                                                                                        ACCEPTED
                                                                                    02-17-00416-CV
                                                                        SECOND COURT OF APPEALS
                                                                              FORT WORTH, TEXAS
                                                                                12/21/2017 12:23 PM
                                                                                     DEBRA SPISAK
                                                                                             CLERK

                         No. 02-17-00416-CV

                                                                     FILED IN
                                                              2nd COURT OF APPEALS
  In the Court of Appeals for the Second District in Fort   Worth,
                                                               FORTTexas
                                                                     WORTH, TEXAS
                                                             12/21/2017 12:23:50 PM
                                                                   DEBRA SPISAK
                                                                      Clerk
   Diligent Texas Dedicated, LLC d/b/a Diligent Delivery Systems,

                                              Appellant,
                                   v.

     Richard York, Elite Parts Group, LLC d/b/a Elite Parts Group
                   and Principle Distribution, Inc.

                                              Appellees.


On Appeal from the 342nd Judicial District Court, Tarrant County, Texas


                      BRIEF OF APPELLANT


                                 Maurice Bresenhan, Jr.
                                 State Bar No. 02959000
                                 mbresenhan@zbplaw.com
                                 Pascal Paul Piazza
                                 State Bar No. 15966850
                                 ppp@zbplaw.com
                                 Cynthia Keen Perlman
                                 State Bar No. 11161700
                                 CPerlman@zbplaw.com
                                 Zukowski, Bresenhan & Piazza, L.L.P.
                                 1177 West Loop South, Suite 1100
                                 Houston, Texas 77027
                                 (713) 965-9969/(713) 963-9169 (Fax)
                                 Attorneys for Appellants

                      Oral Argument Requested

                                                                                1
                  IDENTITY OF PARTIES AND COUNSEL

Appellant:        Diligent Texas Dedicated, LLC d/b/a Diligent Delivery
                  Systems

Trial/Appellate
Counsel:          Maurice Bresenhan, Jr.
                  State Bar No. 02959000
                  mbresenhan@zbplaw.com
                  Pascal Paul Piazza
                  State Bar No. 15966850
                  ppp@zbplaw.com
                  Cynthia Keen Perlman
                  State Bar No. 11161700
                  CPerlman@zbplaw.com
                  Zukowski, Bresenhan & Piazza, L.L.P.
                  1177 West Loop South, Suite 1100
                  Houston, Texas 77027
                  (713) 965-9969/(713) 963-9169 (Fax)

Appellees:        Richard York and Elite Parts Group, LLC d/b/a Elite Parts
                  Group

Trial/Appellate
Counsel:          S. Gary Werley
                  Law Offices of S. Gary Werley
                  1840 Acton Highway, Suite 102
                  Granbury, TX 76049
                  (817) 573-7700/(817) 573-7710 (Fax)

Appellee:         Principle Distribution, Inc.

Trial/Appellate
Counsel:          Russell A. Devenport
                  McDonald Sanders, P.C.
                  777 Main Street, Suite 1300
                  Fort Worth, Texas 76102
                  (817) 336-8651/(817) 334-0271



                                                                              2
                                       TABLE OF CONTENTS


BRIEF OF APPELLANT ..........................................................................................1 

IDENTITY OF PARTIES AND COUNSEL ............................................................2 

TABLE OF CONTENTS ...........................................................................................3 

INDEX OF AUTHORITIES......................................................................................5 

TABLE OF PRINCIPAL ABBREVIATIONS .........................................................8 

STATEMENT OF THE CASE ..................................................................................9 

STATEMENT REGARDING ORAL ARGUMENT .............................................10 

ISSUES PRESENTED.............................................................................................11 

BRIEF OF APPELLANT ........................................................................................13 

  Summary of the Argument ....................................................................................14 

  Standard of Review ...............................................................................................17 

  Background Facts/Course of Proceedings ...........................................................20 

  Analysis Under All Points of Error ......................................................................27 

  Conclusion and Prayer .........................................................................................53 

CERTIFICATE OF SERVICE ................................................................................54 

CERTIFICATE OF COMPLIANCE .......................................................................55 


                                                                                                                    3
Appendices:


Appendix 1    Order on Plaintiff’s Motion to Compel and Motion to Abate
              entered November 9, 2017

Appendix 2    Temporary Injunction entered on November 9, 2017

Appendix 3    Diligent Delivery Systems Employee Confidentiality and
              Business Preservation Agreement

Appendix 4    AAA Commercial Rules, Rule R-7

Appendix 5    Notice of Past Due Findings of Fact and Conclusions of Law
              filed December 13, 2017

Appendix 6    Affidavit of Service upon Principle Distribution, LLC

Appendix 7    Affidavit of Service upon Richard York

Appendix 8    Affidavit of Service upon York Elite Parts Group d/b/a Elite
              Parts Group




                                                                         4
                                    INDEX OF AUTHORITIES

Cases 

BBVA Compass Inv. Solutions, Inc. v. Brooks,
 456 S.W.3d 771,718 (Tex. App. – Fort Worth 2017, no pet.) .............................30

Bryan v. Gordon,
  384 S.W.3d 908 (Tex. App. – Houston [14th Dist.] 2012, no pet.) ......................20

Cell Comp, LLC v. Southwestern Bell Wireless, LLC,
 2008 Tex. App. LEXIS 4510 (Tex. App. – Corpus Christi 2008, no pet.) ..........52

City of Keller v. Wilson,
  168 S.W.3d 802 (Tex. 2004) ................................................................................20

City of The Colony v. N. Tex. Mun. Water Dist.,
  272 S.W.3d 699 (Tex. App. – Fort Worth 2008, pet. dism’d) .............................52

CMH Homes v. Perez,
 340 S.W.3d 444 (Tex. 2011) ................................................................................17

Dargahi v. Handa,
 2017 Tex. App. LEXIS 10373 (Tex. App. – Austin 2017, no pet) ......... 29, 31, 45

Dow Roofing Systems, LLC v. Great Commission Baptist Church
& Chamberlin Dallas, LLC,
 2017 Tex. App. LEXIS 7370 ** 7-8, 17-20 (Tex. App. – Fort Worth
 2017, pet. for review filed) ...................................................................................28

EMS USA, Inc. v. Shary,
 309 S.W.3d 653, 657 (Tex. App. – Dallas 2010, no pet.) ............................ 41, 48

Geo-Tech Foundation Repair v. Leggett,
 2017 Tex. App. LEXIS 2765 (Tex. App. – Fort Worth 2017, no pet.). ....... passim

Haddock v. Quinn,
 287 S.W.3d 158 (Tex. App. – Fort Worth 2009, pet. denied)...................... passim


                                                                                                                 5
Holmes v. Graves,
 2013 Tex. App. LEXIS 14816 (Tex. App. – Houston [1st Dist.]
 2013, no pet) .................................................................................................. 45, 46

In Re Coppola,
  61 Tex. Sup. Ct. J. 170 (December 15, 2017) ......................................................18

In Re Merrill Lynch Trust Co., FSB,
  235 S.W.3d 185 (Tex. 2007) ............................................................. 19, 32, 44, 50

Joseph Chris Personnel Services, Inc. v. Rossi,
  249 Fed. Appx. 988, 991-992 (5th Cir. 2007 ........................................................31

Legoland Discovery Centre (Dallas), LLC v. Superior Builders, LLC,
  2017 Tex. App. LEXIS 3843 (Tex. App. – Fort Worth 2017, no pet.) ........ passim

McCullough v. Ferrell,
 2005 Tex. App. – Fort Worth 2005, no pet.) ........................................................18

McQueen v. Chevron Corp.,
 2017 U.S. Dist. LEXIS 207705 * 4-5 (N.D. Cal. December 18, 2017.) ..............39

Menna v. Romero,
 48 S.W.3d 247, 252-253 (Tex. App. San Antonio 2001, no pet.)........................31

Michiana Easy Livin’ Country, Inc. v. Helton,
 168 S.W.3d 777 (Tex. 2005) ................................................................................18

Otis Elevator Co. v. Parmelee,
  850 S.W.2d 179 (Tex. 1993) ......................................................................... 18, 19

PMS Distributing Co. v. Huber & Suhner, A.G.,
 863 F.2d 639, 641-641 (9th Cir. 1988);.................................................................31

Rio Grande Xarin, II, Ltd. v. Wolverine Robstown, LP,
  2010 Tex. App. LEXIS 5189 ** 22-23 (Tex. App. – Corpus
  Christi 2010, pet. dism’d.). ..................................................................................34

RSL Funding, LLC v. Pippins,
  499 S.W.3d 423 (Tex. 2016) ............................................................. 29, 31, 42, 45
                                                                                                                      6
RSM Prod. Corp. v. Global Petroleum Grp., Ltd.,
  507 S.W.3d 383 (Tex. App. – Houston [1st Dist.] 2016, pet. denied) .................52

Rugen v. Interactive Business Svs.,
  864 S.W.2d 548 (Tex. App. – Dallas 1993, no pet.) ...........................................52

Super Starr Int’l, LLC v. Fresh Tex Produce, LLC,
  2017 Tex. App. LEXIS 8728 ** 6-9 (Tex. App. – Corpus Christi
  2017, no pet.) ........................................................................................................28

Tranter, Inc. v. Liss,
  2014 Tex. App. LEXIS 3398 * 4 (Tex. App. – Fort Worth 2017, no pet.). .........43

Zep Mfg. Co. v. Harthcock,
  824 S.W.2d 642 (Tex. App. – Dallas 1992, no pet.) ...........................................52



Statutes 

9 U.S.C.A. § 3 ................................................................................................... 44, 50


TEX. CIV. PRAC. & REM CODE §§ 134A.002, 143A.004, 134A007 .........................52


TEX. CIV. PRAC. AND REM CODE §§ 171.025 and 172.174 .............................. 44, 50




                                                                                                                         7
                 TABLE OF PRINCIPAL ABBREVIATIONS


(date xCR y-z)    (Date Volume of Clerk’s Record, page(s))

(date RR pp.)     (Date Reporter’s Record, page (s))

Diligent          Diligent Texas Dedicated, LLC d/b/a Diligent Delivery
                  Systems

York              Richard York

Elite             Elite Parts Group, LLC d/b/a Elite Parts Group

PDL               Principle Distribution, Inc.




