Reversed, Rendered, and Remanded and Opinion filed August 25, 2015.




                                     In The

                    Fourteenth Court of Appeals

                             NO. 14-14-00562-CV

  COOPER INDUSTRIES, LLC, COOPER INDUSTRIES, LTD., COOPER
       US, INC., AND COOPER INDUSTRIES, PLC, Appellants
                                       V.

PEPSI-COLA METROPOLITAN BOTTLING CO., INC., AND WHITMAN
            INSURANCE COMPANY LTD., Appellees

                    On Appeal from the 80th District Court
                            Harris County, Texas
                      Trial Court Cause No. 2011-77606

                                OPINION

      This is an interlocutory appeal from an order denying a motion to compel
arbitration.   Appellee Pepsi-Cola Metropolitan Bottling Co. (“Metro”) sued
appellants Cooper Industries, LLC, Cooper Industries, Ltd., Cooper US, Inc., and
Cooper Industries, PLC (collectively, “Cooper”), seeking to enforce two
agreements. Appellee Whitman Insurance Company Ltd. later joined the suit as a
plaintiff. Cooper filed a motion to compel arbitration pursuant to the agreements.
The trial court denied the motion after a hearing without making findings of fact or
conclusions of law.

       On appeal, Cooper argues the trial court erred because the agreements
require arbitration and appellees did not show that Cooper waived its right to
arbitrate. We agree that the trial court erred in denying Cooper’s motion to compel
arbitration. We therefore reverse the trial court’s order, render judgment ordering
arbitration of appellees’ claims against the Cooper defendants who are parties to
this appeal,1 and remand this case to the trial court for further proceedings
consistent with this opinion, including the grant of an appropriate stay.

                                         BACKGROUND

       This case concerns indemnification obligations regarding asbestos claims.
Appellees’ second amended petition and Cooper’s motion to compel arbitration
provide the pertinent background of the parties’ dispute.2 We begin by discussing
the various transactions that resulted in the current alignment of the parties because
they are relevant to our disposition of the case.

       IC Industries—Metro’s predecessor—acquired Abex Corporation and
Pneumo Corporation, two companies that manufactured products containing
asbestos. IC Industries sold its stock in both companies to PA Holdings under a
Stock Purchase Agreement (“SPA”). Under the SPA, IC Industries agreed to
indemnify PA Holdings against certain claims filed between August 29, 1988 and
August 29, 1998, and PA Holdings agreed to indemnify IC Industries and its
       1
          Although Cooper Holdings, Ltd. joined appellants in the motion to compel arbitration,
the trial court did not rule on the motion with respect to Cooper Holdings, Ltd. The notice of
appeal does not list Cooper Holdings, Ltd. as an appellant. Accordingly, Cooper Holdings, Ltd.
is not an appellant in this case. We therefore do not address whether it was entitled to arbitration
of Metro’s and Whitman’s claims.
       2
          Appellees filed a third amended petition after Cooper had filed its motion to compel
arbitration.

                                                 2
affiliates against claims filed after August 29, 1998. As explained below, a Cooper
entity later guaranteed an indemnity of PA Holdings’ successor.            The SPA
provides that if any controversy or claim arising out of or relating to the agreement
has not been resolved within twenty-one days after notice is given, either party
may initiate arbitration to resolve the dispute.

      PA Holdings subsequently became Pneumo Abex, LLC.                IC Industries
became appellee Metro through a merger and name change.                  Whitman’s
predecessor was a captive insurance carrier affiliated with IC Industries, and
Whitman is now a subsidiary of Metro.

      Pneumo Abex eventually sold one of its product lines to Wagner Electronic
Corporation through an Asset Purchase Agreement (“APA”). Under the APA,
Wagner agreed to indemnify and hold Pneumo Abex harmless for any obligations
Pneumo Abex owed to Metro and Whitman. Like the SPA, the APA contains an
arbitration provision. In section 13.2(c), the APA provides that any dispute arising
in connection with the agreement and not settled by the parties within sixty days
after notice is given “shall be finally settled by arbitration . . . .” The provision
states that “[a]ny party may request a court to provide interim relief without
waiving the agreement to arbitrate.”

      Wagner’s then-parent company, Cooper Industries, LLC, guaranteed
Wagner’s indemnification of Pneumo Abex under a Mutual Guaranty agreement
signed in 1994. Section 6 of the Mutual Guaranty provides that any claim or
dispute “arising in connection with” this agreement shall be resolved in accordance
with sections 13.2(b) and (c) of the APA, thus explicitly incorporating the
arbitration provision of the APA.

      Pneumo Abex filed a lawsuit in New York against various Cooper
defendants, contending that Cooper Industries, LLC was mismanaging its assets
                                           3
and thus endangering the Mutual Guaranty. Metro and Whitman were not parties
to that suit.    In 2011, the Cooper defendants and Pneumo Abex reached a
settlement agreement, which the judge in the New York lawsuit approved. Under
the settlement agreement, PCT International Holdings, Inc.—then-owner of
Pneumo Abex—transferred its ownership interest to a trust. Cooper Industries’
indemnities were released and, in exchange, the trust received a cash payment and
notes to be paid over five years.

       In response to the 2011 settlement agreement, Metro filed this lawsuit
alleging various causes of action, among them tortious interference with
contractual relations, conspiracy to commit tortious interference, fraudulent
transfers, and conspiracy to commit fraudulent transfers.3 The suit named several
defendants, including the Cooper appellants.4 Whitman later joined the suit as a
plaintiff, claiming that as successor to an affiliate of IC Industries, it is entitled to
indemnification from Pneumo Abex under the SPA. Metro and Whitman alleged
that the settlement agreement was the end result of collusive efforts by the
defendants that left Pneumo Abex and the trust with a finite amount of assets. In
particular, Metro and Whitman alleged that the defendants “conspired to buy their
way out of uncapped guaranty obligations” and made Pneumo Abex’s performance
of its indemnity obligations to Metro and Whitman more “burdensome, difficult,
and expensive, if not impossible.”

