Nathan Robinson and Misti Robinson, Individually and as Representatives of All Persons Similarly Situated v. Home Owners Management Enterprises, Inc. D/B/A Home of Texas and Warranty Underwriters Insurance Company ( 2021 )

In the
Court of Appeals
Second Appellate District of Texas
at Fort Worth
___________________________
No. 02-20-00215-CV
___________________________
NATHAN ROBINSON AND MISTI ROBINSON, INDIVIDUALLY AND AS
REPRESENTATIVES OF ALL PERSONS SIMILARLY SITUATED, Appellants
V.
HOME OWNERS MANAGEMENT ENTERPRISES, INC. D/B/A HOME OF
TEXAS AND WARRANTY UNDERWRITERS INSURANCE COMPANY,
Appellees
On Appeal from the 271st District Court
Jack County, Texas
Trial Court No. 15-02-019
Before Kerr, Bassel, and Wallach, JJ.
Memorandum Opinion by Justice Bassel
MEMORANDUM OPINION
I. Introduction
We address the current chapter of an ongoing saga between Appellants Nathan
and Misti Robinson and the companies that provided warranty protection for
construction defects in their home—Appellees Home Owners Management
Enterprises, Inc. and Warranty Underwriters Insurance Company.1 Years ago, the
trial court enforced an arbitration provision in the warranty document issued by
Home Owners and referred the Robinsons’ claims to arbitration. During the
arbitration, the Robinsons expanded their claims against Home Owners beyond a
monetary recovery for defects in their home’s construction to also include claims
relating to a form of release that Home Owners allegedly required them to sign before
it would pay their warranty claim.
This is the third appellate opinion generated from the release-related claims.
Our court and the Texas Supreme Court have previously held that the Robinsons
could not arbitrate the release-related claims as a class action because the arbitration
agreement did not encompass class claims.
The present chapter involves a summary judgment in favor of Home Owners
in which the trial court ordered that the Robinsons, individually and as class
representatives, take nothing on the release-related claims. One summary-judgment
Because their positions are aligned, we will refer to Appellees collectively as
1
Home Owners.
2
ground asserted by Home Owners was that res judicata barred the Robinsons’ further
attempts to assert the release-related claims because those claims were or could have
been previously asserted in the arbitration. The trial court decided the summary-
judgment motion, but the Robinsons argue under their first issue, which is dispositive
of this appeal, that the arbitrator should have initially decided whether res judicata
barred the claim. We agree and hold that the question of res judicata presented an
issue of procedural arbitrability that the arbitrator—not the trial court—should have
decided. Thus, we reverse the trial court’s grant of summary judgment, remand this
case to the trial court, and order that the question of res judicata be referred to the
arbitrator previously appointed to hear the Robinsons’ individual claims.
II. Background
The prior opinions of this court and the Texas Supreme Court thoroughly
outlined the underlying facts; we will give only a sparse summary of the facts that
preface the present controversy. Though other parties were involved in the
controversy, the focus of the controversy is Home Owners’ obligations and actions
under the warranty document that it issued. Litigation began when the Robinsons
sued Home Owners for negligence and breach of warranty.
The warranty contained a broadly worded arbitration provision. Shortly after
being sued, Home Owners moved to compel the Robinsons’ claims to arbitration.
The Robinsons resisted that effort. The trial court eventually abated the litigation and
appointed an arbitrator.
3
A lengthy arbitration hearing ensued, and the arbitrator issued an award that
gave the Robinsons a substantial monetary recovery. The Robinsons and other
parties filed motions to confirm the award. The trial court lifted the abatement that it
had imposed when it initially referred the claims to arbitration and confirmed the
arbitrator’s award by decreeing that it had granted “the Motion to Confirm the
Arbitration Award and [had] enter[ed] judgment in accordance with the Arbitration
Award, which [wa]s attached . . . as Exhibit ‘1’ and incorporated . . . by reference as if
fully set forth at length.”
The action by the Robinsons that generated both the prior appeals and the
present appeal was their attempt to add arbitration claims. Those claims allege
misdeeds by Home Owners related to the form of a release that Home Owners
purportedly sought to have the Robinsons sign before Home Owners would pay their
warranty claim. Shortly before the arbitration hearing commenced, the Robinsons
filed a statement of claims in which they asserted the release-related claims and stated
that those claims were brought as a class action.
Before the arbitration hearing commenced, Home Owners filed a motion with
the arbitrator to strike the statement containing the release-related claims. The
arbitrator denied that motion and entered an order that “bifurcated” the release-
related claims from those he was about to hear. The arbitrator also documented the
“bifurcation” in his final award.
4
After the entry of the arbitration award, the Robinsons filed additional
statements of claims that re-urged the release-based claims. Home Owners filed
motions contending that the class claims brought by the Robinsons were not
arbitrable and that it was within the trial court’s purview to decide whether they were
arbitrable. The trial court entered an order finding that the question of arbitrability of
class claims was one it decided, that the parties had not agreed that questions of
arbitrability would be decided by the arbitrator, and that the warranty did not provide
for class arbitration. We affirmed the trial court’s judgment, and in turn, the Texas
Supreme Court affirmed our judgment.
After the Texas Supreme Court issued its judgment, the focus in the trial court
shifted to the controversy that we now review. Home Owners filed a motion for
summary judgment that attacked the merits of the release-based claims. The
Robinsons filed a response to Home Owners’ motion that argued, among other
things, that the Robinsons’ individual claims had been compelled to arbitration. For
this reason, the Robinsons argued that the trial court was not the proper forum to
decide Home Owners’ motion and that the trial court lacked the jurisdiction to hear it.
The Robinsons also filed yet another statement of claims.
Home Owners countered with a second motion for summary judgment that
added res judicata as a summary-judgment ground. The Robinsons responded to the
second motion by asserting that the arbitrator should decide whether res judicata
5
barred their individual release-related claims and with arguments challenging Home
Owners’ merit-based attack on those claims.
The trial court granted Home Owners’ motion for summary judgment and
dismissed with prejudice all of the Robinsons’ claims, whether individually or as a
class representative.
III. Standard of Review
The Robinsons appeal from the grant of a summary judgment, and both sides
cite to the summary-judgment standards of review to guide us in our resolution of the
appeal. We will recite those standards but note below that the standards of review
that apply to the referral of claims to arbitration may be more applicable to our
review.
“A trial court’s decision to grant summary judgment is subject to de novo
review.” Schlumberger Tech. Corp. v. Pasko, 544 S.W.3d 830, 833 (Tex. 2018). “Courts
review the record in the light most favorable to the nonmovant, indulging every
reasonable inference and resolving any doubts against the motion.” Id. (internal
quotation marks omitted). To be entitled to the grant of a summary judgment, a party
must establish that “there is no genuine issue as to any material fact and [that] the
moving party is entitled to judgment as a matter of law.” Tex. R. Civ. P. 166a(c).