                                                                      8
                        STATEMENT OF THE CASE

Nature of the
Case:             This is a breach of contract, non-competition, tortious
                  interference with contract, and misappropriation of trade secrets
                  case.

Trial Court:      Judge Wade Birdwell was the trial judge. He has since
                  resigned to accept a position on this Court. Judge Dana
                  Womack has succeeded to Judge Birdwell at this time.

Course of
Proceedings:      This is an accelerated, interlocutory appeal because the Trial
                  Court refused to compel arbitration and to stay all further
                  proceedings before the Trial Court pending the resolution of the
                  arbitration.

Trial Court’s
Disposition:      Trial Court refused to compel arbitration and to stay all further
                  proceedings before the Trial Court pending the resolution of the
                  arbitration. The Trial Court further denied the jurisdictional
                  plea to allow the arbitrator to decide issues of arbitrability.

Procedural
Posture Pending
Appeal:           Diligent has asked the Trial Court to stay the case pending this
                  appeal. That motion in the Trial Court is scheduled for
                  December 21, 2017. Diligent timely filed a request for Findings
                  of Fact and Conclusions of Law and then, on December 13,
                  2017, Diligent filed a Reminder for Making Findings of Fact
                  and Conclusions of Law. York, Elite and PDL have scheduled
                  hearings on their respective summary judgment motions in the
                  Trial Court on January 18, 2018. This case is set for trial on
                  January 22, 2018.




                                                                                 9
             STATEMENT REGARDING ORAL ARGUMENT

      This appeal concerns fundamental issues involving the critical interplay

between the complementary and conflicting roles of arbitration and trial

proceedings. Diligent respectfully submits that oral argument would aid the

Court’s decision-making and protection of fundamental due process principles.




                                                                                10
                           ISSUES PRESENTED

1.   The Trial Court committed reversible error when it denied Diligent’s
     verified motion to compel arbitration and to stay all proceedings and
     Diligent’s plea-to-the jurisdiction (App. 1).

     a.   Under the de novo standard or the abuse of discretion standard, the
          Trial Court had to give full effect to, but failed to give such effect to,
          the complementary delegation of plenary jurisdiction to the Arbitrator
          to decide issues of arbitrability and to the Trial Court to grant
          injunctive relief and even to reform the restrictive covenants as part of
          the overall arbitration protocols (App. 1).

     b.   Under the de novo standard or the abuse of discretion standard, the
          Trial Court could not decide the issues of arbitrability, including,
          without limitation, the question of whether Diligent waived the right
          to arbitrate in a manner inconsistent with the right to arbitrate to the
          prejudice of York. (App. 1).

     c.   Alternatively, under the de novo standard or the abuse of discretion
          standard, the Trial Court had to give full effect to, but failed to give
          such effect to, the plain terms of the arbitration provision which
          mandated the arbitration of all claims before the Trial Court between
          Diligent and York (App. 1).

     d.   Alternatively, under the de novo standard or the abuse of discretion
          standard, the Trial Court had to give full effect to, but failed to give
          such effect to, the presumption against the waiver of the right to
          arbitrate, the heightened burden to overcome such presumption, and
          the threshold test that waiver of the right to arbitrate requires a
          substantial invocation of the judicial process before the Trial Court,
          with the express or implied intent to act inconsistently with Diligent’s
          right to arbitrate to the prejudice of York (App. 1).

     e.   Alternatively, under the abuse of discretion standard, the Trial Court
          abused its discretion when it found that Diligent had waived the right
          to arbitrate (App. 1).




                                                                                 11
f.   Alternatively, under the de novo standard or the abuse of discretion
     standard, the Trial Court had to stay, but failed to stay, all proceedings
     before the Trial Court until the resolution of the arbitration (App. 1).




                                                                            12
                               No. 02-17-00416-CV


       In the Court of Appeals for the Second District in Fort Worth, Texas


         Diligent Texas Dedicated, LLC d/b/a Diligent Delivery Systems,

                                                    Appellant,
                                         v.

           Richard York, Elite Parts Group, LLC d/b/a Elite Parts Group
                         and Principle Distribution, Inc.

                                                    Appellees.


     On Appeal from the 342nd Judicial District Court, Tarrant County, Texas


                            BRIEF OF APPELLANT


      Appellant Diligent Texas Dedicated, LLC d/b/a Diligent Delivery Systems

files this accelerated, interlocutory appeal challenging the Trial Court’s failure to

compel arbitration of the claims between Diligent and York and to stay all further

proceedings in the Trial Court pending the resolution of the arbitration (App. 1).




                                                                                     13
      Summary of the Argument
      In this protection of trade secrets case, Diligent has to ask this Court to

intervene, now on an accelerated, interlocutory basis or alternative mandamus

basis, to reverse the pre-arbitration and pretrial decision by the Trial Court refusing

to compel arbitration, precluding the arbitrator from deciding all questions of

arbitrability (including, without limitation, any waiver of the right to arbitrate), and

refusing to stay all proceedings in the Trial Court pending a resolution of the

arbitration.   The sanctity of the arbitration provision and the value of Diligent’s

vested property rights hang in the balance.

      This Court has repeatedly charted the roadmap for the resolution of the

issues in this appeal with distinct features. Arbitration is a creature of contract and

is a favored remedy. Diligent, the former employer, and York, the former

employee, had the freedom to draft the details of the arbitration provision in the

employment agreement. The plain terms of the arbitration provision control so

Diligent and York could dictate that the arbitrator has the jurisdiction to decide

issues of arbitrability (including, without limitation, issues of waiver), Diligent

could ask for a temporary injunction in the Trial Court and also seek thereafter to

arbitrate, and the arbitrator or the Trial Court could amend the restrictions in the

employment agreement if Diligent and York so agreed (as they did so agree).




                                                                                     14
      As a result, Diligent could sue, and did sue, York, and later Elite and PDL,

for breach of contract, tortious interference and misappropriation of trade secrets,

respectively, asking for a temporary injunction, but preserving the right to arbitrate

after the issuance or denial of a temporary injunction. Based upon those plain

terms and this Court’s guidance, the Trial Court had to rule on the request for a

temporary injunction, and then compel arbitration and stay all proceedings in the

Trial Court until the arbitration completed.

      The Trial Court followed the first required step. It granted a temporary

injunction, but that process lasted almost one year.

      The Trial Court then did not follow the next required steps. Rather, it denied

Diligent’s plea-to-the-jurisdiction to allow the arbitrator to decide all issues of

arbitrability as the parties had agreed. It denied Diligent’s motion to compel

arbitration and to stay the remainder of the proceedings in the Trial Court.

      The Trial Court decided the jurisdictional plea and the arbitration motion

based solely upon a finding that Diligent had waived the right to arbitrate by

asking for a temporary injunction even though Diligent and York had agreed that

Diligent had the right to seek temporary injunctive relief and then arbitrate as

provided by the plain terms of the arbitration provision. The Trial Court did not

decide the jurisdictional plea or the motion to stay on the respective merits of those




                                                                                   15
claims. Instead, it found a waiver of the right to arbitrate even though it did not

have the power to make that finding.

      Alternatively, the Trial Court found that Diligent had waived the right to

arbitrate when the Trial Court could not do so. It failed to cite to or follow the

existing presumption against any such waiver and the equally high burden on

York, Elite and PDL to try to overcome that burden.          It failed to follow the

standards established by this Court to meet this heightened burden, York, Elite and

PDL had to show that Diligent unequivocally intended to waive the right to

arbitrate and that Diligent acted inconsistently with the right to arbitrate when it

asked for a temporary injunction.

      Based upon its own substituted non-standard, the Trial Court found that

Diligent did not intend to arbitrate even though it acknowledged that Diligent

repeatedly said that it intended to try all arbitrable claims after the Trial Court

ruled on the temporary injunction. It found that the right to ask for a temporary

injunction was not aligned with the right to arbitrate even though it conceded that

both rights were mentioned in the same arbitration provision. It considered facts

without following the established law or the plain text of the arbitration provision.

It cannot explain how there could be waiver under the facts when reviewed under

the presumption against waiver, the higher burden to try to overcome that

presumption or the rulings of this Court.


                                                                                  16
       The Trial Court could not rule as it did. It denied Diligent its arbitration

rights. It forces Diligent to try claims without the right to arbitrate or the right to

stay all proceedings in the Trial Court until the completion of the arbitration. The

Court should reverse the Trial Court and/or issue a writ of mandamus as necessary.

