Fourth Court of Appeals San Antonio, Texas MEMORANDUM OPINION No. 04-16-00286-CV
Margaret Landen SAKS and Philip M. Ross, Appellants
v.
Marcus P. ROGERS, A. Chris Heinrichs, J. Barrett Shipp, and Heinrichs & De Gennaro, P.C., Appellees
From the Probate Court No. 1, Bexar County, Texas Trial Court No. 2011-PC-3466B Honorable Kelly Cross, Judge Presiding
Opinion by: Patricia O. Alvarez, Justice
Sitting: Rebeca C. Martinez, Justice Patricia O. Alvarez, Justice Luz Elena D. Chapa, Justice
Delivered and Filed: July 26, 2017
AFFIRMED
This appeal stems from the probate court’s entry of final judgment confirming an
arbitration award. The judgment also included a monetary sanction award against Appellant Philip
M. Ross. On appeal, Appellants assert the probate court erred in the following: (1) granting
Appellees’ motion to abate and compel arbitration; (2) overruling Appellant Margaret Landen
Saks’s motion to overrule objections to arbitration; (3) compelling arbitration on claims not within
the scope of the arbitration agreement; (4) entering judgment on the arbitrator’s sanction order; 04-16-00286-CV
and (5) entering the order confirming award of final judgment. We affirm the probate court’s
judgment.
FACTUAL AND PROCEDURAL BACKGROUND
The original lawsuit, from which this case arises, was filed in 2011. Several appeals
pending from the initial lawsuit have been before this court. Because this current appeal involves
factual allegations from the previous causes, a rather lengthy factual background is set forth.
A. Previous Appeal: Davis v. Merriman, Nos. 04-13-00518-CV, 04-13-00875-CV, 2015 WL 1004357 (Tex. App.—San Antonio Mar. 4, 2015, pet. denied)
On January 2, 1991, Sandra C. Saks created the Saks Children Family Trust a/k/a ARFL&L
benefitting her children, Gloria Lauren Nicole Saks (Lauren) and Margaret Landen Saks (Landen).
Twenty years later, on August 17, 2011, Lauren filed suit against the trustee, Diane Flores, alleging
breach of fiduciary duty and failure to comply with the trust agreement. Lauren sought an
accounting, constructive trust, and the removal of the trustee. On December 21, 2011, the trustee
ordered the trust dissolved. A week later, on December 28, 2011, an interim trustee, Marcus
Rogers, was appointed by the probate court; the interim trustee concluded that any attempt by the
original trustee to terminate the trust was ineffective.
On April 2, 2012, the parties entered into a mediated settlement agreement (MSA) which
included an arbitration agreement for “disputes aris[ing] with regard to the interpretation and/or
performance of [the MSA] or any of its provisions, including the form of further documents to be
executed . . . .” Although not present at the mediation, Landen provided Lauren a power of
attorney to act on her behalf for the MSA. On May 8, 2012, the probate court signed an order
approving the MSA and authorizing the interim trustee to sign the MSA.
On August 21, 2012, Lauren filed a motion to compel arbitration. In that motion, Lauren
asserted that matters regarding the interpretation and performance of the MSA remained
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unresolved. After a failed attempt at a court-ordered mediation, the matter was heard before an
arbitrator on October 18, 2012. The arbitrator entered findings of fact, specifically that the parties
to the MSA included Lauren, Landen, the original trustee, Sandra, and the interim trustee. 1 The
arbitration award ordered Sandra and the original trustee to execute certain documents conveying
to the trust all of their rights, title, and interests in certain property “no later than October 31,
2012.” On May 7, 2013, the probate court signed the final judgment confirming the arbitrator’s
award and entered the award as the judgment of the court.
On August 16, 2013, the probate court granted Appellee Shipp’s motion to enforce the
probate court’s May 7, 2013 order. The probate court ordered Sandra and Landen to execute and
deliver several conveyance agreements set out in the arbitration award.
