
TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN





NO. 03-05-00423-CV


Kirby Highland Lakes Surgery Center, L.L.P., Appellant 

v.

Edward E. Kirby, M.D. and Helen Kirby, Appellees




FROM THE DISTRICT COURT OF BURNET COUNTY, 33RD JUDICIAL DISTRICT
NO. 31079, HONORABLE GUILFORD L. JONES, III, JUDGE PRESIDING


&



NO. 03-05-00502-CV


In re Kirby Highland Lakes Surgery Center, L.L.P.





ORIGINAL PROCEEDING FROM BURNET COUNTY


O P I N I O N


	Kirby Highland Lakes Surgery Center (the Partnership) filed a petition for writ of
mandamus, 03-05-00502-CV, relying on the Federal Arbitration Act (FAA) (1) to contend that the
district court abused its discretion in denying the Partnership's motion to compel arbitration of a
dispute with one of the partners, Dr. Edward Kirby, and his wife, Helen Kirby.  Contemporaneously,
the Partnership also filed an interlocutory appeal, 03-05-00423-CV, purporting to challenge the
district court's order under the Texas Arbitration Act (TAA).  Concluding that the FAA rather than
the TAA governs and that the Partnership is entitled to relief, we conditionally grant the petition for
writ of mandamus and dismiss the interlocutory appeal as moot.  See In re Valero Energy Corp., 968
S.W.2d 916, 916-17 (Tex. 1998) (orig. proceeding).

BACKGROUND

	Dr. Edward Kirby and his wife, Helen Kirby, operated an outpatient surgical center
in the Highland Lakes area. (2)  In 2001, they were approached by several other doctors who were
interested in forming a partnership and purchasing the center.  After protracted negotiations, the
parties ultimately agreed to a transaction in which (1) the Partnership would be formed between the
other doctors, Edward Kirby, and Highland Lakes Physician Management, L.L.P., with the latter
serving as managing partner with day-to-day responsibilities over operations and billing; and (2) the
Partnership would simultaneously purchase the assets of the surgical center.  The transaction was
effectuated through two agreements, a Partnership Agreement and a Purchase and Sale Agreement,
that were simultaneously executed on December 31, 2002.
	The parties to the Partnership Agreement were Edward Kirby and the other doctors. 
Helen Kirby was not listed as a partner and did not sign the principal agreement.  However, she did
sign a "Joinder of Spouses" addendum, in which she stated that she was aware of the provisions of
the Partnership Agreement and its effect on her community property interests and that she was "fully
aware of, [understood], and fully consented[ed] to and agreed to" its provisions.  The Partnership
Agreement contained an arbitration clause, providing that all "disputes or controversies arising under
or related to this Agreement shall be arbitrated."
	Under the Purchase and Sale Agreement, the Kirbys sold to the Partnership the
surgical center's real estate and all their equipment at the surgical center with the exception of certain
personalty including the "YAG equipment and all fees generated in association with such YAG
equipment." (3)  The Kirbys' "right to retain all fees generated from the YAG equipment located on
the Property . . . so long as such YAG equipment remains on the Property" was recited as part of the
consideration for the Purchase and Sale Agreement.  Unlike the Partnership Agreement, the Purchase
and Sale Agreement did not contain an arbitration clause.  However, the Purchase and Sale
Agreement explicitly required "Seller" to execute the Partnership Agreement, which was attached
and incorporated by reference. 
	For a time, the Partnership remitted fees to the Kirbys for use of the YAG equipment. 
In August 2003, however, the Partnership notified the Kirbys that it would no longer remit fees from
the use of the YAG equipment, citing prohibitions in federal anti-kickback statutes.  The Kirbys
eventually filed suit in district court on November 18, 2004.  As later amended, the Kirbys' pleadings
assert a claim for breach of contract solely under the "Purchase Agreement and related agreements,
regarding the billing of the YAG laser," not the Partnership Agreement. (4)  The Partnership moved to
compel arbitration of the Kirbys' claims.  On June 29, the district court denied the motion, ordering
that the dispute was not governed by the arbitration clause and that Helen Kirby was not a party to
a binding arbitration clause.  The Partnership then filed this petition and the related interlocutory
appeal from the district court's order. 

DISCUSSION

	In both its petition for writ of mandamus and its interlocutory appeal, the Partnership
argues that the Kirbys' breach-of-contract claims are subject to the arbitration clause of the
Partnership Agreement because either (1) the Partnership Agreement, including its arbitration clause,
was incorporated by reference into the Purchase and Sale Agreement, or (2) this dispute "arises under
or is related to" the Partnership Agreement.  Separately, the Partnership also argues that Helen Kirby
was bound to the arbitration clause through the "joinder of spouses" provision of the Partnership
Agreement. 