        Standard of Review

       This Court reviews or considers de novo the determination by the Trial

Court whether the courts or the arbitrator has the jurisdiction to decide questions of
                 1
arbitrability.       This Court should consider this issue as part of this accelerated,

interlocutory appeal, but this Court should consider such matter under a mandamus

review if that issue may not be reviewed as part of this accelerated, interlocutory

appeal. 2

       The Court applies an abuse of discretion standard of review for any

requested mandamus relief. 3 This Court should grant mandamus relief to correct a

clear abuse of discretion (i.e., when the Trial Court failed to follow established law

and/or acted in a manner that the Trial Court could not so act) and when there is no

adequate remedy by appeal. 4 There is no adequate remedy by appeal when a party

is erroneously denied its contracted-for arbitration rights (compelling arbitration

and staying the lawsuit pending the outcome of the arbitration) since the denial of


1
  CMH Homes v. Perez, 340 S.W.3d 444, 447 (Tex. 2011)
2
  Id. at 451-453.
3
  Id.
4
  Id.
                                                                                    17
those rights would skew the proceedings, potentially affecting the outcome of the

litigation and compromising the presentation of the lawsuit in ways unlikely to be

apparent in the appellate record. 5

      Generally, this Court reviews the denial of a motion to compel arbitration

under an abuse of discretion standard as applied to the presumption against waiver

of the right to arbitrate and the accompanying higher burden of proof to show any

such waiver. 6 When, as in this case however, it is undisputed that there is a written

arbitration provision and the claims between Diligent and York fall within the

scope of that provision, this Court conducts a de novo review whether York

established the defense of waiver of the right to arbitrate. 7 The Court also conducts

such a de novo review when, as in this case, the Trial Court considered the motion

and the jurisdictional plea on the Clerk’s Record without the receipt of evidence. 8

In that case, there is no presumption of any fact-findings in favor of the rulings of

the Trial Court in the absence of Findings of Fact and Conclusions of Law. 9 If the

abuse of discretion standard applies, then the Trial Court abused its discretion




5
  Id. at 452; In Re Coppola, 61 Tex. Sup. Ct. J. 170, 173 (December 15, 2017).
6
  Legoland Discovery Centre (Dallas), LLC v. Superior Builders, LLC, 2017 Tex. App. LEXIS
3843 * 6 (Tex. App. – Fort Worth 2017, no pet.).
7
  Legoland Discovery Centre (Dallas), LLC v. Superior Builders, LLC, 2017 Tex. App. LEXIS
3843 * 6 (Tex. App. – Fort Worth 2017, no pet.)
8
  Michiana Easy Livin’ Country, Inc. v. Helton, 168 S.W.3d 777, 782 (Tex. 2005); McCullough
v. Ferrell, 2005 Tex. App. – Fort Worth 2005, no pet.)
9
  Otis Elevator Co. v. Parmelee, 850 S.W.2d 179, 181 (Tex. 1993).
                                                                                        18
when it refused to compel arbitration under a valid and enforceable arbitration

provision. 10

      The Court reviews the refusal to stay the claims between Diligent, on one

hand, and Elite and PDL, on the other hand, under an abuse of discretion

standard.11 This Court conducts a de novo review to determine whether the Trial

Court abused its discretion when it failed to stay these claims when those claims

involve issues to be decided by the arbitrator in the arbitration with York. 12

      Alternatively, as noted above, this Court is to decide this appeal based upon

its de novo review without attributing any implied fact-findings to support the
                              13
rulings of the Trial Court.        Nonetheless, Diligent requested the Trial Court to

make Findings of Fact and Conclusions of Law to preclude any argument that this

Court may infer that the Trial Court made favorable findings that the Trial Court

did not make because Diligent did not request the Trial Court to make such fact-

findings and legal-conclusions. 14

      Alternatively, if the traditional evidentiary standards of review apply to the

evidence in the Clerk’s Record (which Diligent asserts they do not), then there is

no evidence if a reasonable fact-finder could not find a fact based upon the


10
   Geo-Tech Foundation Repair v. Leggett, 2017 Tex. App. LEXIS 2765 * 5 (Tex. App. – Fort
Worth 2017, no pet.).
11
   In Re Merrill Lynch Trust Co., FSB, 235 S.W.3d 185, 195-196 (Tex. 2007).
12
   Id.
13
   See discussion at footnote 8.
14
   Parmelee, 850 S.W.2d at 181.
                                                                                      19
undisputed evidence, and the facts supporting the fact-finding as reviewed under

the presumption against waiver of the right to arbitrate and the accompanying

higher burden of proof to show any such waiver. There is insufficient evidence if

the fact-finding is so against the great weight of the credible evidence that it is

manifestly unjust or wrong as reviewed under the presumption against waiver of

the right to arbitrate and the accompanying higher burden of proof to show any

such waiver. 15

       Background Facts/Course of Proceedings

       The Arbitration Provision in the Agreement Between Diligent and York

       Around October 27, 2015, Diligent, as the Employer, and York, as the

Employee, entered into the “Diligent Delivery Systems Employee Confidentiality

and Business Preservation Agreement” (the “Agreement”) (App. 3). The

Agreement defined expansive proprietary “Confidential Information” (¶ 2) which

York was not to divulge or use to the detriment of Diligent (¶ 3) and which York

was to hold in the strictest confidence (¶ 3)(App. 3). Not surprisingly, for two

years after the end of his employment, York further could not solicit Diligent’s

customers (¶ 5), could not associate in any manner with any business venture

offering the same or similar services as Diligent (¶ 5), could not compete with




15
  City of Keller v. Wilson, 168 S.W.3d 802, 814-815 (Tex. 2004); Bryan v. Gordon, 384 S.W.3d
908, 912 (Tex. App. – Houston [14th Dist.] 2012, no pet.)
                                                                                         20
Diligent (¶ 5), could not poach employees of Diligent (¶ 5), and had to notify

Diligent of any new employer of York (¶ 11)(App. 3).

      The Agreement, in turn, stated:

      This Agreement and its interpretation and enforcement shall be
      governed by the laws of the State of Texas without the application of
      its choice of law rules. If there is any dispute about or involving
      [York] and [Diligent], both [York] and [Diligent] agree to personal
      jurisdiction and venue in the state and federal courts of the United
      States in Harris County, Texas. Either [York] or [Diligent] may
      demand any dispute between [York] and [Diligent] must be
      settled by arbitration utilizing the dispute resolution procedures
      of the American Arbitration Association (AAA) (Commercial
      Rules) only in Harris County, Texas; provided, however, that the
      foregoing shall not prevent [Diligent] from seeking injunctive
      relief in a court of competent jurisdiction ….

(¶ 9)(App. 3)(emphasis added).

      The right to arbitrate integrated one of the remedies granted under the

Agreement to enforce the restrictive covenants protecting the Confidential

Information of Diligent, namely, the right to seek a temporary injunction in a court

of competent jurisdiction (¶¶ 6 and 9) (App. 3). The complementary rights of

arbitration and judicial injunction also included the following right of Diligent

under the Agreement: “… [i]f any of the above-noted restrictions are ever

determined as of the date of enforcement [by a temporary injunction] to be

unlawful or unreasonable, then in such event, the covenants hereinabove which

restrict [York’s] activities shall be amended, by the Court or by the Arbitrator

having jurisdiction over the parties’ dispute, to provide that such restrictions shall
                                                                                   21
apply for the maximum time and geographic scope permitted by applicable law.”

(¶6)(App. 3) (emphasis added).

        In the Agreement, Diligent and York, as they could as parties to their

arbitration provision, established the jurisdiction of the courts to grant temporary

injunctive relief and to amend the restrictive covenants (¶¶ 6 and 9)(App. 3) and

the jurisdiction of the arbitrator to determine all other issues of arbitrability and the

dispute between Diligent and York (¶ 9)(App.3)(Rule R-7 of the AAA Commercial

Rules)(App. 4). More importantly, they could establish the right to seek a

temporary injunction and to enforce the restrictive covenants as consistent with and

complementary to the right to arbitrate without having to say more than they did.

(Id.)

        York was a Party to Other Agreements

        Prior to the execution of the Agreement, York had signed written

employment agreements with restrictive covenants protecting trade secrets with

Noble Logistics, Inc. which became NDLI, Inc. (1 CR 489-490, 513-530).

Diligent is the successor to NDLI, Inc. (Id.)

        York’s Post-Employment Conduct Requires Diligent to File Suit to Seek
        Temporary Injunctive Relief as Part of the Consistent and Complementary
        Rights to Seek Temporary Injunctive Relief and the Right to Arbitrate.

        On December 8, 2016, Diligent sued York for breach of the restrictive

covenants of the Agreement and the NDLI Contract, and misappropriation of trade


                                                                                      22
secrets in support of the request for the issuance of a temporary injunction (1 CR 8,

11-15). Diligent expressly stated:

    that Diligent filed the petition with its intention not to prejudice Diligent’s
     right to assert its claims through arbitration,” (1 CR 8); and

    that Diligent intends to compel arbitration upon entry of a temporary
     injunction and will seek to recover all remedies asserted herein, excluding a
     temporary injunction, in the arbitration proceedings.” (1 CR 13) (emphasis
     added).

Diligent invoked its right to file suit against York consistent with arbitrating the

ultimate claims (¶ 9)(App. 3).

      Diligent’s Journey Leading to Entry of the Temporary Injunction Would
      Last Almost One Whole Year.

     Beginning on December 8, 2016 (1 CR 8) and ending with the entry of the

temporary injunction against York on November 9, 2017 (App. 2), Diligent sought

the entry of that temporary injunction (1 CR 8, 37, 92, 334, 487).

