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Court of Appeals of Texas, El Paso.


No. 08-15-00157-CV

Decided: April 25, 2018


I, respectfully, dissent. I find the arbitration agreement is unenforceable based on the affirmative defense of procedural conscionability. We review a trial court's decision to refuse to compel arbitration for an abuse of discretion. Kmart Stores of Texas, L.L.C. v. Ramirez, 510 S.W.3d 559, 564 (Tex.App.--El Paso, 2016, pet. denied). A trial court abuses its discretion when it acts arbitrarily or unreasonably or without reference to any guiding rules or principles. Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex. 1985). The test for abuse of discretion is not whether, in the opinion of the reviewing court, the trial court's ruling was proper, but whether the trial court acted without reference to guiding rules and principles. See Cire v. Cummings, 134 S.W.3d 835, 838–39 (Tex. 2004). The trial court's ruling should be reversed only if it was arbitrary or unreasonable. Id. at 839.

Here, the trial court did not make specific findings of fact or conclusions of law, as a result, we infer that the trial court made all the necessary findings to support its judgment. Duarte v. Mayamax Rehab. Servs., L.L.P., 527 S.W.3d 249, 256 (Tex.App.--El Paso 2016, pet. denied). “When the inferred findings of fact are supported by the evidence, the appellate court must uphold the judgment on any theory of law applicable to the case.” Paragon Indus. Applications, Inc. v. Stan Excavating, L.L.C., 432 S.W.3d 542, 549 (Tex.App.-- Texarkana 2014, no pet.); Inland Sea, Inc. v. Castro, 420 S.W.3d 55, 57–59 (Tex.App.--El Paso 2012, pet. denied)(affirming denial of motion to compel arbitration on alternative ground where order did not specify the basis for the ruling); In re Weeks Marine, Inc., 242 S.W.3d 849, 854 (Tex.App.--Houston [14th Dist.] 2007)(orig. proceeding). If there is any evidence to support the trial court's ruling then the court did not abuse its discretion. See In re BP Prods. N. Am., Inc., 244 S.W.3d 840, 848 (Tex. 2008). Only when the evidence is such that the trial court could have made but one decision, yet made another, that we say the trial court abused its discretion. Id. In order for a court to conclude an arbitration agreement is unconscionable, the party opposing it bears the burden because the law favors arbitration. In re Rubiola, 334 S.W.3d 220, 223 (Tex. 2011) (orig.proceeding); In re FirstMerit Bank, N.A., 52 S.W.3d 749, 753 (Tex. 2001)

Delfingen, as the majority correctly states, does not give us a precise legal definition of unconscionability but is a “concept” that involves the application of the five factors delineated above. Delfingen US-Texas, L.P. v. Valenzuela, 407 S.W.3d 791, 798 (Tex.App--El Paso 2013, no pet.). We look at the totality of the circumstances at the time the contract for arbitration is formed. Id. The Delfingen's standard of review, abuse of discretion, further instructs us unconscionability is a legal question which is reviewed by an appellate court de novo, however, we must defer to the trial courts fact findings if they are supported by the evidence. Id at 799-800. Unconscionable contracts are not enforceable. In re Palm Harbor Homes, Inc., 195 S.W.3d 672, 677 (Tex. 2006). The principles of unconscionability are to be applied to prevent unfair surprise or oppression. Id. at 677. Procedural unconscionability examines the circumstances of the making or inducement of the contract, focusing on the facts surrounding the negotiating process. TMI, Inc., v. Brooks, 225 S.W.3d 783, 792 (Tex.App.--Houston [14th Dist.] 2007, pet. denied).

Appellant's affidavit includes the following:

I have been diagnosed with a Dysthymic Disorder, learning disorder, reading disorder, disorder of written expression, and language disorder. I have a reading ability below the second grade level. I also have difficulty with my memory. Each sentence of this affidavit has been read out loud to me.

