State v. Cody Joe Posey

Citation: Not availableDocket: 06-09-00040-CR

Court: Court of Appeals of Texas; October 20, 2009; Texas; State Appellate Court

Original Court Document: View Document

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The Court of Appeals for the Sixth Appellate District of Texas addresses the State's appeal regarding the trial court's order that granted Cody Joe Posey shock community supervision after his conviction for two counts of criminally negligent homicide. The court concluded that the affirmative deadly weapon finding disqualified Posey from being "otherwise eligible for community supervision" under Article 42.12 of the Texas Code of Criminal Procedure. Consequently, the court determined that the trial court erred in granting shock community supervision, as Section 3g(a)(2) prohibits such an order given the deadly weapon finding. The court vacated the trial court's order, reinstated the original judgment that revoked Posey's community supervision, and mandated a two-year confinement sentence as reflected in the written judgment.

In a separate issue, the court examined whether a contract included an arbitration clause. Coyner contested the trial court's decision to deny a motion to arbitrate, arguing no agreement existed regarding the arbitration clause. The contract specified an arbitration provision for disputes arising from the contract but allowed for judicial relief to enforce security interests or collect due balances. The court reinforced that a party must prove the existence of a valid arbitration agreement and that the claims fall within its scope to compel arbitration, establishing that arbitration cannot be enforced without such an agreement.

Determining whether parties agreed to an arbitration provision under the FAA involves applying state-law principles related to contract formation. The intent of the parties, as expressed in the contract, is paramount, and courts will not compel arbitration unless there is clear agreement to arbitrate. The interpretation of contract terms relies on their plain and ordinary meanings, and contracts are considered unambiguous if their text yields a definite legal meaning. A contract is ambiguous only if it can be reasonably interpreted in multiple ways, a determination that is a legal question for the court.

To form a binding contract, there must be an offer, acceptance, a meeting of the minds, mutual consent to the terms, and execution with the intent for it to be binding. Coyner's claim of not being aware of the arbitration clause suggests a lack of meeting of the minds and proper acceptance; however, unilateral mistakes typically do not invalidate contracts unless they meet specific equity criteria, which Coyner failed to demonstrate.

Individuals capable of entering contracts are presumed to understand the contract’s language and effects, and the arbitration provision was clear and available for Coyner's review prior to signing. Parties must read contracts to protect themselves, and failure to do so, absent misrepresentation, does not excuse them from its consequences.

No fraud or false representations by the relator regarding the contract have been alleged. Coyner’s failure to read the contract does not alter its terms. Green Tree has demonstrated a valid arbitration agreement, which Coyner does not dispute falls within its scope. The Federal Arbitration Act (FAA) governs the agreement, applicable to contracts involving commerce, and preempts inconsistent state statutes. The FAA’s definition of "commerce" includes transactions substantially affecting interstate commerce. In this case, the parties are from different states, the contract involves interstate goods transfer, and payments were directed to Georgia, indicating a substantial effect on interstate commerce. The contract explicitly states it is governed by the FAA.

Mandamus is available as a remedy when a clear abuse of discretion or violation of a legal duty is evident, and there is no adequate legal remedy. Mandamus is extraordinary, correcting only clear abuses or failures to observe mandatory provisions. A trial court abuses its discretion by making arbitrary legal errors or failing to apply the law correctly, while factual matters are not subject to substitution of judgment by reviewing courts. The Texas Supreme Court recently adopted a balancing test to assess whether an adequate remedy by appeal exists.

A remedy via direct appeal is deemed adequate when the disadvantages of mandamus review exceed its advantages, as established in Prudential Ins. Co. The Texas Supreme Court emphasizes that the term "adequate" lacks a definitive meaning and serves as a guideline for determining when mandamus proceedings may be appropriate, asserting that an appellate remedy is inadequate if the benefits of mandamus review surpass the detriments. This adequacy is context-dependent, guided more by general principles than rigid rules, and mandamus review should be reserved for exceptional circumstances to protect substantive and procedural rights.