Availability of mandamus versus interlocutory appeal
	Mandamus is an extraordinary remedy, available only when a trial court clearly
abuses its discretion and when there is no adequate remedy on appeal.  See In re Kuntz, 124 S.W.3d
179, 180 (Tex. 2003).  When a request to arbitrate under the FAA is denied, the appellate remedy
is through mandamus.  Jack B. Anglin Co. v. Tipps, 842 S.W.2d 266, 272 (Tex. 1992); American
Med. Techs., Inc. v. Miller, 149 S.W.3d 265, 269 (Tex. App.--Houston [14th Dist.] 2004, orig.
proceeding).  In contrast, interlocutory appeal is the proper remedy if this case is governed by the
TAA rather than the FAA.  See Jack B. Anglin Co., Inc., 842 S.W.2d at 272 & n.10, 273.  The Texas
Supreme Court has instructed appellate courts that when, as here, parallel mandamus proceedings
and interlocutory appeals are brought under the FAA and TAA, respectively, we should consolidate
the two proceedings and consider them together.  See In re Valero Energy Corp., 968 S.W.2d at 916-17.  We accordingly consolidate the two proceedings.
	In its first issue in cause 03-05-00502-CV, the Partnership argues that the FAA, and
not the TAA, governs this case.  See id.; see also Tex. Civ. Prac. & Rem. Code Ann. §§ 171.001-.098 (West 1997 & Supp. 2005).  The Partnership explains that it filed its interlocutory appeal
invoking the TAA "[o]ut of an abundance of caution" in the event we find that the TAA applies.  In
their reply to the petition for writ of mandamus, the Kirbys concede that the FAA applies because
the underlying dispute concerns billings to Medicare and Medicaid.  We conclude that this dispute
is governed by the FAA.  We sustain the Partnership's first issue presented in cause 03-05-00502-CV; we dismiss the interlocutory appeal, 03-05-00423-CV, as moot; (5) and we will proceed to address
the merits of the FAA claim in the petition for writ of mandamus.

Compelling arbitration under the FAA; general principles
	A party seeking to compel arbitration under the FAA must establish that: (1) there
is a valid arbitration clause, and (2) the claims raised fall within that agreement's scope.  In re
FirstMerit Bank, 52 S.W.3d at 753 (Tex. 2001); In re Oakwood Mobile Homes, Inc., 987 S.W.2d
571, 573 (Tex. 1999).  The first element includes "gateway matters" such as whether a valid
arbitration clause exists and whether an arbitration clause is binding on a nonparty.  In re Weekley
Homes, L.P., 49 Tex. Sup. Ct. J. 55, 2005 Tex. LEXIS 817, at *4-5 (Tex. Oct. 28, 2005).  Such
matters are governed by Texas law.  Id.  The scope of a valid arbitration clause, however, is governed
by federal law.  "Arbitration is heavily favored under federal and state law and should not be denied
unless it can be said with positive assurance that the arbitration clause cannot be interpreted so as
to encompass the dispute in question."  In re Sun Communications, Inc., 86 S.W.3d 313, 317 (Tex.
App.--Austin 2002, no pet.) (citing Prudential Sec. Inc. v. Marshall, 909 S.W.2d 896, 898-99 (Tex.
1995)).  "We resolve doubts concerning the scope of coverage of an arbitration clause in favor of
arbitration."  Pennzoil Exploration & Prod. Co. v. Ramco Energy Ltd., 139 F.3d 1061, 1067 (5th Cir.
1998).

Whether the Kirbys' claims fall within the arbitration clause
	There is no dispute that Edward Kirby, as one of the Partnership's partners, is a party
to the arbitration clause contained in the Partnership Agreement, nor do the Kirbys challenge the
validity of that provision. (6)  The parties do dispute whether Helen Kirby, as a nonparty to the
Partnership Agreement, can be bound by its arbitration provision.  They also contest whether the
Kirbys' claims fall within the provision's scope.  Because the arbitration agreement's scope is
potentially decisive of the Partnership's right to arbitrate against either Edward or Helen Kirby, we
first turn to that issue.
	To determine the scope of an arbitration agreement, we first look to the terms of that
agreement.  See Marshall, 909 S.W.2d at 900.  We then examine the factual allegations in the
petition rather than the legal causes of action.  Id.

