author: DIANE M. HENSON, Justice. G. ALAN WALDROP, Justice,

text:
    In re GUARANTY INSURANCE SERVICES, INC.
    No. 03-09-00640-CV.
    Court of Appeals of Texas, Austin.
    April 16, 2010.

      Larry Parks, Mitchell Williams Long Burner, Austin, TX, Ronald G. Bankston, Kane Russell Coleman & Logan, PC, Houston, TX, for real party in interest.
    Amy J. Schumacher, Strasburger & Price, LLP, Dallas, TX, for relator.
    Before Chief Justice JONES, Justices WALDROP and HENSON.
   OPINION

DIANE M. HENSON, Justice.

Relator Guaranty Insurance Services (“Guaranty Insurance”) has filed a petition for writ of mandamus seeking to vacate the trial court’s order disqualifying its counsel. On October 12, 2009, the trial court granted a motion to disqualify Guaranty Insurance’s counsel, Strasburger & Price (“Strasburger”), on the ground that a paralegal who had performed work on behalf of Guaranty Insurance while working for Strasburger had also performed work on behalf of the opposing party, Trans-Global Solutions, Inc. (“Trans-Global”), during his previous employment at the law firm of Godwin Pappas Langley Ronquillo, LLP (“Godwin”).

The Texas Supreme Court has held that when a paralegal works on a case at one firm, and then moves to another firm on the opposing side of that litigation, two presumptions come into play. See Phoenix Founders, Inc. v. Marshall, 887 S.W.2d 831, 834-35 (Tex.1994). First, there is a conclusive presumption that the paralegal acquired confidential information during his work on the case at the first firm. Id. at 834. Second, there is a rebut-table presumption that the paralegal shared confidential information about the case with the members of the new firm. Id. at 835. This second presumption may be rebutted by a showing “that sufficient precautions have been taken to guard against any disclosure of confidences.” Id.

Based on Phoenix Founders, the paralegal at issue here is subject to a conclusive presumption that he obtained confidential information about the case while working at Godwin. See id. at 834. This presumption cannot be rebutted. See id. The primary issue in this proceeding is whether the trial court abused its discretion in determining that Strasburger failed to rebut the second presumption — that the paralegal shared confidential information about the case with his new employer. See id. at 835.

The presumption that confidential information will be imparted to a new employer can be rebutted by a showing that certain precautions have been taken to safeguard client confidences:

Specifically, the newly-hired paralegal should be cautioned not to disclose any information relating to the representation of a client of the former employer. The paralegal should also be instructed not to work on any matter on which the paralegal worked during the prior employment, or regarding which the paralegal has information relating to the former employer’s representation. Additionally, the firm should take other reasonable steps to ensure that the paralegal does no work in connection with matters on which the paralegal worked during the prior employment, absent client consent after consultation.

Id.

At the hearing on the motion to disqualify, Strasburger presented evidence of the extensive conflict-screening procedures it employed in hiring the paralegal, and opposing counsel concedes that Strasburger’s conflict-screening process is exemplary. Unfortunately, these precautions did not reveal the potential conflict related to the paralegal’s work for Trans-Global while at Godwin, leading him to eventually perform work on behalf of Guaranty Insurance in connection with the same case.

A firm’s screening procedures, however thorough, must actually be effective in order to rebut the presumption of shared information. See Phoenix Founders, 887 S.W.2d at 833 (“[D]isqualification is not required if the [second] firm is able to establish that it has effectively screened the paralegal from any contact with the underlying suit.”) (emphasis added). Similarly, the precautions taken must be “sufficient ... to guard against any disclosure of confidences.” Id. at 835.

According to Strasburger, performing a conflicts check and instructing a paralegal not to work on any matter on which he worked during prior employment is sufficient to rebut the presumption of shared confidences, even if the paralegal, after being so instructed, works on such matters anyway. We disagree. It is not merely the act of instructing the paralegal to avoid working on both sides of the same litigation that serves to protect client confidences. It is the implication that the paralegal will actually follow the instructions and refrain from doing so. Unless the instructions are followed, they are of no benefit to the clients whose interests are meant to be protected.

The supreme court held in Phoenix Founders that, in addition to giving the proper instructions, “the firm should take other reasonable steps to ensure that the paralegal does no work in connection with matters on which the paralegal worked during the prior employment.” Id. (emphasis added). In this case, Strasburger’s precautions failed to ensure that the paralegal refrained from working on the same matters he had worked on at Godwin, and thus failed to effectively guard against the disclosure of confidences.

In a case where, as here, a paralegal worked on both sides of the same litigation, the supreme court held that disqualification was required because the hiring firm did not take “the necessary steps to isolate” the paralegal from the litigation. In re American Home Prods. Corp., 985 S.W.2d 68, 75 (Tex.1998). While the firm in American Home Products failed to take any screening measures whatsoever, we find that distinction from the present case to be irrelevant for purposes of our analysis. When a paralegal actually performs work on a case that he had previously worked on for opposing counsel, the necessary steps to isolate him from such litigation were, by definition, not taken.

We recognize the difficult position in which Strasburger finds itself at this stage of the proceedings, and further note the supreme court’s warning against using a motion to disqualify as a dilatory tactic. See Phoenix Founders, 887 S.W.2d at 836. Strasburger’s conflict-screening procedures were nothing if not thorough, but where a paralegal has actually been allowed to work on both sides of the same litigation, even the most exhaustive attempts at screening cannot be deemed effective.

Because Strasburger’s screening procedure was ineffective to prevent the paralegal at issue here from actually working on both sides of the same litigation, we hold that the trial court did not abuse its discretion in granting the motion to disqualify. See id. at 835 (stating that absent client consent, “disqualification will always be required ... when screening would be ineffective”).

Accordingly, the petition for writ of mandamus is denied. See Tex.R.App. P. 52.8(a).

Dissenting Opinion by Justice WALDROP.

G. ALAN WALDROP, Justice,

dissenting.

