ACCEPTED 13-14-00641-CV THIRTEENTH COURT OF APPEALS CORPUS CHRISTI, TEXAS 2/13/2015 4:42:42 PM DORIAN RAMIREZ CLERK
FILED IN NO. 13-14-00641-CV 13th COURT OF APPEALS CORPUS CHRISTI/EDINBURG, TEXAS 2/13/2015 4:42:42 PM __________________________________________________________________ DORIAN E. RAMIREZ Clerk IN THE COURT OF APPEALS
FOR THE 13th DISTRICT OF TEXAS
__________________________________________________________________
AOF SERVICES, LLC Appellant v.
RONALD SANTORSOLA Appellee
ON APPEAL FROM AN INTERLOCUTORY ORDER OF THE 2nd 25th DISTRICT COURT OF GONZALES COUNTY, TEXAS TRIAL COURT NO. 25,609-CV
BRIEF FOR THE APPELLANT
AOF SERVICES, LLC
Paul C. Allred Texas Bar No. 01102000 8150 N. Central Expressway, Suite 700 Dallas, TX 75206 Tel (214) 448-9496 Fax (214) 276-1325 paulallred@msn.com
Attorney for Appellant (ORAL ARGUMENT REQUESTED) IDENTITY OF PARTIES AND COUNSEL
PARTIES
AOF Services, LLC Defendant-Appellant
Ronald Santorsola Plaintiff-Appellee
APPELLANT’S COUNSEL
Paul C. Allred
Texas Bar No. 01102000
8150 N. Central Expressway, Suite 700
Dallas, TX 75206
Tel (214) 448-9496
Fax (214) 276-1325
paulallred@msn.com
APPELLEE’S COUNSEL
Javier Espinoza,
The Espinoza Law Firm
503. E. Ramsey, Suite 103
San Antonio, TX 78216
Tel (210) 229-1300
Fax (210) 229-1302
javier@espinozafirm.com
TABLE OF CONTENTS
IDENTITY OF PARTIES AND COUNSEL ............................................... i
REQUEST FOR ORAL ARGUMENT ....................................................... iii
CERTIFICATE OF COMPLIANCE .......................................................... iii
TABLE OF AUTHORITIES ........................................................................ iv
STATEMENT OF THE CASE ..................................................................... vi
ISSUES PRESENTED FOR REVIEW ....................................................... vii
STATEMENT OF FACTS ....................... .................................................... viii
SUMMARY OF THE ARGUMENT ........................................................... 10
ARGUMENT AND AUTHORITIES .......................................................... 12
CONCLUSION/PRAYER.............................................................................. 26
CERTIFICATE OF SERVICE ......................................................................27
APPENDIX…………………………………..……………………….……….28
REQUEST FOR ORAL ARGUMENT
Appellant believes that oral argument is appropriate and will assist the Court
of Appeals in resolving the issues presented in this appeal. Appellant therefore
respectively requests the opportunity to present oral argument in this cause.
CERTIFICATE OF COMPLIANCE
I certify that this document was produced on a computer using Microsoft
Word and contains 4,473 words, as determined by the computer software’s word-
count function, excluding the sections of the document listed in Texas Rule of
Appellate Procedure 9.4(i)(1).
iii TABLE OF AUTHORITIES
CASES page
In re Jim Walter Homes, Inc. ………………………………………… 12 207 S.W.3d 888, 897 (Tex. App.—Houston [14th Dist.] 2000, orig. proceeding)
Jack B. Anglin Co. v. Tipps, …………………………………………. 12
842 S.W.2d 266, 260 (Tex. 1992)
(orig. proceeding)
In re Halliburton …………………………………………………………….. 12 80 S.W.3d 566, 572 (Tex. 2002)
Hathaway v. General Mills, Inc. ……………………………………………12 711 S.W.2d 227 (Tex.1986)
In re FirstMerit Bank, N.A. ………………………………………………… 13, 14 52 S.W.3d 749, 756 (Tex. 2001)
ReadyOne Industries, Inc. v. Flores ……………………….……….………13 S.W.3d, No. 08-13-00161-CV, 2014 WL 6982275 (Tex. App.—El Paso Dec. 10, 2014, no pet. h.)
In re Poly-America, L.P. …………………………………………………… 14, 18, 19 262 S.W.3d 337, 355-56 (Tex. 2008) (orig. proceeding)
Pilot Travel Ctrs., LLC v. McCray ………………………………………… 14, 19, 20 416 S.W.3d 168, 180 (Tex. App.—Dallas 2013, no pet.)
