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03-17-00386-CV
19657014
THIRD COURT OF APPEALS
AUSTIN, TEXAS
03-17-00386-CV 9/25/2017 5:32 PM
JEFFREY D. KYLE
CLERK
NO. 03-17-00368-CV
FILED IN
3rd COURT OF APPEALS
IN THE COURT OF APPEALS AUSTIN, TEXAS
THIRD DISTRICT OF TEXAS 9/25/2017 5:32:16 PM
JEFFREY D. KYLE
Clerk
v.
Carl J. Wilkerson
State Bar No. 21478400
cwilkerson@brstexas.com
200 N. Mesquite St., Suite 200
Arlington, Texas 76011
Telephone: (817) 274-5992
Facsimile: (817) 261-1671
Table of Contents..........................................................................ii
Index of Authorities......................................................................iii
Argument…………………………………………………………………….1
Prayer..............................................................…………………………………….19
Certificate of Compliance…………………………………………………………20
Certificate of Service………………………………………………………………20
ii
INDEX OF AUTHORITIES
RSL Funding, LLC v. Pippins, 499 S.W.3d 423 (Tex. 2016) (per curiam)…..14,15,17
Santander Consumer USA, Inc. v. Mata, 2017 Tex. App. LEXIS 2631
(Tex. App. – Austin 2017, no pet.)…...……………………………………………..3
SEB, Inc. v. Campbell, 2011 WL 749292, 2011 Tex. App. LEXIS 1588
(Tex. App. – Austin 2011, no pet.) (mem. op.)……………………..…………..13,18
iii
Texas Rules
Texas Statutes
iv
ARGUMENT
1. Appellants preserved error under TEX. R. APP. P. 33.1 by: moving to compel
arbitration “pursuant to the terms of the Contract”; presenting complete
summary proof of the existence of an arbitration agreement covering the claims
at issue; and arguing applicable rules of law with sufficient specificity to enable
the trial court to determine, as a matter of law, that the parties agreed to
arbitrate their dispute [in reply to Appellees’ Argument A.].
Dargahi and Kamran Dargahi, made their complaint to the trial court by their
timely Plea in Abatement and Motion to Compel Arbitration that clearly asserted,
“[p]ursuant to the terms of the Contract, Defendants are entitled to abate this
matter for binding arbitration.… [and] the parties have agreed to resolve the
dispute via binding arbitration with the American Arbitration Association … and
Appellant Yekk Construction Services, LLC d/b/a Lakeway Custom Homes and
presentation of applicable rules of law with sufficient specificity to enable the trial
court to determine, as a matter of law, that the parties agreed to arbitrate their
arbitration agreement covering the claims at issue. See TEX. R. APP. P. 33.1 (a).
them and Appellant Yekk Construction Services, LLC d/b/a Lakeway Custom
agreement between them and Appellants Pejman Dargahi and Kamran Dargahi,
specifically those Appellants’ “right to invoke the arbitration clause in the first
To compel arbitration, the trial court must first determine as a matter of law
that the parties have agreed to arbitrate. Murdock v. Trisun Healthcare, LLC, 2013
Tex. App. LEXIS 5638, *6 (Tex. App. – Austin 2013, pet. denied). The party
moving to compel arbitration must present complete summary proof of his case in
chief proving the existence of an arbitration agreement covering the claims at issue.
Id. This includes proving the party seeking to enforce the arbitration agreement
was a party to it or had the right to enforce the agreement notwithstanding. Id. at
*14.
1
Appellees’ Brief, at 14.
the written arbitration agreement but may also bind a non-signatory under
principles of contract law. In re Rubiola, 334 S.W.3d 220, 224 (Tex. 2011). Accord,
Santander Consumer USA, Inc. v. Mata, 2017 Tex. App. LEXIS 2631 (Tex. App. –
bound to an arbitration clause when rules of law or equity would bind them to the
contract law to determine who may enforce an arbitration agreement under the
FAA”).
In re U.S. Home Corp., 236 S.W.3d 761 (Tex. 2007) (per curiam) provides
rules of contract law in response to homeowners’ claims that they do not have to
Houston [14th Dist.] 2012, no pet.) provides a rule of law regarding how allegations
Id. at 272-273.
Contract as a basis for compelling arbitration, that Appellees sued Appellants for
breach of that Contract, and that Appellees’ other claims against Appellants
(including claims against Pejman Dargahi and Kamran Dargahi) were encompassed
referenced U.S. Home’s rules of law in their arguments to the trial court:
As with most home cases, this – this matter had a written contract
between the parties…. I would ask the Court to take judicial notice of
the pleadings on file by plaintiff in this case. But it involves complaints
regarding the construction of the residence, as well as the handling of
RR 27:13 – 28:15.