“A defendant who conclusively negates at least one of the essential elements of
a cause of action or conclusively establishes an affirmative defense is entitled to
summary judgment.” Frost Nat’l Bank v. Fernandez, 315 S.W.3d 494, 508 (Tex. 2010).
6
The burdens placed on a party relying on an affirmative defense to obtain a summary
judgment are
the same . . . as [those placed on] a plaintiff urging summary judgment
on a claim. This is because an affirmative defense is “an independent
reason why the plaintiff should not recover,” not an element of the
plaintiff’s cause of action. The party asserting an affirmative defense has
the burden of pleading and proving it. Only when a party conclusively
proves every element of its affirmative defense is it entitled to summary
judgment. Thus, a defendant urging summary judgment on an
affirmative defense must come forward with summary[-]judgment
evidence for each element of the defense.
Nowak v. DAS Inv. Corp., 110 S.W.3d 677, 680 (Tex. App.—Houston [14th Dist.]
2003, no pet.) (citations omitted).
Should a defendant establish its affirmative defense as a matter of law, “the
burden of production shifts to the non[]movant to defeat the defendant’s affirmative
defense.” Cohen v. Tour Partners, Ltd., No. 01-15-00705-CV, 2017 WL 1528776, at *4
(Tex. App.—Houston [1st Dist.] Apr. 27, 2017, no pet.) (mem. op.). A nonmovant
has three avenues available to defeat a summary-judgment motion when the
affirmative defense is established as a matter of law; the nonmovant may
“(1) demonstrate[] that the motion’s legal position regarding the affirmative defense is
unsound, (2) raise[] a fact issue on the elements of the affirmative defense, or (3) set[]
forth a counter-affirmative defense to the affirmative defense.” Id.But we question whether the summary-judgment standard is the most apt for
our review of this appeal. Though this appeal is not precisely the review of a motion
to compel arbitration, the issues are analogous in that the trial court refused to refer a
7
question to the arbitrator. When we review the refusal to refer a matter to arbitration,
we apply an abuse-of-discretion standard that has the following parameters:
We review a trial court’s denial of a motion to compel arbitration for an
abuse of discretion, but we review whether there is a valid and
enforceable arbitration agreement de novo. Brand FX, LLC v. Rhine, 458
S.W.3d 195, 203 (Tex. App.—Fort Worth 2015, no pet.). If the party
seeking to compel arbitration proves that a valid arbitration agreement
exists, “a strong presumption in favor of arbitration arises[,] and the
burden shifts to the party resisting arbitration to establish a defense to
enforcing arbitration.” Id. at 203–04.
We review the question of whether the party resisting arbitration
has established a defense to arbitration de novo. Id. at 204. However,
we give deference to the trial court’s determination of any facts relevant
to a defense, if those determinations are supported by the record. Id.
“If an arbitration agreement is present, the claims are encompassed by
the agreement, and the party opposing arbitration failed to prove any
defense to enforcement, the trial court has no discretion but to compel
arbitration,” and in that case, the trial court’s denial of a motion to
compel arbitration is an abuse of discretion. Id.
Dow Roofing Sys., LLC v. Great Comm’n Baptist Church, No. 02-16-00395-CV, 2017 WL
3298264, at *2 (Tex. App.—Fort Worth Aug. 3, 2017, pet. denied) (mem. op.).
IV. Analysis
A. It is generally the arbitrator’s, rather than the trial court’s, role to
decide whether res judicata bars subsequent claims in an
arbitration.
1. We set forth the elements of the affirmative defense of res
judicata and the principle that res judicata may bar claims
that were or could have been previously arbitrated.
Res judicata is an affirmative defense that prevents the relitigation of claims
that were finally adjudicated or that a diligent party should have litigated. Travelers Ins.
8
Co. v. Joachim, 315 S.W.3d 860, 862 (Tex. 2010); Barr v. Resolution Tr. Corp., 837 S.W.2d
627, 628 (Tex. 1992); see also Tex. R. Civ. P. 94. “The party relying on the affirmative
defense of res judicata must prove (1) a prior final determination on the merits by a
court of competent jurisdiction[,] (2) identity of parties or those in privity with them[,]
and (3) a second action based on the same claims as were or could have been raised in
the first action.” Joachim, 315 S.W.3d at 862. As a general principle, “[r]es judicata can
apply to bar re-arbitration of matters that have already been arbitrated.” W. Dow
Hamm III Corp. v. Millennium Income Fund, L.L.C., 237 S.W.3d 745, 754 (Tex. App.—
Houston [1st Dist.] 2007, no pet.). 2
2. We explain the substantive/procedural distinction that
guides whether the trial court or the arbitrator decides
arbitration-related questions.
The question that we confront is for a claim referred to arbitration, which of
the two decision makers—the trial court or the arbitrator—decides whether
res judicata bars a claim. As with any question of arbitration, the most basic answer
to this question turns on whether the parties agreed to arbitrate such a dispute. G.T.
Leach Builders, L.L.C. v. Sapphire V.P., LP, 458 S.W.3d 502, 519 (Tex. 2015) (stating
that a court’s role “is first to decide whether the parties made a valid and presently
enforceable agreement to arbitrate”).
2
For ease of reference, we refer to this case as Dow throughout the remainder
of the opinion.
9
But a host of questions arise both in the initial determination of whether a
claim is arbitrable and in the course of the arbitration proceeding and its aftermath.
Determining whether the trial court or the arbitrator decides the questions that arise
depends on whether the question is one of substantive arbitrability or procedural
arbitrability. Questions of substantive arbitrability are for the court and questions of
procedural arbitrability are for the arbitrator. Id. at 520–21.
In adopting the guidance of the United States Supreme Court in Howsam v.
Dean Witter Reynolds, Inc., the Texas Supreme Court explained that procedural
questions “grow out of the dispute and bear on its final disposition.” Id. at 520 (citing
Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 84, 123 S. Ct. 588, 592 (2002)). To
further explain the distinction between questions of substantive versus procedural
arbitrability, our supreme court noted that the United States Supreme Court has
[q]out[ed] the Revised Uniform Arbitration Act of 2000[] [and has]
explained that, “in the absence of an agreement to the contrary, issues of
substantive arbitrability . . . are for a court to decide[,] and issues of
procedural arbitrability, i.e., whether prerequisites such as time limits,
notice, laches, estoppel, and other conditions precedent to an obligation
to arbitrate have been met, are for the arbitrators to decide.”
Id. (quoting Howsam, 537 U.S. at 85, 123 S. Ct. at 592).
Our supreme court also quoted from another United States Supreme Court
opinion to explain the distinction between substantive and procedural questions:
On the one hand, courts presume that the parties intend courts, not
arbitrators, to decide what we have called disputes about “arbitrability.”
These include questions such as “whether the parties are bound by a
10
given arbitration clause[]” or “whether an arbitration clause in a
concededly binding contract applies to a particular type of controversy.”
