Jose Silvio Rivera Silvio's Plumbing v. Alan Utz & Associates, Inc.

NO. 12-23-00009-CV

IN THE COURT OF APPEALS

TWELFTH COURT OF APPEALS DISTRICT

TYLER, TEXAS

JOSE SILVIO RIVERA AND SILVIO'S § APPEAL FROM THE
PLUMBING, APPELLANTS

V. § COUNTY COURT AT LAW

ALAN UTZ & ASSOCIATES, INC.,
APPELLEE § SMITH COUNTY, TEXAS

MEMORANDUM OPINION
Jose Silvio Rivera and Silvio’s Plumbing (Silvio) appeal the grant of summary judgment
in favor of Alan Utz & Associates, Inc. (AUA). In two issues, Silvio contends the trial court
erred in granting summary judgment and not ordering the parties to arbitration. We reverse and
remand.

BACKGROUND
AUA is a general contractor and hired Silvio as a subcontractor to perform certain
plumbing work on a project in Austin, Texas, in February 2021. According to AUA, Silvio
failed to perform the work required under the contract. AUA filed suit for breach of contract in
the Justice Court of Precinct 4 in Smith County. When Silvio failed to file an answer or
otherwise appear in the Justice Court, that court entered a default judgment against Silvio in
September 2021.
Silvio appealed the default judgment to the County Court at Law. AUA filed its first
amended petition in November 2021. Silvio’s attorney did not make an appearance until January
6, 2022. Silvio then filed a verified answer on February 4. Silvio’s answer alleged that the
subcontract included an arbitration clause and requested the parties be ordered to arbitration. On
August 24, AUA filed a traditional motion for summary judgment on its breach of contract
claim. In its response, dated September 19, Silvio did not address the merits of the breach of
contract claim. Instead, it focused on the arbitration clause contained in the subcontract and
requested the trial court deny the summary judgment and order the parties to arbitration.
The trial court held a hearing on the motion for summary judgment on December 13. At
the conclusion of the hearing, the trial court found that Silvio had not effectively requested
arbitration from the trial court. It further found that, even had arbitration been properly
requested, any request was waived as untimely. The trial court granted the motion for summary
judgment. This appeal followed.

