DRUSCH LLC v. BORCHERS (2026)

OPINION

These two interlocutory appeals arise from two lawsuits filed in two different divisions of the Business Court. Stratton Borchers filed the first suit in the First Division of the Business Court, alleging that Karl Drusch and certain affiliated businesses breached a company Operating Agreement and his own Employment Agreement (plus related torts) arising from his termination as President for one of the affiliates. Pursuant to an arbitration clause in the Operating Agreement, the trial court compelled arbitration and abated the suit. Since orders compelling arbitration are generally not appealable,¹ Borchers did not appeal.

During the arbitration, Drusch repossessed certain membership units Borchers had pledged as collateral under a 2021 Promissory Note and Security Agreement used to purchase them. Borchers filed a second lawsuit as a result, this time in the Eighth Division of the Business Court. Drusch moved to dismiss the second suit for lack of subject-matter jurisdiction and to compel arbitration. The second trial court denied Dursch's motions, and granted a temporary injunction on November 25, 2025, barring Drusch from disposing of the contested units. Drusch filed an interlocutory appeal from those orders in this Court in December of 2025 (No. 15-25-00224-CV).

Three months later, Borchers returned to the First Division with an “emergency” motion to stay a final hearing in the pending arbitration scheduled for March 30, 2026. The First Division amended its previous arbitration order to clarify that it applied only to claims arising under the Operating Agreement (which had an arbitration clause) and not to claims arising under the Security Agreement (which did not), but also stayed the arbitration in its entirety due “to ongoing appellate review” of the Eighth Division's orders in the related case. Drusch filed the second interlocutory appeal from that order on April 3, 2026 (No. 15-26-00087-CV).

These two appeals raise several novel issues, not least of which is two appeals from two divisions of a single unitary court,² in each of which the parties agree a decision in one would dispose of the other.³ Two legal rules, both recently addressed by the Texas Supreme Court, guide our analysis: (1) “an arbitration agreement does not have to be included in each of the contract documents it purports to cover”;⁴ and (2) when the parties have two contracts and one provides for AAA arbitration (as here), whether a claim arises under one contract or the other is delegated “exclusively to the arbitrator.”⁵

Because the valid arbitration agreement in one contract here delegates the scope of that arbitration exclusively to the AAA, the Eighth Division erred by failing to refer Borchers' second suit to the arbitrator to decide whether that suit was included. In its effort to avoid an intra-court conflict, the First Division committed the same error by limiting the scope of the ongoing arbitration and then staying it when the parties had delegated such decisions exclusively to the AAA. We reverse those two orders, but affirm the Eighth Division's temporary order barring disposition of the disputed units pending the arbitrator's decision.

BACKGROUND

 The lawsuits

TrueAero Group, LLC is a holding company (the “holding company”) for several subsidiaries, including TrueAero, LLC, a diversified aviation services company (the “aviation company”). Karl Drusch is the CEO and majority owner of the former, which is the sole owner of the latter.

In late October 2024, Stratton Borchers was terminated as President of the aviation company. About a month and a half later, he sued Drusch and several affiliated companies in the Business Court's First Division,⁶ alleging various employment-related claims. In April 2025, the First Division granted Drusch's motion to compel arbitration of those claims pursuant to an arbitration clause in the holding company's Operating Agreement and abated the remainder of the case.⁷

While the arbitration was ongoing, a dispute arose between the parties involving a Promissory Note that Borchers executed in 2021 in favor of the aviation company, using it to purchase membership units in the holding company. As security for the Note, Borchers and the holding company executed a Security Agreement pledging his 975 membership units in the holding company as collateral. The Security Agreement stated that Borchers committed an “Event of Default” if he failed to pay the Note according to its terms, and gave the holding company the right to “dispose of the Collateral ․ by private proceedings” in that event.

Borchers ultimately failed to pay the amount owed under the Promissory Note by its maturity date, October 1, 2025. Eight days later, the holding company's counsel sent Borchers a demand letter advising that he was in default, and demanding payment of principal and interest of $90,531.16, daily interest of $4.98, a late charge, and “reasonable and necessary attorneys' fees and expenses of $5,000.” The notice stated that the company intended “to conduct a private sale (or other commercially reasonable disposition) on or after October 20, 2025,” but that Borchers had a right to cure his default by paying the full amount before that date.

On October 17, Borchers paid $91,071, representing full payment except for the $5,000 in attorneys' fees. Three days later, the holding company's counsel sent Borchers a disposition notice informing him that, in light of his “fail[ure] to remit payment in full,” his 975 membership units had been sold to Drusch by private sale for $100,000.

