author: ANN CRAWFORD McCLURE, Justice.

text:
    In re: Jose Luis VILLANUEVA, Relator.
    No. 08-08-00329-CV.
    Court of Appeals of Texas, El Paso.
    July 8, 2009.
    Order Overruling Rehearing Oct. 28, 2009.

      John P. Mobbs, Attorney At Law, El Paso, TX, for Relator.

      Michael Paul Sharp, Fee Smith Sharp & Vitullo, LLP, Dallas, TX, for Real Party In Interest.
    Before McCLURE, RIVERA, JJ., and BARAJAS, C.J. (Ret., sitting by assignment).
   OPINION ON PETITION FOR WRIT OF MANDAMUS

ANN CRAWFORD McCLURE, Justice.

Relator, Jose Luis Villanueva, seeks a writ of mandamus to require the Honorable Gonzalo Garcia, Judge of the 210th District Court, to set aside an order granting Swift Transportation Company, Inc.’s (Swift) motion to compel arbitration under the Federal Arbitration Act. For the reasons that follow, we conditionally grant relief.

FACTUAL SUMMARY

Villanueva has been employed by Swift since 2001 as an 18-wheel truck driver. His job duties required him to transport goods in interstate commerce. Swift is a non-subscriber to the Texas Workers’ Compensation insurance system. Instead, it has an Injury Benefit Plan in place for its Texas employees. Under the terms of the Plan, Villanueva became a participant in the Plan on its effective date, April 1, 2005.

Section 2.8 of the Plan contains a mandatory arbitration provision. It requires arbitration of any legal or equitable claim by a participant for any form of physical or psychological damage, harm or death which relates to an accident, including claims of negligence and negligent hiring/training/supervision/retention and violation of any noncriminal federal, state, or other governmental common law, statute, regulation or ordinance in connection with a job-related injury. The Plan also provides that both Swift and its employees engage in transactions involving interstate commerce and the arbitration provision is governed by the FAA. The Injury Benefit Plan states that the arbitration provisions apply to all participants without regard to whether they have completed and signed a “Receipt, Safety Pledge, and Arbitration Acknowledgment” form. Finally, it recites that the Plan and arbitration requirement does not change the “at will” employment status of any participant not covered by a collective bargaining agreement.

Appendix B to the Plan is a form entitled “RECEIPT, SAFETY PLEDGE, AND ARBITRATION ACKNOWLEDGMENT.” By signing the document, the employee acknowledges receipt of and an opportunity to read a Summary Plan Description (SPD) of the Injury Benefit Plan. The arbitration section states, in pertinent part:

I also acknowledge that this SPD includes a mandatory company policy requiring that certain claims or disputes relating to an on-the-job injury (that cannot otherwise be resolved between the Company and me) must be submitted to an arbitrator, rather than a judge and jury in court. I understand that by receiving this SPD and becoming employed (or continuing my employment) with the Company at any time on or after April 1, 2005, I am accepting and agreeing to comply with these arbitration requirements. I understand that the Company is also accepting and agreeing to comply with these arbitration requirements.

It is undisputed that Swift does not have an acknowledgment form signed by Villa-nueva.

According to Villanueva’s original petition, he and a co-driver were transporting goods for Swift from Louisville, Kentucky to El Paso, Texas on January 14, 2007. Villanueva allegedly suffered an on-the-job injury when their truck was involved in an accident. Villanueva filed a negligence suit against Swift alleging that the co-driver’s negligence caused the accident. He also alleged that Swift was negligent because it failed to properly train, instruct, and supervise its employees.

Swift filed a motion to compel arbitration based on the arbitration clause in its Injury Benefit Plan. It contended Villa-nueva agreed to — and enrolled in — the Plan, was provided a copy of the Plan and acknowledged its terms. The trial court granted the motion to compel arbitration and Villanueva filed this mandamus proceeding.

