NUMBER 13-24-00308-CV
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI – EDINBURG
CJE CONSTRUCTION, LLC, Appellant,
v.
BOBBIE KRYNICKI AND THOMAS KRYNICKI, Appellees.
ON APPEAL FROM THE COUNTY COURT AT LAW NO. 6 OF HIDALGO COUNTY, TEXAS
MEMORANDUM OPINION
Before Chief Justice Tijerina and Justices West and Fonseca Memorandum Opinion by Justice Fonseca
Appellant CJE Construction, LLC argues by two issues that the trial court erred by
denying its motion to compel arbitration and plea in abatement. We reverse and remand.
I. BACKGROUND
This appeal arises from a contract between appellant and appellees wherein appellees agreed to purchase a lot of land at 2102 King Drive, Weslaco, Texas and have
appellant build a new home there. According to appellees, appellant fraudulently induced
them to purchase the land and services by promising to deliver a timely and quality
construction that appellant did not provide. The parties signed the contract on January
25, 2021, which included a promise for the home to be completed within 180 days.
Appellees claim that the home was not timely completed and that they incurred damages
due to selling their prior home in reliance on this deadline and being forced to pay for
alternative housing until construction was completed. They also allege that the home had
numerous defects.
Appellees filed suit on July 18, 2023, alleging a single cause of action for violations
of the Texas Deceptive Trade Practices Act (DTPA) and attaching the construction
contract as an exhibit to their petition. The contract includes the details of the construction
work appellant was to provide as well as the price, payment details, and the 180-day
construction deadline. Each page of this contract included signatures and/or initials from
both parties dated January 25, 2021. The contract has several addendums from a variety
of dates, each signed with similar signatures to the original contract.
On January 2, 2024, appellant filed its original answer, a plea in abatement, and
motion to compel arbitration. In these filings, appellant asserted that the construction
contract contained a binding arbitration clause that required the parties to resolve the
issues raised in appellees’ suit via arbitration and that the suit should be abated for the
completion of arbitration. The contract contains the following relevant language
concerning arbitration:
The parties agree that any dispute or claim arising under, or relating to, this Contract, any amendments thereto, the Property, Improvements, or any
2 dealings between the Owner and Builder or their representatives, shall first be submitted to mediation and, if not settled during mediation, shall thereafter be submitted to binding arbitration as provided by the Federal Arbitration Act (8 U.S.C. §§ 1 et. seq.) or, if applicable, by similar state statute, and not by or in a court of law. All decisions respecting the arbitrability of any dispute shall be decided by the arbitrator. Any cost or fee associated with filing a claim for arbitration is to be paid by the party filing same. The Parties agree to split the mediation fee and the arbitrator’s fees with all participating parties.
Appellees filed their “First Amended Original Petition” on March 25, 2024, adding a cause
of action for breach of contract but removing the contract as an exhibit. Appellees
amended their petition again on April 2, 2024, to remove the breach of contract cause of
action and add a fraud cause of action, and they amended their petition a third time on
May 21, 2024, to remove direct references to the construction contract.
The trial court held a hearing on the motion to compel arbitration and plea in
abatement on May 23, 2024. At the hearing, appellant asserted that the contract’s
delegation provision required any dispute over the arbitrability of the dispute to be
resolved by the arbitrator. Appellees argued that the dispute at issue in the suit did not
involve the contract and that the contract was not relevant. The trial court denied
appellant’s motions at the hearing and signed a written order on May 24, 2024. This
accelerated interlocutory appeal followed. See TEX. CIV. PRAC. & REM. CODE ANN. §
51.016.
Following the filing of this appeal, appellees filed a “Sixth Verified Amended
Original Petition,” asserting for the first time that appellees’ electronic signatures on the
contract were obtained through fraud and/or deceit and that the contract was void as a
result.
3 II. ANALYSIS
Appellant raises two issues on appeal. First, that the trial court improperly denied
its motion to compel arbitration and, second, that the trial court improperly denied its plea
in abatement. We address each issue in turn.