The next month, Borchers sued Drusch and the holding company in the Business Court's Eighth Division seeking injunctive relief to prevent and recover his units.⁸ He alleged that his payment was improperly rejected because neither the Promissory Note nor the Security Agreement provided for attorneys' fees upon default.⁹ The Drusch defendants moved to dismiss the suit for failure to meet the $5 million amount in controversy required for suits in the Business Court, and alternatively to compel arbitration pursuant to the arbitration provision contained in the company Operating Agreement.

Meanwhile, the AAA arbitrator set a final hearing in the pending arbitration for March 30, 2026. But the parties were busy elsewhere:

• the Eighth Division issued orders on November 25th denying arbitration, granting a temporary injunction, and urging the parties to file “motions for summary judgment as soon as practicable”;

• the Drusch parties filed an interlocutory appeal from those orders in this Court on December 3, 2025, and requested a stay of the trial court proceedings on December 16th;

• when this Court denied that stay on December 23rd, Drusch filed on February 4, 2026 a petition for writ of mandamus and a motion for stay in the Texas Supreme Court, which that Court granted on February 11th;10

• Borchers filed a 500-page emergency motion asking the arbitrator to stay the almost-completed arbitration on February 18, 2026, which the arbitrator denied on February 26, 2026;

• Borchers asked the First Division to stay the arbitration on March 9, 2026, pending the outcome of the Eighth Division litigation;

• the First Division on March 26th confirmed its order compelling arbitration as to claims arising out of the Operating Agreement, but stayed the arbitration pending the outcome of the litigation in the Eighth Division;

• the parties finished briefing in this Court on the merits of the Eighth Division's orders on March 17, 2026;11

• the parties finished briefing in the Texas Supreme Court on March 23rd challenging our denial of a stay to allow the arbitration to proceed;12

• Drusch filed an interlocutory appeal to this Court from the First Division's order staying arbitration on April 3, 2026;

• review of whether a stay is mandatory pending appeal of the First Division's order staying arbitration was granted by the Texas Supreme Court on June 19, 2026, and set for oral argument on December 1, 2026;13

• the parties finished briefing on the merits of the First Division order in this Court on June 22, 2026.14

 The written orders

The Eighth Division. In its written orders, the Eighth Division (1) rejected the Drusch parties' objections to the Business Court's jurisdiction; (2) refused to compel arbitration because the “operative contract” (the Security Agreement) “contains no arbitration provision”; and (3) granted a temporary injunction preventing Drusch from transferring the contested units pending trial, finding that Borchers was likely to prevail on the merits because “there is nothing in the Note or Security Agreement that would require a payment of attorney's fees to cure an event of default.” The Drusch parties appeal all three orders (Cause No. 15-25-00224-CV).

The First Division. Faced with Borchers' claim that the Eighth Division should decide the “threshold” issue whether he still owned any units, and the Texas Supreme Court's possible intervention that might send that dispute to arbitration as well, the First Division amended its previous arbitration order “to clarify” that it was limited to claims arising under the Third Amended and Restated Company Operating Agreement (which contained an arbitration clause), and did not reach claims arising under the Security Agreement (which did not), but ultimately stayed the arbitration in its entirety because “a substantial bona fide dispute exists concerning the arbitrability” of the claims under the Security Agreement, and “the Eighth Division's ruling on arbitrability remains subject to ongoing appellate review.” The Drusch parties appealed that order to this Court too (Cause No. 15-26-00087-CV).

DISCUSSION

In the first appeal to this Court (from Borchers' second lawsuit), the Drusch parties assert the Eighth Division erred by (1) failing to dismiss for lack of subject-matter jurisdiction (see part I); (2) failing to compel arbitration (see part II); and (3) granting a temporary injunction barring transfer of the disputed membership units (see part III). In the second appeal to this Court (from Borchers' first lawsuit), the Drusch parties assert the First Division erred by staying the arbitration (see part IV).

I. Subject-Matter Jurisdiction

The Business Court has jurisdiction concurrent with other district courts subject to two primary limits: (1) an amount-in-controversy limit to cases exceeding $5 million; and (2) a substantive limit to specified corporate, commercial, securities, trade secret, and other listed business disputes.¹⁵ We agree with the Eighth Division that Borchers met both qualifications here.