On the other hand, courts presume that the parties intend
arbitrators, not courts, to decide disputes about the meaning and
application of particular procedural preconditions for the use of
arbitration. These procedural matters include claims of “waiver, delay,
or a like defense to arbitrability.” And they include the satisfaction of
“prerequisites such as time limits, notice, laches, estoppel, and other
conditions precedent to an obligation to arbitrate.”
Id. at 521 (quoting BG Grp., PLC v. Republic of Argentina, 572 U.S. 25, 34–35, 134 S. Ct.
1198, 1206–07 (2014)).
Our supreme court has continued to apply the substantive/procedural
arbitrability distinction when determining whether the trial court or the arbitrator
makes a decision. See Bonsmara Nat. Beef Co. v. Hart of Tex. Cattle Feeders, LLC, 603
S.W.3d 385, 398 (Tex. 2020) (“The availability of an arbitral forum is a matter of
procedural arbitrability, which courts must allow arbitrators to decide.” (citing Leach,
458 S.W.3d at 520)); Robinson v. Home Owners Mgmt. Enters., Inc., 590 S.W.3d 518, 525
(Tex. 2019) (“Gateway arbitrability issues are distinct from procedural or subsidiary
questions that grow out of an arbitrable dispute and are presumptively for an
arbitrator to decide.” (citing Howsam, 537 U.S. at 84, 123 S. Ct. at 592)). 3
3
We see no distinction on the substantive/procedural question issue whether a
case is controlled by the Texas Arbitration Act (TAA) or the Federal Arbitration Act
(FAA). Leach dealt with the TAA but applied cases dealing with the FAA. 458
S.W.3d at 519 n.14. Both Bonsmara and Robinson dealt with the FAA but did not
highlight any distinction between the FAA and the TAA that impacted the
substantive/procedural question. See Bonsmara, 603 S.W.3d at 398; Robinson, 590
S.W.3d at 522.
11
3. The vast majority of federal court opinions dealing with the
issue hold that the arbitrator decides whether a subsequent
claim in an arbitration is barred by res judicata.
The Texas Supreme Court has not decided which decision maker in an
arbitration determines the res judicata effect of an arbitration award. Dow, 237 S.W.3d
at 754. The question, however, has been repeatedly addressed by the federal courts.
The following catalogs a selection of federal circuit court cases holding that the
preclusive effect of an arbitration award is a matter for the arbitrator to decide:
Citigroup, Inc. v. Abu Dhabi Inv. Auth., 776 F.3d 126, 131 (2d Cir. 2015) (“We reason
from our prior decisions interpreting the FAA that the determination of the claim-
preclusive effect of a prior federal judgment confirming an arbitration award is to be
left to the arbitrators.”); Emp’rs Ins. Co. of Wausau v. OneBeacon Am. Ins. Co., 744 F.3d
25, 28 (1st Cir. 2014) (holding that the preclusive effect of a prior arbitration award on
an arbitration pending between an insurance company and reinsurers was a matter for
the arbitrator, rather than the federal district court, to decide); Grigsby & Assocs., Inc. v.
M Secs. Inv., 664 F.3d 1350, 1353 (11th Cir. 2011) (stating that “res judicata is a
question for the arbitrator, in the absence of an agreement to the contrary between
the contracting parties”); Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1132
(9th Cir. 2000) (stating that “a res judicata objection based on a prior arbitration
proceeding is a legal defense that, in turn, is a component of the dispute on the merits
and must be considered by the arbitrator, not the court”); Indep. Lift Truck Builders
Union v. NACCO Materials Handling Grp., Inc., 202 F.3d 965, 968 (7th Cir. 2000)
12
(“[T]he preclusive effect of the first arbitrator’s decision is an issue for a later
arbitrator to consider.”).
Admittedly, the circuit courts are not uniform in their view. The Third Circuit
felt constrained by its prior precedent to hold that the trial court rather than the
arbitrator should decide the application of res judicata. See John Hancock Mut. Life Ins.
Co. v. Olick, 151 F.3d 132, 139 (3d Cir. 1998). Olick gave a somewhat lukewarm
justification for its holding:
These competing considerations [of whether the trial court or the
arbitrator decides the issue] present the court with a high order
challenge. On the one hand, a realistic concern for the finality and
integrity of judgments would arise if parties were free to ignore federal
court decisions that have conclusively settled claims or issues now
sought to be arbitrated. Yet[] arbitration is a matter of contract[,] and
the FAA only authorizes a “limited review” of the parties’ intent before
compelling or enjoining arbitration. See PaineWebber[ v. Hartmann], 921
F.2d [507,] 511 [(3d Cir. 1990), overruled on other grounds by Howsam, 537
U.S. at 85, 123 S. Ct. at 592]. The issue is thoughtfully discussed in Miller
v. Runyon, 77 F.3d 189, 193–94 (7th Cir. 1996), but that court fell short of
providing a comprehensive answer. In the final analysis, we conclude
that a decent respect for a precedent of this court dictates that we
resolve the issue in favor of district court jurisdiction to decide the res
judicata defense as it relates to a prior judgment.
Id. at 138.
And the Fifth Circuit appears not to have decided the issue; its most recent
reference to the issue states that it will decide the question on a later day. See Cooper v.
WestEnd Capital Mgmt., L.L.C., 832 F.3d 534, 542 n.1 (5th Cir. 2016).4 But a federal
Cooper noted that “[s]ome courts have concluded that res judicata is generally
4
an issue for the arbitrator rather than the court and is thus not a basis to enjoin
13
district court in the Fifth Circuit conducted an in-depth analysis of the issue and held
that res judicata was a procedural question for the arbitrator. See Hancock Fabrics, Inc.
v. Rowdec, LLC, 126 F. Supp. 3d 784, 792 (N.D. Miss. 2015).
Hancock initially noted the Fifth Circuit’s failure to deal with the issue, except
for a decades-old case that contained language suggesting that res judicata was an
issue for the arbitrator to decide. Id. at 789–90 (citing and quoting Oil, Chem. &
Atomic Workers Int’l Union v. Rohm & Haas, Tex. Inc., 677 F.2d 492, 494 (5th Cir. 1982),
for proposition that “[w]hether the [arbitral] award can be given an effect akin to res
judicata or stare decisis with regard to future disputes that may arise between the
parties, neither the district court nor this court should decide. If the parties do not
agree, that issue itself is a proper subject for arbitration.”).
Hancock also noted that the Fifth Circuit opinion that it cited predated the
United States Supreme Court’s discussion in Howsam that “expounded on procedural
and substantive arbitrability, as well as the decision-making obligations of both the
court and arbitrators as to those issues.” Id. at 790. Hancock highlighted Howsam’s
distinction in substantive/procedural questions that the Texas Supreme Court has
highlighted by noting that Howsam “explained that matters implicating the procedural
questions which grow out of a dispute and ‘bear out its final disposition’ are
presumptively not for the judge, but for an arbitrator, to decide.” Id. (citing Howsam,
arbitration. Because res judicata does not apply to bar arbitration here, we need not
decide that issue today.” 832 F.3d at 542 n.1 (citations omitted).
