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Jody James Farms V Altman Group - Reply To Respondent's Response To Brief On The Merits
Jody James Farms V Altman Group - Reply To Respondent's Response To Brief On The Merits
17-0062
1/5/2018 5:24 PM
tex-21651834
SUPREME COURT OF TEXAS
BLAKE A. HAWTHORNE, CLERK
PETITIONER,
v.
RESPONDENTS
On Petition for Review from the 110th District Court of Floyd County, Texas, No.
10,422; and the Amarillo Court of Appeals, Jody James Farms, JV v. The Altman
Grp., Inc. and Laurie Diaz, 506 S.W.3d 595 (Tex. App.—Amarillo 2016).
JODY JENKINS
State Bar No. 24029634
Jenkins, Wagnon & Young, P.C.
P.O. Box 420
Lubbock, Texas 79408-0420
Ph: 806-796-7351
Fx: 806-771-8755
jjenkins@jwylaw.com
Plaintiff/Appellant/Petitioner:
Jody James Farms, JV (“JJF”)
Defendants/Appellees/Respondents:
The Altman Group, Inc. (“Altman”) and Laurie Diaz (“Diaz”)
i
TABLE OF CONTENTS
CONCLUSION......................................................................................................... 6
PRAYER ................................................................................................................... 7
ii
INDEX OF AUTHORITIES
Cases
Holman v. Laulo-Rowe Agency, 994 F.2d 666 (9th Cir. 1993) ................................. 6
In re Kellogg Brown & Root, Inc., 166 S.W.3d 732 (Tex. 2005).............................. 3
Nobles v. Rural Community Insurance Services, 122 F. Supp. 2d 1290 (M.D. Ala.
2000) .......................................................................................................................... 5
Rio Grande Underwriters, Inc. v. Pitts Farms, Inc., 276 F.3d 683 (5th Cir. 2001) ... 6
Williams Farms of Homestead, Inc. v. Rain and Hail Ins. Servs., Inc., 212 F.3d 630
(11th Cir. 1997) ........................................................................................................... 5
iii
Case No. 17-0062
PETITIONER,
v.
RESPONDENTS
On Petition for Review from the 110th District Court of Floyd County, Texas, No.
10,422; and the Amarillo Court of Appeals, Jody James Farms, JV v. The Altman
Grp., Inc. and Laurie Diaz, 506 S.W.3d 595 (Tex. App.—Amarillo 2016).
Response to Its Brief on the Merits challenging the decision of the Seventh Court
1
of Appeals in Amarillo.
1
Citations to the Clerk’s Record will be denoted as C.R. ____. Citations to the
Supplemental Clerk’s Record will be denoted as Supp. C.R.____. Jody James Farms, JV will be
referred to as JJF; The Altman Group, Inc. and Laurie Diaz will be referred to as Altman.
1
I
SUMMARY OF ARGUMENT
JJF incorporates its prior argument and authorities. This short reply
addresses two issues raised by Altman: (1) multiple wrongs do not make a right;
and (2) federal crop insurance ties are not dispositive of the errors in need of
Although Respondents argue the trial court considered the arguments of JJF
wrongs do not make a right. When a fact issue exist regarding the applicability of
The underlying source of the arbitration clause is not dispositive of the need
insurance claim or otherwise. The mere fact the arbitration clause at issue is
connected to federal crop insurance does not alter the need for clarification by this
Court and JJF prays the Court grant review and rectify the uncertainties in the law.
2
II
ARGUMENT AND AUTHORITIES
A. Despite the argument that the arbitrability issue was decided “three
times,” three wrongs do not make a right.
Under Texas law, it is well established that a party seeking to compel
arbitration must establish that (1) a valid arbitration clause exists, and (2) the
claims in dispute fall within that agreement’s scope. In re Kellogg Brown & Root,
Inc., 166 S.W.3d 732, 737 (Tex. 2005). Until the initial burden of proving that a
See In re Kellogg Brown & Root, Inc., 166 S.W.3d at 737. Furthermore, under the
FAA, absent unmistakable evidence that the parties intended the contrary, it is the
courts rather than arbitrators that must decide ‘gateway matters’ such as whether a
valid arbitration agreement exists. In re Weekley Homes, L.P., 180 S.W.3d 127
(Tex. 2005). Although this Court has held that the trial court may summarily
evidentiary hearing. Jack B. Anglin Co. v. Tipps, 842 S.W.2d 266, 269 (Tex.
1992).
