SCOTX Declines to Review Order Compelling Arbitration in Real Estate Dispute
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The Supreme Court of Texas has declined to review a case where a foreign real estate investor was ordered to arbitrate its claims against a law firm that allegedly helped a partner secure a secret loan. In Immobiliere Jeuness Establissement v. Ricardo G. Cedillo et al., No. 14-15-00101-CV (August 27, 2015), a Liechtenstein-based limited partner, Immobiliere Jeuness Establissement (“IJE”), of two Texas limited partnerships (the “Original Partnerships”) sued the Texas entities for breach of contract and breach of fiduciary duty in the 215th District Court of Harris County. Next, the Original Partnerships signed an agreement with a San Antonio-based law firm, Davis, Cedillo & Mendoza, Inc. (“DCM”), in connection with obtaining legal representation.
The parties’ Legal Representation Agreement included an arbitration clause that stated any disputes must be resolved through binding arbitration governed by the laws of the State of Texas, held in Bexar County, Texas, using the American Arbitration Association’s Commercial Arbitration Rules.
In response to IJE’s lawsuit, DCM filed a motion to compel the dispute to arbitration. The trial court denied the firm’s motion because IJE was not a party to the Legal Representation Agreement. Next, the law firm filed an interlocutory appeal with the 14th Court of Appeals in Houston.
According to the appellate court, DCM demonstrated that a valid arbitration agreement existed, IJE was bound by its provisions, IJE’s claims fell within the scope of that agreement, and there was no basis for denying the law firm’s motion to compel arbitration. As a result, Texas’ 14th Court of Appeals in Houston reversed the trial court’s order and remanded the case. You can read more about the case history in a prior Disputing blog post.
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