      During that time:

   1. Diligent amended its petition four times, ultimately adding Elite and PDL (1
      CR 40-4, 96-100, 343-349, 487, 341-349, 495-504). In each petition,
      Diligent reaffirmed that Diligent acted without prejudice to the right to
      arbitrate and that Diligent would move to compel after entry of a
      temporary injunction (1 CR 37-43, 92, 98-99, 334, 343-345, 347, 487,
      495-504);

   2. Diligent pursued the temporary injunction (e.g. Id.; 1 CR 17, 24, 35-37, 43,
      109, 129, 139-174, 205, 209, 216-307, 379, 394-395);

   3. Diligent deposed York (1 CR 88-91). A representative of Diligent was
      deposed (1 CR 67-90). Disclosure requests and written discovery were
      exchanged between Diligent and York (2 CR 595; 3 CR 1022-1023);
                                                                                  23
4. The parties agreed to a form of an agreed protective order (1 CR 24, 35, 36);

5. York, Elite and PDL answered and repeatedly challenged the issuance of the
   temporary injunction and even the form of the temporary injunction before,
   during and after each hearing before the Trial Court (e.g. 1 CR 16, 18, 21,
   50, 67-91, 107, 126, 203, 322, 325; 2CR 560);

6. On March 23, 2017, the Trial Court conducted a hearing on the application
   for a temporary injunction, received arguments and evidence, orally notified
   all counsel of the Trial Court’s evaluation of the evidence, took the decision
   under advisement, and allowed the parties to try to reach some agreement (3-
   23-17 2 RR 1-93 and 89-93);

7. Thereafter, York, Elite and PDL filed respective repeated motions for
   summary judgment challenging the claims which underpinned the
   application for temporary injunction (1 CR 96, 192; 2 CR 542; 585, 611,
   618). Diligent responded (e.g. 1 CR 379, 394; 2 CR 825, 1005);

8. On June 23, 2017, the Court convened a hearing on the application for
   issuance of a temporary injunction (6-23-17 3 RR 1-23). The Court made a
   rendition of a temporary injunction on the record and asked for a written
   form of the order to sign. (6-23-17 3 RR at 4-10);

9. On July 12, 2017, July 14, 2017, July 21, 2017 and August 15, 2017,
   respectively, York, Elite and PDL would not agree to the form of a written
   temporary injunction order (2 CR 566-584, 590-592, 616-618). York, Elite
   and PDL, on one hand, and Diligent, on the other hand, filed competing
   forms of a written temporary injunction order (Id.) Both sides respectively
   objected, in writing, to the proposed form of written temporary injunction
   submitted by the opposing side (Id.);

10. The proceedings were interrupted between August 25, 2017 and most of
    September, 2017, due to the impact of Hurricane Harvey shutting down the
    offices of counsel for Diligent (2 CR 846); and

11. Diligent set a hearing for October 26, 2017 for the Trial Court to resolve the
    differences over the form of the written temporary injunction order (10-26-
    17 4 RR 1.)


                                                                               24
      On October 10, 2017, Diligent moved to compel arbitration as it stated it

would do once the entry of the temporary judgment was imminent and as York,

Elite and PDL started to push their summary judgment motions (2 CR 714; 1 CR

37, 43, 92,98, 334, 346, 487, 501). Diligent moved to compel arbitration of the

claims between Diligent and York. (2 CR 714-725). Diligent also moved to abate

the claims between Diligent, on one hand, and Elite and PDL, on the other hand,

pending the resolution of the arbitration (2 CR 726-728). In an amended summary

judgment response, on October 19, 2017, Diligent again moved to abate the Trial

Court’s consideration of any summary judgment motions until the completion of

the arbitration (2 CR 848).

      On October 24, 2017, Diligent filed a verified plea-to-the-jurisdiction (2

CR 987). Diligent asked the Trial Court to follow the allocation of jurisdiction that

Diligent and York had crafted in the arbitration, temporary injunction and

restrictive covenant provisions in the Agreement (2CR 987, ¶¶ 6 and 9 at 993-994).

      On October 25, 2017, York and Elite responded to the motion to compel

arbitration and to abate and the jurisdictional plea (3 CR 1018). York and Elite

claimed that Diligent had waived the right to arbitrate (3 CR 1018-1021). On the

same day, Diligent replied to York and Elite’s response (3 CR 1024-1028).




                                                                                  25
      On October 26, 2017, the Court deferred the hearing on the pending motions

for summary judgment until it ruled on the motion to compel and abate and the

jurisdictional plea. (10-26-17 4 RR 20-25).

      Between October 31, 2017 and November 9, 2017, Elite moved to sever the

claims between Diligent and Elite from the claims between Diligent and York

which are covered by the arbitration provisions, and PDL moved to dismiss or

sever the claims between Diligent and PDL (3 CR 1072). The parties exchanged

pleadings on the pending motions and jurisdictional plea (2 CR 987; 3 CR 1018,

1024, 1029, 1041, 1072, 1081, 1089).

      On November 9, 2017, the Trial Court convened a hearing. (11-9-17 5 RR 4-

45). The Trial Court signed the temporary injunction for entry (App. 2; 3 CR

1094-1096). It denied the motions and the jurisdictional plea solely based upon its

finding that Diligent waived the right to arbitrate (10-26-17 RR at 30). The Trial

Court also signed an order denying the motion to compel arbitration and to abate

and the jurisdictional plea (App. 1; 3 CR 1097).

      This Accelerated, Interlocutory Appeal Ensued

      On November 20, 2017, Diligent filed a Request for Findings of Fact and

Conclusions of Law (3 CR 1106). On December 13, 2017, Diligent filed a

Reminder for Making Findings of Fact and Conclusions of Law. (App. 5.)




                                                                                26
          On November 22, 2017, Diligent perfected this accelerated, interlocutory

appeal (3 CR 1110-1117). This appeal ensued.

          On November 16, 2017, Diligent posted the bond for the temporary

injunction. On November 29, 2017, Diligent requested the issuance of a precept so

that the entered temporary injunction could be served on all parties. On December

1, 2017, December 7, 2017, and December 7, 2017, the precept and the temporary

injunction were respectively served on PDL, York and Elite, as Diligent seeks to

enforce the temporary injunction as signed by the Trial Court. (App. 6, 7 and 8.)

          Analysis Under All Points of Error

          Introduction

          Under its review, this Court is to apply tenured principles which this Court

has been in the forefront in developing. This Court is not writing on a blank slate.

Based upon those principles, this Court must reverse the Trial Court.

          Legal Framework

          Jurisdiction

          The Court has to first determine whether it (or the Trial Court) or the
                                                                          16
arbitrator has jurisdiction to consider all issues of arbitrability.           As in this case,

the parties by contract can allocate the jurisdiction between the courts and the




16
     Haddock v. Quinn, 287 S.W.3d 158, 171-173 (Tex. App. – Fort Worth 2009, pet. denied).
                                                                                             27
                          17
arbitrator, and did so.        As in this case, this can be accomplished by the terms of

the Agreement containing the arbitration provision and the incorporation of the

Commercial Rules of the American Arbitration Association. 18

      Arbitrability Issue One (if the Courts Have Jurisdiction): Enforceable
      Arbitration Provision

      Diligent, as the party seeking to arbitrate, had to establish the existence of a

written arbitration provision and that the disputes to be arbitrated fall within the

scope of that provision.19 Texas law determines the plain meaning of the arbitration

provision. 20

      Arbitrability Issue Two (if the Courts Have Jurisdiction): Defenses Including
      Waiver

      Once Diligent shows that there are claims subject to the arbitration

provision, then York has to show a defense to arbitration. 21 Waiver of the right to
                                 22
arbitrate is such a defense.          In this case, Diligent is not seeking to compel Elite

and PDL to arbitrate since their dispute is not subject to arbitration, as opposed to

its dispute with York. Therefore, whatever conduct Diligent took regarding its



17
   Id.
18
   Id.; Dow Roofing Systems, LLC v. Great Commission Baptist Church & Chamberlin Dallas,
LLC, 2017 Tex. App. LEXIS 7370 ** 7-8, 17-20 (Tex. App. – Fort Worth 2017, pet. for review
filed); Super Starr Int’l, LLC v. Fresh Tex Produce, LLC, 2017 Tex. App. LEXIS 8728 ** 6-9
(Tex. App. – Corpus Christi 2017, no pet.)
19
   Haddock, 287 S.W.3d at 169.
20
   Id.
21
   Id.
22
   Legoland, 2017 Tex. App. LEXIS 3843 at * 7.
                                                                                        28
dispute with Elite and PDL is not relevant to the question of whether Diligent

waived its arbitration rights with York. 23

       When, as in this case, York, Elite and PDL claim waiver based upon

Diligent’s participation in the lawsuit, York alone has to show that Diligent with

regard to York “(1) … substantially invoked the judicial process – engaged in

conduct inconsistent with a claimed right to compel arbitration and (2) the

inconsistent conduct caused York to suffer detriment or prejudice.”24 Prejudice,

in turn, means 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
                                                        25
issue and later seeks to arbitrate that same issue.          Waiver may only be based

upon unequivocal conduct with the actual intention to waive the right to

arbitrate. 26

       “Because the law strongly favors arbitration, [the burden of York] to prove

the defense is a high one.” 27 “So high, in fact, that appellate courts seldom find an




23
   RSL Funding, LLC v. Pippins, 499 S.W.3d 423, 431 (Tex. 2016).
24
   Legoland, 2017 Tex. App. LEXIS 3843 at * 7 (emphasis added); Leggett, 2017 Tex. App.
LEXIS 2765 at **12-13.
25
   Leggett, 2017 Tex. App. LEXIS 2765 at **13-14.
26
   Dargahi v. Handa, 2017 Tex. App. LEXIS 10373 ** 13-14 (Tex. App. – Austin 2017, no pet).
27
   Legoland, 2017 Tex. App. LEXIS 3843 at * 7.
                                                                                        29
                                                       28
implied waiver through litigation conduct.”                 Consequently, there is a strong

presumption against waiver of the right to arbitrate. 29

        Giving effect to this presumption and the heightened burden of proof, this

Court is to consider the totality of the circumstances. 30 This consideration may be

guided by several factors, 31 but none of the factors is dispositive. 32

        It must be noted that the parties try to conflate Diligent’s litigation conduct

with respect to York with Diligent’s litigation conduct with respect to Elite and

PDL; however, Diligent’s conduct with Elite and PDL is not relevant as these

disputes are non-arbitrable disputes. Again, whatever conduct Diligent took

regarding its dispute with Elite and PDL is not relevant to the question of whether

Diligent waived its arbitration rights with York.

