AFFIRMED and Opinion Filed April 4, 2019
S In The Court of Appeals Fifth District of Texas at Dallas No. 05-18-00622-CV
ALLIANCE FAMILY OF COMPANIES AND JUSTIN MAGNUSON, Appellant V. JAMISHA NEVAREZ, Appellee
On Appeal from the 192nd Judicial District Court Dallas County, Texas Trial Court Cause No. DC-18-01162
MEMORANDUM OPINION Before Justices Whitehill, Molberg, and Reichek Opinion by Justice Reichek In this interlocutory appeal, Alliance Family of Companies and Justin Magnuson appeal
the trial court’s order denying their motion to compel arbitration of a suit brought against them by
Jamisha Nevarez. In a single issue, appellants generally contend the ruling was error because (1)
there is a valid arbitration agreement, (2) appellee’s claims fall within the scope of the agreement,
and (3) appellee failed to raise an effective affirmative defense to application of the agreement.
We conclude appellee’s claims fall outside the scope of the arbitration agreement; accordingly, we
affirm the trial court’s order.
FACTUAL BACKGROUND
Alliance Family of Companies is a diagnostic testing facility that provides neurodiagnostic,
cardiac, and sleep testing. Magnusson is its chief executive officer. In November 2016, appellants hired appellee as Magnusson’s personal assistant. Six months later, she signed two nondisclosure
agreements, one with AFC and the other with Magnusson. In each of the NDAs, appellee agreed
she would not “directly, indirectly or in any manner whatsoever, use, disseminate, disclose or
publish” AFC’s or Magnusson’s confidential information. Confidential information was defined
differently in each agreement.
With respect to AFC, confidential information was defined as “any and all technical and
non-technical information provided to [appellee] by AFC,” and included, among other things,
“personal and/or business entity contacts of any type whatsoever relating in any manner
whatsoever to AFC and/or to Justin Magnuson . . ..” As to Magnusson, confidential information
was defined as “any and all information provided to or discovered by [appellee] regarding
[Magnusson], and included, among other things, “personal and/or business contacts; personal
and/or business activities; . . . business and/or personal contacts and/or activities of any type
whatsoever relating in any manner whatsoever to [Magnusson].” Both NDAs also contained
identical alternative dispute resolution clauses that called for “[a]ny dispute under this Agreement”
to be subject to arbitration in the event mediation was unsuccessful.
In January 2018, appellee sued appellants alleging causes of action for assault, sexual
assault, and battery. She alleged the events giving rise to her causes of action occurred after
Magnusson called her to his home. She alleged AFC was directly liable because Magnusson was
acting at such time as a principal or vice principal of AFC and because AFC failed to provide a
safe workplace. She also alleged AFC was vicariously liable for Magnusson’s conduct.
Appellants filed a joint motion to compel arbitration, asserting appellee’s claims were
“squarely covered” by the arbitration clauses of the NDAs because appellee alleged the assault,
sexual assault, and battery occurred in the course and scope of both Magnusson’s and her
employment. Attached to the motion were copies of the NDAs, Magnusson’s declaration stating
–2– that he witnessed appellee sign the agreements, and heavily redacted emails between the parties
regarding settlement and mediation.
In response to the motion, appellee argued there was not a valid arbitration agreement
because there was no consideration to support the NDAs, no meeting of the minds that sexual
assault could not be disclosed, and the arbitration clauses were unconscionable. Additionally, she
asserted that even if the agreements are valid, the claims raised in her petition are not covered by
them.
The trial court conducted a hearing and subsequently denied appellants’ motion to compel
without stating a basis. 1 This appeal followed.
APPLICABLE LAW
We review a trial court’s order denying a motion to compel arbitration for an abuse of
discretion. Henry v. Cash Biz, LP, 551 S.W.3d 111, 115 (Tex. 2018).2 We defer to the trial court’s
determinations if they are supported by evidence but review its legal determinations de novo. Id.
Whether the claims in dispute fall within the scope of a valid arbitration agreement is a question
of law. Id.
Courts may require a party to submit a dispute to arbitration only if the party has agreed to
do so. See Seven Hills Commercial, LLC v. Mirabel Custom Homes, Inc., 442 S.W.3d 706, 714
(Tex. App.—Dallas 2014, pet. denied). A party seeking to compel arbitration must establish a
valid arbitration agreement exists and that the claims asserted are within the scope of the
agreement. Id. at 715. To determine whether a party’s claims are within the scope of an arbitration
agreement, we focus on the factual allegations and not on the legal causes of action asserted. In
1 The trial judge granted appellants’ motion to permanently seal the original and first amended petition. He also ordered that the amended petition “shall only be published in redacted format as set forth in Exhibit A.” No exhibit is attached to the order, and a redacted petition was not filed in this Court. Moreover, we note that this Court granted requests to file under seal both appellee’s brief and appellants’ reply brief. 2 We note that the record does not reflect whether the trial court applied state law or federal law when it denied appellants’ motion. Appellants’ motion did not specify either the Federal Arbitration Act or the Texas General Arbitration Act, and the briefing likewise is nonspecific. Regardless, our decision would be the same under either Act.