A. Motion to Compel Arbitration
Our review of the record indicates that a contract between the parties was
presented to the trial court as part of appellant’s motion to compel arbitration. The contract
language is not disputed by the parties. The contract contains an arbitration clause with
an agreement that “any dispute or claim arising under, or relating to, this Contract” be
resolved by arbitration under the FAA if not first resolved at mediation. However, appellee
challenged the applicability of this language on several grounds: 1) there was no evidence
of a valid contract before the trial court as appellant did not verify the contract, 2) the
entire contract was invalid because appellees’ signatures were induced via fraud, and 3)
there are extracontractual claims that do not fall under the scope of the arbitration clause.1
1. Standard of Review
We review a trial court’s order denying a motion to compel arbitration under an
abuse of discretion standard. See Henry v. Cash Biz, LP, 551 S.W.3d 111, 115 (Tex.
2018); McMillin Tex. Homes, LLC v. Oliver, No. 13-23-00286-CV, 2024 WL 484683, at *4
(Tex. App.—Corpus Christi–Edinburg Feb. 8, 2024, no pet.) (mem. op.). A trial court
abuses its discretion when it acts arbitrarily or unreasonably and without reference to any
guiding rules or principles. Indus. Specialists, LLC v. Blanchard Ref. Co., 652 S.W.3d 11,
16 (Tex. 2022) (citing Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241–42
1 Though this issue was not presented under the “Argument” section of the brief, as it was raised
in the “Statement of Facts”, we treat this as a separate ground for denial of the motion to compel arbitration.
4 (Tex. 1985)). However, while factual determinations are given deference, the trial court’s
legal determinations, including enforcement of an arbitration agreement, are subject to
de novo review. See In re Labatt Food Serv., L.P., 279 S.W.3d 640, 643 (Tex. 2009) (orig.
proceeding).
“A party seeking to compel arbitration under the FAA must establish that (1) there
is a valid arbitration clause, and (2) the claims in dispute fall within that agreement’s
scope.” In re Rubiola, 334 S.W.3d 220, 223 (Tex. 2011) (orig. proceeding); see also State
Stores, Inc. v. Eufracio, 2019 WL 3484430, at *2 (Tex. App.—Corpus Christi–Edinburg
Aug. 1, 2019, no pet.) (mem. op.). We use ordinary principles of contract law to determine
if there is a valid agreement to arbitrate. In re Kellogg Brown & Root, Inc., 166 S.W.3d
732, 738 (Tex. 2005) (orig. proceeding). There is a strong presumption in favor of
arbitration once it is established that the arbitration agreement exists and that the claims
fall within the scope of the arbitration agreement. See Royston, Rayzor, Vickery &
Williams, LLP v. Lopez, 467 S.W.3d 494, 499–500 (Tex. 2015). Refusal to enforce a valid
arbitration agreement constitutes a clear abuse of discretion. In re 24R, Inc., 324 S.W.3d
564, 566 (Tex. 2010) (orig. proceeding).
While courts typically resolve questions regarding the arbitrability of a dispute, it is
well-recognized that parties can contract to delegate disputes over arbitrability to the
arbitrator, which courts must enforce. TotalEnergies E&P, USA, Inc. v. MP Gulf of Mex.,
LLC, 667 S.W.3d 694, 702 (Tex. 2023). However, this delegation will only be enforced
when the agreement is “clear and unmistakable.” Robinson v. Home Owners Mgmt.
Enters., Inc., 590 S.W.3d 518, 532 (Tex. 2019). Further, even if the broader validity of a
contract is challenged but not the arbitration agreement specifically, “courts must enforce
5 the arbitration agreement and require the arbitrator to decide the challenge to the broader
contract.” TotalEnergies E&P, 667 S.W.3d at 701 (citing Rent-A-Ctr., W., Inc. v. Jackson,
561 U.S. 63, 70–71 (2010)).
2. Competent Evidence of Valid Contract
The party that seeks to compel arbitration bears the initial burden to prove the
arbitration agreement’s existence. See In re Estate of Guerrero, 465 S.W.3d 693, 704
(Tex. App.—Houston [14th Dist.] 2015, pet. denied). As a motion to compel arbitration
has the same evidentiary standards as summary judgment, any documents used to prove
there is a valid arbitration agreement must be authenticated “to constitute competent
summary judgment evidence.” Id. at 703–04. Further, a complete absence of
authentication is a defect of substance that may be first raised on appeal even absent an
objection at the trial court. Id. at 706–07.