       Citing the Federal Arbitration Act, Cooper filed a motion to compel

       3
         Appellees pled additional causes of action later abandoned; therefore, we need not
analyze them.
       4
         Metro originally brought this action against Cooper Industries, LLC, Cooper Industries
Ltd., Cooper Holdings, Ltd., Cooper US, Inc., Cooper Industries, PLC, M & F Worldwide Corp.,
MAFCO Worldwide Corp., MAFCO Consolidated Group, LLC, PCT International Holdings,
Inc., and the Pneumo Abex Asbestos Claims Settlement Trust. The third amended petition also
names Mcg Intermediate Holdings Inc. as a defendant.

                                              4
arbitration under various agreements, including the SPA and the Mutual Guaranty.
After an unreported hearing, the court denied the motion.                This interlocutory
appeal followed. See 9 U.S.C. § 16(a)(1)(B) (West 2009); Tex. Civ. Prac. & Rem.
Code Ann. § 51.016 (West 2015).

                                         ANALYSIS

       On appeal, Cooper argues that the trial court erred in denying the motion to
compel arbitration because (1) Metro’s and Whitman’s claims are subject to
arbitration under the SPA and the Mutual Guaranty, and (2) Cooper has not waived
the right to arbitrate as to either Metro or Whitman. We address each issue in turn.

       When the Federal Arbitration Act governs an arbitration clause, a Texas trial
court conducts a summary proceeding under Texas procedural rules to make the
gateway determination of arbitrability, and it applies Texas substantive law
regarding whether a litigant must arbitrate.5 See In re Weekley Homes, L.P., 180
S.W.3d 127, 130 (Tex. 2005) (orig. proceeding). Because the trial court did not
sign written findings or conclusions, we may uphold the court’s order on any
theory supported by the evidence, and we imply all factual findings supported by

       5
          The APA states that it is governed by Delaware law, but the parties do not discuss
Delaware law. The SPA contains a clause stating that the “law of the State of New York shall
govern the parties’ dispute.” In appellees’ response to Cooper’s motion to compel arbitration,
they argued that New York law governs the arbitration provision in the SPA. On appeal,
however, appellees assert that we need not address the question whether Texas or New York law
applies because Cooper is not entitled to compel arbitration under either state’s laws. Cooper,
for its part, contends that Texas law is entirely consistent with New York law, and that it is
entitled to arbitration under the law of both states.
        Texas courts may presume that another state’s law is the same as Texas law absent proof
or argument to the contrary. Coca–Cola Co. v. Harmar Bottling Co., 218 S.W.3d 671, 685 (Tex.
2006). The party requesting application of a foreign law has the initial burden of showing that
the foreign law conflicts with Texas law. Greenberg Traurig of New York, P.C. v. Moody, 161
S.W.3d 56, 70 (Tex. App.—Houston [14th Dist.] 2004, no pet.). Because all parties assert the
outcome is the same under both New York and Texas law, and the parties do not address
Delaware law, we apply Texas law.

                                              5
the record that are necessary to the order. In re W.E.R., 669 S.W.2d 716, 717 (Tex.
1984) (per curiam); Rush v. Barrios, 56 S.W.3d 88, 96 (Tex. App.—Houston [14th
Dist.] 2001, pet. denied). We defer to the trial court’s factual determinations that
are supported by sufficient evidence, but we review the trial court’s legal
determinations de novo. In re Labatt Food Serv., L.P., 279 S.W.3d 640, 643 (Tex.
2009).

I.    Cooper established that appellees’ claims fall within the scope of valid
      arbitration agreements that Cooper can invoke.
      Cooper’s first issue asks whether the trial court erred in refusing to compel
arbitration because appellees’ claims are founded on two contracts that contain
mandatory arbitration provisions. Arbitration cannot be ordered in the absence of
an agreement to arbitrate. Freis v. Canales, 877 S.W.2d 283, 284 (Tex. 1994)
(orig. proceeding) (per curiam). The party moving for arbitration has the initial
burden to present evidence that a valid arbitration agreement exists. In re Koch
Indus., Inc., 49 S.W.3d 439, 444 (Tex. App.—San Antonio 2001, orig.
proceeding). If there is an agreement to arbitrate, the party must also establish that
the claims asserted fall within the scope of the agreement. In re Kellogg Brown &
Root, Inc., 166 S.W.3d 732, 737 (Tex. 2005).

      A.     Cooper may compel arbitration against Metro under the SPA.
      Cooper argues that Metro’s claims are subject to arbitration under the SPA,
which contains a broad clause requiring arbitration of any controversy or claim
arising out of or relating to the agreement. The parties to the SPA are Pneumo
Abex and a company that later became known as Metro. Metro is thus a signatory
to the agreement, but Cooper is not. Appellees Metro and Whitman respond that
Cooper cannot compel arbitration as a non-signatory. Whether a non-signatory can
compel arbitration questions the existence of a valid arbitration agreement between

                                          6
the parties and therefore is a gateway matter for the court to decide. See In re
Weekley Homes, L.P., 180 S.W.3d 127, 130 (Tex. 2005).

      The supreme court has recognized that “[a] person who has agreed to
arbitrate disputes with one party may in some cases be required to arbitrate related
disputes with others.” Meyer v. WMCO-GP, LLC, 211 S.W.3d 302, 304 (Tex.
2006). In particular, a signatory plaintiff who seeks to derive a “direct benefit”
from a contract with an arbitration clause may be equitably estopped from refusing
arbitration. Id. at 305; see also In re Kellogg, 166 S.W.3d at 739 (discussing
direct-benefits estoppel of non-signatories). Although the boundaries of direct-
benefits estoppel are not always clear, the signatory generally must arbitrate claims
if liability arises from a contract with an arbitration clause, but not if liability arises
from general obligations imposed by law. In re Vesta Ins. Group, Inc., 192 S.W.3d
759, 761 (Tex. 2006) (per curiam).              When the facts are not disputed, the
application of estoppel is a question of law, not a matter committed to the trial
court’s discretion. See Meyer, 211 S.W.3d at 308.

