CTI III, LLC v. Peters et al

CTI III, LLC,
Plaintiff,
v.
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
§
§
§
§
§ 	Civil Action No. H-26-1465
§
BLAKE PETERS, et. al., 	§
§
Defendants. 	§
ORDER
Pending 	before 	the 	Court is 	Plaintiffs 	Motion to 	Compel 	Arbitration
(Document No. 34). Having considered the motion, submissions, and applicable law,
the Court determines that the pending motion should be granted, and this matter
should be stayed pending the outcome of the forthcoming arbitration proceedings
between the parties. 1
I. BACKGROUND
This is an employment related contractual dispute. On February 23, 2026,
Plaintiff CTI III, LLC ("CTI") brought suit against its former employee Defendant
Blake Peters ("Peters") and the new company he started; Defendant Peters Specialty
1 Considering 	the 	Court's 	determination 	that 	this 	matter 	should 	proceed to
arbitration, the Court declines to consider Plaintiffs Motion for Preliminary Injunction
(Document No. 	5); Plaintiffs Motion for 	Judicial Notice (Document No. 	38);. and
Plaintiffs Motion to Dismiss Defendants' Counterclaims (Document No. 39). The Court
notes that CTI will have an opportunity to refile these motions should they be necessary
after the completion of arbitration in this matter.
United States District Court
Southern District of Texas
ENTERED
April 24, 2026
Nathan Ochsner, Clerk
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Tax Services, LLC ("Peters Specialty Tax"). CTI contends that Defendant Peters
"secretly formed a competing tax consulting firm" and "set to work soliciting CTI' s
clients and misusing CTI' s confidential information that Peters had gained through
his employment at CTI-all in violation of Peters' agreements with CTl." 2 In
response, Defendants deny the allegations made by CTI and any wrongdoing related
to those claims.
Based on the foregoing, CTI brings claims against Defendants for: (I) breach
of contract; (2) tortious interference with contract; (3) tortious interference with a
third-party agreement; (4) violations of the Defend Trade Secrets Act; and ( 5)
violations of the Texas Uniform Trade Secrets Act. On April 6, 2026. CTI filed the
pending motion to compel arbitration.
II. LAW & ANALYSIS
CTI 	moves 	to 	compel 	arbitration 	and 	stay 	the 	pending 	proceedings,
contending that Peters is bound by a binding arbitration agreement signed by both
parties. 3 In response, Peters argues that there is no· valid agreement to arbitrate the
claims at issue.
2 Plaintiff's Complaint, Document No. 1 at 1.
3 The Court notes CTI's request to dismiss its claims against Peters Specialty Tax
without prejudice, or, in the alternative, to stay the claims associated with Peters Specialty
Tax pending the forthcoming arbitration proceeding. Considering the parties' agreement
that Peters Specialty Tax is not a party to any arbitration agreement, and CTI asserts claims
against Peters Specialty Tax that are distinct from its claims subject to arbitration, the Court
2
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Under the Federal Arbitration Act, Congress established that an arbitration
agreement "shall be valid, irrevocable, and enforceable[.]" 4 The Supreme Court of
the United States has made clear that "as a matter of federal law, any doubts
concerning the scope of arbitrable issues should be resolved in favor of arbitration,
whether the problem at hand is the construction of the contract language itself or an
allegation of waiver, delay, or a like defense to arbitrability." Moses H 	Cone Mem 'l
Hosp. v. Mercury Constr: Corp., 460 U.S. 1, 24-25 (1983).
Here, the parties agree that on July 11, 2024, Peters signed two agreements
with CTI on the same day: 	a Voluntary Arbitration Agreement ("Arbitration
Agreement") and a Confidentiality and Intellectual Property Assignment Agreement
("CIPAA"). Peters relies upon language contained within Section 9 .10 Iof the
CIPAA, which states, in relevant part, that the CIPAA "constitutes the entire
agreement of the Parties, and supersedes any and all prior and contemporaneous
negotiations 	and 	agreements, 	oral 	or 	written." 5 	Peters 	contends 	that 	the
finds that CTI's claims against Peters Specialty Tax should be stayed, not dismissed,
pending resolution of the forthcoming arbitration.