        When determining whether litigation conduct is indeed inconsistent with the

right to arbitrate, the courts have found that the following conduct is not

inconsistent with the right to arbitrate:

      Filing suit; 33

28
   Legoland, 2017 Tex. App. LEXIS 3843 at * 7.
29
   Legoland, 2017 Tex. App. LEXIS 3843 at * 7; Leggett, 2017 Tex. App. LEXIS 2765 at * 11;
BBVA Compass Inv. Solutions, Inc. v. Brooks, 456 S.W.3d 771,718 (Tex. App. – Fort Worth
2017, no pet.)
30
   Legoland, 2017 Tex. App. LEXIS 3843 at * 8.
31
   Is Diligent the plaintiff or a defendant? How long did Diligent wait before seeking arbitration?
How much discovery or pretrial activity did Diligent conduct before seeking arbitration? Did
Diligent ask the Trial Court to dispose of its affirmative claims on the merits? How much time
and expense have the parties incurred? Is the discovery conducted unavailable or useful in
arbitration?
32
   Legoland, 2017 Tex. App. LEXIS 3843 at * 8.
                                                                                                30
      Serving requests for disclosure of facts; 34

      Serving basic written discovery; 35

      Noticing or taking depositions; 36

      Pursuing settlement; 37

      Agreeing to a scheduling order; 38

      Requesting discovery, noticing depositions and agreeing to a trial setting; 39

      Incurring attorney’s fees to pursue claims against the party asserting
       arbitration; 40

      Seeking discovery sanctions or motions to compel discovery; 41

      Seeking a temporary or preliminary injunction; 42

      Self-inflicted costs, expenses and fees incurred by the parties because a party
       opposing arbitration filed a motion for summary judgment and there was
       resulting discovery, motions, responses and other proceedings; 43

      Evidence just of attorney’s fees incurred by a party opposing arbitration; 44

      Mere delay; 45

33
   Leggett, 2017 Tex. App. LEXIS 2765 at ** 11-12.
34
   Legoland, 2017 Tex. App. LEXIS 3843 at * 8.
35
   Legoland, 2017 Tex. App. LEXIS 3843 at * 8.
36
   Leggett, 2017 Tex. App. LEXIS 2765 at **11-12.
37
   Legoland, 2017 Tex. App. LEXIS 3843 at * 9.
38
   Legoland, 2017 Tex. App. LEXIS 3843 at * 9.
39
    Pippins, 499 S.W.3d at 430-431.
40
    Legoland, 2017 Tex. App. LEXIS 3843 at ** 9-10.
41
   Handa, 2017 Tex. App. LEXIS at **17-20.
42
   Id.; Joseph Chris Personnel Services, Inc. v. Rossi, 249 Fed. Appx. 988, 991-992 (5th Cir.
2007); PMS Distributing Co. v. Huber & Suhner, A.G., 863 F.2d 639, 641-641 (9th Cir. 1988);
Menna v. Romero, 48 S.W.3d 247, 252-253 (Tex. App. San Antonio 2001, no pet.)
43
   Id.
44
   Id.
                                                                                          31
      Delays of eight months or even two years. 46

When, as in this case, the Federal Arbitration Act and the Texas General

Arbitration Act may apply, this Court looks to both Texas and federal decisions. 47

Any doubts regarding waiver are resolved in favor of arbitration. 48

        Stay of Interrelated Non-Arbitrated Claims

        Once the Court finds that there has been no waiver, then the Court has to

decide whether the claims between Diligent, on one hand, and Elite and PDL, on

the other hand, have to be stayed pending the resolution of the arbitration of the

arbitrated claims between Diligent and York. 49 The Court has to stay the Diligent-

Elite/PDL claims when those claims involve issues that will be decided in the
                              50
Diligent-York arbitration.         Moreover, the exercise of the stay is an exercise of

the judicial power to determine when a lawsuit is tried and does not equate to

prejudice to Elite or PDL. 51

        Application of the Law to the Facts

        Introduction

        The Trial Court stated,


45
   Leggett, 2017 Tex. App. LEXIS 2765 at ** 12-13.
46
   Leggett, 2017 Tex. App. LEXIS 2765 at **11-12.
47
   Legoland, 2017 Tex. App. LEXIS 3843 at * 5 at fn. 4.
48
   Leggett, 2017 Tex. App. LEXIS 2765 at **13-14.
49
   Merrill Lynch, 235 S.W.3d at 195-196.
50
   Id.
51
   Id.
                                                                                    32
          … [a]nd so the Court’s going to deny the motion to compel arbitration
          [which included the motion to stay] and the plea to the jurisdiction on
          the grounds that Diligent has substantially invoked the judicial
          process by seeking a temporary injunction against Mr. York and
          obtaining, at least, from a verbal order from the Court’s bench, subject
          to the entry of a written order, injunctive relief and doing so before it
          ever sought to invoke the right to arbitration under the circumstances,
          even though from the very beginning, it clearly knew it had the right
          to arbitration at that point. So it does look like you are trying to get a
          second bite at the apple, and the Court is going to find that that is
          inappropriate under the circumstances. So, I’ll deny both the motion
          to compel [which included the motion to stay] and the plea to the
          jurisdiction under those circumstances (11-9-17 5 RR at 30-31).

In doing so, the Trial Court identified the pervasive reversible errors underpinning

this ruling. It did not consider the jurisdictional plea and the motion to stay on

their respective merits. It found a waiver of the right to arbitrate that could not

exist under the legal framework. It ignored Diligent’s straightforward statement in

its Original Petition at § 7.06, and in each amended petition, that it would seek to

compel arbitration once it had obtained a temporary injunction, and that it would

not seek temporary injunctive relief in the arbitration; this is exactly what Diligent

did in the first instance and will not do in the second. (1 CR 13.) Two bites at the

apple is specifically disclaimed by Diligent.

          Jurisdiction and the Motion to Compel Arbitration
                                                                                          52
          The Trial Court had to determine its jurisdiction relative to the arbitrator.

The public policy supporting and favoring arbitration vested Diligent and York


52
     Haddock, 287 S.W.3d at 171-173.
                                                                                          33
with the vested right to allocate in the Agreement the respective jurisdiction among

the courts and the arbitrator relative to the arbitration proceedings. 53

        To give effect to those plain terms, the Trial Court had to determine whether

there was an arbitration provision that covered the claims between Diligent and
        54
York.        Having made that determination, then the Trial Court had to determine

what issues it could still determine, if any, and what issues the arbitrator was to

decide. 55

        The Trial Court found that there was an arbitration provision that covered

the claims between Diligent and York. It had to do so, as there is no dispute that

such a provision exists.

        The Trial Court then did not directly determine its jurisdiction relative to the

arbitrator’s jurisdiction. (11-9-17 5 RR 21-31). There is no discussion in the

record by the Trial Court in this regard. (Id.) The Trial Court simply denied the

arbitration jurisdictional plea because the Trial Court found that Diligent had

waived the right to arbitrate, even though the Trial Court lacked the jurisdiction to

make that finding (11-9-17 5 RR at 30-31).




53
   Id; Rio Grande Xarin, II, Ltd. v. Wolverine Robstown, LP, 2010 Tex. App. LEXIS 5189 ** 22-
23 (Tex. App. – Corpus Christi 2010, pet. dism’d.).
54
   Id.
55
   Id.
                                                                                          34
       The Trial Court, thus, abused its discretion when it did not give effect to

those plain terms. 56 It failed to follow established law. 57 It acted in a manner that

it could not act for which there is no available appeal.58

       Had the Trial Court not so abused its discretion, then the Trial Court would

have given effect to the allocation of jurisdiction established by Diligent and York.

The Court could decide whether to issue a temporary injunction and amend the

restrictive covenants in the Agreement. The arbitrator would, as vested under Rule

R-7 of the AAA Commercial Arbitration Rules, decide all issues of arbitrability

and the merits of these claims unless the arbitrator finds that Diligent had waived

the right to arbitrate.

       The Trial Court had no choice but to grant the jurisdictional plea after the

Trial Court issued the temporary injunction. The Trial Court should have

compelled arbitration so the arbitrator could decide all issues of arbitrability and

the merits of the claims unless the arbitrator would find that Diligent had waived

the right to arbitrate. However, this was the arbitrator’s call. The Trial Court

trampled on the arbitrator’s agreed-to jurisdiction, and thus, reversibly erred.

       There Could Be No Waiver if the Trial Court Could Consider that Issue




56
   See cases at footnotes 1-5, 13-14.
57
   Id.
58
   Id.
                                                                                    35
          Alternatively, the Trial Court reversibly erred when it denied the motion to

compel arbitration after it was conceded that there was an arbitration provision that

covered the claims between Diligent and York. Diligent and York agreed that the

arbitrator was to decide waiver and the Trial Court was not authorized to make the

waiver call. Instead, the Trial Court decided waiver, thus impermissibly thwarting

York and Diligent’s contract. It must be kept in mind at all times that arbitration

and its scope is reserved to the parties to the contract containing the arbitration

provision.

          Arbitration is a favored remedy. 59 Public policy mandates that arbitration be

compelled when, as in this case, there is an arbitration provision that admittedly

covers the claims between Diligent and York. 60

          The Trial Court, however, found that Diligent had waived the right to

arbitrate. There are several reasons for this reversible error.

          First, the Trial Court did not explain how it followed the basic legal

framework for finding a waiver of the right to arbitrate. (11-9-17 5 RR at 21-31).

The Trial Court did not reference the presumption against waiver and the

heightened burden to try to overcome that presumption. (Id.) It did not determine

or explain how it removed from the exclusive jurisdiction of the arbitrator the right

to determine waiver. It did not follow established law (Id.)