I respectfully dissent. The trial court and the majority have failed to apply the appropriate standard for granting a motion to disqualify under these circumstances. The movant conceded that (1) the firm’s screening procedures were adequate, and (2) there was no evidence that the paralegal disclosed confidences to the firm. The movant, the trial court, and the majority take the position that the fact that the paralegal worked on the case for opposing sides, by itself, mandates disqualification of the second firm as a matter of law without consideration of the circumstances, what the second firm did or knew, or what the paralegal did. I do not believe this to be the standard for disqualification as articulated in Phoenix Founders, Inc. v. Marshall, 887 S.W.2d 831 (Tex.1994).

The Texas Supreme Court in Phoenix Founders articulated a more flexible and fact-based test. The supreme court stated that a trial court should examine the circumstances of a non-lawyer’s employment at an opposing firm to determine whether the “practical effect of formal screening has been achieved.” 887 S.W.2d at 835 (quoting In re Complex Asbestos Litig., 232 Cal.App.3d 572, 283 Cal.Rptr. 732, 747 (1991)). The court stated that the factors bearing on such a determination will generally include “the substantiality of the relationship between the former and current matters; the time elapsing between the matters; the size of the firm; the number of individuals presumed to have confidential information; the nature of their involvement in the former matter; and the timing and features of any measures taken to reduce the danger of disclosure.” Id. at 836. The supreme court made a point of noting that “ordinarily ... disqualification is not required as long as ‘the practical effect of formal screening has been achieved.’ ” Id. at 835 (quoting In re Complex Asbestos Litig., 283 Cal.Rptr. at 747). According to the supreme court, the ultimate question in weighing these factors is whether the second law firm “has taken measures sufficient to reduce the potential for misuse of confidences to an acceptable level.” Id. at 836.

The trial court, here, did not weigh any factors or make any determination as to whether the practical effect of formal screening had been achieved or whether Strasburger & Price had taken measures sufficient to reduce the potential for misuse of confidences to an acceptable level. The reason for this is that the trial court labored under the same misconception as the majority — that simply because a non-lawyer does some “work” on the same litigation at opposing firms the second firm must be disqualified as a matter of law. This misconception is a result of a misreading of In re American Home Products Corp., 985 S.W.2d 68 (Tex.1998). In American Home Products, the Texas Supreme Court reaffirmed the rule articulated in Phoenix Founders that there is a presumption of shared confidential information when a non-lawyer goes to work for an opposing firm, but this presumption is rebuttable. See 985 S.W.2d at 75. The supreme court held that disqualification was appropriate in the American Home Products case because the second firm did not rebut the presumption of shared confidences. See id. The court noted that the only evidence offered to rebut the presumption that confidences were shared was evidence that the legal assistant in that case did not possess confidential information. See id. This is not evidence that will rebut the presumption that confidences were shared. It is evidence that the employee did not obtain confidential information. However, there is a conclusive (non-rebuttable) presumption that a non-lawyer employee will obtain confidential information when employed by a law firm. Thus, it is pointless for a firm resisting a disqualification motion to attempt to demonstrate that confidences were not obtained. “While the presumption that a legal assistant obtained confidential information is not rebuttable, the presumption that information was shared with a new employer may be overcome.” Id.

This distinction was crucial in American Home Products because the firm resisting disqualification did not put on evidence of the factors outlined by the supreme court, but only put on evidence on a point that was governed by a conclusive presumption. Under such circumstance, there was no need to weigh the evidence pertaining to the factors bearing on whether “sufficient precautions have been taken to guard against any disclosure of confidences” because there was no evidence presented on those factors. In both American Home Products and Grant v. Thirteenth Court of Appeals, 888 S.W.2d 466 (Tex.1994)—decided by the supreme court the same day as Phoenix Founders-the court noted that the firm resisting disqualification put on no evidence of reasonable steps to screen the legal assistant from being in a position to reveal confidences or to instruct the legal assistant not to work on the matter in question once it was known that she had worked on the same matter at another firm. See American Home Prods., 985 S.W.2d at 76; Grant, 888 S.W.2d at 468. In Grant, the supreme court pointed out that the standard laid out in Phoenix Founders is based on the standard adopted by the American Bar Association that provides:

The nonlawyer should be cautioned ... that the employee should not work on any matter on which the employee worked for the former employer.... When the new firm becomes aware of such matters, the employing firm must also take reasonable steps to ensure that the employee takes no action and does no work in relation to matters on which the employer worked in the prior employment, absent client consent after consultation.

Grant, 888 S.W.2d at 467-68 (quoting ABA Comm. on Ethics and Prof'l Responsibility, Informal Op. 1526 (1988)) (emphasis added).

Strasburger & Price put on evidence of its screening procedures, its actions to ensure confidential information was not shared immediately upon learning of the legal assistant’s prior work, the size of the firm, the passage of time between the legal assistant’s work on one side of the litigation and his work for Strasburger & Price, the nature of the work, and the fact that no confidences were actually shared. The salient point is, under Phoenix Founders, that this is a fact-intensive inquiry that focuses on whether the practical effect of formal screening has been achieved. According to the Texas Supreme Court in Phoenix Founders: “The ultimate question in weighing these factors is whether [the firm to be disqualified] has taken measures sufficient to reduce the potential for misuse of confidences to an acceptable level.” 887 S.W.2d at 836. The trial court did not weigh the evidence on these factors or make a finding on the relevant issue because the movant persuaded the court (as well as the majority) that disqualification was mandatory without regard to the Phoenix Founders factors on the basis that the standard could be ignored where the legal assistant did some work on the same litigation at both firms — regardless of the nature of the work and regardless of whether confidences were actually shared. This is not the standard, nor should it be.