A. Amount in controversy

As the Texas Supreme Court explained 20 years ago, a plaintiff's allegation of damages generally suffices to show the amount in controversy: “[W]hen a defendant asserts that the amount in controversy is below the court's jurisdictional limit, the plaintiff's pleadings are determinative unless the defendant specifically alleges that the amount was pleaded merely as a sham for the purpose of wrongfully obtaining jurisdiction, or the defendant can readily establish that the amount in controversy is insufficient.”¹⁶ If the rule were otherwise, “the plaintiff would be required to try his entire case to show an entitlement to damages in excess of the court's jurisdictional limits.”¹⁷

In his first-amended petition, Borchers pleaded “non-monetary relief that exceeds $5,000,000 in value.” Drusch responded with an expert report claiming that the disputed minority membership units “didn't have any value” given the “negative cash flow and negative equity in the business.” Borchers responded with contrary testimony based on his knowledge of company financials he had reviewed while President, representations made to him and to potential investors about the company's value, and “sales of similarly sized companies in related spaces.”

Like the Eighth Division, we agree the record does not “readily establish” that the amount in controversy pleaded was a sham or plainly incredible. The trial court noted that Drusch's expert's opinion of “$0” was “seriously undermine[d]” by facts that the holding company accepted the units as collateral for a $93,600 loan to Borchers, and that upon repossession Drusch bought the units for $100,000 at a private sale. The financials in Drusch's own expert report show the holding company had consistent gross receipts of $40 to $60 million over the last five years;¹⁸ while they reflect neither net worth nor the value of a minority interest, they are sufficient to show that a major business is at stake. Moreover, by invoking the First Division's jurisdiction to compel arbitration, Drusch implicitly agreed that it met the statutory amount in controversy; and by conceding that the Eighth Division dispute would cancel Borchers' first suit, he implicitly agreed that the same amount was in controversy. We agree Drusch did not “readily establish” that the pleaded amount in controversy was plainly false.¹⁹

B. Substantive grounds

The Drusch parties also challenge the substantive grounds pleaded by Borchers. Under § 25A.004(b)(2), the Business Court has jurisdiction over “an action regarding the governance, governing documents, or internal affairs of an organization” (i.e., matters relating to its “membership or ownership interests”).²⁰ Borchers' suit seeking return of his membership or ownership interests plainly falls within that scope.²¹

We hold the Eighth Division did not err by denying the Drusch parties' motion to dismiss for lack of subject-matter jurisdiction.

II. The Eighth Division erred by failing to compel arbitration

“A party seeking to compel arbitration must establish [1] the existence of a valid arbitration agreement and that [2] the claims at issue fall within the scope of that agreement.”²² The question here is who decides each—a court or an arbitrator?

In 2024, the United States Supreme Court held that whether an arbitration agreement exists must be decided by a court—period.²³ As “arbitration is strictly a matter of consent,”²⁴ nobody can be compelled to arbitrate until a court decides they agreed to do so.²⁵ Arbitrators cannot decide that question, because until such an agreement is proved they have no authority to decide anything.

Who decides the second issue regarding scope of arbitration depends on the parties' agreement. “Ordinarily, a court decides whether the parties' claims fall within the agreement's scope.”²⁶ But arbitration agreements are contracts, so “parties can agree to delegate this question to an arbitrator to decide rather than a court.”²⁷ “When an agreement unmistakably delegates questions of the applicability of the agreement to the parties' claims,” questions about which issues are arbitrable must be sent to the arbitrator,²⁸ “even if the court believes that the arbitrability argument is wholly groundless.”²⁹ “So the proper procedure is for a court to first determine if there is a binding arbitration agreement that delegates arbitrability to the arbitrator. If there is such an agreement, the court must then compel arbitration so the arbitrator may decide gateway issues the parties have agreed to arbitrate.”³⁰

In this case, there are two competing agreements—one with both arbitration and delegation clauses, and one with neither. In this context, whether arbitration is required is an existence question for the courts if it “raises a question whether the first agreement compelling arbitration still exists at all.”³¹ But it is a question of scope if it raises a question whether an existing arbitration agreement covers a particular claim, because “[s]uch a dispute concerns not if an agreement to arbitrate exists, but which claims are arbitrable under that valid agreement.”³²

For example, in Transcor Astra Group S.A. v. Petrobras America Inc., an initial contract with both arbitration and delegation clauses was followed by a settlement agreement with a merger clause stating it “represents the entire agreement of the parties and supersedes all prior written or oral agreements.”³³ The Texas Supreme Court held this was an existence question for the courts, since the question was whether the merger agreement extinguished the agreement to arbitrate.³⁴ But in TotalEnergies E&P USA, Inc. v. MP Gulf of Mexico, LLC, the question was whether an initial contract with arbitration and delegation clauses applied to claims seeking construction only of a different contract.³⁵ The Texas Supreme Court held that is a question of scope for the arbitrator; “[i]mportantly, an arbitration agreement does not have to be included in each of the contract documents it purports to cover, and so long as the parties agreed to arbitrate this dispute, it does not matter which document included that agreement.”³⁶