As the party seeking to compel arbitration, it was appellant’s burden to prove the
existence of the arbitration agreement. While appellant attached a contract containing an
arbitration clause to its motion to compel arbitration, the motion was not verified and no
affidavit attesting to the authenticity of the contract was attached to the motion. Further,
at the trial court’s hearing on the motion to compel arbitration, no witnesses appeared to
verify the authenticity of the contract. Accordingly, there was no competent summary
judgment evidence to prove the existence of a valid contract. See id. at 703–04.2
However, appellant contends appellees’ challenge to the contract’s authenticity is
an act of gamesmanship because appellees attached the contract to their original petition
and initially brought breach of contract claims, constituting judicial admissions. While
2 While appellee did not raise this issue at the trial court level, they can raise this issue for the first
time on appeal. Id. at 706–07.
6 appellees’ subsequent pleadings withdrew the breach of contract claim and no longer
attached the contract, appellant contends this is still a judicial admission and that the live
pleading still stated that appellees “viewed and electronically signed” the contract.
Further, appellees’ suit revolves around appellant’s alleged failure to timely comply with
the construction contract and appellees contend they suffered damages because
appellant did not finish the construction project within the 180-day period contracted to.
The required elements for a judicial admission are: 1) a statement is made during
a judicial proceeding, 2) it is contrary to an essential fact or defense asserted by the
person making the admission, 3) it is deliberate, clear, and unequivocal, 4) if given
conclusive effect, it would be consistent with public policy, and 5) it is not destructive of
the opposing party’s theory of recovery. Amazon.com Servs., LLC v. De La Victoria, No.
14-23-00493-CV, ___ S.W.3d ___, 2024 WL 3941376, at *2 (Tex. App.—Houston [14th
Dist.] Aug. 27, 2024, no pet.) (citation omitted). If a party admits to signing a document,
the party is barred from disputing the document’s authenticity. See id. at *4; Mountain
View Health & Rehab. Ctr., Inc. v. Keele, No. 08-23-00033-CV, 2024 WL 3034878, at *4
(Tex. App.—El Paso June 17, 2024, pet. denied) (mem. op.).
We agree with appellant that appellees have judicially admitted to signing the
subject contract. Appellees’ live pleading at the time of the hearing, the “Third Amended
Original Petition”, constitutes a judicial admission as it discusses payments appellees
made to appellant “to extend the Lot 22 purchase contract” and explicitly references that
appellant “did not complete the home within 180 days as represented[.]” While appellees
amended their petition to avoid a direct reference to the contract as the source of the 180-
day requirement, the deadline’s source is apparent from the record. See In re Labatt Food
7 Serv., L.P., 279 S.W.3d at 643; see also In re Estate of Slaughter, 305 S.W.3d 804, 808
(Tex. App.—Texarkana 2010, no pet.) (explaining that construction of legal documents is
a question of law reviewed de novo).
Appellees’ pleading was littered with references to payments they made to
appellant in conjunction with the contract, even if deliberately removing direct references
to these amounts as being the contract price. While appellees’ most recent pleading,
“Plaintiffs’ Sixth Verified Amended Original Petition,” was not considered by the trial court
at the time of the hearing, this pleading also makes multiple references to appellees
signing the subject contract. Furthermore, appellees’ response to appellant’s motion
acknowledges “there is an agreement that contains language referring ‘disputes’ to
arbitration” and their brief to this Court also states that they signed the contract. See
Amazon.com Servs., 2024 WL 3941376, at *4. What’s more, at the trial court’s hearing,
appellees’ counsel conceded that the arbitration clause would be valid if they were
seeking relief pursuant to the contract, though he asserted that appellees’ claims are
unrelated to the contract. Finally, we cannot ignore direct statements from appellees
regarding their signature on the contract. While appellees argue these signatures were
induced via fraud, which we will address below, this still constitutes a binding judicial
admission that they signed the contract.
All of these statements were made as part of this judicial proceeding, are contrary
to appellees’ position that the contract is not an authentic document, and are deliberate,
clear and unequivocal. See id. at *2. Further, such admissions are not destructive of
appellees’ theories of recovery under the DTPA as the existence of the contract is
arguably foundational to appellees recovering under any of their causes of action. See id.
8 Enforcing this admission is consistent with the policy that parties who concede they
signed a contract waive a right to contest the authenticity of it. See id. at *4. To hold
otherwise would enable appellees’ brazen attempts at gamesmanship by suing on a
contract and claiming damages based directly on the appellant’s alleged failure to comply
with the contractual deadline of 180 days and then reversing course when contract
provisions they dislike are being enforced against them. Appellees cannot bring a suit
against appellant based on appellant’s failure to comply with a contract and then remove
such contentions by artful pleading to gain an unfair advantage.
