Sw. Convenience Stores, LLC v. Iglesias ex rel. Iglesias

656 S.W.3d 784

SOUTHWEST CONVENIENCE STORES, LLC, d/b/a 7-Eleven #655, Alon USA, LP, Delek US Holdings, Inc. d/b/a Delek US, and Jorge Meza, Appellants,

v.Remin IGLESIAS ON BEHALF OF the ESTATE OF Arbin IGLESIAS, Deceased, Carlos Rolando Iglesias Cano and Blanca Manuela Holguin Gomez, Individually and as Wrongful Death Beneficiaries of Arbin Iglesias, Appellees.

No. 08-21-00055-CV

Court of Appeals of Texas, El Paso.

November 29, 2022

Ken Slavin, Sergio M. Estrada, Richard Bonner, Kemp Smith, El Paso, for Appellant.

Maxey Marie Scherr, Brittany Lopez, Scherr & Legate, PLLC, El Paso, for Appellee.

Before Rodriguez, C.J., and Alley, J., and Ferguson, Judge, Ferguson, Judge, sitting by assignment

OPINION

ROY B. FERGUSON, Judge

This is an interlocutory appeal of an arbitration order in a wrongful death case. Appellants Southwest Convenience Stores, LLC, Alon USA, LP, Delek US Holdings, INC., and Jorge Meza appeal the trial court's order denying in part their motion to compel arbitration, and the trial court's refusal to compel a claim for loss of consortium. Because the trial court erred by deciding the arbitrability of the loss of consortium claim—a power delegated to the arbitrator—we reverse and remand.

Factual and Procedural Background

Arbin Iglesias was the son of Carlos Iglesias and Blanca Gomez. Through Iglesias's employment with Appellants, he was a participant in Appellants’ Occupational Injury Benefit Plan (the Benefit Plan.). The Benefit Plan included a binding arbitration agreement (the Agreement) controlled by the Federal Arbitration Act (the FAA). Iglesias signed an arbitration acknowledgement form on December 6, 2018, during his employee training.

On February 20, 2019, Iglesias was murdered while working the night shift as a sales associate for Appellants. After his death, Appellees filed a wrongful death action alleging negligence, gross negligence, and premises liability, in which they also requested damages for loss of consortium. Appellants filed a motion to compel arbitration. The trial court referred all of Appellees’ claims to arbitration except for loss of consortium, which it stated was "one that is owned and not derivative." Appellants filed this interlocutory appeal, challenging only the trial court's refusal to refer the loss of consortium claim to arbitration along with Appellees’ other claims. See TEX. CIV. PRAC. & REM. CODE ANN. § 51.016 ("In a matter subject to the Federal Arbitration Act, a person may take an appeal or writ of error to the court of appeals from the judgment or interlocutory order of a district court ...."). Appellees did not, and could not, file a cross-appeal challenging the trial court's order referring their remaining claims to arbitration.

Arguments of the Parties

First, Appellants contend that because the trial court referred some of Appellees’ claims to arbitration, it was bound to refer all of Appellees’ claims, including the loss of consortium claim. Appellees respond that Appellants did not meet their burden at trial to show the existence of a valid and enforceable agreement. Because Appellees did not, and could not, challenge on appeal the trial court's order of referral to arbitration, we decline to review the trial court's implied finding of validity of the Agreement and the resulting referral of the remainder of Appellees’ claims. Instead, we focus solely on the trial court's decision not to also refer the loss of consortium claim to arbitration, and we review the Agreement only to determine whether the language broadly delegated the determination of arbitrability of claims to the arbitrator.

Second, Appellants contend that the trial court erred because a loss of consortium claim is a type of derivative wrongful death claim for which arbitration is required under the language of the Agreement, to which Appellees respond that the loss of consortium claims are distinct from a wrongful death action and are thus properly excluded from arbitration. Because we find that the arbitrator had the exclusive authority to make that decision under the delegation clause, we decline to review the merits of the trial court's ruling on the issue.