On August 16, 2013, Landen filed an objection to the application for the order enforcing
judgment in which she asserted (1) she was not a party to the lawsuit, (2) the probate court had
lost plenary power, and (3) the judgment was insufficient to serve as proof of title. More
specifically, Landen averred the only parties to the MSA were Lauren, Sandra, and the original
trustee. Landen asserted that she was not a party to either Lauren’s lawsuit or to the MSA; she
further contended her “approval” to the MSA was signed by Lauren’s attorney, A. Chris Heinrichs,
under apparent authority of a limited power of attorney prepared by Heinrichs, who was not
1 Paragraph 25 of the Arbitrator’s Findings and Final Award, dated April 2, 2012, provided as follows:
25) The MSA provides for the payment of fees and expenses of Heinrichs & De Gennaro, P.C. as part of the Parties’ agreement. In this regard, the following findings apply: a) Landen granted her sister, Lauren, the authority to act on Landen’s behalf in the Mediated Settlement Agreement which took place on April 2, 2012 under a Limited Special Power of Attorney, a true and correct copy of which is part of the arbitration record as Exhibit 5; b) Landen did not revoke the power of attorney prior to April 2, 2012, or prior to actual written approval of the MSA as reflected in Exhibit 6; c) Landen is bound to the undertaking in the MSA; d) Landen ratified the MSA by her subsequent written approval of it as shown in Exhibit 6; e) Landen’s attempted revocation of her consent to the terms of the MSA conflicts with the terms of the MSA which specifically provides it is not revocable; thus, Landen is bound to the terms of the MSA.
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Landen’s attorney. Landen conceded that she signed a limited power of attorney designating
Lauren, as her attorney in fact, and authorizing Lauren to settle the pending litigation in Landen’s
best interest. Landen argued, however, that she was misled by Lauren’s attorneys, Heinrichs and
Barrett Shipp, who drafted the power of attorney and advised her to sign it. Landen also contended
that Heinrichs and Shipp negligently misrepresented that it was in Landen’s best interest to sign
the power of attorney and to agree to the terms of the MSA. When Landen sought the advice of
an attorney of her choice, she discovered that, after the trust was dissolved, the MSA provided for
payment of hundreds of thousands of dollars for attorney’s fees and ad litem fees from the trust
assets.
On June 17, 2013, the probate court ordered Sandra and Landen to execute and deliver four
conveyance documents, no later than October 4, 2013. When Sandra and Landen failed to comply,
the interim trustee filed a motion to enforce orders and execute conveyance documents. On
November 14, 2013, the probate court signed an order in aid of enforcement of judgment, finding
that Sandra and Landen failed to comply with the arbitration award and probate court’s judgment
by failing to execute the court-ordered documents.
Landen appealed the probate court’s order in aid of enforcement. In her brief Landen
argued: (1) the probate court lacked subject matter jurisdiction to compel Landen to convey her
interests; (2) the probate court lost plenary power prior to the entry of judgment; and (3) the probate
court’s order in aid of enforcement was void. Landen did not appeal the arbitrator’s finding that
she was a party to the MSA. On March 4, 2015, this court affirmed the probate court’s order in
aid of enforcement. See Davis v. Merriman, Nos. 04-13-00518-CV, 04-13-00875-CV, 2015 WL
1004357, at *6 (Tex. App.—San Antonio Mar. 4, 2015, pet. denied).
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B. Current Appeal
On March 19, 2014, pending this court’s opinion regarding the probate court’s order in aid
of enforcement, Landen filed an original petition against Heinrichs and his law firm, Heinrichs &
De Gennaro, P.C., Shipp, and Rogers (the interim trustee). In her petition, Landen alleged
negligent representation, fraudulent inducement, conspiracy, and fraudulent claim against real
property. The defendants filed a motion to abate and to compel arbitration. In her response,
Landen asserted, inter alia, she was not a party to the MSA, she did not agree to the arbitration,
her claims were not disputes between the parties to the MSA, and because the MSA did not require
Landen to convey or assign her interests in the partnerships or ventures, her current claims were
not related to an interpretation or enforcement of the MSA.
On June 4, 2015, following a hearing on the motion to abate and compel arbitration, the
probate court made the following findings of fact:
(1) Margaret Landen Saks was a party to the Mediated Settlement Agreement dated April 2, 2012, by way of a Power of Attorney given to her sister Lauren Saks and in her appearance in subsequent enforcement hearings and in her appeal regarding the arbitration issues arising out of the same MSA; (2) Landen Saks now claims a conspiracy in procurement of the [power of attorney], negligent misrepresentation, fraudulent inducement and other acts and omissions by A. Chris Heinrichs, Marcus P. Rogers, J. Barrett Shipp and Heinrichs & De Gennaro, P.C.; (3) The issue before the Court is whether the claims against A. Chris Heinrichs, Marcus P. Rogers, J. Barrett Shipp and Heinrichs & De Gennaro, P.C. are within the scope of the MSA; (4) Landen Saks’s claims against Marcus Rogers arise from, are clearly interwoven with and factually intertwined matters that have a significant relationship to the MSA; and (5) Landen Saks’s claims against A. Chris Heinrichs, J. Barrett Shipp and Heinrichs & De Gennaro, P.C. are also factually intertwined with the MSA and have a significant relationship to the MSA.
