Texas Court Endorses Mandamus Review of Denial of Motion to Compel Arbitration (Web)

The Texas Court of Appeals for San Antonio in Dell v. Muniz considered a dispute as to whether a Dell customer stated a claim for breach of the company’s limited written warranty, thus causing the dispute to fall outside of the arbitration agreement’s express exception for such claims.  The trial court denied Dell’s motion to compel arbitration of Muniz’s claim, which had been amended from a range of broader complaints to a consolidated action for breach of Dell’s written warranty.  Though it dismissed Dell’s interlocutory appeal from this decision for lack of jurisdiction, the Court of Appeals proceeded to consider the merits of its petition for writ of mandamus. The Court relied on prior decisions by Texas Courts of Appeals in finding that the FAA allows the denial of a motion to compel arbitration to be reviewable by mandamus because there is no adequate remedy by appeal.  (Section 16 of the FAA does provide for an appeal from a denial of an order directing arbitration to proceed under Section 4 of the FAA, but the Court does not cite to this provision in its decision.)
 
The Court of Appeals pointed out that mandamus would be issued only to “correct a clear abuse of discretion or the violation of a duty imposed by law when there is no other adequate remedy by law.” The Court stated that a “clear failure by the trial court to analyze or apply the law correctly” would constitute an abuse of discretion and serve as grounds for an appellate reversal by “extraordinary” writ. To compel arbitration, Dell needed to establish the existence of a valid arbitration agreement subject to the FAA and that the claims asserted fell within the scope of that agreement. 
 
The Court here found that there was no question as to the existence of a valid arbitration agreement, and focused its analysis on the question of whether the claims asserted by Muniz fell within the stated exception for disputes arising from breach of Dell’s limited written warranty. Reviewing the specific factual allegations, the court found that, though it had been amended to facially comply with the terms of the stated exception, Muniz’s claim did not in fact fall within the exception and was thus within the scope of the arbitration agreement. The Court thus held that the trial court had abused its discretion in declining to compel arbitration and ordered the trial court to withdraw its order denying arbitration and to enter an order compelling arbitration under the FAA.  The Court of Appeals conditionally granted a writ of mandamus to issue if the trial court failed to comply with this order within ten days.
 
The opinion is available on Westlaw.