Gray Wireline Service, Inc. v. Cavanna
2011 Tex. App. LEXIS 8149
| Tex. App. | 2011Background
- GWSI appeals three trial court orders: (1) reforming several employment agreements, (2) compelling arbitration and denying a stay of unrelated litigation pending arbitration, and (3) granting a temporary injunction.
- The arbitration agreements cover non-compete provisions and allow interim relief in court; the trial court reformed the non-compete clauses and tolling provisions.
- The non-compete reform concerned geographic scope and tolling language; the court reform broadened the geographic restriction and altered tolling.
- The arbitration clause requires arbitration of disputes arising from the agreements in Delaware with AAA rules, and allows interim relief in court but not permanent reform by the court.
- The stay issue concerns whether non-signatories to the arbitration clause should be stayed pending arbitration, given the central issue involves alleged non-compete violations.
- The temporary injunction issue centers on Rule 683 requirements and whether the injunction order was void for failing to set a trial on the merits.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the trial court could reform the non-compete under arbitration. | GWSI: reform falls outside arbitration; must be decided by arbitrator. | Cavanna/Gray/Nester: reform is within arbitration as equitable relief. | Reform not within arbitration; must be arbitrated. |
| Whether the stay should cover non-signatories pending arbitration. | Litigation should be stayed to avoid moot arbitration. | Some defendants stayed; others not; stay not required for all. | Stay should be issued for all pending arbitration-related claims. |
| Whether the temporary injunction complied with Rule 683. | Injunction void if not compliant; appeal argues void order. | Injunction valid; procedural defects minor. | Injunction void and must be dissolved. |
| Whether the trial court erred by addressing reformation despite arbitration clause scope. | Arbitration clause covers disputes; reformation should be arbitrated. | Clauses outside arbitration references allow court review. | Court erred; reformation outside scope must be decided by arbitrator. |
Key Cases Cited
- In re D. Wilson Constr. Co., 196 S.W.3d 774 (Tex. 2006) (validity of arbitration agreement; de novo review; presumptions in favor of arbitration)
- J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223 (Tex. 2003) (burden shifts to opposing party after valid agreement; scope controls arbitration)
- FirstMerit Bank, N.A. v. Webster, 52 S.W.3d 749 (Tex. 2001) (resolve doubts about arbitrability in favor of coverage)
- Pennzoil Co. v. Arnold Oil Co., 30 S.W.3d 494 (Tex.App.-San Antonio 2000) (arbitrability requires broad construction of arbitration clause)
- Prudential Sec., Inc. v. Marshall, 909 S.W.2d 896 (Tex. 1995) (policy of enforcing arbitration agreements)
- EMS USA, Inc. v. Shary, 309 S.W.3d 653 (Tex.App.-Houston [14th Dist.] 2010) (final hearing for section 15.51(c) relief; not interim)
- Cardinal Health Staffing Network, Inc. v. Bowen, 106 S.W.3d 230 (Tex.App.-Houston [1st Dist.] 2003) (arbitration scope and remedies; final relief)
- InterFirst Bank San Felipe, N.A. v. Paz Constr. Co., 715 S.W.2d 640 (Tex. 1986) (mandatory setting of trial on merits for injunctions)
- EOG Res., Inc. v. Gutierrez, 75 S.W.3d 50 (Tex.App.-San Antonio 2002) (injunctions and related procedures)
- Tom James of Dallas, Inc. v. Cobb, 109 S.W.3d 877 (Tex.App.-Dallas 2003) (arbitration scope considerations)
- In re Merrill Lynch Trust Co. FSB, 235 S.W.3d 185 (Tex. 2007) (staying litigation pending arbitration when collateral issues exist)