The probate court granted the motion to abate and compel arbitration.
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On December 22, 2015, attorney Philip Ross represented Landen during a telephonic
conference with the arbitrator. The arbitrator ordered Landen “to appear for such deposition in
San Antonio before January 31, 2016.” After Ross failed, or refused, to provide a date for Landen
to appear for her deposition, the arbitrator noticed a telephonic conference on January 18, 2016.
During the January 18, 2016 conference, Ross again represented Landen. Following
arguments of counsel, the arbitrator ordered Landen to appear for her deposition, in person, at the
Law Offices of Attorney Royal Lea, on January 25, 2016.
On January 24, 2016, Ross notified the arbitrator that he did not expect Landen to appear.
The arbitrator ordered Ross to appear at the deposition regardless of whether Landen would be
attending the deposition; a telephonic conference was ordered for morning of January 25, 2016.
The following morning, on January 25, 2016, Ross informed the arbitrator, for the first time, that
he had a hearing in court and would not appear at Mr. Lea’s office; neither Landen nor Ross
appeared for deposition or contacted the arbitrator as ordered. Additionally, Landen failed to
respond or comply with the arbitrator-ordered discovery requests that were due on January 29,
2016.
The arbitrator requested dates for a hearing to address sanctions against Landen for her
failure to attend the oral deposition or otherwise participate in discovery. On February 9, 2016,
Ross emailed the arbitrator that he was available to attend the hearing on February 19, 2016. The
hearing was scheduled for February 19, 2016. On February 18, 2016, Ross notified the arbitrator,
by email, that neither he nor Landen would attend the February 19, 2016 hearing or any other
conference or proceeding on this case.
On February 19, 2016, a hearing was held before the arbitrator. All parties, either
individually or through counsel, received notice. Neither Landen nor her attorney attended the
hearing. On February 25, 2016, the arbitrator entered the following findings: -6- 04-16-00286-CV
• Landen was the claimant in this case and initiated the proceedings; • Landen’s claims are unquestionable about interpretation or enforcement of the MSA and are subject to the arbitration clause; • Landen and her attorney completely failed to participate in the process of exchanging information before the hearing on the merits to allow the parties a meaningful opportunity to obtain discovery; and • Landen’s refusal to participate denied the parties the opportunity to review the evidence supporting Landen’s claims in advance of the arbitration and to prepare a defense against the asserted claims.
As a sanction, the arbitrator concluded in its order, “it is appropriate that [Landen] be prohibited
from offering or presenting any evidence in support of her claims in this case.”
On March 30, 2016, the probate court entered an order confirming the February 25, 2016
arbitrator’s order; the probate court further imposed and confirmed the sanctions awarded by the
arbitration order. The probate court further imposed $20,000.00 in sanctions, payable to
Appellees, for vexatiously multiplying the litigation in this cause to the detriment of Appellees.
On April 6, 2016, following the arbitration conducted the previous day, the arbitrator issued
an award that Landen take nothing in her claims against Heinrichs, Shipp, Heinrichs & De
Gennaro, P.C., and Rogers. 2
Landen filed a motion in opposition to the arbitration award asserting the arbitrator lacked
jurisdiction to hear the matter. On April 11, 2016, the probate court entered an order confirming
the arbitrator’s April 6, 2016 award and for entry of final judgment; the probate court further
ordered that the court’s order of March 30, 2016, that “Marcus Rogers, J. Barrett Shipp, A Chris
Heinrichs and Heinrichs & De Gennaro, P.C., jointly and severally shall recover judgment of
$20,000 (Twenty Thousand Dollars) from Philip [Martin] Ross a/k/a Philip Ross continues to be
the order of this court.” This appeal ensued.
2 Appellees Heinrichs, Shipp, and Heinrichs & De Gennaro, P.C. were further awarded $82,758.18 from Landen based on their counterclaim.
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STANDARD OF REVIEW
An appellate court reviews a trial court’s decision to grant or deny a motion to compel
arbitration under an abuse of discretion standard. City of San Antonio v. Cortes, 468 S.W.3d 580,
583 (Tex. App.—San Antonio 2015, no pet.). Under this standard, we defer to the trial court’s
factual determinations if they are supported by the evidence and review its legal determinations de
novo. In re Labatt Food Serv., 279 S.W.3d 640, 643 (Tex. 2009) (orig. proceeding); Cortes, 468
S.W.3d at 583. “Thus, the existence and the applicability of an arbitration agreement is a question
of law reviewed under a de novo standard.” Cortes, 468 S.W.3d at 583.
