508 S.W.3d 320
Tex. App.2013Background
- NH Insurance and Magellan Reinsurance entered 1997 contract that assigned Magellan 100% of NH's obligations under certain auto dealer policies in exchange for premiums and a trust account for security.
- Arbitration provision requires disputes interpreting the agreement to be resolved by arbitration in New York.
- In 2002 NH withdrew funds from the trust, prompting disputes over deposits and accounting; Magellan demanded documentation and a larger deposit.
- NH filed a wind-up petition in the Turks and Caicos Islands (TCI) in 2004, arguing insolvency issues; TCI court initially denied arbitration, then an appellate process began in NY and TCI.
- Magellan filed Texas declaratory claims in 2005; NH moved to dismiss/abate in 2006; TCI litigation concluded in 2009 with NH not a creditor; Texas action was abated and later revived.
- NH moved to compel arbitration in 2011; Magellan amended its petition; court denied arbitration; NH sought interlocutory appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether NH is judicially estopped from compelling arbitration. | NH contends the claims fall within arbitration scope and waivers do not apply. | Magellan contends NH's prior conduct bars arbitration via judicial estoppel and related doctrines. | NH is judicially estopped; arbitration not compelled. |
Key Cases Cited
- Ferguson v. Bldg. Materials Corp. of Am., 295 S.W.3d 642 (Tex. 2009) (judicial estoppel described; purpose to prevent shifting positions)
- Pleasant Glade Assembly of God v. Schubert, 264 S.W.3d 1 (Tex. 2008) (limits on applying judicial estoppel)
- Moore v. Neff, 629 S.W.2d 827 (Tex. App.—Houston [14th Dist.] 1982) (illustrates shifting positions to suit the case)
- In re Dillard Dep’t Stores, Inc., 186 S.W.3d 514 (Tex. 2006) (arbitration scope focus on factual allegations)
- In re FirstMerit Bank, N.A., 52 S.W.3d 749 (Tex. 2001) (tort claims related to a financing contract arbitrable if intertwined)
- Jack B. Anglin Co., 842 S.W.2d 266 (Tex. 1992) (focus on factual content over labels for arbitration scope)
- Hou-Scape, Inc. v. Lloyd, 945 S.W.2d 202 (Tex. App.—Houston [1st Dist.] 1997) (tort claims arbitrable when arising from contract)
- Prudential Sec. Inc. v. Marshall, 909 S.W.2d 896 (Tex. 1995) (policy favoring arbitration; doubts resolved in favor of arbitrability)
- In re Labatt Food Svc., L.P., 279 S.W.3d 640 (Tex. 2009) (abuse-of-discretion standard for arbitration decisions)