SpeedeMissions, Inc. v. Bear Gate, LP and Spencer Head, LLC
404 S.W.3d 34
| Tex. App. | 2013Background
- Speedemissions sued for declaratory judgment seeking to compel Bear Gate to arbitrate claims arising from leases, arguing the Lease Agreements are within the Stock Purchase Agreement's arbitration clause.
- Stock Purchase Agreement (SPA) excluded the Properties and contained arbitration provisions, but did not reference the Lease Agreements; Bear Gate received the Properties from Mr. Sticker prior to the SPA closing.
- Lease Agreements between Speedemissions and Bear Gate did not contain arbitration clauses, and were separate instruments executed at closing with distinct purposes from the SPA.
- Speedemissions contends the Lease Documents are Contemplated Transactions under the SPA and thus fall under the SPA arbitration clause; Bear Gate contends there was no mutual assent to arbitrate Lease disputes and instruments are separate.
- Trial court denied arbitration; Speedemissions appealed, arguing the agreements should be read together to compel arbitration.
- Court applies state contract law and FAA principles, concluding the SPA and Lease Agreements are separate instruments with no meeting of the minds to bind Bear Gate to arbitration and affirms the denial.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are Bear Gate bound to arbitrate under SPA terms? | Speedemissions: SPA arbitration clause encompasses Contemplated Transactions including Leases. | Bear Gate: SPA excludes the Properties; no mutual assent to arbitrate Lease disputes; separate instruments. | No arbitration against Bear Gate; no valid agreement binding Bear Gate. |
| Should SPA and Lease Agreements be read together as a single transaction? | Documents were part of a single transaction; leases were essential to the acquisition value. | Documents are intrinsically separate with distinct parties and purposes; reading together would misapply arbitration terms. | They are not to be read together; separate agreements control. |
| Does the direct benefits estoppel doctrine apply to Bear Gate? | Bear Gate received benefits from lease-back; estoppel should compel arbitration. | Bear Gate did not receive direct benefits under SPA; estoppel not applicable. | Direct benefits estoppel does not apply. |
| Is Jones v. Kelley applicable to this multi-document transaction? | Contends related documents should be construed together as in Jones. | Jones is distinguishable; here documents do not reference each other or form a single instrument. | Jones is not applicable; not a single integrated contract. |
| Do the Lease Agreements fall within the arbitration clause for any reason? | Lease terms are part of the contemplated transactions under the SPA. | Lease agreements contain no arbitration provision and do not condition performance on SPA terms. | Lease disputes are not arbitrable against Bear Gate. |
Key Cases Cited
- In re Kellogg Brown & Root, Inc., 166 S.W.3d 732 (Tex. 2005) (valid arbitration requires a valid agreement and proper scope)
- J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223 (Tex. 2003) (scope and validity of arbitration agreements governed by contract law)
- Cleveland Constr., Inc. v. Levco Constr., Inc., 359 S.W.3d 843 (Tex. App.—Houston [1st Dist.] 2012) (presumption in favor of arbitration exists only after valid agreement shown)
- AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (U.S. 2011) (parties may limit issues and choose arbitration framework)
- In re Rubiola, 334 S.W.3d 220 (Tex. 2011) (orig. proceeding standard for arbitration orders)
- ExxonMobil Corp. v. Valence Operating Co., 174 S.W.3d 303 (Tex. App.—Houston [1st Dist.] 2005) (court confines analysis to contract language and surrounding circumstances)
- A.J. Robbins & Co. v. Roberts, 610 S.W.2d 854 (Tex. Civ. App.—Amarillo 1980) (separate contracts with distinct purposes may not be merged)
- Jones v. Kelley, 614 S.W.2d 95 (Tex. 1981) (multidocument transactions may be read together only when appropriate)
- Fort Worth Indep. Sch. Dist. v. City of Fort Worth, 22 S.W.3d 831 (Tex. 2000) (contiguous related documents may form a unified agreement when appropriate)