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.)

2 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

3 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.

4 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,

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.

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