      Tortious interference claims do not fall comfortably within either category.
In re Vesta, 192 S.W.3d at 761. The obligation not to interfere with existing
contracts is a general obligation imposed by law, but it is not imposed on the
parties to that contract because a party cannot interfere tortiously with its own
contract. Id. (citing Holloway v. Skinner, 898 S.W.2d 793, 796 (Tex. 1995)). A
person must be a stranger to a contract to interfere tortiously with it. Id. (citing
Morgan Stanley & Co. v. Texas Oil Co., 958 S.W.2d 178, 179 (Tex. 1997)). Thus,
a signatory generally is not “required to arbitrate a tortious interference claim
against a complete stranger to his contract and its arbitration clause.” Id. at 763.
But if the signatory plaintiff’s right to recover and its damages depend on the
existence of the contract containing the arbitration clause, or if the non-signatory

                                            7
defendant is an agent or affiliate of a signatory, then the plaintiff can be compelled
to arbitrate its claim. Meyer, 211 S.W.3d at 306–07; In re Vesta, 192 S.W.3d at
762; PER Group, L.P. v. Dava Oncology, L.P., 294 S.W.3d 378, 387–88 (Tex.
App.—Dallas 2009, no pet.); see also In re Kellogg, 166 S.W.3d at 739 (listing
estoppel and agency among the theories for requiring arbitration with non-
signatory).

      Cooper contends that it may enforce the arbitration clause under the supreme
court’s opinion in Meyer. Appellees argue that Meyer is distinguishable because
the non-signatories in that case were not strangers to the agreement, as they
contend Cooper is here.

      In Meyer, Ford Motor Company’s agreement with one of its dealers
provided Ford with an assignable right of first refusal to acquire the dealer’s
business if the dealer decided to sell. 211 S.W.3d at 304. When the dealer later
signed an agreement to sell its business to WMCO, Ford exercised its right and
assigned that right to Meyer and his company. Id. WMCO then sued the dealer,
Meyer, and Ford, alleging, among other things, that Meyer tortiously interfered
with WMCO’s agreement to buy the dealer’s business. Id. Meyer and Ford
moved to compel arbitration under a clause in the agreement between the dealer
and WMCO. Id. at 304–05. Meyer and Ford contended that because WMCO
made the agreement with the dealer, WMCO was equitably estopped from refusing
arbitration. Id. at 305. The supreme court agreed, noting that WMCO’s claims
against Ford and Meyer “depend on the existence of” WMCO’s agreement with
the dealer:

      If [the dealer] properly terminated the [agreement with WMCO],
      based on Ford’s exercise of its right of first refusal, then there would
      be no claim for tortious interference, no need to decide whether Ford
      validly exercised the right of first refusal, and no need to decide

                                          8
        whether Meyer and Ford conspired to violate statutes protecting
        dealers from certain actions by manufacturers.

Id. at 307. The court also considered it important that WMCO’s damages “cannot
be calculated without reference to the [agreement].” Id. The court thus held that
Meyer and Ford, although nonsignatories to the agreement between WMCO and
the dealer, could compel arbitration under the agreement’s arbitration clause. Id. at
308.6

        Similarly, appellees’ tortious interference claims against Cooper in their
second amended petition depend on the existence of the SPA and Cooper’s
guaranty of Pneumo Abex’s performance thereunder. See Smith v. Kenda Capital,
LLC, 451 S.W.3d 453, 460 (Tex. App.—Houston [14th Dist.] 2014, no pet.)
(“[D]irect benefits estoppel analysis focuses on whether a contract containing the
clause at issue also includes other terms on which the signatory plaintiff must rely
to prosecute its claims.”). As discussed above, the SPA required Pneumo Abex to
indemnify Metro’s predecessor, and Cooper and its then-subsidiary guaranteed that
indemnity in 1994. Appellees allege that in 2011, Cooper tortiously caused (and
conspired with others to cause) Pneumo Abex to breach its indemnity obligation to
Metro under the SPA, which contains an arbitration clause.7 If Pneumo Abex did
not breach the SPA in restructuring the guaranty and other commitments backing
its indemnity obligation, then there would be no claim for tortious interference or
conspiracy. Moreover, the remedies appellees seek under each cause of action are

        6
          In a portion of the Meyer opinion, the supreme court also noted allegations of
substantially interdependent and concerted misconduct. 211 S.W.3d at 307–08. But the court
compelled arbitration on a theory of direct-benefits estoppel, and it declined to adopt a theory of
concerted-misconduct estoppel in a subsequent case. In re Merrill Lynch Trust Co. FSB, 235
S.W.3d 185, 191 & n.22 (Tex. 2007) (orig. proceeding). We rely solely on the theory of direct-
benefits estoppel here.
        7
         Alternatively, appellees allege that Cooper’s actions rendered Pneumo Abex’s
performance of its obligations to Metro under the SPA more difficult, if not impossible.

                                                9
the direct benefit of the indemnity obligation to Metro under the SPA: they request
injunctive relief obligating Cooper to fund any shortfall in the trust set up to pay
the indemnity, or alternatively damages for the loss of Cooper’s guaranty of that
indemnity—damages that cannot be calculated without reference to the terms of
the indemnity obligation in the SPA. For these reasons, Meyer supports Cooper’s
ability to compel Metro to arbitrate its tortious interference claims under the SPA’s
arbitration clause.

       Relying on our decision in Brewer & Pritchard, P.C. v. AMKO Resources
International, LLC,8 appellees argue that Cooper nevertheless cannot compel
arbitration because it is a complete stranger to the SPA. They point out that
Cooper had no relationship with the SPA’s signatories—Metro’s predecessor and
Pneumo Abex—when the SPA was executed, and that the SPA itself did not
require Cooper to guarantee Pneumo Abex’s performance. We do not agree that
these facts defeat direct-benefits estoppel.