 Pleadings 
	The Kirbys pleaded that, after operating their surgical center for approximately three
years, they were approached by principals of the general partner of the Partnership regarding the
possible sale of the center to the Partnership.  "These principals assured Dr. and Mrs. Kirby that their
legal and other advisors were experts in the areas of acquisition of outpatient surgery centers,
medicare and medicaid billing, operations of outpatient surgery centers, and the formation of entities
composed of practicing physicians and an operating partner to own and operate the outpatient
surgery centers."  Lengthy negotiations ensued, but "nearly foundered over the issue of price."  Thus,
the Kirbys alleged,

13.	In order to adequately compensate the Kirbys, the Partnership agreed in the
Purchase Agreement conveying the Center that Dr. Kirby would continue to own
and retain all of the economic value and income stream from . . . the YAG
Laser. . . .  Dr. Kirby, Mrs. Kirby, and the General Partner were all aware of and
discussed the value of the YAG Laser in negotiating the Purchase Agreement
pursuant to which Dr. and Mrs. Kirby conveyed the Center to the Partnership. 

14.	The Kirbys and the Partnership agreed that while Dr. Kirby would continue to
own the YAG laser (because it was excluded from the sale), the Partnership
would bill a facility fee for the deployment of the YAG laser in connection with
posterior capsulotomy and other procedures performed by Dr. Kirby at the
Center.  That revenue stream, even though it would be billed and collected by
the Partnership, would flow directly and solely to Dr. Kirby less a nominal
administration fee.  By carving out this expected revenue stream from the billing
of facility fees for the YAG laser, the Kirbys would receive fair consideration
and compensation for the sale of the Center to the Partnership.

15.	This understanding between the Kirbys and the Partnership was memorialized
in the Purchase Agreement by the exclusion of the YAG laser from the sale of
the other assets that composed the Center.  It was recognized and expected by
all parties that Dr. Kirby would continue to use the YAG laser at the Center after
the sale on the terms outlined above.  With all of these understandings
memorialized, Dr. and Mrs. Kirby agreed to sell the Center to the Partnership
on March 3, 2003.


After remitting the YAG facility fee proceeds to the Kirbys "as had been agreed" for approximately
four months, "the Partnership announced that it would no longer honor the Purchase Agreement and
agreed practice regarding Dr. Kirby's sole receipt of the YAG laser facility fees."  Although the
Partnership gave assurances that "it would determine a way to make sure the Kirbys received what
they contracted for, namely, the full value and benefit of the YAG laser facility fee reimbursements,"
"the Partnership failed and refused to honor its agreements."  The Kirbys pleaded this "Purchase
Agreement and related agreements, regarding the billing of the YAG laser" as the basis for their
breach-of-contract claim.
	The Kirbys also made the following allegation regarding the relationship between the
Purchase and Sale Agreement and the Partnership Agreement: 

The purchase of the Center was related to, but independent from, the formation of the
Partnership.  The Partnership, which was formed pursuant to a written partnership
agreement, did not involve or include Mrs. Kirby.  The Partnership involves
numerous additional third parties who have no direct stake or interest in this suit. 
The partnership agreement set forth numerous undertakings by the various partners
none of which are material to the dispute raised herein. 


 Text of arbitration clause
	The arbitration clause of the Partnership Agreement, provides, in relevant part, that
"[a]ll disputes or controversies arising under or related to this Agreement shall be arbitrated."  The
Partnership asserts two arguments for construing this clause to encompass the Kirbys' allegations
regarding the YAG laser facility fees.  First, the Partnership emphasizes that the Purchase and Sale
Agreement incorporates the Partnership Agreement by reference--the sale agreement attached, as
one of several exhibits, a copy of the executed Partnership Agreement and "incorporated [all of the
exhibits] as part of this Agreement," each to have "the same meaning as if they were incorporated
fully within the text of this Agreement."  Second, the Partnership contends that, even if the
Partnership Agreement was not fully incorporated into the Purchase and Sale Agreement, the Kirbys'
claims nonetheless fell within the scope of the Partnership Agreement's arbitration clause.  Because
we agree that the Partnership Agreement's arbitration clause embraces the Kirbys' claims, we need
not consider the Partnership's incorporation-by-reference argument. 
	The Partnership Agreement's arbitration clause embraces "[a]ll disputes or
controversies arising under or related to this Agreement," terminology that federal courts applying
the FAA have termed "extremely broad" and "capable of expansive reach."  See Pennzoil
Exploration, 139 F.3d at 1067-68; see, e.g., Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth,
473 U.S. 614, 625-26 (1985); Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 397-98
(1967).  Such "related to" language, in contrast to narrower phrases like "arising out of," extends to
"all disputes between the parties having a significant relationship to the contract regardless of the
label attached to the dispute" or that "touch" matters covered by the contract containing the
arbitration provision.  Pennzoil Exploration, 139 F.3d at 1067-68.  The breadth of the Partnership
Agreement's arbitration clause distinguishes it from those in many of the cases cited by the Kirbys. 
See Weber v. Hall, 929 S.W.2d 138, 142-43 (Tex. App.--Houston [14th Dist.] 1996, orig.
proceeding) (construing arbitration clause covering controversies or disputes "as to all or any part
of this Agreement"). (7)  However, "related to" does not mean unlimited in scope.  Penzoil Exploration,
139 F.3d at 1067 n.8 ("We realize that even broad clauses have their limits.").  For instance, such
language is not as broad as "any and all disputes between" the parties.  See Neal, 918 F.2d at 36-37. (8)
	The Kirbys pleaded that "[t]he purchase of the Center," the subject matter of the
Purchase and Sale Agreement, "was related to, but independent from, the formation of the
Partnership," the subject matter of the Partnership Agreement.  The Kirbys also pleaded that the
agreements conferring them rights to YAG laser facility fees were memorialized at least in part in
the Purchase and Sale Agreement and "related agreements."  In these ways, the Kirbys have
judicially admitted that their factual allegations concerning the YAG laser fees are, to some degree,
"related to" the Partnership Agreement.
	The Kirbys' pleadings, while elsewhere stating that the purchase and partnership
formation were "related . . . but independent," allege that the Kirbys entered into both the sale and
the partnership to procure certain benefits of the arrangement:

