NUMBER 13-23-00483-CV
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI – EDINBURG
REMEDY ROOFING, INC., Appellant,
v.
JAVIER PEREZ, Appellee.
ON APPEAL FROM THE 92ND DISTRICT COURT OF HIDALGO COUNTY, TEXAS
MEMORANDUM OPINION
Before Justices Benavides, Longoria, and Silva Memorandum Opinion by Justice Longoria
Appellant Remedy Roofing, Inc. (Remedy) appeals an order denying its motion to
compel arbitration. By a single issue, Remedy argues that the trial court abused its
discretion in denying its motion to compel arbitration. We affirm.
I. BACKGROUND
On October 27, 2021, Remedy and appellee Javier Perez entered into a residential construction contract. Perez agreed to compensate Remedy to perform work on the roof
of his home. The contract indicated that the “Total Proposal Price” was $49,148.26 and
contained an arbitration clause, which provided in relevant part:
All disputes and claims between Owner and Contractor concerning this Contract which either party believes cannot be resolved informally or first through mandatory mediation, which is a condition precedent to the ability of either party to assert a formal claim, including without limitation any warranty claims, shall be resolved by binding arbitration conducted by a single arbitrator under the auspices, rules[,] and procedures of the American Arbitration Association. No discovery shall be allowed except as may be agreed to in writing by the parties. Either party may demand arbitration, or the arbitrator’s final award shall be issued within ninety (90) days after service of the arbitration demand on the other party.
On December 27, 2021, Remedy invoiced Perez for services and materials totaling
$74,117.83. Perez did not tender payment. On February 22, 2022, Remedy’s counsel
sent Perez a letter demanding he tender full payment under the contract. However, Perez
did not tender payment. On March 11, 2022, Remedy’s owner, Greg Arnim, filed an
affidavit claiming a mechanic’s and materialman’s lien against Perez’s home. On March
23, 2022, Remedy filed its original petition against Perez, alleging claims of breach of
contract, quantum meruit, unjust enrichment, violations of the Prompt Pay Act under the
Texas Property Code, and seeking foreclosure of its lien against Perez’s property. See
TEX. PROP. CODE ANN. § 28.002. Perez filed his original answer on April 14, 2022.
On June 10, 2022, Remedy filed its first motion for traditional summary judgment.
On June 16, 2022, the trial court set a hearing for the summary judgment motion. During
the next eight months, the trial court reset this hearing numerous times while Perez twice
retained counsel, only for counsel to subsequently withdraw. After he retained counsel
for a third time, Perez filed his “Original Counter-Claim and Supplemental Answer” on
2 April 4, 2023. On the same day, Perez filed his response to Remedy’s motion for
traditional summary judgment, alleging that Remedy did not complete the project, that
Remedy’s work was not properly done, and that the “contract price sued upon was never
agreed to.” Perez attached an affidavit and photos as part of his response. The trial court
held a hearing 1 on Remedy’s motion for summary judgment on April 11, 2023, and signed
and entered its order denying Remedy’s motion on April 17, 2023. Remedy filed its
original answer to Perez’s counter-claims on April 19, 2023.
On April 20, 2023, Remedy filed its second motion for traditional summary
judgment. This second motion essentially mirrored its first, but also alleged that Perez
had admitted facts establishing Remedy’s claims by failing to respond to its requests for
admissions. On May 15, 2023, Remedy filed an amended second motion for traditional
summary judgment with additional attachments. On May 26, 2023, Remedy filed a
second-amended second motion for traditional summary judgment. On May 31, 2023,
Perez filed his objections and response to Remedy’s amended and second-amended
second motion for traditional summary judgment.
On June 26, 2023, the trial court entered a “Proposed Docket Control Order for
Bench Trial.” This proposed docket control order indicated, among other things, that the
discovery period would end on September 11, 2023, and that trial would commence on
October 10, 2023. On August 14, 2023, the trial court signed and entered its order denying
Remedy’s second-amended second traditional motion for summary judgment.
On August 28, 2023, Remedy filed its designation of rebuttal expert witnesses.