       Unlike in Brewer & Pritchard, Cooper guaranteed the performance of one of
the agreement’s signatories, Pneumo Abex, in 1994—long before the allegedly
tortious 2011 transactions made the basis of this suit.                Moreover, Brewer &
Pritchard did not involve a non-signatory defendant seeking to compel arbitration
with a signatory plaintiff (as our inquiry under the SPA does), nor did it address
whether the plaintiff’s right to recover and its damages depended on the existence
of the agreement containing the arbitration clause.            Metro’s tortious interference
claims do depend on the existence of the SPA, so Meyer supports arbitration of
those claims as explained above. Other courts agree that a guarantor or surety of a
       8
          No. 14-13-00113-CV, 2014 WL 3512836, at *11 (Tex. App.—Houston [14th Dist.] July
15, 2014, no. pet.) (mem. op.) (holding buyer of leases was stranger to seller’s fee agreement
with law firm that had represented seller in dispute with lease operator, and therefore firm could
not use arbitration clause in fee agreement to compel buyer to arbitrate claims regarding buyer’s
failure to pay firm a portion of sales price).

                                               10
party’s obligation under a contract containing an arbitration clause may invoke or
be bound by that clause in a suit regarding the obligation.9 Because Metro’s
tortious interference claims depend on the existence of Pneumo Abex’s indemnity
obligation in the SPA, which Cooper guaranteed, we hold Cooper may compel
signatory Metro to arbitrate those claims under the SPA.10

       B.      Cooper may compel arbitration against Whitman and Metro
               under the Mutual Guaranty despite its termination.
       Cooper also argues that both Whitman’s and Metro’s claims are
independently subject to arbitration under the 1994 Mutual Guaranty agreement,
which broadly requires arbitration of any dispute arising in connection with the

       9
          See, e.g., Choctaw Generation L.P. v. Am. Home Assur. Co., 271 F.3d 403, 406–08 (2d
Cir. 2001) (holding surety for one party’s obligation under a construction contract containing
arbitration clause could compel other party to arbitrate its claims against surety even though
surety was not a party to construction contract and surety contract contained no arbitration clause
because the controversy presented was linked to the construction contract); T-Mobile USA, Inc.
v. Montijo, No. C12-1317RSM, 2012 WL 6194204, at *4 (W.D. Wa. Dec. 11, 2012) (same as to
guarantors); Bimota SPA v. Rousseau, 628 F. Supp. 2d 500, 505–06 (S.D.N.Y. 2009) (same);
Fujian Pac. Elec. Co. v. Bechtel Power Corp., No. C 04-3126 MHP, 2004 WL 2645974, at *6–7
(N.D. Cal. Nov. 19, 2004) (same); see also Bell v. Campbell, 143 S.W. 953, 956–57 (Tex. Civ.
App.—Amarillo 1911, writ ref’d) (holding sureties bound by arbitration agreement and award
against principal); Empire Steel Corp. v. Omni Steel Corp., 378 S.W.2d 905, 911 (Tex. Civ.
App.—Fort Worth 1964, writ ref’d n.r.e.) (same as to guarantors). We note that in a subsequent
case, the Second Circuit described Choctaw as involving a situation in which the non-signatory
surety (American Home) was explicitly named in the underlying contract as having certain tasks
to perform thereunder. Ross v. Am. Exp. Co., 547 F.3d 137, 145 (2d Cir. 2008). The Choctaw
opinion does not appear to support this characterization. See 271 F.3d at 403–05, 407 (noting
that underlying contract required party to post and replenish letter of credit, and that American
Home contracted separately with party to issue bond securing party’s performance but was not
party to underlying contract). In any event, none of the cases cited at the beginning of this
footnote attach importance to whether the surety or guarantor is identified by name in the
underlying agreement containing the arbitration clause.
       10
           Because we conclude that Whitman is bound to arbitrate its claims under the 1994
Mutual Guaranty, as discussed below, we do not address whether Cooper could compel Whitman
to arbitrate under the SPA. We also note that the parties have not separately addressed whether
Cooper could compel Metro to arbitrate its claims of fraudulent transfer and conspiracy to
commit fraudulent transfer. We likewise need not address that issue under the SPA given our
conclusion below that Metro is bound to arbitrate those claims under the Mutual Guaranty.

                                                11
agreement. The parties to the Mutual Guaranty are Pneumo Abex and Cooper
Industries, LLC. Thus, appellees Whitman and Metro are not parties to the Mutual
Guaranty. Nevertheless, direct-benefits estoppel can also require non-signatory
plaintiffs to arbitrate if they seek to derive a direct benefit from a contract
containing an arbitration clause.   See In re Kellogg, 166 S.W.3d at 739–741
(considering whether plaintiff’s claims seek to enforce contract or stand
independently of contract).

      In their second amended petition, appellees seek to enforce Cooper’s
obligations under the Mutual Guaranty. They allege that Cooper’s acts of tortious
interference in connection with the 2011 settlement (and its agreement with the
other defendants to interfere) were undertaken with a specific intent to cap its
guaranty obligation, and that Cooper engaged in fraudulent transfers (and
conspired to do so) when it obtained a release of its guaranty obligation in
exchange for certain payments to the trust. The remedies appellees seek include an
injunction obligating Cooper to fund any shortfall in the trust set up to pay the
indemnity Cooper had guaranteed, or alternatively damages in the amount of the
shortfall. In short, appellees are claiming the benefit of the Mutual Guaranty, so
they are estopped from avoiding the burden of its arbitration clause. See In re
Kellogg, 166 S.W.3d at 739.