Royston, Rayzor, Vickery & Williams, L.L.P. v. Lopez…………….…… 15 2013 Tex. App. LEXIS 7843 at *23 (Tex. App. – Corpus Christi, June 27, 2013)
iv In re Fleetwood Homes of Texas, L.P……………………………………... 16
257 S.W.3d 692, 695 (Tex. 2008) (per curium)
Green Tree Fin. Corp.—Ala. v. Randolph …………………………..…… 19
531 U.S. 79, 90-91 (2000)
In re Weeks Marine, Inc. …………………………………………………… 20
242 S.W.3d 849, 859 (Tex. App.—Houston
[14th Dist.] 2007, mand. denied)
STATUTES
Texas Labor Code Section §451 ……………………………………… 8
v
STATEMENT OF THE CASE
The underlying suit brought by Appellee is for wrongful termination from
his employment with AOF Services, LLC (“AOF”). This interlocutory appeal,
however, relates only to the trial court’s denial of AOF’s Plea in Abatement and
Motion to Compel Arbitration. AOF sought enforcement of a written arbitration
agreement between the parties; Appellee contested the Motion to Compel. After
hearing, the trail court found that the arbitration agreement was unconscionable
and unenforceable and entered an order denying the Motion to Compel.
AOF appeals the trial court’s interlocutory order denying its Motion to
Compel.
APPELLANT’S BRIEF -Page 6 D/921498v1 ISSUES PRESENTED
1. The trial court erred in holding that the arbitration agreement is unconscionable.
2. The trial court erred in holding that the arbitration agreement is unenforceable.
3. The trial court erred in denying AOF’s Plea in Abatement and Motion to Compel Arbitration.
APPELLANT’S BRIEF -Page 7 D/921498v1 STATEMENT OF FACTS
1. On June 13th, 2013, AOF offered Appellee, Ronald Santorsola
(“Appellee”) employment as a laborer in its oil field services business. (Apx:
Exhibit B p3) As a condition to employment, Appellee agreed to resolve certain
disputes between the parties in arbitration. (See Dispute Resolution Policy, at
Apx: Exhibit B p4)
2. After working for AOF for approximately two and a half months,
Appellee allegedly sustained a work related injury and filed suit against AOF
claiming wrongful termination pursuant to Texas Labor Code section 451 (Apx:
Exhibit C at p1). AOF disputes the alleged work related injury and alleged
wrongful termination.
3. AOF filed its Plea in Abatement and Motion To Compel Arbitration
(“the Motion to Compel”) in the wrongful termination suit, seeking enforcement of
the Dispute Resolution Policy (Apx: Exhibit A). In support thereof, AOF filed
the affidavit of Amit Sharma as a business records affidavit and attached the
Dispute Resolution Policy, more than 14 days before the hearing on Motion to
Compel (Apx: Exhibit B).
4. The trial court held a hearing on AOF’s Motion to Compel on May
9th, 2014, before the Honorable W.C. Kirkendall (CR-II: at 1). On June 16th,
APPELLANT’S BRIEF -Page 8 D/921498v1 2014, Judge Kirkendall advised the parties that he was denying the Motion to
Compel because he found the arbitration agreement unconscionable and
unenforceable (Apx: Exhibit D). On October 20th, 2014 the trial court entered an
order denying the Motion to Compel (CR:III at 13) (Apx: Exhibit E).
APPELLANT’S BRIEF -Page 9 D/921498v1 SUMMARY OF THE ARGUMENT
Arbitration agreements are favored under Texas law and are presumed to be
fully enforceable. Appellee agreed to resolve certain disputes between the parties
through binding arbitration as a condition to his employment with AOF.
Appellee does not dispute this; nor does he dispute that claims made in Appellee’s
suit are within the scope of the arbitration agreement. Nevertheless, Appellee
claims, and the trial court found, that the arbitration agreement is unenforceable.
Appellee argues that the arbitration agreement is unconscionable, and thus
unenforceable, for three reasons:
a) that it is one sided in favor of the AOF;
b) that it unreasonably limits Appellee’s discovery; and
c) that it contains a cost sharing and fee splitting agreement.