ARBITRABILITY
In her first three issues on appeal, Landen contends that because her claims were not within
the scope of the MSA, the probate court’s order granting Appellee’s motion to abate and to compel
arbitration, and overruling her objections thereto, were in error.
A. Motion to Compel Arbitration
The arbitration agreement in question is governed by the Texas Arbitration Act (TAA).
Davis v. Merriman, 2015 WL 1004357, at *2 (citing TEX. CIV. PRAC. & REM. CODE ANN.
§ 171.001-.098 (West 2011)). A party seeking to compel arbitration must (1) establish the
existence of a valid arbitration agreement; and (2) show that the claims asserted are within the
scope of the agreement. See TEX. CIV. PRAC. & REM. CODE ANN. § 171.021(a); G.T. Leach Bldrs.,
LLC v. Sapphire V.P., LP, 458 S.W.3d 502, 524 (Tex. 2015); In re AdvancePCS Health L.P., 172
S.W.3d 603, 605 (Tex. 2005) (orig. proceeding); In re First Merit Bank, N.A., 52 S.W.3d 749,
753–54 (Tex. 2001) (orig. proceeding); Cortes, 468 S.W.3d at 583. The party who seeks to compel
arbitration bears the burden to prove the existence of the arbitration agreement; generally, this
requires establishing proof of a contractual right to that remedy. See AdvancePCS Health, 172
S.W.3d at 605. -8- 04-16-00286-CV
The burden then shifts to the party opposing arbitration to establish some ground upon
which to nullify the arbitration agreement. See id. at 607; J.M. Davidson, Inc. v. Webster, 128
S.W.3d 223, 227 (Tex. 2003). “[O]rdinary principles of state contract law determine whether there
is a valid agreement to arbitrate.” In re Kellogg Brown & Root, 166 S.W.3d 732, 738 (Tex. 2005)
(orig. proceeding). As such, courts treat arbitration agreements like other contracts terms when
applying legal rules of interpretation. See id. Only defenses relating solely to the arbitration
clause, not the contract as a whole, are applicable. See FirstMerit Bank, 52 S.W.3d at 756 (“[I]f
they are to defeat arbitration,” defenses “must relate specifically” to arbitration provisions;
“[d]efenses that pertain to the entire . . . contract can be arbitrated.”)). Absent evidence supporting
a defense to the arbitration, the trial court must compel arbitration. See J.M. Davidson, 128 S.W.3d
at 227.
B. Mediated Settlement Agreement
Landen concedes the validity of the MSA’s arbitration agreement. The arbitration
agreement contained within the MSA provides as follows:
If one or more disputes arise with regard to the interpretation and or performance of this Agreement or any of its provisions, including the form of further documents to be executed, the Parties agree to further mediation in an attempt to resolve same with Thomas Smith, the Mediator[] who facilitated this settlement. In the event a dispute arises between the Parties, it is hereby agreed that the dispute shall be referred to Thomas Smith, the Mediator herein, for arbitration in accordance with the applicable United States Arbitration and Mediation Rules of Arbitration.
“A broad arbitration clause, purporting to cover all claims, disputes, and other matters arising out
of or relating to the contract or its breach, creates a presumption of arbitrability.” Am. Realty Trust,
Inc. v. JDN Real Estate–McKinney, L.P., 74 S.W.3d 527, 531 (Tex. App.—Dallas 2002, pet.
denied); see also FD Frontier Drilling, Ltd. v. Didmon, 438 S.W.3d 688, 695 (Tex. App.—
Houston [1st Dist.] 2014, pet. denied) (noting that, “[g]enerally, when an arbitration provision uses
the language ‘any dispute,’ it is considered broad,” and that “[s]uch clauses are capable of -9- 04-16-00286-CV
expansive reach.”); RSR Corp. v. Siegmund, 309 S.W.3d 686, 701 (Tex. App.—Dallas 2010, no
pet.) (“‘The phrase ‘relates to,’ in particular, is recognized as a very broad term.’”) (quoting In re
Wilmer Cutler Pickering Hale & Dorr LLP, No. 05–08–01395–CV, 2008 WL 5413097, at *4
(Tex. App.—Dallas Dec. 31, 2008, orig. proceeding) (mem. op.)).
