                                      In The
                                 Court of Appeals
                        Seventh District of Texas at Amarillo
                                 ________________________

                                      No. 07-12-00218-CV
                                 ________________________

                  WELLS FARGO FINANCIAL TEXAS, INC., APPELLANT

                                                  V.

                  ANITA VALERO AND EVA SHIELLS, GUARDIANS OF
                  THE PERSON AND ESTATE OF ABDENAGO VALERO,
                                  APPELLEES



                            On Appeal from the 121st District Court
                                     Yoakum County, Texas
                   Trial Court No. 9168, Honorable Kelly G. Moore, Presiding


                                         August 21, 2013

                                MEMORANDUM OPINION
                     Before QUINN, C.J., and CAMPBELL and PIRTLE, JJ

       This is an accelerated appeal from an order denying an application to compel

arbitration. 1 Appellant, Wells Fargo Financial Texas, Inc., contends the trial court erred




1
 See TEX. CIV. PRAC. & REM. CODE ANN. § 51.016 (W EST SUPP. 2012); In re Merrill Lynch & Co., Inc., 315
S.W.3d 888, 891 n.3 (Tex. 2010).
by refusing to compel arbitration and stay the trial court proceedings. 2 In support, Wells

Fargo asserts Appellees, Anita Valero and Eva Shiells, Guardians of the Person and

Estate of Abdenago Valero failed to establish (1) the Valeros’ incapacity when the

arbitration agreement was executed; (2) the parties’ dispute falls within the “foreclosure

action” exception in the arbitration clause; and (3) Wells Fargo waived its right to

arbitration. Because we find that the parties’ dispute falls within an exception to their

agreement to arbitrate, we affirm the trial court’s denial of the motion to compel

arbitration.


                                          Background


       In July 2010, Wells Fargo filed its Original Petition to collect a mortgage debt

owed by Abdenago and Anita Valero and enforce its security interest in the Valeros’

residence.     Because Abdenago’s estate was [when] placed in guardianship, Wells

Fargo sought to obtain a judgment against his estate. See TEX. PROB. CODE ANN. §§

800, 801, 804, 817, 832-34 (W EST 2003); TEX. PROP. CODE ANN. 51.002 (W EST 2012).

In its Original Petition, Wells Fargo sought an order authorizing a public sale of the

residence. The Guardians filed an answer and counterclaimed against Wells Fargo

seeking actual and exemplary damages for alleged exploitation and abuse of the elderly

as well as predatory lending practices.


       In September 2011, Wells Fargo filed its Motion to Compel Arbitration premised

on an arbitration clause that contains the following exclusion:




2
See TEX. CIV. PRAC. & REM. CODE ANN. §§ 171.098(a)(1), 171.025 (W EST 2011).

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       If your loan is made pursuant to Section 50(a)(6), Article XVI of the Texas
       Constitution, our sole remedy is to initiate judicial foreclosure and any
       claims or defenses asserted in the foreclosure action will not be subject to
       arbitration. However, if you initiate a separate lawsuit against us, we may
       elect to submit such claim(s) to arbitration.

(Emphasis added.)


       Throughout its Motion to Compel, Wells Fargo referred to its Original Petition as

an action to “foreclose” on the residence via a “judicial foreclosure.” Wells Fargo also

represented the Valeros’ loan “was a home equity loan pursuant to Section 50(a)(6),

Article XVI of the Texas Constitution, which requires judicial foreclosure.”


       In April 2012, the trial court held a hearing and subsequently issued an order

denying Wells Fargo’s motion.       This appeal followed.     We address Wells Fargo’s

second issue first because we find it dispositive.


       STANDARD OF REVIEW


       In an accelerated appeal of an interlocutory order denying a motion to compel

arbitration, we apply an abuse of discretion standard of review. See Carr v. Main Carr

Development, LLC, 337 S.W.3d 489, 494 (Tex.App.—Dallas 2011, pet. denied) (citing

Sidley Austin Brown & Wood, LLP v. J.A. Green Development Corp., 327 S.W.3d 859,

862-63 (Tex.App.—Dallas 2010, no pet.)). Under this standard, we defer to the trial

court’s factual determinations if they are supported by the evidence, but we review its

legal determinations de novo. Id. Whether an arbitration agreement is enforceable is

subject to de novo review. Carr, 337 S.W.3d at 494 (citing In re Labatt Food Service,

L.P., 279 S.W.3d 640, 643 (Tex. 2009)). See Dalton Contractors, Inc. v. Bryan Autumn

Woods, Ltd., 60 S.W.3d 351, 352-53 (Tex.App.—Houston [1st Dist.] 2001, no pet.) (de

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novo review is appropriate when the legal interpretation of an arbitration clause is at

issue).


          Disputes regarding the interpretation of an arbitration agreement are governed by

traditional principles of contract construction.    J.M. Davidson, Inc. v. Webster, 128

S.W.3d 223, 227-28 (Tex. 2003) (collected cases cited therein). We examine the plain

language of the arbitration clause in context and give the language its plain grammatical

meaning in order to ascertain the intent of the parties. Wachovia Securities, LLC v.