1 The transcript of this hearing is not included in the appellate record.
3 Two days later, on August 30, 2023, Remedy filed its motion to compel arbitration and
plea in abatement with accompanying exhibits. In its filing, Remedy claimed that it had
not waived its right to arbitration pursuant to the contract.
On August 31, 2023, Perez filed a combined response to Remedy’s motion to
compel arbitration and plea in abatement, and his own motion to stay arbitration. In this
filing, Perez alleged that the United States Supreme Court’s decision in Morgan v.
Sundance, Inc. eliminated the need for a showing of prejudice from a party resisting
arbitration pursuant to a contract provision containing an arbitration clause. See 596 U.S.
411, 417–19 (2022). Perez further asserted, among other things, that Remedy waived its
right to arbitration under the Morgan standard and the previous “heavy burden” standard.
On September 5, 2023, Perez filed a supplemental response. On the same day, Remedy
filed its reply to Perez’s response, a motion to exclude expert testimony offered by Perez,
and an unopposed motion for continuance for the original trial setting due to a scheduling
conflict with another trial setting of a different lawsuit predating the instant case.
On September 8, 2023, Perez filed a sur-reply to Remedy’s response. On
September 11, 2023, Perez filed his motion for “anti-suit injunction, [temporary restraining
order,] and temporary injunction, or alternatively motion to abate arbitration proceeding.” 2
On September 14, 2023, Remedy filed its “Motion to Strike Perez’s Supplemental
Expert Designation, Subject to Motion to Compel Arbitration.” On October 5, 2023, Perez
filed his supplement response to Remedy’s motion to compel arbitration. On October 6,
2 In this filing, Perez alleged that, “Despite this clear opposition, and despite that this Court had yet
to rule if arbitration was appropriate, Remedy nevertheless proceeded with initiating arbitration, apparently falsely representing to the American Arbitration Association that Perez was in agreement.”
4 2023, Remedy filed its trial brief in support of its motion to compel arbitration. On the
same day, Perez filed his second sur-reply.
On October 18, 2023, the trial court signed and entered its order denying
Remedy’s motion to compel arbitration. 3 This appeal ensued. See TEX. CIV. PRAC. & REM.
CODE ANN. § 171.098.
II. STANDARD OF REVIEW & APPLICABLE LAW
In its sole issue, Remedy argues that the trial court abused its discretion when it
denied its motion to compel arbitration.
“We review a trial court’s order denying a motion to compel arbitration for abuse of
discretion.” Henry v. Cash Biz, LP, 551 S.W.3d 111, 115 (Tex. 2018) (citing In re Labatt
Food Serv., L.P., 279 S.W.3d 640, 642–43 (Tex. 2009) (orig. proceeding)). “A trial court
abuses its discretion when a decision is arbitrary, unreasonable, and without reference to
guiding principles.” In re Allstate Indem. Co., 622 S.W.3d 870, 875 (Tex. 2021) (orig.
proceeding) (citation omitted). “Under an abuse of discretion standard, we defer to the
trial court’s factual determinations if they are supported by evidence, but we review the
trial court’s legal determinations de novo.” In re Labatt Food Serv., L.P., 279 S.W.3d at
643 (citations omitted). “Whether the claims in dispute fall within the scope of a valid
arbitration agreement and whether a party waived its right to arbitrate are questions of
law, which are reviewed de novo.” Henry, 551 S.W.3d at 115 (first citing In re Labatt Food
Serv., L.P., 279 S.W.3d at 643; and then citing Perry Homes v. Cull, 258 S.W.3d 580,
3 The appellate record indicates that the trial court conducted a hearing on October 5, 2023, and
October 12, 2023, regarding Remedy’s motion to compel arbitration. However, the parties did not include the hearings as part of the appellate record.
5 598 & n.102 (Tex. 2008)).
