Court of Appeals
Tenth Appellate District of Texas
10-24-00353-CV
Sonic Drive-In, Keene, TX, LLC, Appellant
v.
Leigh Anne Miller, Individually, and as Representative of the Estate of Matthew Davis, Appellee
On appeal from the
413th District Court of Johnson County, Texas Judge William C. Bosworth Jr., presiding Trial Court Cause No. DC-C202300453
CHIEF JUSTICE JOHNSON delivered the opinion of the Court.
MEMORANDUM OPINION
Sonic Drive-In, Keene, TX, LLC (Sonic) appeals from the trial court’s interlocutory order denying its motion to abate and compel arbitration. See In re Whataburger Rests. LLC, 645 S.W.3d 188, 190 & n.1 (Tex. 2022) (citing TEX. CIV. PRAC. & REM. CODE ANN. § 51.016 and 9 U.S.C. § 16(a)(1)(C)) (recognizing party may bring accelerated appeal from interlocutory order denying arbitration under Federal Arbitration Act (FAA)). We will reverse.
Background
The petition in this lawsuit presents the following factual allegations:
On the evening of May 13, 2023, Jose Gomez entrusted his vehicle to his intoxicated relatives, twenty-year-old Angel Gomez and eighteen-year-old Ashley Gomez, for the purpose of picking up twelve-year-old R.G. After picking up R.G., Angel and Ashley drove to John Doe Gas Station, where they purchased alcohol while visibly intoxicated. After leaving the gas station, Angel and Ashley continued to drink alcohol and drove to the Sonic Drive-In in Keene, Texas, where Matthew Davis was working as Sonic’s employee. Once at the Sonic Drive-In, Angel began to urinate in the dimly lit back parking lot of the establishment. In response, Davis’s immediate supervisor directed Davis to confront Angel and to ask him to leave. Davis followed his supervisor’s instructions. Davis approached Angel and asked him to leave the premises, along with Ashley and R.G. Angel responded to Davis’s request by becoming belligerent. Angel began a verbal altercation with Davis that quickly escalated into a physical altercation. Ashley then grabbed a gun that she had in her possession, handed it to R.G., and told him, “Go.” R.G. exited the vehicle and shot Davis six times. Davis was airlifted to a hospital where he was later pronounced dead.
Leigh Anne Miller is Davis’s mother. Following her son’s untimely death, she, individually and as the representative of her son’s estate, sued
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Sonic and NTX SDI Properties, LLC, the entity that she alleges owned or controlled the property where the Sonic Drive-In is located. Additionally, Miller sued John Doe Gas Station, Jose, Angel, Ashley, and R.G. Miller alleges wrongful-death and survival actions against all the defendants. Regarding Sonic specifically, Miller alleges that it was negligent in instructing Davis to confront the individual urinating in the poorly lit back parking lot of the premises and in allowing dangerous conditions to exist on the premises. Miller further alleges that Sonic negligently hired the manager on duty at the time of the incident and negligently trained and supervised both the manager and Davis.
Sonic filed its answer, generally denying Miller’s allegations.
Approximately nine months after Miller had filed her original petition, Sonic then filed a motion to abate and compel arbitration of Miller’s claims against it. Sonic supported its motion with attached evidence.
Miller thereafter filed a response to Sonic’s motion, also supported by attached evidence. The trial court then conducted a non-evidentiary hearing on Sonic’s motion to abate and compel arbitration and subsequently denied the motion. This appeal ensued.
Issues
In three issues, Sonic contends: (1) the trial court erred in denying its motion to abate and compel arbitration; (2) it did not waive its right to compel
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arbitration; and (3) the arbitration agreement is not unenforceable as unconscionable.
Discussion
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). We defer to the trial court’s factual determinations if they are supported by evidence but review the trial court’s legal determinations de novo. Id. When, as here, the trial court did not enter findings of fact or conclusions of law to explain its denial of the motion to compel arbitration, we must uphold the trial court’s decision on any appropriate legal theory urged below. Bonded Builders Home Warranty Ass’n of Tex. v. Rockoff, 509 S.W.3d 523, 532 (Tex. App.—El Paso 2016, no pet.).