When Appellants argued applicability of those rules of law, they did not
specifically state: “A litigant who sues based on a contract subjects him or herself
to the contract’s terms”; or “direct benefits estoppel.” See U.S. Home, at 765;
Courtland Bldg. Co., at 271. But, the trial court’s inquiry to Appellees – “Have you
just sued on the contract, or have you brought other claims?” – indicates the trial
all Appellants had the right to enforce arbitration. RR 13:12-13. When Appellees
answered the trial court’s inquiry, they proved Appellants’ right to enforce
arbitration:
2
CR 18, from Appellees’ Motion for Partial Summary Judgment, recites “Defendants are
general contractors hired to build Plaintiffs’ home under a fixed-price contract.” CR 156-157,
from Appellees’ Fourth Amended Petition, their live pleading at the time of the trial court’s
5/24/17 hearing, recites Appellees’ specific breach of contract claims “Against Pejman Dargahi
and Yekk” and Appellees’ general “Defendants have breached their contracts and warranties”
claims “Against All Defendants.” CR 269-270, from Appellees’ Response to Motion to Compel
Arbitration recites “Defendants were hired to build Plaintiffs’ home under a fixed-price
contract” and “Defendants breached the construction contract.”
brokers for failing to renew a builder’s risk insurance policy covering the project.
parties as responsible third parties and Sapphire then asserted its own claims
against those parties. Id. G.T. Leach was the general contractor for the
condominium project. Id. at 510. The general contract between G.T. Leach and
arbitration of Sapphire’s claims against it. Id. All other defendants, i.e. the
compel arbitration based upon the arbitration agreement between G.T. Leach and
Sapphire. Id. The trial court denied all the motions without explanation and the
The Texas Supreme Court held that Sapphire must arbitrate its claims
against G.T. Leach. See id. at 523. The Court concluded that Sapphire did not agree
parties to the general contract; they did not show a valid legal right to enforce the
general contract’s arbitration agreement; and Sapphire was not equitably estopped
from refusing to arbitrate its claims against them. See id. at 523-524.
Equitable estoppel did not require Sapphire to arbitrate its claims against the
insurance brokers, subcontractors, and engineers because Sapphire did not sue
those parties for breach of obligations under the general contract containing the
arbitration agreement. See id. at 527-528. Sapphire alleged those parties’ breaches
of “contractually agreed” duties, but those duties arose from separate contracts:
Id. at 528-529.
Kamran Dargahi. Appellees seek to hold Pejman Dargahi and Kamran Dargahi
provision. See G.T. Leach, at 527. Unlike Sapphire’s claims against the insurance
Appellees’ claims against Pejman Dargahi and Kamran Dargahi: arise from and
Home, at 765; Courtland Bldg. Co., at 271. By those rules of law, consistent with
G.T. Leach, Appellees are equitably estopped from denying Appellants’ right to
Applicable rules of law, provided by the Texas Supreme Court and courts of
arbitration of Appellees’ claims against them as a matter of law. The record shows
individually liable for any breaches of Yekk’s obligations since he is a signatory of the
evidence that Pejman Dargahi “signed as an agent for an identified principal, and
his principal’s identity was actually known to and acknowledged by the Handas.”
CR 309.
Appellees also submitted evidence that Pejman Dargahi and Kamran Dargahi
are agents of Lakeway Custom Homes and Renovation by suing and moving for
summary judgment against them for breaches of fiduciary duties under the
3
Appellees’ Brief, at 17-21.
“trustees” under those statutes, Appellees rely upon the statutory definition of
TEX. PROP. CODE §§ 162.002. By that definition, Appellees admitted that Pejman
Dargahi and Kamran Dargahi are each an “agent of a contractor … who has control
and Kamran Dargahi had control and direction over Plaintiffs’ progress payments
for the Project” CR 153, 456. As members and managers of Lakeway Custom
Homes and Renovation, Kamran Dargahi and Pejman Dargahi are agents of
Lakeway Custom Homes. See TEX. BUS. ORG. CODE §§ 101.251, 101.254 (a). By
this Court’s rule of law, Kamran Dargahi and Pejman Dargahi are also covered by
the arbitration agreement in the Contract and may enforce it against Appellees. See
SEB, Inc. v. Campbell, 2011 Tex. App. LEXIS 1588, *13-*14 (Tex. App. – Austin
Since Perry Homes v. Cull, the Texas Supreme Court’s more recent opinions
against claims of waiver of arbitration show that Appellees’ evidence did not
overcome the strong presumption against waiver. Compare Perry Homes v. Cull, 258
S.W.3d 580 (Tex. 2008) (plaintiffs vigorously opposed arbitration for 14 months,
then moved to compel arbitration on the eve of trial) with Richmont Holdings, Inc. v.