–3– re FirstMerit Bank, N.A., 52 S.W.3d 749, 754 (Tex. 2001). We resolve any doubts about the
factual scope in favor of arbitration. Id. Although both Texas and federal policy strongly favor
arbitration, that policy “cannot serve to stretch a contractual clause beyond the scope intended by
the parties or allow modification of the plain and ambiguous provisions of an agreement.” IKON
Office Sol., Inc. v. Eifert, 2 S.W.3d 688, 697 (Tex. App.—Houston [14th Dist.] 1999, no pet.).
DISCUSSION
We need not address appellants’ arguments regarding consideration, meeting of the minds,
and unconscionability because, even if we assume there is a valid arbitration agreement, we
conclude the claims here do not fall within its scope.
Appellants argue the arbitration clause is broad and so long as the factual allegations
“‘touch matters,’ are ‘factually intertwined,’ have a ‘significant relationship’ to or are ‘inextricably
enmeshed,’ with the contract containing the arbitration provision, the claim is arbitrable.’” But
the arbitration clause at issue here does not contain broad language.
Language in an arbitration clause providing for arbitration of “any dispute arising between
the parties,” or “any controversy or claim arising out of or relating to the contract thereof,” or “any
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AFFIRMED and Opinion Filed April 4, 2019
S In The Court of Appeals Fifth District of Texas at Dallas No. 05-18-00622-CV
ALLIANCE FAMILY OF COMPANIES AND JUSTIN MAGNUSON, Appellant V. JAMISHA NEVAREZ, Appellee
On Appeal from the 192nd Judicial District Court Dallas County, Texas Trial Court Cause No. DC-18-01162
MEMORANDUM OPINION Before Justices Whitehill, Molberg, and Reichek Opinion by Justice Reichek In this interlocutory appeal, Alliance Family of Companies and Justin Magnuson appeal
the trial court’s order denying their motion to compel arbitration of a suit brought against them by
Jamisha Nevarez. In a single issue, appellants generally contend the ruling was error because (1)
there is a valid arbitration agreement, (2) appellee’s claims fall within the scope of the agreement,
and (3) appellee failed to raise an effective affirmative defense to application of the agreement.
We conclude appellee’s claims fall outside the scope of the arbitration agreement; accordingly, we
affirm the trial court’s order.
FACTUAL BACKGROUND
Alliance Family of Companies is a diagnostic testing facility that provides neurodiagnostic,
cardiac, and sleep testing. Magnusson is its chief executive officer. In November 2016, appellants hired appellee as Magnusson’s personal assistant. Six months later, she signed two nondisclosure
agreements, one with AFC and the other with Magnusson. In each of the NDAs, appellee agreed
she would not “directly, indirectly or in any manner whatsoever, use, disseminate, disclose or
publish” AFC’s or Magnusson’s confidential information. Confidential information was defined
differently in each agreement.
With respect to AFC, confidential information was defined as “any and all technical and
non-technical information provided to [appellee] by AFC,” and included, among other things,
“personal and/or business entity contacts of any type whatsoever relating in any manner
whatsoever to AFC and/or to Justin Magnuson . . ..” As to Magnusson, confidential information
was defined as “any and all information provided to or discovered by [appellee] regarding
[Magnusson], and included, among other things, “personal and/or business contacts; personal
and/or business activities; . . . business and/or personal contacts and/or activities of any type
whatsoever relating in any manner whatsoever to [Magnusson].” Both NDAs also contained
identical alternative dispute resolution clauses that called for “[a]ny dispute under this Agreement”
to be subject to arbitration in the event mediation was unsuccessful.
In January 2018, appellee sued appellants alleging causes of action for assault, sexual
assault, and battery. She alleged the events giving rise to her causes of action occurred after
Magnusson called her to his home. She alleged AFC was directly liable because Magnusson was
acting at such time as a principal or vice principal of AFC and because AFC failed to provide a
safe workplace. She also alleged AFC was vicariously liable for Magnusson’s conduct.
Appellants filed a joint motion to compel arbitration, asserting appellee’s claims were
“squarely covered” by the arbitration clauses of the NDAs because appellee alleged the assault,
sexual assault, and battery occurred in the course and scope of both Magnusson’s and her
employment. Attached to the motion were copies of the NDAs, Magnusson’s declaration stating
–2– that he witnessed appellee sign the agreements, and heavily redacted emails between the parties
regarding settlement and mediation.