A party seeking to compel arbitration under the FAA must establish that (1) a valid arbitration agreement exists and (2) the claims in dispute fall within that agreement’s scope. In re Rubiola, 334 S.W.3d 220, 223 (Tex. 2011) (orig. proceeding). Here, Sonic supported its motion to compel arbitration with evidence that Davis entered into an arbitration agreement with Sonic as part of his employment with Sonic. Sonic then argued that Miller’s claims against Sonic are bound by such arbitration agreement.
Miller acknowledged that Davis electronically signed an arbitration agreement with Sonic. Miller argued, however, that the arbitration agreement
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between Sonic and Davis is unenforceable because it was procedurally unconscionable. Miller also points out that she is a non-signatory to any arbitration agreement with Sonic.
“[U]nder Texas law, as with any other contract, agreements to arbitrate are valid unless grounds exist at law or in equity for revocation of the agreement.” In re Poly–Am., L.P., 262 S.W.3d 337, 348 (Tex. 2008) (orig. proceeding). Unconscionability is such a ground under Texas law. See In re Olshan Found. Repair Co., 328 S.W.3d 883, 892 (Tex. 2010) (orig. proceeding) (“Texas law renders unconscionable contracts unenforceable.”).
Whether an arbitration agreement is unconscionable is a question of law for the court. Royston, Rayzor, Vickery, & Williams, LLP v. Lopez, 467 S.W.3d 494, 499 (Tex. 2015). Accordingly, when 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. Id.
Procedural unconscionability refers to the circumstances surrounding adoption of the arbitration provision. In re Palm Harbor Homes, Inc., 195 S.W.3d 672, 677 (Tex. 2006) (orig. proceeding).
In deciding whether a contract is procedurally unconscionable, we look to “(1) the entire atmosphere in which the agreement was made; (2) the alternatives, if any, available to the parties at the time the contract was made; (3) the non-bargaining ability of one party; (4) whether the contract was illegal or against public policy;
and (5) whether the contract is oppressive or unreasonable.”
[Internal quotation marks omitted].
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Whataburger Rests. LLC v. Cardwell, 545 S.W.3d 73, 80 (Tex. App.—El Paso 2017, no pet.) (quoting Delfingen US–Tex., L.P. v. Valenzuela, 407 S.W.3d 791, 798 (Tex. App.—El Paso 2013, no pet.)). The burden of proving unconscionability falls on the party opposing the contract. Royston, Rayzor, Vickery, & Williams, LLP, 467 S.W.3d at 500.
In the present case, both Sonic and Miller relied on the affidavit of Carla Swenson as evidence of the circumstances surrounding the adoption of the arbitration provision. Swenson explained in her affidavit that she is the Director of Training & Special Projects for Sonic’s franchise owner, MHR North Texas, and “the custodian of the records generated by System 8, the computer system utilized by MHR North Texas-owned Sonic stores for onboarding Texas new hires.”
Swenson stated in her affidavit that Sonic is a participating employer in the Texas Sonic Employers’ Trade Association Occupational Injury Benefit Plan (the Plan), an alternative to workers’ compensation that provides benefits to Texas employees who sustain injuries in the course and scope of their employment. Swenson asserted that “[t]he Plan includes a Mutual Agreement to Arbitrate requiring that negligence liability claims related to work-related injuries must be submitted to mandatory, final and binding arbitration.” Swenson further stated that all newly hired Texas employees “receive a
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Summary Plan Description (‘SPD’) that explains in detail the terms of the Plan and Mutual Agreement to Arbitrate.”
Swenson then asserted in her affidavit that a newly hired Texas employee for an MHR North Texas-owned Sonic store cannot “clock in” or otherwise begin work for the store before completing the onboarding process. Swenson stated that the onboarding process requires the reviewing and signing of several documents electronically through System 8, including:
• a “Consent to Receive Electronic Documents”;
• an “Acknowledgement of Receipt of (1) Notice to Employees Concerning Workers’ Compensation in Texas and (2) the SPD”
(“Acknowledgement”); and
• an “Arbitration Agreement and Class Action Waiver Agreement.”