We conclude that the use of the language “disputes arise with regard to the interpretation
and or performance of this Agreement or any of its provisions,” speaks to the broad nature of the
arbitration agreement; it is not limited to claims that literally arise under the agreement, but instead
embraces all disputes between the parties that have a significant relationship with the agreement.
See Am. Realty Trust, Inc., 74 S.W.3d at 531; FD Frontier Drilling, Ltd., 438 S.W.3d at 695; RSR
Corp., 309 S.W.3d at 701.
We, thus, turn to whether Landen’s claims, as alleged in her original petition, fall within
the scope of that agreement.
C. Landen’s Factual Allegations
“To determine whether a party’s claims fall within an arbitration agreement’s scope, we
focus on the complaint’s factual allegations rather than the legal causes of actions asserted.” First
Merit Bank, 52 S.W.3d at 754. Any doubt about the scope of the agreement must be resolved in
favor of arbitration. See id.; see also Prudential Sec. Inc. v. Marshall, 909 S.W.2d 896, 899 (Tex.
1995) (orig. proceeding) (concluding courts should not deny a motion to compel arbitration unless
the arbitration clause in the parties’ agreement is not susceptible of an interpretation that is
sufficiently broad so that it includes the matters at issue in a dispute). In other words, “[i]f the
allegations underlying the claim touch upon matters covered by the agreement, then the claim is
subject to arbitration regardless of the legal label attached to it.” United Parcel Serv., Inc. v.
McFall, 940 S.W.2d 716, 719 (Tex. App.—Amarillo 1997, no pet.); accord City of Laredo v.
Mojica, 399 S.W.3d 190, 195 (Tex. App.—San Antonio 2012, pet. denied). “Any doubts - 10 - 04-16-00286-CV
concerning the scope of what is arbitrable should be resolved in favor of arbitration.” Mojica, 399
S.W.3d at 195 (citing Myer v. Americo Life, Inc., 232 S.W.3d 401, 408 (Tex. App.—Dallas 2007,
no pet.)); see also McReynolds v. Elston, 222 S.W.3d 731, 740 (Tex. App.—Houston [14th Dist.]
2007, no pet.) (holding courts may not deny arbitration if the arbitration agreement is susceptible
to an interpretation that would cover the dispute at issue).
Focusing on the facts alleged by Landen, her petition alleges, inter alia:
(1) Following the trust’s termination, Landen communicated “weekly, if not daily” with Appellees “about the Trust and/or anticipated mediation of Lauren’s lawsuit;” (2) After several requests, Landen executed a power of attorney, drafted by Shipp, “authorizing Lauren to represent Landen regarding mediation and settlement of Lauren’s case;” (3) None of the Appellees “disclosed in writing to Landen of any and all known or potential conflicts of interest associated with the power of attorney, Lauren’s case or the prospective mediation . . . [or] otherwise advised Landen to seek advice from another attorney before signing the power of attorney;” (4) Pursuant to the mediated settlement agreement, and without disclosing their intentions to Landen, Appellees “intended to be paid by the Trust” and “acquire Landen’s interests in properties for the Trusts;” (5) Landen’s consent to the power of attorney was acquired through a conspiracy by Appellees; (6) Landen’s consent to the power of attorney was obtained through Appellees’ fraudulently inducing her agreement by negligent or intentional misrepresentation.”
Landen asserts the Appellees intended to be paid by the Trust, the subject of the mediated
settlement agreement, pursuant to the mediated settlement agreement. See Gerwell v. Moran, 10
S.W.3d 28 (Tex. App.—San Antonio 1999, no pet.) (analyzing claims for breach of the assignment
agreement, breach of fiduciary duty, fraud, fraudulent inducement, and unjust enrichment
stemming from an arbitration agreement contained in a partnership agreement); In re Bath Junkie
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Franchise, Inc., 246 S.W.3d 356 (Tex. App.—Beaumont 2008, orig. proceeding) (analyzing
claims of breach of franchise termination agreement, fraud, and conspiracy).
“Claims generally are arbitrable when the facts alleged ‘touch matters’ that are covered by,
have a ‘significant relationship’ to, are ‘inextricably enmeshed’ with, or are ‘factually intertwined’
with the contract that contains the arbitration provision.” Southwinds Express Constr., LLC v.
D.H. Griffin of Tex., Inc., 513 S.W.3d 66, 74 (Tex. App.—Houston [14th Dist.] 2016, no pet.); see
also Pennzoil Co. v. Arnold Oil Co., 30 S.W.3d 494, 498 (Tex. App.—San Antonio 2000, orig.
proceeding). If the facts alleged “stand-alone” and are completely independent of the contract, the
asserted cause of action is not subject to arbitration. See Pennzoil Co., 30 S.W.3d at 498.