This point can be illustrated by considering two hypothetical examples. Suppose a legal assistant working at firm A sorts and labels exhibits for a variety of motions on a particular piece of litigation. That legal assistant leaves firm A, works for firm B for a time, is unemployed for a time, and two years later is hired by firm C, which was and still is opposing counsel on the litigation the assistant did some work on sorting and labeling exhibits at firm A. Firm C has completely appropriate and adequate conflict screening procedures, but the legal assistant does not immediately remember the style of the litigation that might generate a conflict. The legal assistant is given the job of summarizing depositions in the litigation— depositions that had not been taken at the time of the previous employment at firm A. The legal assistant summarizes ten of these depositions before realizing that the litigation is, in fact, the same litigation as that at firm A. The legal assistant alerts the management of firm C, shares no confidences, and confirms that no confidences have been shared with anyone, and the firm immediately takes steps to screen the legal assistant and be sure that no confidences get shared and that no harm is done. Under the majority’s reading of American Home Products, this example will necessarily result in disqualification of firm C as a matter of law because the legal assistant “worked on both sides of the litigation.” Under the majority’s analysis, this is true regardless of the nature of the work, whether confidences were shared, and whether there is any harm done due to the misuse (or any use) of a confidence. This type of example, however, does not warrant disqualification and is precisely the type of situation contemplated by the supreme court in Phoenix Founders when it laid out factors that a court should consider when there is evidence that might rebut the presumption of shared confidences and evidence that would support a finding that the practical effect of formal screening has been achieved.

Another example is more pointed. If the standard were as the majority holds, there would be an incentive not just for dilatory tactics, but truly unacceptable tactics. If disqualification is mandatory as a matter of law simply because a legal assistant “works on both sides of a case,” without more (such as evidence that there was a disclosui'e of confidences or, at a minimum, evidence of a genuine threat of disclosure of confidences), the right litigation with enough in controversy and enough adversity between the parties and lawyers could generate an intentional delivery of a legal assistant for the purpose of disqualifying a firm. Under the majority’s version of the rule, there would never be a need for a lawyer to accept a confidence, misuse a confidence, or even be involved in the circumstances at all. A legal assistant could simply apply for a job, get hired, find a way to get assigned to the particular litigation at issue, do some work, and the firm is disqualified. This, of course, is not the standard articulated by the supreme court, nor could it be.

The simple fact that a non-lawyer “worked” on both sides of a case or piece of litigation cannot be, by itself, the only relevant inquiry for the harsh remedy of disqualification. The nature of the “work” could be anywhere on the spectrum of entirely inconsequential to crucial to the outcome of the litigation. It could involve the sharing of very important confidential information or the sharing of no confidential information. If there is some evidence presented to overcome the presumption of shared confidences, there must be some examination of what the non-lawyer did, what confidences were or might have been imparted, what the circumstances were, etc. In essence, there must be an inquiry into whether what the non-lawyer did and what the second firm did resulted in at least potential harm to the party for whom the non-lawyer worked in the first instance — e.g. the disclosure of confidences or evidence demonstrating a genuine threat of the disclosure of confidences. When a firm comes forward with evidence to rebut the presumption of shared confidences and puts on evidence that the practical effect of formal screening has been achieved, it is up to the courts to weigh the factors set out in Phoenix Founders. The simple, unexamined fact that a paralegal “worked” on the same litigation at opposing firms is not a dispositive fact for the purposes of disqualification. The harm to be protected against is not “work” on a case. It is the misuse of confidences. The majority’s view of how this type of case gets resolved amounts to a new conclusive (non-rebuttable) presumption that if a non-lawyer works on a case for opposing firms in any capacity and under any circumstances, there have been shared confidences. This is not the standard articulated in Phoenix Founders. Creating this new conclusive presumption effectively negates the standard actually set out in Phoenix Founders that allows for an examination of the evidence and factors bearing on the issue that matters — the sharing and misuse of confidences.

Where there is evidence in the record on the rebuttable presumption of whether confidences have been shared, the court is required to weigh the evidence against the factors set out in Phoenix Founders, and determine whether the firm to be disqualified has taken sufficient measures to reduce the potential for misuse of confidences to an acceptable level under the circumstances presented. This is the lesson and standard set out in Phoenix Founders. It is a sensible standard — both flexible and responsive to what can be a wide range of circumstances. It is designed to allow courts to assess the circumstances involved in situations like this before imposing the extremely harsh sanction of disqualification.

The majority states that “whether or not confidential information was actually disclosed is immaterial, as the ‘test for disqualification is met by demonstrating a genuine threat of disclosure, not an actual materialized disclosure,’ ” citing Grant v. Thirteenth Court of Appeals, 888 S.W.2d at 467. Grant did not hold that the question of whether or not confidences were actually disclosed was immaterial. The Grant court held that the evidence presented in that case did not overcome the presumption of an “unacceptable danger of a prohibited disclosure.” 888 S.W.2d at 467-68. It is one thing to fail to demonstrate that confidences were not shared— i.e. rebut the presumption — such that it is unknown whether confidences were shared and there is still a genuine threat that they might have been. It is altogether a different matter to demonstrate either conclusively or by a preponderance of the evidence or by concession of your opposing party that, in fact, confidences were not shared and there is no danger that they might have been shared. Such evidence will rebut the presumption of shared confidences and satisfy the standard. Whether confidences were shared is not only material, it is the operative and dispositive fact. The holding in Grant goes to the burden of proof of that fact. The party seeking disqualification need only show that there is a genuine threat of disclosure of confidences (such as by showing that a non-lawyer worked on the same litigation at both firms). At that point, the burden shifts to the party resisting disqualification to rebut the presumption of shared confidences and affirmatively demonstrate that no confidences were shared and that the potential for misuse of confidences has been reduced to an acceptable level. See id. This includes institutional safeguards designed to prevent disclosure of confidences. If the party resisting disqualification does not carry its burden, as it failed to do in Grant, disqualification will be required. The teaching of Grant is that the firm to be disqualified cannot simply have its lawyers testify that they did not receive confidences and thereby rebut the presumption recognized in Phoenix Founders. There must be proof of institutional safeguards in place or something more than the word of the lawyers involved to demonstrate that the threat of disclosure has been reduced to an acceptable level. See id.