14
537 U.S. at 84, 123 S. Ct. at 592). Hancock then cataloged many of the circuit court
opinions that we have set forth above that rely on Howsam to hold “that res judicata
is . . . a procedural matter that is a question for the arbitrator, in the absence of an
agreement to the contrary between the contracting parties.” Id.Because of the breadth of the arbitration clause involved in the parties’ dispute,
Hancock did not tarry when deciding that the clause was broad enough to place the
procedural questions in the hands of the arbitrator. Id. at 792. The clause was broad
ranging, covering “[a]ny dispute, claim[,] or controversy between the parties arising
under or related to this Agreement or the parties’ performance there-under.” Id. at
790, 792.
Hancock also offered its own rationale regarding why questions of res judicata
should be decided by an arbitrator; that rationale turned on the limited involvement
that a court confirming a confirmation award has with the merits of the case. Id. at
790. The opinion noted the obvious fact that in an arbitration, the arbitrator hears
and resolves the substantive claim. Id. at 790–91. The trial court had only “limited
exposure to the facts and analysis underlying the arbitration decision” when it
performed its limited role in the arbitration process of confirming the award. Id. at
791. This lack of involvement impaired the trial court’s ability to apply the factors to
be considered in deciding the question of res judicata. Id. It was the arbitrator who
had charted the path to resolving the claims. Id. Because the merits were outside the
purview of the trial court in confirming an arbitration award, Hancock agreed with one
15
of the circuit court opinions that the trial court had no special prerogative to decide
the scope of its judgment confirming the award because of the limited scope of that
judgment. Id. (citing Emp’rs Ins. Co. of Wausau, 744 F.3d at 29).
Hancock finally cited other federal district court opinions that reached the same
conclusion that it had to assign the question of res judicata to the arbitrator. Id. at
791–92. Hancock cited Broadscape.com, Inc. v. KDS USA, Inc., to support its holding that
because “the court’s scope of inquiry at the confirmation stage is so narrow and the
arbitration clause was broad, the arbitrator was in a better position to determine the
preclusive effect of the first arbitration.” Id. at 792 (citing No. CIV. A. 01-CV-0607,
2001 WL 1063895, at *5–7 (E.D. La. Sept. 12, 2001) (order & reasons)). Hancock then
cited Biobased Systems, LLC v. Biobased of South Texas, LLC, for its holding that “where
the arbitration agreement required arbitration of all disputes[] and did not contain
language that would require the res judicata defense to be treated differently than
other disputes, the preclusive effect of the prior arbitration decision itself was a
component of the dispute on the merits.” Id. (citing No. H-06-2149, 2007 WL
1080114, at *1 (S.D. Tex. Apr. 9, 2007) (mem. op. & order)).
The federal opinions that we have discussed persuade us that generally the
question of the res judicata effect of an arbitration award should be decided by the
arbitrator. The federal holdings turn on the substantive/procedural question
distinction explained in Howsam that our supreme court has adopted. And the
practical rationale of Hancock is also persuasive: the arbitrator, rather than the court
16
confirming the arbitration award, is much better versed with what claims were actually
at issue and were decided in the arbitration. Thus, we hold that the res judicata effect
of an arbitration award is generally a question for the arbitrator.
4. Several Texas cases also hold that the arbitrator decides whether
a subsequent claim in an arbitration is barred by res judicata.
The few Texas cases dealing with the question of who decides the res judicata
question reflect Hancock’s rationale that the arbitrator’s broad-ranging role in resolving
the merits of a case make the arbitrator the best candidate to decide a merits-intensive
issue such as res judicata. As the First Court of Appeals has explained,
Res judicata is an affirmative defense on the merits. See Williams v.
Hous[.] Firemen’s Relief & Ret. Fund, 121 S.W.3d 415, 437 n.21 (Tex.
App.—Houston [1st Dist.] 2003, no pet.). Accordingly, it is a matter
that “grow[s] out of the dispute and bear[s] on its final disposition,”
which under the Howsam Court’s paradigm is one of procedural
arbitrability. . . . 537 U.S. at 84, 123 S. Ct. at 592. That is, res judicata is
a “component of the dispute on the merits and must be considered by
the arbitrator, not the courts.” Chiron Corp. . . . , 207 F.3d [at] 1132 . . . ;
accord Nat’l Union Fire Ins. Co. v. Belco Petroleum Corp., 88 F.3d 129, 135–36
([2d] Cir. 1996). Some of these courts have expressly rejected the
argument that requiring an arbitrator to determine the res judicata effect
of a prior arbitral award will allow prior arbitral decisions to be
relitigated ad infinitum: they reason that the parties have the same ability
to pursue a res judicata defense before the second arbitrator as they
would have before a court. See Local 103 of Int’l Union of Elec[.], Radio &
Mach[.] Workers . . . v. RCA Corp., 516 F.2d 1336, 1341 ([3d] Cir. 1975);
accord Little Six Corp. v. United Mine Workers . . . Local Union No. 8332, 701
F.2d 26, 29 (4th Cir. 1983); Teamsters Local 623 v. United Parcel Serv., Inc.,
786 F. Supp. 509, 513 (E.D. Pa. 1992); Auto., Petroleum & Allied Indus.
Emp[s.] Union, Local 618 v. Gelco Corp., 581 F. Supp. 1155, 1158 (E.D.
Mo. 1984) (“If an arbitrator accepts Gelco’s preclusion argument and the
union continues to . . . arbitrate the same grievance involving the same
parties, then Gelco may sue in this [c]ourt to compel the union to abide by
the arbitrator’s decision that the prior award precludes further arbitration.”).
17
Dow, 237 S.W.3d at 755; see also Aspri Invs., LLC v. Afeef, No. 04-10-00573-CV, 2011
WL 3849487, at *5 (Tex. App.—San Antonio Aug. 31, 2011, pet. dism’d) (mem. op.)
(citing Dow to support the proposition that “[a]s a general rule, res judicata is an
affirmative defense for the arbitrator to decide”), abrogated on other grounds by Hoskins v.
Hoskins, 497 S.W.3d 490, 493 n.4 (Tex. 2016). 5
5
Dow provided its own catalog of the federal precedents that assign the question
of res judicata to the arbitrator:
See Klay v. United Healthgroup, Inc., 376 F.3d 1092, 1109–10 (11th Cir.