(CC:II at p7 line 8)
The evidence submitted by Appellee, however, does not support the trial
court’s finding that the arbitration agreement was unconscionable on any of these
grounds. Moreover, the unambiguous terms of the arbitration agreement
conclusively show that the agreement is not one-sided in favor or AOF. Therefore,
the trial court erred in denying AOF’s Plea in Abatement and Motion to Compel
Arbitration.
APPELLANT’S BRIEF -Page 10 D/921498v1 AOF respectively requests this Court to reverse the trial court’s order
denying AOF’s Plea in Abatement and Motion To Compel Arbitration, and render
judgment in favor of Appellant compelling arbitration and abating pending suit
pending resolution of the arbitration proceeding.
APPELLANT’S BRIEF -Page 11 D/921498v1 ARGUMENT AND AUTHORITIES A. It Is Appellee’s Burden To Prove That The Arbitration Agreement Is Unconscionable
AOF filed its Plea in Abatement and Motion to Compel Arbitration. (Apx:
Exhibit A). The party moving to compel arbitration has the initial burden of proof
to establish by summary proof that an agreement to arbitrate exists and to show
that the claims asserted against it fall within the arbitration agreement’s scope. In
re Jim Walter Homes, Inc., 207 S.W.3d 888, 897 (Tex. App.—Houston [14th Dist.]
2000, orig. proceeding) (citing Jack B. Anglin Co. v. Tipps, 842 S.W.2d 266, 260
(Tex. 1992) (orig. proceeding)).
Appellee was an at-will employee of AOF. (Apx: Exhibit B p4) As a
condition to Appellee’s employment with AOF, Appellee had to agree to the
company’s Dispute Resolution Policy, which includes the arbitration agreement at
issue in this suit. (Apx: Exhibit B p4) The Texas Supreme Court has held that an
employer may make a “take it or leave it” offer to its at-will employees with
respect to arbitration of disputes as a condition to employment. In re Halliburton
Co., 80 S.W.3d 566, 572 (Tex. 2002); Hathaway v. General Mills, Inc., 711
S.W.2d 227 (Tex.1986).
AOF’s Offer of Employment, to which Appellee undisputedly agreed
provides, in pertinent part:
APPELLANT’S BRIEF -Page 12 D/921498v1 By accepting employment with AOF Services, LLC, I agree that any claim, controversy, or other dispute relating to my employment, separation from the company, or following separation from the company, shall be resolved by arbitration, in lieu of jury trial or any other legal proceeding, pursuant to the Federal Arbitration Act (Title 9, United States Code), and in accordance with the provisions of the AOF Dispute Resolution Policy (“DRP”), which I have received and been given an opportunity to read….”
(Axp: Exhibit B at p4) (emphasis added). The Dispute Resolution Policy
itself likewise includes a substantially identical arbitration provision. (Axp: Exhibit
B at p5) Appellee does not dispute that he agreed to the arbitration agreement or
that Appellee’s wrongful termination claim in the suit falls within the scope of
claims covered by the arbitration agreement. AOF thus met its initial burden of
showing that an arbitration agreement exists between the parties and that the
dispute in question falls within the scope of the agreement.
Texas law favors arbitration. In re FirstMerit Bank, N.A., 52 S.W.3d 749,
756 (Tex. 2001). When a party seeks to compel arbitration and proves a valid
arbitration agreement exists, a “presumption attaches favoring arbitration and the
burden shifts to the party resisting arbitration to establish a defense to
enforcement.” ReadyOne Industries, Inc. v. Flores, --- S.W.3d ---, No. 08-13-
00161-CV, 2014 WL 6982275 (Tex. App.—El Paso Dec. 10, 2014, no pet. h.).
Here, Appellee claims the arbitration agreement is unenforceable because it is
APPELLANT’S BRIEF -Page 13 D/921498v1 unconscionable. The burden of proving that a contract is unconscionable falls on
the party opposing the contract. In re Poly-Am., L.P., 262 S.W.3d 337, 348 (Tex.
2008); In re FirstMerit Bank, 52 S.W.3d at 756.
B. Appellee failed to prove that The Arbitration Agreement Is Unconscionable Appellee claimed several grounds of unconscionability in his response. The
trial court did not issue a memorandum opinion, and thus it is not clear on which
ground or grounds the court found the agreement unconscionable. AOF thus
addresses each ground asserted by Appellee. Two forms of unconscionability in
arbitration provisions are recognized in Texas: (1) procedural unconscionability,
which refers to the circumstances surrounding the adoption of the arbitration
provision, and (2) substantive unconscionability, which refers to the fairness of the
arbitration provision itself. Pilot Travel Ctrs., LLC v. McCray, 416 S.W.3d 168,
180 (Tex. App.—Dallas 2013, no pet.).