STANDARD OF REVIEW

To be entitled to mandamus relief, a relator must meet two requirements. First, the relator must show that the trial court clearly abused its discretion. In re Prudential Insurance Company of America, 148 S.W.3d 124, 135 (Tex.2004). Sec ond, the relator must demonstrate he has no adequate remedy by appeal. Id. at 136. A trial court abuses its discretion if it acts in an arbitrary or unreasonable manner without reference to any guiding rules or principles. Cire v. Cummings, 134 S.W.3d 835, 838-39 (Tex.2004); Bowie Memorial Hospital v. Wright, 79 S.W.3d 48, 52 (Tex.2002). When reviewing the trial court’s decision for an abuse of discretion, the reviewing court may not substitute its judgment for that of the trial court with respect to resolution of factual issues or matters committed to the trial court’s discretion. Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 242 (Tex.1985); see Walker v. Packer, 827 S.W.2d 833, 839 (Tex.1992). Review of the trial court’s de termination of the legal principles controlling its ruling is much less deferential. Walker, 827 S.W.2d at 840. A trial court has no discretion in determining what the law is or applying the law to the facts, even when the law is unsettled. In re Prudential, 148 S.W.3d at 135. A clear failure by the trial court to analyze or apply the law correctly will constitute an abuse of discretion. Walker, 827 S.W.2d at 840.

A party seeking to compel arbitration must (1) establish the existence of a valid arbitration agreement; and (2) show that the claims asserted are within the scope of the agreement. See In re AdvancePCS Health L.P., 172 S.W.3d 603, 605 (Tex.2005). The trial court’s determina tion of the arbitration agreement’s validity is a legal question subject to de novo review. J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 227 (Tex.2003). Once the party seeking to compel arbitration proves that a valid arbitration agreement exists, a presumption attaches favoring arbitration and the burden shifts to the party resisting arbitration to establish a defense to enforcing arbitration. See In re AdvancePCS, 172 S.W.3d at 607; J.M. Davidson, 128 S.W.3d at 227.

APPLICABILITY OF FAA

Villanueva first asserts that the arbitration clause is not enforceable under Section 1 of the Federal Arbitration Act because it is included in an employment contract of a transportation worker. Swift responds that since its injury benefit plan is a not a contract of employment, Section l’s exemption is inapplicable.

The FAA compels judicial enforcement of a wide range of written arbitration agreements. Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 111, 121 S.Ct. 1302, 1307, 149 L.Ed.2d 234 (2001). The FAA’s coverage provision is found in Section 2:

A written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, or an agreement in writing to submit to arbitration an existing controversy arising out of such a contract, transaction, or refusal, shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract. 9 U.S.C.A. § 2 (West 1999).

The United States Supreme Court has interpreted Section 2 as implementing Congress’ intent “to exercise [its] commerce power to the full.” Circuit City, 532 U.S. at 112, 121 S.Ct. at 1307, quoting Allied-Bruce Terminix Companies, Inc. v. Dobson, 513 U.S. 265, 277, 115 S.Ct. 834, 841, 130 L.Ed.2d 753 (1995). Section 1 of the Act is an exemption provision and it provides the FAA does not apply “to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” 9 U.S.C.A. § 1. The Supreme Court has interpreted the phrase “other class of workers engaged in foreign or interstate commerce” as exempting from the FAA’s coverage employment contracts of transportation workers “actually engaged in the movement of goods in interstate commerce.” Circuit City, 532 U.S. at 112, 121 S.Ct. at 1307. Truck drivers, such as Villanueva, are considered transportation workers within the meaning of this exemption provision, and Swift does not contend otherwise. . See e.g., Harden v. Roadway Package Systems, Inc., 249 F.3d 1137, 1140 (9th Cir.2001); Lorntzen v. Swift Transportation, Inc., 316 F.Supp.2d 1093, 1095 (D.Kan.2004).

Swift maintains the Injury Benefit Plan is not a contract of employment within the meaning of Section 1, but rather is a separate agreement providing benefits incident to employment. Swift also places particular reliance on Section 9.4 of the Plan which states that the establishment of the Plan does not affect an employee’s “at will” status. We understand Swift to argue that since Villanueva remains an “at will” employee, the Plan cannot be an employment contract. Implicit in Swift’s argument is the notion that there is no employment contract in an at-will employment relationship. This is incorrect. Texas courts have for many years considered an employment-at-will agreement to be a contract. See Sterner v. Marathon Oil Company, 767 S.W.2d 686, 689 (Tex.1989). A contract of employment may be terminable at will or for cause.

There are other problems with Swift’s interpretation of the phrase “contract of employment” as used in Section 1 of the FAA. First, it would attribute an intent on the part of Congress to draw a distinction between employees who are terminable at will and those who are terminable for cause. There is no evidence Congress intended to make this distinction in determining which employees would be subject to the reach of the FAA. Second, Swift’s interpretation of the phrase is based on Texas employment law. We do not determine the meaning of a federal statute by examining state law.

