Garcia v. Huerta
340 S.W.3d 864
| Tex. App. | 2011Background
- Garcia challenges an amended order denying arbitration; the court reverses and remands for arbitration against Garcia.
- The Huertas originated a Wells Fargo home equity loan with an arbitration clause; the dispute involved Wells Fargo, its affiliates, and Garcia as an agent.
- Huertas defaulted, filed bankruptcy, loan discharged; Wells Fargo foreclosed non-judicially and sold the property to Wells Fargo.
- Huertas sued multiple entities, including Garcia, alleging TDA violations and tort claims; all defendants moved to compel arbitration.
- Settlement waived arbitration rights as to Garcia by Wells Fargo and affiliates; Huertas moved to amend to deny arbitration for Garcia.
- Trial court granted the Motion to Amend; Garcia appeals the denial of arbitration and the waiver issue.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Wells Fargo's express waiver extend to Garcia? | Garcia argues waiver cannot be imputed to him; he is an agent and may enforce arbitration. | Huertas argue waiver of Wells Fargo means Garcia cannot arbitrate as Wells Fargo’s agent. | Waiver cannot be imputed to Garcia; court reverses and compels arbitration for Garcia. |
| Whether Garcia may enforce the arbitration agreement as Wells Fargo's agent remains valid after waiver. | Garcia relied on agency-based extension of arbitration rights. | Huertas contend waiver defeats Garcia’s right. | Garcia may enforce the arbitration agreement as Wells Fargo's agent; waiver did not bar him. |
| What standard applies to the interlocutory appeal of the arbitration denial? | Interlocutory appeal under § 51.016 is appropriate for reviewing denial. | Argues standard and scope of review should align with FAA/TAA precedents. | The court applies abuse of discretion for mixed questions and de novo for legal questions; reviews waiver de novo. |
Key Cases Cited
- In re Wells Fargo Bank, N.A., 300 S.W.3d 818 (Tex.App.-San Antonio 2009) (agency-based extension of arbitration to agents; mandamus relief determined)
- In re Kellogg Brown & Root, Inc., 166 S.W.3d 732 (Tex. 2005) (nonsignatories bound to arbitration via agency theory)
- In re Merrill Lynch Trust Co., 123 S.W.3d 549 (Tex.App.-San Antonio 2003) (scope of arbitration extending to agents for principal signatory)
- In re Labatt Food Service, L.P., 279 S.W.3d 640 (Tex. 2009) (standard for determining existence of a valid arbitration agreement)
- Perry Homes v. Cull, 258 S.W.3d 580 (Tex. 2008) (waiver analyzed in arbitration context; invocation of judicial process)
- In re D. Wilson Const. Co., 196 S.W.3d 774 (Tex. 2006) (presumption favoring arbitration; no waiver unless clear)
- In re Bruce Terminix Co., 988 S.W.2d 702 (Tex. 1998) (strong presumption against waiver; doubts resolved in favor of arbitration)
- Webster v. First Am. Bank, 128 S.W.3d 223 (Tex. 2003) (application of ordinary contract law to enforce arbitration agreements)
- First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (U.S. 1995) (arbitration contracts are interpreted under ordinary contract principles)