Opinion
No. 05-04-01807-CV
Opinion issued February 15, 2005.
Original Proceeding from the 14th Judicial District Court, Dallas County, Texas, Trial Court Cause No. 03-10366-A.
Writ of Mandamus Granted.
Before Justices MOSELEY, BRIDGES, and FRANCIS.
MEMORANDUM OPINION
Relators J. Bryan Sutherlin, Brad Sutherlin, Kevin Sutherlin, Culebra Oil Gas Company, and Culebra Oil Gas, L.L.C. (collectively Sutherlin) contend the trial court abused its discretion in denying their plea in abatement and motion to compel arbitration. We agree and conditionally grant the writ.
Anthony Abernathy sued Sutherlin seeking (1) a declaratory judgment as to his ownership interest in Culebra Oil Gas, L.L.C., (2) an order permitting him to inspect the books of Culebra Oil Gas, L.L.C., and (3) damages for fraud, conspiracy, and conversion. Sutherlin filed a plea in abatement and motion to compel arbitration under the federal arbitration act. Sutherlin contended that Abernathy, by claiming an ownership interest in Culebra Oil Gas, L.L.C., is bound by its regulations requiring arbitration of all disputes. After a hearing in which evidence was presented in the form of affidavits and deposition testimony on file, the trial court denied the plea in abatement and motion to compel arbitration. See Jack B. Anglin Co. v. Tipps, 842 S.W.2d 266, 269 (Tex. 1992) (orig. proceeding) (trial court need not conduct evidentiary hearing to determine motion to compel arbitration if the facts are established by uncontroverted affidavits, pleadings, discovery, and stipulated facts). Sutherlin then filed this original proceeding asserting the trial court abused its discretion in denying the plea and motion.
There is no adequate remedy at law from the denial of a motion to arbitrate under the federal arbitration act, therefore relief by writ of mandamus lies if the trial court abused its discretion in denying the motion. Id. at 272. An error in analyzing or applying the law is an abuse of discretion. In re Bruce Terminix, 988 S.W.2d 702, 703-04 (Tex. 1998) (orig. proceeding). The party moving for arbitration bears the burden of showing the existence of an arbitration agreement and that the claims at issue fall within the scope of the agreement. Cantella Co v. Goodwin, 924 S.W.2d 943, 944 (Tex. 1996) (orig. proceeding). Once these are established, the trial court must stay its proceedings and compel arbitration. Id.
Abernathy seeks a declaratory judgment from the trial court that he has an ownership interest in Culebra Oil Gas, L.L.C. In order for Abernathy to receive the benefits of ownership in Culebra Oil Gas, L.L.C., he must rely on the terms of the regulations and other contracts establishing it. The regulations of Culebra Oil Gas, L.L.C. require arbitration of all disputes involving it. We conclude Abernathy is bound by the arbitration agreement of Culebra Oil Gas, L.L.C. for all claims which involve any claim of ownership in Culebra Oil Gas, L.L.C. See Carlin v. 3V, Inc., 928 S.W.2d 91, 94-97 (Tex.App.-Houston [14th Dist.] 1996, no writ) (if a party must rely on the terms of an agreement in asserting its claims, it is bound by an arbitration clause contained within that agreement, even if it is a non-signatory). Thus, we conclude the trial court abused its discretion in denying the plea in abatement and motion to compel arbitration relating to Abernathy's claims of ownership in Culebra Oil Gas, L.L.C.
Abernathy's remaining causes of action also require that Abernathy possess an ownership interest in Culebra Oil Gas, L.L.C. These causes of action involve the conduct of Sutherlin in a series of transactions and damages caused by denying Abernathy's ownership interest. The facts necessary to establish these causes of action involve the same facts necessary to establish Abernathy's claim to an interest in Culebra Oil Gas, L.L.C. Thus, these causes of action are factually intertwined with Abernathy's claims of an ownership interest in Culebra Oil Gas, L.L.C. See Anglin, 842 S.W.2d at 271, (causes of action which are factually intertwined with issues subject to arbitration are also subject to arbitration). We conclude that because the remainder of Abernathy's causes of action are factually intertwined with his claims relating to an ownership interest in Culebra Oil Gas, L.L.C., they are also subject to Culebra Oil Gas, L.L.C.'s arbitration requirements. We conclude the trial court abused its discretion in denying the plea in abatement and motion to compel arbitration on the remainder of Abernathy's issues.
Accordingly, we conditionally grant the writ of mandamus. We order the trial court to vacate its order signed August 9, 2004 denying relators' plea in abatement and motion to compel arbitration and to enter an order granting relators' plea in abatement and motion to compel arbitration. We order the trial court to file a certified copy of its order in compliance with this order within thirty days of the date of this order. Should the trial court fail to comply, the writ will issue.