Beaumont justices grant Citgo writ forcing lower court to compel arbitration

David Yates Feb. 26, 2008, 5:40am

An absent signature on a dispute resolution agreement failed to persuade justices on the Texas Ninth Court of Appeals to throw out Citgo's motion for a writ of mandamus. However, a second appellant was denied its writ and will head back to court.

Beaumont justices released an opinion per curiam on Feb. 21 forcing a lower court to reverse its ruling and compel arbitration between Citgo and Rodney Rose, an injured worker who sued Citgo and an electric company in 2006 after receiving an electrical shock while working at the oil company's Lake Charles refinery.

Citgo Petroleum Corp., along with Stoneburner-Verret Electronic Co., submitted a writ of mandamus last November following Judge Gary Sanderson's, 60th Judicial District, denial of the oil company's motion for arbitration.

A writ of mandamus is intended to correct a clear abuse of discretion when no adequate remedy at law exists.

Citgo's writ was granted while Stoneburner's was denied.

"Stoneburner's request for a writ of mandamus is denied," the per curiam opinion stated. "We conditionally grant Citgo's petition for a writ of mandamus and direct the trial court to enter an order granting Citgo's motion to compel arbitration. We are confident the trial court will comply. The writ will issue only if the court does not."

A per curiam opinion expresses the court's opinion without identifying the particular author.

Rose and his wife Paula filed a personal injury lawsuit against Stoneburner and Citgo in the Jefferson County District Court on May 10, 2006, claiming the companies negligently failed to provide him with a safe place to work.

According to the plaintiffs' petition, on Feb. 1, 2006, Rose, a Pat Tank Inc. employee, was performing boilermaker labor at Citgo's refinery in Lake Charles when he "was electrocuted while near a welding machine due to a defective panel box."

"(Rose) was electrocuted because Stoneburner improperly serviced … the welding machine and panel box prior to its use, and Citgo failed to properly inspect … the welding machine prior to putting it in service at the facility," the suit stated.

In his suit, Rose says he now suffers from migraines, neck and back pain, blurred vision, seizures, memory loss and brain damage.

Before he began working for Pat Tank Inc., Rose signed a "Dispute Resolution Agreement" with the company containing an arbitration clause. Citgo and Stoneburner argued that they had the right to invoke and enforce the arbitration agreement, the opinion and court documents stated.

Judge Sanderson held a hearing on the defendants' motion to compel arbitration and denied the motion on three grounds:

  • No arbitration agreement exists between Citgo and plaintiffs;
  • No arbitration agreement exists between Rose and his employer Pat Tank, because Pat Tank did not sign the agreement;
  • And Citgo waived arbitration.

    "… (T)he (Dispute Resolution Agreement) states that the … the sole and exclusive remedies for resolving all claims between Pat Tank and Rose, as well as all claims against Pat Tank's customers …shall be exclusively resolved by the parties first trying to settle by mediation . . . , failing which, the settlement of the dispute shall be by binding arbitration. . .," the opinion stated.

    Although Rose signed the agreement, he and his wife argued Pat Tank did not assent to the agreement because a company representative did not sign it, "and therefore arbitration cannot be compelled," the opinion stated.

    "Rose owed no duty to relators to arbitrate the dispute if a contract was not formed between Pat Tank and Rose. The Roses contend the dispute resolution agreement requires that the agreement be signed and witnessed."

    A party's signature on a contract is "strong evidence" that the party unconditionally assented to its terms, Justices wrote.

    However, "when a party's signature is not present, other evidence may be relied on to prove the party's unconditional assent. If one party signs a contract, the other party's acceptance may be demonstrated by its conduct, 'thus making it a binding agreement on both parties.' MG Bldg. Materials, Ltd. v. Moses Lopez Custom Homes, Inc., 179 S.W.3d 51, 61-62 (Tex. App.--San Antonio 2005, pet. denied)."

    By affidavit, Pat Tank's president, Hans Jorgensen, stated that the company's policy requires that a dispute between the company and its employees be resolved in the manner set forth in the dispute resolution agreement, the opinion stated.

    "Pat Tank considered the agreement 'binding upon it and its employees once the employee has signed the agreement and started their employment with Pat Tank'" Jorgensen acknowledged that occasionally, even though an employee has signed the agreement, Pat Tank may not have signed it. That omission, he stated, is 'not an indication of Pat Tank's intent not to abide by its own dispute resolution policy.'

    "Jorgensen's affidavit explains the absence of the signature, and Pat Tank's employment of Rose demonstrates Pat Tank's acceptance of the contract. (See generally Stinson v. Am.'s Home Place, Inc., 108 F.Supp.2d 1278, 1283, M.D. Ala. 2000; see also In re Bunzl, 155 S.W.3d at 211 n.4.)"

    Stoneburner had argued that it was also protected by Pat Tank's and Rose's agreement because the company was hired by Citgo, who in turn hired Pat Tank.

    "We need not address the waiver issue as it relates to Stoneburner-Verrett, because notwithstanding any waiver issue, Stoneburner did not show entitlement to arbitration," the opinion stated.

    In addition, the plaintiffs failed to show how Citgo waived its right to arbitration.

    The Roses are represented by Kurt Arnold, a partner in the Arnold & Itkin law firm.

    The defendants were represented in part by the Benckenstein, Norvell & Nathan law firm.

    Appeals case No. 09-07-563 CV

    Trial case No. B176-978

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