2004) (dictum); Chiron Corp. . . . , 207 F.3d [at] 1132–33 . . . ; Indep. Lift
Truck Builders Union . . . , 202 F.3d [at] 968 . . . ; . . . Olick, 151 F.3d [at]
139–40 . . . ; . . . Belco Petroleum Corp., 88 F.3d [at] 135–36 . . . ;
Chi[.]Typographical Union No. 16 v. Chi[.] Sun–Times, Inc., 860 F.2d 1420,
1424 (7th Cir. 1988) (dictum); Transit Mix Concrete Corp. v. Local Union No.
282, Int’l Brotherhood of Teamsters . . . , 809 F.2d 963, 969–70 ([2d] Cir.
1987); Butler Armco Indep. Union v. Armco, Inc., 701 F.2d 253, 255–56 ([3d]
Cir. 1983); Little Six Corp. . . . , 701 F.2d [at] 29 . . . ; Bos[.] Shipping Ass’n,
Inc. v. Int’l Longshoremen’s Ass’n, 659 F.2d 1, 3 (1st Cir. 1981); Local 103 of
Int’l Union of Elec[.], Radio & Mach[.] Workers . . . , 516 F.2d [at] 1340 . . . ;
New Orleans Steamship Ass’n v. Gen. Longshore Workers, 626 F.2d 455, 468
(5th Cir. 1980), aff’d on other grounds, 457 U.S. 702, 102 S. Ct. 2672, 73
L.Ed.2d 327 (1982); Steris Corp. v. Int’l Union, Auto., Aerospace, Agric.
Implement Workers . . . Local No. 832, 489 F. Supp. 2d 501, 511–12 (W.D.
Pa. 2007); Basin Elec. Pow[er] Coop. v. PPL Energy Plus, L.L.C., 313 F.
Supp. 2d 1039, 1042 (D. N.D. 2004); N. River Ins. Co. v. Allstate Ins. Co.,
866 F. Supp. 123, 129 (S.D. N.Y. 1994); Teamsters Local 623 . . . , 786 F.
Supp. [at] 512–13 . . . ; Auto., Petroleum & Allied Indus. Emp[s.] Union,
Local 618 . . . , 581 F. Supp. [at] 1158 . . . ; see also Local 616, Int’l Union of
Elec., Radio & Mach[.] Workers . . . v. Byrd Plastics, Inc., 428 F.2d 23, 26
([3d] Cir. 1970). But see S.F. Elec. Contractors Ass’n v. Int’l Brotherhood of
Elec. Workers, Local No. 6, 577 F.2d 529, 533–34 (9th Cir. 1978).
237 S.W.3d at 754 n.10.
18
Dow also rejected the reasoning of the Third Circuit’s opinion in Olick to the
extent that it refused to consign the issue of res judicata to the arbitrator. Dow
rejected Olick’s rationale that “a court is inherently empowered to protect the integrity
and finality of its own prior judgment, and this policy outweighs even the strong
policy in favor of arbitration.” 237 S.W.3d at 755. Dow noted that the Second Circuit
specifically rejected this rationale because it ignored that judgments confirming
arbitration awards are “qualitatively different” than traditional judgments and were
entered “without reviewing either the merits of the award or the legal basis upon
which it was reached.” Id. at 756 (citing and quoting Chiron Corp., 207 F.3d at 1133–
34). Further, Dow concluded that the exception articulated in Olick would swallow the
rule “if the judicial confirmation of an arbitration award were all that it took to
bootstrap a prior arbitration award into the prior-court-judgment exception.” Id.; see
also Citigroup, 776 F.3d at 132 (distinguishing Olick because the judgment in Olick
addressed the merits of the underlying claim).
5. A party that presents its case to the trial court for resolution
cannot argue that the arbitrator should decide whether a
claim is barred by res judicata.
No matter the general rule that assigns the arbitrator the duty to decide a
procedural question, such as res judicata, there is also authority for the proposition
that a party may forfeit the argument that an arbitrator should decide whether the
res judicata effect of an arbitration award bars the prosecution of additional claims. If
a party prosecutes additional claims in the trial court that were arguably arbitrable as
19
part of the same transaction as prior claims that were arbitrated, the party’s selection
of that forum also means that it has, in essence, selected the trial court as the decision
maker on the res judicata issue.
The First Court of Appeals explained this principle in Premium Plastics Supply,
Inc. v. Howell, 537 S.W.3d 201, 206–07 (Tex. App.—Houston [1st Dist.] 2017, no pet.).
In Premium Plastics, a party had dismissed a counterclaim that it had filed in the
arbitration proceeding. Id. at 205. It then refiled that claim in the trial court. Id. The
counterclaim was within the scope of the claims covered by the parties’ arbitration
agreement and thus was properly raised in that proceeding. Id. at 205–06. When the
party dismissing the counterclaim in arbitration refiled the same claim in the trial
court, its opponent filed a motion for summary judgment asserting that res judicata
barred prosecution of the claim. Id. at 203. After the trial court granted the motion
for summary judgment, the losing party asserted on appeal that the res judicata
question should have been decided by the arbitrator and relied on the First Court’s
prior opinion in Dow and its holding that the question of res judicata was for the
arbitrator. Id. at 206–07 (citing Dow, 237 S.W.3d at 754–55).
The First Court disagreed that Dow’s general rule referring res judicata
questions to the arbitrator created a fact question that prevented the entry of a
summary judgment. Id. As the following quote shows, Premium Plastics did not
question Dow’s general principle but concluded that the principle did not apply to its
facts:
20
Appellants argue that the res judicata issue in this case is likewise one of
procedural arbitrability and therefore could only be decided by the
arbitrator. But this is not a matter of arbitrability of additional claims in
arbitration after a first arbitration. To the contrary, appellants
voluntarily dismissed their counterclaims during the arbitration
proceeding. They then continued arbitration on the other claims to a
final award[] and now seek to try the claims they dismissed. Therefore,
the question to be decided here is not whether the counterclaims cannot
be arbitrated[] but rather[] whether they can be relitigated and were not
compulsory counterclaims. Tanox[, Inc. v. Akin, Gump, Strauss, Hauer &
Feld, L.L.P.] demonstrates that, in these circumstances, the trial court has
jurisdiction to determine the issue of res judicata. See . . . 105 S.W.3d
[244,] 250, 270 [(Tex. App.—Houston [14th Dist.] 2003, pet. denied)
(op. on reh’g)] (affirming trial court’s determination that res judicata
based on prior arbitration proceeding barred litigation of defendant’s
counterclaims). Dow is inapposite. We therefore conclude that
appellants failed to raise a fact issue regarding whether the trial court
could determine that their claims were barred by res judicata.
Id. at 207. As we read Premium Plastics, the court held that it would not allow a party to
be two-faced in its selection of a forum and further held the appellants to their
decision on which forum they had chosen when they filed their counterclaim in the
trial court.
B. We detail the winding path of the Robinsons’ individual release-
related claims in this proceeding and the Robinsons’ persistent
objections to allowing the trial court to make the determination of
whether res judicata barred those claims.