Swift also relies upon In re Mission Petroleum Carriers, Inc., No. 13-04-00550-CV, 2005 WL 326848 (Tex.App.Corpus Christi Feb. 11, 2005, orig. proceeding). There, a truck driver employed by Mission was injured in an accident while in the course and scope of her employment. She filed suit against Mission but the employer moved to compel arbitration pursuant to an agreement to arbitrate contained within Mission’s employee health and safety plan. The trial court denied the motion and Mission sought mandamus relief. The Corpus Christi Court of Appeals held that the FAA applied because the arbitration provision was included in the health and safety plan rather than an employment contract. Id. at *2. The court of appeals emphasized that the health and safety plan expressly stated that it was not a contract of employment. Id.

Federal courts which have considered the meaning of the phrase “employment contract” as used in Section 1 have defined it as a “contract between an employer and an employee in which the terms and conditions of employment are stated.” See Carr v. Transam Trucking, Inc., No. 3-07-CV-1944-BD, 2008 WL 1776435 (N.D.Texas April 14, 2008); Awe v. 1 & M Rail Link, L.L.C., No. C04-3011-PAZ, 2007 WL 2572405 at *4 (N.D.Iowa Sept. 4, 2007), quoting Black’s Law Dictionary 321 (7th ed. 1999); Brown v. Nabors Offshore Corporation, 339 F.3d 391, 394 (5th Cir.2003); Buckley v. Nabors Drilling USA, Inc., 190 F.Supp.2d 958, 960 (S.D.Tex.2002), aff'd, 51 Fed.Appx. 928 (5th Cir.2002). In Carr, the federal district court determined that the arbitration agreement was an employment contract within the meaning of Section 1 because it was conditioned on commencement of or continued employment with the defendant, and as such, formed part of the employment contract with the defendant. Carr, 2008 WL 1776435 at *2.

One federal district court has addressed whether Swift’s Injury Benefit Plan is an employment contract within the. meaning of Section 1. In Shanks v. Swift Transportation Company, Inc., the federal district court held that the Injury Benefit Plan is a component of the employee’s contract of employment because it is a mandatory company policy which the employee accepted as a condition of becoming employed and it provided benefits tied to continued employment. Shanks v. Swift Transportation Company, Inc., No. L-07-55, 2008 WL 2513056 at ⅜3 (S.D.Tex. June 19, 2008). This conclusion is consistent with the definition adopted in Carr and the other federal cases cited in the previous paragraph.

It is unclear from the appellate court’s memorandum opinion in Mission Petroleum whether the health and safety plan was a condition of employment. The court did not consider whether the health and safety plan was a component of the employee’s contract of employment. Rather than looking to narrowly-focused state employment law to determine whether the Injury Benefit Plan is a contract of employment as that term is used in Texas, we believe the better approach in determining the meaning of a federal statute is to look at a broader definition as done by the federal courts in Carr and Shanks. Consequently, we decline to follow Mission Petroleum because we find the analyses in Carr and Shanks to be more persuasive.

Swift’s Injury Benefit Plan is a mandatory company policy and it includes an arbitration provision. Under the terms of the Plan, each “covered employee” becomes a participant in the Plan on April 1, 2005, or the time and date of his or her employment if employed after April 1, 2005, and it provides benefits tied to continued employment. According to Appendix B attached to the Plan, Villanueva accepted the mandatory arbitration provision by his continued employment with Swift on or after April 1, 2005. We conclude that the Injury Benefit Plan is an employment contract within the meaning of Section 1 because the Plan and agreement to arbitrate are conditions of Villa-nueva’s employment and form part of his at-will employment contract with Swift. The FAA is therefore inapplicable to the Plan’s arbitration provision.

APPLICABILITY OF TAA

Swift did not expressly argue in the trial court and it has not asserted in this mandamus proceeding that the arbitration provision should be enforced under the Texas General Arbitration Act (TAA) if it cannot be enforced under the FAA. Villanueva maintains that the Texas Arbitration Act does not apply because this is a personal injury suit and he did not sign an agreement to arbitrate. Under the Texas Arbitration Act, an agreement to arbitrate a personal injury claim is enforceable only if each party to the claim agrees to arbitrate on the advice of counsel, and the agreement is signed by each party and each party’s attorney. Tex.Civ.Prac. & Rem.Code Ann. § 171.002(c) (Vernon 2005). The record does not contain a signed agreement to arbitrate. Accordingly, TAA does not apply.

