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A Texas appellate court considered whether a court or an arbitrator should decide issues involving procedural preconditions to arbitration and invoked a rare exception in holding that, in cases of undisputed fact, the court can decide whether procedural preconditions to arbitration have been met.
In In re Pisces Foods, L.L.C., No. 03-06-00274-CV, 2007 WL 1518076 (Tex. App. May 24, 2007), Carmen Jimenez, an employee of Pisces Foods (Wendy's), was hurt while working. Jimenez brought suit and Wendy's moved to compel arbitration. The trial court denied the motion. Wendy's appealed.
Wendy's dispute resolution program specifically outlined individual steps to be taken in which mediation was to occur prior to arbitration. There was no evidence that either party had attempted mediation or that Jimenez had refused to mediate.
The Court considered whether it was for the court or for the arbitrator to decide whether preconditions to arbitration had been met. Generally, courts have held that issues relating to whether conditions precedent to arbitration have been met are procedural, and thus should be decided by the arbitrator. See In re R &R Personnel Specialists of Tyler, Inc., 146 S.W.3d 699, 704 (Tex. App. 2004).
However, in cases where there is no dispute of fact, a rare exception exists. The issue is treated as one of contract compliance rather than arbitration procedure. See Kemiron Atl., Inc. v. Aguakem Int'l, Inc., 290 F.3d 1287, 1290-91 (11th Cir. 2002). The facts in this case as to the mediation pre-condition were undisputed. Arbitration was not properly invoked in accordance with the parties' contract.
In denying Wendy's motion to compel arbitration, the Court specifically noted that its decision did not reflect an opinion regarding whether Wendy's had waived its right to arbitrate once the precondition to arbitration had been satisfied or whether the case should go to trial in spite of the dispute resolution agreement.
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