in Re Adan Volpe Properties, LTD, Maricela Volpe, General Partner

Opinion

ACCEPTED 04-17-00384-CV FOURTH COURT OF APPEALS SAN ANTONIO, TEXAS 11/14/2017 3:07 PM

NO.04-17-00384-CV

IN THE FOURTH COURT OF APPEALS FILED IN 4th COURT OF APPEALS SAN ANTONIO, TEXAS 11/14/2017 3:07:48 PM KEITH E. HOTTLE IN RE ADAN VOLPE PROPERTIES, LTD., CLERK MARICELA VOLPE, GENERAL PARTNER Relators

ORIGINAL PROCEEDING FROM THE 341ST DISTRICT COURT OF WEBB COUNTY, TEXAS CAUSE NO. 2013-CVF-000127-D3

RELATORS’ MOTION FOR REHEARING EN BANC AND REQUEST FOR EMERGENCY STAY

Law Office of Juan A. Gonzalez State Bar Number 08129310 1502 Meadow Wood Weslaco, Texas 78596 Phone: (956) 550-1345 Fax: (956) 550-1348 Cell: (956) 494-7292 Email:juangonzalez387@msn.com Attorney for Relators

EMERGENCY RELIEF REQUESTED ORAL ARGUMENT NOT REQUESTED

1 TO THE HONORABLE FOURTH COURT OF APPEALS:

Pursuant to Texas Rules of Appellate Procedure 52.9, Relators, Adan Volpe

Properties, Ltd. and Maricela Volpe, General Partner (collectively “AVP”), file

this motion for rehearing en banc and for emergency stay and respectfully ask this

Court to grant their motion for rehearing en banc and reconsider the September 20,

2017 opinion and judgment denying the relief sought in AVP’s petition for writ of

mandamus and would show:

AVP urges that this case is worthy of en banc consideration because of the

extraordinary circumstances of the case and important considerations concerning the

conflict presented between the finality of judgment doctrine and the public policy in favor

of arbitration. AVP continues to maintain that there is no valid current agreement to

arbitrate; that the trial court erred in compelling arbitration in view of the earlier

related final judgment; that the Panel erred in failing to overrule that order and asks

this honorable Court to reconsider the September 20, 2017 opinion en banc; grant the

relief AVP seeks or; in the alternative, issue an opinion that sets forth the full Court’s

reasoning in denying the requested relief.

The P a n e l d i d n o t p r o p e r l y c o n s i d e r t h a t t h e t r i a l court conduct an evidentiary hearing on AVP’s contract defenses against arbitration when it issued its order compelling arbitration on the basis of the 2005 order and 1995 partnership agreement and as such was an abuse of discretion remediable by mandamus.

The trial court compelled arbitration in part based on the first trial court’s

2005 order and the 1995 partnership agreement but failed to properly consider 2 AVP’s defenses against arbitration. AVP believes that the Panel did not properly

consider, analyze and apply the law to the facts.

The factual underpinnings of this case demonstrate that for three and a half

years after the first trial court dismissed the first lawsuit, ordered the parties to

arbitration, and appointed an arbitrator who would later be determined to be

unqualified, Volpe did absolutely nothing to either modify, correct, or amend the

dismissal of the case as a whole or to advance the arbitration as required under the

AAA. As the claimant, Volpe was required to initiate the arbitration by filing a

demand for arbitration, the administrative filing fee, and producing a copy of the

arbitration agreement from the parties’ contract.1

1 R-4 (b) of the Arbitration Rules and Mediation Procedures provides: (b) Arbitration pursuant to a court order shall be initiated by the initiating party filing with the AAA a Demand for Arbitration, the administrative filing fee, and a copy of any applicable arbitration agreement from the parties’ contract which provides for arbitration. i. The filing party shall include a copy of the court order. ii. The filing fee must be paid before a matter is considered properly filed. If the court order directs that a specific party is responsible for the filing fee, it is the responsibility of the filing party to either make such payment to the AAA and seek reimbursement as directed in the court order or to make other such arrangements so that the filing fee is submitted to the AAA with the Demand. iii. The party filing the Demand with the AAA is the claimant and the opposing party is the respondent regardless of which party initiated the court action. Parties may request that the arbitrator alter the order of proceedings if necessary pursuant to R-32.