When, as here, the movant concedes no confidences have been shared, it is difficult to imagine exactly what the potential is for misuse of confidences. As noted by the supreme court, “[a]s with any disqualification motion, the trial court must adhere to an exacting standard so as to discourage any use of a disqualification motion as a dilatory tactic.” Id. Considering the concessions made by the movant here that Strasburger & Price’s screening procedures were adequate and that no confidences were shared, it is fair to wonder what purpose the motion to disqualify or an order of disqualification serves. No harm is articulated by the movant. No prejudice is shown. In fact, a lack of prejudice or harm is conceded. There is no real reason for disqualification shown on this record. How an actual concession on the part of the party seeking disqualification that no confidences were shared and no harm done does not satisfy the concern that is at the heart of this type of inquiry is not explained by the majority.

Disqualification of a firm in a case like this where so much has been invested in counsel is no minor matter. It can have not only substantial impacts on the parties, but potentially catastrophic impacts both from a financial standpoint as well as a temporal standpoint. It is not a sanction to be imposed on parties lightly or without just cause demonstrated on the record. Nevertheless, the majority concludes that the Phoenix Founders standard is not flexible enough to account for this type of situation and allow the courts to arrive at a more just outcome. I do not think the trial court or the majority here have correctly applied the standard for disqualification articulated by the Texas Supreme Court.

It is altogether possible, if not likely, that if the trial court understood that it could weigh the evidence and the Phoenix Founders factors, it would have come to a different conclusion with respect to disqualification. I would reverse the order of disqualification and remand to the trial court for further proceedings and application of the appropriate standard for weighing the evidence pertaining to disqualification.

      . The record reflects that during his employment at the Godwin firm, the paralegal reviewed the case file to identify persons with knowledge of relevant facts, prepared an initial draft of Trans-GIobal's response to Guaranty Insurance's request for disclosure, assisted in document production, and communicated with Guaranty Insurance’s counsel. Once employed at Strasburger, the paralegal organized pleadings and documents, and assisted in document production on behalf of Guaranty Insurance. Trans-Global discovered the conflict when the paralegal at issue sent email correspondence to Trans-GIobal's counsel on behalf of Guaranty Insurance. The email contained redacted documents in response to a request for production. In a follow-up phone conversation, the paralegal informed counsel for Trans-Global that counsel could call him “on all issues related to the Guaranty case."

      . The Texas Supreme Court has since described its holding in Phoenix Founders as requiring disqualification "unless the hiring firm effectively screens the paralegal from any contact with the suit.” In re Meador, 968 S.W.2d 346, 353 (Tex.1998) (emphasis added); see also In re Smith Barney, Inc., 975 S.W.2d 593, 599 (Tex.1998) ("[I]n Phoenix Founders, Inc. v. Marshall, we held that a law firm's hiring opposing counsel’s paralegal did not require the firm's disqualification in the litigation if the paralegal was screened from any contact with the case at the firm.”). Here, it is undisputed that the paralegal was not effectively screened from contact with the case.

      . Strasburger also points to its evidence, in the form of affidavits, that no confidential information was actually disclosed. Whether or not confidential information was actually disclosed is immaterial, as the "test for disqualification is met by demonstrating a genuine threat of disclosure, not an actual materialized disclosure.” Grant v. Thirteenth Court of Appeals, 888 S.W.2d 466, 467 (Tex.1994) (per curiam). As the supreme court pointed out, "any rule focusing on actual disclosure would place a virtually insurmountable burden on the party seeking disqualification, since the only persons who know whether confidences were actually shared will generally be the very lawyers seeking to avoid disqualification.” Id.


source: Caselaw Access Project

author: Opinion By Justice MURPHY.

license: Public Domain

text:
    Donald B. SMALL, Appellant, v. SPECIALTY CONTRACTORS, INC., Billy Don Elliott, Leland T. Skinner, LDD, L.P., and ESS Management, LLC, Appellees.
    No. 05-08-01701-CV.
    Court of Appeals of Texas, Dallas.
    April 21, 2010.

      John T. Cox, Christopher J. Schweg-mann, Lynn Tillotson & Pinker, L.L.P., Dallas, for Appellant.
    Ralph C. Perry-Miller, Looper Reed & McGraw, P.C., Dallas, Robert J. Ffrench, Law Office of Robert J. Ffrench, P.C., Houston, for Appellees.
    Before Justices RICHTER, LANG, and MURPHY.
   OPINION

Opinion By Justice MURPHY.

This is an appeal from an order compelling arbitration in a shareholder dispute. After compelling all pending disputes to arbitration, the trial court signed an order dismissing the litigation without prejudice. In his first issue, appellant Donald B. Small contends three of the appellees, Specialty Contractors, Inc., Billy Don Elliott, and Leland T. Skinner (collectively, “Specialty defendants”) waived any right to arbitrate by substantially invoking the judicial process. In his second issue, Small argues his non-suit of appellees LDD, L.P. and ESS Management, LLC (collectively, “ESS defendants”) prevents the Specialty defendants from relying on the arbitrability of Small’s claims against the ESS defendants to compel arbitration of their claims. We affirm the trial court’s order.

BACKGROUND

Small, Elliott, and Skinner are the sole shareholders in Specialty, a closely-held Texas corporation. Each owns a minority share and was an officer of Specialty. Small was also an employee. LDD is a limited partnership in which ESS is the general partner and Small, Elliott, and Skinner are limited partners. Elliott and Skinner terminated Small’s employment with Specialty on August 8, 2007 and sought to remove him as an officer. Two days later, on August 10, Small filed suit against the Specialty defendants claiming breach of fiduciary duty, minority shareholder oppression, and civil conspiracy, and seeking an accounting and a declaratory judgment of the rights and status of each shareholder and related partnerships. On September 4, 2007, Elliott and Skinner answered, raising affirmative defenses and special exceptions, seeking rule 13 sanctions, asserting a counterclaim for attorney’s fees, and serving a request for disclosure. Small asserts in his appellate brief that Specialty also answered the same date, with a request for disclosure and counterclaim for attorney’s fees. No filing is contained in the record, however.

