Summary
rejecting employer's argument that plaintiff had ratified arbitration agreement by acceptance of payment of medical bills where plaintiff testified that she had not signed any document relating to or referencing arbitration agreement; no one had mentioned or given her plan booklet until after she had sued her employer for negligence for her injury; and she had received no medical bills, which were sent directly to her employer
Summary of this case from In re Weeks MarineOpinion
No. 09-04-126 CV
Submitted on May 24, 2004.
Opinion Delivered July 29, 2004.
Original Proceeding
Petition for Writ of Mandamus Denied.
Before McKEITHEN, C.J., BURGESS and GAULTNEY, JJ.
MEMORANDUM OPINION
Callee McCoy alleges she injured her back at work. She incurred medical bills which were paid for by her employer, Beyond the Arches, Inc., d/b/a McDonald's. McCoy sued Arches for negligence, and Arches filed a motion to compel arbitration. The trial court denied the arbitration request, and Arches filed this petition for writ of mandamus.
McCoy contends the Texas Arbitration Act, rather than the Federal Arbitration Act, applies in this case. But the arbitration agreement, whether it is valid or not, provides for arbitration under the FAA and states the employer is engaged in interstate commerce.
A writ of mandamus will issue to correct a clear abuse of discretion when there is no other adequate remedy at law. In re FirstMerit Bank, N.A., 52 S.W.3d 749, 753 (Tex. 2001). A trial court clearly abuses its discretion if it reaches a decision so arbitrary and unreasonable as to amount to clear and prejudicial error of law. Walker v. Packer, 827 S.W.2d 833, 839 (Tex. 1992) (orig. proceeding). When the trial court's decision rests on the resolution of factual issues or matters committed to the court's discretion, the party opposing the trial court's decision must establish the court could reasonably have reached only one decision. Id. at 839-40. Regarding resolution of factual issues, we may not substitute our judgment for that of the trial court, even if we would have decided the issue differently. Id. As to legal issues, the trial court has no discretion in determining what the law is or in applying the law to the facts. Id. at 840. A clear failure by the trial court to analyze or apply the law correctly constitutes an abuse of discretion. Id.
A party seeking to compel arbitration must first establish that an arbitration agreement exists. In re Oakwood Mobile Homes, Inc., 987 S.W.2d 571, 573 (Tex. 1999). Although there is a strong presumption favoring arbitration, the presumption arises only if a valid arbitration agreement exists. J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 227 (Tex. 2003). Arbitration agreements are interpreted under traditional contract principles, and an employer attempting to enforce an arbitration agreement must show the agreement meets all requisite contract elements. Id. at 227-28.
Arches explains that employees, at the time of their employment, are given a copy of the "Right Plan," a dispute resolution program, and each employee signs a "Release of Medical Records" form contained in the "Plan." Arches maintains McCoy could not have signed the form without being presented a copy of the plan booklet. Arches says the form references the employer's "occupational injury plan." Based on McCoy's having signed the form, Arches asserts McCoy knew or had reason to know of the arbitration agreement contained in the "Plan."
McCoy, on the other hand, declares she did not sign any document relating to arbitration. She acknowledges she signed a "Release of Medical Records" form, but it does not contain any reference to arbitration or an employee injury plan. McCoy explains no one ever mentioned or gave her a plan booklet or an arbitration agreement prior to injury and suit.
In an affidavit, McCoy stated she had not seen any documents on the "Plan" until after she filed suit; she did not know the "Plan" existed prior to her injury; she never received any medical bills for the work-related injury; and she never agreed to arbitrate. During her deposition, McCoy again testified about her knowledge of the "Plan" booklet:
Q. (Defense counsel): Do you remember exactly when you asked [supervisor] for a copy of that book?
A. (McCoy): No, sir, not a specific date. All I know, it was after I got hurt.
Q. Do you remember if it was before you went to the doctor?
A. No, it was after my doctor.
. . . .
Q. (Plaintiff's counsel): Ms. McCoy, isn't it true that you had already sued McDonald's when you got that book?
[Defense Counsel]: Objection, leading.
A. Yes, sir.
Q. Do you remember whether . . . it was before or after you sued McDonald's when you got that book from [supervisor]?
[Defense Counsel]: Objection, form.
A. After.
McCoy indicates she signed the Release of Medical Records form as a separate paper in a stack of papers, and there was no booklet or plan with it. The release form contains no reference in the form to any employee injury plan.
