Thomas v. Cook

350 S.W.3d 382, 2011 Tex. App. LEXIS 6788, 2011 WL 3717014
CourtCourt of Appeals of Texas
DecidedAugust 25, 2011
Docket14-09-00892-CV
StatusPublished
Cited by20 cases

This text of 350 S.W.3d 382 (Thomas v. Cook) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Thomas v. Cook, 350 S.W.3d 382, 2011 Tex. App. LEXIS 6788, 2011 WL 3717014 (Tex. Ct. App. 2011).

Opinions

OPINION

WILLIAM J. BOYCE, Justice.

Elizabeth Thomas appeals from the trial court’s final judgment confirming an arbitration award in favor of Ardyss International, Inc. and Dorothy Cook. We affirm.

BACKGROUND

Cook and Thomas signed a “Distribution Contract” with Ardyss in 2007. Under this contract, Cook and Thomas were to receive commissions and bonuses for their joint efforts to sell Ardyss products including cosmetics, underwear, and weight loss supplements. Cook and Thomas jointly signed a single copy of the Distribution Contract; Cook signed in the space designated for the “Applicant” and Thomas signed in the space designated for the “Co-Applicant.”

The Distribution Contract signed by Cook and Thomas specifically incorporates the Ardyss Policies and Procedures Manual. Section 9.3 of the manual includes the following arbitration provision:

[386]*386Any controversy or claim arising out of or relating to the Agreement, or the Breach thereof, shall be settled by arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. Distributors waive all rights to trial by jury or to any court. All arbitration proceedings shall be held in Las Vegas, Nevada. All parties shall be entitled to all discovery rights pursuant to the Federal Rules of Civil Procedure. There shall be one arbitrator, an attorney at law, who shall have expertise in business law transactions with a strong preference being an attorney knowledgeable in the direct selling industry, selected from the panel which the American Arbitration Panel provides. Each party to the arbitration shall be responsible for its own costs and expenses of arbitration, including legal and filing fees. The decision of the arbitrator shall be final and binding on the parties and may, if necessary, be reduced to a judgment in any court of competent jurisdiction. This agreement shall survive any termination or expiration of the Agreement.

Section 9.4 of the manual states that “[t]he Federal Arbitration Act shall govern all matters relating to arbitration.”

Thomas sued Cook in August 2008, contending among other things that Cook had (1) created a new entity; and then (2) diverted Ardyss commission checks arising from their joint sales efforts to this entity instead of splitting the commissions between Thomas and Cook as required under the Distribution Contract. Thomas alleged that Ardyss violated the Distribution Contract by issuing commission checks to the new entity created by Cook, but she did not sue Ardyss in this pleading. Thomas asserted claims against Cook for tortious interference with prospective business advantage; breach of the Distribution Contract; conversion; and fraud. She also sought a temporary injunction and a declaratory judgment regarding the rights and responsibilities for payment of commissions and bonuses under the Distribution Contract. Cook answered with a general denial and asserted several affirmative defenses.

Thomas filed an amended petition in September 2008 and added Ardyss as a defendant. As to Cook, Thomas dropped her tortious interference claim and asserted claims for breach of the Distribution Contract; conversion; fraud; and money had and received. Thomas sued Ardyss for breach of the Distribution Contract. Thomas also requested a temporary injunction, along with a declaratory judgment “that sets out the rights and responsibilities regarding payment of commissions and bonuses under the Distribution Contract....” Ardyss responded with a general denial and asserted several affirmative defenses.

Shortly after Thomas filed her amended petition, Ardyss and Cook filed a joint motion to compel arbitration under the Federal Arbitration Act. See 9 U.S.C. § 3 (2009). The trial court conducted a hearing on the motion in October 2008 but withheld its ruling. At a hearing on Thomas’s request for a temporary injunction held on October 14, 2008, the trial court orally ruled on the motion to compel and stated: “I am compelling arbitration.” However, the parties agreed to mediate their dispute as the hearing continued and Thomas’s attorney passed on the request for a temporary injunction.1 The trial [387]*387court signed an agreed order to mediate. After mediation failed, Thomas filed a demand for arbitration against Ardyss and Cook in November 2008 with the American Arbitration Association.

In March 2009, Thomas filed an amended arbitration demand that omitted the claims against Cook. In April 2009, Thomas filed an amended petition in state court asserting claims solely against Cook. At approximately the same time, Thomas filed a complaint in federal district court asserting claims solely against Ardyss.2

The April 2009 state court petition against Cook asserted claims for tortious interference with prospective business advantage; breach of the Distribution Contract; breach of fiduciary duty; conversion; breach of the duty of good faith and fair dealing; and fraud. In addition to compensatory and exemplary damages, Thomas also sought attorney’s fees under Chapter 38 of the Civil Practices and Remedies Code and an injunction.

Cook filed a second motion to compel arbitration in the trial court on April 29, 2009. Thomas responded to this motion and argued that the claims she asserted against Cook were not subject to arbitration. At a hearing on the motion held on May 15, 2009, Cook asserted that she had filed a counterclaim in the arbitration proceedings in December 2008 by joining Ar-dyss’s arbitration counterclaim. Thomas responded that she had not received a pleading containing a counterclaim from Cook. The trial court asked Cook to provide evidence of her counterclaim, and she complied. The trial court then signed an order compelling the parties to arbitrate and staying all proceedings in the trial court pending completion of the arbitration.

Thomas filed a motion to reconsider the trial court’s order compelling arbitration. At the June 2009 hearing on this motion, Thomas again claimed that she had not received Cook’s counterclaim. The trial court noted that the counterclaim had been filed via email several months earlier, before Thomas attempted to omit Cook from the arbitration proceedings. The court left it to the arbitrator to determine whether an email filing was appropriate, and ordered the parties back to arbitration.

In early July 2009, Thomas filed in state court a notice of motion to dismiss and nonsuit as to the claims against Ardyss, and a motion to dismiss her claims against Cook without prejudice.

The scheduled arbitration took place on July 23, 2009. Ardyss and Cook attended the arbitration proceeding; Thomas did not. The arbitrator issued his award and judgment in favor of Ardyss and Cook on August 28, 2009. The arbitrator concluded that Thomas owed Ardyss $48,009.35, plus reimbursement for costs and fees in the amount of $629.33. He also concluded that Thomas owed Cook $53,433.40, plus costs and fees reimbursement of $629.33. The arbitration award and judgment provided no recovery to Thomas.

On September 14, 2009, Ardyss and Cook filed a motion in state court to confirm the arbitration award. Thomas sub

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Thomas v. Cook
350 S.W.3d 382 (Court of Appeals of Texas, 2011)

Cite This Page — Counsel Stack

Bluebook (online)
350 S.W.3d 382, 2011 Tex. App. LEXIS 6788, 2011 WL 3717014, Counsel Stack Legal Research, https://law.counselstack.com/opinion/thomas-v-cook-texapp-2011.