      Appellees respond that arbitration can no longer be compelled under the
Mutual Guaranty because Cooper, Pneumo Abex, and others terminated that
agreement following the 2011 settlement. They point to the following language in
the termination agreement:

      Effective as of the Closing, and notwithstanding any provision of the
      Mutual Guaranty to the contrary, the Mutual Guaranty shall be fully,
      finally and irrevocably terminated and of no further force or effect,
      and no Party nor any other Person shall have any further obligation or

                                       12
          liability under the Mutual Guaranty from and after Closing.

          ...

          Each Party hereby irrevocably consents and agrees that any dispute
          regarding this Agreement shall be brought only to the exclusive
          jurisdiction of the federal or state courts located in New York County,
          New York . . . .

We disagree with appellees that this language cuts off the estoppel effect of the
Mutual Guaranty’s arbitration clause.

          In general, as our sister court has held, an “arbitration agreement contained
within a contract survives the termination or repudiation of the contract as a
whole.” Cleveland Constr. Inc. v. Levco Constr. Inc., 359 S.W.3d 843, 854 (Tex.
App.—Houston [1st Dist.] 2012, pet. dism’d)) (citing Henry v. Gonzalez, 18
S.W.3d 684, 690 (Tex. App.—San Antonio 2000, pet. dism’d)).11                          Our facts
illustrate the sensible result of applying this rule here. Appellees’ position is that
the Mutual Guaranty was tortiously and fraudulently terminated by Cooper and
that the court should, in effect, require Cooper to honor its guaranty
notwithstanding the termination. Having asked the court to ignore the Mutual
Guaranty’s termination, appellees can hardly complain if its clause requiring
arbitration of any dispute “arising in connection with” the agreement is also given
effect.

          Appellees urge us instead to follow TransCore Holdings, Inc. v. Rayner, 104
S.W.3d 317 (Tex. App.—Dallas 2003, pet. denied).                       In TransCore, parties
including TransCore and Rayner entered into a stock purchase agreement

          11
          See also Butchers, Food Handlers & Allied Workers Union, Local 174 v. Hebrew Nat’l
Kosher Foods, Inc., 818 F.2d 283, 287 (2d Cir. 1987) (“If the contract does not state that the duty
to arbitrate ends with the termination of the contract, the strong policies favoring arbitration
should ordinarily lead the court to conclude that the obligation to arbitrate—especially as to
claims that accrued during the term of the contract—survives the expiration of the contract.”).

                                                13
containing an arbitration clause. Id. at 319. Subsequently, the parties entered into
a termination agreement that included a backward-looking mutual release of
obligations and claims and a forward-looking provision requiring actions relating
to the agreement to be brought in court. Id. at 320–21, 323. Rayner argued that
the termination agreement released him from his obligation to arbitrate
TransCore’s claim that he made misrepresentations prior to termination. Id. at 321.
The Dallas Court of Appeals agreed, noting that the termination agreement was a
new agreement with new consideration that unconditionally released the parties
from all previous obligations. Id. at 321–22, 323.

      This case differs from TransCore in two critical respects.          First, the
backward-looking release language in the TransCore termination agreement is
absent here. This termination agreement, which was entered into effective April 5,
2011, only eliminates any “further obligation” to arbitrate under the Mutual
Guaranty “from and after” termination. The provision agreeing to bring disputes
regarding the termination agreement only to New York courts does not address the
handling of disputes under the Mutual Guaranty.12           Thus, the termination
agreement leaves intact the obligation under the Mutual Guaranty to arbitrate
disputes “arising in connection with the agreement” up to the point of termination.
Appellees’ claims challenge Cooper’s acts leading up to and including the 2011
settlement, which was entered into as of February 1, 2011. Because those claims
arise in connection with the Mutual Guaranty agreement as explained above, the
termination agreement does not affect the obligation to arbitrate them.

      Second, the termination agreement in TransCore was between the parties to
the original agreement: one party seeking to compel arbitration under the original

      12
         See Valero Energy Corp. v. Teco Pipeline Co., 2 S.W.3d 576, 587 (Tex. App.—
Houston [14th Dist.] 1999, no pet.).

                                         14
agreement, and another party arguing that the termination agreement ended its
obligation to arbitrate.    Here, appellees are not parties to the termination
agreement. Instead, appellees are third parties trying to revive the obligations of
the original agreement.     The logical force of the doctrine of direct-benefits
estoppel—which was not at issue in TransCore—supports requiring appellees to
arbitrate their claims.

      Appellees’ claims against Cooper hinge on the existence of the Mutual
Guaranty, and the gist of their case is to undo its termination. If Cooper “properly
terminated the” Mutual Guaranty, then “there would be no claim for tortious
interference” or fraudulent transfer and no need to determine whether Cooper
“conspired” with the other defendants to do so.        Meyer, 211 S.W.3d at 307.
Appellees cannot have it both ways, picking and choosing which portions of the
Mutual Guaranty should be enforced and which portions should not. See id. at
306; cf. Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983) (“No single
[contractual] provision taken alone [should] be given controlling effect; rather, all
the provisions must be considered with reference to the whole instrument”).

      We hold that the termination of the Mutual Guaranty agreement between
Cooper and Pneumo Abex did not abrogate Cooper’s ability to compel arbitration
of appellees’ claims under that agreement. In addition, as explained above, Cooper
may compel arbitration of Metro’s claims under the SPA. Accordingly, we sustain
Cooper’s first issue and hold that the trial court erred to the extent it denied
Cooper’s motion to compel arbitration on the ground that appellees’ claims do not
fall within the scope of valid arbitration agreements that Cooper can invoke.

II.   Cooper did not expressly waive its right to arbitrate appellees’ claims.
      Once the arbitration movant establishes a valid arbitration agreement that
encompasses the claims at issue, a trial court has no discretion to deny the motion

                                         15
to compel arbitration unless the opposing party proves a defense to arbitration such
as waiver. J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 227 (Tex. 2003); In re
First Merit Bank, N.A., 52 S.W.3d 749, 753–54 (Tex. 2001) (orig. proceeding).
Cooper’s second and third issues ask whether the trial court erred to the extent it
denied the motion to compel by finding that Cooper waived its right to arbitration
against Metro and Whitman.

