Court of Appeals of Texas, San Antonio.
BRACKENRIDGE HEALTHCARE, INC. d/b/a Sonterra Health Center, Appellant
Susana CAMERO, Appellee
Delivered and Filed: April 27, 2023
From the 131st Judicial District Court, Bexar County, Texas
Trial Court No. 2021CI08010
Honorable Monique Diaz, Judge Presiding
Sitting: Irene Rios, Justice
Liza A. Rodriguez, Justice
Lori I. Valenzuela, Justice
Opinion by: Liza A. Rodriguez, Justice
*1 REVERSED AND RENDERED
Brackenridge Healthcare, Inc. d/b/a Sonterra Health Center (“Sonterra”) appeals from the trial court’s interlocutory order denying its motion to compel arbitration. We reverse and render judgment compelling the parties to arbitration.
Sonterra, a nonsubscriber to the Texas Workers’ Compensation Act, was sued for negligence by Susana Camero, a former employee. Camero worked as a certified nursing assistant at Sonterra’s nursing and rehabilitation center. In her original petition, Camero alleged she was injured in the workplace and sought damages for her injuries.
Sonterra answered Camero’s suit, generally denying her claims and raising affirmative defenses. Sonterra engaged in limited discovery, answering Camero’s written discovery and sending one set of written discovery to Camero. About six and a half months after filing its answer, Sonterra moved to compel arbitration of Camero’s claims. Attached to the motion to compel were an arbitration agreement and an acknowledgement of receipt of arbitration agreement. Both documents were signed by Camero.
Camero filed a response opposing arbitration, asserting that the arbitration agreement was unenforceable based on procedural unconscionability and waiver. Attached to the response was Camero’s affidavit in which she testified that English was her second language and she was unable to read complicated legal documents in English.
The trial court held an evidentiary hearing on the motion to compel. Both the arbitration agreement and acknowledgement signed by Camero were admitted into evidence. The arbitration agreement was entirely in English. The acknowledgement was both in English and in Spanish. Camero’s signature appeared in the signature block immediately under the English version of the acknowledgement. The acknowledgement was titled, “Acknowledgment Of Receipt Of Mutual Agreement to Arbitrate, Summary Plan Description And Other Nonsubscriber Documents,” and stated, “The undersigned acknowledges that he or she has received a copy of the Mutual Agreement to Arbitrate ....”
A Spanish-language version of the arbitration agreement was also admitted into evidence. However, it was undisputed that Sonterra never provided Camero with a Spanish-language version of the arbitration agreement.
Sonterra’s human resources representative, Kendra Diaz, testified about Sonterra’s typical “onboarding” process, explaining that new employees went to Sonterra’s facility to sign their new-hire paperwork, which consisted of documents concerning Sonterra’s policies and procedures, including telephone use, break times, arrival times, the occupational injury plan, and arbitration. It was customary for a company representative to review the documents with the new employee. If a new employee asked for a copy of the new-hire documents to take home with her, a copy was provided. The new-hire documents were in English; however, copies of certain documents, including the occupational injury plan and the arbitration agreement, were available in Spanish. If the employee asked for a Spanish version of these documents, the Spanish version was provided.
*2 Next, Camero testified, through an interpreter, about her hiring and onboarding process. Camero was interviewed by two Sonterra representatives, who began the interview in English. However, after hearing Camero’s accent and learning that she was from Mexico, one of the interviewers began speaking to her in Spanish. According to Camero, the interviewers were aware that she did not speak English well. After the interview, another Sonterra representative took her to a room and told her that she was going to watch videos and sign documents there. The representative left the room and Camero signed the documents. No one sat down with her and explained the documents to her. Additionally, no one told her that she was waiving her right to a jury trial, that she was going to have to arbitrate any work-related claims, or that she was signing an arbitration agreement.
Camero further testified that even though she did not know what she was signing, she did not ask anyone to explain the documents to her because she “did not know the magnitude, how serious the documents were.” She did not ask for a Spanish-language version of the documents because no one told her that the documents were available in Spanish. When asked why she signed the English version of the acknowledgement, Camero replied, “I just signed where they told me to sign.” When she left the facility later that day, she did not receive a copy of the arbitration agreement to take home with her.