Small also asserts that he served discovery immediately after the Specialty defendants answered the lawsuit, and that they responded on October 22, 2007. A month later, the parties attempted to settle through mediation, but the mediation was unsuccessful. According to Small, each of the Specialty defendants served a first set of interrogatories and request for production in January 2008, to which Small responded on February 25, 2008.

A week later, on March 4, 2008, Small amended his petition, adding a claim for breach of contract and adding LDD and ESS as defendants. Small did not request issuance of citations for the ESS defendants and there is no record they were ever formally served.

On April 30, 2008, the Specialty defendants filed a traditional motion for summary judgment, claiming the shareholder agreement was dispositive of the rights and obligations between Specialty and Small. The motion also included no evidence points as to Small’s original claims. The trial court denied the motion in its entirety by order dated June 11, 2008.

On July 18, 2008, the Specialty defendants filed a motion to compel arbitration and verified motion to abate, relying on the arbitration provision in their shareholders’ agreement. Two months later, on September 19, 2008, Small filed his response, claiming the Specialty defendants had substantially invoked the judicial process and therefore had waived any right to compel arbitration. On September 22, 2008, the Specialty defendants filed a supplement to their motion based on the arbitration clause contained in the LDD limited partnership agreement. Prior to any hearing on the Specialty defendants’ motion, the ESS defendants filed their own motion to compel arbitration and, subject thereto, original answer, counterclaim, and request for disclosure. The counterclaim was based on a request for costs and attorney’s fees under the declaratory judgment act.

Small did not respond to the ESS defendants’ motion; instead, on October 17, 2008, he filed a notice of partial non-suit without prejudice as to the ESS defendants. Three days later, on October 20, 2008, the trial court granted both motions to compel arbitration. Small filed a motion for reconsideration, asking in the alternative for a dismissal of the entire case to allow for appeal. By order dated December 9, 2008, the trial court granted the alternative request and signed an “Order Dismissing the Case Without Prejudice in Favor of Arbitration.” This appeal followed.

DISCUSSION

Jurisdiction

We first address our jurisdiction to hear the appeal. The parties agree that had the trial court stayed the litigation pending arbitration, no interlocutory appeal would lie. See Tex. Civ. Prac. & Rem. Code §§ 51.014(a) (Vernon 2008) (listing appealable interlocutory orders); 171.098 (Vernon 2005) (authorizing interlocutory appeal only from orders denying application to compel arbitration and orders granting application to stay arbitration). Courts may review an order compelling arbitration if the order also dismisses the entire case and is therefore a final, rather than interlocutory, order. In re Gulf Exploration,, LLC, 289 S.W.3d 836, 840 (Tex.2009) (orig.proceeding) (quoting Perry Homes v. Cull, 258 S.W.3d 580, 586 n. 13 (Tex.2008) (citing Green Tree Fin. Corp.Ala., 531 U.S. 79, 87 n. 2, 121 S.Ct. 513 (2000); Childers v. Advanced Found. Repair, L.P., 193 S.W.3d 897, 898 (Tex.2006) (per curiam)), cert. denied, — U.S. -, 129 S.Ct. 952, 173 L.Ed.2d 116 (2009)). Appellees contest our ability to review the arbitration order in this case, however.

Appellees first argue that the Texas Supreme Court in In re Gulf Exploration disapproved dismissal of a case, rather than staying it pending the outcome of arbitration. See In re Gulf Exploration, 289 S.W.3d at 841 (because court order may be necessary to replace arbitrator, compel attendance of witnesses, direct arbitrators to proceed promptly, and to confirm, modify, or vacate arbitration award, “dismissal would usually be inappropriate”). Yet appellees have not cross-appealed based on a claim the trial court erred in dismissing, rather than staying the case. See Tex.R.App. P. 25.1(c) (without filing notice of appeal, party may not obtain more favorable relief than obtained at trial court). Accordingly, appellees are precluded from raising this complaint on appeal.

Appellees also argue, citing Green Tree Financial Corp.-Alabama v. Randolph, 531 U.S. 79, 121 S.Ct. 513, 148 L.Ed.2d 373 (2000), that because the trial court dismissed the case without prejudice, the order is not final and appealable. Citing In re Gulf Exploration, they claim that “a dismissal in favor of arbitration does not create a ‘final’ order that can be subject to appeal because it does not ‘clearly and unequivocally state[ ] that it finally disposes of all claims and all parties.’ ” In re Gulf Exploration, 289 S.W.3d at 840 (quoting Lehmann v. Har-Con Corp., 39 S.W.3d 191, 205 (Tex.2001)). This quoted language is part of the Texas Supreme Court’s analysis approving the finality of the order in Childers, in which the trial court had dismissed the case “without prejudice” after compelling the parties to arbitration. Id. Even if the quoted language stood for the proposition urged by appellees, the order signed by the trial court below states unequivocally: “This judgment is final, disposes of all parties and all claims in this case, is appealable, and disposes of this case in its entirety.” Whether the dismissal is with or without prejudice is irrelevant to the question of whether there are pending claims precluding finality. See, e.g., Childers, 193 S.W.3d at 898 (appellate court erroneously determined appeal to be interlocutory where case dismissed “without prejudice” in favor of arbitration); Lehmann, 39 S.W.3d at 205 (language “that the case is dismissed, shows finality if there are no other claims by other parties”).