Because the trial court did not issue findings of fact or conclusions of law, we must
uphold the trial court’s decision on any appropriate legal theory urged below. See Bonded
Builders Home Warranty Ass’n of Tex. v. Rockoff, 509 S.W.3d 523, 531–32 (Tex. App.—
El Paso 2016, no pet.). Further, because a trial court errs if it denies a motion to compel
arbitration on a ground not raised by the resisting party, we may affirm a trial court’s
refusal to compel arbitration only if one of the grounds presented by the resisting party is
valid. See APC Home Health Servs., Inc. v. Martinez, 600 S.W.3d 381, 389 (Tex. App.—
El Paso 2019, no pet.).
A party seeking to compel arbitration must establish the existence of a valid
arbitration agreement and that the claims at issue fall within the scope of that agreement.
See Venture Cotton Co-op. v. Freeman, 435 S.W.3d 222, 227 (Tex. 2014). If the party
seeking to compel arbitration meets this burden, the burden shifts, and to avoid
arbitration, the party opposing it must prove an affirmative defense to the provision’s
enforcement, such as waiver. See id. To establish an implied waiver, the nonmovant has
the burden to demonstrate that the movant (1) substantially invoked the judicial process
in a manner inconsistent with his claimed right to compel arbitration, and (2) suffered
actual prejudice as a result of this inconsistent conduct. See Henry, 551 S.W.3d at 116.
“Due to the strong presumption against waiver of arbitration, this hurdle is a high one.”
Perry Homes, 258 S.W.3d at 590.
To determine whether a party has waived arbitration, we look to the totality of the
circumstances and consider a wide variety of non-exclusive factors, including:
(1) how long the party moving to compel arbitration waited to do so;
6 (2) the reasons for the movant’s delay;
(3) whether and when the movant knew of the arbitration agreement during the period of delay;
(4) how much discovery the movant conducted before moving to compel arbitration, and whether that discovery related to the merits;
(5) whether the movant requested the court to dispose of claims on the merits;
(6) whether the movant asserted affirmative claims for relief in court;
(7) the extent of the movant’s engagement in pretrial matters related to the merits (as opposed to matters related to arbitrability or jurisdiction);
(8) the amount of time and expense the parties have committed to the litigation;
(9) whether the discovery conducted would be unavailable or useful in arbitration;
(10) whether activity in court would be duplicated in arbitration; and
(11) when the case was to be tried.
G.T. Leach Builders, LLC v. Sapphire V.P., LP, 458 S.W.3d 502, 512 (Tex. 2015) (cleaned
up) (citing Perry Homes, 258 S.W.3d at 590–91); see Ellman v. JC Gen. Contractors, 419
S.W.3d 516, 520 (Tex. App.—El Paso 2013, no pet.) (describing these as the “Perry
Homes factors”). In general, no single factor is dispositive. RSL Funding, LLC v. Pippins,
499 S.W.3d 423, 430 (Tex. 2016). Nor must all or even most of these factors be present
to support waiver. See Perry Homes, 258 S.W.3d at 591. Courts look to the specific
circumstances of each case. Henry, 551 S.W.3d at 116. However, “key factors” that the
Texas Supreme Court has identified “include the reason for delay in moving to enforce
arbitration, the amount of discovery conducted by the movant, and whether the movant
7 sought disposition on the merits.” Richmont Holdings, Inc. v. Superior Recharge Sys.,
L.L.C., 455 S.W.3d 573, 575 (Tex. 2014) (per curiam).
To establish waiver, the party opposing arbitration must also show that it has been
prejudiced by the moving party’s delay in moving to compel arbitration. 4 See Perry
Homes, 258 S.W.3d at 595. In this context, “prejudice refers to the inherent unfairness in
terms of delay, expense, or damage to a party’s legal position that occurs when the party’s
opponent forces it to litigate an issue and later seeks to arbitrate that same issue.” Id. at
597 (citation omitted). Such unfairness results when a party attempts “to have it both ways
by switching between litigation and arbitration to its own advantage[.]” Id. The nonmovant
must show the fact of prejudice, but not its extent. Id. at 599.
III. DISCUSSION
A. Valid Arbitration Agreement
The record supports, and the parties do not dispute, that the residential
construction contract at issue contains an arbitration clause, and that the claims at issue
fall within the scope of that contract. See Venture Cotton Co-op., 435 S.W.3d at 227.