INVOKING ARBITRATION
In its first issue, Silvio argues that the trial court erred when it ruled against sending the
case to arbitration.
Arbitration Principles
A party seeking to compel arbitration must establish two elements: (1) the existence of a
valid arbitration agreement and (2) that the disputed claims fall within the scope of that
agreement. Wagner v. Apache Corp., 627 S.W.3d 277, 284 (Tex. 2021); see also TEX. CIV.
PRAC. & REM. CODE ANN. § 171.021 (West 2019). Once the party seeking to compel arbitration
establishes the first element, “a ‘strong presumption favoring arbitration arises’ and we resolve
doubts as to the agreement’s scope in favor of arbitration.” Wagner, 627 S.W.3d at 284 (quoting
Rachal v. Reitz, 403 S.W.3d 840, 850 (Tex. 2013)). Generally, the trial court “shall stay a
proceeding that involves an issue subject to arbitration if an order for arbitration or an
application for that order is made under this subchapter.” TEX. CIV. PRAC. & REM. CODE ANN.
§ 171.025 (West 2019).
“If the party seeking arbitration carries its initial burden, the burden then shifts to the
party resisting arbitration to present evidence on its defenses to the arbitration agreement.”
Mohamed v. Auto Nation USA Corp., 89 S.W.3d 830, 835 (Tex. App.—Houston [1st Dist.]
2002, no pet.); see Ellis v. Schlimmer, 337 S.W.3d 860, 862 (Tex. 2011). One such defense is
that the party seeking arbitration has waived its right to arbitration. Williams Indus., Inc. v.
Earth Dev. Sys. Corp., 110 S.W.3d 131, 135 (Tex. App.—Houston [1st Dist.] 2003, no pet.). A
party does not waive arbitration merely by delay; rather, waiver may be found only if the
proponent of the defense establishes that: (1) the party seeking arbitration substantially invoked
the judicial process and (2) the party opposing arbitration suffers actual prejudice as a result.
G.T. Leach Builders, LLC v. Sapphire V.P., LP, 458 S.W.3d 502, 511–12, 515 (Tex. 2015);
Williams Indus., Inc., 110 S.W.3d at 135. Waiver may be implied or express, but it must be
intentional. See Williams Indus., Inc., 110 S.W.3d at 135. Because public policy favors
arbitration, there is a strong presumption against finding that a party waived its right to
arbitration. Id. Whether waiver occurred depends on the individual facts and circumstances of
each case. Id.
Motion to Compel Arbitration
In his first issue, Silvio urges the trial court improperly granted summary judgment
because the contract requires arbitration. In response, AUA urges that the trial court correctly
granted summary judgment because Silvio did not properly request arbitration. It contends that
the proper mechanism for invoking arbitration under Section 171.021 is a motion to compel
arbitration and that Silvio did not file such a motion. Silvio, in contrast, urges that it sought
arbitration in both its answer and summary judgment response.
In support of its assertion, AUA relies on Currid v. Coit Cleaning & Restoration
Services, No. 01-17-00630-CV, 2018 WL 1801798 (Tex. App.—Houston [1st Dist.] Apr. 17,
2018, no pet.) (mem. op.). In that case, Currid attempted to compel arbitration in her summary
judgment response by objecting to the plaintiff’s “choice of forum in denigration of the
arbitration agreement” and asking the court to deny the motion for summary judgment and
dismiss the case. Id. at *4. On appeal, the court of appeals determined that Currid failed to
move to compel arbitration and presented nothing for its review. Id. at *5. Instrumental to its
decision was the fact that Currid failed to “direct [it] to any place in her response, or to any other
place in the record, in which she requested an order from the trial court compelling the parties to
arbitrate Coit’s claims or to abate or to stay the proceedings.” Id. at *4. Additionally, Currid
represented to the trial court at a hearing on her motion to vacate the judgment that she had not
moved to enforce the arbitration provision. Id.
“A party to a lawsuit who seeks to enforce an arbitration provision must file a motion to
compel arbitration.” S.C. Maxwell Family P’ship, Ltd. v. Kent, 472 S.W.3d 341, 343 (Tex.
App.—Houston [1st Dist.] 2015, no pet.) (“[A]rbitration provisions are not self-executing . . .”);
Ground Force Const., LLC v. Coastline Homes, LLC, No. 14–13–00649–CV, 2014 WL
2158160, at *2 (Tex. App.—Houston [14th Dist.] May 22, 2014, no pet.) (mem. op.) (noting that
Section 171.021 “requires an ‘application of a party’ for the court to order arbitration”); see also
TEX. CIV. PRAC. & REM. CODE ANN. § 171.021 (“A court shall order the parties to arbitrate on
[the] application of a party ....” (emphasis added)); see, e.g., Schlumberger Tech. Corp. v.
Baker Hughes Inc., 355 S.W.3d 791, 797 (Tex. App.—Houston [1st Dist.] 2011, no pet.)
(holding that interlocutory jurisdiction required filing of “an application to compel arbitration
made under Section 171.021”).
Silvio certainly could have been clear and more diligent in seeking arbitration. But
unlike the defendant in Currid, Silvio asked the trial court to “enter an order dismissing [the
case] and sending the parties to Arbitration” in both its answer and summary judgment response.
The entirety of the summary judgment response brought the arbitration agreement to the trial
court’s attention. And, a response to a motion for summary judgment that requests an order
compelling arbitration can be sufficient to bring the issue to the trial court’s, and appellate
court’s, attention. See Grace Interest, LLC v. Wallis State Bank, 431 S.W.3d 110, 122-23 (Tex.
App.—Houston [14th Dist.] 2013, pet. denied).
Because Silvio specifically requested an order sending the parties to arbitration, he
effectively moved to compel arbitration. See id. The trial court could have, and should have,
heard the merits of Silvio’s defense to the summary judgment motion, i.e., that the contract
requires the dispute be sent to arbitration. Therefore, the trial court erred in finding Silvio did
not effectively request arbitration. As the demand for arbitration was the only ground Silvio
asserted in its summary judgment response and the trial court did not consider it, we sustain
Silvio’s first issue.