3 The Panel should have determined that Volpe’s delay in advancing arbitration

once it had been ordered by the trial court constituted a material breach of that

agreement that should h a v e precluded Volpe from trying to enforce the agreement

to arbitrate now. The Panel should have but did not overrule the trial court on this

issue. AVP requests that the Court en banc revisit and reconsider this result and

rectify it or at a minimum detail the reasoning for such a result.

The Panel should have determined that Volpe’s delay in advancing arbitration constitutes a material breach of the arbitration agreement precluded him from seeking arbitration twelve years after it was agreed upon.

Agreements to arbitrate stand on the same footing as other contracts. In re

Dillard Dep’t Stores, Inc., 186 S.W.3d 514, 515 (Tex. 2006). As a result, just like

other contracts, if a party materially breaches an arbitration agreement, the non-

breaching party is relieved of its obligations under the agreement. Mustang Pipeline

Co. v. Driver Pipeline Co., 134 S.W.3d 195, 196 (Tex.2004) (per curiam).

("It is a fundamental principle of contract law that when one party to a contract

commits a material breach of that contract, the other party is discharged or excused

from further performance.").

AVP believes the Panel improperly failed to find that Volpe substantially

invoked the judicial process by filing two different lawsuits and filing a motion for

summary judgment in a third lawsuit and that Volpe’s failure to diligently advance

arbitration once it had been ordered in 2005, constituted a material breach to AVP’s

4 detriment.

Here, the Panel improperly failed to find that the trial court should

have, but did not consider, and s h o u l d h a v e b u t did not conduct an evidentiary

hearing to determine whether Volpe’s delay in advancing arbitration after it had

been ordered constituted a material breach or a waiver to AVP’s detriment.

Volpe’s arguments in the trial court and before this Court address only the issue of

substantially invoking the judicial process but wholly ignore his failure or refusal to

advance the 2005 court ordered arbitration diligently and in accordance with the

AAA rules. AVP submits that the issue of whether Volpe’s failure or refusal to

advance the 2005 court ordered arbitration diligently should have precluded any

claimed right to arbitration merits en banc review for important jurisprudence and

practical reasons.

AVP asks the Court en banc to consider the delay and gamesmanship that

could result if parties are allowed to ignore their obligations to advance arbitration

after being ordered to arbitration without consequence. The sole remedy available

to a party prejudiced by such delay would be a court order compelling a return

to arbitration. The same offending party could then delay a second time and the

prejudiced party’s sole remedy, again, would be another order compelling

arbitration. In this case, even that remedy was not available because, as this court

previously determined; the trial court dismissed the case as a whole and could no

5 longer exercise jurisdiction over the matter. AVP believes that Panel did not properly

consider this issue and requests that this Court en banc reconsider the issue and find

that Volpe is not entitled to arbitration on this entire record.

While determining whether a refusal or failure to advance arbitration once it is

ordered by a court constitutes a material breach of an arbitration agreement must be

made on a case-by-case basis after considering the agreement's terms and the conduct

of the parties, Hernandez v. Gulf Group Lloyds, 875 S.W.2d 691, 693 (Tex.1994);

Tri-Star Petroleum Co. v. Tipperary Corp., 107 S.W.3d 607, 622 (Tex. App.-El Paso

2003, pet. denied), AVP requests the Court en banc consider the totality of the

circumstances and find that such failure or refusal to advance arbitration here is and

was a material breach that would preclude Volpe from now seeking arbitration.

In reconsidering the relief that AVP seeks, the Court en banc should instruct

the trial court at the very least to conduct an evidentiary hearing to determine

whether Volpe’s delay in advancing arbitration following the trial court’s 2005,

constitutes a material breach of the agreement to arbitrate and therefore precludes

Volpe from seeking arbitration almost twelve years later and at most to consider

AVP’s summary judgment motion.

The Panel improperly failed to consider that Volpe’s delay in advancing arbitration constituted waiver of the arbitration agreement that precluded him from seeking arbitration twelve years after it was agreed upon.

The trial court never considered or addressed this issue and the Panel

failed to order that the trial court, at a minimum should be required to consider this 6 issue. A party seeking to enforce an arbitration agreement can lose the right to

do so by waiver. See e.g. In re Fleetwood Homes of Texas, L.P., 257 S.W.3d

692 (Tex. 2008) (delay alone insufficient); In re Vesta Ins. Group, Inc., 192 S.W.3d

759, 763 (Tex. 2006) (same).