In Gerwell, 10 S.W.3d at 32, this court concluded that because the arbitration agreement
was contained within the partnership agreement, and determination of the plaintiff’s claims
necessarily required a review of the partnership agreement to calculate the purchase price of her
partnership interest, the dispute “relate[d] to or touche[d] upon the [partnership] agreement.”
Similarly, in Bath Junkie Franchise, Inc., 246 S.W.3d at 366, the arbitration agreement was
contained within the franchise agreement, and the plaintiff alleged a breach of the termination
agreement, fraud, and conspiracy. The appellate court concluded that the plaintiff’s claims
stemmed from the franchise agreement and necessarily required an analysis of the franchise
agreement; therefore, in light of the broad language contained within the arbitration agreement,
the dispute arose from and was “related to” the parties’ relationship set forth in the franchise
agreement. Id.
The present case is no different. The MSA’s primary goal was the execution of documents
regarding properties owned by the trust. At the heart of Landen’s dispute is the distribution of the
trust’s corpus. In the previous appeal, Landen did not dispute the probate court’s order that she
was a party to the MSA. See generally Davis, 2015 WL 1004357. Whether a conflict of interest - 12 - 04-16-00286-CV
exists regarding Appellees’ procurement of Landen’s power of attorney turns on any benefits
Appellees might receive under the MSA. See Gerwell, 10 S.W.3d at 32; Bath Junkie Franchise,
Inc., 246 S.W.3d at 366. Similarly, whether any payment of monies to Appellees, under the MSA,
involved elements of fraud also requires an evaluation of any monies owed under the MSA or the
distribution of benefits stemming from the MSA. See Gerwell, 10 S.W.3d at 32; Bath Junkie
Franchise, Inc., 246 S.W.3d at 366. The probate court’s order, about which Landon complains,
required her to execute documents under the trust.
We conclude Landen failed to prove that her claims stand-alone from the MSA and that
they are not “‘inextricably enmeshed’ with, or are ‘factually intertwined’” with the MSA and
distributions from the trust. See First Merit Bank, 52 S.W.3d at 754; see also Southwinds Express
Constr., LLC, 513 S.W.3d at 74; Pennzoil Co., 30 S.W.3d at 498. We, therefore, conclude that
Landen’s claims are connected to and arise from the MSA.
We next turn to whether Landen’s claims based on fraud are outside the scope of the
arbitration agreement.
D. Fraud
Allegations of fraud that are related to the arbitration clause itself are properly addressed
by the trial court; any issue of fraud related to the broader contract is properly determined by the
arbitrator. FirstMerit Bank, 52 S.W.3d at 758. To prove fraud, the record must clearly evidence
the fraudulent representations were related specifically to the arbitration provision, as opposed to
the entire engagement agreement. See id. (there was “no evidence that the sellers actually
misrepresented the [arbitration] Addendum’s terms, or that they made any false material
representations with regard to the Arbitration Addendum itself”); accord Sidley Austin Brown &
Wood, LLP v. J.A. Green Dev. Corp., 327 S.W.3d 859, 864 (Tex. App.—Dallas 2010, no pet.);
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Fogal v. Stature Const., Inc., 294 S.W.3d 708, 720 (Tex. App.—Houston [1st Dist.] 2009, pet.
denied).
Landen’s causes of action all stem from allegations that Appellees fraudulently induced
her to sign the power of attorney. Landen’s fraud allegations thus extend to the entire MSA, not
solely to the arbitration clause within the MSA. While fraud in the inducement of the arbitration
clause itself is not subject to arbitration, Landen alleged fraudulent acts relate to the entire
agreement and the dispute must be decided by the arbitrator. See Babcock & Wilcox Co. v. PMAC,
Ltd., 863 S.W.2d 225, 236 (Tex. App.—Houston [14th Dist.] 1993, writ denied).
Landen next contends that Appellees, as non-signatories to the MSA, could not compel
arbitration under the MSA.
E. Non-Signatory to an Arbitration Agreement
“Generally, only signatories to an arbitration agreement are bound by the agreement.”