10.	On or about July 2001, the Kirbys were approached by principals of the general
partner of the Partnership regarding the possible sale of the [Kirbys' surgical]
Center to the Partnership.  These principals held themselves out as experienced
managers of outpatient surgery centers.  These principals assured Dr. and Mrs.
Kirby that they uniquely understood and grasped the complexities of the
arrangement they proposed.  These principals assured Dr. and Mrs. Kirby that
their legal and other advisors were experts in the areas of acquisition of
outpatient surgery centers, medicare and medicaid billing, operations of
outpatient surgery centers, and the formation of entities composed of practicing
physicians and an operating partner to own and operate the outpatient surgery
centers. Pursuant to these representations, which continued throughout the
negotiations process, lengthy negotiations ensued between the Kirbys, on one
hand, and the Partnership, on the other hand.


(Emphases added.).  The Kirby's intent to procure these benefits was ultimately reflected in both the
Purchase and Sale Agreement and the Partnership Agreement.  The latter appointed Highland Lakes
Physician Management, L.L.P., as managing partner and charged that entity with day-to-day
operations and management of the surgery center, including collecting bills and paying debts.
According to the Kirbys' pleadings, the dispute in this case arises from the Partnership's failure to
pay the amounts due to the Kirbys from the bills it collected for the use and operation of the YAG
equipment.  As the Kirbys' own pleadings emphasize, the agreement to exclude the YAG equipment
and rights to facility fees was also an integral part of this overall transaction, a product of the Kirbys'
bargaining over price. 
	In Personal Security & Safety Systems Inc. v. Motorola, Inc., the Fifth Circuit
considered a similar situation of simultaneously executed contracts, where only one of the contracts
of which contained an arbitration clause with broad "related to" language.  297 F.3d 388, 392-95 (5th
Cir. 2002); see also Ramco, 139 F.3d 1067.  In Personal Security & Safety, Motorola initiated
negotiations with Personal Security and Safety Systems Inc. (PSSI) concerning an investment in
PSSI that would give Motorola access to certain technology that PSSI was developing.  297 F.3d
390-91.  The parties eventually executed two agreements: (1) a Stock Purchase Agreement, under
which Motorola would provide a total of twelve million dollars in financing in return for a
convertible debenture and equity stake in PSSI; and (2) a Product Development and License
Agreement, under which the parties agreed to collaborate on the development of new technologies
based on existing PSSI systems and which addressed respective rights to existing or future
intellectual property. (9) Id. at 391.  Only the Product Development Agreement contained an arbitration
clause, which, like the one here, extended to disputes "arising out of or relating to this Agreement." 
Id. at 392-93.  PSSI subsequently sued Motorola for failing to provide it financing to which PSSI
claimed it was entitled under the Stock Purchase Agreement, claiming breach of that agreement and
fraudulent inducement.  Id. at 391.  Motorola sought unsuccessfully in the trial court to compel
arbitration.  Id.
	The Fifth Circuit relied on the broad language of the Product Development
Agreement's arbitration clause, as well as the principle that "separate agreements executed
contemporaneously by the same parties, for the same purposes, and as part of the same transaction,
are to be construed together."  Id. at 393.  "Although the Stock Purchase Agreement and the Product
Development Agreement govern[ed] different facets of the parties' relationship," both agreements
were "key elements of a transaction in which Motorola agreed to provide financing in return for a
stake in PSSI and access to PSSI's technology."  Id.  The court also observed that each agreement
expressly anticipated the execution of the other and that the Product Development Agreement was
attached as an exhibit to the Stock Purchase Agreement.  Id.  It added that "the Product Development
Agreement, which governed access to each party's intellectual property as well as the parties' joint
development efforts, was a central part of this transaction," pointing out that PSSI pleaded that