1. The Arbitration Agreement is a Bilateral Agreement to Arbitrate that Applies Equally To AOF and Appellee
Appellee’s first argument is that the arbitration agreement is substantively
unconscionable because it is unfairly one sided. Substantive unconscionability of
an arbitration agreement refers to the fairness of the arbitration provision itself.
Pilot Travel Ctrs., LLC v. McCray, 416 S.W.3d 168, 180 (Tex. App.—Dallas
APPELLANT’S BRIEF -Page 14 D/921498v1 2013, no pet.). Appellee’s argument is based solely to the arbitration agreement
itself, without any other supporting evidence.
Appellee argues, without authority or support, that only an employee’s
claims would be subject to arbitration, while “all claims that could ever be brought
by Defendant AOF” are excluded. This is contrary to the unambiguous language
of the arbitration agreement. The arbitration agreement provides that “any claim,
controversy, or other dispute relating to my employment, separation from the
company, or following separation from the company, shall be resolved by
arbitration.” This agreement applies equally to employer and employee.
The agreement has certain exceptions, but these exceptions again apply
equally to employer and employee, and are primarily for claims subject to
administrative procedures. Appellee has provided no evidence whatsoever to
support its claim that all claims by employers would be excluded by the agreement
– no legal authority, no examples, no affidavits.
The case Appellee relies on is wholly distinguishable and illustrates how an
agreement that a court found is one-sided is different from the AOF arbitration
agreement. In Royston, Rayzor, Vickery & Williams, L.L.P. v. Lopez, 2013 Tex.
App. LEXIS 7843 at *23 (Tex. App. – Corpus Christi, June 27, 2013), an attorney
engagement agreement provided that disputes about services provided under the
APPELLANT’S BRIEF -Page 15 D/921498v1 agreement would be subject to arbitration but a dispute over payment of services
would not. Id. at *2. That is two sides of the same coin, and it is thus not
surprising that, particularly in an attorney/client agreement where a fiduciary duty
is owed to the client, the court found this to be unfairly one-sided.
The opposite is true here. The arbitration agreement does not provide that
one type of claim is arbitrable for the employee but not for the employer. Thus,
Appellee failed to meet his burden of proving that the arbitration agreement is
substantively unconscionable.
2. The Arbitration Agreement Does Not Unfairly Limit Discovery
Appellee next argues that the arbitration agreement is substantively
unconscionable because it unfairly limits his discovery. The relevant provision of
the arbitration agreement states the following:
“Discovery – The arbitrator will permit and set deadlines for the completion of the following discovery: up to 15 Interrogatories per party, including subparts; up to 25 Requests for Production per party, including subparts; depositions of the parties to the proceeding and any technical experts designated to testify; third party document subpoenas as appropriate; any other discovery to which the parties agree.” (Apx: Exhibit B at p6)
This limitation on discovery is appropriate and fully enforceable. Indeed,
the Texas Supreme Court held that “limited discovery is one of arbitration’s ‘most
distinctive features.’” In re Fleetwood Homes of Texas, L.P., 257 S.W.3d 692, 695
(Tex. 2008) (per curium). The Court further noted that the argument that
APPELLANT’S BRIEF -Page 16 D/921498v1 “‘streamlined’ discovery makes arbitration unconscionable would nullify almost
all arbitration agreements. We hold that arbitration's limits on discovery for both
parties does not make it unconscionable.” Id. Likewise, the Supreme Court in
Poly-America held that discovery limits of 25 interrogatories and 25 requests for
production in the arbitration agreement at issue in that case were not substantively
unconscionable.
Appellee agreed to the discovery limits in the arbitration agreement as a
condition to his employment with AOF, and the discovery limits apply bilaterally.
Appellee’s so-called evidence in support of his response to the motion to compel in
which Appellee’s counsel states that in these types of cases he sends
“approximately 85 requests for production” and “21 interrogatories with permitted
subparts” (see Apx: Exhibit F p1) is no evidence at all.
