S.C. Maxwell Family Partnership, Ltd v. Thomas Kent and Nancy Kent, 472 S.W.3d 341

Thomas and Nancy Kent filed a declaratory-judgment suit seeking a declaration that a partnership agreement with S.C. Maxwell Family Partnership, Ltd. is valid and that they own 50% of a Brenham self-storage facility.
Maxwell answered denying formation/validity of the partnership agreement and pleaded fraud, fraud in the inducement, failure of consideration, and lack of consideration.
Maxwell moved to compel arbitration under the agreement’s arbitration clause (invoking the Texas Arbitration Act); the Kents opposed arbitration.
At the motion hearing Maxwell repeatedly asserted lack of consideration (challenging formation), while also asserting fraud-based challenges to validity.
The trial court denied Maxwell’s motion to compel arbitration; Maxwell appealed the interlocutory order.

Issue	Plaintiff's Argument (Kents)	Defendant's Argument (Maxwell)	Held
Whether the trial court erred in denying motion to compel arbitration	Kents argued arbitration is improper because Maxwell denies contract formation (lack of consideration) and thus the court must decide threshold formation issues	Maxwell argued arbitration should be compelled and that defenses attacking validity (not formation) are for the arbitrator; relied on TAA §171.021 and its motion to compel	Court held Maxwell’s pleading that there was no consideration challenged contract formation, so Maxwell failed to prove an agreement to arbitrate; denial of motion to compel affirmed
Whether the Kents’ statement conceding arbitration (if agreement valid) constituted a judicial admission forcing arbitration	Kents noted they would arbitrate if the agreement is valid	Maxwell argued the statement shows Kents admitted arbitration applies	Court held the Kents’ conditional statement did not overcome Maxwell’s contemporaneous attack on formation; conditional concession insufficient to force arbitration

Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395 (U.S. 1967) (separability doctrine: arbitration clause generally severable from contract)
Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 (U.S. 2006) (distinguishing challenges to contract formation from general validity challenges)
In re Morgan Stanley & Co., 293 S.W.3d 182 (Tex. 2009) (where existence of contract is disputed, court must decide formation issues)
J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223 (Tex. 2003) (movant must prove existence of agreement to arbitrate under Texas law)
G.T. Leach Builders, LLC v. Sapphire V.P., LP, 458 S.W.3d 502 (Tex. 2015) (Texas law favoring arbitration and discussion of arbitration waiver and procedure)
Am. Med. Techs., Inc. v. Miller, 149 S.W.3d 265 (Tex. App.—Houston [14th Dist.] 2004) (lack of authority/capacity and formation-related defenses are for the court)