Camero’s affidavit was also admitted into evidence. In her affidavit, Camero testified that she was originally from Mexico, that Spanish was her native language, that English was her second language, and that there was no way she would be able to read complicated documents in English and understand their meaning or importance. Camero further testified that: “As part of taking the job[,] a person from human resources brought me into their office and said that I needed to sign a bunch of documents in order to be employed. It was explained to me that these were standard forms that I needed in order to be employed and that I had to sign them in order to be employed.”
After hearing all the evidence, the trial court denied the motion to compel arbitration. Sonterra appealed.
STANDARD OF REVIEW
“A party seeking to compel arbitration must establish the existence of a valid arbitration agreement and that the claims at issue fall within the scope of that agreement.” Henry v. Cash Biz, LP, 551 S.W.3d 111, 115 (Tex. 2018). “If the party seeking to compel arbitration meets this burden, the burden then shifts, and to avoid arbitration, the party opposing it must prove an affirmative defense to the provision’s enforcement, such as waiver” or unconscionability. Id. “We review a trial court’s order denying a motion to compel arbitration for abuse of discretion.” Id. “We defer to the trial court’s factual determinations if they are supported by evidence but review its legal determinations de novo.” Id.
On appeal, no one challenges the existence of a valid arbitration agreement or argues that the claims at issue do not fall within the scope of the arbitration agreement. Instead, the issue before us is whether the trial court abused its discretion in refusing to compel arbitration because Camero failed to meet her burden to prove either of her affirmative defenses. First, we determine if Camero met her burden to prove procedural unconscionability. Second, we determine if Camero met her burden to prove waiver by substantially invoking the judicial process.
In her response to the motion to compel, Camero argued that the arbitration agreement was procedurally unconscionable because she was not an English speaker, Sonterra’s representatives failed to explain the arbitration agreement to her, Sonterra did not provide her with a Spanish version of the arbitration agreement, and Sonterra’s representatives misrepresented the arbitration agreement and acknowledgement to her. On appeal, Camero maintains that she met her burden to prove procedural unconscionability because the undisputed evidence showed that (1) she “speaks basic English and reads almost none,” (2) Sonterra’s “employees were keenly aware of this during the interview and signing process,” (3) no one “explained or attempted to explain any of the documents signed by [her],” and (4) Sonterra “violated its own policies by failing to translate or provide a translated version of the employment documents.”
*3 “Agreements to arbitrate disputes between employers and employees are generally enforceable under Texas law; there is nothing per se unconscionable about an agreement to arbitrate employment disputes and, in fact, Texas law has historically favored agreements to resolve such disputes by arbitration.” In re Poly-Am., L.P., 262 S.W.3d 337, 348 (Tex. 2008) (orig. proceeding). Nevertheless, an arbitration agreement is unenforceable if the party opposing arbitration proves that the agreement is unconscionable. See id. Unconscionability is not subject to precise definition and, therefore, is determined in light of a variety of factors. Id. at 348-49. Substantive unconscionability refers to the fairness of the arbitration provision itself, whereas procedural unconscionability refers to the circumstances surrounding adoption of the arbitration agreement. In re Palm Harbor Homes, Inc., 195 S.W.3d 672, 677 (Tex. 2006) (orig. proceeding). “Procedural unconscionability relates to the making or inducement of the contract, focusing on the facts surrounding the bargaining process.” Micocina, Ltd. v. Balderas-Villanueva, No. 05-16-01507-CV, 2017 WL 4857017, at *5 (Tex. App.—Dallas Oct. 27, 2017, no pet.).
“The principles of unconscionability do not negate a bargain because one party to the agreement may have been in a less advantageous bargaining position.” In re Palm Harbor Homes, Inc., 195 S.W.3d at 679 (recognizing that parties claiming they were unsophisticated persons, who would not have signed the arbitration agreement if the concept of arbitration had been explained to them, failed to establish procedural unconscionability). To support a finding of procedural unconscionability, the circumstances surrounding the adoption of the agreement must be shocking. Delfingen US-Texas, L.P. v. Valenzuela, 407 S.W.3d 791, 798 (Tex. App.—El Paso 2013, no pet.). The burden of proving the affirmative defense of unconscionability is on the party opposing arbitration. In re FirstMerit Bank, N.A., 52 S.W.3d 749, 756 (Tex. 2001) (orig. proceeding).