Swenson further explained that System 8 requires a newly hired Texas employee to view the SPD before signing the “Acknowledgement.”
Swenson then confirmed in her affidavit that Davis did electronically sign a “Consent to Receive Electronic Documents,” an “Acknowledgement,” and an “Arbitration Agreement and Class Action Waiver Agreement” on April 26, 2023. Swenson stated that a true and correct copy of each electronically signed document was attached to Sonic’s motion to compel arbitration, as well as a true and correct copy of the Plan’s SPD.
Miller highlights from the foregoing evidence that Davis was not allowed to “clock in” until after completing the electronic review and signature process.
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Miller argues that Davis was therefore incentivized to complete the process as quickly as possible and that he had no meaningful opportunity to negotiate. Miller also contends that the arbitration provision proffered by Sonic was included as “Appendix B” to the SPD and therefore “deceptively buried” such that Davis would not have comprehended the legal importance or effect of the provision.
First, we acknowledge that Davis had to accept the arbitration provision to begin his work as Sonic’s employee. But this inequality of bargaining power between an employer and an at-will employee does not amount to procedural unconscionability. See In re Halliburton Co., 80 S.W.3d 566, 572 (Tex. 2002) (orig. proceeding); Albertson’s Holdings, LLC v. Kay, 514 S.W.3d 878, 886 (Tex. App.—Tyler 2017, no pet.).
Second, we acknowledge that the “Mutual Agreement to Arbitrate” is in “Appendix B” to the SPD. But we disagree with Miller’s contention that the arbitration provision was therefore “deceptively buried” such that Davis would not have comprehended the legal importance or effect of the provision.
As stated above, Swenson explained in her affidavit that Davis was required to electronically review and sign an “Acknowledgement” as part of his onboarding process as Sonic’s employee, and the evidence includes a copy of such document. Just above Davis’s electronic signature on the document, it
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states: “My signature below certifies that I have read (or had read to me) and understand the information in this notice.”
The “Acknowledgment” is a one-page document that expressly points out the “Mutual Agreement to Arbitrate” and notes its inclusion in the appendix of the SPD. The “Acknowledgement” also emphasizes the “mandatory and binding” nature of the arbitration agreement. Specifically, the “Acknowledgement” provides that the Texas Sonic Employers Trade Association, Inc. (TSETA), and its employer-members, including Davis’s employer, do not have Texas worker’s compensation insurance coverage but that Davis may have rights under Texas common law. The document then contains the following paragraphs in a box in bold text:
TSETA is the sponsor of the “Texas Sonic Employers Trade Association, Inc. Occupational Injury Benefits Plan” (the “Plan”), which provides benefits for covered occupational injuries and diseases that are incurred by employees of TSETA’s members. The Plan is not workers’ compensation insurance.
I, the employee named below, hereby certify that I have been informed that my employer does not carry Texas workers’
compensation insurance. I acknowledge that I have received (1)
the Notice to Employees Concerning Workers’ Compensation in Texas and (2) a personal copy of the “Summary Plan Description”
(“SPD”), which also includes a copy of the mandatory and binding arbitration program. Negligence and other causes of action resulting from work-related bodily injuries or diseases will be subject to mandatory and binding arbitration, as described in the arbitration program, including the Mutual Agreement to Arbitrate in an appendix to the SPD. I have been instructed to read the SPD or have it read to me by a trusted advisor. I understand that any questions I have should be directed to my supervisor at any time.
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Miller nonetheless cites Daspit Law Firm, PLLC v. Herman, No. 05-19-
00615-CV, 2020 WL 5015274 (Tex. App.—Dallas Aug. 25, 2020, no pet.) (mem. op.), as support for her argument that the trial court could have found that Davis did not execute the arbitration provision here or that he was “tricked” into executing it without a reasonable opportunity to review it. We, however, believe that Daspit Law Firm is distinguishable from the present case.