59
     Legoland, 2017 Tex. App. LEXIS 3843 at **6-7; Haddock, 287 S.W.3d at 169.
60
     Id.
                                                                                     36
      Second, the Trial Court substituted its own test for the existing legal

framework. (11-9-17 5 RR at 21-31). The fundamental concept of the legal

framework is that Diligent had to act unequivocally with the intent to waive the

right to arbitrate by acting in a manner inconsistent with the right to arbitrate such

that any such inconsistent conduct was prejudicial to York. 61 The Trial Court does

not cite these concepts and discuss how Diligent acted unequivocally, with intent,

inconsistently and with prejudice. (Id.) Rather, the Trial Court simply looked to

find whether Diligent participated in the litigation. (Id.)       It did not follow

established law. (Id.)

      Third, the Trial Court could not show that Diligent acted with some intent to

waive the right to arbitrate when Diligent stated in its Original Petition and the

subsequent amended petitions that Diligent filed the petitions without prejudice to

the right to arbitrate and with the intent to move to compel to arbitrate once the

Trial Court issued a temporary injunction. (11-9-17 5 RR at 21-31). The Trial

Court could not dispute that this is exactly what Diligent did. (Id.) The Trial Court

does not show and cannot show how Diligent intended to waive the right to

arbitrate when Diligent expressed the exact opposite intent not to do so. (Id.)

      Fourth, the Trial Court could not demonstrate that Diligent’s seeking the

issuance of a temporary injunction was inconsistent with the right to arbitrate when

 Legoland, 2017 Tex. App. LEXIS 3843 at * 7 (emphasis added); Leggett, 2017 Tex. App.
61

LEXIS 2765 at **12-13.
                                                                                   37
the parties’ contract contained qualifying language          expressly providing     that

Diligent could seek such a temporary injunction, and having done so, proceed to

arbitration. (11-9-17 5 RR at 21-31). The Trial Court had to give effect to the plain

terms of the Agreement which created consistent temporary injunction and

arbitration rights.62 The Trial Court noted that the text of the arbitration provision

even contemplated Diligent asking for a temporary injunction. (10-23-17 RR at

25). It never explained why these rights are not consistent when Diligent and York

agreed that they were. (10-23-17 RR at 21-31). The Trial Court noted that it could

be implied that the right to arbitrate and the right to seek a temporary injunction

were consistent, but then never explained and cannot explain how the Trial Court

found them to be incompatible under the presumption against waiver and the

higher burden to overcome that presumption. (11-9-17 5 RR at 25 and 23-25). The

Trial Court could not separate the right to seek injunctive relief from the text of the

arbitration provision which provided for explicit consistent remedies. (11-9-17 5

RR 21-31)

          Fifth, the Trial Court gave controlling weight to the fact that the plain terms

of the Agreement did not expressly state that the right to seek a temporary

injunction was not a waiver of the right to arbitrate. (11-9-17 5 RR at 22-25). The

Trial Court did not explain, though, how that could exist when the injunctive


62
     Haddock, 287 S.W.3d at 171-173.
                                                                                      38
qualifying language was interposed into the middle of the arbitration provision and

in light of the strong presumption against waiving the right to arbitrate and the

higher burden of proof. (Id.) It cannot. The issue is whether the temporary

injunction and arbitration rights may be consistently pursued and not whether the

word “waiver” is found in the arbitration provision when providing for the

complementary right to seek a temporary injunction.

        Sixth, the Trial Court gave equally controlling weight to the fact that the

Texas General Arbitration Act provides limited relief by temporary injunction. (11-

9-17 5 RR at 23-24). The Trial Court does not address the Federal Arbitration Act

which equally applies to the arbitration provision and permits a party seeking
                                                         63
arbitration to seek temporary injunctive relief. (Id.)        The Trial Court’s ruling

wholly conflicts with the federal decisions allowing Diligent to seek a temporary

injunction and not waive the right to arbitrate. 64 There should be no conflict with

these federal decisions which like the Texas decisions should form a seamless

body of law.65 It also ignores that the parties have the freedom of contract to craft

consistent or complementary arbitration and temporary injunction remedies as

Diligent and York did in the Agreement. (Id.) It did not follow established law.

(Id.)

63
   See footnote 42.
64
   Id.
65
   McQueen v. Chevron Corp., 2017 U.S. Dist. LEXIS 207705 * 4-5 (N.D. Cal. December 18,
2017.)
                                                                                    39
      Seventh, the Trial Court expressed concern that Diligent sought two bites at

the apple. (11-9-17 5 RR at 29-31). The Trial Court issued a temporary injunction

which Diligent then served and seeks to enforce. (App. 2, 7, 8, 9). The Trial Court

cited to no evidence that Diligent will ask the arbitrator to reverse or modify the

same temporary injunction that Diligent seeks to enforce. (11-9-17 5 RR 21-31).

The evidence is to the contrary. (App. 2, 7, 8, 9). First, it cannot be ignored that if

there was some concern over Diligent’s getting two bites at the apple, there was a

simple and time-tested means to see if that was Diligent’s intent, namely, to ask its

trial counsel who was standing before him. Trial judges do that every day. Second,

there is the specific disclaimer in all its petitions and amended petitions where

Diligent represents to the court that it has no intention of trying to obtain a

different temporary injunction from the arbitrator.

      Eighth, the Trial Court correctly notes that filing the lawsuit was not a

waiver of the right to arbitrate (11-9-17 5 RR at 21), but it nonetheless infers that

somehow filing a lawsuit acknowledging the existence of the right to arbitrate

should be held against Diligent since Diligent did not invoke the right to arbitrate

until October 10, 2017. (10-23-17 RR at 21, 26). The Trial Court does not explain

and cannot explain how it reached its inference when even the Trial Court

acknowledged that the arbitration provision contained qualifying language that

permitted asking for a temporary injunction, and that Diligent invoked the right to


                                                                                    40
arbitrate when it filed its Original Petition and repeated on multiple occasions that

it would arbitrate the merits of the claims once the temporary injunction was

entered. (11-9-17 5 RR at 25 – 26). There is no basis under the presumption against

waiver of the right to arbitrate and the higher burden to overcome it to make the

inference that the Trial Court did.          That is especially true when the text of the

arbitration provision permitted Diligent to file its petitions with its statement of

intent ultimately to arbitrate.

          Ninth, the Trial Court assumed that the temporary injunction is an

adjudication on the merits. (11-9-17 5 RR at 27). That is legally wrong. The

issuance of a temporary injunction is not an adjudication on the merits.66 Diligent

also stated in all of its petitions that it would ask the arbitrator to decide the merits

of the claims (1 CR 37-43, 92, 98-99, 334, 343-345, 347, 487, 495-504) The Trial

Court did not follow the law. (Id.)

          The Trial Court also surmised that the discovery went to the merits of the

claims, yet the Trial Court also conceded that it had to decide whether Diligent

could prevail on the merits in order to grant the temporary injunction. (11-9-17 5

RR at 27-29). The Trial Court does not explain and cannot explain how its ruling

on the temporary injunction represents a ruling on the merits when it only had to




66
     EMS USA, Inc. v. Shary, 309 S.W.3d 653, 657 (Tex. App. – Dallas 2010, no pet.)
                                                                                      41
find, and did find, that Diligent probably could prevail on the merits at arbitration.

(Id.)

          In addition, the Trial Court suggests that none of the discovery pertained to

questions of arbitrability or jurisdiction and therefore represents discovery on the

merits, crossing the line and comprising evidence of a waiver of the right to

arbitrate. (11-9-17 5 RR at 27). The Trial Court does not explain and cannot

explain a basis for this suggestion. The Trial Court admits that the discovery

related to the claims which formed the basis of the requested temporary injunction

which the arbitration provision contemplated could be sought consistently with the

right to arbitrate. (11-9-17 5 RR at 27-29). Thus, that discovery is consistent with

the right to arbitrate. The Trial Court did not discuss this point. (Id.) Moreover,

discovery even on the merits, as a matter of law, is not a waiver if the discovery

relates to discovery that would be conducted in the arbitration. The Trial Court did

not address this legal point. (Id.) Nor did it make a distinction regarding discovery

that occurred between Diligent and York, which is the only pertinent discovery in

this case, and that between Diligent and Elite/PDL, which is not relevant to the

alleged waiver of the arbitration with York.67

          Tenth, the Trial Court suggests that its reformation of the restrictive

covenants is inconsistent with the powers of the arbitration. (11-9-17 5 RR at 21-


67
     Pippins, 499 S.W.3d at 431
                                                                                    42
22, 29-31). It does not explain and cannot explain how that can be the case when

the plain terms of the Agreement vest the Trial Court with such a power consistent

with the powers granted to the arbitrator and the Covenants Not to Compete statute

requires reformation, if deemed necessary. (¶6)(App. 3)

          The Trial Court may have impliedly adopted the suggestion from York, Elite

and PDL that asking for statutory reformation of a non-competition covenant is a

final adjudication even when it is done as part of a temporary injunction

proceeding. (e.g. 3 CR 1030). This Court has rejected that very argument. 68 The

Trial Court did not follow established law if it accepted the suggestion from York,

Elite and PDL.

          Eleventh, the Trial Court mistakenly avers that Diligent did not invoke the

right to arbitrate until October 10, 2017. (11-9-17 5 at 21). It does not discuss that

Diligent noted that it would move to compel arbitration after the issuance of a

temporary injunction in the very first filed petition and in each subsequent petition.

(11-9-17 5 RR at 21-31)(1 CR 37-43, 92, 98-99, 334, 343-345, 347, 487, 495-504).