      A party can waive a contractual right to arbitrate either expressly or by
implication. Sedillo v. Campbell, 5 S.W.3d 824, 826 (Tex. App.—Houston [14th
Dist.] 1999, no pet.). Whether waiver has occurred is a question of law for the
court that we review de novo. Perry Homes v. Cull, 258 S.W.3d 580, 598 (Tex.
2008). Because public policy favors arbitration, there is a strong presumption
against waiver of the right to arbitrate. In re Bruce Terminix Co., 988 S.W.2d 702,
704 (Tex. 1998) (orig. proceeding).

      Express waiver arises when a party affirmatively indicates that it wishes to
resolve the case in the judicial forum rather than in arbitration. See Okorafor v.
Uncle Sam & Assocs., Inc., 295 S.W.3d 27, 39 (Tex. App.—Houston [1st Dist.]
2009, pet. struck). Appellees contend that Cooper expressly waived the right to
arbitrate by first moving to dismiss the case in favor of adjudication in New York
based on principles of exclusive jurisdiction, comity, and forum non conveniens.
In its motion, Cooper argued that the New York court that approved the 2011
settlement had exclusive jurisdiction over questions regarding that settlement.

      Moving to dismiss in favor of exclusive jurisdiction in another court is
equivalent, for present purposes, to moving to transfer venue or filing a notice of
removal to another court. The Supreme Court of Texas and many other courts
have held that such actions do not waive a right to arbitrate. E.g., Richmont
Holdings, Inc. v. Superior Recharge Sys., L.L.C., 455 S.W.3d 573, 576 (Tex. 2015)

                                         16
(per curiam); In re Citigroup Global Markets, Inc., 258 S.W.3d 623, 626 (Tex.
2008).13

       In Richmont Holdings, Superior and Richmont signed an asset purchase
agreement with an arbitration clause, and Superior’s part-owner, Blake, signed a
related employment agreement with Richmont that contained a Dallas County
forum selection clause.        455 S.W.3d at 575.          Superior and Blake later sued
Richmont in Denton County on various causes of action and sought a declaration
that a covenant not to compete in the employment agreement was unenforceable.
Id. In response, Richmont moved to transfer venue to Dallas County and also filed
a separate suit against Blake in Dallas County to enforce the covenant not to
compete. Id. Richmont later filed a motion to compel arbitration in the Denton
County suit, but the trial court denied the motion. Id. at 576.

       The supreme court held that the motion should have been granted because
Richmont had not waived arbitration. Id. The court explained that “[m]erely filing
suit does not waive arbitration, even when the movant, as in this case, files a
second, separate suit in another county based in part on a contract at issue in the
first action. Nor, we think, does moving to transfer venue. The motion does not
address the merits of the case.” Id. (citations omitted).

       Thus, Richmont went far beyond asserting—as Cooper did here—that
another forum was the only correct place to decide the parties’ disputes. Richmont
actually filed a second suit in the other forum, yet the supreme court held that act
       13
          See also In re Bruce Terminix Co., 988 S.W.2d at 704 (citing case holding no waiver
by defendant who removed case from state to federal court); In re Frost Nat’l Bank, 13-07-
00748-CV, 2008 WL 4889836, at *3 (Tex. App.—Corpus Christi Nov. 7, 2008, no pet.) (holding
party did not waive right to compel arbitration by moving to transfer venue based on provision in
agreement) (mem. op.); Global Fin. Servs., L.L.C. v. Estate of McLean, No. 04-07-627-CV, 2008
WL 372521, at *3 (Tex. App.—San Antonio Feb. 13, 2008, no pet.) (mem. op.); Granite Constr.
Co. v. Beaty, 130 S.W.3d 362, 367 (Tex. App.—Beaumont 2004, no pet.) (“[A] motion to
transfer venue does not seek a final determination of the litigation.”).

                                               17
did not waive Richmont’s ability to compel arbitration in the original suit.
Richmont therefore supports the conclusion that Cooper did not waive its right to
arbitration.

       Similarly, in In re Citigroup Global Markets, the supreme court held that
Citigroup did not waive arbitration despite its previous attempts to transfer the case
to a federal multidistrict litigation court in New York. 258 S.W.3d at 626. The
court held that despite statements in various transfer pleadings about the case’s
similarity to others already transferred, the potential savings in consolidated
discovery, and the potential convenience of parties and witnesses in consolidated
proceedings, Citigroup did not expressly waive its right to arbitrate. Id. As the
court explained, “we disagree . . . that transfer to an MDL court is necessarily
inconsistent with seeking arbitration.” Id.

       Appellees urge that Citigroup is distinguishable because in that case, the
party seeking to compel arbitration expressly reserved the right to request
arbitration early on. See id. But the court in Citigroup did not hold that a party
must expressly reserve its right to arbitrate before seeking to transfer a case.
Rather, Citigroup simply noted that the party “never opposed arbitration.” Id. The
same is true here: Cooper never opposed arbitration before filing its motion to
compel. Accordingly, we hold the trial court erred to the extent it denied the
motion to compel arbitration on the ground that Cooper expressly waived its right
to arbitrate.

III.   Cooper did not waive its right to arbitrate by implication.
       A party waives an arbitration clause by implication when it substantially
invokes the judicial process to the other party’s detriment or prejudice. Perry
Homes, 258 S.W.3d at 589–90. The hurdle of proving implied waiver is a high
bar. Kennedy Hodges, L.L.P. v. Gobellan, 433 S.W.3d 542, 545 (Tex. 2014) (per

                                         18
curiam). In close cases, the “strong presumption against waiver” should govern.
Perry Homes, 258 S.W.3d at 593.