WAIVER
In his second issue, Silvio contends it did not waive its right to arbitration and that the
trial court erred in finding it did so.
Standard of Review and Applicable Law
A party waives the right to compel arbitration if (1) the party substantially invokes the
judicial process and (2) the opposing party suffers detriment or prejudice as a result. Perry
Homes v. Cull, 258 S.W.3d 580, 589–90 (Tex. 2008); Holmes, Woods & Diggs v. Gentry, 333
S.W.3d 650, 654 (Tex. App.—Dallas 2009, no pet.). There is a strong presumption against
waiver of arbitration. Perry Homes, 258 S.W.3d at 590; see RSL Funding, LLC v. Pippins, 499
S.W.3d 423, 430 (Tex. 2016) (per curiam) (party asserting waiver “bears a heavy burden of
proof”). Whether a party waived its right to arbitration is a question of law subject to de novo
review. Henry v. Cash Biz, LP, 551 S.W.3d 111, 115 (Tex. 2018).
The substantial-invocation element requires the court to consider the totality of the
circumstances. Perry Homes, 258 S.W.3d at 591. Relevant factors include (1) whether the party
seeking to compel arbitration is a plaintiff or a defendant in the lawsuit; (2) when the party knew
of the arbitration clause; (3) how long the party waited before seeking arbitration and any
reasons for the delay; (4) how much discovery has been conducted, who initiated it, whether it
related to the merits rather than arbitration or standing, and how much of it would be unavailable
or useful in arbitration; (5) whether the party sought judgment on the merits; (6) whether the
party asserted affirmative claims for relief in court; (7) the amount of time and expense the
parties expended on litigation; (8) whether the discovery conducted would be unavailable or
useful in arbitration; (9) whether judicial activity would be duplicated in arbitration; and (10)
when the case was to be tried. RSL Funding, 499 S.W.3d at 430; G.T. Leach Builders, 458
S.W.3d at 512; Perry Homes, 258 S.W.3d at 591. Generally, no single factor is dispositive. RSL
Funding, 499 S.W.3d at 430. Although substantial invocation must be decided on a case-by-case
basis, Perry Homes suggests the element would be satisfied if the movant conducted full
discovery, filed motions addressing the merits, and sought arbitration only on the eve of trial.
258 S.W.3d at 590.
The prejudice prong refers to inherent unfairness in terms of delay, expense, or damage to
a party’s legal position caused when a party’s opponent forces it to litigate an issue and later
seeks to arbitrate the same issue. Id. at 597. The party seeking to establish waiver must show
the fact of prejudice but is not required to prove its precise extent. Id. at 599. And although delay
is a factor, mere delay is ordinarily not enough to show prejudice, even if the delay is substantial.
G.T. Leach Builders, 458 S.W.3d at 515; Sivanandam v. Themesoft, Inc., No. 05-21-00645-
CV, 2022 WL 872623, at *2–3 (Tex. App.—Dallas Mar. 24, 2022, pet. denied) (mem. op.).
Discussion
AUA first initiated the suit against Silvio in the Justice Court in June or July 2021. 1
Silvio did not participate in the Justice Court, and AUA was awarded a default judgment in