In response to the motion, appellee argued there was not a valid arbitration agreement
because there was no consideration to support the NDAs, no meeting of the minds that sexual
assault could not be disclosed, and the arbitration clauses were unconscionable. Additionally, she
asserted that even if the agreements are valid, the claims raised in her petition are not covered by
them.
The trial court conducted a hearing and subsequently denied appellants’ motion to compel
without stating a basis. 1 This appeal followed.
APPLICABLE LAW
We review a trial court’s order denying a motion to compel arbitration for an abuse of
discretion. Henry v. Cash Biz, LP, 551 S.W.3d 111, 115 (Tex. 2018).2 We defer to the trial court’s
determinations if they are supported by evidence but review its legal determinations de novo. Id.
Whether the claims in dispute fall within the scope of a valid arbitration agreement is a question
of law. Id.
Courts may require a party to submit a dispute to arbitration only if the party has agreed to
do so. See Seven Hills Commercial, LLC v. Mirabel Custom Homes, Inc., 442 S.W.3d 706, 714
(Tex. App.—Dallas 2014, pet. denied). A party seeking to compel arbitration must establish a
valid arbitration agreement exists and that the claims asserted are within the scope of the
agreement. Id. at 715. To determine whether a party’s claims are within the scope of an arbitration
agreement, we focus on the factual allegations and not on the legal causes of action asserted. In
1 The trial judge granted appellants’ motion to permanently seal the original and first amended petition. He also ordered that the amended petition “shall only be published in redacted format as set forth in Exhibit A.” No exhibit is attached to the order, and a redacted petition was not filed in this Court. Moreover, we note that this Court granted requests to file under seal both appellee’s brief and appellants’ reply brief. 2 We note that the record does not reflect whether the trial court applied state law or federal law when it denied appellants’ motion. Appellants’ motion did not specify either the Federal Arbitration Act or the Texas General Arbitration Act, and the briefing likewise is nonspecific. Regardless, our decision would be the same under either Act.
–3– re FirstMerit Bank, N.A., 52 S.W.3d 749, 754 (Tex. 2001). We resolve any doubts about the
factual scope in favor of arbitration. Id. Although both Texas and federal policy strongly favor
arbitration, that policy “cannot serve to stretch a contractual clause beyond the scope intended by
the parties or allow modification of the plain and ambiguous provisions of an agreement.” IKON
Office Sol., Inc. v. Eifert, 2 S.W.3d 688, 697 (Tex. App.—Houston [14th Dist.] 1999, no pet.).
DISCUSSION
We need not address appellants’ arguments regarding consideration, meeting of the minds,
and unconscionability because, even if we assume there is a valid arbitration agreement, we
conclude the claims here do not fall within its scope.
Appellants argue the arbitration clause is broad and so long as the factual allegations
“‘touch matters,’ are ‘factually intertwined,’ have a ‘significant relationship’ to or are ‘inextricably
enmeshed,’ with the contract containing the arbitration provision, the claim is arbitrable.’” But
the arbitration clause at issue here does not contain broad language.
Language in an arbitration clause providing for arbitration of “any dispute arising between
the parties,” or “any controversy or claim arising out of or relating to the contract thereof,” or “any
controversy concerning the interpretation, performance or application of the contract” is
considered broadly worded. Cotton Commercial USA, Inc. v. Clear Creek Indep. Sch. Dist., 387
S.W.3d 99, 107–08 (Tex. App.—Houston [14th Dist.] 2012, no pet.); see In Re Signor, No. 05-16-
00703-CV, 2017 WL 1046770, at *6 (Tex. App.—Dallas Mar. 20, 2017, orig. proceeding) (mem.
op.) (“Both federal and Texas courts––including this Court––have concluded that similar
arbitration provisions that employ terms like “any dispute” and “relating to” are broad arbitration
clauses capable of expansive reach and create a presumption of arbitrability.”); Cash Biz, 551
S.W.3d at 116 (agreement that applies to “all disputes” and specifies that “‘dispute’ and ‘disputes’
are given the broadest possible meaning and include, without limitation . . . all claims, disputes or
–4– controversies arising from or relating directly or indirectly to the signing of this Arbitration
Provision” was broad clause); Saxa Inc. v. DFD Architecture Inc., 312 S.W.3d 224, 229 (Tex.
App.—Dallas 2010, pet. denied) (“‘[a]ny claim, dispute or other matter in question arising out of
or related to’ the contract” was subject to arbitration was broad clause); AdvoCare GP, LLC v.