“Absent fraud, misrepresentation, or deceit, a party is bound by the terms of the contract [s]he signed, regardless of whether [s]he read it or thought it had different terms.” In re McKinney, 167 S.W.3d 833, 835 (Tex. 2005) (orig. proceeding). “It is well settled that illiteracy will not relieve a party of the consequences of a contract.” Vera v. North Star Dodge Sales, Inc., 989 S.W.2d 13, 17 (Tex. App.—San Antonio 1998, no pet.). “Every person who has the capacity to enter into a contract, in the absence of fraud, misrepresentation, or concealment, is held to know what words were used in the contract, to know their meaning, and to understand their legal effect.” Id. “Therefore, if a party is unable to read the contract, [s]he must have it read to [her].” Id.
“Whether a party is illiterate or incapable of understanding English is not a defense to a contract.” In re Ledet, No. 04-04-00411-CV, 2004 WL 2945699, at *5 (Tex. App.—San Antonio Dec. 22, 2004, orig. proceeding). In In re Ledet, we rejected the relator’s argument that the parties’ arbitration agreement was procedurally unconscionable because he did “not understand, speak, or read English, no one explained the agreement to him, and he felt pressured to sign the arbitration agreement.” Id. We concluded that the parties’ arbitration agreement was enforceable because there was “no allegation of fraud, misrepresentation, or concealment” and the fact that the relator “did not speak English and therefore could not read the contract d[id] not affect the validity of the contract.” Id., at *6.
On appeal, Sonterra argues that Camero did not meet her burden to establish procedural unconscionability because there is no evidence of fraud, misrepresentation, or deceit surrounding the adoption of the arbitration agreement and acknowledgement. Camero counters that she met her burden to establish procedural unconscionability, relying on Delfingen. See 407 S.W.3d at 803. In Delfingen, which also involved an arbitration agreement between an employer and employee, the El Paso court of appeals upheld the trial court’s order refusing to compel arbitration because the evidence established that (1) the employee was illiterate in English, (2) a Spanish language translation of the arbitration agreement was not provided to the employee, and (3) the employer affirmatively misrepresented the contents of the arbitration agreement during the new employee’s orientation session. Id. at 801. The court of appeals recognized that the trial court could have believed the employee’s testimony that her employer told her she would translate the important portions of the new-hire documents to her and that her employer misrepresented to her that the arbitration agreement was an attendance policy. Id. at 802-03. Deferring to the trial court’s factual determinations, the court of appeals held that the employee carried her burden of proving that the arbitration agreement was procedurally unconscionable. Id. at 803.
*4 The present case is distinguishable from Delfingin. Here, unlike Delfingin, there is no evidence that Sonterra affirmatively misrepresented the contents of the arbitration agreement to Camero. During her direct examination, Camero provided the following testimony:
Counsel: Do you believe [the Sonterra representative] misrepresented what was in these documents?
Counsel: Why do you say that?
Camero: They misrepresented because they should have informed me. If you hear me speaking in English, you understand that I don’t speak in English. If they have the paperwork in Spanish, why don’t you give them to me? You have been listening to such an accent, such a heavy accent and my English is not that good.
Counsel: And your accent was so heavy that actually one of the employees started to speak to you in Spanish, correct?
Counsel: Did that employee ever say, You know, you’re waiving some important rights. Here’s the document in Spanish so you understand?
Counsel: They just told you you’re signing some standard forms?
Camero: Yes. And that I should watch some videos.
Later, on cross-examination, Camero testified:
Counsel: [N]o one showed you the Mutual Agreement to Arbitrate Claims and then told you it was something else, like an attendance policy?
Camero: They gave me the papers, and they said sign. That’s the only thing I was told, and then she left. She said, You have to sign this. She came back. She checked them, and she said, You missed a signature here[.] You missed a signature here.
Counsel: So it’s not your testimony today that someone misrepresented the documents to you and called them something else?
Camero: Simply, I was not informed.
Based on Camero’s testimony, the trial court could have found that Sonterra’s representatives were aware of her heavy accent, did not provide her with the Spanish-language version of the arbitration agreement, and told her that the documents were “standard forms.” But these findings do not establish that Sonterra’s representatives actively misled Camero about the contents of the arbitration agreement. The statement that the arbitration agreement was a “standard form” was an accurate statement and, therefore, is not an affirmative misrepresentation. See Micocina, Ltd., 2017 WL 4857017, at *6 (concluding that employer’s statements that acknowledgement and mutual agreement to arbitrate were restaurant policies and were related to work were true statements and could not support a finding of fraud, misrepresentation, or deceit required for procedural unconscionability); Emerald Tex., Inc. v. Peel, 920 S.W.2d 398, 402 (Tex. App.—Houston [1st Dist.] 1996, no pet.) (concluding that party’s representation that a contract containing an arbitration provision was a “standard” contract was not evidence of unconscionability, when there was no evidence that the contract was not “standard”). Furthermore, throughout her testimony, Camero was unwavering in her position that Sonterra’s representatives never explained the contents of the new employee documents to her. Because Camero’s testimony failed to show that Sonterra’s representatives actively misled Camero about the contents of the arbitration documents, it cannot support a legal determination of procedural unconscionability.