Appellee fails to identify and provide specific evidence as to why the
Appellee cannot reasonably meet his proof burden based upon the discovery that is
provided for in the arbitration agreement. Appellee fails to provide specific
evidence of what information Appellee reasonably must obtain from AOF in the
additional 60 requests for production and the additional 7 Interrogatories that
Appellee’s attorney allegedly normally serves in this type of case, and why that
information is not otherwise reasonably obtainable through deposition testimony,
APPELLANT’S BRIEF -Page 17 D/921498v1 or any other discovery that the parties could agree to. Furthermore, Appellee fails
to provide any evidence that Appellee cannot reasonably obtain the information he
needs to meet his burden of proof under the discovery limitations in the arbitration
agreement.
3. The Fee-Splitting Agreement In The Arbitration Agreement Is Fair And Reasonable
Appellee’s final argument is that the arbitration agreement is substantively
unconscionable because it requires the Appellee to pay prohibitively excessive
arbitration costs. The arbitration agreement between AOF provides, in relevant
part:
“…An initiating Team Member will pay the first $100 in filing fees to the AAA and the Company will pay the portion of filing fees that exceed $100, plus any other administrative fees or costs (other than the arbitrator’s compensation). The arbitrator’s compensation will be paid 20% by the Team Member and 80% by the Company.” (Apx: Exhibit B at p6) * * * “…The arbitrator may award attorney’s fees and costs of arbitration to a prevailing party….” (Apx: Exhibit B at p6)
In Texas, fee-splitting provisions in employment arbitration agreements are
not per se unconscionable. Poly-America, 262 S.W.3d at 355-56. The
complaining party opposing arbitration must introduce some evidence that it will
incur arbitration costs that would deter enforcement of statutory rights in the
APPELLANT’S BRIEF -Page 18 D/921498v1 arbitral forum. Id. at 356 (emphasis added). Appellee has not provided such
evidence.
Mere “risk” that a claimant may have to pay prohibitive costs is too
speculative to justify the invalidation of an arbitration agreement. Poly-America,
262 S.W.3d at 356 (citing Green Tree Fin. Corp.—Ala. v. Randolph, 531 U.S. 79,
91 (2000)). In Poly-America, the Supreme Court found the arbitration clause
between an employer and employee that provided for fees to be split equally was
enforceable because: (1) the record contained no evidence of the employee’s likely
share of arbitration costs and (2) the arbitration agreement specifically provided
that the arbitrator could modify unconscionable terms. Id.
In McCray, the court considered an employment arbitration provision that
provided the costs and fees charged by the arbitrator would be borne equally by the
parties, but, like the arbitration agreement here, allowed for discretion by the
arbitrator to “reapportion the arbitration fees (except attorney fees) and costs in a
manner which the arbitrator deems equitable.” Additionally, the arbitration
agreement in McCray limited fees borne by the employee to no more than one-half
of the fees and costs. Here, the agreement is even more favorable to Appellee,
providing that AOF shall pay 80% of the fees and costs.
The court in McCray found that there was no evidence on the record APPELLANT’S BRIEF -Page 19 D/921498v1 indicating that the appellees did not have the financial ability to pay a portion of
the arbitrator’s fees or that arbitration would be more costly than litigation in state
court. McCray, 416 S.W.3d at 181. Consequently, the court concluded that the
employees failed to establish a defense of unconscionability and that the arbitration
provision should be enforced. Id. Likewise, as is discussed in detail below,
Appellee failed to provide competent evidence that he does not have the financial
ability to pay any portion of the arbitration fees or that the cost of litigation in state
court would be less costly.
Even if a plaintiff provides competent evidence to show the likely costs of
arbitration, he or she must also provide evidence demonstrating the likelihood of
incurring such costs. In re Weeks Marine, Inc., 242 S.W.3d 849, 859 (Tex. App.—
Houston [14th Dist.] 2007, mand. denied) (citing Green Tree, 531 U.S. at 92
(“where, as here, a party seeks to invalidate an arbitration agreement on the ground
that arbitration would be prohibitively expensive, that party bears the burden of
showing the likelihood of incurring such costs”). In In re Weeks Marine, the
agreement provided for subsequent allocation of fees between the parties after
Weeks Marine paid the filing fee and any deposit for arbitrator compensation. Id.
at 860. The Houston Court of Appeals held that the fee-splitting agreement was
not unconscionable and the arbitration agreement was enforceable. Id.
APPELLANT’S BRIEF -Page 20 D/921498v1 In support of his argument, Appellee offers the affidavits of Javier Espinoza
and Ronald Santorsola (Axp: Exhibits F and G).
The Espinoza affidavit is offered as evidence of the potential arbitrator fees
that might be incurred by the parties in the arbitration of this case, alleging that the
invoice attached to the affidavit is representative of the arbitration costs that would
be incurred in this case.