4 9 u.s.c. § 2.
5 Plaintiff's Motion to Compel Arbitration, Document No. 344, Exhibit Bat§ 9.10.
3
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aforementioned language contained within the CIPAA supersedes the Arbitration
Agreement, leaving no valid agreement to arbitrate. 6
In response, CTI argues that the CIPAA cannot be construed to supersede the
Arbitration Agreement signed by both parties. CTI first contends that the Arbitration
Agreement contains express terms stating, in relevant part, that the Arbitration
Agreement "can only be modified or revoked by a writing signed by the parties that
specifically states an intent to revoke or modify this Agreement." 7 CTI further
contends that the CIPAA contains no such specific statement of the parties' intent,
thus failing to invalidate the Arbitration Agreement. 8 CTI notes for the Court the
Fifth Circuit's clear guidance that once the existence of an Arbitration Agreement is
shown, "the burden shifts to the party opposing arbitration to demonstrate either that
the agreement is invalid or, at a minimum, to allege the dispute is outside of the
agreement's scope." Grantv. Houser, 469 F. App'x 310,315 (5th Cir. 2012).
Having considered the parties' substantial briefing on this matter, and the
Fifth Circuit's clear guidance that the burden is on Peters in this matter to show that
6 The Court notes that Peters does not contest that he signed the Arbitration
Agreement on July 	11, 2024. Rather, Pe_ters elects to solely contest the Arbitration
Agreement based on the language within CIPPA signed contemporaneously on the same
day.
7 Plaintiff's Motion to Compel Arbitration, Document No. 34, Exhibit A at X.B.
8 Plaintiffs Motion to Compel Arbitration, Document No. 34, Exhibit A at X.B.
4
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the Arbitration Agreement is invalid, the Court finds that Peters has failed to meet
his burden to show the Court why the Arbitration Agreement should be declared .
invalid. The Court has also independently reviewed the language 	of both the
Arbitration Agreement and the CIPAA, both of which were signed by Peters·
contemporaneously, 	and 	can 	find 	no 	such 	language 	within 	the 	CIPAA 	that
specifically states the parties' intent to revoke or modify the Arbitration Agreement.
Accordingly, based on the foregoing, and having considered the pending motion,
submissions, and applicable law, the Court finds that the underlying Arbitration
Agreement is valid, Plaintiffs motion to compel arbitration should be granted, and
this matter should be stayed pending the outcome of arbitration.
III. CONCLUSION
Based on the foregoing, the Court hereby
ORDERS that Plaintiffs Motion to Compel Arbitration (Document No. 34)
is GRANTED. The Court further
ORDERS that Plaintiff CTI, LLC and Defendant Blake Peters are hereby
COMPELLED 	to 	proceed to 	arbitration •pursuant to the 	parties' 	Arbitration
Agreement. The Court further
ORDERS 	that ALL 	CLAIMS 	against Defendant Peters Specialty Tax
Services, LLC in this matter are STA YED pending resolution of the claims to be
arbitrated. The Court further
5
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ORDERS 	that 	this 	matter 	is 	STAYED 	and 	ADMINISTRATIVEY
CLOSED pending the parties' 	forthcoming arbitration proceeding. The Court
further
ORDERS that all other pending motions are hereby DENIED WITHOUT
PREJUDICE, subject to refiling, if applicable, after the completion of arbitration
in this matter. The Court further
ORDERS that the parties file a joint status report informing the Court of the
status of this matter no later than NINETY DAYS from the date of this Order.·
SIGNED at Houston, Texas, on this 	i3day of April, 2026.
• 	DAVID HITTNER
United States District Judge
6
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