In this entry of the Texas Civil Trial Blog, we are wondering what the Texas Supreme Court is going to say about your contract's severability clause. Specifically, whether a general severability clause in a contract applies to an arbitration provision that does not have a separate severability clause.
The Facts: Academy, Ltd. and Academy Management Co, L.L.C. (collectively, "Academy") established an executive compensation plan in 2007. Donna Miller's husband was part of that plan. After his death, she sought $2.4 million under the plan.
In this recent case, Maria Figueroa sued her employer VNA in state court for negligence due to an on-the-job injury. In re VNA, Inc., 2013 WL 1776079 (Tex. App.-El Paso 2013, no. pet. h.) VNA moved to compel arbitration on the basis of an agreement between Figueroa and VNA that employee injury claims would be arbitrated. Figueroa requested limited discovery on the enforceability of the arbitration agreement.
The Dallas Court of Appeals, in a case decided August 20, 2012, held that a litigant in arbitration who had information relevant to its post arbitration claim of "evident bias" waives that argument by failing to object to bias during the arbitration process. Ponderosa Pine Energy, LLC v. Tenaska Energy, Inc., No. 05-10-00516-CV, 2012 Tex. App. LEXIS 6915 (Tex. App. Dallas Aug. 20, 2012, nph). The Fifth Circuit reached a similar conclusion a week earlier in Dealer Computer Servs. v. Michael Motor Co., No. 11-20053, 2012 U.S. App. LEXIS 17162 (5th Cir. Tex. Aug. 14, 2012) (unpublished).