Elgohary v. Herrera, 405 S.W.3d 785, 789 (Tex. App.—Houston [1st Dist.] 2013, no pet.); see
Labatt Food Serv., 279 S.W.3d at 642–43 (explaining Texas procedural rules and substantive law
apply in determining whether nonsignatories are bound by an arbitration agreement). Equitable
estoppel allows a non-signatory to compel arbitration if the nature of the underlying claims
requires the signatory to rely on the terms of the written agreement containing the arbitration
provision in asserting its claims against the non-signatory. See Kellogg Brown & Root, Inc., 166
S.W.3d at 739; In re Hartigan, 107 S.W.3d 684, 691 (Tex. App.—San Antonio 2003, orig.
proceeding). Under certain circumstances, a party to an arbitration agreement may be compelled
to arbitrate claims with a nonparty if the controversy arises from a contract containing an
arbitration clause. See Meyer v. WMCO–GP LLC, 211 S.W.3d 302, 305 (Tex. 2006); In re Palm
Harbor Homes, Inc., 195 S.W.3d 672, 678 (Tex. 2006) (orig. proceeding); see also In re Vesta Ins.
Group, Inc., 192 S.W.3d 759, 760 (Tex. 2006) (orig. proceeding). - 14 - 04-16-00286-CV
As the Texas Supreme Court explained in Meyer v. WMCO-GP, LLC, 211 S.W.3d at 306–
07, “[t]he phrase ‘between the parties,’ without more, suggests only that [the parties] meant to
ensure that the agreement applied to disputes between them, not that they intended to preclude the
application of equitable estoppel.” This court previously upheld the probate court’s determination
that Landen was a party to the MSA. Landen’s causes of action rest on Appellees’ involvement
in procuring the power of attorney utilized by Lauren to bind Landen, and her interests, to the
MSA. Landen’s status as a party to the MSA is vested within Lauren’s signature pursuant to the
power of attorney. While all claims touching the MSA may not be included, Landen’s claims
clearly derive from Appellees’ actions during the formation of the MSA. Thus, the basis for the
MSA, the benefits received or provided by parties stem directly from the MSA, and the
circumstances surrounding the procurement of the power of attorney and its application to bind
Landen to the MSA all derive from an interpretation of the MSA and its provisions.
Therefore, resolving any doubt in favor of arbitration, we conclude Appellees, even as non-
signatories to the MSA, can compel arbitration of Landen’s claims. See Meyer, 211 S.W.3d at
305; Palm Harbor Homes, 195 S.W.3d at 678; Vesta Ins. Group, Inc., 192 S.W.3d at 760.
Accordingly, we conclude the probate court did not err in determining Appellees could compel the
arbitration.
We now turn to Landen’s due process issues.
DUE PROCESS
In her last two issues on appeal, Landen contends (1) she was denied due process regarding
the arbitrator’s February 25, 2016 sanctions order, and (2) the probate court’s April 11, 2016 entry
of order confirming final judgment denied her due process rights, including her right to a jury trial.
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A. Due Process within the Arbitration Proceedings
The record reflects that Landen had notice of the arbitration proceedings, including the
February 19, 2016 hearing before the arbitrator, and the April 11, 2016 hearing before the probate
court. “Parties in an arbitration proceeding have due process rights to notice and a meaningful
opportunity to be heard.” Ewing v. Act Catastrophe-Tex. L.C., 375 S.W.3d 545, 551 (Tex. App.—
Houston [14th Dist.] 2012, pet. denied) (citing Bernstein Seawell & Kove v. Bosarge, 813 F.2d
726, 729 (5th Cir. 1987)). Landen does not claim that she did not have notice of the arbitration
hearing; rather, she complains she was denied a full hearing before the court and the right to
introduce evidence at a meaningful time and in a meaningful manner.
“The Due Process Clause does not mandate the parties be heard at the arbitration hearing;
rather, the Due Process Clause requires that the parties be given a meaningful opportunity to be
heard at the arbitration hearing.” See id. at 551–52; Univ. of Tex. Med. School v. Than, 901 S.W.2d
926, 930 (Tex. 1995). Due process generally requires that notice be “reasonably calculated, under
the circumstances, to apprise interested parties of the pendency of the action and afford them the
opportunity to present their objections.” Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S.
306, 314 (1950). Due process is satisfied when notice procedures are followed in compliance with
the rules under which the parties agreed to be bound. See id.; see also Ying Chun Tan v. Hung Pin
Lee, No. 14–06–00319–CV, 2007 WL 582084, at *4 (Tex. App.—Houston [14th Dist.] Feb. 27,
2007, no pet.) (mem. op.). “If a party’s absence at the arbitration hearing is the result of her
decision not to attend, there is no due process violation.” Ewing , 375 S.W.3d at 552.
Judicial review of an arbitration award “is so limited that even a mistake of fact or law by
the arbitrator in the application of substantive law is not a proper ground for vacating an award.”