In Daspit Law Firm, a prospective client had signed an arbitration agreement with a law firm after briefly meeting with a non-attorney employee of the law firm. Id. at *1. The Dallas Court of Appeals drew attention to “the employee’s impatience [during the meeting], lack of time, and the false assurance [to the prospective client] that the document was not a contract.” Id. at *6 (emphasis added). The Dallas Court of Appeals reasoned that, based on the evidence before it, the trial court could have concluded that the law firm’s employee “tricked” the prospective client into agreeing to the arbitration provision. Id. The Dallas Court of Appeals thus determined that the trial court could have reasonably concluded that the conduct by the law firm toward the prospective client “was sufficiently shocking to constitute procedural unconscionability concerning the arbitration agreement.” Id. at *7.
Here, however, there is no evidence indicating that Davis was misled into believing that the documents that he signed during the onboarding process
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were not contracts or that he would not be bound by the provisions in the documents that he signed. Furthermore, although the evidence shows that Davis was not allowed to “clock in” until after completing the onboarding process, there is no evidence that Davis did not actually read the arbitration agreement, as indicated by the signed documents.
Miller additionally argues that Sonic’s assertion of the arbitration provision in these circumstances raises serious public policy considerations. Miller asserts that the public’s right to transparency in the resolution of safety issues weighs in favor of denying Sonic’s motion to compel arbitration. But Miller cites no authority to support this argument.
For these reasons, we conclude that Miller did not meet her burden of proving that the arbitration agreement between Sonic and Davis was procedurally unconscionable. See Royston, Rayzor, Vickery, & Williams, LLP, 467 S.W.3d at 500; Wal–Mart Stores, Inc. v. Constantine, No. 05-17-00694-CV, 2018 WL 2001959, at *9–10 (Tex. App.—Dallas Apr. 30, 2018, no pet.) (mem. op.); Cardwell, 545 S.W.3d at 80–81.
Moreover, although Miller was a non-signatory to the arbitration agreement between Sonic and Davis, the Texas Supreme Court has held that non-signatory wrongful-death beneficiaries must arbitrate wrongful-death claims against an employer where the decedent signed an arbitration agreement. In re Labatt Food Serv., L.P., 279 S.W.3d 640, 644 (Tex. 2009)
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(orig. proceeding). The supreme court explained that the wrongful-death action was entirely derivative of the decedent’s right to sue for his own injuries and that the wrongful-death beneficiaries stood in the exact “legal shoes” of the decedent. Id. Likewise, a survival action “is wholly derivative of the decedent’s rights”; therefore, a survival action is subject to the decedent’s arbitration agreements. Prestonwood Tradition, LP v. Jennings, 653 S.W.3d 436, 442 (Tex. App.—Dallas 2022, no pet.) (quoting Russell v. Ingersoll–Rand Co., 841 S.W.2d 343, 345 (Tex. 1992)).
We must now turn to Miller’s contention that Sonic impliedly waived its right to arbitrate in the present case. Whether a party waived its right to arbitrate is a question of law, which is reviewed de novo. Henry, 551 S.W.3d at 115.
There is a strong presumption against the waiver of a contractual right to arbitrate. Perry Homes v. Cull, 258 S.W.3d 580, 584, 590 (Tex. 2008). Thus, even though the presumption against waiver is rebuttable, the “hurdle is a high one.” Id. at 590; accord Richmont Holdings, Inc. v. Superior Recharge Sys., L.L.C., 455 S.W.3d 573, 575 (Tex. 2014) (per curiam). To establish that Sonic impliedly waived its right to arbitrate, Miller had the burden to show that (1) Sonic substantially invoked the judicial process in a manner inconsistent with its claimed right to compel arbitration and (2) Miller suffered
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actual prejudice because of Sonic’s inconsistent conduct. See Henry, 551 S.W.3d at 116; Perry Homes, 258 S.W.3d at 589–90.