The court has previously ruled that a party denied arbitration under the Federal Arbitration Act (FAA) lacks an adequate remedy on appeal, reinforcing this stance in recent cases where forcing a party to trial undermines their arbitration rights. Consequently, Green Tree is eligible for mandamus relief due to the absence of an adequate appellate remedy.

Coyner claims Green Tree waived its right to arbitration by initiating a lawsuit, citing incurred legal fees and expenses due to the situation. The burden of proof shifts to the opposing party once a valid arbitration agreement is established, requiring them to demonstrate prejudice from the judicial process's invocation. Waiver of an arbitration clause occurs if a party significantly engages in judicial proceedings to the detriment of the other party, with a strong presumption against waiver under the FAA. The determination of waiver is a legal question, requiring proof of substantial invocation of judicial processes and resultant prejudice. In ambiguous cases, the presumption against waiver prevails.

The Texas Supreme Court has established that merely filing a lawsuit does not constitute a waiver of the right to arbitration, nor does minimal discovery invoke the judicial process substantially. In this case, discovery had not commenced, and the act of filing suit alone is inadequate to demonstrate waiver. Additionally, there was insufficient evidence of prejudice, as Green Tree's motion to compel and plea in abatement came approximately ninety days after the suit was filed, and mere delay does not establish prejudice. Previous case law supports the notion that even significant expenses and extensive discovery do not automatically indicate prejudice.

Green Tree also argued that the arbitration clause was unconscionable. However, the court noted that arbitration agreements are not inherently unconscionable and defined unconscionability as comprising procedural and substantive elements. The burden of proof lies with the party asserting unconscionability, and it is treated as a legal question.

Coyner claimed procedural unconscionability because the arbitration clause was on the last page of the contract, which he did not sign. He alleged that he was misled about the nature of the documents he was signing. However, the court emphasized that failing to read a contract does not invalidate it unless there is fraud or misrepresentation. No evidence indicated that Green Tree engaged in deception or that Coyner was incapable of understanding the agreement, especially since each page of the contract was numbered and clearly labeled.

A page number indicating additional terms on the back of a signature page was sufficient to put a reasonable person on notice about the arbitration clause. An agreement is not considered unconscionable solely because one party was unaware of the arbitration clause, as established in Emerald Tex. Inc. v. Peel. The arbitration clause in question is not procedurally unconscionable. Coyner's argument regarding unequal bargaining power does not align with Texas Supreme Court precedent, which dictates that substantive unconscionability is determined by whether the clause is excessively one-sided when considering the parties' commercial backgrounds and needs. The court has clarified that the mere existence of a consumer adhesion contract does not automatically render it unconscionable, and arbitration agreements are not inherently problematic. Since there are no facts indicating unconscionability beyond the consumer adhesion aspect, the trial court's finding of unconscionability was erroneous. The trial court abused its discretion in denying the motion to arbitrate, leading to the conditional grant of a writ of mandamus directing the trial court to compel arbitration and stay any further proceedings until arbitration is concluded. The opinion clarifies that the writ will be issued only if the trial court fails to act accordingly.

Perry Homes references several legal cases to support its conclusions, some of which the relator also cites. The cited cases include In re Bank One, N.A., D. Wilson Constr. Co., Vesta Ins. Group, Inc., Serv. Corp. Int'l, Oakwood Mobile Homes, Bruce Terminix Co., Mancias, and Prudential Sec. Inc. v. Marshall. The contract states that a lawsuit may be initiated to enforce a security interest or seek a monetary judgment without waiving either party's right to compel arbitration for other disputes or counterclaims. However, the court has not relied on or interpreted this clause in its opinion. Additionally, the court has previously identified unconscionability in contracts where a party was functionally illiterate, did not comprehend the arbitration clause, and where the clause was inadequately explained, as seen in Turner Bros. Trucking Co. The contract in question comprises four pages, numbered accordingly, and is printed on two sheets with the fourth page appearing on the reverse side of the third page.