However, the Espinoza affidavit fails to establish what the anticipated
arbitrator’s fees would be and what Appellee’s share of the anticipated arbitration
costs would reasonably be anticipated to be in the arbitration of his claims with
AOF. There are several reasons the Espinoza affidavit fails to establish what the
anticipated arbitrator’s fees in this case would be and what Appellee’s anticipated
share of the anticipated arbitration costs in the arbitration of his claims with AOF
would be.
The Espinoza affidavit states that the arbitration of the Christine Torres v.
Stagg Restaurants case to which the attached aribtors’ invoice is attached was for
an arbitration that lasted only one day, stating in relevant part:
“…The arbitration took place in San Antonio, TX in the spring of 2013 and lasted only one day.” (Apx: Exhibit F at p1)
But this sworn statement directly conflicts with the arbitrator’s invoice which
APPELLANT’S BRIEF -Page 21 D/921498v1 identifies anticipated arbitrator’s fees and costs for three days of arbitration
(identified on the invoice as the days of 01/22/2013, 01/22/2013, and 01/23/2013),
stating in relevant part:
“..Your Share of the Neutral Compensation Deposit covering 3 days of Hearing…..7,500” (Apx: Exhibit F at p2)
Additionally, the Invoice/Statement reflects anticipated arbitrator’s charges
of $7,500 for 24 hours of Study.
The Invoice/Statement attached to the Espinoza affidavit appears to be only
a cost estimate, or a request for a deposit for a three day arbitration and a deposit
for 24 hours’ worth of “Study” by the arbitrator. The Invoice/Statement on its
face is not a representation of the actual costs incurred in the arbitration of the
Christine Torres v Stagg Restaurants case.
The Espinoza affidavit states that the “Total cost for the entire arbitration,
from start to finish, was $20,225.” This large figure is not represented on the
attached Invoice/Statement anywhere, and based upon the Invoice/Statement it
cannot be accurate or valid for the actual charges incurred for a one day arbitration,
which could only reasonably be guessed at being a third of the $17,250 figure of
the Invoice/Statement. There is no evidence that 24 hours of “Study” for the
arbiter would be applicable to the arbitration of Appellee’s claim against AOF.
APPELLANT’S BRIEF -Page 22 D/921498v1 Not only does the Espinoza affidavit completely misrepresent the arbitrator’s
actual charges for a 1 day arbitration based on the attached Invoice/Statement,
more critically it fails to ever state: a) that the arbitration of Appellee’s claims
against AOF in this dispute will require 3 days arbitration and 24 hours of “Study”
by the arbitrator so that an arbitrator’s fee in excess of $20,000 is reasonably
anticipated; and b) that the Appellee will likely actually incur arbitration costs
exceeding $5,000.
The Espinoza affidavit states that Appellee’s case against AOF is very
similar to the Christine Torres v Stagg Restaurants case, which at best implies that
it would require a 1 day arbitration, since it identifies the cases as being similar,
and not a 3 day arbitration. Based on the Invoice/Statement, the arbitrator’s fees
for a 1 day arbitration in the Christine Torres v Stagg Restaurants case could not
possibly be the $20,225 asserted in the affidavit. The Invoice/Statement does not
state what the arbitrator’s fees actually were for a 1 day arbitration in the Christine
Torres v Stagg Restaurants case.
What the Espinoza affidavit specifically states regarding the anticipated
arbitrator’s fees is as follows:
“If Mr. Santorsola is required to arbitrate his case through a similar arbitration association, the cost for the arbitration and litigation process will reasonably exceed $5,000, if he is require to pay approximately twenty percent of the costs”.
APPELLANT’S BRIEF -Page 23 D/921498v1 (Apx: Exhibit F at p1)
Espinoza’s statement in the affidavit alleges that the entire cost of the arbitration
and litigation process will reasonably exceed $5,000, but fails to specifically allege
what Mr. Santorsola’s portion of those costs would be. The affidavit fails to
specifically state what Mr. Santorsola’s anticipated portion of the anticipated
arbitrator’s fees would be.
In additional support for its argument, Appellee also submits the affidavit of
Ronald Santorsola (Apx: Exhibit G), which states in relevant part:
“…If it is determined that I must bring my lawsuit against
my employer in arbitration, and risk having to pay over
$5,000 in arbitrator fees, I will probably not continue with
my claim. This risk is too great for me and I do not have
that type of money…” (Apx: Exhibit G at p1)
Santorsola’s affidavit does not state that he reasonably anticipates incurring $5,000
in arbitrator’s fees in the arbitration of his claim against AOF.
