Jurisdiction: Texas Appellate Court Says It Can't Rule on a Motion to Compel (Web)

The Houston-based First Court of Appeals of Texas dismissed an application by a credit card holder to overturn a trial court order to arbitrate in Tiffany J. Koontz v. Citibank (South Dakota) N.A., No. 01-05-01140-CV, 2007 WL 1299674. (May 3, 2007)(available at http://www.1stcoa.courts.state.tx.us/opinions/HTMLopinion.asp?OpinionID=84202).

Plaintiff Tiffany J. Koontz's appeal from a trial court order granting Citibank’s motion to compel arbitration was denied for a lack of jurisdiction. Koontz provided a long list of reasons to overturn the case, in which Citibank filed suit to collect an overdue balance on an amount less than $3,000, according to the brief memorandum opinion.

But the state appeals court held that, even though the trial court didn’t state whether the Federal Arbitration Act or the Texas Arbitration Act applied, it didn’t have jurisdiction over the order to compel, and it dismissed Koontz’s appeal.

The dispute arose out of a credit card account opened by Koontz with Citibank in 1995. Citibank filed suit to collect on the overdue balance in March 2005.

In June 2005, Koontz filed a counterclaim. On July 19, 2005, Citibank countered by moving to compel arbitration pursuant to the FAA and to stay the trial court proceedings.

On Nov. 15, 2005, the trial court ordered the parties to proceed to arbitration without stating whether the FAA or the Texas act applied.

On appeal, Koontz argued that (1) the rules relating to summary judgment proof apply to the proof of the agreement to arbitrate; (2) she is entitled to discovery on the costs associated with arbitration before the motion to compel is ruled on; (3) Citibank has elected not to arbitrate; (4) the agreement to arbitrate has been mutually repudiated; (5) Citibank cannot arbitrate the entire matter; (6) the arbitration agreement is unconscionable; and (7) the arbitration agreement is illusory.

But the Texas appellate court didn’t get past the jurisdiction issue. The opinion states that “[b]ecause orders compelling arbitration do not dispose of all parties and issues, but instead contemplate continuing resolution through arbitration process, orders compelling arbitration are interlocutory, per se.” Brook v. Pep Boys Auto. Supercenters Inc., 104 S.W.3d 656, 660 (Tex.App.-Houston [1st Dist.] 2003).

The unanimous three-judge panel notes that “Koontz challenges an order that grants Citibank's motion to compel arbitration, and that is, therefore, interlocutory. Whether under the Texas Arbitration Act or the Federal Arbitration Act, there is no interlocutory appeal over an order granting a motion to compel arbitration. . . . As a result, we have no jurisdiction to address this appeal and must dismiss it.” Texas.R.App. P. 42.3(a); see Trico Marine Servs. Inc. v. Stewart & Stevenson Technical Servs., 73 S.W.3d 545, 547-48 (Tex.App.-Houston [1st Dist.] 2002).

--Ongmu Tshering, CPR Intern