in-re-autonation-usa-corporation-autonation-usa-autonation-inc ( 2004 )

In The

Court of Appeals

For The  

First District of Texas

____________

NO. 01-03-00488-CV

____________

IN RE AUTO NATION USA CORP.; AUTO NATION, USA; AUTO NATION, INC.; AUTO NATION, INC. F/K/A MERCEDES BENZ OF HOUSTON–GREENWAY; HOUSTON AUTO IMPORTS GREENWAY, LTD. D/B/A MERCEDES BENZ OF HOUSTON–GREENWAY, RELATORS

---

Original Proceeding on Petition for Writ of Mandamus

---

MEMORANDUM OPINION

          By petition for writ of mandamus, relators, AutoNation USA Corp., AutoNation, USA, AutoNation, Inc., AutoNation, Inc. f/k/a Mercedes Benz of Houston–Greenway, and Houston Auto Imports Greenway, Ltd. d/b/a Mercedes Benz of Houston–Greenway (the AutoNation parties), challenge the trial court’s order denying the AutoNation parties’ second motion to compel arbitration. We determine whether we have jurisdiction over the mandamus proceeding or the interlocutory appeal. We dismiss the petition for writ of mandamus for want of jurisdiction.

Background

          Kebret I. Mohamed, real party in interest, is a United States citizen who was born and raised in Ethiopia. In May 1999, the Mercedes Benz Greenway dealership hired Mohamed as a valet for its car-sales business. Mohamed alleges that, shortly after he was hired, his co-workers began severely harassing him because of his race and national origin. Mohamed alleges the harassment continued until he was constructively discharged.

          Mohamed signed an alternative dispute resolution agreement (“the arbitration agreement”) with his employer, Park Place, in June 1999. The arbitration agreement was between Mohamed and “Employer,” which was defined as (1) Park Place Motorcars, Park Place Lexus, Park Place Bodywerks, Park Place Porsche/Audi, or any Park Place Company and (2) any of those companies’ parent company, subsidiary company, affiliate company, directors, officers, employees, or agents. It is undisputed that Mohamed’s employer at the time of the arbitration agreement, Park Place, fell under the definition of “Employer.” Some time before Mohamed quit, but after he signed the arbitration agreement, the AutoNation parties purchased Park Place.

          In November 2001, Mohamed sued the AutoNation parties and two of his supervisors for race discrimination; intentional infliction of emotional distress; and negligent hiring, supervision, and retention. In January 2002, the AutoNation parties moved to compel arbitration. Mohamed contested the arbitration agreement’s validity and enforceability. Both parties submitted summary evidence along with their arbitration pleadings. After a non-evidentiary hearing, the trial court granted the AutoNation parties’ motion to compel arbitration and abated the cause.

          Mohamed filed a petition for writ of mandamus and an interlocutory appeal in this Court. On October 31, 2002, this Court dismissed the interlocutory appeal and conditionally granted the petition for writ of mandamus, instructing the trial court to vacate its order compelling arbitration. Mohamed v. AutoNation USA Corp., 89 S.W.3d 830, 832-33 (Tex. App.—Houston [1st Dist.] 2002, no pet.) (hereinafter referred to as “Mohamed-I”). On November 21, 2002, the trial court vacated its order compelling arbitration. A few months later, on February 3, 2003, the AutoNation parties filed a second motion to compel arbitration, which the trial court denied. The AutoNation parties now file this petition for writ of mandamus.

Interlocutory Appeal or Mandamus

          The trial court did not expressly determine whether the Texas General Arbitration Act (TAA) or the Federal Arbitration Act (FAA) applied. See Tex. Civ. Prac. & Rem. Code Ann. §§ 171.001-.098 (Vernon 2003); 9 U.S.C. §§ 1-16 (2001). The method of review depends on which act applies. Mandamus is appropriate to review an order denying arbitration when the FAA applies to the arbitration agreement. See In re Valero Energy Corp., 968 S.W.2d 916, 916-17 (Tex. 1998); Jack B. Anglin Co. v. Tipps, 842 S.W.2d 266, 272-73 (Tex. 1992). Interlocutory appeal is appropriate to review an order denying arbitration when the TAA applies. See Tex. Civ. Prac. & Rem. Code Ann. § 171.098(a)(1), (2) (Vernon Supp. 2004). The AutoNation parties stated that they filed both an interlocutory appeal and a mandamus proceeding “out of an abundance of caution.”

          The arbitration agreement in this case specifically refers to the TAA; it does not mention the FAA. Section 10.1 of the arbitration agreement states, “Any proceeding pursuant to the ADR Procedure shall be an arbitration proceeding subject to the Texas General Arbitration Act.” Additionally, section 12.3 of the arbitration agreement makes the following reference to the TAA:

Applicability of Arbitration Statute. The arbitration proceeding shall be deemed an arbitration proceeding subject to the Texas General Arbitration Act. If this ADR Procedure is in conflict with any mandatory requirements of the Texas General Arbitration Act, the statute shall govern. The Arbitrator shall have all powers granted to arbitrators under the Texas General Arbitration Act.

Given the arbitration agreement’s express adoption of the TAA, we hold that this agreement falls under the TAA. See In re Kellogg Brown & Root, 80 S.W.3d 611, 617 (Tex. App.—Houston [1st Dist.] 2002, orig. proceeding). Interlocutory appeal is, thus, the appropriate method to review the order denying arbitration. See Tex. Civ. Prac. & Rem. Code Ann. § 171.098(a)(1), (2). Accordingly, we dismiss the petition for writ of mandamus.   

                                                                                  George C. Hanks, Jr.

                                                                                  Justice

Panel consists of Justices Nuchia, Hanks, and Higley.