Royston, Rayzor, Vickery, & Williams, Llp v. Francisco "Frank" Lopez

467 S.W.3d 494, 58 Tex. Sup. Ct. J. 1422, 2015 Tex. LEXIS 622, 2015 WL 3976101
CourtTexas Supreme Court
DecidedJune 26, 2015
Docket13-1026, 14-0109
StatusPublished
Cited by131 cases

This text of 467 S.W.3d 494 (Royston, Rayzor, Vickery, & Williams, Llp v. Francisco "Frank" Lopez) is published on Counsel Stack Legal Research, covering Texas Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Royston, Rayzor, Vickery, & Williams, Llp v. Francisco "Frank" Lopez, 467 S.W.3d 494, 58 Tex. Sup. Ct. J. 1422, 2015 Tex. LEXIS 622, 2015 WL 3976101 (Tex. 2015).

Opinions

Justice Johnson

delivered the opinion of the Court.

This interlocutory appeal involves the enforceability of an arbitration provision in an attorney-client employment contract. The provision specifies that the client and firm will arbitrate disputes that arise between them, except for claims made by firm for recovery of its fees and expenses. After the underlying matter was settled, the client sued the firm. The trial court denied the firm’s motion to order the dispute to arbitration. On interlocutory appeal, the court of appeals affirmed on the basis that the arbitration provision is substantively unconscionable and unenforceable.

We conclude that the client did not prove that either the arbitration provision is substantively unconscionable or any other defense to the arbitration provision. Accordingly, the judgment of the court of [498]*498appeals is reversed and the cause is remanded to the trial court.

I. Background

Francisco Lopez hired Royston, Rayzor, Vickery, & Williams, LLP to represent him in a suit for divorce from his alleged common-law wife who won $11 million in the lottery. The two-page employment contract between Lopez and Royston, Ray-zor contained the following arbitration provision:

While we would hope that no dispute would ever arise out of our representation or this Employment Contract, you and the firm agree that any disputes arising out of or connected with this agreement (including, but not limited to the services performed by any attorney under this agreement) shall be submitted to binding arbitration in Nueces County, Texas, in accordance with appropriate statutes of the State of Texas and the Commercial Arbitration Rules of the American Arbitration Association (except, however, that this does not apply to any claims made by the firm for the recovery of its fees and expenses).

Royston, Rayzor then filed suit for divorce on Lopez’s behalf, the trial court ordered the parties in the divorce suit to mediation, and they settled. Lopez later sued Roy-ston, Rayzor, claiming the firm induced him to accept an inadequate settlement. The firm moved to compel arbitration under both the Texas Arbitration Act (Arbitration Act), and common law. See Tex. Civ. Prac. & Rem. Code §§ 171.001-.098; see also L.H. Lacy Co. v. City of Lubbock, 559 S.W.2d 348, 351 (Tex.1977) (noting that arbitration in Texas can be pursuant to statute or common law). The trial court held a hearing on the firm’s motion and denied it. The only evidence introduced at the hearing was the employment contract.

Royston, Rayzor filed both an interlocutory appeal challenging the denial under the Arbitration Act, and an original proceeding seeking mandamus relief under common law. Royston, Rayzor, Vickery & Williams, L.L.P. v. Lopez, 443 S.W.3d 196 (Tex.App.-Corpus Christi 2013). The court of appeals affirmed the trial' court’s refusal to order arbitration under the Arbitration Act and denied mandamus relief. Id. at 209. The appeals court noted that Lopez did not challenge the existence of the arbitration provision or whether he agreed to it as part of his contract with Royston, Rayzor. Id. at 202. The court concluded that Lopez’s claims were within the scope of the arbitration agreement and then moved on to Lopez’s “several affirmative defenses to arbitration.” Id. at 202-03. It first considered his assertion that the arbitration provision is substantively unconscionable because it viewed that issue as determinative. Id. at 203.

As an initial part of its analysis, the appeals court considered whether Lopez was required to show that the arbitration provision was both procedurally and substantively unconscionable. Id. at 203-04. It concluded that he needed to show only one or the other. Id. at 204. The court, then concluded that the provision was so one-sided it was substantively unconscionable and unenforceable. Id. at 206.

In cause number 13-1026, Royston, Ray-zor seeks relief from the court of appeals’ judgment denying its interlocutory appeal, and in cause number 14-0109, it seeks mandamus relief directing the trial court to order arbitration. In 13-1026, the firm challenges the two determinations on which the court of appeals affirmed the trial court’s order. It also urges that we consider Lopez’s remaining defenses to arbitration even though the court of appeals did not reach them, hold that they are also invalid, reverse the court of appeals’ judg[499]*499ment, and remand to the trial court 'with instructions that it order the case to arbitration.

Lopez responds by urging that we affirm the lower courts’ decisions for several reasons: (1) the court of appeals correctly determined that an arbitration provision need not be,both procedurally and substantively unconscionable to be unenforceable, and this provision is substantively unconscionable because it is excessively one-sided; (2) the arbitration provision was entered into in the context of Lopez’s agreeing to become a client of the law firm, and given that context it violates public policy; (3) Lopez’s status as a prospective client shifted the burden of proof to Royston, Rayzor to establish it met its ethical obligation to explain the effects of the arbitration provision to him and Roy-ston, Rayzor did not do so; and (4) the arbitration provision is illusory because it allows Royston, Rayzor to avoid arbitration as to its fee disputes while requiring Lopez to arbitrate all his disputes.

II. Standard of Review

Arbitration agreements can be enforced under either statutory provisions or the common law. L.H. Lacy Co., 559 S.W.2d at 351. Under provisions of the Arbitration Act, a trial court’s ruling on a motion to compel arbitration may be challenged by interlocutory appeal. Tex. Civ. Prac. & Rem. Code § 171.098. Under common law standards, the trial court’s ruling on such a motion .may be challenged by means of an original proceeding seeking mandamus relief. See L.H. Lacy Co., 559 S.W.2d at 351. The ultimate issue of whether an arbitration agreement is against public policy or unconscionable is a question of law for the court. See In re Poly-Am., L.P., 262 S.W.3d 337, 349 (Tex.2008); J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex.2003). When public policy or unconscionability is the basis for denying a motion to compel arbitration and there are no factual disputes, the standard of review on appeal is de novo. See J.M. Davidson, 128 S.W.3d at 229.

III. Analysis

We first address the unconscionability issue which was the basis for the court of appeals’ decision. Because we reverse on that issue and resolve the appeal by means of Royston, Rayzor’s interlocutory appeal under the Arbitration Act, we do not address the firm’s petition for writ of mandamus. See Walker v. Packer, 827 S.W.2d 833, 839 (Tex.1992) (explaining that mandamus is a discretionary remedy that issues only to correct a clear abuse of discretion where no other adequate remedy by law exists). However, in the interest of judicial economy we also consider Royston, Rayzor’s other potentially dispositive issues instead of remanding them to the court of appeals. See Rusk State Hosp. v. Black,

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

Related

Cite This Page — Counsel Stack

Bluebook (online)
467 S.W.3d 494, 58 Tex. Sup. Ct. J. 1422, 2015 Tex. LEXIS 622, 2015 WL 3976101, Counsel Stack Legal Research, https://law.counselstack.com/opinion/royston-rayzor-vickery-williams-llp-v-francisco-frank-lopez-tex-2015.