Accordingly, appellant’s failure to authenticate the contract is not fatal and we will
treat this contract as competent evidence based on the judicial admissions contained in
appellees’ pleading, set forth in their response to the motion to compel arbitration, in their
appellate briefs, and made at the trial court’s hearing.
3. Delegation Clause
Having determined that the contract is competent evidence, we now examine
whether the trial court abused its discretion in denying the motion to compel arbitration.
The contract language references arbitration under the FAA and, therefore, appellant had
a burden to prove there was a valid agreement and that the claims fell under the scope
of arbitration. See In re Rubiola, 334 S.W.3d at 223. The parties do not dispute that the
contract contains language constituting an arbitration clause. The contract bears
signatures from both parties on every page indicating agreement. We find that the
contract constitutes evidence there was a valid agreement to arbitrate.
Appellees’ only other challenge to the arbitration clause at the trial court was that
appellees’ claims were extra-contractual and not under the scope of the arbitration
9 agreement. In other words, they challenge the arbitrability of the claims. See
TotalEnergies, 667 S.W.3d at 702. Appellant typically would bear a burden to prove that
the claims fall under the scope of arbitration. See In re Rubiola, 334 S.W.3d at 223.
However, the contract contained a delegation clause requiring the question of arbitrability
to be decided by the arbitrator. The delegation clause is enforceable because it was “clear
and unmistakable.” Robinson, 590 S.W.3d at 532. The contract plainly stated that all
disputes over the arbitrability of the claims would be decided by the arbitrator. Appellees
have not argued that such clause is vague or otherwise challenged the content of the
contract language.
Therefore, we find that the trial court abused its discretion in failing to enforce the
plain language of the delegation clause requiring the arbitrator to determine the
arbitrability of the claims. Courts have a duty to enforce valid delegation clauses, and the
trial court should have enforced this delegation clause by ordering the case to arbitration
and allowing the arbitrator to determine whether appellees’ claims fall under the scope of
arbitration. See TotalEnergies E&P, 667 S.W.3d at 701.
4. Fraudulent Inducement
Finally, appellees also contend that the contract is void because appellant made
fraudulent statements to induce them into signing the contract and that the potential
voidness of the contract is a gateway issue that the trial court must decide before the
question of arbitrability is reached. This issue was not raised at the trial court level and is
being raised for the first time on appeal. Regardless, appellees’ argument relies on a
misstatement of the law. If there is a challenge to the entirety of a contract but not
specifically to the arbitration or delegation clause, then the question of the contract’s
10 voidness must also be decided by an arbitrator. TotalEnergies E&P, 667 S.W.3d at 701
(citing Rent-A-Ctr., 561 U.S. at 70–71).
Appellees contend that the entire contract is potentially void due to alleged
inducement. But importantly, appellees do not specifically challenge the arbitration and
delegation clauses. Therefore, the trial court may not decide the voidness of the entire
contract. See id. Instead, due to the delegation clause, the parties’ agreement to delegate
arbitrability issues to the arbitrator requires the arbitrator to decide the question of
voidness. See id. Accordingly, this issue should also be ordered to arbitration.
We sustain appellant’s first issue.
B. Plea in Abatement
Generally, the decision to grant or deny an abatement lies within the trial court’s
sound discretion. In re Becker, 554 S.W.3d 780, 781 (Tex. App.—Amarillo 2018, no pet.).
The trial court has considerable discretion to manage its own docket. See id. at 782.
However, in cases where the suit is ordered to arbitration under the FAA, the trial court is
required to stay the case until arbitration resolves. 9 U.S.C. § 3.
Here, the parties’ arbitration agreement requires arbitration pursuant to the FAA.
As a result, the trial court was required to abate the case until the resolution of arbitration.
See id. Accordingly, the trial court abused its discretion when it denied the plea in
abatement. We sustain appellant’s second issue.
III. CONCLUSION
We reverse the trial court’s judgment denying appellant’s motion to compel
arbitration and plea in abatement. We remand the cause with instructions to grant the
motion to compel arbitration and plea in abatement and for further proceedings consistent
11 with this opinion. Due to the delegation clause, this Court does not opine on whether
appellees’ claims are subject to arbitration or whether the contract is void due to fraud,
and orders that these issues be resolved by the arbitrator.
YSMAEL D. FONSECA Justice
Delivered and filed on the 12th day of June, 2025.