In Re Golden Peanut Co., LLC

269 S.W.3d 302, 2008 Tex. App. LEXIS 8583, 2008 WL 4901110
CourtCourt of Appeals of Texas
DecidedNovember 13, 2008
Docket11-08-00215-CV
StatusPublished
Cited by18 cases

This text of 269 S.W.3d 302 (In Re Golden Peanut Co., LLC) 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
In Re Golden Peanut Co., LLC, 269 S.W.3d 302, 2008 Tex. App. LEXIS 8583, 2008 WL 4901110 (Tex. Ct. App. 2008).

Opinion

OPINION

RICK STRANGE, Justice.

This is a mandamus proceeding complaining of the trial court’s order denying Golden Peanut Company, LLC’s motion to abate and compel arbitration. We deny the petition.

I. Background Facts

Golden Peanut did not subscribe to workers’ compensation insurance. It instead provided employees with an Employee Injury Benefit Plan under the Employ *306 ee Retirement Income Security Act. 1 That plan included medical and disability benefits for injured employees and a death benefit in the case of job-related fatalities. Golden Peanut also gave its employees a document entitled Mutual Agreement to Arbitrate. Grant Drennan was an employee of Golden Peanut and acknowledged receiving Golden Peanut’s benefit plan and arbitration agreement and agreed to comply with the arbitration agreement.

Drennan was killed while in the course and scope of his employment. Drennan’s estate applied for and received plan benefits, but his widow Mindi Drennan elected to file suit against Golden Peanut on behalf of herself, their children, and Drennan’s estate rather than claim the plan’s death benefit. Drennan’s parents, Louie and Joyce Drennan, were subsequently added as plaintiffs. Golden Peanut filed a motion to abate and compel arbitration. Plaintiffs amended their petition and dropped the estate as a party. The trial court conducted a hearing and denied Golden Peanut’s motion.

II. Issues

Golden Peanut contends that the trial court abused its discretion by denying the motion to abate and compel arbitration. Plaintiffs respond that the arbitration agreement is void under Texas law, that it is not supported by consideration, and that it does not bind nonsignatories.

III. Standard of Review

Golden Peanut contends, and plaintiffs do not dispute, that the arbitration agreement is subject to the Federal Arbitration Act (FAA) 2 and that an order denying a motion to compel arbitration is properly reviewable by mandamus. 3 Even though federal law applies, we still utilize Texas procedural rules when reviewing a petition for writ of mandamus. In re Champion Technologies, Inc., 173 S.W.3d 595, 598 (Tex.App.-Eastland 2005, orig. proceeding). We review orders denying a motion to compel arbitration under the FAA for an abuse of discretion. Jack B. Anglin Co. v. Tipps, 842 S.W.2d 266, 271 (Tex.1992) (orig.proceeding). A trial court abuses its discretion if it acts without reference to any guiding rules or principles or acts in an arbitrary or unreasonable manner. Do wner v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex.1985). When reviewing matters committed to a trial court’s discretion, an appellate court may not substitute its own judgment for that of the trial court. Walker v. Packer, 827 S.W.2d 833, 839 (Tex.1992) (orig.proceeding). Nor may a reviewing court set aside the trial court’s determination unless it is clear from the record that the trial court could only reach one decision. Id. at 840.

The trial court’s interpretation of the arbitration agreement itself is a legal question subject to de novo review. See J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 227 (Tex.2003). Arbitration agreements are interpreted under traditional contract principles. Id. Our primary concern is to ascertain the true intentions of the parties as expressed in the instrument. R & P Enters. v. LaGuarta, Gavrel & Kirk, Inc., 596 S.W.2d 517, 518 (Tex.1980). We examine and consider the entire writing in an effort to harmonize and give effect to all the provisions of the contract so that none will be rendered meaningless. Universal C.I.T. Credit *307 Corp. v. Daniel, 150 Tex. 513, 243 S.W.2d 154, 158 (1951). No single provision taken alone will be given controlling effect. All the provisions must be considered with reference to the whole instrument. Myers v. Gulf Coast Minerals Mgmt. Corp., 361 S.W.2d 193, 196 (Tex.1962). The contracts are construed from a utilitarian standpoint, bearing in mind the particular business activity sought to be served. Reilly v. Rangers Mgmt., Inc., 727 S.W.2d 527, 530 (Tex.1987).

IV. Analysis

A party seeking to compel arbitration under the FAA must establish that there is a valid arbitration clause and that the claims raised fall within its scope. In re FirstMerit Bank, N.A., 52 S.W.3d 749, 754 (Tex.2001) (orig.proceeding). The first element includes gateway matters such as whether a valid arbitration clause exists and whether an arbitration clause is binding on a nonparty. In re Weekley Homes, L.P., 180 S.W.3d 127, 130 (Tex.2005) (orig.proceeding). Courts may not order parties to arbitrate unless they have agreed to do so. Belmont Constructors, Inc. v. Lyondell Petrochem. Co., 896 S.W.2d 352, 356-57 (Tex.App.-Houston [1st Dist.] 1995, no writ [appeal and orig. proceeding]). Consequently, despite a presumption favoring arbitration, a valid agreement to arbitrate remains a threshold requirement. See In re Kellogg Brown & Root, Inc., 166 S.W.3d 732, 737-38 (Tex.2005) (orig.proceeding) (presumption favoring arbitration arises only after party seeking to compel arbitration establishes valid agreement to arbitrate because purpose of FAA is to make arbitration agreements as enforceable as other contracts, not more so). 4

A. Is the Arbitration Agreement Void?

Plaintiffs argue initially that the arbitration agreement is void under Texas law because it violates Tex. Lab.Code Ann. § 406.033 (Vernon 2006). This statute provides in relevant part:

(a) In an action against an employer who does not have workers’ compensation insurance coverage to recover damages for personal injuries or death sustained by an employee in the course and scope of the employment, it is not a defense that:
(1) the employee was guilty of contributory negligence;
(2) the employee assumed the risk of injury or death; or

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269 S.W.3d 302, 2008 Tex. App. LEXIS 8583, 2008 WL 4901110, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-golden-peanut-co-llc-texapp-2008.