       Waiver must be decided on a case-by-case basis, and we look to the totality
of the circumstances. Id. at 592. The party’s conduct must be unequivocally
inconsistent with claiming a known right to arbitration. See Van Indep. Sch. Dist.
v. McCarty, 165 S.W.3d 351, 353 (Tex. 2005).14 We consider a wide variety of
factors in deciding whether a party substantially invoked the litigation process,
such as:

    whether the party who pursued arbitration was the plaintiff or the defendant;

    how long the party who pursued arbitration delayed before seeking
     arbitration;

    when the party who pursued arbitration learned of the arbitration clause’s
     existence;

    how much of the pretrial activity related to the merits rather than to
     arbitrability or jurisdiction;

    how much time and expense has been incurred in litigation;

    whether the party who pursued arbitration sought or opposed arbitration
     earlier in the case;

    whether the party who pursued arbitration filed affirmative claims or
     dispositive motions;

    how much discovery has been conducted and who initiated the discovery;

    whether the discovery sought would be useful in arbitration;

    what discovery would be unavailable in arbitration;

       14
            As noted above, whether a party has waived an arbitration right is a question of law
that this Court reviews de novo. See Perry Homes, 258 S.W.3d at 598. If the trial court is called
upon to resolve factual disputes about the conduct in which the party engaged, this Court defers
to the trial court’s implied fact findings if they are supported by sufficient evidence. See id.

                                               19
    whether activity in court would be duplicated in arbitration;

    when the case was to be tried; and

    whether the party who pursued arbitration sought judgment on the merits.

Baty v. Bowen, Miclette & Britt, Inc., 423 S.W.3d 427, 433 (Tex. App.—Houston
[14th Dist.] 2013, pet. denied) (citing Perry Homes, 258 S.W.3d at 591–92).

       The quantum of litigation conduct that constitutes “substantial” invocation
of the litigation process depends on the context. See Perry Homes, 258 S.W.3d at
593. A party who enjoys substantial direct benefits by gaining an advantage in the
pretrial litigation process should be barred from turning around and seeking
arbitration with the spoils. Id. Delay alone generally does not establish waiver.
See In re Serv. Corp. Int’l, 85 S.W.3d 171, 174 (Tex. 2002) (orig. proceeding).

       “Even substantially invoking the judicial process does not waive a party’s
arbitration rights unless the opposing party proves that it suffered prejudice as a
result.”   In re Bruce Terminix Co., 988 S.W.2d 702, 704 (Tex. 1998).              The
arbitration opponent must provide proof of prejudice to overcome the strong
presumption against waiver. In re Vesta, 192 S.W.3d at 763. In the context of
waiver of an arbitration right, “prejudice” relates to the inherent unfairness in terms
of delay, expense, or damage to a party’s legal position that occurs when the
party’s opponent forces it to litigate an issue and later seeks to arbitrate that same
issue. Perry Homes, 258 S.W.3d at 597. A party cannot attempt to have it both
ways by switching between litigation and arbitration to its own advantage. See
Okorafor, 295 S.W.3d at 40 (citing In re Fleetwood Homes of Texas, L.P., 257
S.W.3d 692, 694 (Tex. 2008)).

       To support their position that Cooper substantially invoked the judicial
process, appellees assert that Cooper “inexplicably delayed” moving to compel


                                          20
arbitration until May 2014, twenty-eight months after it was sued. Appellees
further contend that Cooper participated in extensive discovery related to the
merits. They point out that Cooper sought admissions that Metro is “seeking to
void and/or avoid the transfers incident to the creations of the [trust]” and that
Pneumo Abex did “not owe a duty to [Metro] to ensure that it obtained
consideration that was at least equal to the value” of Cooper’s obligations.
Appellees argue that those requests relate directly to their claims of fraudulent
transfer and tortious interference.

      They also point to Cooper’s request for the production of “all documents and
communications that show what amount would have constituted ‘equivalent value’
with respect to the settlement of the New York Lawsuit” and “all documents (if
any) in which Whitman Insurance Company . . . is identified, as an entity and/or a
party that is entitled to indemnification . . . pursuant to the terms of the SPA.”
Appellees declare that they have produced more than 21,000 documents, and argue
that Cooper is trying to have it both ways by moving to compel arbitration only
after receiving extensive discovery responses. The affidavit of appellees’ counsel
states that, “[t]o date, [appellees’] attorneys and staff have spent over 9,000 hours
working on the lawsuit and incurred approximately $3,500,000 in fees and $94,000
in other costs.” Appellees also argue that Cooper substantially invoked the judicial
process by moving for a continuance and agreeing to an extension of discovery.

      We disagree with appellees’ position that Cooper substantially invoked the
judicial process. In holding that substantial invocation had occurred in Perry
Homes, the Supreme Court of Texas noted the extensive discovery propounded by
the movants but stated that discovery is not the only measure of waiver under the
totality-of-the-circumstances test. Perry Homes, 258 S.W.3d at 596.15 The court

      15
           See also G.T. Leach Builders, LLC v. Sapphire V.P., LP, 458 S.W.3d 502, 514 (Tex.
                                             21
then pointed out that the movants had objected stridently to arbitration before
changing their minds and seeking arbitration shortly before the trial setting. Id.
The court also invoked the rule that one cannot wait until the eve of trial to request
arbitration, observing that “most of the discovery in the case had already been
completed before [movants] requested arbitration.” Id.

       The facts here are different from those in Perry Homes and more analogous
to In re Vesta, in which the supreme court held that arbitration had not been
waived. 192 S.W.3d at 763–64. The parties moving for arbitration in Vesta had
litigated for two years and engaged in discovery, but they did not initially oppose
arbitration. See Perry Homes, 258 S.W.3d at 600 (distinguishing Vesta on those
grounds).     Furthermore, the Vesta case was not close to trial, and the party
opposing arbitration incurred most of its discovery expenses in obtaining discovery
rather than providing it. Id.

