Hector A. Garcia and Cynda Maddox, Individually and d/b/a The Insurance Outlet v. James K. Walker and Wells Fargo--Appeal from 79th Judicial District Court of Jim Wells County

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Laws-info.com » Cases » Texas » 4th District Court of Appeals » 2006 » Hector A. Garcia and Cynda Maddox, Individually and d/b/a The Insurance Outlet v. James K. Walker and Wells Fargo--Appeal from 79th Judicial District Court of Jim Wells County

State: Texas

Court: Criminal Court of Appeals

Docket No: 04-05-00343-CV

Case Date: 02/22/2006

Plaintiff: LISA M. NUNEZ

Defendant: THE STATE OF TEXAS--Appeal from 357th District Court of Cameron County

Preview:Hector A. Garcia and Cynda Maddox, Individually and d/b/a The Insurance Outlet v. James K. Walker and Wells Fargo--Appeal from 79th Judicial District Court of Jim Wells County
/**/ MEMORANDUM OPINION

No. 04-05-00343-CV

Hector A. GARCIA and Cynda Maddox, Individually and d/b/a The Insurance Outlet, Appellants

v.

James K. WALKER and Wells Fargo Bank, N.A., Appellees

From the 79th Judicial District Court, Jim Wells County, Texas Trial Court No. 00-09-38904-CV Honorable Richard C. Terrell, Judge Presiding Opinion by: Sandee Bryan Marion, Justice Sitting: Catherine Stone, Justice Karen Angelini, Justice Sandee Bryan Marion, Justice

Delivered and Filed: February 22, 2006

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AFFIRMED

In September 2000, appellants sued Wells Fargo Bank, N.A. and one of its employees, James Walker, alleging that appellees published false and defamatory statements that plaintiffs business account was overdrawn over one million dollars. In November 2001, appellees moved to compel arbitration pursuant to the terms of an arbitration agreement contained in the parties depository account agreement. On February 6, 2002, the trial court ordered that arbitration commence by March 13, 2002. The court s order recited that if appellants did not commence arbitration on or before March 13, 2002, their claims would be dismissed. On March 19, 2002, appellees filed a motion to dismiss appellants claims on the grounds that appellants failed to comply with the arbitration order. Almost three years later, on March 7, 2005, the trial court signed an order dismissing the lawsuit on the grounds that appellants failed to commence arbitration pursuant to the court s February 2002 order. We affirm. DISCUSSION On appeal, appellants present five issues: (1) the arbitration agreement is not supported by consideration, (2) none of appellees customers are bound by the arbitration agreement, (3) appellants themselves did not agree to arbitration, (4) the agreement does not apply to appellants, and (5) the agreement to arbitrate does not apply to appellants dispute with appellees. However, in their response opposing arbitration and at the hearing on the motion to compel, appellants asserted only a single objection to the motion to compel arbitration: that there was a complete failure of consideration for the agreement. Because appellants raised only the failure of consideration objection at the hearing, all other objections to the motion to compel arbitration have been waived. According to appellants, consideration failed because they received nothing from defendants other than a breach of fiduciary duties which nearly resulted in the obliteration of [their] business. Appellants argument lacks merit because mutual promises to give up the right to litigate can constitute consideration supporting an agreement to arbitrate. See Northern Natural Gas Co. v. Conoco, Inc., 986 S.W.2d 603, 607 (Tex. 1998); In re Jebbia, 26 S.W.3d 753, 758 (Tex. App. Houston [14th Dist.] 2000, orig. proceeding); In re Alamo Lumber Co., 23 S.W.3d 577, 579 (Tex. App. San Antonio 2000, orig. proceeding). Here, under the terms of the agreement, all parties agreed to arbitration and to waive their right to a jury trial and to a bench trial. Because the parties surrendered their right to litigate, these mutual promises supplied valid consideration. In re Alamo Lumber, 23 S.W.3d at 579. Accordingly, the trial court did not err in ordering appellants to arbitration. A trial court has the authority to dismiss a plaintiff s claims for failure to comply with its orders. See Tex. Gov t Code Ann. 21.001(a) (Vernon 2004) ( A court has all powers necessary for the exercise of its jurisdiction and the enforcement of its lawful orders, including authority to issue the writs and orders necessary or proper in aid of its jurisdiction. ); see also Sherman v. Triton Energy Corp., 124 S.W.3d 272, 279-80 (Tex. App. Dallas 2003, pet. denied) (section 21.001(a) empowers trial court to strike party s pleadings and enter judgment for opposing party in response to party s repeated noncompliance with trial court s orders); Woodall v. Clark, 802 S.W.2d 415, 418 (Tex. App. Beaumont 1991, no writ) (same). Therefore, we next consider whether the trial court abused its discretion in dismissing appellants claims based on a failure to comply with the court s order compelling arbitration. See Roberts v. Padre Island Brewing Co., 28 S.W.3d 619, 620 (Tex. App. Corpus Christi 2000, denied) (stating abuse of discretion standard of review of dismissal order). Two hearings were held on appellees motion to dismiss. At a November 6, 2002 hearing, the trial court heard arguments on whether it had the authority to dismiss a lawsuit that had been abated to allow arbitration to proceed. No orders were signed following this hearing. The motion to dismiss was again taken up at a March 2, 2005 hearing. At this hearing, appellants testified they had previously been unable to pay the $5,000 arbitration fee; however, they were now willing to proceed to arbitration. On cross-examination, appellants could not state where they learned it would cost $5,000 to initiate arbitration and they were unaware of any rule requiring advance payment of $5,000. Appellants stated they had not contacted the American Arbitration Association; were not aware of their attorney contacting the association; and did not know whether they could commence arbitration without paying any fees.
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In its dismissal order, the trial court found that appellants failed to make reasonable efforts to comply with the February 2002 order in a timely manner. Under an abuse of discretion standard, we defer to a trial court s rulings when discretionary matters depend on the resolution of conflicting facts. See Walker v. Packer, 827 S.W.2d 833, 839 (Tex. 1992); see also Henry Schein, Inc. v. Stromboe, 102 S.W.3d 675, 691 (Tex. 2002) (stating that only some of [the trial court s] determinations like those based on its assessment of the credibility of witnesses must be given the benefit of the doubt. ). On this record, we conclude the court did not abuse its discretion by dismissing appellants claims. See Smith v. H.E. Butt Grocery Co., 18 S.W.3d 910, 914 (Tex. App. Beaumont 2000, pet. denied) (holding trial court did not err in dismissing claims due to plaintiff s failure to proceed with arbitration). CONCLUSION We overrule appellants issue on appeal and affirm the trial court s order. Sandee Bryan Marion, Justice

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