Centex/Vestal v. Friendship W. Baptist Church, 314 S.W.3d 677, 683 (Tex. App.—Dallas 2010,
pet. denied); see also D.R. Horton–Tex., Ltd. v. Bernhard, 423 S.W.3d 532, 534 (Tex. App.— - 16 - 04-16-00286-CV
Houston [14th Dist.] 2014, pet. denied) (an arbitrator does not exceed her authority by committing
a mistake of law, but instead by deciding a matter not properly before her). Arbitrators “exceed
their powers when they decide matters not properly before them.” Pheng Investments, Inc. v.
Rodriquez, 196 S.W.3d 322, 329 (Tex. App.—Fort Worth 2006, no pet.).
Here, the record clearly shows Landen elected not to participate. Having already
determined Landen was a party to the MSA, she agreed to be bound by a particular set of rules,
and notice was provided in accordance with such rules. See Ewing, 375 S.W.3d at 552. Landen
received notice; after the parties agreed on available dates, Landen’s attorney affirmatively stated
Landen would not be participating. Having concluded Landen was properly compelled to arbitrate,
and that she received proper notice of the hearing before the arbitrator and decided not to attend,
we cannot say the arbitrator’s imposition of sanctions was not a matter properly before the
arbitrator. Landen, therefore, failed to show that she was deprived of a meaningful opportunity to
be heard in the arbitration proceeding or any violation of her due process rights.
B. Denial of Right to a Jury Trial in Proceedings before the Probate Court
In her final issue on appeal, Landen contends the probate court’s April 11, 2016 entry of
order confirming final judgment deprived her of her right to a jury trial and therefore denied her
due process. Landen’s brief provides no authority supporting her contention that the probate
court’s order confirming the arbitration award mandates a jury trial. See TEX. R. APP. P. 38.1(i)
(providing that appellate arguments must be supported by appropriate citations to authorities).
Moreover, having already determined Landen was subject to arbitration pursuant to the MSA, she
waived her right to a jury trial when she agreed to have the dispute resolved through arbitration
rather than a judicial proceeding. See Massey v. Galvan, 822 S.W.2d 309, 318 (Tex. App.—
Houston [14th Dist.] 1992, writ denied) (“It is clear that when a party agrees to have a dispute
resolved through arbitration rather than judicial proceeding, that party has waived its right to a jury - 17 - 04-16-00286-CV
trial.”); accord Serna v. Int’l Bank of Commerce, 357 S.W.3d 89, 93 (Tex. App.—San Antonio
2011, no pet.); In re Wells Fargo Bank Minnesota N.A., 115 S.W.3d 600, 607 (Tex. App.—
Houston [14th Dist.] 2003, orig. proceeding). Having previously determined the probate court
properly concluded Landen was a party to MSA and the probate court did not err in compelling
arbitration, we conclude that Landen waived her right to a jury trial.
Accordingly, we overrule her final issue on appeal and address Roger’s request for
sanctions based on a frivolous appeal.
FRIVOLOUS APPEAL
Rogers, the interim trustee, contends this appeal is frivolous and asks this court to sanction
appellants pursuant to Texas Rule of Appellate Procedure 45. See TEX. R. APP. P. 45 (appellate
court may award prevailing party just damages if it determines appeal is frivolous). To determine
if an appeal is frivolous, we apply an objective test, review the record from the appellant’s point
of view, and decide whether he had reasonable grounds to believe the judgment could be reversed.
Elm Creek Villas Homeowner Ass’n, Inc. v. Beldon Roofing & Remodeling Co., 940 S.W.2d 150,
155 (Tex. App.—San Antonio 1996, no writ). “To justify sanctions, we must determine that the
appeal was taken for delay only and without sufficient cause.” Id. Appellate courts are urged to
“exercise prudence and caution and use careful deliberation.” Smith v. Brown, 51 S.W.3d 376,
381 (Tex. App.—Houston [1st Dist.] 2001, pet. denied); see also Lance v. Robinson, No. 04-12-
00754-CV, 2013 WL 820590, at *5 (Tex. App.—San Antonio Mar. 6, 2013, no pet.) (reiterating
sanctions only imposed in “truly egregious” circumstances). After full consideration of both the
sanctions’ request and the entire appellate record from the appellants’ point of view, we deny
Appellee Roger’s request for sanctions. See TEX. R. APP. P. 45.
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CONCLUSION
Having overruled each of Landen’s issues on appeal, we affirm the trial court’s judgment.
Patricia O. Alvarez, Justice
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