Iguana Joe's Crosby, Inc. v. Micaela Martinez

Reversed and Remanded and Memorandum Opinion filed November 26,
2024.

In The

Fourteenth Court of Appeals

NO. 14-23-00636-CV

IGUANA JOE’S CROSBY, INC., Appellant
V.
MICAELA MARTINEZ, Appellee

On Appeal from the 80th District Court
Harris County, Texas
Trial Court Cause No. 2023-00067

MEMORANDUM OPINION

Appellant Iguana Joe’s Crosby, Inc. (“Iguana Joe’s”) appeals the trial court’s
order denying its motion to compel arbitration in the lawsuit filed by appellee
Micaela Martinez (“Martinez”). In what we construe as one issue, Iguana Joe
argues the trial court erred in denying its motion to arbitrate. We reverse the trial
court’s order and remand for further proceedings.
I. BACKGROUND
On January 3, 2023, Martinez filed suit against Iguana Joe’s, her employer,
for an injury she suffered when she slipped and fell at work. Iguana Joe’s then filed
a motion to compel arbitration pursuant to the Federal Arbitration Act (“FAA”),
alleging Martinez signed an agreement to arbitrate with Iguana Joe’s on August 10,
2022.

Martinez filed a combined motion for a continuance and a response to
Iguana Joe’s motion to compel arbitration. Martinez argued there was no
arbitration agreement between the parties because the agreement put forth by
Iguana Joe’s did not identify Iguana Joe’s as part of the agreement and is unsigned
by any representative of Iguana Joe’s. Martinez further argued that the FAA was
inapplicable because Iguana Joe’s is not regularly engaged in interstate commerce
and the arbitration agreement was unenforceable under the Texas Arbitration Act
(“TAA”) because the TAA requires that an agreement to arbitrate personal-injury
claims be signed by both parties and their attorneys. Martinez field her response on
August 10, 2023, one day after it was due.

On August 16, 2023, the trial court denied Iguana Joe’s motion to compel
arbitration. This interlocutory appeal followed. See Tex. Civ. Prac. & Rem. Code
Ann. § 51.016.

II. DISCUSSION
Iguana Joe’s advances several arguments in support of its position that the
trial court erred in denying its motion to compel arbitration.

A. STANDARD OF REVIEW
We review the denial of a motion to compel arbitration for an abuse of
discretion and review questions of law de novo. See Henry v. Cash Biz, LP, 551
S.W.3d 111, 115 (Tex. 2018). A trial court abuses its discretion if it acts in an
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arbitrary or unreasonable manner or acts without reference to any guiding rules or
principles. Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241–42 (Tex.
1985). We review de novo the trial court’s determinations as to whether a valid
arbitration agreement exists and whether an arbitration agreement is binding on a
nonparty. See Lennar Homes of Tex. Land & Constr., Ltd. v. Whiteley, 672 S.W.3d
367, 376 (Tex. 2023); In re Labatt Food Serv., L.P., 279 S.W.3d 640, 643 (Tex.
2009) (orig. proceeding).

The trial court erred in denying the motion to compel if the evidence before
the trial court proved as a matter of law that (1) the Arbitration Agreement is a
valid arbitration agreement, and (2) Martinez’s claims against Iguana Joe’s fall
within the scope of the arbitration agreement. See In re Poly-Am., L.P., 262 S.W.3d
337, 354 (Tex. 2008) (orig. proceeding).

B. APPLICABLE LAW
“Contracts require mutual assent to be enforceable.” Baylor Univ. v.
Sonnichsen, 221 S.W.3d 632, 635 (Tex. 2007) (per curiam). “Evidence of mutual
assent in written contracts generally consists of signatures of the parties and
delivery with the intent to bind.” Id.

