Justia.com Opinion Summary: This case arose when Norma Sandoval and her sister, Nora Martinez, jointly filed suit against SCI alleging fraud, deceptive trade practices, and other tort claims arising from their respective interment rights and services contracts for family burial plots at Mont Meta Memorial Park. Martinez's contract allowed the court to appoint an arbitrator, while Sandoval's contract required the American Arbitration Association (AAA) to appoint the arbitrator if the parties could not reach a mutual agreement. The trial judge severed the cases and then appointed an arbitrator for Martinez's case. Over the objection of SCI, the trial court also appointed the same arbitrator to arbitrate Sandoval's case. At issue on appeal was whether SCI allowed a lapse or mechanical breakdown in the contractual process for selection of an arbitrator, thereby validating the trial court's intervention to appoint the arbitrator. The court held that the trial court abused its discretion by appointing an arbitrator instead of following the agreed-upon method of selection outlined in the contract. As a matter of law, the two-month delay in the selection of an arbitrator in this case, by itself, did not establish a lapse or failure of the parties to avail themselves of the contractual selection method. Accordingly, without hearing oral argument, the court conditionally granted SCI's petition for writ of mandamus and directed the trial court to vacate its prior order appointing David Calvillo as arbitrator.
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IN THE SUPREME COURT OF TEXAS
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NO. 10-0158
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IN RE SERVICE CORPORATION INTERNATIONAL AND SCI
TEXAS FUNERAL SERVICES, INC., JOINTLY D/B/A MONT META
MEMORIAL GARDENS
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ON PETITION FOR WRIT OF MANDAMUS
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PER CURIAM
Norma Sandoval and her sister, Nora Martinez, jointly filed suit against Service Corporation
International (SCI) alleging fraud, deceptive trade practices, and other tort claims arising from their
respective interment rights and services contracts for family burial plots at Mont Meta Memorial
Park.1
The parties agree the dispute was required to be arbitrated pursuant to the Federal
Arbitration Act, 9 U.S.C. §§ 1-16. The contracts that Sandoval and Martinez signed both included
arbitration clauses, albeit with different contractual methods for appointing the arbitrators.
Martinez’s contract allowed the court to appoint an arbitrator, while Sandoval’s contract required
the American Arbitration Association (AAA) to appoint the arbitrator if the parties could not reach
1
SCI’s briefing before this Court alternately provides its d/b/a name as “Mont Meta Memorial Gardens” and
“Mont Meta Memorial Park.” The certified mandamus record consistently refers to SCI’s d/b/a name as “Mont Meta
Memorial Park.”
a mutual agreement.2 Due to the differing contract terms, the trial judge severed the cases and then
appointed arbitrator David Calvillo for Martinez’s case. Sandoval asked the court to appoint an
arbitrator in her case as well. Over the objection of SCI, the trial court also appointed David
Calvillo to arbitrate Sandoval’s case. SCI unsuccessfully sought a writ of mandamus from the court
of appeals. In this Court, SCI requests that we issue a writ of mandamus directing the trial court to
vacate its order naming David Calvillo as arbitrator.
The disputed issue is whether SCI allowed a lapse or mechanical breakdown in the
contractual process for selection of an arbitrator, thereby validating the trial court’s intervention to
appoint the arbitrator. After suit was filed, SCI moved to compel arbitration.
Sandoval
acknowledges that at the October 5, 2009 hearing on the motion, SCI insisted on its right to seek
AAA appointment of an arbitrator after the parties could not agree. Sandoval argues that SCI
refused to initiate AAA procedures for appointment of an arbitrator because it claimed that Sandoval
had the duty to do so. According to SCI, because the parties contracted to be governed by AAA
rules, the burden of approaching the AAA rests on Sandoval, as she is the party seeking relief. Over
SCI’s objections, the trial court appointed Calvillo as the arbitrator from the bench on December 3,
2009. The trial court signed an order to that effect on January 11, 2010.
2
As in In re Service Corp. International & SCI Tex. Funeral Services, Inc. d/b/a Magic Valley Memorial
Gardens, __ S.W.3d __ (Tex. 2011), the arbitration agreement in Sandoval’s contract is governed by the Federal
Arbitration Act. See 9 U.S.C. §§ 1–16. The relevant portion of the arbitration provision in Sandoval’s contract provides:
The arbitrator shall be selected by mutual agreement of the parties. If the parties fail to or are unable
to agree on the selection of an appropriate arbitrator, the AAA shall select the arbitrator pursuant to
its rules and procedures upon the application of one or both parties.
2
SCI asserts that the trial court’s appointment of an arbitrator interfered with the contractual
rights of the parties and was not authorized by the Federal Arbitration Act. Without reaching the
parties’ arguments as to which party or parties have the burden of approaching the AAA to appoint
an arbitrator, we agree with SCI that the trial court’s appointment was an abuse of discretion from
which there is no adequate remedy by appeal. In re Prudential Ins. Co. of Am., 148 S.W.3d 124,
135–36 (Tex. 2004). In a related case also decided today, In re Service Corp. International & SCI
Tex. Funeral Services, Inc. d/b/a Magic Valley Memorial Gardens, we analyzed an identical
arbitration provision. __ S.W.3d __ (Tex. 2011). Following the rationale in Magic Valley Memorial
Gardens, we conclude the trial court abused its discretion by appointing an arbitrator instead of
following the agreed-upon method of selection outlined in the contract. As a matter of law, the twomonth delay in the selection of an arbitrator in this case, by itself, does not establish a lapse or
failure of the parties to avail themselves of the contractual selection method. See 9 U.S.C. § 5;
Magic Valley Memorial Gardens, __ S.W.3d __ (Tex. 2011). Accordingly, without hearing oral
argument, we conditionally grant SCI’s petition for writ of mandamus and direct the trial court to
vacate its prior order appointing David Calvillo as arbitrator. TEX. R. APP. P. 59.1, 52.8(c). We are
confident the trial court will comply, and the writ will issue only if it fails to do so.
OPINION DELIVERED: December 16, 2011
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