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Keywords

contractlawsuitarbitrationappealtrialcorporationwrit of mandamus

contractarbitrationappealhearingtrialcorporationwrit of mandamus

Related Cases

In re J.D. Edwards World Solutions Co., 87 S.W.3d 546, 46 Tex. Sup. Ct. J. 18

Facts

Doskocil Manufacturing Company, a Texas corporation, entered into a software licensing agreement with J.D. Edwards, a Colorado corporation. The agreement included a choice-of-law and arbitration provision stating that disputes would be governed by Colorado law and submitted to arbitration under the Uniform Arbitration Act. After experiencing dissatisfaction with the software, Doskocil filed a lawsuit asserting claims including fraudulent inducement, while J.D. Edwards moved to compel arbitration for all claims except the fraudulent inducement claim, which the trial court denied.

Doskocil, a Texas corporation with its principal place of business in Arlington, Texas, entered into a software licensing agreement with J.D. Edwards, a Colorado corporation with its principal place of business in Denver, Colorado.

Issue

Whether the fraudulent inducement claim falls within the scope of the parties' arbitration agreement and whether J.D. Edwards has an adequate remedy by appeal.

Whether the fraudulent inducement claim is a dispute 'involving' the software licensing agreement and whether J.D. Edwards has an adequate remedy by appeal.

Rule

The court applied the principle that a claim for fraud in the inducement of a contract falls within the scope of a broad arbitration agreement, as established in Prima Paint Corp. v. Flood & Conklin Manufacturing Co.

A claim for fraud in the inducement of a contract falls within the scope of a broad arbitration agreement.

Analysis

The court determined that the fraudulent inducement claim was indeed a dispute 'involving' the licensing agreement, thus falling within the arbitration agreement's scope. The court rejected Doskocil's argument that the term 'involving' was narrower than the standard arbitration language recommended by the American Arbitration Association, affirming that the claim was related to the contract itself. Additionally, the court found that J.D. Edwards had no adequate remedy by appeal due to the nature of the arbitration agreement and the applicable law.

Whether the contract between Doskocil and J.D. Edwards was induced by fraud is a dispute 'involving' their agreement.

Conclusion

The court conditionally granted the writ of mandamus, directing the trial court to compel Doskocil's fraudulent inducement claim to arbitration.

Accordingly, without hearing oral argument, we conditionally grant the writ of mandamus and direct the trial court to order that Doskocil's fraudulent inducement claim proceed to arbitration.

Who won?

J.D. Edwards prevailed in the case because the court found that the fraudulent inducement claim was covered by the arbitration agreement and that J.D. Edwards had no adequate remedy by appeal.

J.D. Edwards is entitled to mandamus relief because it has no adequate remedy by appeal.

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