TEXAS COMMON LAW

The inapplicability of the FAA and TAA does not automatically render the arbitration agreement unenforceable. Arbitration clauses may also be enforced under Texas common law, the TAA, or the FAA. In re Green Tree Servicing LLC, 275 S.W.3d 592, 599 (Tex.App.-Texarkana 2008, orig. proceeding); see L.H. Lacy Company v. City of Lubbock, 559 S.W.2d 348, 351-52 (Tex.l977)(common law arbitration and statutory arbitration are “cumulative” and part of a “dual system”); Carpenter v. North River Insurance Company, 436 S.W.2d 549, 553 (Tex.Civ.App.-Houston [14th Dist.] 1969, writ refd n.r.e.)(“In the many other states having arbitration statutes similar to our 1965 statute, it is almost uniformly held that the statutory remedy is cumulative and that the common law remedy remains available to those who choose to use it.”). Mandamus is the appropriate procedure by which we may review the trial court’s ruling on a motion to compel arbitration under the common law. See In re Paris Packaging, 136 S.W.3d 723, 727 & n. 7 (Tex.App.-Texarkana 2004, orig. proceeding). Swift’s motion to compel arbitration was not restricted to the FAA or the TAA. Consequently, the trial court might have determined that the arbitration agreement is enforceable under Texas common law. In determining whether the trial court abused its discretion in compelling arbitration, we must consider whether the agreement is enforceable under Texas common law.

We review de novo whether the arbitration agreement is valid. Section 406.033 of the Texas Labor Code provides that:

A cause of action described in Subsection (a) may not be waived by an employee before the employee’s injury or death. Any agreement by an employee to waive a cause of action or any right described in Subsection (a) before the employee’s injury or death is void and unenforceable.

Tex.Lab.Code Ann. § 406.033(e)(Vernon 2006). Ordinarily, Section 406.033(e) is preempted by the FAA because it takes precedence over state attempts to undercut the enforceability of arbitration agreements. See In re Border Steel, Inc., 229 5.W.3d 825, 831-32 (Tex.App.-El Paso 2007, orig. proceedingXholding that Section 406.033(e) is preempted by FAA); In re R & R Personnel Specialists of Tyler, 146 S.W.3d 699, 703-04 (Tex.App.-Tyler 2004, orig. proceedingXsame). We have determined, however, that the FAA is inapplicable to the arbitration clause at issue here. Applying Section 406.033(e) to this case, we hold that Swift’s arbitration agreement with Villanueva is void and unenforceable. The trial court abused its discretion by granting Swift’s motion to compel arbitration. Further, Villanueva does not have an adequate remedy by appeal. Accordingly, he has established his entitlement to mandamus relief. We direct the 210th District Court to set aside its order compelling arbitration. We are confident the court will comply with our directive and the writ of mandamus will issue only if it does not.

OPINION DENYING MOTION FOR REHEARING

On July 8, 2009, this court conditionally granted mandamus relief in favor of Jose Luis Villanueva because we concluded the trial court had abused its discretion by granting a motion to compel arbitration. The real party in interest, Swift Transportation Company, Inc., has filed a motion for rehearing asserting that Villanueva has an adequate remedy by appeal. We write to explain the basis for our conclusion that appeal is an inadequate remedy and to discuss In re Gulf Exploration, LLC, 289 S.W.3d 836 (Tex.2009).

To be entitled to mandamus relief, a relator must demonstrate he has no adequate remedy by appeal. In re Prudential Insurance Company of America, 148 S.W.3d 124, 136 (Tex.2004). Swift contends that the Supreme Court’s recent opinion in In re Gulf Exploration, LLC, 289 S.W.3d 836 (Tex.2009) forecloses mandamus review of an order compelling arbitration except where legislative mandates conflict. In Gulf Exploration, the Supreme Court explained that in 1994 it had authorized general mandamus review of orders either compelling or denying arbitration under the FAA. Id. at 841-42, citing Freis v. Canales, 877 S.W.2d 283, 284 (Tex.1994). But with the Palacios decision, the court limited mandamus review to orders denying arbitration while leaving open the question whether mandamus review of orders compelling arbitration should be entirely precluded. Id. at 842, citing In re Palacios, 221 S.W.3d 564, 565 (Tex.2006). It addressed this question in Gulf Exploration.