The Eighth Division denied arbitration here “for the simple reason that the parties did not agree to arbitrate the claims asserted here.” (emphasis added). But the crux of that order is the last four words, and they raise a question of the scope delegated to the arbitrator. It may seem counterintuitive that agreeing to arbitrate issues “arising out of” the Operating Agreement could apply to issues “relating to the Collateral” under the Security Agreement. But whether the answer seems obvious to a court does not matter when the scope of arbitrability has been delegated to an arbitrator. The question for the trial courts here was not what was to be arbitrated, but who should decide what was to be arbitrated. A delegation clause reserves that question for an arbitrator.

In 2023, the Texas Supreme Court held that a contract providing for arbitration “in accordance with the rules of the AAA” serves to “clearly and unmistakably demonstrate[ ] the parties' intent to delegate arbitrability issues to the arbitrator.” TotalEnergies, 667 S.W.3d at 712. The Court pointed to AAA Commercial Rule7(a), which “by providing that the arbitrator ‘shall have the power’ to determine the arbitrability of any claim, the rule clearly and unmistakably delegates that decision exclusively to the arbitrator.”³⁷

The parties' Operating Agreement here provides that “any controversy between the parties arising out of this Agreement shall be submitted to the American Arbitration Association for arbitration.” That does not expressly refer to the AAA rules (as the contract in TotalEnergies did), but the AAA Rules provide that parties “shall be deemed” to have made the AAA Rules “a part of their arbitration agreement whenever they have provided ․ for arbitration by the AAA of a domestic commercial dispute without specifying particular rules.”³⁸ That is the case here. Because the delegation clause to AAA in TotalEnergies applies with equal force here, we apply the same construction: the parties clearly and unmistakably delegated arbitrability decisions exclusively to the arbitrator.

That agreement was neither extinguished nor supplanted when Borchers limited his suit in the Eighth Division to claims arising out of the Security Agreement. The Security Agreement does contain a merger clause declaring that it is “the entire agreement ․ with respect to the Collateral” and that in “any prior agreement, either written or oral, relating to the Collateral, the terms of this Agreement shall amend and supersede the terms of such prior agreements.” All four versions of the Operating Agreement contain a similar clause (one signed the same day as the Security Agreement, one signed earlier, and two signed thereafter).³⁹ Unlike the merger clause in Transcor, which used express language confirming that a prior arbitration agreement did not continue to exist,⁴⁰ the merger clause here is silent as to the arbitration provision in the Operating Agreement. Reading the two provisions together, the only reasonable interpretation is that the arbitration agreement does continue to exist.⁴¹ Because the question whether Borchers' claims are covered by the arbitration agreement goes to its scope rather than its existence,⁴² the merger clause does not compel any different result.

The Eighth Division also held that a venue clause granting exclusive jurisdiction to Texas courts for disputes arising under the Security Agreement “further belies any intent to arbitrate.” But again, whether that was true was a question the parties delegated to AAA. In any case, legal proceedings in state court may be necessary before, during, or after arbitration, so there is nothing inconsistent about including both arbitration and venue clauses in the same contract, as the parties may choose to specify where each takes place.⁴³

We hold that the Eighth Division erred by failing to compel arbitration of Borchers' second lawsuit.

III. The Eighth Division did not err in its temporary injunction

The Eighth Division also granted a temporary injunction—not to unwind Drusch's repossession of the disputed units but to prevent further transfer of them. The Drusch parties filed an interlocutory appeal from that order, which we have jurisdiction to review.⁴⁴

To obtain a temporary injunction, a party must show (1) a cause of action against the party to be enjoined; (2) a probable right to recover on that claim after a trial on the merits; and (3) a probable, imminent, and irreparable injury absent the temporary injunction.⁴⁵ Drusch challenges only the second and third elements. We review the order for an abuse of discretion.⁴⁶

A. Probable right to relief

Borchers alleged (among other defenses) that the holding company had no right to dispose of his units because he tendered full and timely payment during the cure period except for the improper demand for $5,000 in attorneys' fees and expenses. The Business Court agreed, holding that “attorney's fees are not recoverable absent an express contractual or statutory provision.” That Agreement states:

If [Borchers] fails to perform any agreement or obligation provided herein, Secured Party may itself perform, or cause performance of, such agreement or obligation, and the expenses of Secured Party incurred in connection therewith shall be a part of the Indebtedness, secured by the Collateral and payable by Debtor on demand. (emphasis added)

“For more than a century, Texas has followed the ‘American Rule’ requiring parties to bear their own attorney's fees and precluding recovery of fees from an opposing party unless authorized by contract or statute.”⁴⁷ Such authorization “may not be inferred; rather it must be provided for by the express terms of the statute in question.”⁴⁸ But as the last phrase indicates, this rule is generally stated in cases seeking attorneys' fees provided by “statute,” not by contract.

