Adams v. STAXXRING, INC.
344 S.W.3d 641
| Tex. App. | 2011Background
- Langford and Adams are 50/50 owners of StaxxRing, a closely held jewelry company.
- The dispute centers on control of StaxxRing, described as a corporate power struggle.
- StaxxRing bylaws include Article II, §13, requiring arbitration in Dallas, Texas for shareholder disputes.
- Adams initiated extensive litigation including discovery, injunctive relief, and third-party claims against Langford, StaxxRing, and others.
- After months of litigation and discovery, Adams sought to compel arbitration via the bylaws provision.
- The trial court denied arbitration, and Adams appealed alleging waiver of arbitration rights.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Adams waived his arbitration rights. | Adams argues the claims fall within the arbitration clause. | Langford and StaxxRing contend Adams substantially invoked the judicial process causing waiver. | Adams waived arbitration rights due to substantial invocation of the judicial process. |
Key Cases Cited
- Perry Homes v. Cull, 258 S.W.3d 580 (Tex. 2008) (waiver shown by extensive discovery and late arbitration request; strong presumption against waiver)
- Bruce Terminix Co., 988 S.W.2d 702 (Tex. 1998) (waiver when arbitration rights are invoked in ways inconsistent with a decisive arbitration request)
- Oakwood Mobile Homes, 987 S.W.2d 571 (Tex. 1999) (strong presumption against waiving arbitration rights; resolves questions of waiver de novo)
- In re Christus Spohn Health Sys. Corp., 231 S.W.3d 475 (Tex.App.—Corpus Christi 2007) (examines factors for waiver including timing and discovery related to merits)
- Okorafor v. Uncle Sam & Assocs., Inc., 295 S.W.3d 27 (Tex.App.—Houston [1st Dist.] 2009) (conduct addressing merits and discovery can support waiver)
- Holmes v. Woods & Diggs v. Gentry, 333 S.W.3d 650 (Tex.App.—Dallas 2009) (discusses waiver standards in arbitration context)