*5 Camero further argues that she established fraud, misrepresentation, or deceit because Sonterra’s representatives were aware of her poor English language skills and they “violated [Sonterra’s] own policies by failing to translate or provide a translated version of the employment documents” to Camero. We reject this argument. Here, Camero mischaracterizes the evidence. Sonterra’s human resources representative, Diaz, did not testify that it was Sonterra’s practice to translate the new-hire documents during the onboarding process. Rather, Diaz testified that it was Sonterra’s practice to give new employees a Spanish-language version of the arbitration agreement, but only when they requested it. Camero testified that she never asked for a Spanish-language version of any of the new-hire documents.
To the extent Camero testified that she failed to understand the significance of her signature on the arbitration agreement, her testimony was not evidence of fraud, misrepresentation, or deceit. “A party’s testimony that he did not understand the significance of his signature on a contract is not evidence of procedural unconscionability.” H-E-B, LP v. Saenz, No. 01-20-00850-CV, 2021 WL 4733460, at *4 (Tex. App.—Houston [1st Dist.] Oct. 12. 2021, pet. denied); see In re McKinney, 167 S.W.3d at 835 (stating that a party’s “contention that he did not understand his signature’s significance [did] not negate his acceptance of the contract terms.”). “Likewise, testimony that a party is unsophisticated, or that she would not have signed the arbitration agreement if the concept of arbitration had been explained to her does not establish procedural unconscionability.” Saenz, 2021 WL 4733460, at *4. Without proof of a confidential or fiduciary relationship, Sonterra had no duty to explain the contents of the arbitration agreement to Camero. See Peel, 920 S.W.2d at 403 (“a failure to disclose information is not fraudulent unless one has an affirmative duty to disclose, such as where a confidential or fiduciary relationship exists.”). “[A]bsent proof of mental incapacity, a person who signs a contract is presumed to have read and understood the contract, unless [s]he was prevented from doing so by trick or artifice.” In re Ledet, 2004 WL 2945699, at *5. Here, Camero did not argue, much less show, that the parties had a confidential or fiduciary relationship, or that she was mentally incapacitated when she signed the arbitration documents.
“[A] party to an arms-length transaction is charged with the obligation of reading what [s]he signs and, failing that, may not, thereafter, without a showing of trickery or artifice, avoid the instrument on the ground that [s]he did not know what [s]he was signing.” Micocina, 2017 WL 4857017, at *5 (quoting Thigpen v. Locke, 363 S.W.2d 247, 251 (Tex. 1962)). “If a person is unable to read a contract, it is [her] duty to find some reliable person to read and explain it to [her] before [s]he signs it.” Id., at *6; see Vera, 989 S.W.2d at 17 (explaining that “if a party is unable to read the contract, [s]he must have it read to [her].”).
“The law requires that a party is bound by an instrument she signs absent fraud, trickery or deceit.” Micocina, 2017 WL 4857017, at *8; see In re McKinney, 167 S.W.3d at 835. Having signed the arbitration agreement and the acknowledgement, the law requires us to presume that Camero read and understood them. See ReadyOne Indus., Inc. v. Casillas, 487 S.W.3d 254, 262 (Tex. App.—El Paso 2015, no pet.) (concluding that, absent proof of mental incapacity or an affirmative misrepresentation, employee was “presumed to have read and understood” the arbitration acknowledgement he signed). Because there is no evidence of any misrepresentation, fraud, or deceit at the time Camero signed the arbitration documents, we hold that Camero failed to meet her burden to establish her affirmative defense of procedural unconscionability. See ReadyOne Indus., Inc. v. Lopez, 551 S.W.3d 305, 316 (Tex. App.—El Paso 2018, pet. denied) (holding the record failed to support a determination of procedural unconscionability when there was no evidence that the employer affirmatively misrepresented the contents of the arbitration agreement to the employee or prevented her, by trick or artifice, from reading the arbitration agreement and the acknowledgement).
