Foley & Lardner LLP, Successor-In-Interest to Gardere Wynne Sewell, LLP, Timothy Spear, James G. Munesteri, and Sharon M. Beausoleil v. Stephen H. Dernick and David D. Dernick

CourtTexas Court of Appeals, 1st District (Houston)
DecidedApril 30, 2026
Docket01-25-00109-CV
StatusPublished

This text of Foley & Lardner LLP, Successor-In-Interest to Gardere Wynne Sewell, LLP, Timothy Spear, James G. Munesteri, and Sharon M. Beausoleil v. Stephen H. Dernick and David D. Dernick (Foley & Lardner LLP, Successor-In-Interest to Gardere Wynne Sewell, LLP, Timothy Spear, James G. Munesteri, and Sharon M. Beausoleil v. Stephen H. Dernick and David D. Dernick) is published on Counsel Stack Legal Research, covering Texas Court of Appeals, 1st District (Houston) primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Foley & Lardner LLP, Successor-In-Interest to Gardere Wynne Sewell, LLP, Timothy Spear, James G. Munesteri, and Sharon M. Beausoleil v. Stephen H. Dernick and David D. Dernick, (Tex. Ct. App. 2026).

Opinions

Opinion issued April 30, 2026

In The

Court of Appeals For The

First District of Texas ———————————— NO. 01-25-00109-CV ——————————— FOLEY & LARDNER LLP, SUCCESSOR-IN-INTEREST TO GARDERE WYNNE SEWELL, LLP, TIMOTHY SPEAR, JAMES G. MUNISTERI, AND SHARON M. BEAUSOLEIL, Appellants V. STEPHEN H. DERNICK AND DAVID D. DERNICK, Appellees

On Appeal from the 269th District Court Harris County, Texas Trial Court Case No. 2021-77937

OPINION

This lawyer-client case presents an issue about waiver of the right to arbitrate.

The engagement letter has an arbitration clause, but the clients broke that promise

and went directly to court. The lawyers then did the following:

• They demanded arbitration even before filing an answer, but to no avail (December 2021). • They followed up on the arbitration demand with a combined answer and motion to compel arbitration and for stay (December 2021). • A month later—under the strict timeline prescribed by the legislature—they moved to dismiss under the TCPA, subject to the motion to compel arbitration (January 2022). • A few weeks after that, they persuaded the judge to grant the TCPA motion and dismiss the clients’ claims (March 2022).

When the clients appealed, this Court reversed the TCPA ruling and remanded for

further proceedings in August 2024. On remand, the lawyers supplemented the

motion to compel arbitration and set it for a hearing. But the clients argued that the

lawyers had now missed the train to arbitration.

Neither side has identified a case quite like this one. But the party asserting

waiver “bears a heavy burden of proof to show the party seeking arbitration has

waived its arbitration right,” and the presumption against waiver “governs in close

cases.” RSL Funding, LLC v. Pippins, 499 S.W.3d 423, 430 (Tex. 2016) (per

curiam). The burden has been said to be even heavier where the party seeking

arbitration demands arbitration at or prior to the suit commencing. See Polyflow,

L.L.C. v. Specialty RTP, L.L.C., 993 F.3d 295, 307 (5th Cir. 2021). That heavy

burden has not been met. In our view, the arbitration train was delayed but not

missed. In this case, the lawyers had two tools at their disposal: their contractual 2 right to arbitrate, and their statutory right to seek dismissal (on a short timeline)

under the TCPA. They pursued both—and on this record, they did not waive their

right to arbitrate.

We reverse the trial court’s order denying the lawyers’ motion to compel

arbitration.

Background

In 2013, four minority shareholders in a corporation hired Gardere Wynne

Sewell LLP to help with certain legal matters. The engagement letter devotes an

entire section to arbitration. That section begins:

Mediation/Arbitration

In the event of any dispute or controversy regarding or arising out of our representation of you, it is agreed that the same shall be subject to mediation before a mutually-agreeable mediator. If the mediation is unsuccessful, or if we are unable to agree upon a mediator within thirty days after the dispute arises, then the dispute shall be subject to binding arbitration at Houston, Texas. The arbitration shall be administered by the American Arbitration Association in accordance with its then current rules and procedures.