Superior Recharge Sys, L.L.C., 455 S.W.3d 573, 575-576 (Tex. 2014) (per curiam)
(party did not waive arbitration by: delaying nineteen months after being sued;
filing second suit; moving to transfer venue; and engaging in very limited
discovery); G.T. Leach, at 511-515 (Tex. 2015) (party did not waive arbitration by:
delaying approximately twelve months after being sued; filing motions to transfer
disclosures); and RSL Funding, LLC v. Pippins, 499 S.W.3d 423, 430-434 (Tex.
2016) (per curiam) (party did not waive arbitration by: adding sellers of annuities to
suit against issuers of annuities; delaying less than eight months to seek arbitration
against sellers; and engaging in extensive discovery and motion for summary
• Appellants waited nine months, from the date Appellees filed suit, to
seek arbitration;
• Appellants’ awareness of the arbitration clause in the Contract;
• Appellants sought arbitration on the eve of trial;
• Appellants engaged in pretrial matters related to the merits; and
• Appellees’ amount of time and expense committed to the litigation.
CR 273-276.
Texas Supreme Court, “while delay by the party seeking arbitration may be a
factor, we have found no waiver in cases where there were delays as much as eight
Appellees argued that Appellants “do not and cannot assert that they were
unaware of the arbitration clause in the Contract.” CR 275. Appellees argued that
the Residential Construction Contract was Appellees’ “own form contract”, but
and when [Appellants] knew of the arbitration agreement during the period of
tried.” Id. Appellees presented no evidence of the trial court’s trial setting.
Although Appellees argued that their filing of a Motion for Partial Summary
Judgment was an “eve of trial” circumstance, Perry Homes does not support that
argument. In that case, the Texas Supreme Court based its waiver holding on a
motion to compel arbitration filed 14 months after filing suit resulting in an order
compelling arbitration signed four days before the court’s trial setting, i.e. on the
“eve of trial.” See Perry Homes, at 585, 596. That Court did not equate a hearing on
trial setting. Appellees likewise declined such equation when they admitted, in this
Court, that since Appellees’ “Motion for Partial Summary Judgment does not seek
to dispose of all issues and parties in this lawsuit”, this Court’s June 22, 2017
Order staying trial court proceedings until the disposition of this appeal was not
required.4
pretrial matters without once mentioning the arbitration clause.” CR 275. But the
Texas Supreme Court considers “the extent of the movant’s engagement in pretrial
4
Appellees’ Motion for Reconsideration of Order Granting Appellants’ Emergency Motion for
Temporary Relief etc. filed 6/23/2017.
filing of their answer, and responding /supplementing their discovery responses are
process and do not amount to waiver. See G.T. Leach, at 513-514. Appellants’ sole
lender does not amount to substantial invocation of the judicial process and does
not amount to waiver. See RSL Funding, at 430. And, without waiving Appellants’
argument that Appellees presented no evidence that Appellants “agreed to set the
case for trial”, the Texas Supreme Court’s most recently recited examples of its
“no waiver” cases includes a case in which the party seeking arbitration conducted
discovery and agreed to a trial setting. See RSL Funding, at 430 (citing EZ Pawn
Appellees argued the amount of their time and expense expended in the
$35,000.00 in attorney’s fees, without testimony that such fees were reasonable or
necessary. CR 276, 448. But, Appellees presented no evidence that they suffered
actual prejudice by showing they incurred costs and fees “due to the movant’s
actions or delay.” See In re Castro, 246 S.W.3d 756, 762 (Tex. App. – Eastland
2008) (party seeking arbitration waived arbitration clause in open court, then filed
attorney’s fees incurred during delay in seeking arbitration and in preparing for
trial). Accord, In re Vesta Ins. Group, Inc., 192 S.W.3d 759, 763 (Tex. 2006)
SEB, Inc., at *21-*23 (citing Vesta and additional court of appeals cases requiring
evidence … may be made for the first time on appeal in the complaining party’s
Kamran Dargahi, and Yekk Construction Services, LLC d/b/a Lakeway Custom
Homes and Renovation pray that this Court: reverse the trial court’s May 30, 2017
abuse of discretion; remand the case to the trial court with instructions that the
with the parties’ arbitration agreement in their Contract, and abate further
proceedings in the trial court pending conclusion of the parties’ arbitration; award
Appellants their costs on appeal; and award Appellants such other relief to which
Respectfully submitted,
CERTIFICATE OF SERVICE
David King
State Bar No. 24083310
dking@gdhm.com
Brian T. Cumings
State Bar No. 24082882
bcumings@gdhm.com
GRAVES, DOUGHERTY, HEARON & MOODY
401 Congress Ave., Suite 2200
Austin, Texas 78701
Telephone: (512) 480-5603
Facsimile: (512) 536-9942