The trial court’s error in compelling arbitration when the parties have not agreed to it can be reviewed on final appeal. Id. at 842. Both the federal and Texas arbitration statutes provide for va-eating an arbitration award on final appeal if the arbitrators exceeded their powers. Id. But the court stopped short of holding that mandamus review is never available for an order compelling arbitration. See id. at 843 (noting Supreme Court had reviewed order compelling arbitration in In re Poly-America, 262 S.W.3d 337 (Tex.2008) and granted mandamus relief regarding a waiver of statutory remedies). The critical inquiry is whether appeal is an adequate remedy. See id. at 842. Answering this question depends on a careful balancing of the case-specific benefits and detriments of delaying or interrupting a particular proceeding. Id. at 842, citing In re Prudential, 148 S.W.3d at 136. The Supreme Court’s explanation in Prudential of the factors to be considered bears repeating here:

The operative word, ‘adequate’, has no comprehensive definition; it is simply a proxy for the careful balance of jurisprudential considerations that determine when appellate courts will use original mandamus proceedings to review the actions of lower courts. These considerations implicate both public and private interests. Mandamus review of incidental, interlocutory rulings by the trial courts unduly interferes with trial court proceedings, distracts appellate court attention to issues that are unimportant both to the ultimate disposition of the case at hand and to the uniform development of the law, and adds unproductively to the expense and delay of civil litigation. Mandamus review of significant rulings in exceptional cases may be essential to preserve important substantive and procedural rights from impairment or loss, allow the appellate courts to give needed and helpful direction to the law that would otherwise prove elusive in appeals from final judgments, and spare private parties and the public the time and money utterly wasted enduring eventual reversal of improperly conducted proceedings. An appellate remedy is ‘adequate’ when any benefits to mandamus review are outweighed by the detriments. When the benefits outweigh the detriments, appellate courts must consider whether the appellate remedy is adequate.

Prudential, 148 S.W.3d at 136.

Given that both the federal and state arbitration acts exclude immediate review of orders compelling arbitration, the balance is tilted strongly against mandamus review. Gulf Exploration, 289 S.W.3d at 842. Nevertheless, we have held that appeal is an inadequate remedy for Villanueva. It is true that delay and expense generally do not, standing alone, render a final appeal inadequate because arbitration clauses are usually contractual and cover contractual claims. Gulf Exploration, 289 S.W.3d at 842-43. In those cases, a prevailing party can recover its fees and expenses even if they were incurred in collateral proceedings like arbitration. Id. at 843. But the instant case concerns an on-the-job injury claim, not a contractual claim. Thus, Villanueva will not be able to recover his fees and expenses incurred during the arbitration proceeding. This fact is not dispositive but it is entitled to some weight in our case-specific balancing.

The more compelling argument is that we were presented with two mandamus petitions concerning the same employer, the same injury benefit plan, the same arbitration clause, and two plaintiff-employees in similar circumstances. Yet the two district judges hearing Swift’s motion to compel arbitration filed in each case reached opposite conclusions, with one judge compelling arbitration and the other denying it. These conflicting rulings are not incidental; they are significant rulings in exceptional cases. It is patently unjust and arbitrary to fully address the merits of the significant issues presented in Swift Transportation but summarily deny mandamus review of the same issues in Villa-nueva because the trial court chose to grant Swift’s motion to compel arbitration.

Finally, we note that Swift did not raise its argument regarding the unavailability of mandamus review until its motion for rehearing. We do not suggest that Swift waived the issue, but the failure to raise it sooner cuts against any argument that permitting mandamus review unnecessarily interrupts the underlying proceedings, increases the expense and delay of civil litigation, and distracts the attention of the appellate court from other important matters. See Prudential, 148 S.W.3d at 136. We are not persuaded by Swift’s argument that it could not have raised the issue earlier because Gulf Exploration was not decided until after this case was argued. As Villanueva suggests, the parties in Gulf Exploration raised the argument under Palacios both in the court of appeals and the Supreme Court. See In re Great Western Drilling, Ltd., 211 S.W.3d 828, 834-35 (Tex.App.-Eastland 2006, orig. proceeding), mand. granted, In re Gulf Exploration, LLC, 289 S.W.3d 836 (Tex.2009).

Under the unique circumstances presented, we conclude that direct appeal following arbitration is an inadequate remedy for Villanueva. We overrule Swift’s motion for rehearing.