Neither the Espinoza nor the Santorsola affidavits state what the actual
anticipated arbitrator’s costs Santorsola reasonably anticipates incurring would be
for the arbitration of his claim against AOF. The record fails to offer any
evidence of what the actual anticipated arbitrator’s costs Santorsola reasonably
anticipates incurring would be.
The record establishes that Appellee has failed to meet his burden of proof to
APPELLANT’S BRIEF -Page 24 D/921498v1 establish Appellee’s likely share of arbitration costs.
Finally, the arbitration agreement authorizes the arbitrator to award
arbitration fees and costs against a party. In relevant part, the arbitration
agreement states:
“…The arbitrator may award attorney’s fees and costs of arbitration to a prevailing party…” (Apx: Exhibit F at p6)
Because the arbitrator is authorized to award Appellee his arbitration costs if he
prevails in the arbitration, Appellee may not be responsible for any arbitrator’s fees
at all in the arbitration.
The record establishes as a matter of law that Appellee has failed to meet his
burden of proof to establish that the arbitration agreement is substantively
unconscionable because Appellee might incur arbitrator’s costs that would deter
enforcement of statutory rights in the arbitral forum.
APPELLANT’S BRIEF -Page 25 D/921498v1 CONCLUSION/PRAYER
For the reasons stated herein, AOF requests this Court to find that the trial
court erred by finding that 1) the arbitration agreement is unconscionable, and 2)
that the arbitration agreement is unenforceable. AOF requests this Court to find
that the trial court erred by denying the Plea in Abatement and Motion to Compel
Accordingly, AOF respectfully requests that the order denying the Plea in
Abatement and Motion to Compel Arbitration be reversed. In the alternative, AOF
prays that this Court remand this cause to the trial court for further proceedings
consistent with its opinion on the issues presented herein. AOF further requests
that this Court award it its costs of court on appeal.
AOF further prays for such other and further relief, both general and special,
at law or in equity, to which it is justly entitled, and for which it will ever pray.
APPELLANT’S BRIEF -Page 26 D/921498v1 Respectfully Submitted,
LAW OFFICES OF PAUL C. ALLRED
Paul C. Allred State Bar Number: 001102000
Campbell Centre II 8150 North Central Expressway, Suite 700 Dallas, Texas 75206 Telephone Number (214) 449-9496 Facsimile Number (214) 276-1325
ATTORNEY FOR APPELLANT
CERTIFICATE OF SERVICE
The undersigned attorney at law, does hereby certify that a true and correct copy of the foregoing attached instrument has been served upon the Appellee, Ronald Santorsola by and through his respective attorney of record on this the 13th day of February, 2015.
APPELLANT’S BRIEF -Page 27 D/921498v1 APPENDIX
Exhibit A: Defendant’s Original Answer, Plea in Abatement, and Motion to Compel Arbitration
Exhibit B: Affidavit for Admission of Business Records
Exhibit C: Plaintiff’s Response in Opposition to Defendants Motion to Compel Arbitration, Request for Evidentiary Hearing, and Motion for Sanctions
Exhibit D: Court’s Finding of Unconscionability
Exhibit E: Order Concerning Defendant’s Motion to Compel Arbitration
Exhibit F: Affidavit of Javier Espinoza
Exhibit G: Affidavit of Ronald Santorsola
APPELLANT’S BRIEF -Page 28 D/921498v1 Appellant’s Brief
Exhibit A
NO. 25,609
RONALD SANTORSOLA § IN THE DISTRICT COURT Plaintiff, § § V. § 25TH JUDICIAL DISTRICT § AOF SERVICES, LLC § Defendant. § OF GONZALES COUNTY, TEXAS
DEFENDANT'S ORIGINAL ANSWER, AND
PLEA IN ABATEMENT, and MOTION TO COMPEL ARBITRATION
NOW COMES Defendant, AOF Services, LLC, named Defendant in the above-entitled
and numbered cause, and files this Original Answer, Plea In Abatement, and Motion To Compel
Arbitration, and shows the Court:
I.
PARTY IDENTIFICATION INFORMATION
AOF Services, LLC has not been issued a driver's license. AOF Services, LLC has not
been issued a Social Security number.