Motorola had originally engaged in negotiations primarily to gain access to PSSI's technology.  Id.
at 394 & n.7.  The court concluded that "where the parties include a broad arbitration provision in
an agreement that is 'essential' to the overall transaction, we will presume that they intended the
clause to reach all aspects of the transaction--including those aspects governed by other
contemporaneously executed agreements that are part of the same transaction."  Id. at 395.  Finding
no "contrary expression of intent" in the Stock Purchase Agreement, the court held that the Product
Development Agreement's arbitration clause covered all disputes related to the subject matter of the
entire transaction between PSSI and Motorola.  Id.  "It is of no moment," the court maintained, that
each agreement "focuses on a different aspect of the transaction and could be a valid free-standing
contract."  Id.
	The circumstances in Personal Security & Safety are similar to those here: the
Partnership Agreement contains a broad arbitration clause extending to disputes "related to" that
agreement; that agreement and the Purchase and Sale Agreement were executed at the same time as
parts of a single transaction; and the Partnership Agreement was essential to the overall transaction. 
In light of these circumstances, applicable case law, and the Kirbys' own admissions in their
pleadings, we do not have "positive assurance that the arbitration clause is not susceptible of an
interpretation which would cover the dispute at issue."  Id. at 395 (internal citations and quotations
omitted). 
	In response, the Kirbys maintain that the Purchase and Sale Agreement provides that
"venue of any legal action filed in connection herewith shall be in Burnet County."  However, the
Fifth Circuit rejected a similar contention in Personal Security & Safety and found such a clause to
show that the parties intended the clause to apply only in the event of a non-arbitrable dispute that
must be litigated in court.  See id. at 395-96.  Thus, the venue clause governs only after the court
determines that the dispute is not subject to arbitration; the venue clause does not itself except
disputes from arbitration.  See id.  The arbitration clause in this case functions similarly, and we
reject the Kirbys' argument.
	Additionally, the Kirbys attempt to draw a temporal distinction between the
Partnership Agreement, governing the "ongoing internal affairs" of the Partnership, and the Purchase
and Sale Agreement, governing "a finite transaction."  See Fit Tech, Inc. v. Bally Total Fitness
Holding Corp., 374 F.3d 1 (1st Cir. 2004).  To the contrary, as the Kirbys emphasize in their own
pleadings, the Partnership's obligations related to the YAG equipment and fees are ongoing in
nature.  Cf. Personal Sec. & Safety, 297 F.3d at at 390-92.  In addition, the Fit Tech court specifically
relied on the fact that both agreements it was considering contained their own alternative dispute
resolution provisions.  Fit Tech, 374 F.3d at 10-11. (10)  To have read a general arbitration clause found
in one contract into another, which specified a different, and more narrow, dispute resolution
process, would have rendered the language of the second agreement redundant.  See id. at 10.  Here,
only the Partnership Agreement contains a dispute resolution provision.
	Finally, the Kirbys emphasize that the parties to the Purchase and Sale Agreement
differed from those to the Partnership Agreement.  Specifically, while the Kirbys and the Partnership
were the parties to the sale agreement, only Edward Kirby and the other individual partners--and
not Helen Kirby--were parties to the Partnership Agreement.  See Personal Sec. & Safety, 297 F.3d
at 393 ("separate agreements executed contemporaneously by the same parties, for the same
purposes, and as part of the same transaction, are to be construed together").  With regard to Edward
Kirby, we find these distinctions immaterial.  He was a party to both agreements, and the purpose
of the two agreements was to be one complete transaction--the creation of the Partnership to buy
the assets of the surgical center. 
	In sum, we hold that the Kirbys' allegations relating to the YAG equipment and
facility fees are "related to" the Partnership Agreement, and subject to the arbitration clause
contained in that agreement.  Because Edward Kirby is a party to the Partnership Agreement, his
claims are subject to arbitration.