Third, we recognize that Appellees are barred by the FAA and Texas procedural rules from appealing an interlocutory order compelling arbitration. See TEX. CIV. PRAC. & REM. CODE § 51.016 ("In a matter subject to the Federal Arbitration Act, a person may take an appeal or writ of error to the court of appeals from the judgment or interlocutory order of a district court, county court at law, or county court under the same circumstances that an appeal from a federal district court's order or decision would be permitted by 9 U.S.C. Section 16."); see also TEX. CIV. PRAC. & REM. CODE § 171.098 (listing orders a party may appeal, which does not include a grant of an application to compel arbitration). Thus, we recognize that Appellees could not appeal the grant of the motion to compel.¹

Standard of Review

We review a trial court's decision to grant or deny a motion to compel arbitration for abuse of discretion. Firstlight Federal Credit Union v. Loya , 478 S.W.3d 157, 160 (Tex. App.—El Paso 2015, no pet.). A party seeking to compel arbitration must establish two things: (1) the existence of a valid arbitration agreement, and (2) that the claims asserted in the case are within the scope of the agreement. Ridge Natural Resources, L.L.C. v. Double Eagle Royalty, L.P. , 564 S.W.3d 105, 117 (Tex. App.—El Paso 2018, no pet.). A court abuses its discretion when it refuses to compel arbitration once a party establishes the existence and scope of the agreement. Lucchese Boot Company v. Rodriguez , 473 S.W.3d 373, 380 (Tex. App.—El Paso 2015, no pet.). We defer to the trial court's factual findings if they are supported by the evidence, but we review the trial court's legal determinations de novo. In re Labatt food Serv., L.P. , 279 S.W.3d 640, 643 (Tex. 2009) (orig. proceeding). Whether a disputed claim falls within the scope of an arbitration agreement is a question of law that we review de novo. Henry v. Cash Biz, LP , 551 S.W.3d 111, 115 (Tex. 2018).

Generally, the trial court has the power to rule on gateway issues such as the validity and enforceability of an arbitration agreement. Firstlight Federal Credit Union , 478 S.W.3d at 163. However, as this Court has previously recognized, when an arbitration clause "sweeps broadly enough to subsume gateway issues [regarding contract validity and scope] into an arbitral dispute, and there is evidence that both parties agreed to the covenants, then the trial court should compel arbitration and leave issues of validity and enforceability to the arbitrator." Lucchese Boot Company , 473 S.W.3d at 382.

Relevant Contract Language

To begin our analysis, we set out the following relevant excerpts from Appellants’ Benefit Plan, which contains the Agreement as Appendix A:

The Employer has adopted a mandatory company policy requiring that you comply with the following arbitration requirements....

Arbitration Requirement

All claims or disputes described below that cannot otherwise be resolved between the Employer and you are subject to final and binding arbitration. This binding arbitration is the only method for resolving any such claim or dispute.

Claims Covered By This Arbitration Requirement

This arbitration requirement applies to:

• Any legal or equitable claim or dispute relating to enforcement or interpretation of the arbitration provision in a Receipt, Safety Pledge and Arbitration Acknowledgement form or this arbitration requirement; and

• Any legal or equitable claim by or with respect to you for any form of physical or psychological damages, harm or death which relates to an accident, occupational disease, or cumulative trauma (including, but not limited to, claims of negligence or gross negligence or discrimination; and claims for assault, battery, negligent hiring/training/supervision/retention, or emotional distress, retaliatory discharge, or violation of any other non criminal federal, state or other governmental common law, statute, regulation or ordinance in connection with a job-related injury, regardless of whether the common law doctrine was recognized or whether the statute, regulation or ordinance was enacted before or after the effective date of this booklet).

This includes all claims listed above that you have now or in the future against the Employer, its officers, directors, owners, employees, representatives, agents, subsidiaries, affiliates, successors, or assigns. The determination of whether a claim is covered by these provisions will also be subject to arbitration under this arbitration requirement. Neither you nor the Employer will be entitled to a bench or jury trial on any claim covered by this arbitration requirement. This arbitration requirement applies to you without regard to whether you have completed and signed a Receipt, Safety Pledge and Arbitration Acknowledgement form or other similar written receipt. These provisions also apply to any claims that may be brought by your spouse, children, parents, beneficiaries, Representatives, executors, administrators, guardians, heirs or assigns (including, but not limited to, any survival or wrongful-death claim). This binding arbitration will be the sole and exclusive remedy for resolving any such claim or dispute....

• The arbitrator will apply the substantive law of Texas (other than the Texas General Arbitration Act), or federal law, or both, depending upon the claims asserted. The arbitrator, and not any federal, state, or local court or agency, shall have exclusive authority to resolve any dispute relating to the interpretation, applicability, enforceability or formation of this agreement including, but not limited to, any claim that all or any part of this agreement is void or voidable. ....

• The Federal Arbitration Act will govern the interpretation, enforcement, and proceedings under this arbitration requirement....

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