In the case at bar, the trial court and the Seventh Court of Appeals did not
use the correct analytical framework in resolving this issue. In fact, Altman
submitted no evidence to the trial court but simply filed a motion to compel
3
arbitration without even including the alleged arbitration agreement. C.R. 9-17.
The trial court then granted the motion via letter which makes no mention of
review of evidence. C.R. 26. In fact, the only potential evidence submitted was
that contained in the exhibits to JJF’s Response: all of which JJF argued created
a fact issue. Supp. C.R. 4-76. The failure to conduct an evidentiary hearing at this
Following this erroneous ruling, JJF ask for reconsideration of the trial
court’s order. In response, Altman argued no new evidence was submitted and the
trial court could not consider new evidence without compliance with the standard
for newly discovered evidence when moving for a motion for new trial. C.R. 38-
39. Although the trial court recites in its order that it considered the evidence and
arguments of counsel, no evidence appears in the record other than an excerpt from
the insurance policy. C.R. 34-36. This second wrong did not make a right.
The alleged “third” time review was not the charm either. At this stage,
Altman filed its Petition to Confirm and Enforce Final Arbitration Award. C.R.
42. In response, JJF asked the trial court to set aside the arbitration award because
the arbitrator exceeded his authority. C.R. 57. Again, the trial court did not
conduct an evidentiary hearing but ruled solely upon the briefing. C.R. 124.
The failure to apply the correct legal standard to the review is the exact issue
in need of correction and clarification. Not only was the standard disregarded
4
initially, but it was disregarded three times as emphasized by Altman. Obviously,
the operative legal standard is not as clear as Altman would have this Court believe
in light of the erroneous standard applied by the talented judges involved in the
B. The fact the underlying contract was issued pursuant to the Federal
Crop Insurance Act has no bearing on the need for this Court to issue a
decision.
Regardless of the form of the alleged arbitration agreement, the trial court
and the Seventh Court of Appeals applied the incorrect legal analysis. Altman and
Diaz are not parties to the agreement and were able to compel arbitration without
presenting any evidence. Although the Federal Crop Insurance Act does preempt
certain state laws and requires arbitration of certain claims, it does not preempt the
state law claims asserted against Altman. Although Altman urges that Nobles v.
Rural Community Insurance Services, 122 F. Supp. 2d 1290 (M.D. Ala. 2000)
somehow displaces the need for review by this Court, such arguments are
misplaced. In fact, Nobles specifically held that the initial claims against the
insurance provider, Rain and Hail, should be arbitrated and “plaintiffs then are free
to pursue their ancillary claims in court.” Id. at 1298. Here, JJF did pursue
arbitration with Rain and Hail and subsequently pursued its ancillary claims in
state court against Altman. See also Williams Farms of Homestead, Inc. v. Rain
and Hail Ins. Servs., Inc., 212 F.3d 630, 634 (11th Cir. 1997) (holding that the
5
FCIA does not completely preempt state law claims against agents and insurers);
Holman v. Laulo-Rowe Agency, 994 F.2d 666 (9th Cir. 1993) (holding that claims
against agents selling FCIC insurance are not completely preempted); Rio Grande
Underwriters, Inc. v. Pitts Farms, Inc., 276 F.3d 683, 685-687 (5th Cir. 2001)
(holding that Congress did not intend to so displace state law claims against agents
who sell policies reinsured by the FCIC as to convert them to federal claims and
subject them to federal jurisdiction). The fact that the underlying arbitration
agreement was connected to federal crop insurance does not obviate the need for
review by this Court as the state law claims still existed but were compelled to
III
CONCLUSION
This Court should exercise jurisdiction over this case and overturn both
lower courts. The trial court clearly erred when it allowed an arbitrator to decide
the gateway issue of whether an arbitration agreement existed between the parties
to the dispute. The decision of the Seventh Court of Appeals to affirm further
conflicts with the controlling jurisprudence of this State. This error of law is of
and deprive litigants of their right to have disputes adjudicated in court, while
6
IV
PRAYER
Respondents;
3. GRANT all other relief to which it has shown itself justly entitled.
Respectfully Submitted,
CERTIFICATE OF COMPLIANCE
I hereby certify that the word count in this Reply is 1,819 words when all
sections are included.
7
CERTIFICATE OF SERVICE
The undersigned certifies that a true and correct copy of the foregoing has
been served via electronically on this 5th day of January, 2018 on the following:
J. Paul Manning
Anna McKim
Field, Manning, Stone, Hawthorne & Aycock, P.C.
2112 Indiana Ave.
Lubbock, TX 79410