Courts consider a “wide variety” of factors in deciding whether a party has waived its right to arbitrate, including:
• whether the party pursuing arbitration is the plaintiff or the defendant;
• how long the party pursuing arbitration delayed before seeking it and what the reasons were for any delay;
• when the party pursuing arbitration learned of the arbitration agreement;
• how much discovery and other pretrial activity was conducted by the party pursuing arbitration before seeking it and whether such discovery and other pretrial activity related to the merits (as opposed to matters related to arbitrability or jurisdiction);
• whether the party pursuing arbitration asserted affirmative claims for relief in court;
• whether the party pursuing arbitration sought to dispose of claims on the merits in court;
• how much time and expense has been incurred in litigation;
• whether the discovery conducted would be available or useful in arbitration; and
• when the case was to be tried.
Perry Homes, 258 S.W.3d at 590–92; see G.T. Leach Builders, LLC v. Sapphire V.P., LP, 458 S.W.3d 502, 512 (Tex. 2015). The Texas Supreme Court has noted that “all these factors are rarely presented in a single case” and that “[f]ederal
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courts have found waiver based on a few, or even a single one.” Perry Homes, 258 S.W.3d at 591. But the supreme court has also stated that “[g]enerally, no one factor is, by itself, dispositive.” RSL Funding, LLC v. Pippins, 499 S.W.3d 423, 430 (Tex. 2016) (per curiam). Implied waiver of the right to arbitrate is determined on a case-by-case basis from the totality of the circumstances. Perry Homes, 258 S.W.3d at 591.
Miller filed her original petition here on August 7, 2023, and as evidence attached to her response to Sonic’s motion to compel arbitration, Miller presented an affidavit indicating that Sonic’s registered agent was served a copy of the original petition and citation on August 9, 2023. Sonic thereafter filed its original answer on August 23, 2023. The original answer includes the following paragraph:
In the alternative, Defendants Sonic Drive-In, Keene, TX, LLC would further show that Decedent Matthew Davis, and Defendants, entered into a valid and binding Arbitration Agreement. Plaintiff is bound by the terms of the Arbitration Agreement. The allegations made by Plaintiff in this suit are specifically covered by the Arbitration Agreement. Therefore, this suit must be abated, and the case transferred to arbitration per the agreement of the parties.
Sonic further added in its original answer that it “move[s] this Court to abate this matter in accordance with the arbitration agreement.”
As additional evidence attached to her response to Sonic’s motion to compel arbitration, Miller presented evidence that Sonic nevertheless served
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her with its first requests for production on October 13, 2023. The requests for production are related to the merits of Miller’s claims. Miller notes that these requests for production ask her to execute the following forms on behalf of Davis:
• an “Authorization to Release Employment Information”;
• an “Authorization for the Release of Protected Health Information”;
and
• an “Authorization to Release Confidential Information Submitted to the Texas Workforce Commission.”
The record, however, does not indicate to what extent Miller responded to Sonic’s requests for production. And the record does not indicate that Sonic initiated any further discovery.
On the other hand, as evidence attached to her response to Sonic’s motion to compel arbitration, Miller presented evidence that, on October 20, 2023, she sent a notice of intention to take depositions by written questions of the custodian of records for the Johnson County Sheriff’s Office and the Keene Police Department. Miller also presented evidence that a notice of delivery of the completed deposition of the custodian of records for the Johnson County Sheriff’s Office was filed on November 17, 2023, and a notice of delivery of the completed deposition of the custodian of records for the Keene Police Department was filed on January 8, 2024.
On May 2, 2024, approximately nine months after Miller had filed her original petition, Sonic then filed its motion to abate and compel arbitration of Miller’s claims against it. The trial court thereafter conducted a hearing on the motion on October 4, 2024, during which Sonic acknowledged that it had answered discovery during the case and had “participated in two very short depositions.” The trial court signed its order denying Sonic’s motion to abate and compel arbitration on October 15, 2024. 1 0F
Miller contends that the foregoing shows that Sonic has “reaped the benefits of substantial litigation during its unexplained delay and has waived its rights to compel arbitration through its substantial invocation of the judicial process.” Miller stresses that Sonic obtained records from the Johnson County Sheriff’s Office and the Keene Police Department—records that Miller argues are non-public and unavailable outside of litigation.
