Dallas Appeals Court Vacates Order Denying Arbitration in Marketing and Sales Case
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Texas’ Fifth District Court of Appeals has vacated a trial court’s order denying arbitration in a marketing and sales dispute. In Momentis U.S. Corp. et al. v. Perissos Holdings, Inc. et al., No. 05-13-01085-CV, (Tex. App. – Dallas, July 30, 2014), a company (“Momentis”) that sold “energy contracts, mobile phone services, internet services, and digital television services” using third-party independent contractors (“IRs”) using a sales network was sued by a former salesperson (“Hale”) and the company he used to market the products (“Perissos”). According to Hale, the President of Momentis (“McWilliams”) unilaterally changed the terms of the parties’ sales contract, mistreated Hale, denied Hale earned compensation, and eventually terminated him.
Perissos and Hale filed a lawsuit against Momentis alleging breach of contract, fraud, negligent misrepresentation, specific violations of the Texas Deceptive Trade Practices Act, and more. In response, Momentis filed a motion to compel arbitration pursuant to a letter agreement between Hale and Momentis that referenced Momentis’s Policies and Procedures. Hale countered that the parties did not enter into an agreement to arbitrate and even if they did “any purported agreement is illusory, unconscionable, and void as against public policy.” The trial court denied Momentis’s motion to compel arbitration without explanation and Momentis filed an interlocutory appeal with the Fifth District Court of Appeals.
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