It does not explain and cannot explain how that is a delay in noting Diligent’s

intentions. (Id.) It also does not discuss the details of what happened regarding the

temporary injunction. (Id.) It cannot dispute that it took almost one full year for the

Trial Court to sign the temporary injunction. (Id.) During that time, there were


68
     Tranter, Inc. v. Liss, 2014 Tex. App. LEXIS 3398 * 4 (Tex. App. – Fort Worth 2017, no pet.).
                                                                                                43
hearings devoted to granting the temporary injunction, to the form of the

injunction, and finally, hearings on getting the temporary injunction signed and to

compel arbitration. Diligent said that it would move to compel arbitration after the

process would lead to the issuance of a temporary injunction (1 CR 37-43, 92, 98-

99, 334, 343-345, 347, 487, 495-504). That is what happened.

      Twelfth, the Trial Court does not explain how Elite or PDL can claim any

prejudice from any alleged conduct by Diligent that is inconsistent with York’s

right to arbitrate. (11-9-17 5 RR at 21-31). The claims between Diligent, on one

hand, and Elite and PDL, on the other hand, are not covered by the arbitration

provision. Those claims are to be tried after the arbitration with York. Thusly,

Elite and PDL cannot complain about discovery, pleadings, motions or attorney’s

fees incurred in the lawsuit which they would have had to participate in or incur as

parties to that same lawsuit. Elite and PDL can only complain that the lawsuit will

be stayed, but that is a result that is statutorily mandated for judicial economy and

cannot be prejudice.69

      Thirteenth, the Trial Court does not address that York, Elite and PDL cannot

file motions for summary judgment, conduct discovery or otherwise engage in the




69
  Merrill Lynch, 235 S.W.3d at 195-196; 9 U.S.C.A. § 3; TEX. CIV. PRAC. AND REM CODE §§
171.025 and 172.174.
                                                                                    44
lawsuit, and then claim that they have been injured by their own self-inflicted

wounds. (11-9-17 5 RR at 21-31).70

       Fourteenth, the Trial Court does not explain and cannot explain why the

conduct by Diligent in the lawsuit can constitute a waiver of the right to arbitrate

when the same conduct has already been found not to be such a waiver. (11-9-17-

5 RR at 21-31). 71

       Fifteenth, the Trial Court does not explain and cannot explain why all of the

disclosure requests and discovery served on York could prejudice York when it

would be available in the arbitration and will be used in the arbitration. (11-9-17 5

RR at 21-31).72

       Sixteenth, the Trial Court relied almost exclusively on the decision in

Holmes v. Graves 73 to support its finding of waiver. (11-9-17 5 RR at 25-31). The

Trial Court does not explain and cannot explain how it overlooked the

distinguishing facts and law of that case. It could not do so.

       The arbitration provision in Holmes did not contain the qualifying language

found in the Agreement that York agreed to that permitted Diligent to consistently

pursue arbitration and a temporary injunction. Holmes was based upon a different

text, and this key difference underpinned the holding that “… [w]e reject [the]

70
   Handa, 2017 Tex. App. LEXIS at **17-20
71
   See discussion at footnotes 33-46.
72
   Pippins, 499 S.W.3d at 430-431.
73
   2013 Tex. App. LEXIS 14816 (Tex. App. – Houston [1st Dist.] 2013, no pet).
                                                                                  45
contention that requesting injunctive relief from the trial court was not a specific or

deliberate act that was inconsistent with the right to arbitrate because injunctive

relief is not permitted under the applicable rules of arbitration.” 74 Diligent did not

first mention arbitration until after an adverse ruling. Holmes was based upon such

a change in position when Holmes stated that “… [t]hey moved to compel

arbitration only after being denied merit-based injunctive relief.” 75 Diligent is not

trying to re-adjudicate or modify the temporary injunction. Holmes was based
                        76
upon such an attempt.        The Trial Court wrongly followed Holmes because the

Trial Court failed to apply the basic legal framework. Had it done so, it would not

have followed Holmes.

        The arbitration agreement in Diligent’s contract with York had qualifying

language reserving to the Trial Court jurisdiction to rule on the request for a

temporary injunction. The Trial Court stood that limited reservation on its head by

saying it had the effect of waiving the arbitration provision.

         There Are No Additional Bases to Support the Trial Court’s Rulings

        The foregoing analysis demonstrates the reversible errors underpinning the

ruling that Diligent waived the right to arbitrate based upon the Trial Court’s stated




74
   Id. at ** 15-16.
75
   Id. at * 15.
76
   Id. at * 17.
                                                                                    46
bases for that ruling. There are no other bases pleaded by York, Elite or PDL that

supports that ruling.

      The Trial Court’s stated bases for its ruling on waiver tracks the pleaded

arguments made by York, Elite or PDL. (e.g. 3 CR 1018, 1029, 1089). York and

Elite, however, also allege that Diligent’s motions to quash the depositions of

corporate representatives regarding trade secrets constituted prejudice. (e.g. 3 CR

1023). York and Elite do not explain and cannot explain under the presumption

against waiver of the right to arbitrate and the higher burden to try to overcome

that presumption how not being able to depose Diligent’s corporate

representative(s) can overcome that presumption and meet their burden. (Id.)

They further do not show that they will not get any missing depositions as part of

the arbitration or as part of the trial against Elite and PDL once the arbitration is

completed. (Id.)

      York, Elite and PDL surmise that Diligent only moved to compel arbitration

when Diligent was faced with summary judgment motions. (e.g. 3 CR 1032). Yet,

they do not explain and cannot explain that Diligent stated that it would move to

compel arbitration on the merits of the claims to be arbitrated once there was a

ruling on the requested temporary injunction long before any summary judgment

motion was filed, and Diligent did what it said it would do. (1 CR 37-43, 92, 98-

99, 334, 343-345, 347, 487, 495-504). They further do not explain why Diligent


                                                                                  47
should be so afraid when the Trial Court found that Diligent would likely prevail

on the same merits challenged by the summary judgment motions by granting the
                              77
temporary injunction.              York, Elite and PDL do not explain and cannot explain

under the presumption against waiver of the right to arbitrate and the higher burden

to try to overcome that presumption how Diligent doing what it said it would do

from the start of the case can overcome that presumption and meet their burden of

proof.

           There is a pervasive error in the arguments of York, Elite and PDL.

Significantly, York, Elite and PDL fail to address that presumption and their

burden of proof. (e.g. 3 CR 1018, 1029, 1089). They do so, because they cannot

do either. (Id.)

          The preceding analysis showing the errors made by the Trial Court and in

the arguments of York, Elite and PDL provides the actual answers to the several
               78
questions           to be asked regarding waiver of the right to arbitrate when viewed

under the legal framework. They also show how the Trial Court, York, Elite and

PDL did not correctly answer those questions.

          Taken together or separately, that prior analysis demonstrates reversible

error. When this Court conducts a de novo review based upon the Clerk’s Record,

the presumption against the right to arbitrate, and the heightened burden imposed

77
     Shary, 309 S.W.3d at 657.
78
     See questions at footnote 31.
                                                                                      48
upon York, Elite and PDL to try to overcome that presumption, then this Court will

rule that Diligent did not waive the right to arbitrate by conduct inconsistent with
                                                        79
that right with the unequivocal intent to do so.             Alternatively, when this Court

conducts an abuse of discretion review, then this Court will find that the Trial

Court did not follow established law, did not do what a trial court could have done,

and failed to give effect to Diligent’s vested substantive arbitration rights in a

manner for which there is no adequate appeal. 80 Alternatively, no reasonable fact-

finder could find waiver of the right to arbitrate under the presumption against such

waiver and the heightened burden to try to overcome that presumption. There is no
                                     81
evidence of such a waiver.                Alternatively, any finding of waiver under the

presumption against such waiver and the heightened burden to try to overcome that

presumption is so against the great weight of the credible evidence to be manifestly

unjust and wrong. 82

       The Stay is Mandatory

       Alternatively, the Trial Court reversibly erred when it denied the motion to

stay the claims between Diligent, on one hand, and Elite and PDL, on the other

hand, pending the resolution of the arbitration of the claims between Diligent and




79
   See cases cited at footnotes 6-14, 19-48.
80
   See cases cited at footnotes 3-14, 19-48.
81
   See cases cited at 15.
82
   Id.
                                                                                        49
York. The Trial Court had to stay the Diligent-Elite/PDL claims, but failed to do

so.

      Arbitration is a favored remedy. 83 It is implemented through the terms of the

arbitration provision in the Agreement. 84 The public policy favoring arbitration is

undermined if the issues to be decided by the arbitrator are also tried by the Trial

Court. 85 The stay is statutorily mandated by both federal and state law.86

      As a result, when issues to be decided by the arbitrator to resolve the claims

of Diligent and York are also involved in the resolution of the claims between

Diligent, on one hand, and Elite and PDL, on the other hand, outside of arbitration,

then the Diligent-Elite/PDL claims must be stayed pending resolution of the

Diligent/York claims in arbitration. 87 Otherwise, Diligent and York will be denied

their protected and vested right to have the arbitrator decide the issues involved in
                   88
the arbitration.        The stay is a proper application of the Trial Court’s power and
                                                                                   89
judicial economy to decide when the Diligent-Elite/PDL claims are resolved.

      The Trial Court did not mention this mandatory law. (11-7-17 5 RR 1-45). It

did not mention the interconnected issues involved in the resolution of the claims


83
   Legoland, 2017 Tex. App. LEXIS 3843 at **6-7; Haddock, 287 S.W.3d at 169.
84
   Id.
85
   Merrill Lynch, 235 S.W.3d at 195-196.; 9 U.S.C.A. § 3; TEX. CIV. PRAC. AND REM CODE §§
171.025 and 172.174.
86
    Id.
87
   Id.
88
   Id.
89
   Id.
                                                                                        50
of Diligent-York claims and the Diligent-Elite/PDL claims. (Id.) The Trial Court

had to consider both the law and the relevant issues. Its failure to do so is

reversible error.