B. Substantial Invocation of Judicial Process
Remedy argues that it did not substantially invoke the judicial process and
4 The United States Supreme Court recently held in 2022 that “prejudice is not a condition of finding
that a party, by litigating too long, waived its right to stay litigation or compel arbitration under the [Federal Arbitration Act].” Morgan v. Sundance, Inc., 596 U.S. 411, 419 (2022). The parties do not apply Morgan in their arguments regarding prejudice. We assume for purposes of this opinion that the Supreme Court’s opinion in Morgan did not abrogate the rule in Texas that a party waives enforcement of an arbitration clause by substantially invoking the judicial process and the opposing party suffers prejudice. See F.T. James Constr., Inc. v. Hotel Sancho Panza, LLC, 657 S.W.3d 623, 635 (Tex. App.—El Paso, 2022 no pet.) (acknowledging Morgan but applying Texas law requiring a finding of prejudice when arbitration is waived for substantially invoking the judicial process); see also Logicorp Mexico SA de CV v. Andrade, No. 13-21- 00243-CV, 2023 WL 406286, at *8 n.4 (Tex. App.—Corpus Christi–Edinburg Jan. 26, 2023, pet. denied) (mem. op.) (assuming but not deciding that “Morgan did not abrogate the rule in Texas that a party waives enforcement of a forum selection clause only if the opposing party suffers prejudice”).
8 therefore did not waive its right to arbitration. In support of its argument, Remedy asserts
that it “exchanged minimal discovery in this lawsuit” and that “mere delay in moving to
compel arbitration is not enough for waiver.” We disagree.
Remedy initiated the lawsuit in the trial court below and subsequently moved to
compel arbitration. The Texas Supreme Court warns about placing undue importance on
a party sitting as a plaintiff who filed suit because “Texas procedure . . . contemplates that
parties may file suit in order to compel arbitration.” Perry Homes, 258 S.W.3d at 592
(citing TEX. CIV. PRAC & REM. CODE ANN. § 171.021(a) (“A court shall order the parties to
arbitrate on application of a party showing: (1) an agreement to arbitrate; and (2) the
opposing party’s refusal to arbitrate.”)). However, the record demonstrates that Remedy
sought to compel arbitration over seventeen months after it had filed its original petition
against Perez and participated in pretrial activity during that time period. In its appellate
brief, Remedy does not deny that it was aware of the arbitration clause during the period
of delay 5 but attributes that delay solely to Perez, citing his failure to respond to its
discovery requests, his “refus[al] to cooperate with Remedy in resolving this dispute,” and
that Perez “has been represented by three separate attorneys.” We do not find that this
reasoning excuses Remedy’s delay because none of this conduct prevented Remedy
from seeking arbitration earlier. Accordingly, we find the following factors weigh in favor
of waiver: how long Remedy waited to move for arbitration; the reasons for its delay; and
Remedy’s knowledge of the arbitration provision during the period of delay. See G.T.
5 We presume a party, like Remedy, who has the opportunity to read a contract containing an
arbitration clause and signs it, knows its contents. See EZ Pawn Corp. v. Mancias, 934 S.W.2d 87, 90 (Tex. 1996) (per curiam).
9 Leach Builders, LLC, 458 S.W.3d at 512.
The record also indicates that Remedy filed its motion to compel arbitration less
than five weeks before trial on the merits was set to commence. 6 While five weeks is not
the “eve of trial,” this factor, combined with the length of delay in filing a motion to compel
arbitration, allows us to consider the proportion of time between the initiation of the
lawsuit, the filing of the motion to compel arbitration, and the trial date. See Perry Homes,
258 S.W.3d at 596; In re Vesta Ins. Grp., Inc., 192 S.W.3d 759, 764 (Tex. 2006) (orig.
proceeding) (per curiam) (citing Com-Tech Assocs. v. Computer Assocs. Int’l, Inc., 938
F.2d 1574, 1576–77 (2d Cir. 1991) (holding arbitration was waived when request did not
come until eighteen months after filing and four months before trial)). Here, we note the
seventeen months between the initiation of the lawsuit and Remedy’s motion to compel
arbitration, and the five weeks between the motion and the trial date. We conclude that
these two factors, when taken together, weigh in favor of a finding of waiver. See G.T.