      . The Injury Benefit Plan at issue in Shanks appears to be the same Plan at issue in this case.

      . On issues of federal law, such as the proper interpretation of the FAA, we must follow the decisions of the United States Supreme Court and the Texas Supreme Court. See Roehrs v. FSI Holdings, Inc., 246 S.W.3d 796, 803 (Tex.App.-Dallas 2008, pet. denied). The decisions of other courts, by contrast, may be persuasive but are not binding on us. Id.

      .The Plan defines "covered employee" as an employee whose employment with Swift is principally located within Texas or whose assigned terminal is located within the state.

      . Even if we concluded that the TAA applied, mandamus review would be unavailable. A trial court’s order denying arbitration, if based upon the Texas Arbitration Act, is subject to interlocutory appeal. Tex.Civ.Prac. & Rem.Code Ann. § 171.098(a)(Vernon 2005).

      . Subsection (a) pertains to a cause of action against an employer who does not have workers' compensation insurance coverage to recover damages for personal injuries or death sustained by an employee in the course and scope of the employment. Tex.Lab.Code Ann. § 406.033(a)(Vernon 2006).

      . The Legislature enacted Section 406.033(e) in 2001 in response to Lawrence v. CDB Servs., Inc., 44 S.W.3d 544, 551-53 (Tex. 2001), which rejected public-policy challenges to the validity of an employee's pre-injury agreement to limit a nonsubscriber employer’s liability in exchange for benefits. See Storage & Processors, Inc. v. Reyes, 134 S.W.3d 190, 192 (Tex.2004).


source: Caselaw Access Project

license: Public Domain

text:
    In re: SWIFT TRANSPORTATION COMPANY, INC., Relator.
    No. 08-08-00348-CV.
    Court of Appeals of Texas, El Paso.
    July 8, 2009.

      Michael Paul Sharp, Fee Smith Sharp & Vitullo, LLP, Dallas, TX, for Relator.
    Joseph Isaac, Scherr & legate, PLLC, El Paso, TX, for Real Party In Interest.
    Before McCLURE, RIVERA, JJ., and BARAJAS, C.J. (Ret.).
   OPINION ON PETITION FOR WRIT OF MANDAMUS

ANN CRAWFORD McCLURE, Justice.

Relator, Swift Transportation Company, Inc., seeks a writ of mandamus to require the Honorable David C. Guaderrama, Judge of the 243rd District Court, to grant its motion to compel arbitration. For the reasons that follow, we deny relief.

FACTUAL SUMMARY

Jose Valtierra, the real party in interest, has been employed by Swift since August 31, 2005 as an over-the-road truck driver. Swift is a non-subscriber to the Texas Workers’ Compensation insurance system. Instead, it has an Injury Benefit Plan for its Texas employees. Under the terms of the Plan, Valtierra became a participant in the Plan on the date of employment— August 31, 2005.

Section 2.3 of the Plan contains a mandatory arbitration provision. It requires arbitration of any legal or equitable claim by a participant for any form of physical or psychological damage, harm, or death which relates to an accident, including claims of negligence and negligent hir-ingTraining/supervision/retention and violation of any noncriminal federal, state, or other governmental common law, statute, regulation or ordinance in connection with a job-related injury. The Plan also provides that Swift and its employees engage in transactions involving interstate commerce and that the arbitration provision is governed by the Federal Arbitration Act (FAA). The Injury Benefit Plan states that the arbitration provisions apply to all participants without regard to whether they have completed and signed a “Receipt, Safety Pledge, and Arbitration Acknowledgment” form. Finally, it recites that the Plan and arbitration requirement do not change the “at will” employment status of any participant not covered by a collective bargaining agreement.

Appendix B to the Plan is a form entitled “RECEIPT, SAFETY PLEDGE, AND ARBITRATION ACKNOWLEDGMENT.” By signing the document, the employee acknowledges receipt of and an opportunity to read a Summary Plan Description (SPD) of the Injury Benefit Plan. The arbitration section states in pertinent part:

I also acknowledge that this SPD includes a mandatory company policy requiring that certain claims or disputes relating to an on-the-job injury (that cannot otherwise be resolved between the Company and me) must be submitted to an arbitrator, rather than a judge and jury in court. I understand that by receiving this SPD and becoming employed (or continuing my employment) with the Company at any time on or after April 1, 2005, I am accepting and agreeing to comply with these arbitration requirements. I understand that the Company is also accepting and agreeing to comply with these arbitration requirements.