It is not easy to find cases barring recovery of attorneys' fees unless a contract provides for attorney's fees in express terms. Such a phrase has been largely superfluous for 50 years, because attorneys' fees have been recoverable in all suits based on an oral or written contract since the predecessor of Chapter 38 was adopted in 1977.⁴⁹ While judicial pleadings must expressly refer to contractual requirements that differ from those in Chapter 38,⁵⁰ Chapter 38 itself provides for attorney-fee recovery in all contract suits whether a contract expressly mentions attorneys' fees or not.⁵¹

But the Security Agreement cannot be read outside the context here.⁵² For well over a century, Texas common law has barred recovery of attorneys' fees “unless provided for by statute or by contract.”⁵³ This rule has become “so venerable and ubiquitous in American courts it is known as ‘the American Rule.’ ”⁵⁴ If we were writing on a blank slate, it might be reasonable to construe a contract that allows recovery of “expenses” incurred in collecting collateral to include legal fees paid to attorneys. But in the context of the long-standing law of contracts in this state, we do not think that term is either sufficiently plain or unambiguous to unmistakably communicate an intent to require payment of attorneys' fees by an adversary as part of an initial demand letter.⁵⁵ While the term may include other costs of collection, Drusch offered no evidence detailing any of that here.

At this stage, we of course need only decide whether the trial court abused its discretion in finding Borchers was likely to prevail at trial (in court or in arbitration), not whether he will or should win. To that extent, we hold that the trial court did not abuse its discretion.

B. Imminent, Irreparable Injury

The trial court also found sufficient evidence of irreparable injury due to the ongoing risk that Borchers' units could be sold to a third party with no way to recover them. The court also noted that ownership interests in a privately held company are infrequently traded and thus are “uniquely difficult to value” and “not readily compensable in damages.”⁵⁶ We agree with that, and add one further reason.

Drusch argues, and we agree, that it is probable that Borchers' loss of units could be compensated by money damages. The parties' Operating Agreement stated that units owned by a “Terminated Member” were “automatically subject to purchase,” and detailed an appraisal process involving appointment of three appraisers. The parties having agreed to assign dollar values to units in this manner; we cannot conclude it would be impossible for a court.

But Borchers argues that the forced sale of his units was merely a means to a different end: nullifying his standing to pursue his arbitration claims. Borchers concedes that his claim in arbitration “hinges on [his] status as a shareholder,” and alleges Drusch fabricated the loan default and transfer of his units “primarily to support an argument that [he] lacks standing to proceed.” In proceedings in the First Division, Drusch's counsel “conceded this is their legal position,” and argued Borchers was required “to prove, as part of his case-in-chief, that he was an owner of [the units] during all relevant times.” As stated in part II, we agree that arbitrability of the units and Security Agreement must be referred to the arbitrator.

But the likelihood of irreparable injury is present for that very reason. While irreparable injury normally focuses on harm to a TI movant, “[c]ourts must likewise consider the harm that other parties or the public will suffer if relief is granted.”⁵⁷ While Borchers could be irreparably harmed by having his units confiscated and underlying claims wrongly dismissed, there was no evidence of potential injury to Drusch. The TI here did not unwind the private sale to him; it merely prevented him from transferring the units any further. There was no evidence he would lose a sale or suffer other injury if he held the units until final judgment, or what “expenses” he incurred in transferring the units from one line in the holding company's accounting books to another.

While we disagree with the Eighth Division's order declining to compel arbitration, that does not mean the TI itself was necessarily improper. During arbitration, the TAA provides that a court may grant an order to “restrain or enjoin the destruction of all or an essential part of the subject matter of the controversy.”⁵⁸ Consistent with our order requiring that the units claims be referred to the arbitrator, we affirm the TI granted here to protect the arbitrator's jurisdiction.