Mims, 312 S.W.3d 243, 247 (Tex.App.—Dallas 2010, no pet.) (citing Jenkins & Gilchrist

v. Riggs, 87 S.W.3d 198, 201 (Tex.App.—Dallas 2002, no pet.)).               Although the

language of the agreement must clearly indicate an intent to arbitrate; Aldridge v. Thrift

Financial Marketing, LLC, 376 S.W.3d 877, 882 (Tex.App.—Fort Worth 2012, no pet.),

courts must resolve any doubts about the scope of an arbitration agreement in favor of

arbitration because there is a presumption favoring such agreements. Ellis v. Ron, 337

S.W.3d 860, 861-62 (Tex. 2011); In re Kellogg Brown & Root, Inc., 166 S.W.3d 732,

737-38 (Tex. 2005). However, although arbitration 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 Dillard Dep’t Stores, Inc., 186 S.W.3d 514,

516 (Tex. 2006) (per curiam), the strong policy favoring arbitration cannot serve to

stretch a contractual clause beyond the scope intended by the parties or allow

modification of unambiguous meaning of the arbitration clause.            See Osornia v.

AmeriMex Motor & Controls, Inc., 367 S.W.3d 707, 712 (Tex.App.—Houston [14th Dist.]

2012, no pet.); IKON Office Solutions, Inc. v. Eifert, 2 S.W.3d 688, 697 (Tex.App.—

Houston [14th Dist.] 1999, no pet.).


                                              4
       MOTION TO COMPEL


       When considering a motion to compel arbitration, a court must determine (1)

whether a valid agreement exists, and (2) whether the disputed claim falls within the

agreement’s scope.         In re Rubiola, 334 S.W.3d 220, 223 (Tex. 2011) (original

proceeding). The parties do not dispute whether their arbitration agreement is valid.

Thus, we are constrained to consider whether the agreement encompasses Wells

Fargo’s cause of action. Hawthorne Townhomes, L.P. v. Branch, 282 S.W.3d 131, 139

(Tex.App.—Dallas 2009, no pet.) (citing In re D. Wilson Constr. Co., 196 S.W.3d 774,

781 (Tex. 2006) (orig. proceeding)).


       Wells Fargo does not dispute whether the Valeros’ home equity loan was made

pursuant to Section 50(a)(6), Article XVI of the Texas Constitution. Accordingly, if Wells

Fargo’s action is a “foreclosure action,” “any claims or defenses asserted . . . will not be

subject to arbitration.”    The term “foreclosure” used either in its common usage;

Webster’s Third New International Dictionary 888 (4th Ed. 1976) (“a legal proceeding

that bars or extinguishes a mortgagor’s right of redeeming a mortgaged estate”), or its

legal usage; Black’s Law Dictionary 674 (8th Ed. 2004) (“a legal proceeding to terminate

a mortgagor’s interest in property, instituted by the lender (the mortgagee) either to gain

title or force a sale in order to satisfy the unpaid debt secured by the property”),

accurately describes Wells Fargo’s suit against the Guardians.         See Pratt-Shaw v.

Pilgrim’s Pride Corp., 122 S.W.3d 825, 833 (Tex.App.—Dallas 2003, pet. denied) (if a

term in an arbitration agreement is undefined, courts may resort to external references

such as dictionaries for the term’s meaning). Moreover, the term “claims” is unqualified

and commonly understood to mean “an authoritative or challenging request” or “a

                                             5
demand of a right or supposed right.” Webster’s Third New International Dictionary 414

(4th Ed. 1976). Like Wells Fargo’s pleadings before the trial court, we also interpret its

action as a “foreclosure action” and are “positively assured” the agreement’s exclusion

clause applies to Wells Fargo’s and the Guardians’ claims or defenses asserted here.


      Wells Fargo contends that establishing a claim under section 799 of the Texas

Probate Code is a proceeding separate and distinct from a “foreclosure” or sale under

section 800.    See TEX. PROB. CODE ANN. §§ 799, 800 (W EST 2003).            This hyper-

technical division of a “proceeding” under the Probate Code amounts to hair-splitting.

The relevant provisions are all part of the “Claims Procedures,” Subpart G of the

Probate Code.    Section 817 provides that, after a creditor’s claim is approved, the

creditor may apply for an order that the property be sold.        See id. at § 817.     No

additional “proceeding” is described or required. Further, the term “foreclosure action”

in the arbitration agreement’s exclusionary clause is unqualified and both the common

and legal definitions of “foreclosure” describe Wells Fargo’s suit regardless of how one

may parse the Probate Code’s claims procedure.          Even though the Probate Code

requires an intermediate procedural step of obtaining a final and appealable order

establishing Wells Fargo’s claim, this is still a “foreclosure action” because the ultimate

relief sought is the enforcement of that claim via the forced sale of the residence in

question.


      Accordingly, we find the trial court did not abuse its discretion by denying Wells

Fargo’s Motion To Compel and overrule Well Fargo’s second issue.               Our ruling

pretermits Wells Fargo’s remaining issues. See TEX. R. APP. P. 47.1.



                                            6
                                 CONCLUSION


The trial court’s order is affirmed.


                                           Patrick A. Pirtle
                                               Justice




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