Appellees also misplace reliance on Green Tree for the proposition that a dismissal without prejudice is not a final ap-pealable order. The United States Supreme Court stated in Green Tree that a decision that “ ‘ends the litigation on the merits and leaves nothing more for the court to do but execute the judgment’ ” is a “final decision.” Green Tree, 531 U.S. at 86, 121 S.Ct. 513 (quoting Digital Equip. Corp. v. Desktop Direct, Inc., 511 U.S. 863, 867, 114 S.Ct. 1992, 128 L.Ed.2d 842 (1994); Coopers & Lybrand v. Livesay, 437 U.S. 463, 467, 98 S.Ct. 2454, 57 L.Ed.2d 351 (1978) (both quoting Catlin v. United States, 324 U.S. 229, 233, 65 S.Ct. 631, 89 L.Ed. 911 (1945))). Green Tree involved an “embedded proceeding” — an action involving both a request to order arbitration and other claims for relief. Id. at 87, 121 S.Ct. 513. The United States Supreme Court declined to adopt a definition that would distinguish between “independent” proceedings — in which the sole issue before the court is a request to order arbitration—and “embedded proceedings.” Id. at 88-89, 121 S.Ct. 513. Similarly, the Texas Supreme Court has not made such a distinction. See In re Gulf Exploration, 289 S.W.3d at 840 (“We too have adopted [the Green Tree rule]: ‘Courts may review an order compelling arbitration if the order also dismisses the underlying litigation so it is final rather than interlocutory.’ ”); see also Perry Homes, 258 S.W.3d at 586 n. 13; Childers, 193 S.W.3d at 898.

By dismissing this case when “there [were] no other claims by other parties” that had not been compelled to arbitration, and stating unequivocally that the “judgment is final ... and disposes of this case in its entirety,” the trial court left nothing pending. The order therefore became final for purposes of appeal. See Lehmann, 39 S.W.3d at 205.

Mootness

Appellees also contest our ability to review the arbitration order, claiming mootness. Citing University of Texas Medical Branch v. Estate of Blackmon, 195 S.W.3d 98 (Tex.2006) (per curiam) and General Land Office v. OXY U.S.A. Inc., 789 S.W.2d 569 (Tex.1990), appellees assert that “[g]enerally a voluntary non-suit of all of a party’s claims obviates all pending, interlocutory orders.” They maintain that by filing a non-suit and asking the trial court to dismiss the lawsuit in its entirety, Small left no “live controversies between the parties” and “no reason to arbitrate.”

Small non-suited only his claims against the ESS defendants. See Tex.R. Civ. P. 162. He did not dismiss the Specialty defendants or the ESS defendants’ counterclaim for costs and attorney’s fees. See id. (“dismissal pursuant to this rule shall not prejudice the right of an adverse party to be heard on a pending claim for affirmative relief’); BHP Petrol. Co. Inc. v. Millard, 800 S.W.2d 838, 842 (Tex.1990) (orig.proceeding) (non-suit did not resolve counterclaim seeking independent relief). Contrary to appellees’ assertion, these controversies remained alive as the subject of the arbitration order and any related arbitration proceedings. We therefore reject appellees’ assertion that the arbitration order was rendered moot as a result of Small’s non-suit of his claims against the ESS defendants.

We also reject appellees’ assertion that Small’s alternative request that the trial court dismiss the entire case without prejudice left no “reason to arbitrate.” Small’s alternative request for dismissal, made a part of his motion for reconsideration of the arbitration order, was not an affirmative claim for relief or a non-suit as contemplated under rule 162. Rather, it was a procedural request for a final judgment so the arbitration order could be appealed. The trial court’s order of dismissal without prejudice did not dismiss the claims ordered to arbitration; it simply functioned as a procedural mechanism allowing appeal of an otherwise interlocutory order. Accordingly, the issues raised on appeal are not moot.

Waiver

Turning to the merits of the appeal, Small’s first issue is whether the Specialty defendants substantially invoked the judicial process, and thereby waived the right to arbitrate Small’s claims asserted against them. We begin our discussion of that issue with the settled legal standards relating to waiver of arbitration rights.

Waiver is a question of law that this Court reviews de novo. Perry Homes, 258 S.W.3d at 587, 598; In re Bruce Terminus Co., 988 S.W.2d 702, 703-04 (Tex.1998) (orig.proceeding) (per curiam). Arbitration rights are contractual, and the law includes a strong presumption against the waiver of those rights. See Bruce Terminix, 988 S.W.2d at 704; Transweste rn Pipeline Co. v. Horizon Oil & Gas Co., 809 S.W.2d 589, 592 (Tex.App.-Dallas 1991, writ dism’d w.o.j.). When presented with questions of waiver, we are required to resolve any doubts in favor of arbitration. In re Oakwood Mobile Homes, 987 S.W.2d 571, 574 (Tex.1999) (orig.proceeding) (per curiam), abrogated in part on other grounds by, In re Halliburton Co., 80 S.W.3d 566, 572 (Tex.2002) (orig.proceeding); see also Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983). Although both state and federal law favor arbitration, arbitration rights, like any other contractual right, may be waived. See Transwestern Pipeline, 809 S.W.2d at 592. The standard for determining waiver is the same under federal and state law. See Southwind Group, Inc. v. Landwehr, 188 S.W.3d 730, 735 (Tex.App.-Eastland 2006, orig. proceeding). When parties have not expressly waived those rights, waiver may be implied from the party’s conduct, so long as that conduct is unequivocal. Perry Homes, 258 S.W.3d at 593 (citing Van Indep. Sch. Dist. v. McCarty, 165 S.W.3d 351, 353 (Tex.2005); First Valley Bank v. Martin, 144 S.W.3d 466, 471 (Tex.2004); Jernigan v. Langley, 111 S.W.3d 153, 156 (Tex.2003); Equitable Life Assurance Soc’y v. Ellis, 105 Tex. 526, 152 S.W. 625, 628 (1913)). In “close cases, the ‘strong presumption against waiver’ should govern.” Id. (quoting In re D. Wilson Constr. Co., 196 S.W.3d 774, 783 (Tex.2006)).

As the party claiming waiver, Small had the heavy burden of establishing the Specialty defendants substantially invoked the judicial process. See Bruce Terminix, 988 S.W.2d at 704; Valero Energy Corp. v. Teco Pipeline Co., 2 S.W.3d 576, 594 (Tex.App.-Houston [14th Dist.] 1999, no pet.). Additionally, and as recently reconfirmed by the Supreme Court of Texas, “waiver of arbitration requires a showing of prejudice.” Perry Homes, 258 S.W.3d at 595. In determining whether Small met his burden, we must examine the case-specific facts and look to the totality of the circumstances. Id. at 591. Until the case of Perry Hemes, the Supreme Court of Texas had addressed waiver in multiple cases, but had never found such a waiver.