IV. The First Division erred in staying arbitration

Last but not least, on March 9, 2026, Borchers asked the First Division to stay the arbitration pending the outcome of the Security Agreement litigation, which is pending on appeal in both this Court and the Texas Supreme Court.⁵⁹ On March 26th, the First Division (1) confirmed its order compelling arbitration “pursuant to the arbitration clause” in the parties “Third Amended and Restated Company Operating Agreement”; (2) amended that order to clarify that “[o]nly claims arising out of that agreement are compelled to arbitration”; and also (3) stayed the arbitration “pending a full and final resolution of the arbitrability dispute” raised in the Eighth Division. The latter two orders were error for two reasons.

First, “A court may stay an arbitration commenced or threatened on application and a showing that there is not an agreement to arbitrate.”⁶⁰ The First Division's order confirmed that there is an agreement to arbitrate. But whether that agreement extended to the Security Agreement dispute about Borchers' units was a question of the scope of that arbitration agreement rather than its existence, an issue delegated to the arbitrator. The court erred by purporting to limit the scope of that arbitration instead of referring that issue to the arbitrator.

Second, “[b]oth the Federal and Texas Arbitration Acts require courts to stay litigation of issues that are subject to arbitration.”⁶¹ When the same issues must be decided both in arbitration and in court, “the latter must be stayed until the former is completed.”⁶² Here, all parties agree that whether Borchers or Drusch own the units must be decided in both cases; since the parties' agreement delegated issues of arbitrability to the arbitrator, the arbitration “must be given priority so that it is not rendered moot by deciding the same issues in court.”⁶³ This is “one of many circumstances in which litigation must be abated to ensure that an issue two parties have agreed to arbitrate is not decided instead in collateral litigation.”⁶⁴ The trial court erred by staying the arbitration for the litigation to proceed.⁶⁵

* * *

Disposition of these cases might have been more expedited or consistent had Borchers not chosen to file two cases before different judges rather than one.⁶⁶ The parties agreed that Borchers' ownership of membership units was “a common question of law or fact” in both.⁶⁷ Allowing each to proceed separately duplicated the briefing, hearings, and written orders required in each. It also led to two appeals on different schedules: briefing on the Eighth Division appeal was completed on March 17, 2026, but the appeal from the First Division was not even filed until 17 days later, nor briefing completed until June 22, 2026. Some of these problems may be addressed in future Business Court cases by consolidating related cases,⁶⁸ re-assignment by the court's administrative presiding judge,⁶⁹ or exchanging benches.⁷⁰

CONCLUSION

In Cause No. 15-25-00224-CV, we reverse the Eighth Division's order denying the Drusch parties' motion to compel arbitration, but affirm its temporary injunction. Subject to the Texas Supreme Court's stay of trial court proceedings, we remand the case to the Eighth Division for an order compelling arbitration.

In Cause No. 15-26-00087-CV, we reverse the First Division's order staying arbitration and remand the case to that court with instructions to order it resumed.

FOOTNOTES

1.   See Tex. Civ. Prac. & Rem. Code § 171.098(a).

2.   See Tex. Gov't Code § 25A.002 (“The business court is a statutory court created under Section 1, Article V, Texas Constitution.” (emphasis added)).

3.   That is, Borchers can prevail only if he is both (1) an owner of membership units who can assert a claim under the Company Agreement, and (2) has a valid claim under that Agreement. Borchers is right that the two cases are not identical, but agrees that if he loses on (1) he has no claim on (2), and if he loses on (2) it doesn't matter whether he wins on (1).

4.   TotalEnergies E&P USA, Inc. v. MP Gulf of Mexico, LLC, 667 S.W.3d 694, 720 (Tex. 2023) (emphasis added) (quoting In re AdvancePCS Health L.P., 172 S.W.3d 603, 606 (Tex. 2005)).

5.   Id. at 711 (emphasis added).

6.   We refer to each trial court by its division to avoid confusion.

7.   The First Division later clarified that it compelled arbitration pursuant to the Third Amended and Restated Company Operating Agreement, which stated “any controversy between the parties arising out of this Agreement shall be submitted to the American Arbitration Association for arbitration in Texas.”

8.   Borchers said he filed in that Division based on a venue provision in the Security Agreement.

9.   Borchers alleged jurisdiction under subsections (b)(2), (4), (5), and (7) of Government Code § 25A.004.

10.   See Petition and Stay Motion, In re Drusch, No. 26-0107 (Tex. Feb. 4, 2026).

11.   Reply Br. of Appellants, Drusch v. Borchers, No. 15-25-00224-CV (Tex. App.—15th Dist. Mar. 17, 2026).

12.   Reply to Petition for Writ of Mandamus, In re Drusch, No. 26-0107 (Tex. Mar. 23, 2026).

13.   See Notice, In re Drusch, No. 26-0107 (Tex. June 19, 2026).

14.   See Reply Br. of Appellants, Drusch v. Borchers, No. 15-26-00087 (Tex. App.—15th Dist. June 22, 2026).

15.   See Tex. Gov't Code § 25A.004(b). The amount-in-controversy limit does not apply to publicly traded companies. See id. § 25.004(c).