Whether Helen Kirby can be compelled to arbitrate her claims
	We now consider the Partnership's fourth issue, whether Helen Kirby, as a nonparty
to the Partnership Agreement, can be compelled to arbitrate under the Partnership Agreement's
arbitration clause.  The district court concluded that "Helen Kirby is not a party to a binding
arbitration."  The Partnership challenges this conclusion on two grounds.  First, relying on the
undisputed fact that Helen Kirby is a party to the Purchase and Sale Agreement, the Partnership
contends that she is also a party to the Partnership Agreement's arbitration clause because the
Purchase and Sale agreement incorporated the Partnership Agreement.  Second, the Partnership
argues that Helen Kirby bound herself to arbitrate disputes arising from or relating to the Partnership
Agreement by executing a "Joinder of Spouses" addendum to the Partnership Agreement:

The Partners' spouses join in the execution and delivery of this Agreement for the
express purpose of binding their respective community property interests, if any, in
the Partnership Units.  The Partners' spouses are fully aware of, understand, and fully
consent and agree to the provisions of this Agreement and its effect upon any
community property interests they may now or hereafter own, and agree that the
termination of their marital relationship with any Partner for any reason or for no
reason will not have the effect of removing any Partnership Units of the Partnership
otherwise subject to this Agreement from coverage and that their awareness,
understanding, consent, and agreement are evidenced by their signing this exhibit this
exhibit to the Agreement.

We need consider only the Partnership's second argument.
	By purporting to "join in the execution and delivery of this Agreement" and "fully
consent and agree to the provisions of this Agreement," the Partnership asserts that Helen Kirby
agreed to be bound by the Partnership Agreement's arbitration clause.  Because we have determined
that the Kirbys' claims regarding the YAG laser facility fees are "related to" the Partnership
Agreement, we agree that Helen Kirby, like her husband, must arbitrate her claim.
	Helen Kirby is not a party to the Partnership Agreement.  It is not entirely clear
whether Texas or federal law governs whether a nonparty must arbitrate, and the inquiry can involve
issues of both whether an arbitration agreement has been formed (a state law issue) and the scope
of an arbitration clause governed by the FAA (federal law).  See In re Weekley Homes, L.P., 2005
Tex. LEXIS 817, at *8.; In re Kellogg Brown & Root, Inc., 166 S.W.3d 732, 738-39 (Tex. 2005). 
We will begin by considering, under Texas state law, whether Helen Kirby's execution of the joinder
of spouses addendum bind her to arbitration.  When construing a written contract, our paramount
concern is to ascertain the true intentions of the parties as expressed in the instrument and we should
examine and consider the entire writing in an effort to harmonize and give effect to all the provisions
of the contract so that none will be rendered meaningless.  Coker v. Coker, 650 S.W.2d 391, 393-94
(Tex. 1983).
	The joinder of spouses addendum is intended to address the rights of partner spouses
holding potential community property interests in partnership units.  To eliminate these potential
limitations on the operation of the Partnership, the spouses "join in the execution and delivery of this
Agreement for the express purpose of binding their respective community property interests, if any,
in the Partnership Units," and "are fully aware of, understand, and fully consent and agree to the
provisions of this Agreement and its effect upon any community property interests they may now or
hereafter own."  The Partnership Agreement to which Helen Kirby "fully consent[ed] and agree[d]"
includes the arbitration clause.  Cf. In re Weekley Homes, L.P., 2005 Tex. LEXIS 817, at *10-11
(describing incorporation by reference as one means by which nonparties to arbitration agreements
may be bound to arbitrate).
	Having determined that Helen Kirby has consented to arbitration under the
Partnership Agreement, we now address the scope of that agreement.  Federal law governs this
aspect of our inquiry.  Id. at *6 (citing Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460
U.S. 1, 24 (1983)).  Applying those principles, we have previously determined that the Kirbys'
claims regarding the YAG equipment fees are "related to" the Partnership Agreement and thus fall
within its arbitration provision.  We thus conclude that Helen Kirby is bound to arbitrate her claim
and that the district court abused its discretion in determining otherwise.


CONCLUSION

 We consolidate causes 03-05-00502-CV, In re Kirby Highland Lakes Surgery Center,
L.L.P., and 03-05-00423-CV, Kirby Highland Lakes Surgery Center L.L.P. v. Edward E. Kirby,
M.D., & Helen Kirby.  The Kirbys have conceded that the FAA applies, and, in cause 03-05-00502-CV, we have concluded that the FAA requires both Edward and Helen Kirby to arbitrate their claim
regarding YAG equipment fees. Therefore, the district court abused its discretion in not ordering
their claims to arbitration.
	We conditionally grant the petition for writ of mandamus and order the trial court to
compel arbitration of the Kirbys' claims.  The writ will issue only in the unlikely event that the
district court does not modify its June 29 order consistent with this opinion.  We dismiss cause 03-05-00423-CV as moot.