Leach Builders, LLC, 458 S.W.3d at 512; Perry Homes, 258 S.W.3d at 596; F.T. James
Constr., Inc. v. Hotel Sancho Panza, LLC, 657 S.W.3d 623, 632 (Tex. App.—El Paso,
2022 no pet.) (comparing the near twelve months between the initiation of the lawsuit and
the apellant’s motion to compel with the ten months remaining until the trial date and
concluding these factors, when taken together, weighed slightly in favor of a finding of a
waiver).
Although substantial delay and pretrial activity often do not rise to the level of
6 In its motion to compel arbitration, Remedy stated it sought to invoke the arbitration clause “in
light of Perez’s election to assert counterclaims against it.” We note that Perez filed his counter-claims on April 4, 2023, over three months before Remedy filed its motion.
10 conduct warranting waiver of the right to arbitrate, whether the movant previously
attempted to dispose of the litigation on the merits “ordinarily is a key factor in assessing
a waiver defense.” Pounds v. Rohe, 592 S.W.3d 549, 554 (Tex. App.—Houston [1st Dist.]
2019, no pet.) (citing Richmont Holdings, 455 S.W.3d at 575). Prior to moving to compel
arbitration, Remedy sought a determination on the merits by filing several motions for
traditional summary judgment. 7 “[A]n attempt to resolve the merits and still retain the right
to arbitration is clearly impermissible.” Id. at 556 (internal quotations omitted) (cleaned
up). Moving for summary judgment or seeking a final resolution of the dispute are
examples of impermissible conduct. See id. We note that when Remedy filed its motions
for summary judgment, it was done offensively and not defensively, and the trial court
signed and entered two orders dening the motions in toto. “[F]ailing to seek arbitration
until after proceeding in litigation to an adverse result is the clearest form of inconsistent
litigation conduct and is inevitably found to constitute substantial invocation of the
litigation process resulting in waiver.” Haddock v. Quinn, 287 S.W.3d 158, 180 (Tex.
App.—Fort Worth 2009, pet. denied), abrogated on other grounds by TotalEnergies E&P
USA, Inc. v. MP Gulf of Mexico, LLC, 667 S.W.3d 694 (Tex. 2023); see also Accord Bus.
Funding, LLC v. Ellis, 625 S.W.3d 612, 618 (Tex. App.—Houston [14th Dist.] 2021, no
pet.) (holding movant waived right to arbitration where it “delayed seeking arbitration until
it was clear that it would receive an adverse result” in litigation). We conclude this factor
weighs heavily in favor of waiver. See G.T. Leach Builders, LLC, 458 S.W.3d at 512.
Remedy asserts that minimal discovery was conducted in this case. Perez
7 Remedy filed its motion to compel arbitration a little over two weeks after the trial court had entered its second order denying his second-amended second summary judgment motion.
11 concedes that discovery was limited and asserts that none of it would be useful or
available in arbitration. We note that the arbitration clause at issue provides that, “No
discovery shall be allowed except as may be agreed to in writing by the parties.” Though
the discovery factors do not favor waiver, the totality of the circumstances presented by
this case, as shown by the factors discussed above, demonstrate that Remedy
substantially invoked the judicial process. See Perry Homes, 258 S.W.3d at 597; G.T.
Leach Builders, LLC, 458 S.W.3d at 512.
C. Prejudice
Remedy argues that Perez failed to prove he suffered prejudice. We disagree.
Where a party fails to demand arbitration and, in the meantime, engages in pretrial activity
inconsistent with an intent to arbitrate, the party later opposing a motion to compel
arbitration may more easily show that its position has been compromised or prejudiced.
Perry Homes, 258 S.W.3d at 600. Prejudice may take the form of considerable delay,
expense, and damage to the nonmovant’s legal position. See Ellman, 419 S.W.3d at 522;
see also Perry Homes, 258 S.W.3d at 597.