16.   Bland ISD v. Blue, 34 S.W.3d 547, 554 (Tex. 2000) (emphasis added).

17.   Id.

18.   $40 million in 2020, $42 million in 2021, $57 million in 2022, $59 million in 2023, and $39 million in 2024.

19.   See Raoger Corp. v. Myers, 711 S.W.3d 206, 211 n.7 (Tex. 2025).

20.   Tex. Gov't Code §§ 25A.004(b)(2), 25A.001(7)(B).

21.   The Operating Agreement governs what rights the units represent; the Security Agreement governs who owns them.

22.   TotalEnergies E&P USA, Inc. v. MP Gulf of Mexico, LLC, 667 S.W.3d 694, 720 (Tex. 2023) (numeral and emphasis added); accord, In re Copart, Inc., 619 S.W.3d 710, 715 (Tex. 2021); Henry v. Cash Biz, LP, 551 S.W.3d 111, 115 (Tex. 2018).

23.   See Coinbase, Inc. v. Suski, 602 U.S. 143, 152, 144 S.Ct. 1186, 218 L.Ed.2d 615 (2024).

24.   Id. at 148, 144 S.Ct. 1186.

25.   Id.; see Cerna ex rel. R.W. v. Pearland Urban Air, LLC, 714 S.W.3d 585, 588, 589 (Tex. 2025); Transcor Astra Grp. S.A. v. Petrobras Am. Inc., 650 S.W.3d 462, 480 (Tex. 2022).

26.   Cerna, 714 S.W.3d at 589.

27.   Id. at 589.

28.   Id. at 590.

29.   TotalEnergies, 667 S.W.3d at 716 (discussing Henry Schein, Inc. v. Archer & White Sales, Inc., 586 U.S. 63, 70–71, 139 S.Ct. 524, 202 L.Ed.2d 480 (2019)).

30.   RSL Funding, LLC v. Newsome, 569 S.W.3d 116, 121 (Tex. 2018).

31.   Cerna, 714 S.W.3d at 589 (emphasis added); see Coinbase, 602 U.S. at 150, 144 S.Ct. 1186.

32.   Cerna, at 591 (emphasis in original).

33.   650 S.W.3d 462, 481 (Tex. 2022) (emphasis in original).

34.   Id. at 482.

35.   667 S.W.3d at 719.

36.   Id. at 720 (emphasis added) (quoting In re AdvancePCS Health L.P., 172 S.W.3d 603, 606 (Tex. 2005)).

37.   Id. at 711; see Am. Arb. Ass'n. R-7(a) (2013) (“The arbitrator shall have the power to rule on his or her own jurisdiction, including any objections with respect to the existence, scope, or validity of the arbitration agreement or to the arbitrability of any claim or counterclaim.”).

38.   Am. Arb. Ass'n. R 1(a) (2022) (emphasis added).

39.   It provides that the Operating Agreement constitutes “the complete and exclusive statement of agreement among the Members with respect to the subject matter herein and therein and shall replace and supersede all prior written and oral agreements among the Members.”

40.   650 S.W.3d at 481.

41.   See Pathfinder Oil & Gas, Inc. v. Great W. Drilling, Ltd., 574 S.W.3d 882, 888–89 (Tex. 2019) (rules of contract interpretation).

42.   See TotalEnergies, 667 S.W.3d at 720.

43.   See Tex. Civ. Prac. & Rem. Code § 171.096; Sharpe v. AmeriPlan Corp., 769 F.3d 909, 916 (5th Cir. 2014).

44.   See Tex. Civ. Prac. & Rem. Code § 51.014(a)(4).

45.   Webb Consol. ISD v. Marshall, No. 24-0339, 2026 WL 1108676, at *5 (Tex. Apr. 24, 2026).

46.   State v. Loe, 692 S.W.3d 215, 226 (Tex. 2024).

47.   Webb Consol. ISD, 2026 WL 1108676, at *4.

48.   Travelers Indem. Co. of Conn. v. Mayfield, 923 S.W.2d 590, 593 (Tex. 1996); see Dudley Constr., Ltd. v. ACT Pipe & Supply, Inc., 545 S.W.3d 532, 542 (Tex. 2018); Tucker v. Thomas, 419 S.W.3d 292, 297 (Tex. 2013).