It then details the pros and cons of arbitration. The clients signed the letter on a page

that starts with the words: “THIS LETTER CONTAINS AN AGREEMENT TO

RESOLVE DISPUTES BY ARBITRATION.”

3 The firm took on the engagement, which lasted for years and involved details

that we have summarized elsewhere.1 By November 2021, two of the clients felt that

the firm had done them wrong, so they sued the firm and three of its lawyers. They

alleged that the arbitration clause they signed was not “adequately disclosed.” We

will refer to all the defendants together simply as Foley.

The procedural history matters greatly to the issue of waiver, so we will lay it

out in some detail. On December 13, 2021, Foley’s counsel sent the clients’ counsel

a letter noting that the 2013 engagement letter contained an arbitration clause. He

asked whether the clients would agree to stay the litigation and advance their claims

in arbitration. “Absent such an agreement, Foley shall file an application to compel

arbitration and to stay all judicial proceedings.”

No such agreement was forthcoming, and a few days later Foley moved to

compel arbitration in a document entitled “Application to Compel Arbitration and

Stay Proceeding” that also contained an original answer made “subject to” the

motion to compel. It did not set the motion for a hearing.

In January 2022, Foley filed a TCPA motion, entitled “Defendants’ Motion to

Dismiss Under Tex. Civ. Prac. & Rem. Code § 27.003.” On page 1, Foley stated that

1 See Dernick v. Foley & Lardner LLP, No. 01-22-00251-CV, 2024 WL 3941011, at *1–4 (Tex. App.—Houston [1st Dist.] Aug. 27, 2024, no pet.) (mem. op.). 4 it “expressly preserves and does not waive its right to arbitrate any claims not

ultimately subject to dismissal.”

As part of the effort to reserve its rights to arbitrate, Foley cited the TCPA’s

short deadlines as a reason for invoking the statute at the beginning of the lawsuit:

“[A] litigant must assert its right to dismissal in court no later than 60 days after

service of the action, a hearing on such a motion must be set no later than 60 days

after service of the motion . . . and the court must rule on such a motion no later than

the 30th day after the hearing on such a motion concludes.” To support its view that

a dismissal motion need not result in waiver, Foley cited In re Vesta Insurance

Group, Inc., 192 S.W.3d 759, 764 (Tex. 2006) (per curiam), with a parenthetical

stating, “motion to dismiss for lack of standing does not sufficiently invoke judicial

process to overcome strong presumption against waiver.”

On March 11, 2022, the clients filed a response to the TCPA motion. They

regarded the TCPA motion as a tactic intended “solely to delay” and brought by the

defendants “because they know that the TCPA dismissal mechanism is arguably not

available to them in arbitration.” The clients contended that the motion was frivolous

and that the court should award them fees.

On March 21, 2022, the trial court sided with Foley and granted the TCPA

motion, dismissing the claim and awarding Foley its fees and costs. The clients

appealed to this Court. We abated the appeal pending a supreme court decision in

5 another lawyer liability case with a TCPA issue. After that decision, we lifted the

abatement, reversed the TCPA ruling, and remanded for further proceedings. See

Dernick v. Foley & Lardner LLP, No. 01-22-00251-CV, 2024 WL 3941011, at *15

(Tex. App.—Houston [1st Dist.] Aug. 27, 2024, no pet.) (mem. op.). By the time the

mandate issued on December 9, 2024, about two years had passed.

The trial court issued a new docket control order on December 18, 2024. On

January 6, 2025, Foley filed a notice of hearing and set the motion to compel for an

oral hearing on February 7, 2025. The trial court denied the motion, and Foley then

brought this appeal.

Waiver of Right to Arbitrate

The parties agree on the legal framework but disagree about its application. In

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Foley & Lardner LLP, Successor-In-Interest to Gardere Wynne Sewell, LLP, Timothy Spear, James G. Munesteri, and Sharon M. Beausoleil v. Stephen H. Dernick and David D. Dernick, Counsel Stack Legal Research, https://law.counselstack.com/opinion/foley-lardner-llp-successor-in-interest-to-gardere-wynne-sewell-llp-txctapp1-2026.