It is undisputed that Swift does not have an acknowledgment form signed by Valti-erra.

Valtierra and a co-driver were transporting goods in Illinois on December 1, 2006. They stopped to change drivers and Gutierrez instructed Valtierra to place chains on the tires because it was icy. Valtierra broke his arm. His claim for benefits under the Plan was initially denied, but following an appeal, he received benefits. Valtierra filed a negligence suit against Swift and alleging claims of negligence.

Swift filed a motion to compel arbitration based on the arbitration clause in its Injury Benefit Plan. It contended Valtierra agreed to — and enrolled in — the Plan, was provided a copy of the Plan, and acknowledged its terms. The trial court denied the motion to compel arbitration without specifying the basis for its ruling. Swift filed this mandamus proceeding.

STANDARD OF REVIEW

To be entitled to mandamus relief, a relator must meet two requirements. First, the relator must show that the trial court clearly abused its discretion. In re Prudential Insurance Company of America, 148 S.W.3d 124, 135 (Tex.2004). Sec ond, the relator must demonstrate he has no adequate remedy by appeal. Id. at 136. A trial court abuses its discretion if it acts in an arbitrary or unreasonable manner without reference to any guiding rules or principles. Cire v. Cummings, 134 S.W.3d 835; 838-39 (Tex.2004); Bowie Memorial Hospital v. Wright, 79 S.W.3d 48, 52 (Tex.2002). When reviewing the trial court’s decision for an abuse of discretion, the reviewing court may not substitute its judgment for that of the trial court with respect to resolution of factual issues or matters committed to the trial court’s dis cretion. Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 242 (Tex.1985); see Walker v. Packer, 827 S.W.2d 833, 839 (Tex.1992). Review of the trial court’s determination of the legal principles controlling its ruling is much less deferential. Walker, 827 S.W.2d at 840. A trial court has no discretion in determining what the law is or applying the law to the facts, even when the law is unsettled. In re Prudential, 148 S.W.3d at 135. A clear failure by the trial court to analyze or apply the law correctly will constitute an abuse of discretion. Walker, 827 S.W.2d at 840.

A party seeking to compel arbitration must (1) establish the existence of a valid arbitration agreement; and (2) show that the claims asserted are within the scope of the agreement. See In re AdvancePCS Health L.P., 172 S.W.3d 603, 605 (Tex.2005). The trial court’s determina tion of the arbitration agreement’s validity is a legal question subject to de novo review. J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 227 (Tex.2003). Once the party seeking to compel arbitration proves that a valid arbitration agreement exists, a presumption attaches favoring arbitration and the burden shifts to the party resisting arbitration to establish a defense to enforcing arbitration. See In re AdvancePCS, 172 S.W.3d at 607; In re J.M. Davidson, 128 S.W.3d at 227. When a trial court erroneously denies a party’s motion to compel arbitration under the federal act or Texas common law, the mov-ant has no adequate remedy at law and is entitled to a writ of mandamus. In re FirstMerit Bank, N.A., 52 S.W.3d 749, 753 (Tex.2001); In re Paris Packaging, 136 S.W.3d 723, 727 & n. 7 (Tex.App.-Texarkana 2004, orig. proceeding).

APPLICABILITY OF FAA

In its sole issue for review, Swift maintains that the trial court abused its discretion by denying the motion to compel arbitration. Valtierra responds that the arbitration clause is not enforceable under Section 1 of the Federal Arbitration Act (FAA) because it is included in an employment contract of a transportation worker. Swift counters that since the Injury Benefit Plan is a not a contract of employment, Section l’s exemption is inapplicable.

The FAA compels judicial enforcement of a wide range of written arbitration agreements. Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 111, 121 S.Ct. 1302, 1307, 149 L.Ed.2d 234 (2001). The FAA’s coverage provision is found in Section 2:

A written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, or an agreement in writing to submit to arbitration an existing controversy arising out of such a contract, transaction, or refusal, shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract. 9 U.S.C.A. § 2 (West 1999).

