in Re Multifuels, L.P. ( 2010 )

Opinion issued July 2, 2010

In The

Court of Appeals

For The

First District of Texas

NO. 01-09-00475-CV

IN RE MULTIFUELS, L.P., Relator

Original Proceeding on Petition for Writ of Mandamus

MEMORANDUM OPINION DISSENTING

FROM GRANT OF WRIT OF MANDAMUS

“Heads, I win.  Tails, you lose.”  Multifuels played this game to Arriaga’s detriment, and this Court should not countenance it. 

When Multifuels filed suit against Arriaga, it chose the courts of this state as the forum in which to resolve its disputes with him.  It then used the tools available to it through litigation—interrogatories, requests for admissions, requests for production and deposition—to extract information from Arriaga about his claims and defenses relative to those disputes.  But when it was Arriaga’s “turn” for discovery from Multifuels, and Multifuels’s “turn” to respond to Arriaga’s discovery requests, Multifuels unexpectedly and fortuitously discovered that the parties had an existing arbitration agreement, and it refused to provide any of its information to Arriaga.

The case is a textbook example of the “inherent unfairness caused by ‘a party’s attempt to have it both ways by switching between litigation and arbitration to its own advantage.’”  In re Fleetwood Homes, L.P., 257 S.W.3d 692, 694 (Tex. 2008) (defining “detriment”) (quoting Perry Homes v. Cull, 258 S.W.3d 580, 596 (Tex. 2008)). Forcing a party to litigate an issue and then requiring it to arbitrate that same issue causes an “inherent unfairness in terms of delay, expense, or damage to a party’s legal position.”  Perry Homes, 258 S.W.3d at 597 (citations omitted).  It is precisely this type of prejudicial gamesmanship—where the party moving for arbitration reaps the benefits of litigation and then denies them to the non-moving party—that the Texas Supreme Court decried as a “manipula[tion . . .] of arbitral rights . . . to gain an unfair tactical advantage” that should not be permitted.  Id. (citation omitted).  I believe that in such situations, the harm is intrinsic and fundamental.  Multifuels chose a judicial forum to settle its disputes with Arriaga, it benefitted from being in that forum, and it should now be required to resolve these disputes in that forum.  Likewise, Arriaga, who was brought into the judicial forum by Multifuels, should be able to reap the same benefits that Multifuels has received from that forum, and he should be permitted to resolve these disputes in the forum in which he has already invested time and money and compromised his legal position.  It is that kind of fundamental fairness that the Texas Supreme Court intended to ensure through the doctrine of waiver of arbitration rights.  Because the majority fails to ensure this fundamental fairness for Arriaga, I dissent.

                                                                    Jim Sharp

                                                                    Justice

 Panel consists of Justices Jennings, Higley, and Sharp.

Justice Sharp, dissenting.