Santander Consumer USA, Inc. v. Mario A. Mata Centroplex Automobile Recovery, Inc. Blake Thornton Vandusen, John F. Thompson D/B/A Centroplex Automobile Recovery, Inc. And Redshift Investigation, Inc.
03-14-00782-CV
| Tex. App. | Jan 21, 2015Background
- Plaintiff Mario Mata sued Santander (auto-finance company) and repossession-related parties after an alleged wrongful repossession caused injury; Mata’s Sale Contract with Santander was amended in 2009 to include an FAA-governed arbitration clause.
- Santander contracted with Redshift (and Redshift subcontracted to Centroplex and repossession agent Blake Vandusen) under Service/Recovery Agreements that expressly designated independent-contractor relationships and contain no arbitration provisions.
- Mata served Santander, Redshift, and Vandusen; he never served Centroplex or its president, John Thompson. After limitations expired on Mata’s claims, Santander asserted cross-claims (contribution/indemnity) against Centroplex, Thompson, Redshift, and Vandusen and moved to compel arbitration.
- The trial court compelled arbitration as to Mata but denied Santander’s motion to compel arbitration as to the Cross-Defendants (Centroplex, Thompson, Redshift, Vandusen).
- On appeal, Santander argued Cross-Defendants should be compelled to arbitrate under the Sale Contract’s arbitration clause via nonsignatory doctrines (primarily agency and incorporation-by-reference), but the Cross-Defendants contended they never signed or saw the Sale Contract and no applicable exception binds nonsignatories.
Issues
| Issue | Plaintiff's Argument (Mata / Cross-Defendants) | Defendant's Argument (Santander) | Held |
|---|---|---|---|
| Can nonsignatory repossession contractors be compelled to arbitrate under Mata–Santander Sale Contract? | Cross-Defendants: No—they never signed or consented; only contracts they signed lack arbitration clauses. | Santander: Yes—nonsignatory doctrines (agency or incorporation by reference) permit compelling arbitration. | Court: No—Cross-Defendants cannot be compelled; no arbitration agreement with them and preserved exceptions do not apply. |
| Does the incorporation-by-reference doctrine bind Cross-Defendants to the Sale Contract arbitration clause? | Cross-Defendants: No—agreements contain no language incorporating the Sale Contract; Cross-Defendants never saw the Sale Contract (no assent). | Santander: (Raised on appeal) Service/Recovery Agreements incorporate or reference terms sufficient to bind subcontractors. | Court: Waived on appeal and, on the merits, inapplicable—no clear language showing knowledge and assent to incorporate the Sale Contract. |
| Does the agency exception bind nonsignatories to arbitration when the signatory later sues them? | Cross-Defendants: No—agency exception requires the signatory to have signed as agent of the nonsignatory at time of contracting; Santander did not sign as agent of Cross-Defendants. | Santander: Cross-Defendants were effectively agents/subject to Santander such that arbitration should attach. | Court: No—the agency exception does not apply; Santander produced no evidence it signed on behalf of Cross-Defendants and cited cases where nonsignatories invoked arbitration, not where nonsignatories were compelled. |
| Are there arbitrable claims pending against Centroplex/Thompson? | Cross-Defendants: No—Plaintiff never served them; only Santander’s post-limitations cross-claims remain, which Santander conceded it cannot compel to arbitration. | Santander: (implicitly) sought to include Centroplex Defendants but acknowledged cross-claims are not arbitrable. | Court: No—there were no plaintiff claims against Centroplex/Thompson, and cross-claims were not moved to arbitration; denial as to Centroplex/Thompson proper. |
Key Cases Cited
- In re Kellogg Brown & Root, Inc., 166 S.W.3d 732 (Tex. 2005) (arbitration depends on consent; state contract law principles govern whether parties agreed to arbitrate)
- In re Merrill Lynch Trust Co. FSB, 235 S.W.3d 185 (Tex. 2007) (FAA does not compel arbitration absent parties’ agreement; trial court lacks discretion to force arbitration without consent)
- Bridas S.A.P.I.C. v. Gov’t of Turkm., 345 F.3d 347 (5th Cir. 2003) (enumerates narrow exceptions permitting arbitration to bind nonsignatories)
- One Beacon Ins. Co. v. Crowley Marine Servs., Inc., 648 F.3d 258 (5th Cir. 2011) (incorporation-by-reference requires knowledge and assent to incorporated terms)
- Bob Montgomery Chevrolet, Inc. v. Dent Zone Cos., 409 S.W.3d 181 (Tex. App.—Dallas 2013) (terms incorporated only if signed document shows parties intended other document to become part of agreement)
- Volt Info. Scis., Inc. v. Bd. of Trs. of Leland Stanford Junior Univ., 489 U.S. 468 (U.S. 1989) (FAA does not displace ordinary contract principles; arbitration requires consent)
- Keytrade USA, Inc. v. AIN Temouchent M/V, 404 F.3d 891 (5th Cir. 2005) (example where contract language explicitly incorporated arbitration clause of another contract)
- Kvaerner ASA v. Bank of Tokyo-Mitsubishi, Ltd., 210 F.3d 262 (4th Cir. 2000) (incorporation/assumption can bind nonsignatory where contract expressly adopts another contract’s obligations)