Neither the FAA nor Texas law requires that arbitration agreements or
clauses be signed, so long as they are written and agreed to by the parties. In re
Polymerica, LLC, 296 S.W.3d 74, 76 (Tex. 2009) (orig. proceeding) (per curiam).
Unless the parties explicitly require that a party to an arbitration agreement sign the
agreement to manifest the party’s assent thereto, a party may manifest its assent to
the arbitration agreement by its acts, conduct, or acquiescence in the terms of the
agreement. See Mid-Continent Cas. Co. v. Glob. Enercom Mgmt., Inc., 323 S.W.3d
151, 157 (Tex. 2010); Hearthshire Braeswood Plaza L.P. v. Bill Kelly Co., 849
S.W.2d 380, 392 (Tex. App.—Houston [14th Dist.] 1993, writ denied). Signing the

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agreement is not a condition precedent to its enforceability. See Mid-Continent
Cas. Co., 323 S.W.3d at 157; Hearthshire Braeswood Plaza Ltd. P’ship, 849
S.W.2d at 392.

In construing an arbitration agreement, our primary concern is to ascertain
and give effect to the intentions of the parties as expressed in the contract. Kelley-
Coppedge, Inc. v. Highlands Ins., 980 S.W.2d 462, 464 (Tex. 1998); Carter v. ZB,
N.A., 578 S.W.3d 613, 618–19 (Tex. App.—Houston [14th Dist.] 2019, no pet.).
When a written agreement is worded so that it can be given a certain or definite
legal meaning or interpretation, it is unambiguous, and courts construe it as a
matter of law. Am. Mfrs. Mut. Ins. v. Schaefer, 124 S.W.3d 154, 157 (Tex. 2003).
We cannot rewrite an arbitration agreement or add to its language under the guise
of interpretation. See id. at 162.

Absent an enforceable agreement to delegate disputes regarding one or more
arbitrability issues to the arbitrator, a party seeking to compel arbitration under the
FAA must establish that (1) a valid arbitration agreement exists and (2) the claims
at issue are within the scope of the agreement. Amazon.com Servs., LLC v. De La
Victoria, No. 14-23-00493-CV, __ S.W.3d __, __, 2024 WL 3941376, at *6 (Tex.
App.—Houston [14th Dist.] Aug. 27, 2024, no pet. h.); see In re Rubiola, 334
S.W.3d 220, 223 (Tex. 2011) (orig. proceeding); J.M. Davidson v. Webster, 128
S.W.3d 223, 227 (Tex. 2003). If these two showings are made, then the burden
shifts to the party opposing arbitration to present a valid defense to the agreement,
and absent evidence supporting such a defense, the trial court must compel
arbitration. J.M. Davidson, Inc., 128 S.W.3d at 227–28; In re J.D. Edwards World
Sols. Co., 87 S.W.3d 546, 549 (Tex. 2002) (orig. proceeding) (per curiam). Though
there is a strong presumption under the FAA favoring arbitration, that presumption
arises only after the party seeking to compel arbitration proves that a valid

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arbitration agreement exists. See J.M. Davidson, Inc., 128 S.W.3d at 227.

The TAA does not apply to a claim for personal injury unless “each party to
the claim, on the advice of counsel, agrees to arbitrate” and both parties and their
attorneys sign the agreement. Tex. Civ. Prac. Rem. Code Ann. § 171.002(a)(3), (c).

C. ANALYSIS
Martinez argued that there was no agreement to arbitrate because (1) Iguana
Joe’s was not identified in the agreement and did not sign the arbitration agreement
at issue and (2) because the TAA requires that both parties and their attorneys sign
the arbitration agreement for it to be valid as to personal-injury claims. See id. The
arbitration agreement here is not signed by Iguana Joe’s or any attorney.

