Anthony Aldridge v. Thrift Financial Marketing, LLC
2012 Tex. App. LEXIS 6372
| Tex. App. | 2012Background
- Aldridge and Harvison formed Thrift in 2008 under the Limited Liability Company Agreement, which includes arbitration provisions.
- The Company Agreement defines Member and expressly excludes anyone who has ceased to be a Member, affecting arbitration rights.
- Aldridge resigned as a Member and Manager of Thrift effective September 30, 2011, relinquishing all membership interests.
- Thrift filed suit against Aldridge and others on October 6, 2011, asserting debt, TLT Act liability, fiduciary breaches, and related relief.
- Aldridge moved to compel arbitration; the trial court denied; Aldridge appealed via interlocutory appeal under FAA § 51.016.
- The court must decide whether a former Member may compel arbitration under the Company Agreement and whether Thrift can be bound by the arbitration provision.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Can Aldridge compel arbitration as a former Member? | Aldridge contends the arbitration clause survives his resignation since the claims relate to acts while he was a Member. | Thrift argues the Agreement excludes former Members, so Aldridge cannot compel arbitration. | No; former Members are excluded from the definition of Member, so Aldridge cannot compel arbitration. |
| Can Thrift, a nonsignatory, be compelled to arbitrate under the Company Agreement? | Thrift should be bound because it is the entity governed by the Agreement and the dispute falls within its scope. | Arbitration requires a direct contract with the party; Thrift is not a signatory to the arbitration agreement. | Dispositive; court does not reach, as Aldridge lacks standing to compel arbitration. |
| Does Aldridge’s conduct while a Member support arbitration against Thrift for acts during membership? | Arbitration clause should apply to disputes arising from conduct while Aldridge was a Member. | Exclusion of former Members and the contractual text prevent arbitration by Aldridge. | Rejected; the contractual text excludes former Members, so arbitration is not compelled. |
Key Cases Cited
- AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (U.S. 2011) (federal policy favoring arbitration; arbitration is a matter of contract)
- First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (U.S. 1995) (gateway issues governed by ordinary contract principles)
- In re Weekley Homes, L.P., 180 S.W.3d 127 (Tex. 2005) (gateway matters for arbitration determined by courts per Texas Supreme Court)
- J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223 (Tex. 2003) (de novo review of arbitrability questions)
- Bates v. Tex. City, 177 S.W.3d 419 (Tex. App.—Hou. [1st Dist.] 2005) (contract interpretation governs arbitration scope)
- Rent-A-Center, W. Inc. v. Jackson, 556 U.S. 635 (U.S. 2009) (arbitration agreements are contracts to be enforced according to terms)