                                   NO. 07-03-0499-CV

                             IN THE COURT OF APPEALS

                      FOR THE SEVENTH DISTRICT OF TEXAS

                                      AT AMARILLO

                                        PANEL D

                                  DECEMBER 30, 2003

                          ______________________________


            IN RE DENNIS WILLIAMS AND PATTY WILLIAMS, RELATORS

                         _______________________________

Before QUINN and REAVIS and CAMPBELL, JJ.


                               MEMORANDUM OPINION


       Relators Dennis and Patty Williams seek mandamus relief from an order of the

district court abating and requiring arbitration of the underlying action, Cause No. 53,219-

B, 181st District Court of Randall County. The underlying action was initiated by real party

in interest Steamatic of Amarillo, Inc., as a suit on sworn account against the Williams.

After the Williams answered and asserted counterclaims under the Deceptive Trade

Practices Act and for breach of contract, Steamatic asserted that the parties’ disputes were

subject to arbitration under the terms of a written agreement signed by the Williams, and

asked the trial court to compel arbitration. The trial court did so following a hearing,
entering the order that is the subject of the Williams’ petition in this court. We will deny the

petition.1




       The trial court made no determination whether the federal2 or Texas3 arbitration

statute governs the written agreement between the parties. Relators’ mandamus petition

and Steamatic’s response both suggest the federal act applies. Neither the Texas nor

federal arbitration statute permits interlocutory appeal from a trial court decision

compelling arbitration; the Williams may seek relief, then, if at all,4 only through

mandamus.




       1
       Relators’ petition requested oral argument. We decide the case without oral
argument, finding that argument would not significantly aid the court in determining the
issues presented. Tex. R. App. P. 39.8.
       2
           9 U.S.C.A. §§ 1–16 (1999 & Supp. 2003).
       3
           Tex. Civ. Prac. & Rem. Code Ann. §§ 171.001-171.098 (Vernon Supp. 2004).
       4
         The parties do not raise the question whether the availability of court action
following arbitration (and thus an adequate remedy by law) renders an order compelling
arbitration, as opposed to one refusing to compel arbitration, not reviewable by mandamus.
As noted, both the Texas and federal arbitration statutes provide for review by interlocutory
appeal of trial court decisions denying arbitration, but not of decisions ordering arbitration.
Tex. Civ. Prac. & Rem. Code § 171.098; 9 U.S.C.A. § 16; see, e.g., Lipshy Motorcars, Inc.
v. Sovereign Assocs., Inc., 944 S.W.2d 68, 69 (Tex.App.–Dallas 1997, no writ). Although
it appears that the Fifth Circuit will, in a proper case, permit mandamus to correct
erroneous decisions ordering arbitration under the federal statute, see Apache Bohai
Corp., LDC v. Texaco China, B.V., 330 F.3d 307, 310-11 (5th Cir. 2003), at least one Texas
court of appeals has pointed to the availability of appeal following arbitration in denying
mandamus relief. McMullen v. Yates, 697 S.W.2d 500, 502-03 (Tex.App.–San Antonio
1985, no writ); but see Freis v. Canales, 877 S.W.2d 283 (Tex. 1994).

                                               2
       One seeking issuance of a writ of mandamus must provide a sufficient record to

establish the right to such relief. Walker v. Packer, 827 S.W.2d 833, 837 (Tex. 1992).

Mandamus issues only to correct a clear abuse of discretion or the violation of a duty

imposed by law when there is no other adequate remedy by law. Johnson v. Fourth Court

of Appeals, 700 S.W.2d 916, 917 (Tex. 1985). The Fifth Circuit has held that the burden

on a party seeking mandamus relief from an order compelling arbitration is particularly

heavy. Apache Bohai Corp., LDC v. Texaco China, B.V., 330 F.3d 307, 310 (5th Cir. 2003).




       The parties do not dispute that a valid arbitration agreement exists between

Steamatic and the Williams, nor that the claims asserted by each fall within the scope of

the agreement. The Williams contend, though, that Steamatic waived its right to require

arbitration by initiating the underlying action through its suit on sworn account.


