Professional Advantage Software Solutions, Inc. v. West Gulf Maritime Asociation Inc.

Court of Appeals of Texas·Decided December 22, 2015·No. 01-15-01006-CV·Published

Opinion

ACCEPTED

01-15-01006-CV

FIRST COURT OF APPEALS

HOUSTON, TEXAS

12/22/2015 2:11:07 PM

CHRISTOPHER PRINE

CLERK

NO. 01-15-01006-CV

FILED IN

1st COURT OF APPEALS

IN THE COURT OF APPEALS HOUSTON, TEXAS FOR THE FIRST DISTRICT OF TEXAS 12/22/2015 2:11:07 PM CHRISTOPHER A. PRINE

Clerk

PROFESSIONAL ADVANTAGE SOFTWARE SOLUTIONS, INC., Appellant,

FILED IN

1st COURT OF APPEALS

v. HOUSTON, TEXAS 12/22/2015 2:11:07 PM

WEST GULF MARITIME ASSOCIATION INC., CHRISTOPHER A. PRINE

Appellee. Clerk

Appealed From the 151st Judicial District Court Harris County, Texas

Trial Court Cause No. 2012-58827, the Honorable Mike Engelhart, Presiding.

APPELLANT PROFESSIONAL ADVANTAGE SOFTWARE SOLUTIONS, INC.’S MOTION FOR EN BANC REHEARING

TO THE HONORABLE FIRST COURT OF APPEALS:

Pursuant to Rule 49.7 of the Texas Rules of Appellate Procedure, Appellant Professional Advantage Software Solutions, Inc. (“PA”) files this Motion for En Banc Rehearing of the denial of its Emergency Motion for Temporary Relief requesting that the Court stay all proceedings in the trial court.

THE NEED FOR TEMPORARY RELIEF Based on the valid arbitration provision of the Software License Agreement between PA and Appellee West Gulf Maritime Association, Inc., PA filed its Motion to Compel Arbitration and Stay Proceedings on October 19, 2015. The trial court denied the motion on November 18, 2015. The trial court also denied PA’s Motion to Stay the Proceedings on November 24, 2015.

PA then promptly filed its Notice of Appeal on November 25, 2015, appealing the trial court’s interlocutory Order Denying PA’s Motion to Compel Arbitration and Stay Proceedings. PA filed its Emergency Motion for Temporary Relief on Thursday December 10, 2015, and Appellee responded to the emergency motion on Friday December 11, 2015. Without the benefit of a reply, this Court denied PA’s emergency motion on Tuesday December 15, 2015.

Because trial is currently set for January 18, 2016, PA re-urges that it will be prejudiced by having to proceed with pre-trial motions1 and trial while its interlocutory appeal is pending in this Court. PA has a statutory right to an interlocutory appeal of the denial of its Motion to Compel Arbitration and Stay Proceeding. The parties have not even briefed this matter yet, and allowing the case to proceed to trial without allowing the parties to be sufficiently heard

1 The trial court recently issued a pre-trial order on December 10, 2015, in which the parties must file its pre-trial filings prior to January 7, 2016. (See Tab A to the Appendix.)

prejudices both parties should this Court find PA has not waived its right to arbitrate. A short stay of the trial setting in this matter will give this Court the opportunity to consider and rule on the merits of this interlocutory appeal.

ARGUMENT

This Court has held that there is a “strong presumption against finding that a party has waived its right to arbitration; the burden to prove waiver is thus a heavy one.” Enter. Field Servs., LLC v. TOC-Rocky Mountain, Inc., 405 S.W.3d 767, 774 (Tex. App.—Houston [1st Dist.] 2013, pet. denied) (citing In re Bank One, N.A., 216 S.W.3d 825, 827 (Tex. 2007)). “Any doubts regarding waiver are resolved in favor of arbitration.” Id. (citing In re Bruce Terminix Co., 988 S.W.2d 702, 705 (Tex. 1998)). The waiver can be express or implied, but the waiver must be intentional. Id.

The issue pending before this Court is whether the entire case is subject to arbitration. The question is not whether Appellee had to do some things it may not have had to do otherwise if PA had moved for arbitration earlier; the question is whether the case should be referred to arbitration.

A. Standard of Review.

The Court reviews a trial court’s denial of a motion to compel arbitration under an abuse-of-discretion standard. See Okorafor v. Uncle Sam & Assocs., Inc., 295 S.W.3d 27, 38 (Tex. App.—Houston [1st Dist.] 2009, pet. denied) (citing In re D. Wilson Constr. Co., 196 S.W.3d 774, 780 (Tex. 2006) (orig. proceeding)). A trial

court abuses its discretion when it acts arbitrarily or unreasonably, without reference to guiding rules or principles. See Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241–42 (Tex. 1985). However, the Court reviews de novo whether a party has waived its right to arbitration. See Perry Homes v. Cull, 258 S.W.3d 580, 598 (Tex. 2008).