      Had the Trial Court reviewed those issues under the law, then the Trial

Court would have no choice but to grant the motion to stay. The stay inescapably

flows from a review of the issues in the Diligent-York arbitration and the Diligent-

Elite/PDL lawsuit.

      Diligent claims that York breached the restrictive covenants in the

Agreement and the NDLI Contract, that Elite and PDL tortiously interfered with

the Agreement or the NDLI Contract by directing York to breach these restrictive

covenants and by poaching customers of Diligent, and that York, Elite and PDL

jointly or severally misappropriated Diligent’s trade secrets. (e.g. 1 CR 8, 37, 92,

109, 334, 379, 487; 2 CR 825; 3CR 1005). These are the claims that Diligent stated

would be resolved in arbitration from the filing of the original petition. (1 CR 37-

43, 92, 98-99, 334, 343-345, 347, 487, 495-504).

      York, Elite and PDL dispute just about every element of Diligent’s

respective claims. (1 CR 18, 21, 47, 50, 193, 325, 375; 2 CR 542, 585, 611, 518,

960; 3 CR 1099). York, Elite and PDL further have raised denials, defense issues,

affirmative defenses and affirmative claims that question the existence of any trade

secrets of Diligent, that question the enforceability of the Agreement or the NDLI


                                                                                 51
Contract, that question the conduct of York to breach the restrictive covenants or to

misappropriate Diligent’s trade secrets, that question whether Elite or PDL directed

York to breach the Agreement or the NDLI Contract, that question whether York,

Elite or PDL misappropriated trade secrets of Diligent, and whether they conspired

to do so. (Id.) These are elements of the claims between Diligent and York which

will be decided by the arbitrator.90

       If the stay is not imposed, then the arbitrator and the Trial Court will decide

some of the very same issues. Without the stay, then it would be possible for the

arbitrator to reach different results on the very same issue. The stay is designed to

prevent that from happening.

       The Trial Court, thus, abused its discretion when it did not give effect to

those plain terms. 91 It failed to follow established law. 92 It acted in a manner that

it could not act for which there is no available appeal.93




90
   TEX. CIV. PRAC. & REM CODE §§ 134A.002, 143A.004, 134A007; City of The Colony v. N.
Tex. Mun. Water Dist., 272 S.W.3d 699, 738 (Tex. App. – Fort Worth 2008, pet. dism’d); RSM
Prod. Corp. v. Global Petroleum Grp., Ltd., 507 S.W.3d 383, 393 (Tex. App. – Houston [1st
Dist.] 2016, pet. denied); Zep Mfg. Co. v. Harthcock, 824 S.W.2d 642, 662 (Tex. App. – Dallas
1992, no pet.); Rugen v. Interactive Business Svs., 864 S.W.2d 548, 551 (Tex. App. – Dallas
1993, no pet.); Cell Comp, LLC v. Southwestern Bell Wireless, LLC, 2008 Tex. App. LEXIS
4510 * 20 (Tex. App. – Corpus Christi 2008, no pet.)
91
   See cases at footnotes 1-5, 11-14.
92
   Id.
93
   Id.
                                                                                          52
      Conclusion and Prayer
      Based on the foregoing, the Trial Court failed to follow the law and

misapplied the law to the facts. Therefore, the Trial Court abused its discretion

when it found that Diligent had waived the right to arbitrate its claims with York.

      The Trial Court reversibly erred for the above stated reasons. The Court

should reverse the Trial Court. The Court should compel arbitration of the claims

between Diligent and York. The Court should stay all proceedings in the Trial

Court between Diligent, on one hand, and Elite and PDL, on the other hand. The

Court should grant Diligent all other whole, partial, general, specific or other relief

which is requested or to which it is justly entitled.

                                         Respectfully submitted,

                                         Zukowski, Bresenhan & Piazza, L.L.P.

                                              /s/Maurice Bresenhan, Jr.
                                         Maurice Bresenhan, Jr.
                                         State Bar No. 02959000
                                         mbresenhan@zbplaw.com
                                         Pascal Paul Piazza
                                         State Bar No. 15966850
                                         ppp@zbplaw.com
                                         Cynthia Keen Perlman
                                         State Bar No. 11161700
                                         CPerlman@zbplaw.com
                                         1177 West Loop South, Suite 1100
                                         Houston, Texas 77027
                                         (713) 965-9969/(713) 963-9169 (Fax)
                                         Attorneys for Appellants



                                                                                      53
                           CERTIFICATE OF SERVICE

      On December 21, 2017, I electronically filed this Brief of Appellant with the

Clerk of the Court using the ECF filing system which will send notification of such

filing to the following:

      Russell A. Devenport
      McDonald Sanders, P.C.
      777 Main Street, Suite 1300
      Fort Worth, Texas 76102
      ECF and Email: rdevenport@mcdonaldlaw.com

      S. Gary Werley
      Law Offices of S. Gary Werley
      1840 Acton Highway, Suite 102
      Granbury, TX 76049
      ECF and Email: sgwerley@werleylaw.com



                                              /s/ Maurice Bresenhan, Jr.




                                                                                54
                      CERTIFICATE OF COMPLIANCE

      Based upon the word count run in Microsoft Word 2013, this brief contains

11467 words inclusive of all sections.



                                              /s/ Maurice Bresenhan, Jr.




                                                                            55
                         No. 02-17-00416-CV


  In the Court of Appeals for the Second District in Fort Worth, Texas


   Diligent Texas Dedicated, LLC d/b/a Diligent Delivery Systems,

                                             Appellant,
                                   v.

     Richard York, Elite Parts Group, LLC d/b/a Elite Parts Group
                   and Principle Distribution, Inc.

                                             Appellees.


On Appeal from the 342nd Judicial District Court, Tarrant County, Texas


                             APPENDIX


                                Maurice Bresenhan, Jr.
                                State Bar No. 02959000
                                mbresenhan@zbplaw.com
                                Pascal Paul Piazza
                                State Bar No. 15966850
                                ppp@zbplaw.com
                                Cynthia Keen Perlman
                                State Bar No. 11161700
                                CPerlman@zbplaw.com
                                Zukowski, Bresenhan & Piazza, L.L.P.
                                1177 West Loop South, Suite 1100
                                Houston, Texas 77027
                                (713) 965-9969/(713) 963-9169 (Fax)
                                Attorneys for Appellants



                                                                          1
                                Commercial
                                 Arbitration Rules and Mediation Procedures

                                 Including Procedures for Large, Complex Commercial Disputes




                                 Available online at    adr.org/commercial
                                 Rules Amended and Effective October 1, 2013
                                 Fee Schedule Amended and Effective October 1, 2017
Rules Amended and Effective October 1, 2013. Fee Schedule Amended and Effective October 1, 2017.   COMMERCIAL RULES 1
(b)	 A respondent may file a counterclaim at any time after notice of the filing of the
     Demand is sent by the AAA, subject to the limitations set forth in Rule R-6. The
     respondent shall send a copy of the counterclaim to the claimant and all other
     parties to the arbitration. If a counterclaim is asserted, it shall include a statement
     setting forth the nature of the counterclaim including the relief sought and the
     amount involved. The filing fee as specified in the applicable AAA Fee Schedule
     must be paid at the time of the filing of any counterclaim.
(c)	 If the respondent alleges that a different arbitration provision is controlling, the
     matter will be administered in accordance with the arbitration provision submitted
     by the initiating party subject to a final determination by the arbitrator.
(d)	 If the counterclaim does not meet the requirements for filing a claim and the
     deficiency is not cured by the date specified by the AAA, it may be returned to the
     filing party.


R-6. Changes of Claim

(a)	 A party may at any time prior to the close of the hearing or by the date
     established by the arbitrator increase or decrease the amount of its claim or
     counterclaim. Written notice of the change of claim amount must be provided to
     the AAA and all parties. If the change of claim amount results in an increase in
     administrative fee, the balance of the fee is due before the change of claim
     amount may be accepted by the arbitrator.
(b)	 Any new or different claim or counterclaim, as opposed to an increase or decrease
     in the amount of a pending claim or counterclaim, shall be made in writing and
     filed with the AAA, and a copy shall be provided to the other party, who shall have
     a period of 14 calendar days from the date of such transmittal within which to file
     an answer to the proposed change of claim or counterclaim with the AAA. After
     the arbitrator is appointed, however, no new or different claim may be submitted
     except with the arbitrator’s consent.


R-7. Jurisdiction

(a)	 The arbitrator shall have the power to rule on his or her own jurisdiction, including
     any objections with respect to the existence, scope, or validity of the arbitration
     agreement or to the arbitrability of any claim or counterclaim.
(b)	 The arbitrator shall have the power to determine the existence or validity of a
     contract of which an arbitration clause forms a part. Such an arbitration clause
     shall be treated as an agreement independent of the other terms of the contract.
     A decision by the arbitrator that the contract is null and void shall not for that
     reason alone render invalid the arbitration clause.
(c)	 A party must object to the jurisdiction of the arbitrator or to the arbitrability of a
     claim or counterclaim no later than the filing of the answering statement to the
     claim or counterclaim that gives rise to the objection. The arbitrator may rule on
     such objections as a preliminary matter or as part of the final award.

Rules Amended and Effective October 1, 2013. Fee Schedule Amended and Effective October 1, 2017.   COMMERCIAL RULES 13
                              FILED
                 TARRANT COUNTY
342-289368-16   12/14/2017 3:13 PM
                THOMAS A. WILDER
                  DISTRICT CLERK
                               FILED
342-289368-16    TARRANT COUNTY
                 12/14/2017 3:13 PM
                THOMAS A. WILDER
                   DISTRICT CLERK
                              FILED
                 TARRANT COUNTY
342-289368-16   12/14/2017 3:13 PM
                THOMAS A. WILDER
                  DISTRICT CLERK