Arches also submitted another document, titled "Authorization For Initial Treatment and Prescription Services," as evidence of an agreement to arbitrate. Expressly addressed to the provider, this page authorizes the provider to give medically necessary treatment, subject to the "Employer's occupational injury plan," for conditions related to the employee's injury. McCoy's name and social security number are printed in the blanks at the top of the page for the employee's name and social security number. Listed as the "owner operator Employer" on the provider notice is McDonald's of Woodville. The page is signed by Travis Darcel, designated as employer representative. McCoy's signature is not on the page; nor is the document addressed to her.
At the time of her August 1999 employment, McCoy also filled out and signed an employment application that states in part as follows:
1. I certify that I have read and fully completed both sides of this application and that the information contained on this application is correct to the best of my knowledge. . . . 3. I acknowledge that this independently owned and operated McDonald's franchise reserves the right to amend or modify the policies in its Handbook and other policies of this McDonald's franchise at any time, without prior notice. These policies do not create any promises or contractual obligations between this independent McDonald's franchise and its employees. At this McDonald's franchise, my employment is at will. This means I am free to terminate my employment at any time, for any reason, with or without cause, and this McDonald's franchise retains the same rights. The independent Owner/Operator of this McDonald's franchise is the only person who may make an exception to this, and it must be in writing and signed by the Owner/Operator. I understand that my employer is an independent Owner/Operator of a McDonald's franchise and that I am not employed by McDonald's Corporation or any of its subsidiaries. The independent Owner/Operator of this restaurant is solely responsible for all terms, condition, and any other issues concerning my employment. . . .
The employment application is the only document signed by McCoy that mentions a "Handbook and other policies." The document recites that the Handbook and other policies do not create any policies or contractual obligations between the franchise and its employees; further the document contains no reference to any requirement to arbitrate.
By affidavit and deposition, McCoy stated she was never shown or told, and was not aware of, the "Plan" prior to suit, and she never agreed to arbitrate; her signature is not found on any document referencing the "Right Plan" or an arbitration agreement. The evidence submitted to the trial court supports that position. "[T]he presence or absence of signatures on a written contract is relevant to determining whether the contract is binding on the parties." In re Bunzl USA, Inc. No. 08-03-00306-CV, 2004 WL 42615, at * 4 (Tex. App.-El Paso Jan. 8, 2004, orig. proceeding) (application for mand filed) (not yet released for publication). If a party signs a contract, the signature is strong evidence the party unconditionally assented to its terms. Id. But when the parties have unconditionally assented to terms stated in an unsigned document, the document constitutes a binding written contract, regardless of whether it is signed. Id. (citing 1 ARTHUR LINTON CORBIN, CORBIN ON CONTRACTS § 2.10, at 168 (Joseph M. Perillo rev., 1993)); see also Simmons Simmons Constr. Co. v. Rea, 155 Tex. 353, 286 S.W.2d 415, 418 (1955). When a person's signature is not on a written contract, other evidence may be relied on to prove the party's unconditional assent. Bunzl, 2004 WL 42615, at *4-5. Arches' burden included establishing that the parties intended to be bound regardless of whether McCoy's signature was present or not. Bunzl, 2004 WL 42615, at *6. And the question of the parties' intent was a fact question for the trial court. Id.; see generally ABB Kraftwerke Aktiengesellschaft v. Brownsville Barge Crane, Inc., 115 S.W.3d 287, 292 (Tex. App.-Corpus Christi 2003, pet. denied) (signatures are not a required factor where there is no evidence of intent to require both signatures as a condition precedent to the agreement's becoming effective as a contract).
The elements of a valid contract are (a) an offer, (b) an acceptance in strict compliance with the offer's terms, (c) a meeting of the minds, (d) each party's consent to the terms, and (e) execution and delivery of the contract with the intent that it be mutual and binding. Copeland v. Alsobrook, 3 S.W.3d 598, 604 (Tex. App.-San Antonio 1999, pet. denied). Here, Arches did not meet its burden of establishing a "meeting of the minds," consent to the terms, and acceptance of the terms in strict compliance with the offer's terms. The trial judge considered the evidence and was free to believe McCoy's testimony that she did not sign any document relating to or referencing an arbitration agreement and that she had no intent to be bound by an arbitration clause of which she had no knowledge. Arches did not produce any evidence that McCoy had knowledge of, assented to, or signed a document containing or referencing an arbitration agreement. Under the mandamus standard, the trial court's denial of Arches' motion to arbitrate was not arbitrary and unreasonable. Issue one is overruled.
