Gilberto Rincones v. Whm Custom Services, Inc.

CourtCourt of Appeals of Texas
DecidedFebruary 29, 2012
Docket13-11-00075-CV
StatusPublished

This text of Gilberto Rincones v. Whm Custom Services, Inc. (Gilberto Rincones v. Whm Custom Services, Inc.) 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
Gilberto Rincones v. Whm Custom Services, Inc., (Tex. Ct. App. 2012).

Opinion

NUMBER 13-11-00598-CV

COURT OF APPEALS

THIRTEENTH DISTRICT OF TEXAS

CORPUS CHRISTI - EDINBURG

IN RE DIRECTORY ASSISTANTS, INC.

On Petition for Writ of Mandamus.

MEMORANDUM OPINION

Before Justices Rodriguez, Vela, and Perkes Memorandum Opinion by Justice Rodriguez1

Relator, Directory Assistants, Inc. (“Directory Assistants”), filed a petition for writ

of mandamus in the above cause on September 26, 2011, contending that the trial court

“abused its discretion by appointing an arbitrator in contravention to the Rule 11

agreement entered into between the parties.” Directory Assistants thus seeks to set

aside the order appointing the Honorable Veronica Gonzales as arbitrator. We

1 See TEX. R. APP. P. 52.8(d) (“When denying relief, the court may hand down an opinion but is not required to do so.”); TEX. R. APP. P. 47.4 (distinguishing opinions and memorandum opinions). conclude that Directory Assistants failed to avail itself of the agreed-upon method for

selecting an arbitrator, and thus the trial court did not abuse its discretion in appointing

an arbitrator. We deny the petition for writ of mandamus.

I. BACKGROUND

Real party in interest, Rio Grande Plumbing, Inc. (“Rio Grande”), entered into a

“Consulting Contract” with Directory Assistants whereby Directory Assistants provided

consulting services to Rio Grande concerning methods by which Rio Grande could save

on advertising costs. This contract contained an arbitration agreement2:

HOW WE RESOLVE DISPUTES:

Should a dispute arise, we both agree to try to resolve it with the other party. If we cannot, we both want to resolve it quickly, cost[-]effectively[,] and informally. To achieve that, we both agree to resolve any dispute arising out of or relating to this contract through confidential binding arbitration and agree to try to mutually choose the arbitration service, the location[,] and which state’s law will govern. If we are unable to come to a mutual agreement, or if one of us refuses to participate in choosing, the party filing the demand will have the right to make the choices unilaterally, as long as the filing party has made a good faith attempt to come to a mutual agreement. The non-filing party expressly consents to and waives any and all objections to the choices made.

After Directory Assistants allegedly performed its obligations under the contract and

presented its bill to Rio Grande, Rio Grande attempted to cancel the contract and

2 We express no opinion herein regarding the validity of this arbitration agreement insofar as it appears to allow the unilateral selection of an arbitrator by one party to the agreement. See, e.g., Lawson v. Archer, 267 S.W.3d 376, 383–384 (Tex. App.—Houston [14th Dist.] 2008, no pet.) (discussing McMullen v. Meijer, Inc., 355 F.3d 485, 488, 493–94 (6th Cir. 2004) (holding arbitrator selection provision unfair and unenforceable when provision granted employer unilateral control over pool of at least five arbitrators from which employer and employee would then mutually select one); Floss v. Ryan's Family Steak Houses, Inc., 211 F.3d 306, 314 (6th Cir. 2000) (stating arbitral forum fundamentally unfair when third-party arbitration services provider hired by employer—and arguably biased for that reason—had discretion to select pool of potential arbitrators); Hooters of Am., Inc. v. Phillips, 173 F.3d 933, 938-39 (4th Cir. 1999) (observing arbitration rules provided mechanism crafted to ensure biased decision-maker when employer selected one of three arbitrators and also created list from which employee's arbitrator and third arbitrator were to be selected)).

2 refused to pay on grounds that Directory Assistants breached the contract and was

guilty of fraud, negligence, and negligent misrepresentation.

On Tuesday, November 17, 2009, by email, a representative of Directory

Assistants asked Rio Grande about its arbitration choices under the contract:

Please let us know what arbitration service you feel would be equitable to use, what location would be equitable to conduct the arbitration[,] and what State’s law should govern this matter. Please let me know this information on or before November 20th, 2009. If you elect not to respond, we will make the choices pursuant to the contract.

Rio Grande did not answer these inquiries.

On November 23, 2009, Directory Assistants submitted a “Demand for

Arbitration” with the American Dispute Resolution Center, Inc. Rio Grande responded

by filing suit against Directory Assistants in the County Court at Law Number One of

Hidalgo County, Texas, and requesting a temporary restraining order to halt the pending

arbitration.3 The trial court granted Rio Grande’s request for a temporary restraining

order. Directory Assistants then moved to compel arbitration. After a hearing, the trial

court denied Directory Assistant’s motion to compel arbitration. By order signed on April

22, 2010, the trial court ordered the parties to mediation within sixty days with Robert

Smith serving as mediator.

Directory Assistants subsequently filed a petition for writ of mandamus with this

Court seeking to enforce the arbitration agreement in the contract. See In re Directory

Assistants, Inc., No. 13-10-00271-CV, 2010 Tex. App. LEXIS 6923, at *1 (Tex. App.—

Corpus Christi Aug. 24, 2010, orig. proceeding) (mem. op. per curiam). Before the

Court reached the merits of the proceeding, however, on June 21, 2010 the parties

3 The respondent in this original proceeding is the Honorable Rudolfo Gonzalez, Judge of the County Court at Law Number One of Hidalgo County, Texas.

3 entered into a written agreement regarding arbitration which provides, in relevant part,

as follows:

1. The parties agree that the dispute resolution provision of the Consulting Contract between the parties entitled “How We Resolve Disputes” is valid and enforceable, and [Rio Grande] waives any and all claims related to the validity and/or enforceability thereof.

2. The parties agree to submit all claims and causes of action arising out of the contract and facts made the basis of the above- referenced lawsuit to binding arbitration with Robert Smith, a licensed Texas attorney previously appointed by the Court to conduct mediation. The arbitration shall be conducted in 1/2 day (not to exceed 5 hours) only at a mutually agreeable date and time within the next 90 days, and all parties, their counsel and/or witnesses will attend via videoconference;

3. The Arbitrator, Robert Smith, shall conduct an initial teleconference with counsel within 2 weeks of the date of this Rule 11 agreement to understand the nature of the dispute, discuss any procedures and rules, discovery requests, etc. pursuant to the dispute resolution procedures set forth in the Consulting Contract, and set the date for the arbitration at a mutually agreeable date and time;

4. The Arbitrator shall apply Texas law to the substance of the dispute;

5. [Rio Grande] agrees to pay all arbitration costs with Mr. Smith up to and not to exceed $2[,]000, based upon Mr. Smith’s agreement to charge $900/party for a 1/2 day arbitration hearing (not to exceed 5 hours) plus a small admin[istrative] fee of $200. The arbitration fees shall include the initial conference, any pre-arbitration research by Mr.

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