I have looked at Exhibit ‘B’ attached to ReadyOne's Motion to Compel Arbitration that claims to have my signature on a document with a date of ‘5/31/2011.’ I do not remember signing this document. I have never seen this document before my lawyers showed it to me. I do not remember anything about this document. From time to time, I was brought into the facilities to sign the numerous documents related to my employment and hiring. When I was called in to sign the paperwork, I was required to sign many things and I did not know why. When it was time to sign the documents I was told by the employees from ReadyOne ‘that the documents are for benefits if you get hurt on the job, just sign them’ or words to that effect. I was misled into believing that the documents were not important and were just routine documents that the company needed to complete their paperwork on my employment and so I could receive benefits if I was hurt on the job. I did not know that what I was signing was an arbitration agreement or anything other than papers required to be signed for my job. I was never told that I could be waiving rights that I had or that I could seek the advice of an attorney before signing these documents. I was never told that I could decline to sign or that I had a right not to sign them. I was never told that the documents contained a ‘stand-alone’ arbitration agreement. I was never given any time to review the documents prior to signing them. Nobody from ReadyOne read the documents to me out loud so I could understand them.

No one from ReadyOne ever told me that I was signing an arbitration agreement or what that meant. No one from ReadyOne ever told me or explained to me the contents and effect of the papers I signed. No one from ReadyOne ever provided an orientation session or any other kind of meeting where any of the documents I was required to sign was explained. No one at ReadyOne ever explained, discussed, or translated any arbitration agreement to me. I would never have signed an arbitration agreement at ReadyOne if I had been told that by signing the agreement I was waiving my right to a jury trial. No one told me or explained to me that I was giving up my right to a jury trial. [Emphasis added].

Under the five factors for procedural unconscionability, the last two factors militate in ReadyOne's favor, the arbitration agreement is not illegal, against public policy, oppressive or unreasonable. We turn to the remaining three factors: 1) the entire atmosphere in which the agreement is made; 2) the alternatives, if any, available to the time the contract was made; and 3) the non-bargaining ability of one party. Whataburger Rests. LLC v. Cardwell, No. 08-13-00280-CV, 2017 WL 3167487, *4 (Tex.App.--El Paso, July 26, 2017, no pet.). A party should be given an opportunity to read the agreement. In re AdvancePCS Health L.P., 172 S.W.3d 603, 608 (Tex. 2005)(orig. proceeding).

ReadyOne does not dispute Lopez' facts outlined in her affidavit and thus, we must accept them as true. Jack B. Anglin Co., Inc. v. Tipps, 842 S.W.2d 266, 270 (Tex. 1992)(orig. proceeding). Lopez attests to her lack of reading and comprehension ability, however, illiteracy is no defense against the enforcement of an arbitration clause. Associated Emp'rs Lloyd v. Howard, 294 S.W.2d 706, 708 (Tex. 1956). In Delfingen, our decision did not turn solely on Valenzuela's, the employee, lack of English speaking and reading skills. Delfingen, 407 S.W.3d at 794, 803. We found sufficient evidence the employer had affirmatively misrepresented the arbitration agreement as an attendance policy. Id. at 803.

This case revolves on the question whether ReadyOne misrepresented the arbitration agreement and if the atmosphere surrounding the formation of the agreement was oppressive to such a degree that it works an unfair surprise to Lopez. Coupled with our duty to review the legal conclusions de novo and ultimately, whether those conclusions constitute an abuse of discretion by the trial court.

Lopez states she was not given time to review the documents. Further, she was told “ ‘that the documents are for benefits if you get hurt on the job, just sign them’ or words to that effect. I was misled into believing that the documents were not important and were just routine documents that the company needed to complete their paperwork on my employment and so I could receive benefits if I was hurt on the job. I did not know that what I was signing was an arbitration agreement or anything other than papers required to be signed for my job.” This is sufficient evidence to support a legal conclusion that Lopez was affirmatively misled into signing the arbitration agreement. We must uphold the trial court's decision on an applicable legal theory and she clearly acted in accordance with guiding rules or principles. The trial court did not abuse her discretion in refusing to compel arbitration, because her conclusion is not arbitrary or unreasonable.