In issue two, Arches maintains that by accepting benefits McCoy ratified the existence of both the employee benefit plan and the arbitration agreement. Arches paid McCoy's medical bills on her back injury. Ratification may be inferred by a party's course of conduct in retaining a transaction's benefit after acquiring full knowledge of the circumstances. See generally Miller v. Kennedy Minshew, Prof'l Corp., No. 2-01-408-CV, 2003 WL 22725125, at *11 (Tex. App.-Fort Worth Nov. 20, 2003, no pet.) (not yet released for publication); Missouri Pac. R.R. Co. v. Lely Dev. Corp., 86 S.W.3d 787, 792 (Tex. App.-Austin 2002, pet. dism'd). Before the acceptance of benefits can be said to trigger estoppel or demonstrate ratification, it must be shown that the benefits were accepted with knowledge of all material facts. Frazier v. Wynn, 472 S.W.2d 750, 753 (Tex. 1971); Herschbach v. City of Corpus Christi, 883 S.W.2d 720, 737 (Tex. App.-Corpus Christi 1994, writ denied). The question is — did McCoy's acceptance of the payment of her medical bills amount to conduct showing she recognized the arbitration agreement as existing and binding after she learned of its existence? McCoy testified she did not learn of the booklet and the agreement until after her injury and the filing of suit. She explained she only acquired the booklet after she learned of another employee who had been injured and had a booklet. McCoy said she asked her supervisor for a copy of the booklet. She also said she was never sent a medical bill; the doctors directly billed her employer. By affidavit, McCoy stated the following:
I did not accept any benefits under any "Plan." I did not know any "Plan" existed prior to my injury nor agree to any terms of any "Plan" as alleged by John Schwartz and [Arches]. I did not receive any medical bills. As far as I knew, my employer was paying my medical bills for the injury I received at work. I never met with John Schwartz at the time I as hired. No policy involving employee benefits or health care coverage called the "Right Plan[."] I never received a copy or was told of the plan until after I was injured. I never agreed to arbitration of any disputes with my employer.
By affidavit, John Schwartz, owner of the franchise, stated the "store policy for the McDonald's restaurant involving employee benefits and health care coverage was under the program entitled "The Right Plan[,]" and "copies of the Plan booklets were distributed to all employees, including Callee McCoy at orientation." Schwartz's statement concerns "store policy" regarding distribution of booklets to employees, but his statement does not establish he knew McCoy received a booklet or that she knew or understood the employer's payments of her medical bills for a work-related injury meant she agreed to arbitrate her negligence claim against her employer.
The record also contains two affidavits from Clayton Hood, the restaurant's manager at the time of McCoy's injury in October 1999. One affidavit says the store policy, upon the hiring of an employee, was to have each employee sign and date a written form acknowledging her receipt and reading of the benefit plan known as "Safe Workers Ahead Occupational Energy Plan" and the arbitration agreement in the "Right Plan." Hood stated in the first affidavit as follows:
It was also the policy of [Arches] that this written acknowledgment form bearing the date and signature of the employee be placed in the employee's personnel file if the arbitration and benefit plan were received and agreed to by the employee. If no plan documents were received, read and agreed to by an employee, no acknowledgment form with the employee's signature would be found in that employee's personnel file.
The record contains no written acknowledgment form signed by McCoy. A few weeks later Hood executed another affidavit stating that subsequently he had been shown McCoy's employee file and, upon review of those documents, concluded the "file indicates [she] received the "Right Plan" on the date she signed the "Release of Medical Records" form "taken from the Right Plan." Hood's conclusion is that the presence of the signed medical records release form "indicates [McCoy] received the [Right] Plan according to [Arches'] policies." The trial court may have rejected the second affidavit. The statements in the affidavit are conclusory and the trial court may have viewed them as inconsistent with his earlier affidavit. The trial court's decision rested on a resolution of fact issues. Arches has not shown that McCoy knew of the arbitration agreement or that her conduct in allowing her employer to pay her work-related medical bills demonstrates a knowledge of any arbitration agreement. Issue two is overruled.
We need not address issues three and four since they assume the existence of a valid arbitration agreement. And we need not address Arches' complaint about the trial judge's striking of Arches' supporting affidavits. Even if the affidavits had not been struck, their contents do not establish that an arbitration agreement existed or that McCoy ratified the arbitration by accepting the employer's payment of her work-related accident benefits under the "Plan." All issues are overruled. The petition for writ of mandamus is denied.