Absence of Iguana Joe’s Signature

Martinez argued that there was no arbitration agreement between the parties
because the agreement did not identify Iguana Joe’s; however, the agreement did
identify Iguana Joe’s as Martinez’s employer. The agreement stated “I agree to
arbitrate and resolve any and all employment-related disputes between the
company and myself. . . . I UNDERSTAND THAT THIS IS A CONTRACT
FOR EMPLOYMENT. YOUR EMPLOYMENT WITH IGUANA JOE’S
MEXICAN RESTAURANT IS BASED UPON THE EMPLOYMENT AT
WILL LAWS OF THE STATE OF TEXAS.” Thus, we reject this argument.

Martinez also argued that there was no arbitration agreement because it was
unsigned by Iguana Joe’s representative. “Contracts require mutual assent to be
enforceable.” Baylor Univ. v. Sonnichsen, 221 S.W.3d 632, 635 (Tex. 2007) (per
curiam). “Evidence of mutual assent in written contracts generally consists of
signatures of the parties and delivery with the intent to bind.” Id. Neither the FAA
nor Texas law requires that arbitration agreements or clauses be signed, so long as

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they are written and agreed to by the parties. In re Polymerica, LLC, 296 S.W.3d at
76. Unless the parties explicitly require that a party to an arbitration agreement
sign the agreement to manifest the party’s assent thereto, a party may manifest its
assent to the arbitration agreement by its acts, conduct, or acquiescence in the
terms of the agreement, and signing the agreement is not a condition precedent to
its enforceability. See Mid-Continent Cas. Co. v. Glob. Enercom Mgmt., Inc., 323
S.W.3d 151, 157 (Tex. 2010) (per curiam).

The arbitration agreement advanced by Iguana Joe’s states:

I agree to arbitrate and resolve any and all employment-related
disputes between the company and myself. I understand that the
consideration for this and myself a forum in which claims or disputes
may be resolved by arbitration than litigation.
Any matter covered tinder this agreement shall be heard and decided
under the provisions and authority of the Federal Arbitration Act, 9
U.S.C. & I applicable. For purposes of the Agreement, an
employment related disputed includes, but is not limited
to, . . . personal injury . . . .
YOUR EMPLOYMENT WITH IGUANA JOE’S MEXICAN
RESTAURANT IS BASED UPON THE EMPLOYMENT AT
WILL LAWS OF THE STATE OF TEXAS. THIS IS ONLY
INTENDED TO LIST TERMS OF EMPLOYMENT WITH OUT
[sic] COMPANY.
The agreement is signed by Martinez and has no signature block for Iguana Joe’s.
Contrary to Martinez’s argument, the arbitration agreement did not require Iguana
Joe’s signature as a condition precedent to enforceability, and it does identify
Iguana Joe’s.

Furthermore, the agreement expressly states that “I UNDERSTAND THAT
THIS AGREEMENT IS EFFECTIVE IMMEDIATELY . . . .” Iguana Joe’s
could have assented to the agreement by employing Martinez, which it
undisputedly did. See id. (“An unsigned agreement all the terms of which are

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embodied in a writing, unconditionally assented to by both parties, is a written
contract.” (quoting Simmons & Simmons Constr. Co. v. Rea, 286 S.W.2d 415, 418
(Tex. 1956) (emphasis in original)); Mann Frankfort Stein & Lipp Advisors, Inc. v.
Fielding, 289 S.W.3d 844, 850 (Tex. 2009) (noting that mutual assent can be
inferred from the circumstances); In re Halliburton Co., 80 S.W.3d 566, 569 (Tex.
2002) (orig. proceeding) (holding arbitration clause was accepted by employee’s
continued employment); United Concrete Pipe Corp. v. Spin-Line Co., 430 S.W.2d
360, 364 (Tex. 1968) (“[P]erformance of that act which the offeree was requested
to promise to perform may constitute a valid acceptance.”). Thus, we also reject
this argument.

TAA’s Signature Requirement for Personal Injury Claims

Martinez also argued there was no agreement to arbitrate because the TAA
requires that both parties and their attorneys sign an arbitration agreement as to
personal-injury claims in order for the agreement to be valid.