One factor in our analysis is the considerable delay involved here, which weighs
in favor of prejudice. Remedy filed its arbitration request over seventeen months after
initiating its lawsuit, and we have already found its explanation for its delay unavailing. In
addition, the temporary proximity to trial weighs in favor of a prejudice finding. As noted
above, Remedy’s motion to compel arbitration was filed less than two weeks before the
end of the discovery period and five weeks before trial was set to commence. While the
record indicates that Remedy filed an unopposed motion for continuance of the trial, it did
not do so until after it had filed its motion to compel arbitration. Remedy’s filing of its
12 motion to compel arbitration ensured, five weeks prior to trial, that it could, in all likelihood,
successfully evade a trial on the merits—an event seventeen months in the making—
regardless of how the trial court ruled. If the motion was granted, Remedy could
successfully change forums and avoid a bench trial; 8 if not, it could force an interlocutory
appeal that would further delay the case until the matter was submitted for appellate
consideration more than ten months later.
Remedy argues that it did not use the judicial process “to gain access to
information that would not have been discoverable in arbitration.” We find this argument
problematically speculative because the arbitration clause of the contract at issue
provides that, “No discovery shall be allowed except as may be agreed to in writing by
the parties.” (Emphasis added). There is no evidence in the record demonstrating what
discovery the parties would agree to had the parties arbitrated the case upon Remedy’s
request. As such, we cannot assume that Perez would have been placed in the same
position vis-à-vis discovery had the parties arbitrated the case from the outset. We note
that the parties do appear to agree that discovery was not extensive in this case.
Accordingly, in our view, discovery and its attendant costs do not provide a basis to find
prejudice in this case. However, “[a] party opposing arbitration is not always required to
prove the cost of . . . extensive discovery in order to prove prejudice.” Ellman, 419 S.W.3d
at 522 (citing Perry Homes, 258 S.W.3d at 599–600).
Remedy also argues that Perez did not suffer prejudice by incurring substantial
8 The contract at issue contained a waiver of jury trial, which provided the following: “The parties
agree that any disputes between them shall be resolved by a court of competent jurisdiction in the county where the Property is located without the use of a jury. The right to a trial by jury is hereby expressly waived by Owner and Contractor.”
13 attorney’s fees in the litigation. In connection to this assertion, Remedy argues that Perez
did not provide billing invoices demonstrating the amount of litigation expenses Perez
“has already paid.” However, despite the lack of billing invoices, the record is not silent
on this matter. Perez’s first response to Remedy’s arbitration request, filed one day after
Remedy’s arbitration request, included a declaration from his counsel, who stated, among
other things, the following:
The arbitration clause specifies that no parties may engage in discovery unless agreed. This condition, as well as the arbitration process in general, would have meant significantly less attorney fee[’s] claimed by Remedy as well as incurred by[ ]Perez.[ ]Perez has paid me more than $3,000.00 and my time records show attorney time to be charged of over $7,000.00 additional[.] I expect there to be more in this litigation. These amounts would not have been incurred had Remedy proceeded to arbitration rather than this litigation and would have overall resulted in less than 1/2 the charges to Perez on my end. Additionally, Remedy has asserted close to $25,000.00 in attorney’s fees in this litigation which it seeks to have[ ]Perez pay. The vast majority of this amount would not have been incurred by Remedy had it chosen arbitration from the outset and had Remedy not engaged in the various failed motion practice in this litigation.
In addition, Perez attached a supplemental declaration of his counsel on October 6, 2023,
as part of his second sur-reply, which indicated that Perez had accrued more than
$12,000 in attorney’s fees and that he was on a payment plan because “he does not have
the financial capacity to pay thousands in attorney’s fees at once.” Further, counsel stated
in his declaration that, “Given my experience with arbitration, my attorney’s fees seldom
exceed $8,500.00[–]$10,000.00 on matters of this size, and it is my opinion that[ ]Perez
has already paid or incurred attorney’s fees substantially in excess of what he would have
paid had this matter gone straight to arbitration.”
