Houston’s 14th District Court of Appeals has ordered a legal malpractice case to arbitration. In Cedillo v. Immobiliere Jeuness Establissement, No. 14–15–00101–CV (Tex. App. – Houston [14th], August 27, 2015), a Lichtenstein-based limited partner, Immobiliere Jeuness Establissement (“IJE”), of two Texas limited partnerships (the “Original Partnerships”) initiated litigation against them in 2009. In response, the Original Partnerships secured the services of a San Antonio-based law firm (“DCM”).

The parties’ Legal Representation Agreement included an arbitration clause which 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. The agreement also stated that the firm would represent a number of other related business entities and their executives.

Initially, IJE asked a Texas court to compel the Original Partnerships to produce records related to the subject of the litigation. After that, IJE filed an amended complaint alleging breach of contract and breach of fiduciary duty. Later, IJE again amended its complaint to assert derivative claims against one of the Original Partnerships’ related business entities and its executive. As a result, the law firm successfully sought to withdraw its representation based on a potential conflict between the firm’s clients in June 2011.

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