Here, the parties try to shoehorn themselves into the rule that each finds more
beneficial. The Robinsons argue that their release-related claims had been referred to
arbitration, and thus, the arbitrator should have decided how res judicata impacted the
release-related claims. Home Owners argues that the Robinsons opted to pursue
21
those claims in the trial court and are now bound by that choice, just as the appellants
in Premium Plastics were.
Each parties’ briefing makes categorical statements of what the record shows
about how the release-related claims were presented and to whom they were
presented. We find the record more of a muddle than either of the parties
acknowledges. With that state of affairs, the decision maker with the most
information to resolve the question of whether the Robinsons could have or did
litigate the release-related claims in the arbitration is the arbitrator. We conclude that
the trial court should not have decided the issue of whether the Robinsons’ individual
release-related claims were barred by res judicata and that the determination whether
res judicata barred the claims should have preceded a determination of whether the
claims had merit.
As a starting point, Home Owners does not argue that the arbitration
agreement between the parties lacks the breadth to cover the Robinsons’ individual
release-related claims or for the arbitrator to generally decide questions of procedural
arbitrability. The arbitration provision is broad enough to vest the arbitrator with the
power to decide procedural questions. 6 Instead, Home Owners argues that the
The Texas Supreme Court’s prior opinion in this case described the arbitration
6
provisions in the limited warranty as follows:
The limited warranty requires “mandatory binding arbitration of
Unresolved Warranty Issues” and provides that “[t]his binding
arbitration is governed by the procedures of the Federal Arbitration Act
22
Robinsons, like the appellants in Premium Plastics, eventually placed the res judicata
determination in the hands of the trial court.
To understand how the release-related claims wound their way through the
litigation process requires an admittedly tedious mapping of the path of those claims.
It appears that the Robinsons’ live statement at the time of the arbitration was their
first amended statement of claims. The first amended statement does not allege the
release-related claims. The first specific mention of the release-related claims comes
in the Robinsons’ first supplement to the previously filed amended statement of
[FAA].” The addendum requires the same: “All Unresolved Warranty
Issues will be submitted to binding arbitration . . . [and] [t]his binding
arbitration is governed by the procedures of the Federal Arbitration
Act.” Both contracts broadly define “Unresolved Warranty Issue” using
identical language:
All requests for warranty performance, demands, disputes,
controversies[,] and differences that may arise between the parties
to this [Limited Warranty or Addendum] that cannot be resolved
among the parties. An Unresolved Warranty Issue may be a
disagreement regarding:
a. the coverages in this [Limited Warranty or Addendum];
b. an action performed or to be performed by any party
pursuant to this [Limited Warranty or Addendum]; [or]
c. the cost to repair or replace any item covered by this
Limited Warranty [or Addendum].
The addendum further defines “Unresolved Warranty Issue” as
including “any other complaint or controversy regarding this . . .
Addendum between the parties to the Addendum.”
Robinson, 590 S.W.3d at 522–23 (footnote omitted).
23
claims. 7 Home Owners contends that the first supplement “asserted exclusively
class[-]action claims.” However, the first supplement is not so categorical and
includes the statement in its opening paragraphs that “[t]his class action is authorized
by Texas Insurance Code Section 541.251 and brought individually and by class
representatives NATHAN ROBINSON and MISTI ROBINSON.” [Emphasis
added.]
As discussed above, Home Owners moved to strike the first supplement. The
parties’ next disagreement is how the arbitrator resolved the motion and what claims
he bifurcated.
Without question, the arbitrator denied the motion to strike. He also ordered
that the first supplement was “bifurcated from the pending hearing scheduled” to
occur shortly after the order was entered. The order, however, does not state whether
the bifurcation included the release-related claims arguably asserted by the Robinsons
individually in the first supplement.
The parties then highlight the portion of the arbitrator’s award that they would
have us read as an indication that the arbitrator did or did not resolve the release-
related claims. The Robinsons quote and highlight the portion of the award carrying
7
The full title of the document is “Plaintiffs’ First Supplement To Plaintiffs’
First Amended Statement Of Claims As Representatives Of All Persons Similarly
Situated As To Home Owner’s Management Enterprises, Inc[.], d/b/a[]Home Of
Texas And Warranty Underwriters Insurance Company.”
24
forward the bifurcation that the arbitrator implemented in his order denying Home
Owners’ motion to strike the first supplement as follows:
All pleadings, claims[,] and issues by and between the Robinsons as
suggested Class Representatives and Home Owners Management
Enterprises, Inc. d/b/a Home of Texas and Warranty Underwriters
Insurance Company sounding in or dealing with signed or unsigned [r]eleases,
class action[,] and/or class certification were bifurcated and severed from the
Robinson[s’] “damage” issues in this Arbitration by previous order, and
are not addressed in this Award.
Home Owners emphasizes the Mother Hubbard clause in the award that provides
that “[t]his Award of Arbitrator is a Full and Final Adjudication of all claims,
counterclaims, cross-claims[,] and the like submitted to the Arbitrator. Any and all
claims for relief not expressly granted in this Award are hereby DENIED.” Once
again, these provisions are vague guidance on the impact of the bifurcation of the
Robinsons’ individual release-related claims.
Home Owners’ brief describes the Robinsons’ next action after the arbitrator
issued his award as the filing of another statement of claims that “asserted an individual
claim for breach of contract, as well as class claims, related to the alleged overbroad [r]elease that
had been proposed by [Home Owners] to the Robinsons during settlement discussions concerning the
Robinsons’ individual construction-defect claims.” [Emphasis added.] Home Owners’ brief
then states that the Robinsons “demanded their class claims be compelled to
25
arbitration[,] and [Home Owners] objected.”8 The statement of claims that Home
Owners described set in motion the trial court’s ruling and the subsequent appeals to
this court and the Texas Supreme Court that determined the Robinsons’ class claims
were not arbitrable.
After the Texas Supreme Court’s opinion signaled the final loss in the
Robinsons’ efforts to arbitrate the class claims, Home Owners turned its attack to the
merits of the release-related claims and filed its initial motion for summary judgment
that challenged the released-related claims. The initial motion did not raise res
judicata as a ground to bar those claims.
The Robinsons responded to this motion, and their first argument to parry its
thrust was that the trial court was the wrong forum to decide the merits of the
Robinsons’ individual release-related claims. Specifically, the Robinsons’ response
summarized their position as
object[ing] to the trial court[’s] deciding the Robinsons’ individual claims
and this Motion[] and [as] request[ing] the [c]ourt [to] compel arbitration
of such claims to the extent the [c]ourt has not already done so. The
Robinsons[], alternatively, request this [c]ourt abstain from ruling on the
[Home Owners’] Motion and refer this Motion to the Arbitrator to decide.
On the same day that the Robinsons filed their response, they also filed their
fourth amended statement of claims that elaborated on the release-related claims.