B. Appellant Has Not Expressly Waived Its Right to Arbitration.

Appellee West Gulf Maritime Association, Inc.’s sole response to arbitration has been and continues to be waiver.2 A waiver of arbitration must be done intentionally and affirmatively and must be clearly supported by the record. See G.T. Leach Builders, LLC v. Sapphire V.P., LP, 458 S.W.3d 502, 511 (Tex. 2015). This record does not reflect an intentional waiver. PA’s trial counsel discussed the delay in seeking arbitration with the trial court at the hearing on PA’s Motion to Compel Arbitration:

Sure, could we have raised this issue before now? Yes. And I can’t explain to you why it was never raised. I can tell you that the client was not aware until 60 days ago that they even had this right, which is why I’m the one standing here before you and not my predecessor.

(1 RR 7.) When this statement is considered in relation to how quickly PA’s current trial counsel moved to assert the right to arbitrate, it is clear PA did not expressly

2 PA incorporates by reference its Factual Background and arguments relating to why the case is subject to arbitration from its Emergency Motion for Temporary Relief. Based on Appellee’s arguments to the trial court, it does not appear to dispute that there is a broad provision in the pertinent agreement between it and PA.

intend to waive the right to arbitrate nor, as counsel for Appellee indicates, was it a tactical decision to sit on the arbitration provision until the eve of trial. Indeed, from the record, it is clear that counsel moved for arbitration when he realized that Appellee’s claims invoked the arbitration clause in the Agreement. (6 CR 1708–36.) On this basis this Court cannot find express waiver of the right to arbitrate. See G.T. Leach Builders, LLC, 458 S.W.3d at 511 (holding that party who agreed to a new trial date and sought a continuance did not expressly waive its arbitration rights).

C. Appellant Has Not Impliedly Waived Its Right to Arbitration.

Appellee argues that Appellant PA waived its right to arbitrate. It points this Court to the Texas Supreme Court’s decisions in In re Vesta Ins. Group, Inc., 192 S.W.3d 759 (Tex. 2006) and Perry Homes, 258 S.W.3d 580 for its proposition that PA waived its right to arbitration. Notably, the Texas Supreme Court did not find waiver in In re Vesta Ins. Group, Inc. In In re Vesta Ins. Group, Inc., the Texas Supreme Court held that the relators, who litigated in the trial court for two years, did not substantially invoke the judicial process to their opponent’s detriment because the relators engaged in minimal discovery, and the real party in interest failed to demonstrate sufficient prejudice to overcome the strong presumption against waiver. 192 S.W.3d at 763. “Merely taking part in litigation is not enough unless a party ‘has substantially invoked the judicial process to its opponent’s detriment.’” In re Vesta Ins.

Group, Inc., 192 S.W.3d 759, 762 (Tex. 2006) (quoting In re Serv. Corp. Int'l, 85 S.W.3d 171, 174 (Tex. 2002).

Free access — add to your briefcase to read the full text and ask questions with AI

Professional Advantage Software Solutions, Inc. v. West Gulf Maritime Asociation Inc., (Tex. Ct. App. 2015).

Professional Advantage Software Solutions, Inc. v. West Gulf Maritime Asociation Inc. (Professional Advantage Software Solutions, Inc. v. West Gulf Maritime Asociation Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related

In Re Vesta Insurance Group, Inc.
192 S.W.3d 759 (Texas Supreme Court, 2006)
In Re D. Wilson Const. Co.
196 S.W.3d 774 (Texas Supreme Court, 2006)
In Re Bank One, N.A.
216 S.W.3d 825 (Texas Supreme Court, 2007)
Perry Homes v. Cull
258 S.W.3d 580 (Texas Supreme Court, 2008)
In Re Citigroup Global Markets, Inc.
258 S.W.3d 623 (Texas Supreme Court, 2008)
In Re Fleetwood Homes of Texas, L.P.
257 S.W.3d 692 (Texas Supreme Court, 2008)
Associated Glass, Ltd. v. Eye Ten Oaks Investments, Ltd.
147 S.W.3d 507 (Court of Appeals of Texas, 2004)
Texas Residential Mortgage, L.P. v. Portman
152 S.W.3d 861 (Court of Appeals of Texas, 2005)
In Re Service Corporation Intern.
85 S.W.3d 171 (Texas Supreme Court, 2002)
Oryx Capital International, Inc. v. Sage Apartments, L.L.C.
167 S.W.3d 432 (Court of Appeals of Texas, 2005)
EZ Pawn Corp. v. Mancias
934 S.W.2d 87 (Texas Supreme Court, 1996)
Okorafor v. UNCLE SAM & ASSOCIATES, INC.
295 S.W.3d 27 (Court of Appeals of Texas, 2009)
In Re Bruce Terminix Co.
988 S.W.2d 702 (Texas Supreme Court, 1998)
Downer v. Aquamarine Operators, Inc.
701 S.W.2d 238 (Texas Supreme Court, 1985)
G.T. Leach Builders, LLC v. Sapphire V.P., Lp
458 S.W.3d 502 (Texas Supreme Court, 2015)
Enterprise Field Services, LLC v. TOC-Rocky Mountain, Inc.
405 S.W.3d 767 (Court of Appeals of Texas, 2013)
Richmont Holdings, Inc. v. Superior Recharge Systems, L.L.C.
455 S.W.3d 573 (Texas Supreme Court, 2014)