Remedy argues that these declarations violate the “best evidence rule” and rule
against hearsay. See TEX. R. EVID. 802, 1004. However, nothing in the record indicates
14 that Remedy lodged any objections to these declarations and has therefore waived this
argument. See TEX. R. APP. P. 33.1(a)(1).
Remedy also argues that the amount of litigation fees that Perez has incurred in
this case is not “substantial,” and it cites to a case involving litigation fees in excess of
$200,000. See In re Vesta, 192 S.W.3d at 760–764 (addressing waiver of arbitration in a
case involving an insurance company and an independent agent). We do not find Vesta
factually analogous. Remedy also asserts that “[a]ll cases that have addressed the factor
of expense the parties have committed to litigation have looked at the total amount
irrespective of a party’s financial status,” and cites three cases as examples. We find this
argument unsupported by the cited cases and flawed because our review of whether
Remedy waived arbitration requires us to apply a totality of the circumstances test, which
we conduct on a case-by-case basis. Perry Homes, 258 S.W.3d at 590. Regarding the
litigation conduct factor of this test, the Texas Supreme Court has stated, “How much
litigation conduct will be ‘substantial’ depends very much on the context.” Id. at 593.
Similarly, we conclude that whether the amount of litigation expenses are “substantial”
also depends on the context. Here, the supplemental declaration of Perez’s counsel
stated that Perez had accrued more than $12,000 in litigation expenses, that this was an
amount in excess what he would have paid had the matter “gone straight to arbitration,”
and that Perez had to enter into a payment plan with counsel because he did not have
the financial capacity to pay “thousands in attorney’s fees at once.” In other words, the
supplemental declaration supports a finding that the litigation expenses incurred were
“substantial” to Perez.
Remedy next argues that Perez failed to “present any evidence showing the nature
15 of fees incurred, how much of those fees were attributable to Remedy, or whether those
fees or costs were for matters that could not be used in arbitration.” While counsel for
Perez’s declarations do not address these details, we cannot conclude that there was
insufficient evidence to support a finding of prejudice based on considerable expense.
Moreover, although proof of prejudice is required to support a claim that a party waived
arbitration, “proof establishing the precise extent of that prejudice is not.” Id. at 599–600.
We are mindful that cost is only one dimension of prejudice. Where the movant
deploys an arbitration agreement to tactically switch from one forum to another, the
nonmovant may show prejudice. See Ellman, 419 S.W.3d at 522 (finding prejudice where
defendant did not move to arbitrate until plaintiff already revealed trial strategy in
pleadings); see also Hogg v. Lynch, Chappell & Alsup, P.C., 480 S.W.3d 767, 793 (Tex.
App.—El Paso 2015, no pet). Here, Perez was forced to respond to Remedy’s summary
judgment motions and was therefore obligated to present evidence to defeat its motions,
providing Remedy with a preview of the evidentiary and legal theories Perez purports to
present at a trial on the merits, including information concerning the basis of Perez’s
counter-claims in the process. The record also indicates that Perez provided Remedy
with an expert witness designation before Remedy filed its arbitration request, further
revealing Perez’s trial strategy. 9 Thus, the record supports a finding that Perez’s legal
position was damaged.
This case presents prejudice in the form of considerable delay, expense, and
9 On September 5, 2013, Remedy filed a motion to strike Perez’s expert designation. The trial
court’s docket sheet does not indicate that it ruled on this motion prior to denying Remedy’s motion to compel arbitration or prior to Remedy filing its notice of appeal in this case.
16 damage to Perez’s legal position. See Ellman, 419 S.W.3d at 522; see also Perry Homes,
258 S.W.3d at 597. Based on the totality of the circumstances, we conclude that Remedy
waived the right to arbitrate by substantially invoking the judicial process to Perez’s
prejudice. We overrule Remedy’s sole issue and affirm the trial court’s order denying the
motion to compel arbitration.
IV. CONCLUSION
The trial court’s judgment is affirmed.
NORA L. LONGORIA Justice
Delivered and filed on the 29th day of August, 2024.