennar Homes, alleging personal injuries due to a construction defect. The purchase contract between Rafiei and Lennar contained an agreement to submit disputes to arbitration under the Federal Arbitration Act, including issues of formation, validity, or enforceability of the arbitration agreement. Lennar moved to compel arbitration, but Rafiei argued that the arbitration agreement was unconscionable because the cost of arbitration was prohibitively high. The trial court denied Lennar's motion to compel arbitration.The Court of Appeals for the Fourteenth District of Texas affirmed the trial court's decision, holding that Rafiei had sufficiently demonstrated that the cost to arbitrate was excessive, making the arbitral forum inadequate to vindicate his rights. The court of appeals concluded that if Rafiei were required to pay more than $6,000, he would be precluded from pursuing his claims.The Supreme Court of Texas reversed the judgment of the court of appeals. The court held that the record failed to support a finding that the parties' delegation clause was itself unconscionable due to prohibitive costs to adjudicate the threshold issue in arbitration. The court noted that Rafiei had not provided sufficient evidence to show that he could not afford the cost of arbitrating the arbitrability question. The court also noted that Rafiei had not provided evidence of how the fee schedule would be applied to resolve the unconscionability issue. The court remanded the case to the trial court for further proceedings consistent with its opinion. View "Lennar Homes Of Texas Inc. v. Rafiei" on Justia Law

The Supreme Court reversed the trial court's denial of Defendant's motion to compel arbitration, holding that remand was required for reconsideration in light of this Court's holdings in TotalEnergies E&P USA, Inc. v. MP Gulf of Mexico, LLC, 667 S.W.3d 694 (Tex. 2023).Lone Star Cleburne Autoplex filed this suit asserting that Alliance Auto Auctions of Dallas conspired with two of Lone Star's employees in order to embezzle money from Lone Star. Alliance moved to compel arbitration based on arbitration clauses contained in authorization agreements between Lone Star and a company Alliance used to verify and authorize car dealerships to buy and sell in the company's auctions. In opposing the motion Lone Star asserted that its claims fell outside the scope of the arbitration agreement. The trial court denied Alliance's motion to compel. The court of appeals affirmed. The Supreme Court reversed, holding that because the court of appeals decided this case without addressing arguments rejected in TotalEnergies, remand was required. View "Alliance Auto Auction of Dallas, Inc. v. Lone Star Cleburne Autoplex, Inc." on Justia Law

The Supreme Court affirmed the judgment of the court of appeals reversing the orders of the trial court granting TotalEnergies E&P USA, Inc.'s motion to stay arbitration before the American Arbitration Association (AAA) and denying MP Gulf of Mexico, LLC's motion to compel that arbitration, holding that the parties' contracts required them to resolve their controversies through arbitration.In the underlying dispute involving oil and gas leases Total E&P filed this suit seeking a declaratory construing the parties' cost sharing agreement. Thereafter, MP Gulf initiated an arbitration proceeding asserting that Total E&P breached the agreement. At issue was whether the parties clearly and unmistakably delegated arbitrability issues to the arbitrator by agreeing to arbitrate their controversies in accordance with the AAA Commercial Rules. The trial court granted Total E&P's motion to stay the AAA arbitration and denied MP Gulf's motion to compel that arbitration. The court of appeals reversed and compelled AAA arbitration. The Supreme Court reversed, holding that the parties clearly and unmistakably delegated to the AAA arbitrator the decision of whether the parties' controversy must be resolved by arbitration. View "TotalEnergies E&P USA, Inc. v. MP Gulf of Mexico, LLC" on Justia Law

The Supreme Court reversed the judgment of the court of appeals in this employment discrimination suit ruling that an arbitration agreement was unconscionable and affirming the order of the trial court denying the employer's motion to compel arbitration, holding that the court of appeals erred in ruling that the evidence supported the trial court's finding that the arbitration agreement was unconscionable.After Petitioner terminated Respondent's employment Respondent sued for race discrimination and retaliation under federal and state law. Petitioner moved to compel arbitration based on the arbitration agreement signed by Respondent when he was hired. Respondent opposed the motion, arguing that the agreement was unconscionable. The trial court denied the motion to compel, and the court of appeals affirmed. The Supreme Court reversed, holding that there was insufficient evidence to prove that the agreement was unconscionable. View "Houston AN USA, LLC v. Shattenkirk" on Justia Law