       Like the parties moving to compel arbitration in Vesta, Cooper did not
oppose arbitration at any time during the case. In addition, although the parties
had engaged in some merits discovery, this case was not on the eve of trial when
Cooper filed its motion to compel arbitration in May 2014—approximately four
months after Whitman joined the case as a plaintiff.16 The record shows that
during the first ten months of the case, from December 2011 to October 2012, the


2015) (collecting cases in which “we have declined to find waiver even when the movant itself
propounded written discovery”).
       16
            Although appellees point to evidence (summarized above) that substantial merits
discovery had occurred, the record also contains indications that the situation was not like that in
Perry Homes, in which most discovery had been completed. According to a filing by appellees
in February 2014, no “meaningful merits discovery” had yet been received from Cooper given
the litigation over jurisdictional issues. In April 2014, appellees moved to modify the docket
control order, stating that the parties had been “prevented . . . from being able to engage in
meaningful document discovery on the merits until recently,” and that “no fact-witness
depositions have been taken on the merits as of this date.”

                                                22
parties were engaged in settlement negotiations and Metro sought to extend trial
deadlines for that reason.17 Much of the second year was spent on venue motions,
jurisdictional motions, and mediation, which failed in November 2013. Settlement
negotiations and mediation do not substantially invoke the judicial process, nor are
they inconsistent with a desire to arbitrate. See Tex. Residential Mort., L.P. v.
Portman, 152 S.W.3d 861, 863–64 (Tex. App.—Dallas 2005, no pet.). Likewise,
venue and jurisdictional motions do not constitute substantial invocation of the
judicial process because they do not relate to the merits of the case. See Granite,
130 S.W.3d at 367; Deep Water Slender Wells, Ltd. v. Shell Intern. Exploration &
Prod., Inc., 234 S.W.3d 679, 695 (Tex. App.—Houst.[14th Dist.] 2007, pet.
denied) (“A dismissal of all claims to enforce a clause requiring litigation in
another forum is a determination that the merits of the claims should be determined
elsewhere; therefore, enforcement of such a forum-selection clause is a nonmerits
basis for dismissal.”).

       Appellees cite Tuscan Builders, LP v. 1437 SH6 L.L.C., 438 S.W.3d 717
(Tex. App.—Houston [1st Dist.] 2014, pet. denied), a case in which the First Court
of Appeals held that the movant substantially invoked the judicial process.
Appellees assert that this case is similar because the movant in Tuscan waited for
more than a year after the lawsuit was filed before seeking arbitration, did not
accompany its answer with a notice to pursue arbitration, completed written
discovery on the merits, inspected property at issue in the lawsuit, designated
experts, and joined in a motion to extend the discovery period and postpone trial.

       17
           Metro filed its original petition on December 30, 2011. On October 31, 2012, Metro
filed an unopposed motion to modify the scheduling order and request for Rule 166 Conference.
Metro asserted that the “parties have been engaged in extensive settlement negotiations in an
effort to resolve this case. Because the parties’ efforts have been focused on resolving the matter
short of litigating the issue, the parties request an extension and modification of this Court’s
docket control order.”

                                                23
Id. at 722–23.

      This case is distinguishable from Tuscan Builders. The party seeking to
compel arbitration in Tuscan Builders filed a third-party action and conducted a
building inspection that likely would not have been available in arbitration. Id. at
723. The court concluded that the motion to compel arbitration was “more
consistent with a late-game tactical decision than an intent to preserve the right to
arbitrate.” Id. at 722. In this case, by contrast, Cooper did not file counterclaims,
and appellees do not contend that any merits discovery obtained would not have
been available in arbitration. Appellees also “do[] not allege that the discovery
already conducted would not be useful in arbitration.” In re Vesta, 192 S.W.3d at
763; see also Granite, 130 S.W.3d at 367 (“Propounding discovery will not, in and
of itself, result in waiver of the right to compel arbitration”). Cooper’s twenty-
eight-month delay is but one factor, which by itself is insufficient to waive the
right to arbitrate. See In re Serv. Corp. Int’l, 85 S.W.3d at 174; see also Granite,
130 S.W.3d at 367 (“Length of delay alone is not a basis for inferring waiver.”).

      Cooper is in court because appellees sued it, and Cooper did not seek
disposition on the merits. See G.T. Leach Builders, LLC v. Sapphire V.P., LP, 458
S.W.3d 502, 512–13 (Tex. 2015) (noting similar factors in holding right to
arbitrate had not been waived). Appellees have not shown that Cooper obtained
discovery it otherwise would not have obtained, and this case was not on the eve of
trial. As for the expenses appellees incurred in prosecuting their suit, the affidavit
does not delineate which costs were incurred in litigating against Cooper and
which costs were incurred in litigating against the other named defendants. Nor
does it address which costs were incurred in obtaining or responding to discovery.
The costs thus likely include those associated with litigating the claims against the
other named defendants and those associated with appellees’ efforts at obtaining

                                         24
discovery from Cooper. The record does not demonstrate the extent to which
appellees “pre-trial costs were . . . self-inflicted.” In re Vesta, 192 S.W.3d at 763.
Accordingly, we hold appellants have not shown that Cooper unequivocally
waived its right to arbitration by substantially invoking the judicial process. Perry
Homes, 258 S.W.3d at 593.

      Having concluded that under the totality of the circumstances, Cooper did
not substantially invoke the judicial process, we need not address whether
appellees suffered prejudice. We sustain Cooper’s second and third issues and
hold the trial court erred to the extent it ruled that Cooper waived its right to
arbitration of appellees’ claims.

                                    CONCLUSION

      For these reasons, the trial court erred in denying the Cooper appellants’
motion to compel arbitration. We reverse the trial court’s order denying the
motion, render judgment ordering arbitration of appellees’ claims against the
Cooper defendants who are parties to this appeal, and remand this case to the trial
court for further proceedings consistent with this opinion, including the grant of an
appropriate stay. See Tex. Civ. Prac. & Rem. Code Ann. § 171.025(a) (West
2011).




                                       /s/    J. Brett Busby
                                              Justice



Panel consists of Justices Jamison, Busby, and Brown.




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