II.
PLEA IN ABATEMENT – ARBITRATION
1. Plaintiff and Defendant entered into a written agreement whereby they agreed that
the claims Plaintiff has plead in this lawsuit would be subject to binding
2. The Dispute Resolution Policy contained in that certain Offer of Employment
document executed by the parties on June 13th, 2013 (a true copy of which is
attached hereto as Exhibit “A” and incorporated hereinafter for all purposes),
Defendant’s Original Answer,
Plea in Abatement, and Motion To Compel Arbitration Page: 1
states in relevant part:
“By accepting employment with AOF Services LLC, I agree that any claim, controversy or other dispute relating to my employment, separation from the company, or following separation from the company, shall be resolved by arbitration, in lieu of a jury trial or any other legal proceeding, pursuant to the Federal Arbitration Act (Title 9, United States Code), and in accordance with the provisions of the AOF Services LLC Dispute Resolution Policy (“DRP”), which I have received and been given an opportunity to read…”
3. Accordingly, AOF Services, LLC requests that this suit be abated and that the
dispute between the parties be subjected to arbitration between the parties.
III.
MOTION TO COMPEL ARBITRATION
4. The allegations in paragraphs 1, 2 and 3 are incorporated herein as if set forth at
length.
5. A valid written arbitration agreement exists between the parties and covers the
claims presented in this lawsuit.
6. Pursuant to Section 171.021(a) of the Texas Civil Practice and Remedies Code,
AOF Services, LLC requests that the Court order the parties to arbitrate the claims
presented in this suit and to stay this proceeding pending the completion of the
arbitration proceeding.
IV.
GENERAL DENIAL
7. Subject to the forgoing Plea in Abatement and Motion to Compel Arbitration,
Defendant AOF Services, LLC denies each and every allegation of Plaintiff's
Original Petition, and demands strict proof thereof as required by the Texas Rules
Plea in Abatement, and Motion To Compel Arbitration Page: 2
of Civil Procedure.
PRAYER
Defendant prays the Court will abate this lawsuit and order the parties to arbitrate the
claims herein; furthermore and after notice and hearing or trial, Defendant prays that the Court
will enter judgment in favor of Defendant, awards Defendant the costs of court, attorney's fees,
and such other and further relief as Defendant may be entitled to in law or in equity.
Plea in Abatement, and Motion To Compel Arbitration Page: 3
Respectfully submitted,
By: Paul C. Allred Texas Bar No. 01102000
8150 N. Central Expressway, Suite 700 Dallas, TX 75206 Tel. (214) 448-9496 Fax. (214) 276-1325 paulallred@msn.com
Attorney for Defendant AOF Services, LLC
FIAT:
A hearing shall be heard on Defendant’s Plea in Abatement and Motion To Compel Arbitration on _________________ at ____ o’clock ___m..
_____________________________ Judge Presiding
I certify that on April 11th, 2014, a true and correct copy of Defendant's Original Answer and Plea in Abatement was served on Plaintiff’s attorney of record, Javier Expinoza, 503. E. Ramsey, Suite 103, San Antonio, TX 78216.
Plea in Abatement, and Motion To Compel Arbitration Page: 4
EXHIBIT “A”
Plea in Abatement, and Motion To Compel Arbitration Page: 5
Appellant’s Brief
Exhibit B
EXHIBIT A
Exhibit C
Exhibit D
Exhibit E
CAUSE NO. 25,609
RONALD SANTORSOLA, § IN THE DISTRICT COURT
§
Plaintiff §
v. § 25 th JUDICIAL DISTRICT § AOF SERVICES, LLC § § Defendant. § GONZALEZ COUNlY, TEXAS
ORDER CONCERNING DEFENDANT'S MOTION TO COMPEL ARBITRATION
On this the 9th day of May 2014 came to be heard Defendant's Motion to Compel
Arbitration. The Court having considered the Motion and all applicable arguments, case law and
evidence is of the opinion that the following Order is appropriate and necessary.
IT IS THEREFORE ORDERED, ADJUDGED AND DECREED that Defendant's
Motion to Compel Atbitration is hereby in all things DENIED.
SIGNED and ENTERED this ,\" J\ th~\) day of \).\.L ~1t.( ,2014.
HON. JUDGE PRESIDING
PAUL C. ALLRED 8150 N. Central Expressway, Suite 700 Dallas, TX 75206
14 Appellant’s Brief
Exhibit F
Exhibit G