  
					Bob Pemberton, Justice
Before Justices Puryear, Pemberton and Waldrop
Dismissed as Moot in Cause No. 03-05-00423-CV
Filed:   January 13, 2005
1.   See 9 U.S.C.A. §§ 1-16 (West 1999 & Supp. 2005).
2.   Helen Kirby served as office manager.
3. 	The "YAG equipment" is a type of laser used to perform certain medical procedures on the
eye.  It is apparently installed in the center's facilities.  The Kirbys allege that the Partnership agreed
to bill a facility fee each time the YAG is used and that this revenue would flow directly to the
Kirbys rather than be divided among the partners.
4. 	The Kirbys originally also asserted a breach-of-fiduciary-duty claim predicated upon
allegations that "the formation of the Partnership and the purchase of the Center were two related
and dependent transactions" that "could not successfully occur without the other" and that the
partners' fiduciary duties under the Partnership Agreement extended to the Purchase and Sale
Agreement.  The Kirbys amended their petition to drop their breach-of-fiduciary-duty claim.

	We will consider the Kirby's current pleadings when addressing whether their claims are
subject to arbitration.  See Prudential Sec. Inc. v. Marshall, 909 S.W.2d 896, 900 (Tex. 1995) (to
determine whether claim falls within arbitration clause's scope, we look at terms of agreement and
factual allegations in petition); Drake Ins. Co. v. King, 606 S.W.2d 812, 817 (Tex. 1980) (if pleading
is amended, it ceases to be judicial pleading; statements in such pleading cease to be judicial
admissions); cf. Personal Sec. & Safety Sys., Inc. v. Motorola, Inc., 297 F.3d 388, 391 n.1 (5th Cir.
2002). 
5.   Texas law currently is unclear regarding the proper disposition of an interlocutory appeal
under the TAA from the denial of arbitration where the FAA is held to govern the arbitration
provision at issue.  Some courts of appeals have determined that, if the FAA applies, any right to
relief under the TAA is preempted, and they are without jurisdiction to consider the interlocutory
appeal.  See Kroupa v. Casey, No. 01-05-00224-CV, 2005 Tex. App. LEXIS 10212, at *14-15 (Tex.
App.--Houston [1st Dist.] Dec. 8, 2005, no pet. h.); Mony Secs. Corp. v. Padilla, 132 S.W.3d 201,
203 & n.4 (Tex. App.--Corpus Christi 2004, pet. dism'd by agr.); Verlander Family Ltd. P'ship v.
Verlander, No. 08-02-00135-CV, 2003 Tex. App. LEXIS 1413, at *9 (Tex. App.--El Paso Feb. 13,
2003, no pet.); Pennzoil Co. v. Arnold Oil Co., 30 S.W.3d 494, 498 (Tex. App.--San Antonio 2000,
orig. proceeding); see also Roger W. Hughes, Interlocutory Appeals from Orders Denying
Arbitration Under the Texas Arbitration Act:  Federal Law Does Not Preempt Jurisdiction, 14 The
Appellate Advocate 18-22 (Fall 2005) (disputing this view and urging that it enables appellate courts
to evade supreme court review by finding that FAA governs, summarily denying mandamus, and
dismissing TAA appeal for want of jurisdiction, all without supplying opinion detailing reasoning).
The supreme court recently granted review to consider this question.  In re D. Wilson Construction
Co., No. 05-0326 (Tex. filed Apr. 25, 2005), consolidated with American Standard v. Brownsville
Indep. Sch. Dist., No. 05-0327 (Tex. filed April 22, 2005); see American Standard v. Brownsville
Indep. Sch. Dist. (In re D. Wilson Constr. Co.), Nos. 13-04-184-CV & 13-04-333-CV, 2005 Tex.
App. LEXIS 1016, at *6 (Tex. App.--Corpus Christi Feb. 10, 2005, pet. granted).  We need not
consider this issue here, however.  In cases where it has granted full relief under the FAA, the
supreme court has dismissed as moot parallel TAA appeals.  See In re L & L Kempwood Assoc.,
L.P., 9 S.W.3d 125, 128 (Tex. 1999); In re Valero Energy Corp., 968 S.W.2d 916, 917 (Tex. 1998). 
But see Kroupa, 2005 Tex. App. LEXIS 10212, at *14-15 (granting relief under FAA and dismissing
TAA appeal for want of jurisdiction on basis that TAA was preempted).  Thus, because we
ultimately conclude that the Partnership is entitled to full relief under the FAA, we dismiss as moot
its TAA appeal.
6.   The Kirbys argue that the Partnership "cannot have it both ways" by both asserting an
illegality defense to its obligations regarding YAG facility fees while attempting to invoke arbitration
under the same set of agreements.  See American Med. Tech., Inc. v. Miller, 149 S.W.3d 265, 272-73
(Tex. App.--Houston [14th Dist.] 2004, orig. proceeding).  Miller involved a defendant who denied
the very existence of the employment agreement made the basis of its arbitration claim.  Id. at 270-72.  The Miller court contrasted "the more common argument made by a party that does not
challenge the existence of a contract, but rather attacks the enforceability of the contract."  Id. at 272-73.  Enforceability is normally an issue for the arbitrator unless the claim is specifically directed at
the arbitration provision alone.  Id. at 272-73.  The Partnership's illegality defense is in the nature
of "this more common argument"--it does not dispute the existence of the Partnership Agreement
and related agreements, but merely attacks enforceability.
7. 	The Kirbys suggest that our sister courts have split concerning the appropriate standard for
determining whether their dispute falls within the arbitration provision of the Partnership Agreement. 
Applying chiefly Texas law, some of these courts appear to espouse what the Kirbys characterize as
a "close" view, requiring the claim to be "so interwoven with the contract that it cannot stand alone,"
as contrasted with claims "completely independent of the contract and [that] could be maintained
without reference to the contract."  See Associated Glass, Ltd. v. Eye Ten Oaks Invs., Ltd., 147
S.W.3d 507, 513 (Tex. App.--San Antonio 2004, no pet.); Loy v. Harter, 128 S.W.3d 397, 403-05
(Tex. App.--Texarkana 2004, pet. denied); Valero Energy Corp. v. Teco Pipeline Co., 2 S.W.3d
576, 590 (Tex. App.--Houston [14th Dist.] 1999, no pet.); Valero Energy Corp. v. Wagner &
Brown, II, 777 S.W.2d 564, 566 (Tex. App.--El Paso 1989, writ denied).  In contrast, the Waco
court of appeals has applied a standard closer to the federal one we apply above.  See Dennis v.
College Station Hosp., L.P., 2005 Tex. App. LEXIS 4258, at *7 (Tex. App.--Waco June 1, 2005,
pet. filed) ("[g]enerally, if the facts alleged 'touch matters,' have a 'significant relationship' to, are
'inextricably enmeshed' with, or are 'factually intertwined' with the contract that is subject to the
arbitration agreement, the claim will be arbitrable.").

