Opinion
No. 05-09-01396-CV
Opinion Filed July 22, 2011.
On Appeal from the County Probate Court No. 2, Dallas County, Texas, Trial Court Cause No. PR09-2413-2.
MEMORANDUM OPINION
This is an appeal from the denial of a motion to compel arbitration and stay litigation in a probate proceeding. We affirm the trial court's order denying the motion.
Mary Louise Cornell established an inter vivos trust and appointed herself as sole trustee. Upon her death in October 2008, Hal Rachal, Jr., appellant and Cornell's attorney, became the successor trustee. Lynda Letkiewicz and Rhonda Gayle Foster, appellees, were named as beneficiaries of the trust. They sued Rachal and his wife in July 2009 for, among other things, breach of fiduciary duty and fraud alleging that the Rachals looted the trust funds for their personal gain. After the lawsuit was filed, Rachal resigned as trustee and Letkiewicz became the successor trustee.
Appellees sought a temporary restraining order against the Rachals to preserve the status quo of the remaining trust funds. A few minutes before the scheduled hearing, Rachal filed a motion to compel arbitration and stay of litigation. He argued that the trust document contained a mandatory arbitration clause requiring appellees to arbitrate their claims. Rachal argued that the trial court had no discretion but to stay the litigation and order appellees to arbitration. The court overruled the motion. No findings of fact and conclusions of law were requested or filed.
On appeal, Rachal argues that the trial court erred by denying his motion to compel arbitration and stay litigation because the trust document contains a mandatory arbitration clause and appellees did not offer any evidence to support their challenge to the arbitration clause.
Based on our opinion in Rachal v. Reitz, No. 05-09-01422-CV (Tex. App.-Dallas July 22, 2011, no pet. h.) (en banc), issued this same date, we affirm the trial court's order denying the motion to compel arbitration.
Murphy, J. concurring, joined by JJ. Morris, O'Neill, and Richter.
CONCURRING OPINION
For the reasons described in Rachal v. Reitz, No. 05-09-01422-CV (Tex. App.-Dallas July, 22, 2011, no pet. h.) (Murphy, J., dissenting), issued this same date, I disagree with the majority's conclusion that a mandatory arbitration provision in a trust agreement is unenforceable. I concur in the conclusion the trial court did not err in overruling Hal Rachal, Jr.'s motion to compel arbitration because appellees have sued Rachal in various capacities and based on numerous factual and legal claims that would not fall within the scope of the trust agreement arbitration clause, including Rachal's alleged breaches of his duty as a lawyer for settlor, the trust, and the estate and as a former executor of the estate. Additionally, a substantial portion of the petition includes claims for breach of a promissory note Rachal signed on behalf of his business and collusion between Rachal and his wife to hide funds and impair rights of the successor trustee and creditors to recover trust funds. Rachal's wife Kathy is also a named defendant who did not move to compel arbitration and is not a party to this appeal. Based on the different parties, their various relationships, the different documents (including the promissory note made the subject of the breach of contract claim), and the extensive factual and legal allegations against both Rachal and his wife, I would conclude Rachal failed to establish appellees' claims fall within the scope of the arbitration provision.