Enterprise Field Services, LLC v. TOC-Rocky Mountain, Inc.
405 S.W.3d 767
Tex. App.2013Background
- Interlocutory appeal from denial of motion to compel arbitration in an interstate dispute over gas gathering and NGL allocations.
- Dispute centers on whether TOC’s counterclaims fall under arbitration for the 2006 Gathering Agreement containing an arbitration clause.
- Enterprise filed suit seeking declaratory relief that Straddle Agreement had expired and that it had no obligation to gather/deliver Conoco/TOC gas.
- TOC alleged breach of the Straddle Agreement regarding NGL allocations and sought related declaratory relief; TOC is a party to the Straddle Agreement but non-signatory to the 2006 Gathering Agreement.
- 2006 Gathering Agreement contains an arbitration clause; prior to this appeal, Enterprise sought arbitration under that clause, and TOC amended counterclaims to focus on Straddle Agreement allocations; court decision denied arbitration and remained in district court for declaratory relief and breach claims.
- The issue on appeal is whether TOC’s amended counterclaims are arbitrable under the 2006 Gathering Agreement and whether Enterprise waived arbitration by its prior litigation posture.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether TOC’s counterclaims fall within the Gathering Agreement’s arbitration clause | TOC’s claims touch on interpretation/performance of the Gathering Agreement | TOC’s claims require interpreting the Straddle Agreement with Gathering Agreement terms | Yes; TOC’s claims involve interpreting provisions of the Gathering Agreement, within its scope |
| Whether a non-signatory TOC can be compelled to arbitrate | TOC is bound by BP’s signatory status via the 2006 Gathering Agreement | TOC admitted it has a separate Gathering Agreement and is bound | Yes; TOC pleaded it has a separate Gathering Agreement and thus is bound |
| Whether Enterprise waived arbitration by substantial invocation of judicial process | Enterprise moved to compel arbitration after TOC filed counterclaims | No affirmative conduct seeking to avoid arbitration; minimal discovery; stayed proceedings | No; the trial court erred in finding waiver |
Key Cases Cited
- In re Kellogg Brown & Root, Inc., 166 S.W.3d 732 (Tex. 2005) (establishes framework for arbitration scope and pleading burden)
- In re Provine, 312 S.W.3d 824 (Tex. App.—Houston [1st Dist.] 2009) (recognizes burden-shifting on arbitration motions)
- In re Citigroup Global Mkts., Inc., 258 S.W.3d 623 (Tex. 2008) (waiver and scope principles; substantial invocation standard)
- Perry Homes v. Cull, 258 S.W.3d 580 (Tex. 2008) (waiver analysis; persistent litigation vs. arbitration)
- In re Hawthorne Townhomes, L.P., 282 S.W.3d 131 (Tex. App.—Dallas 2009) (waiver factors; discovery and trial readiness considerations)
- In re D. Wilson Constr. Co., 196 S.W.3d 774 (Tex. 2006) (arbitration scope and de novo review on legal questions)
- In re Bank One, N.A., 216 S.W.3d 825 (Tex. 2007) (waiver and arbitration standards; presumption in favor of arbitration)
- In re FirstMerit Bank, N.A., 52 S.W.3d 749 (Tex. 2001) (establishes standard for arbitration enforcement and scope)
- In re Labatt Food Serv., L.P., 279 S.W.3d 640 (Tex. 2009) (application of de novo review to arbitration questions)