The Supreme Court reversed in part the opinion of the court of appeals in this interlocutory appeal concerning whether a subsequent purchaser (Purchaser) of a home is required to arbitrate her claims against the builder (Builder) for alleged construction defects, holding that the trial court erred in granting Purchaser's motion to vacate and denying Builder's motion to confirm.The trial court granted the motion to compel arbitration filed by Builder, which joined two subcontractors in the arbitration, asserting that they owed defense and indemnity obligations. The arbitrator issued an award in favor of Builder. The trial court vacated the award against Purchaser but made no ruling whether to vacate the award against the subcontractors. The Supreme Court rendered judgment confirming the award against Purchaser and remanded the case, holding (1) Purchaser was bound by the arbitration clause in the purchase-and-sale agreement under the doctrine of direct-benefits estoppel; and (2) because the record contained no ruling on whether to vacate the award against the subcontractors, remand was required. View "Lennar Homes of Tex. Land & Construction, Ltd. v. Whiteley" on Justia Law

The Supreme Court affirmed the judgment of the court of appeals reversing the orders of the trial court granting TotalEnergies E&P USA, Inc.'s motion to stay an American Arbitration Association (AAA) arbitration and denying MP Gulf of Mexico, LLC's motion to compel that arbitration, holding that the parties clearly and unmistakably delegated to the AAA arbitrator the decision of whether the parties' controversy must be resolved by arbitration.In this dispute arising over interests in a group of oil-and-gas leases Total E&P sought a declaration construing the parties' "Cost Sharing Agreement." On the same day, Total E&P initiated an arbitration proceeding asking the International Institute to determine the parties' rights under their "Chinook Operating Agreement." MP Gulf subsequently initiated the AAA arbitration proceeding. Total E&P filed a motion to stay the arbitration, which the trial court granted. The court of appeals reversed and compelled AAA arbitration. The Supreme Court affirmed, holding that the parties agreed to delegate the arbitrability issue to the arbitrator. View "TotalEnergies E&P USA, Inc. v. MP Gulf of Mexico, LLC" on Justia Law

The Supreme Court conditionally granted mandamus relief directing the district court to withdraw its order modifying its underlying judgment, holding that the district court's plenary power had expired before it undertook to revise its final judgment, and therefore the order modifying the judgment was void.The parties in this case, which arose from a construction project dispute, resolved their dispute via arbitration. The arbitrator issued a final arbitration award, and the district court entered a judgment confirming the award. More than one year later, one parties moved to modify the judgment to clarify that it was not a "final judgment" but merely interlocutory. The district court modified the judgment to reflect that it was interlocutory but sua sponte certified the question for interlocutory appeal. The Supreme Court held that the judgment rendered was clearly and unequivocally final. View "Patel v. Nations Renovations, LLC" on Justia Law

In this dispute over an arbitration clause within a contract, the Supreme Court held that the minor children who joined Plaintiffs, their parents, in bringing this action seeking damages for construction defects in their home may be compelled to arbitrate along with their parents on the basis of direct-benefits estoppel.Plaintiffs, Tony and Michelle Ha, signed a purchase agreement with Taylor Woodrow Communities-League City, Ltd. to build a home in Texas. The agreement included an arbitration provision. The Has sued both Taylor Woodrow Communities-League City, Ltd. and Taylor Morrison of Texas, Inc., for negligent construction and other claims, alleging the home developed significant mold problems due to construction defects. Plaintiffs' second amended petition named both Tony and Michelle and their three children. Taylor Morrison moved to compel arbitration, but the trial court denied the motion as it pertained to Michelle and the children. The court of appeals affirmed. The Supreme Court reversed, holding that when a family unit resides in a home and files suit for factually intertwined construction-defect claims concerning the home, a nonsignatory spouse and minor children have accepted direct benefits under the signatory spouse’s purchase agreement such that they may be compelled to arbitrate through direct-benefits estoppel. View "Taylor Morrison of Texas, Inc. v. Ha" on Justia Law

In this dispute over an arbitration clause within a contract, the Supreme Court held that the minor children who joined Plaintiffs, their parents, in bringing this action seeking damages for construction defects in their home may be compelled to arbitrate along with their parents on the basis of direct-benefits estoppel.Plaintiffs, Jack and Erin Skufca, signed a purchase agreement with Taylor Woodrow Communities-League City, Ltd. to build a home in Texas. The agreement included an arbitration provision. Plaintiffs sued both Taylor Woodrow Communities-League City, Ltd. and Taylor Morrison of Texas, Inc., for construction defects and fraud, alleging that less than a year after they moved in, the home developed mold issues that caused their minor children to be ill. The petition listed Jack and Erin as plaintiffs individually, as well as Erin as next friend of the couple's children. Taylor Morrison moved to compel arbitration, but the trial court denied the motion as it pertained to the children. The court of appeals affirmed. The Supreme Court reversed, holding that the minor children sued based on the contract and were subject to its terms, including the arbitration clause. View "Taylor Morrison of Texas, Inc. v. Skufca" on Justia Law