Among the factors the Court in Perry Homes identified as insufficient standing alone to constitute waiver were filing suit; moving to dismiss for lack of standing; moving to set aside a default judgment and requesting a new trial; opposing a trial setting and seeking to remove to federal court; moving to strike an intervention and opposing discovery; sending multiple discovery requests; requesting initial discovery, noticing but not taking a deposition, and agreeing to a continuance; and seeking initial discovery, taking four depositions, and moving for dismissal based on standing. Id. at 590. The Court also emphasized what would constitute waiver: ‘“allowing a party to conduct full discovery, file motions going to the merits, and seek arbitration only on the eve of trial.’ ” Id. (quoting In re Vesta Ins. Group, Inc., 192 S.W.3d 759, 764 (Tex.2006)). Here, the record does not fit squarely within the circumstances that clearly “would constitute waiver,” and we therefore must review relevant factors in the context of the totality of the circumstances.

The Recard

To begin that analysis, we note there was no evidentiary hearing and no reporter’s record of argument before the trial court. The Specialty defendants filed a verified motion to compel arbitration based on an arbitration clause in the Specialty shareholders’ agreement. They also filed a supplement based on the arbitration clause in the LDD limited partnership agreement. Small filed only an unverified response to the original motion to compel. The trial court made no findings, but did state in its order compelling arbitration that, after “hearing arguments of counsel and reviewing all relevant matters in the file,” the court was granting the motions to compel filed by all defendants. The only appellate record evidencing the trial court’s file as it existed prior to issuance of the order compelling arbitration consists of the docket sheet; the pleadings of Small, Skinner, Elliott and the ESS defendants; the motion for summary judgment of the Specialty defendants and Small’s response; the motions to compel arbitration and single response; and Small’s notice of partial non-suit as to the ESS defendants.

Knowledge of Arbitration Clause and Delay

Although the record is limited, the parties do not appear to contest the facts as to the status of the proceedings and knowledge of the arbitration clause. The Specialty defendants do not claim they were unaware of the arbitration clause; they in fact sought summary judgment claiming Small’s claims were governed by the same agreement containing the arbitration provision. With regard to the factor of delay, the record shows a period of approximately nine months between the time the Specialty defendants answered the lawsuit and the time they sought to compel arbitration. The delay between the date of the amended petition adding breach of contract claims against the Specialty defendants and joining the ESS defendants was just over four months. Far greater delays have been insufficient to constitute waiver of arbitration rights, and we must consider this delay in the context of other factors affecting the litigation process. See, e.g., In re Vesta, 192 S.W.3d at 763 (litigating for two years in trial court insufficient to overcome strong presumption against waiver).

Discovery

It does not appear from the record that the trial court examined the actual discovery propounded prior to ordering arbitration. No discovery was admitted into evidence, attached to Small’s response, or produced as summary judgment evidence. Rather, Small argued in his unverified response that all parties had propounded a first set of written discovery and responded to discovery. The record does show, however, discovery had not been completed. Small argued in his response to the Specialty defendants’ no evidence summary judgment motion that the parties had delayed the cost of document discovery and depositions to attempt settlement. When the mediation was unsuccessful in November 2007, the parties resumed negotiations in early 2008. When those efforts were unsuccessful, the parties discussed amending the discovery schedule to allow for exchange of documents, depositions, and designation of experts, as well as a possible second mediation. The supporting affidavit from Small’s attorney requested the summary judgment motion be postponed until “Small [was] afforded a reasonable opportunity to complete the requested discovery.” On the face of this record, Small cannot contend discovery was extensive.

Merits Activity

Addressing next the merits activity in the case, the record shows the Specialty defendants delayed invoking their arbitration rights until they suffered defeat of their merits attack. After Small amended his petition to add new claims and parties, the Specialty defendants sought judgment on the merits of the case. Their summary judgment motion sought not only judgment that certain provisions of the shareholders’ agreement governed the dispute, but also asserted no-evidence grounds. They moved to compel arbitration only after losing that motion. Additionally, although the trial court did not review the parties’ discovery at the time it ruled on the motions to compel arbitration, the Specialty defendants do not contend any pretrial discovery was directed to arbitration, rather than the merits of the case.

Other Factors

To meet its burden of showing waiver, Small gives slight attention to the remaining factors we are to consider as part of the totality of circumstances. The record is silent as to actual time and expenses incurred in the litigation process, with the exception that Small argued in response to the summary judgment motion that he had incurred substantial fees and expenses responding to the summary judgment motion, participating in discovery, and preparing for trial, and that the parties had attempted to save expenses by early mediation and delaying exchange of depositions and documents. Similarly, Small made no attempt to establish the usefulness of discovery actually taken or the availability of discovery in arbitration. With regard to Small’s assertion Specialty pleaded affirmative claims, the record does not contain a copy of its pleadings. Small does not claim, however, that Specialty sought

greater relief than the counterclaim filed by Skinner and Elliott in which they sought only recovery of attorney’s fees. With regard to claims for attorney’s fees, Small argues on appeal that the trial court should, “as a ministerial act,” have dismissed the ESS defendants’ claims for attorney’s fees “before they asserted any meaningful counterclaim seeking affirmative relief.” With respect to Skinner and Elliott’s special exceptions and request for sanctions due to Small’s allegedly groundless petition, the record contains no reference to hearings requested, scheduled, or held, and Small does not contend otherwise.

The record also does not suggest an impending trial date. The only record we have of a trial date is the assertion in Small’s response to the Specialty defendants’ motion for summary judgment that trial was set for February 2, 2009. Accordingly, the motion to compel arbitration, filed July 18, 2008, was not on the eve of trial. Nor do we have evidence the February 2, 2009 trial date was realistic in light of Small’s plea for additional discovery and his amended petition adding the ESS defendants as new parties. While he non-suited those parties in an attempt to avoid arbitration, the non-suit did not adjudicate the pending counterclaim for attorney’s fees. Regardless of whether Small characterizes one set of attorney’s fees as ministerial and another as a substantial claim, Small has failed to present any record showing when trial was likely to occur. Nor has he presented any record of whether the trial would have been to a jury or to the court.