8
After the arbitration, the Robinsons, individually and as a class representative,
filed a statement of claims that was based on the release-related claims. That
statement alleged that the claims were within the jurisdiction of the arbitrator.
26
This statement of claims divided the jurisdiction over who should hear the individual
and class claims as follows:
The Arbitrator has jurisdiction [over] the individual claims
pursuant to the [Home Owners’] demands for arbitration and the
previous court order of July 1, 2015[,] compelling the individual
claims to arbitration. The trial court has jurisdiction over the class
claims pursuant to the Texas Supreme Court’s decision in Robinson v.
Home Owners Management Enterprises, Inc., No. 18-0504, issued on
November 22, 2019. [Emphasis added in bold.]
Home Owners responded to the Robinsons’ flurry of activity by filing a second
motion for summary judgment. This motion elaborated on the evolution of the
Robinsons’ claims and added the defense of res judicata as a summary-judgment
ground to bar the Robinsons’ ability to prosecute the release-related claims. In
essence, Home Owners asserted that the Robinsons’ individual release-related claims
were a part of the same transaction and occurrence that was the subject of the
arbitration and that if the Robinsons’ individual claims were barred, they could not act
as class representatives.
Home Owners’ motion emphasized the portion of the arbitration award that
we have already highlighted, which states that all of the claims brought by the
Robinsons had been adjudicated. The motion argued that the only claims bifurcated
from the arbitration were class claims and not any individual claims brought by the
Robinsons because “[t]he only claims that remained following the arbitration hearing
were the class[-]action claims asserted in [the statement filed before the arbitration
hearing raising the release-related claims] that the Arbitrator bifurcated from the
27
hearing on the Robinsons’ individual claims.” Home Owners set forth its position
regarding how the release-related claims had progressed through the litigation and
why the Robinsons had already litigated those claims in an argument that is revealing
in how much it relies on the actions occurring during the arbitration and which turn
on an interpretation of the arbitrator’s award:
The claims set forth by the Robinsons in the Fourth Amended
Statement of Claims are clearly barred by res judicata. The Robinsons
asserted a litany of claims against [Home Owners] in the arbitration
proceeding through their First Amended Statement of Claims. Those
claims arose out of the same construction-defect related allegations for
which [Home Owners] presented the Robinsons with the [r]elease that is
now at issue in the Fourth Amended Statement of Claims. Indeed, the
First Amended Statement of Claims alleged that [Home Owners]
violated the D[TP]A and Texas Insurance Code by, among other things,
engaging in unfair settlement practices, and the Robinsons presented
evidence on that issue during the arbitration hearing.
All of the Robinsons’ individual claims arising out of [the]
transaction or occurrence for which the [r]elease was provided were
litigated and finally adjudicated in the arbitration. The Arbitrator could
not have been more clear on this issue. The Award specifically states
that it “is a Full and Final Adjudication of all claims, counterclaims,
cross-claims[,] and the like submitted to the Arbitrator. Any and all
claims for relief not expressly granted in the Award are hereby
DENIED.” The Robinsons subsequently confirmed the Award in this
[c]ourt. The only claims that remained following the arbitration hearing
were the class[-]action claims asserted in the First Supplement (i.e., the
only claims asserted in the First Supplement) that the Arbitrator
bifurcated from the hearing on the Robinsons’ individual claims.
[Record references omitted.]
The argument concluded with Home Owners summarizing why it had established the
elements of the defense of res judicata.
28
The Robinsons responded to Home Owners’ res judicata argument by again
arguing that the trial court lacked the jurisdiction to decide the summary-judgment
motion because their individual claims were ordered to arbitration. The Robinsons
augmented this argument by asserting that the issue of res judicata raised a question of
procedural arbitrability and that such a question was within the purview of the
arbitrator to decide.
Home Owners filed a reply, arguing that the authorities that the Robinsons had
relied on to support their argument were inapposite. Home Owners also argued that
the Robinsons had previously admitted that the release-related issues had been
litigated in the arbitration and that the only claims bifurcated from the arbitration
were class claims. Home Owners attached portions of the record from the arbitration
hearing to support its view that the Robinsons had discussed the release-related claims
and had introduced evidence that pertained to them. Home Owners also included a
footnote in their reply stating that the arbitrator had responded to a recent inquiry
about the arbitration by noting that the award says what it says and that he believed
that he no longer had jurisdiction “and [was] done.”
The Robinsons then made various objections to Home Owners’ summary-
judgment motion, including two objections stating that they
object to the trial court[’s] hearing [Home Owners’] Motion because the
individual claims [that were the] subject of the Motion ha[d] been
compelled to arbitration pursuant to this [c]ourt’s order of July 10, 2015.
Moreover, [Home Owners is] estopped to contest that all individual
29
claims be compelled to arbitration[] because it was [Home Owners] who
compelled such claims to arbitration.
....
[The Robinsons] lastly object to hav[ing] [Home Owners’] Motion
heard by submission particularly where the [c]ourt has not resolved the
issue of who decides the individual claims—arbitration versus litigation.
Until that issue is decided subject to a full hearing, this [c]ourt should
not decide a summary[-]judgment motion on which it has been divested
of jurisdiction because of arbitration.
The trial court denied these objections by written order.
The trial court also signed an order granting Home Owners’ motion for
summary judgment and decreeing that the motion was granted and that “all of [the
Robinsons’] causes of action and pleadings, whether individually or as purported class
representatives, against [Home Owners] are hereby DISMISSED with prejudice to the
re-filing of same.”
C. We reject Home Owners’ effort to apply the rule of Premium
Plastics and to deviate from the general rule that the arbitrator
should decide the res judicata issue. The Robinsons’ actions did
not put the res judicata decision in the hands of the trial court.
Our purpose in charting the path of the Robinsons’ individual release-related
claims and the Robinsons’ consistent objections to the trial court’s deciding whether
res judicata bars those claims is that it rebuts Home Owners’ primary argument
regarding why the trial court should have decided the res judicata issue. Home
Owners does not challenge the principle that generally assigns the question of the
res judicata effect of an arbitration award to the arbitrator.
30
Instead, Home Owners posits that a distinction is to be found in the First
Court’s opinions in Dow and Premium Plastics that should guide us. In Home Owners’
words, the distinction is that Dow held “that res judicata is an affirmative defense
reserved for the arbitrator when a party is seeking to initiate another arbitration,”
while Premium Plastics held that “Dow does not apply where a party is seeking to
proceed in court on claims that another party argues are barred by res judicata due to
a prior arbitration.” From this premise, Home Owners argues that
the Robinsons filed both individual and class[-]action claims in court and
neither the Statement of Claims nor the Fourth Amended Statement of
Claims sought to compel any claims to arbitration. It was not until after
[Home Owners] filed for summary judgment that the Robinsons first
suggested [that] they wanted to return to the arbitrator to prosecute their
“unresolved” individual [r]elease-related claims. Again, however, that is
not what is prayed for in their pleadings. Moreover, the Robinsons
cannot, as a matter of law, serve as class representatives unless they are
legally capable of maintaining a claim against [Home Owners] for the
same conduct they seek to redress on behalf of the proposed class. See
Grizzle[ v. Tex. Commerce Bank, N.A.], 38 S.W.3d [265,] 274 [(Tex. App.—
Dallas 2001), rev’d on other grounds, 96 S.W.3d 240 (Tex. 2002)].