Heath, No. 05–16–00409–CV, 2017 WL 56402, at *2 (Tex. App.–Dallas Jan. 5, 2017, no pet.)
(mem. op.) (concluding clause requiring arbitration of “any controversy, dispute or claim arising
out of or in any way related to or involving the interpretation, performance or breach of” a
nondisclosure agreement is broad arbitration clause requiring arbitration of all asserted claims and
defenses, including tort claims).
The clause in this case does not employ terms like “arising out of” or “relating to;” rather,
it narrowly calls for arbitration of “[a]ny dispute under this Agreement.” See RSR Corp. v.
Siegmund, 309 S.W.3d 686, 701 (Tex. App.—Dallas 2010, no pet.) (explaining that phrase “under
the agreement,” in context of forum selection clause, suggests direct relationship between
agreement and dispute and limits application to actions that arose as result of agreement). Thus,
the question before us is whether appellee’s claims are disputes under the NDAs. We have
reviewed the factual allegations contained in appellee’s amended petition3 and conclude appellees’
claims for assault, sexual assault, and battery do not fall within the scope of the arbitration
agreement. The NDAs address the nondisclosure of confidential information and provide an
alternative dispute resolution procedure in the event of a dispute. The NDAs do not address in any
way the intentional torts alleged by appellee.
In reaching this conclusion, we reject any notion that our sister court’s opinion in IFMG
Securities, Inc. v. Sewell, suggests a different result. In Sewell, the court of appeals concluded an
arbitration clause covered an employee’s claims for sexual harassment, assault, and battery.
3 Because the pleading is under seal, we do not detail the particular allegations.
–5– No.13-10-00235-CV, 2011 WL 5515528, at *3 (Tex. App.—Corpus Christi Nov. 10, 2011, no
pet.) (mem. op.). But the clause in that case, unlike here, “contained broad provisions, including
a mutual promise between the parties to take all disputes related to their employment relationship
to binding arbitration.” 2011 WL 5515528, at *1. The agreement covered a non-exclusive list of
claims, including breach of contract, torts, harassment, and violations of state law and applied to
actions taken by [her employer], all of its affiliated entities, and its employees/agents. Id. Thus,
the result in Sewell can be explained by reference to the much broader language in the arbitration
provision.
Moreover, we reject any suggestion that recitals, or “whereas clauses,” in the agreements
transformed them from NDAs as part of her employment into full employment contracts that
required arbitration of any disputes arising out of that employment relationship. A contract recital
is a preliminary statement explaining the background of the transaction or the reason for entering
the contract. Fulmanite Worldwide, Inc. v. NextCorp, Ltd., 339 S.W.3d 326, 336 (Tex. App.—
Dallas 2011, no pet.). Recitals in a contract are not strictly part of a contract and will not control
a contract’s operative clauses unless those clauses are ambiguous. Id.; Fleming v. Kirklin Law
Firm, P.C., No. 14-14-00202-CV, 2015 WL 7258700, at *5 (Tex. App.—Houston [14th Dist.]
Nov. 17, 2015 (mem. op.) (no pet.). Where the recitals are broader than the contract stipulations,
the former will not extend the latter. Fulmanite Worldwide, 339 S.W.3d at 336.
The Magnusson NDA contains a recital that Magnusson requested appellee to provide
services as an assistant “with the understanding that all work done by appellee shall be in the
course and scope of this Agreement[.]” The AFC NDA contains a similar provision that adds the
clause “and paid for by AFC” after “all work done.” These recitals do nothing more than explain
the reason for the NDA; they do not transform the agreement into an employment contract or
otherwise expand the terms of the agreement.
–6– We conclude the scope of the arbitration clause in the NDAs does not include the claims
brought by appellee. Accordingly, we conclude the trial court did not abuse its discretion in
denying the motion to compel. We overrule the sole issue.
We affirm the trial court’s order.
/Amanda L. Reichek/ AMANDA L. REICHEK JUSTICE
180622F.P05
–7– S Court of Appeals Fifth District of Texas at Dallas JUDGMENT
ALLIANCE FAMILY OF COMPANIES On Appeal from the 192nd Judicial District AND JUSTIN MAGNUSON, Appellants Court, Dallas County, Texas Trial Court Cause No. DC-18-01162. No. 05-18-00622-CV V. Opinion delivered by Justice Reichek; Justices Whitehill and Molberg JAMISHA NEVAREZ, Appellee participating.
In accordance with this Court’s opinion of this date, the order denying appellants’ motion to compel arbitration of the trial court is AFFIRMED.
It is ORDERED that appellee JAMISHA NEVAREZ recover her costs of this appeal from appellants ALLIANCE FAMILY OF COMPANIES AND JUSTIN MAGNUSON.
Judgment entered April 4, 2019.
–8–