AVP asks the Court en banc to consider whether Volpe waived the right to

arbitration by substantially invoking the judicial process by filing two different

lawsuits and filing a motion for summary judgment in a third lawsuit, and also

waived the right to arbitration by failing to diligently advance arbitration once it

had been ordered in 2005, to AVP’s detriment. The trial court failed to consider,

as asserted by AVP in its motion for summary judgment that, in failing to take any

action to advance arbitration Volpe demonstrated a clear and unmistakable

disinclination to arbitrate to AVP’s substantial detriment and prejudice. See Miller

Brewing Co. v. Fort Worth Distrib. Co., Inc., 781 F.2d 494, 497 (5th Cir. 1986).

The Panel did not properly consider this issue. AVP asks the Court en banc to

reconsider the facts that Volpe initiated not one but two lawsuits seeking damages;

filed a motion for summary judgment in the lawsuit filed by AVP; that Volpe

turned to arbitration only after suffering an adverse result in the first suit; and that

to allow arbitration at this late date is inherently unfair given the record presented in

this case.

The P a n e l S h o u l d h a v e r e q u i r e d t h e trial court t o conduct an evidentiary hearing on AVP’s defenses against a r b i t r a t i o n 7 AVP urges that the Panel should have ordered the trial court to conduct an

evidentiary hearing on Volpe’s claim of mental incapacity. Because the trial court

failed to conduct an evidentiary hearing on the issue of capacity and did not make

a determination on the capacity issue and the validity of the 2001 buy/sale

agreement, there was no basis on which to grant Volpe’s motion to compel arbitration

under the provision of the 2001 buy/sale agreement and to have done so was an abuse

of discretion and error. The Panel should have found such to be the case. AVP requests

the Court en banc reconsider this issue and order that the trial court conduct such an

evidentiary hearing.

Motion for Emergency Stay

Relator, AVP, file this motion and ask the Court en banc to stay the

underlying trial court proceedings and court ordered arbitration pending resolution of

its motion for rehearing en banc, A stay of the challenged order is necessary in

order to preserve the questions this Court is n o w called upon to answer en banc

and to preserve the status quo while this Court considers AVP’s motion for rehearing

en banc on its petition for writ of mandamus seeking to vacate and dissolve the

order and to instruct the trial court to rule on AVP’s motion for summary judgment

in the procedural and substantive posture in which it existed on June 29, 2015.

Absent emergency relief, AVP will be forced to expend, time and resources in

participating in an arbitration solely because the trial court abused its discretion

8 and misapplied the law.

Conclusion & Prayer

For the reasons discussed herein, Relators, Adan Volpe Properties, Ltd. and

Maricela Volpe, General Partner respectfully ask this C o u r t t o grant their motion

for rehearing en banc and, upon reconsideration of AVP’s arguments and authorities

contained in its petition for writ of mandamus and this motion and the earlier

motion for rehearing, grant AVP the relief it seeks and any and all other relief in

law or in equity, AVP has shown itself entitled.

Respectfully submitted,

/s/Juan A. Gonzalez Juan A. Gonzalez Law Office of Juan A. Gonzalez State Bar Number 08129310 1502 Meadow Wood Weslaco, Texas 78596 Phone: (956) 550-1345 Fax: (956) 550-1348 Cell: (956) 494-7292 Email:juangonzalez387@msn.com Attorney for Relators, Adan Volpe Properties, Ltd. and Maricela Volpe, General Partner

9 CERTIFICATE OF SERVICE

I certify that on November 14, 2017 a true and correct copy of Relators’ Motion for Rehearing

En Banc and Request for Emergency Stay was served by counsel upon counsel of record listed below

as follows:

Via E-mail: acampero@camperotamez.com paynec@cbpaynelaw.com Via E-mail: marc@mgonzalezlawfirm.com Mr. Adolfo Campero Law Office of Marc A. Gonzalez Mr. Christopher Payne 1308 San Agustin 315 Calle Del Norte Suite Laredo, Texas78040 Laredo, Texas 78041 Phone: 956.728.9191 Phone: 956.796-0330 Facsimile: 956.791.9502 Facsimile: 956.796-0399

/s/ Juan A. Gonzalez Juan A. Gonzalez