Therefore, the [c]ourt had no choice but to address the res judicata issue
to determine whether the Robinsons could proceed in court on their
class[-]action claims regarding the alleged overbroad [r]elease. [Record
references omitted.]
We disagree with Home Owners and conclude that this matter is a prime
candidate to apply the rule that the arbitrator should determine the res judicata effect
of his award on the Robinsons’ release-related claims. Beginning with the broad
question of which decision maker is usually assigned the task of deciding the
res judicata question, the authority we have detailed establishes that procedural
31
questions fall to the arbitrator, and whether a subsequent claim is barred by the res
judicata effect of a prior arbitration award is a procedural question. The practical
rationale of Hancock regarding why the arbitrator should decide the res judicata
question—because the arbitrator is the person most knowledgeable of what was
actually litigated—is especially persuasive in this case. The trial court’s role in this
case was merely to confirm the arbitration award. The knotty questions—what claims
were being arbitrated, the effect of the arbitrator’s order denying the motion to strike
the first supplemental statement raising the release-related claims and the bifurcation
provision of the arbitration award, and what evidence exists to support the release-
related claims—were all matters much more within the particular knowledge of the
arbitrator than the trial court.
Nor do we see the narrow application of the rule in Dow that Home Owners
advocates. The contention that the arbitrator may decide the procedural question of
res judicata only if a party initiates a new arbitration attempts to superimpose a
limitation not found in the case discussion of the principle. We do not understand
why there has to be a new arbitration initiated before the decision maker with intimate
knowledge of what occurred during the arbitration determines what claims were or
were not litigated in the arbitration.
And to unpack Home Owners’ argument that the rule of Premium Plastics should
apply, the question of whether there is a demarcation between who would decide the
individual versus class release-related claims was not finally resolved until the Texas
32
Supreme Court ruled that the class claims were not arbitrable. Home Owners’ instant
reaction was to file its first motion for summary judgment in an attempt to place the
resolution of the merits of those claims in the hands of the trial court.
The Robinsons hardly acquiesced in that effort. In every filing after Home
Owners filed their first summary-judgment motion, the Robinsons contended that the
arbitrator should decide their individual release-related claims. When Home Owners
raised the defense of res judicata, the Robinsons consistently argued that the arbitrator
should be the one to decide that issue. These consistent actions are contrary to the
intent shown by the appellants in Premium Plastics to have the trial court resolve their
claim when they dismissed their counterclaim from the arbitration and refiled it with
the trial court.
Home Owners cites several facts in an effort to argue that the Robinsons
exhibited an intent to have the trial court decide the claims, but the facts cited do not
show such an intent. Home Owners references two pages in the Fourth Statement
and assert that the Robinsons did not pray for the arbitrator to decide those claims.
But that argument ignores the allegation of jurisdiction in the claims that states that
“[t]he Arbitrator has jurisdiction [over] the individual claims pursuant to [Home
Owners’] demands for arbitration and the previous court order of July 1, 2015[,]
compelling the individual claims to arbitration.” That statement is hardly consistent
with the premise that the Robinsons wanted the trial court to decide their individual
claims. The other page referenced in the argument is from the statement of claims
33
that the Robinsons filed after the arbitration but before the trial court ruled that the
class claims were not arbitrable. This statement notes that the arbitrator has
jurisdiction over the claims. That allegation is again contrary to the inference that the
Robinsons were submitting the release-related claims to the trial court.
Finally, we disagree with Home Owners that the trial court had to resolve the
res judicata question because that question impacted whether the Robinsons could be
class representatives. We agree that someone had to decide the question, but Home
Owners’ argument begs the question of why the trial court had to be the one to do so.
If the arbitrator was the decision maker best equipped to make the res judicata
decision, Home Owners’ argument fails to explain why he should not do so nor why
the trial court should not defer to his determination. Also, to adopt Home Owners’
argument would introduce narrow and confusing exceptions to the issue of who
decides questions of procedural arbitrability. Those exceptions would impair the
rule’s efficiency by creating subclasses of procedural questions and spawn even more
litigation as parties argue how broad-ranging the effect of the question would be.
Every time the issue arose, a trial court would have to make a vague prejudgment
regarding whether it should resolve the question because that might impact a party’s
right to relief down the line.
V. Conclusion
The arbitrator rather than the trial court should have decided whether the
Robinsons’ individual release-related claims were barred by res judicata based on the
34
assertion that those claims were or could have been resolved in the previous
arbitration. Logically, the question was a preface to the determination of whether the
release-related claims had merit. If we examine this case through the summary-
judgment standard of review, we conclude that the Robinsons have raised a fact issue
regarding whether the arbitrator should decide if their individual release-related claims
are barred by res judicata. See Premium Plastics, 537 S.W.3d at 206–07 (analyzing
whether nonmovant “raised a fact issue regarding the applicability of res judicata
because the issue of res judicata could only be decided by the arbitrator, and not the
trial court” and deciding that it had “raised a fact issue about the applicability of
res judicata”).
And though this is an appeal from a summary judgment, the standard of review
applicable to determinations of whether claims are arbitrable seems more attuned to
the issues before the trial court and is the more appropriate standard for us to apply.
Our de novo review establishes that the res judicata issue is a procedural question
within the purview of the arbitrator. To the extent that there is a factual question that
arises from whether the Robinsons fell within the rule of Premium Plastics by filing
those claims in the trial court, the Robinsons’ statements of claims and their
consistent objection to the trial court’s resolution of the claims and the res judicata
question show that the record does not support a finding that they opted to have the
trial court decide the claims. Thus, the trial court abused its discretion when it
35
granted Home Owners’ summary-judgment motion that raised res judicata. We
sustain the Robinsons’ first issue. 9
We reverse the trial court’s grant of summary judgment, remand this case to the
trial court, and order that the question of whether the Robinsons’ individual release-
related claims are barred by res judicata be referred to the arbitrator previously
appointed to hear the Robinsons’ individual claims.
/s/ Dabney Bassel
Dabney Bassel
Justice
Delivered: March 11, 2021
Because the Robinsons’ first issue is dispositive of this appeal, we need not
9
address the Robinsons’ remaining three issues challenging rulings on their objections
to Home Owners’ summary-judgment motion, arguing that the trial court erred by
granting summary judgment, and raising a cumulative-errors argument. See Tex. R.
App. P. 47.1.
36