1
The petition in the Justice Court is not marked with a filing date; therefore, we are unsure of the exact
filing date.
September. Silvio appealed to the County Court at Law that October. AUA filed its first
amended petition on November 23. The court set an initial trial date of January 6. Silvio’s
attorney filed his appearance on January 6, and Silvio filed its verified answer on February 4.
Nothing else appeared to occur in the case until AUA filed its motion for summary judgment on
August 24. Silvio responded on September 19. AUA urges that Silvio waived its right to
arbitration by waiting until after it filed summary judgment to request arbitration.
In considering the relevant factors, we note first that Silvio did not elect to resolve the
dispute in court; rather, AUA initiated the lawsuit. See G.T. Leach Builders, 458 S.W.3d at 512;
Perry Homes, 258 S.W.3d at 591. Silvio did not assert a counterclaim in its answer. It merely
denied the allegations and sought arbitration. At oral argument, the parties represented that
neither party engaged in much discovery. AUA sent the initial request for disclosures but
conducted no other discovery. Silvio did not request any discovery. Responding to discovery
and simply being named in the lawsuit while discovery is ongoing does not amount to waiver.
G.T. Leach Builders, 458 S.W.3d at 514. And while we agree that Silvio could have been more
prompt in seeking arbitration, most of the delay occurred prior to Silvio’s participation in the
lawsuit. Only seven months transpired between Silvio filing its answer and filing its response to
the motion for summary judgment. We conclude that seven months is not a substantial delay
under these circumstances. See In re Fleetwood Homes of Tex., L.P., 257 S.W.3d 692, 694
(Tex. 2008) (no waiver despite eight-month delay). Even if we were to calculate the delay from
the initial filing of the suit in the Justice Court, a fifteen-month delay is not per se unreasonable.
See In re Vesta Ins. Group, Inc., 192 S.W.3d 759, 763 (Tex. 2006) (no waiver despite two-year
delay).
Considering the totality of the circumstances, we hold that Silvio has not substantially
invoked the litigation process in contravention of its contractual right to arbitration. See Perry
Homes, 258 S.W.3d at 589–90 (adopting totality-of-the-circumstances test). As in several cases
involving greater participation in litigation than occurred here, we decline to find waiver under
these circumstances. See G.T. Leach Builders, 458 S.W. 3d at 514-15 (holding that movant did
not waive arbitration rights by asserting counterclaim, challenging venue, filing defensive
motions, and participating in discovery); Richmont Holdings Inc. v. Superior Recharge Sys.,
L.L.C., 455 S.W.3d 573, 576 (Tex. 2014) (holding that movant did not waive arbitration rights
by initiating lawsuit, invoking forum-selection clause, moving to transfer venue, propounding
request for disclosure, and waiting nineteen months after being sued to move for arbitration);
Fleetwood Homes, 257 S.W.3d at 694 (holding that movant did not waive arbitration rights by
noticing deposition, serving written discovery, and waiting eight months to move for arbitration);
In re Bruce Terminix, 988 S.W.2d 702, 703–04 (Tex. 1998) (holding that movant did not waive
arbitration rights by propounding requests for production and interrogatories and waiting six
months to seek arbitration); EZ Pawn Corp. v. Mancias, 934 S.W.2d 87, 88–89 (Tex. 1996)
(holding that movant did not waive arbitration rights by propounding written discovery, noticing
deposition, agreeing to reset trial date, and waiting nearly a year to move for arbitration).
Nor has AUA proven that it suffered unfair prejudice as a result of Silvio’s litigation
conduct. Detriment or prejudice, in this context, refers to an “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 Citigroup Global Mkts., Inc., 258 S.W.3d 623, 625 (Tex. 2008) (per curiam)
(quoting Perry Homes, 258 S.W.3d at 597). Prejudice may result when a party seeking
arbitration first sought to use the judicial process to gain access to information that would not
have been available in arbitration, but propounding discovery will not, in and of itself, result in
waiver of a right to compel arbitration. Bruce Terminix, 988 S.W.2d at 704. Similarly, while
delay may be a factor both in terms of whether the movant substantially invoked the judicial
process and the nonmovant suffered prejudice, mere delay is not ordinarily enough, even if it is
substantial. Richmont Holdings, 455 S.W.3d at 576; see also Fleetwood Homes, 257 S.W.3d at
694 (eight-month delay); Vesta Ins., 192 S.W.3d at 763 (two-year delay). “Waiver can be
implied from a party’s unequivocal conduct, but not by inaction.” In re ADM Investor Servs.,
Inc., 304 S.W.3d 371, 374 (Tex. 2010) (citing Perry Homes, 258 S.W.3d at 593).
AUA cites to nothing other than delay to support prejudice. But again, mere delay is not
ordinarily enough to waive arbitration rights. See G.T. Leach Builders, 458 S.W.3d at 515.
AUA, not Silvio, chose to initiate this suit in the courts rather than arbitration, and Silvio did not
serve a single discovery request.
In summary, although we agree that Silvio could have demanded waiver more promptly
than it did, we hold that the totality of the circumstances do not establish that Silvio substantially
invoked the judicial process to the extent required to demonstrate a waiver of its right to
arbitration. Nor has Silvio’s participation in the litigation caused AUA the kind of prejudice
necessary to clear the “high hurdle” of waiver. We thus conclude that Silvio did not impliedly
waive its right to demand arbitration in this case and the trial court erred by concluding
otherwise. We sustain Silvio’s second issue.

DISPOSITION
Having sustained Silvio’s two issues, we reverse the trial court’s order granting summary
judgment and remand for proceedings consistent with this opinion.

BRIAN HOYLE
Justice

Opinion delivered September 20, 2023.
Panel consisted of Worthen, C.J., Hoyle, J., and Neeley, J.
COURT OF APPEALS

TWELFTH COURT OF APPEALS DISTRICT OF TEXAS

JUDGMENT

SEPTEMBER 20, 2023

NO. 12-23-00009-CV

JOSE SILVIO RIVERA AND SILVIO'S PLUMBING,
Appellants
V.
ALAN UTZ & ASSOCIATES, INC.,
Appellee

Appeal from the County Court at Law
of Smith County, Texas (Tr.Ct.No. 73587)

THIS CAUSE came to be heard on the appellate record, briefs filed herein, and oral
arguments and the same being considered, because it is the opinion of this court that there was
error in the judgment of the court below, it is ORDERED, ADJUDGED and DECREED by this
court that the judgment be reversed and the cause remanded to the trial court for further
proceedings and that all costs of this appeal are hereby adjudged against Alan Utz &
Associates, Inc. in accordance with the opinion of this court; and that this decision be certified to
the court below for observance.

Brian Hoyle, Justice.
Panel consisted of Worthen, C.J., Hoyle, J., and Neeley, J.