The Texas Supreme Court has explained that the necessary conduct required to substantially invoke the judicial process “must go beyond merely filing suit or seeking initial discovery.” Henry, 551 S.W.3d at 116. The supreme court has pointed out that it has accordingly “declined to conclude that the right to arbitrate was waived in all but the most unequivocal of circumstances.” Id. at 116–17 (comparing Perry Homes, 258 S.W.3d at 595–96
1The order includes a handwritten note indicating that the October 15, 2024 order is a replacement for an original order that was signed on October 4, 2024, but misplaced by the district clerk.
Sonic Drive-In, Keene, TX, LLC v. Miller Page 16
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(holding that plaintiffs waived right to arbitrate by participating in extensive discovery, including hundreds of requests for production and interrogatories, then requesting arbitration fourteen months after filing suit and only four days before scheduled trial date), with G.T. Leach Builders, LLC, 458 S.W.3d at 512 (holding plaintiffs did not waive arbitration by asserting counterclaims; seeking change of venue; filing motions to designate responsible third parties, for continuance, and to quash depositions; designating experts; and waiting six months to move for arbitration), In re Fleetwood Homes of Tex., L.P., 257 S.W.3d 692, 694 (Tex. 2008) (orig. proceeding) (per curiam) (holding party did not waive arbitration by noticing deposition, serving written discovery, and waiting eight months to move for arbitration), and In re Bruce Terminix Co., 988 S.W.2d 702, 703–04 (Tex. 1998) (orig. proceeding) (per curiam) (holding arbitration was not waived by sending eighteen interrogatories and nineteen requests for production and waiting six months to seek arbitration)).
Here, Miller initiated the litigation, and although Sonic did not file its motion to compel arbitration until approximately nine months after Miller filed her original petition, Sonic claimed its right to arbitration in its original answer, which was filed just sixteen days after Miller filed her original petition. Furthermore, Miller has shown that Sonic has sought only initial discovery—one set of requests for production—and the record does not indicate to what extent Miller responded to Sonic’s requests for production. Assuming
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that Sonic received non-public records from the Johnson County Sheriff’s Office and the Keene Police Department, Sonic did not initiate such discovery. And at the hearing on the motion to compel arbitration, Sonic acknowledged only that it had answered discovery and “participated in two very short depositions.”
Miller cites F.T. James Construction, Inc. v. Hotel Sancho Panza, LLC, 657 S.W.3d 623 (Tex. App.—El Paso 2022, no pet.), as support for her argument that Sonic has waived its right to arbitrate. But in F.T. James Construction, the defendant that was seeking arbitration moved to compel arbitration only after asserting a counterclaim against the plaintiff and filing a third-party petition, contrary to a desire to arbitrate. Id. at 631. Additionally, the defendant seeking arbitration did not claim a right to arbitration until seven- and-a-half months after the lawsuit had begun and did not file its motion to compel arbitration until almost one year after the lawsuit had begun. Id. at 632. F.T. James Construction is therefore distinguishable from the present case.
For these reasons, we conclude that Miller did not meet her burden of showing that Sonic substantially invoked the judicial process in a manner inconsistent with its claimed right to compel arbitration. See Henry, 551 S.W.3d at 116. Accordingly, we need not address whether Miller showed that she was actually prejudiced by Sonic’s conduct. See id. Having concluded that
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Miller did not meet her burden of showing that Sonic substantially invoked the judicial process in a manner inconsistent with its claimed right to compel arbitration, we conclude that Miller did not overcome the strong presumption against the waiver of a contractual right to arbitrate. See id.; Perry Homes, 258 S.W.3d at 589–90.
Conclusion
Based on the foregoing, we hold that the trial court erred in denying Sonic’s motion to abate and compel arbitration. See Henry, 551 S.W.3d at 115. Sonic’s issues are sustained.
We reverse the trial court’s order denying Sonic’s motion to abate and compel arbitration and remand this case to the trial court for further proceedings consistent with this opinion.
MATT JOHNSON
Chief Justice
OPINION DELIVERED and FILED: September 17, 2026 Before Chief Justice Johnson, Justice Smith, and Justice Harris Reversed and remanded CV06