       A party to an arbitration agreement may waive its right to insist on arbitration as the

means to resolve a dispute if it intentionally chooses to pursue its remedies through the

judicial process. See, e.g., In re Bruce Terminix Co., 988 S.W.2d 702, 704 (Tex. 1998).

The public policy favoring arbitration brings about a strong presumption against such a

waiver, however, and the case law requires a showing that the party against whom waiver

is asserted has substantially invoked the judicial process, and that the opposing party has

suffered prejudice as a result. Id.; EZ Pawn Corp. v. Mancias, 934 S.W.2d 87, 89 (Tex.

1996); see Subway Equip. Leasing Corp. v. Forte, 169 F.3d 324, 326 (5th Cir. 1999). Any



                                              3
doubt that waiver has occurred must be resolved in favor of arbitration. Bruce Terminix,

988 S.W.2d at 705.


       Steamatic does not deny that it invoked the judicial process by initiating the

litigation, but contends that the Williams have demonstrated no prejudice. The Williams

concede that the requirement of showing prejudice normally applies, but say that the

requirement does not apply when the party seeking arbitration is the plaintiff. Filing suit on

an arbitrable claim, contend the Williams, waives the right to arbitration as a matter of law.

For several reasons, we cannot agree with this broad contention. It finds no support in the

language of the arbitration statute. Section 3 of the federal statute provides for the stay of

litigation pending arbitration on the application of “one of the parties.”5 Secondly, relators’

contention runs counter to the policy favoring arbitration that is reflected in the federal

statute. See, e.g., Bruce Terminix, 988 S.W.2d at 704. Thirdly, we find no case drawing

the distinction relators urge, and we see no reason in logic why a party’s initial invocation

of the judicial process as plaintiff should relieve its opponent of the burden the law

otherwise imposes to demonstrate prejudice.6 This is particularly so, where, as here, the




       5
           9 U.S.C.A. § 3.
       6
         The third case relators cite, Miller Brewing Co. v. Fort Worth Distributing Co., 781
F.2d 494 (5th Cir. 1986), does not support relators’ contention. There, the court did find that
Fort Worth Distributing had waived its right to arbitrate through litigation it had filed as
plaintiff, but the court made specific findings concerning prejudice to Miller Brewing caused
by its opponent’s invocation of the judicial process.

                                              4
defendant asserts counterclaims that significantly change the nature of the litigation from

the suit on sworn account initially filed by the plaintiff.7


       Relators rely on Bruce Terminix, 988 S.W.2d 702. That opinion cannot be said to

support the proposition that a plaintiff is barred as a matter of law from seeking an order

compelling arbitration following the filing of counterclaims by the defendant and without a

demonstration of prejudice.




       Relators’ petition in this court does not argue that they have been prejudiced as a

result of Steamatic’s initially filing suit. The record before us does not demonstrate

prejudice of the type the case law requires to support a finding of waiver of the right to

arbitrate. See Subway, 169 F.3d at 327; Miller Brewing, 781 F.2d at 497–98; Home Club,

Inc. v. Barlow, 818 S.W.2d 192, 193 (Tex.App.–San Antonio 1991, no writ). The litigation

was in its early stages when the trial court abated it and ordered arbitration.8 Doing so


       7
        In this regard, note the holding of the Fifth Circuit in Subway, a case on which
relators rely, that “a party only invokes the judicial process to the extent it litigates a
specific claim it subsequently seeks to arbitrate.” 169 F.3d at 328. It seems difficult to
argue that Steamatic’s motion to compel arbitration following the filing of the Williams’
counterclaims amounts to an effort to arbitrate the “specific claim” on which it initiated its
suit on sworn account.
       8
         The appendix to relators’ mandamus petition indicates the following: Steamatic filed
its suit on sworn account on July 15, 2003; it obtained an order for substitute service on
the Williams on August 7, 2003; the Williams answered and counterclaimed on or about
August 26, 2003; Steamatic initiated no discovery; the Williams sent discovery requests
to Steamatic with responses due initially on September 25, 2003; Steamatic first initiated
efforts in the trial court to compel arbitration some time before October 1, 2003; the trial
court’s order to arbitrate is dated November 7, 2003.

                                               5
was not an abuse of the trial court’s discretion. Relators’ petition for a writ of mandamus

is denied.




                                                 James T. Campbell
                                                     Justice




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