49.   See Act of April 25, 1977, 65th Leg., R.S., ch. 76, § 1, 1977 Tex. Gen. Laws 153, 153; see also Tex. Civ. Prac. & Rem. Code § 38.001(b)(8).

50.   See Intercont'l Grp. P'ship v. KB Home Lone Star L.P., 295 S.W.3d 650, 659 (Tex. 2009) (holding argument that parties' contract delegated fee issues to the bench was waived by pleading for fees only under Chapter 38).

51.   The Drusch parties' demand letter here demanded fees under both Chapter 38 and the “expenses” clause in the Security Agreement.

52.   See In re Office of the Attorney Gen. of Tex., 456 S.W.3d 153, 155 (Tex. 2015) (“When construing statutes, or anything else, one cannot divorce text from context.”).

53.   Turner v. Turner, 385 S.W.2d 230, 233 (Tex. 1964); Mundy v. Knutson Const. Co., 294 S.W.2d 371, 373 (Tex. 1956); Wm. Cameron & Co. v. Am. Sur. Co. of N.Y., 55 S.W.2d 1032, 1035 (Tex. Comm'n App. 1932); Turner v. Miller, 42 Tex. 418, 421 (1875).

54.   Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 310–11 (Tex. 2006).

55.   See KWA Constr., L.P. v. ADC West Ridge, L.P., 2026 WL 265251, at *12–13 (Tex. App.—Dallas Jan. 30, 2026, pet. filed); see also James Constr. Grp., LLC v. Westlake Chem. Corp., 650 S.W.3d 392, 403 (Tex. 2022) (“We construe the language of an unambiguous contract according to its plain meaning.”).

56.   See Harley Channelview Props., LLC v. Harley Marine Gulf, LLC, 690 S.W.3d 32, 37 (Tex. 2024) (“An injury is irreparable if the injured party cannot be adequately compensated in damages or if the damages cannot be measured by any certain pecuniary standard.”).

57.   In re State, 711 S.W.3d 641, 645 (Tex. 2024).

58.   See Tex. Civ. Prac. & Rem. Code § 171.086(a)(3), (b)(1); see, e.g., City of Rockwall v. Hughes, 246 S.W.3d 621, 625 (Tex. 2008) (“The Estate filed suit in district court seeking an order compelling arbitration pursuant to section 43.052(i) and a temporary restraining order and temporary injunction preventing the City from proceeding with annexation pending completion of arbitration.”).

59.   The issue in the Supreme Court is whether a stay of trial court proceedings is required during the pendency of an interlocutory appeal regarding a motion to compel arbitration. See Petition for Writ of Mandamus, In re Drusch, No. 26-0107 (Tex. Feb. 4, 2026). The issue in this Court is the merits of the interlocutory appeal from the Eighth Division's order denying arbitration.

60.   Tex. Civ. Prac. & Rem. Code § 171.023(a) (emphasis added).

61.   In re Merrill Lynch Tr. Co. FSB, 235 S.W.3d 185, 195 (Tex. 2007) (citing 9 U.S.C. § 3; Tex. Civ. Prac. & Rem. Code §§ 171.025, 172.174).

62.   Merrill Lynch, 235 S.W.3d at 195.

63.   Id. at 196.

64.   Id.

65.   The TAA allows a stay of related litigation to be limited “to the issue subject to arbitration if that issue is severable from the remainder of the proceeding.” Tex. Civ. Prac. & Rem. Code § 171.025(b). But when arbitrability is delegated to an arbitrator, the issue of severability is necessarily included in that delegation.

66.   See Wang v. Whittenburg, 735 S.W.3d 710, 717 (Tex. 2026) (“Ordinarily, plaintiffs should bring new claims related to pending ones in the same jurisdiction where the trial court is already familiar with the parties and issues.”).

67.   Tex. R. Civ. P. 174(a).

68.   See Tex. Bus. Ct. Loc. R. 2. Both parties, but at different stages, asked for the Security Agreement litigation to be consolidated into the arbitration.

69.   See id. (“A motion to consolidate cases must be filed in the first-filed case”); see also In re U.S. Silica Co., 157 S.W.3d 434, 437 (Tex. 2005) (noting that a “local administrative judge may transfer cases pursuant to local rules”); but cf. id. (stating that “enforcing or overruling competing orders is the duty of a higher court”).

70.   See Tex. Gov't Code § 25A.009(f); cf. id. § 24.003(a); Tex. R. Civ. P. 330(e).

Scott A. Brister, Chief Justice