Waiver by Substantially Invoking the Judicial Process
*6 In her response to the motion to compel, Camero argued that Sonterra impliedly waived its right to arbitration by substantially invoking the judicial process. “A party asserting implied waiver as a defense to arbitration has the burden to prove that (1) the other party has ‘substantially invoked the judicial process,’ which is conduct inconsistent with a claimed right to compel arbitration, and (2) the inconsistent conduct has caused [her] to suffer detriment or prejudice.” GT Leach Builders, LLC v. Sapphire V.P., LP 458 S.W.3d 502, 511-12 (Tex. 2015). “Because the law favors and encourages arbitration,” the “hurdle” a party must “clear” to prove this affirmative defense is “a high one.” Id. at 512.
In determining whether a party has substantially invoked the judicial process, courts consider a wide variety of factors and look at the facts of each case. Cash Biz, 551 S.W.3d at 116. “The necessary conduct must go beyond merely filing suit or seeking initial discovery.” Id. The Texas Supreme Court has “declined to conclude that the right to arbitrate was waived in all but the most unequivocal of circumstances.” Id. Among the factors courts consider in determining if a party has substantially invoked the judicial process are: (1) how long the movant waited to move for arbitration; (2) the reasons for the movant’s delay; (3) whether the movant was aware of the arbitration agreement during the delay; (4) how much discovery the movant conducted before moving for arbitration, and whether the discovery related to the merits; (5) whether the movant asked the court to dispose of any claims on the merits; (6) whether the movant asserted affirmative claims for relief in court; (7) the extent to which the movant engaged in pre-trial matters related to the merits (as opposed to matters related to arbitrability or jurisdiction); (8) the amount of time or expense the parties have committed to the litigation; (9) whether the discovery conducted in litigation would be unavailable or useful in arbitration; and (10) whether the activity in court would be duplicated in arbitration. GT Leach Builders, 458 S.W.3d at 512.
In support of her argument that Sonterra substantially invoked the judicial process, Camero emphasizes Sonterra’s delay in filing its motion to compel arbitration and its participation in discovery. Camero filed her original petition on April 22, 2021. Sonterra filed its original answer on May 14, 2021, and its motion to compel arbitration on December 1, 2021. Thus, Sonterra waited about six and a half months to assert its right to arbitration. Sonterra mentioned the arbitration agreement in its answer, demonstrating that it was aware of its right to compel arbitration from the beginning. The record is silent about the reason for Sonterra’s delay in moving to compel arbitration. During the delay, Sonterra propounded written discovery on Camero—twenty-five interrogatories and twenty-four requests for production. The discovery Sonterra propounded was merits-based, but nothing showed that it was unavailable in arbitration. Sonterra did not assert any affirmative claims for relief, nor did it ask the trial court to dispose of the suit on the merits. Apart from entering into an agreed protective order to address the handling of sensitive information produced in discovery, Sonterra did not engage in any pre-trial matters. Although Camero’s counsel advised the trial court that he had taken this case on a contingency fee and that he was going to have to “start all over” in arbitration, he presented no evidence regarding the amount of time or expense the parties had committed to the litigation. Based on this record, we conclude that Camero failed to meet her burden to establish that Sonterra waived its right to arbitration by substantially invoking the judicial process in a manner inconsistent with arbitration. See In re Fleetwood Homes of Tex., L.P., 257 S.W.3d 692, 694-95 (Tex. 2008) (orig. proceeding) (holding party did not waive arbitration by noticing deposition, serving written discovery, and waiting eight months to move for arbitration); EZ Pawn Corp. v. Mancias, 934 S.W.2d 87, 90 (Tex. 1996) (orig. proceeding) (holding defendant did not substantially invoke the judicial process by answering suit, participating in a docket-control conference, sending plaintiff interrogatories and requests for production, noticing plaintiff’s deposition, and entering into an agreed order resetting the trial date).
*7 Having concluded that Camero failed to establish that Sonterra waived its right to arbitration by substantially invoking the judicial process, we need not address whether Camero established that she was prejudiced by Sonterra’s conduct. See Cash Biz, 551 S.W.3d at 118 (declining to address prejudice after determining that party seeking arbitration did not substantially invoke the judicial process).
Because Camero failed to prove either of her affirmative defenses to arbitration, we conclude the trial court abused its discretion in denying Sonterra’s motion to compel arbitration. We reverse the trial court’s order and render judgment compelling the parties to arbitrate Camero’s claims.