	As we are required to do, we will rely on federal law to determine the scope of the
Partnership Agreement's arbitration provision, but we note that the Kirby's close-connection cases
are founded ultimately upon Wagner & Brown, II, which involved narrow arbitration language
governing any dispute "arising under this contract."  777 S.W.2d at 566; see Associated Glass, 147
S.W.3d at 513; Loy, 128 S.W.3d at 403-05 (quoting Fridl v. Cook, 908 S.W.2d 507, 511 (Tex.
App.--El Paso 1995, writ dism'd w.o.j.), which relied on Wagner & Brown, II); Teco Pipeline Co.,
2 S.W.3d at 590 (quoting standard from Wagner & Brown, II).  In contrast, the Waco court in Dennis
relied in part on the language of the arbitration clause in that case, which, like the one here, applied
to claims "relating to this Agreement."  2005 Tex. App. LEXIS 4258, at *3 ("the term used in many
arbitration agreements and in the agreement at issue here is the term 'related'--not 'interrelated,'
'interwoven,' or 'interdependent'").
8.   In Neal, one of the principal cases on which the Partnership relies, a restaurant chain and
its franchisee agreed in six license agreements to arbitrate "any and all disputes between" the parties. 
Neal v. Hardee's Food Sys., Inc., 918 F.2d 34, 35 (5th Cir. 1990).  A dispute later arose under a
purchase agreement concerning the restaurant facilities that had been executed at the same time as
the license agreements.  Id. at 36-37.  The purchase agreement did not contain its own arbitration
provision.  Id. at 37.  "Recognizing that the License Agreements were at the heart of their deal," the
Fifth Circuit held that "when the parties included a broad arbitration clause in the essential License
Agreements covering 'any and all disputes,' they intended the clause to reach all aspects of the
parties' relationship including the purchase of the physical properties."  Id. at 38.
9.   The parties also executed a Shareholders Agreement that was not at issue in the case.  See
Personal Sec. & Safety, 297 F.3d at 390. 
10.   The Kirbys also rely upon Van Weber v. Hall, 929 S.W.2d 138, 141-43 (Tex.
App.--Houston [14th Dist.] 1996, orig. proceeding), which involved employment agreements
containing arbitration clauses and annual sales agreements that did not.  However, Van Weber
involved a narrow arbitration clause covering only any "controversy or dispute . . . as to all or any
part of this Agreement," not the broad "related to" language at issue here.  See id. at 142.

