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Ellis, et al. v. Dr. Schlimmer, et al.

The court of appeals dismissed an interlocutory appeal of the trial court's order denying the defendants' motion to compel arbitration for want of jurisdiction because the movants failed to establish that the Federal Arbitration Act (FAA) did not apply. While appellants did not specifically invoke the Texas Arbitration Act (TAA) in their motion to compel arbitration, their counsel specifically referred to it in the hearing on the motion. The burden was on the appellees to show that some Texas state law or statutory requirement would prevent enforcement of the arbitration agreement under the TAA so that the FAA would pre-empt the Texas act. They did not raise any such defenses, nor did they question the agreement's existence. Instead, they argued merely that the agreement did not cover the dispute, and that appellants had waived the right to arbitration or were estopped from enforcing it. The court of appeals' decision erroneously placed the burden to establish the absence of any defenses to arbitration on appellants. Accordingly, under Texas Rules of Appellate Procedure Rule 59.1, without hearing oral argument, the court of appeals' judgment is reversed and remanded to that court to allow it to consider the appeal's merits. Texas Supreme Court, No. 10-0243, 04-01-2011

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In this case, the court of appeals dismissed an interlocutory appeal of the trial court’s order denying the defendants’ motion to compel arbitration for want of jurisdiction because the movants failed to establish that the Federal Arbitration Act did not apply. ___ S.W.3d ___, ___. We reverse and remand to the court of appeals to consider the appeal’s merits.*fn1

In 2006, Ron and Tana Schlimmer purchased a house in Corpus Christi from Veronica Ellis. Coldwell Banker Pacesetter Steel Realtors (“Pacesetter”) was the broker in the transaction and Ellis, who worked for Pacesetter, was the home’s listing agent. After purchasing the home, the Schlimmers allegedly discovered various undisclosed defects. The Schlimmers sued Pacesetter and Ellis, alleging claims for fraud, breach of contract, negligent misrepresentation, and violations of the Deceptive Trade Practices Act. Ellis filed a third-party complaint against the builder from whom she purchased the house originally. Ellis’s third-party claim was later severed and the Schlimmers’ lawsuit was set for trial. Ellis and Pacesetter initiated discovery and proceeded with the lawsuit until five months before the trial setting, when their lawyers purportedly discovered a mandatory arbitration clause in the Schlimmers’ real estate contract with Ellis. The clause provided:

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