Courtland Building Company, Inc. v. Jalal Family Partnership, Ltd, Sohail Jalal, Individually and Yasmeen Jalal, Individually

403 S.W.3d 265, 2012 WL 5868900, 2012 Tex. App. LEXIS 9572
CourtCourt of Appeals of Texas
DecidedNovember 20, 2012
Docket14-12-00249-CV
StatusPublished
Cited by12 cases

This text of 403 S.W.3d 265 (Courtland Building Company, Inc. v. Jalal Family Partnership, Ltd, Sohail Jalal, Individually and Yasmeen Jalal, Individually) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Courtland Building Company, Inc. v. Jalal Family Partnership, Ltd, Sohail Jalal, Individually and Yasmeen Jalal, Individually, 403 S.W.3d 265, 2012 WL 5868900, 2012 Tex. App. LEXIS 9572 (Tex. Ct. App. 2012).

Opinion

OPINION

TRACY CHRISTOPHER, Justice.

Courtland Building Company, Inc. brings this interlocutory appeal challenging the trial court’s denial of its motion to compel arbitration and to stay further judicial proceedings. Because the claims for which Courtland seeks to compel arbitration are within the scope of a valid arbitration agreement, and because the respondents failed to establish that Courtland waived its right to enforce the agreement, we reverse and remand the case to the trial court with instructions to stay further litigation of those claims pending arbitration, and to determine whether it is appropriate to stay further litigation of those claims that Courtland does not seek to arbitrate.

I. Factual and Procedural Background

Sohail and Yasmeen Jalal entered into a written “cost-plus” residential construction contract with builder Courtland Building Company, Inc. In the contract, the Jalals were identified collectively as “Owner,” and they represented that they had “full ownership of, or a unilateral right to pur *269 chase, the Property in fee simple, free and clear of any liens or encumbrances” except for purchase-money liens and similar obligations. As relevant to this appeal, the contract contained the following provision:

16. RESOLUTION OF DISPUTES. The Parties desire prompt, inexpensive and efficient dispute resolution procedures and therefore agree that their disputes shall be governed by the following:
(c) Mediation-Binding Arbitration/Waiver of Jury Trial. The Owner and Builder agree that all controversies, claims (and any related settlements), or matters in question arising out of or relating to (i) this Contract, (ii) any breach or termination of this Contract, (iii) the construction of the Home and/or its repairs, (iv) any acts or omissions by the Builder (and its officers, directors or agents), and/or (v) any actual or purported representations or warranties, express or implied, relating to the Property and/or the Home (herein referred to collectively as a “Dispute”) shall be submitted to binding arbitration. The Parties will attempt to resolve any Dispute through informal discussions, and the Dispute may be submitted to nonbinding mediation under the Construction Industry Mediation Rules of the American Arbitration Association (“AAA”). In the event that one or both Parties do not desire to mediate, or the Dispute is not resolved by direct discussions and/or mediation, the Dispute shall be submitted to the AAA for binding arbitration in accordance with the Construction Industry Arbitration Rules of the AAA. The Parties will share equally all filing fees and administrative costs of the arbitration, however, any Award rendered may equitably reallocate those costs. The arbitration shall be governed by Texas law and the U.S. Arbitration Act, 9 U.S.C. §§ 1-16, to the exclusion of any provisions of state law that are inconsistent with the application of the Federal Act.

A dispute arose concerning the construction contract, and Courtland apparently sued the Jalal Family Partnership, Ltd. (“the Family Partnership”). 1 In May 2011, Courtland filed a motion to have the case referred to mediation. The Family Partnership did not oppose mediation, and the trial court granted the motion; however, the mediation apparently did not take place.

In August 2011, Courtland amended its pleadings to add claims against the Jalals in their individual capacities and as co-trustees of an entity referred to as “the Jalal Management Trust.” According to Courtland’s pleadings, the Jalal Management Trust is the general partner of the Family Partnership. 2 Courtland asserted claims against all of these parties for (a) *270 foreclosure of Courtland’s mechanic’s lien, (b) breach of contract, (c) declaratory-judgment concerning the validity of Court-land’s mechanic’s and materialman’s lien, (d) breach of fiduciary duty, (e) violations of chapter 28 of the Texas Property Code, (f) quantum meruit, and (g) common-law fraud. In addition, Courtland asserted that each Property Owner aided, abetted, and conspired with the others in the commission of these torts, and thus, each is vicariously liable for the torts of the others. The Jalals were served with citation in their individual capacities and as co-trustees of the Jalal Management Trust in December 2011, and they, together with the Family Partnership (collectively, “the Property Owners”), asserted counterclaims against Courtland for breach of the construction contract and for alleged violations of Chapter 27 of the Texas Property Code.

About five weeks after the Jalals were served, Courtland filed a motion to compel arbitration and abate further proceedings in the trial court. The Property Owners filed a response opposing the motion. Courtland and the Property Owners then amended their pleadings; in particular, Courtland sued an additional party, Qamar Khan; asserted claims against all of the opposing parties for fraudulent transfer; and added two requests for declaratory judgment, bringing the total number of such requests to three. The trial court denied the motion, and Courtland brought this interlocutory appeal challenging the trial court’s ruling. 3

II. ANALYSIS

When considering a motion to compel arbitration, a court must determine whether a valid arbitration agreement exists, and whether the claims in dispute fall within that agreement’s scope. In re Rubiola, 334 S.W.3d 220, 224 (Tex.2011) (orig. proceeding). Where, as here, the signatories to the contract have agreed that the federal arbitration act (the “FAA”) applies, courts apply state contract law in determining whether there is a valid agreement to arbitrate. See id. “Whether a valid arbitration agreement exists is a legal question subject to de novo review.” In re D. Wilson Constr. Co., 196 S.W.3d 774, 781 (Tex.2006) (orig. proceeding) (citing J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 227 (Tex.2003)). If a valid arbitration agreement exists, then a strong presumption arises favoring arbitration, and the burden shifts to the party opposing arbitration to raise an affirmative defense to enforcing arbitration. J.M. Davidson, Inc., 128 S.W.3d at 227.

A. A valid contract containing an arbitration provision covers most of the parties’ claims.

A party seeking to compel arbitration can meet its burden to establish that a valid arbitration agreement covers the claims at issue by producing a signed agreement covering these claims. See In re H.E. Butt Grocery Co., 17 S.W.3d 360, 367 (Tex.App.-Houston [14th Dist.] 2000, orig. proceeding) (citing In re Oakwood Mobile Homes, Inc.,

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Delirium TV LLC v. Tran Dang
Court of Appeals of Texas, 2024
Bradley Krause v. Kenneth Mayes
Court of Appeals of Texas, 2022
in the Estate of Rosa Elvia Guerrero
465 S.W.3d 693 (Court of Appeals of Texas, 2015)
Peter Smith v. Kenda Capital, LLC
451 S.W.3d 453 (Court of Appeals of Texas, 2014)
Scott D. Morgan v. Bronze Queen Management Company, LLC
474 S.W.3d 701 (Court of Appeals of Texas, 2014)
Pilot Travel Centers, LLC v. Joan McCray
416 S.W.3d 168 (Court of Appeals of Texas, 2013)

Cite This Page — Counsel Stack

Bluebook (online)
403 S.W.3d 265, 2012 WL 5868900, 2012 Tex. App. LEXIS 9572, Counsel Stack Legal Research, https://law.counselstack.com/opinion/courtland-building-company-inc-v-jalal-family-partnership-ltd-sohail-texapp-2012.