However, the FAA preempts the TAA provision requiring both parties to
sign an agreement to arbitrate a personal injury claim because such a provision is
inconsistent with the FAA. See In re Olshan Foundation Repair Co., 328 S.W.3d
883, 890 (Tex. 2010) (stating that the FAA preempts the provisions of § 171.002
that would otherwise render an arbitration agreement unenforceable); Forged
Components, Inc. v. Guzman, 409 S.W.3d 91, 98 (Tex. App.—Houston [1st Dist.]
2013, no pet.) (“[T]he FAA preempts inconsistent state law—including the TAA
provision that requires parties to sign an arbitration agreement . . . .”); see, e.g.,
APC Home Health Servs., Inc. v. Martinez, 600 S.W.3d 381, 391 (Tex. App.—El
Paso 2019, no pet.) (concluding that the TAA’s signature requirement for personal
injury claims was inapplicable because the FAA preempted the TAA when they
are in conflict); ReadyOne Indus., Inc. v. Lopez, 551 S.W.3d 305, 316 (Tex.

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App.—El Paso 2018, pet. denied) (same); see also In re Advance PCS Health,
L.P., 172 S.W.3d 603, 606 n.5 (Tex. 2005) (orig. proceeding) (per curiam) (“[T]he
FAA preempts state contractual requirements that apply only to arbitration
clauses.”). Here, the arbitration agreement expressly provides that it shall be
governed by the FAA, and thus it is enforceable as to Martinez’s personal injury
claim despite the absence of the signatures of Iguana Joe’s and the parties’
attorneys.

Martinez also argued at the trial court that the FAA does not apply because
the agreement does not involve or affect interstate commerce. The FAA applies to
all suits in state or federal court when the dispute concerns “a contract evidencing a
transaction involving commerce.” Jack B. Anglin Co. v. Tipps, 842 S.W.2d 266,
269–70 (Tex. 1992) (orig. proceeding); see 9 U.S.C. § 2. “Commerce” has been
broadly defined and encompasses contracts relating to interstate commerce. See
Royce Homes, L.P. v. Bates, 315 S.W.3d 77, 85 (Tex. App.—Houston [1st Dist.]
2010, no pet.) (“It requires only that interstate commerce be involved or
affected.”). Contrary to Martinez’s argument, when, as in this case, the arbitration
agreement expressly provides that it shall be governed by the FAA, a party
seeking to compel arbitration under the arbitration agreement is not required to
establish that the agreement or transaction at issue involves or affects interstate
commerce. See Amazon.com Servs., LLC, 2024 WL 3941376, at *6, __ S.W.3d at
__; In re ReadyOne Indus., Inc., 294 S.W.3d 764, 769 (Tex. App.—El Paso 2009,
orig. proceeding) (“[I]f the parties expressly choose for their arbitration agreement
to be governed by the FAA, the agreement should be enforced regardless of the
parties’ nexus to interstate commerce.”); In re Kellogg Brown & Root, 80 S.W.3d
611, 617 (Tex. App.—Houston [1st Dist.] 2002, orig. proceeding) (“We hold that
when, as here, the parties agree to arbitrate under the FAA, they are not required to

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establish that the transaction at issue involves or affects interstate commerce.”).
Thus, we reject this argument.

We conclude that Iguana Joe’s has established that a valid arbitration
agreement exists and that Martinez’s claims fall within the arbitration agreement.
We further conclude that Martinez failed to carry her burden to present a valid
defense to the agreement. See J.M. Davidson, Inc., 128 S.W.3d at 227–28.
Therefore, we conclude that the trial court erred when it denied Iguana Joe’s
motion to compel arbitration and sustain Iguana Joe’s issue on appeal. See id.

III. CONCLUSION
We reverse the trial court’s order and remand for further proceedings
consistent with this opinion.

/s/ Margaret “Meg” Poissant
Justice

Panel consists of Justices Jewell, Bourliot, and Poissant.

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