Prejudice

In addition to his burden of showing the Specialty defendants substantially invoked the judicial process, Small had the burden to show prejudice. “Prejudice” in the context of waiver of arbitration rights was defined by the Texas Supreme Court in Perry Homes as “the inherent unfairness in terms of delay, expense, or damage to a party’s legal position that occurs when the party’s opponent forces it to litigate an issue and later seeks to arbitrate that same issue.” Perry Homes, 258 S.W.3d at 597 (quoting Republic Ins. Co. v. PAICO Receivables, LLC, 383 F.3d 341, 346 (5th Cir.2004)). The Court explained that in the context of waiver by litigation conduct, “the precise question is not so much when waiver occurs as when a party can no longer take it back.” Id. at 595. The record from which the Court found prejudice in Perry Homes showed:

that the [plaintiffs] objected to arbitration initially, and then insisted on it after the [defendants acquiesced in litigation. They got extensive discovery under one set of rules and then sought to arbitrate the case under another. They delayed disposition by switching to arbitration when trial was imminent and arbitration was not. They got the court to order discovery for them and then limited their opponents’ rights to appellate review. Such manipulation of litigation for one party’s advantage and another’s detriment is precisely the kind of inherent unfairness that constitutes prejudice under federal and state law.

Id. at 597.

Here, Small neither verified nor offered any evidence in support of his opposition to arbitration. He claimed in his response and on appeal that he will suffer “substantial prejudice.” The most detail he provides in that regard is that the Specialty defendants “forced [Small] to incur substantial legal fees by responding to [their] motion for summary judgment, and additional legal fees participating in discovery and preparing this case for trial.” Small did not claim the discovery already exchanged could not be used in arbitration, nor did he argue he would be unable to take additional discovery in arbitration. He similarly did not suggest any unidentified preparation for trial could not be used in arbitration.

Applying the analysis from Perry Homes, the record before the trial court showed no original objection to arbitration by the Specialty defendants. There was one set of discovery, which Small argued was insufficient to allow him to respond properly to the summary judgment motion. See In re Vesta, 192 S.W.3d at 763 (waiver not shown where defendants each sent a document request, noticed for depositions, and sent standard requests for disclosure). The February 2009 trial date was not imminent at the time arbitration was first sought in July 2008, and Small does not argue arbitration cannot occur as quickly as trial. While Small argues he requested a jury trial in his petition, the trial court docket sheet does not show payment of a jury fee. We therefore have no record of whether the case would have proceeded to a jury trial in February 2009 with or without the ESS defendants. Regarding the final factor of obtaining a court order for discovery, which the Court in Perry Homes observed as contributing to the prejudice it found, the Specialty defendants here did not seek orders compelling discovery from Small, nor did they seek to have any special exceptions heard.

Of the factors we are charged with considering to determine waiver, the Specialty defendants’ delay in seeking arbitration until they were unsuccessful in obtaining summary judgment on the merits is the most troubling. We must balance that factor, however, in reviewing the totality of circumstances. Those circumstances include the litigation status in which Small claimed the parties had delayed discovery and expenses to pursue mediation. Arbitration was not sought on the eve of trial, but followed, in addition to the summary judgment ruling, Small’s amendment adding claims and parties. Small has not contested the order compelling arbitration as to the ESS defendants. Additionally, it is Small who amended his petition adding breach of contract claims and the ESS defendants, while never requesting issuance of citation. Then he non-suited the ESS defendants in an attempt to avoid arbitration, leaving the question of whether those claims will be brought in arbitration or disbanded.

Considering the totality of the circumstances in this case, we conclude Small has not met his heavy burdens of establishing the Specialty defendants substantially invoked the judicial process and that he has been prejudiced as a result. Although he argues he has been forced to incur substantial legal fees, the record is void of evidence relating to those fees. The record is also silent as to whether any of the work exceeds what would be allowed in arbitration. With regard to whether Small has shown “such manipulation [by the Specialty defendants] of litigation” for their advantage and to Small’s detriment as to constitute “inherent unfairness that constitutes prejudice,” the limited record we have shows all parties have manipulated the litigation process. See Perry Homes, 258 S.W.3d at 597.

CONCLUSION

We overrule Small’s first issue. As a result, we do not reach the question of whether the Specialty defendants may rely on the arbitrability of Small’s non-suited claims against the ESS defendants to compel arbitration of Small’s claims against them. Tex.R.App. P. 47.4. We affirm the trial court’s order compelling all pending claims to arbitration.

      . Appellees fail to recognize that Lehmann details many ways an order can be final and appealable, and the quoted language is one way to determine finality. Dismissal of all claims and all parties is another way to determine finality. Lehmann, 39 S.W.3d at 205. The Court's complete statement, including the portion on which appellees rely, explained: "we conclude that when there has not been a conventional trial on the merits, an order or judgment is not final for purposes of appeal unless it actually disposes of every pending claim and party or unless it clearly and unequivocally states that it finally disposes of all claims and all parties.” Id. Elaborating, the Court noted that "[¡language that the plaintiff take nothing by his claims in the case, or that the case is dismissed, shows finality if there are no other claims by other parties.” Id. (emphasis added).

      . Those factors include: when the movant knew of the arbitration clause; the extent of discovery, who initiated it, whether it related to the merits rather than arbitrability or standing, and how much of it would be useful in arbitration; and, whether the movant sought judgment on the merits. See Perry Homes, 258 S.W.3d at 591-92.

      . In his motion for reconsideration, Small attached discovery, which is the part of the record. That discovery was not part of the trial court record at the time the trial court ruled on the motions to compel arbitration.

      . The petition contains a jury demand, but the docket sheet does not show payment of a jury fee. Small also failed to offer any evidence showing a pretrial schedule or trial notice.