The United States Supreme Court has interpreted Section 2 as implementing Congress’ intent “to exercise [its] commerce power to the full.” Circuit City, 532 U.S. at 112, 121 S.Ct. at 1307, quoting Allied-Bruce Terminix Companies, Inc. v. Dobson, 513 U.S. 265, 277, 115 S.Ct. 834, 841, 130 L.Ed.2d 753 (1995). Section 1 of the Act is an exemption provision and it provides the FAA does not apply “to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” 9 U.S.C.A. § 1. The Supreme Court has interpreted the phrase “other class of workers engaged in foreign or interstate commerce” as exempting from the FAA’s coverage employment contracts of transportation workers “actually engaged in the movement of goods in interstate commerce.” Circuit City, 532 U.S. at 112, 121 S.Ct. at 1307. Truck drivers, such as Valtierra, are considered transportation workers within the meaning of this exemption provision, and Swift does not contend otherwise. See e.g., Harden v. Roadway Package Systems, Inc., 249 F.3d 1137, 1140 (9th Cir.2001); Lorntzen v. Swift Transportation, Inc., 316 F.Supp.2d 1093,1095 (D.Kan.2004).

Swift argues that the Injury Benefit Plan is not a contract of employment within the meaning of Section 1, but rather is a separate agreement providing benefits incident to employment. Swift also places particular reliance on Section 9.4 of the Plan which states that the establishment of the Plan does not affect an employee’s “at will” status. We understand Swift to argue that since Valtierra remains an “at will” employee, the Plan cannot be an employment contract. Implicit in Swift’s argument is the notion that there is no employment contract in an at-will employment relationship. This is incorrect. Texas courts have for many years considered an employment-at-will agreement to be a contract. See Sterner v. Marathon Oil Company, 767 S.W.2d 686, 689 (Tex.1989). A contract of employment may be terminable at will or for cause.

There are other problems with Swift’s interpretation of the phrase “contract of employment” as used in Section 1 of the FAA. First, it would attribute an intent on the part of Congress to draw a distinction between employees who are terminable at will and those who are terminable for cause. There is no evidence Congress intended to draw such a distinction in determining which employees would be subject to the reach of the FAA. Second, Swift’s interpretation of the phrase is based on Texas employment law. We do not determine the meaning of a federal statute by examining state law.

Swift also relies upon In re Mission Petroleum Carriers, Inc., No. 13-04-00550-CV, 2005 WL 326848 (Tex.App.Corpus Christi Feb. 11, 2005, orig. proceeding). There, a truck driver employed by Mission was injured in an accident while in the course and scope of her employment. She filed suit against Mission but the employer moved to compel arbitration pursuant to an agreement to arbitrate contained within Mission’s employee health and safety plan. The trial court denied the motion and Mission sought mandamus relief. The Corpus Christi Court of Appeals held that the FAA applied because the arbitration provision was included in the health and safety plan rather than an employment contract. Id. at *2. The court of appeals emphasized that the health and safety plan expressly stated that it was not a contract of employment. Id.

Federal courts which have considered the meaning of the phrase “employment contract” as used in Section 1 have defined it as a “contract between an employer and an employee in which the terms and conditions of employment are stated.” See Carr v. Transam Trucking, Inc., No. 3-07-CV-1944-BD, 2008 WL 1776435 (N.D.Texas April 14, 2008); Awe v. I & M Rail Link, L.L.C., No. C04-3011-PAZ, 2007 WL 2572405 at *4 (N.D.Iowa Sept. 4, 2007), quoting Black’s Law Dictionary 321 (7th ed. 1999); Brown v. Nabors Offshore Corporation, 339 F.3d 391, 394 (5th Cir.2003); Buckley v. Nabors Drilling USA, Inc., 190 F.Supp.2d 958, 960 (S.D.Tex.2002), affd, 51 Fed.Appx. 928 (5th Cir.2002). In Carr, the federal district court determined that the arbitration agreement was an employment contract within the meaning of Section 1 because it was conditioned on commencement of or continued employment with the defendant, and as such, formed part of the employment contract with the defendant. Carr, 2008 WL 1776435 at *2.

One federal district court has addressed whether Swift’s Injury Benefit Plan is an employment contract within the meaning of Section 1. In Shanks v. Swift Transportation Company, Inc., the federal district court held that the Injury Benefit Plan is a component of the employee’s contract of employment because it is a mandatory company policy which the employee accepted as a condition of becoming employed and it provided benefits tied to continued employment. Shanks v. Swift Transportation Company, Inc., No. L-07-55, 2008 WL 2513056 at *3 (SD.Tex. June 19, 2008). This conclusion is consistent with the definition adopted in Carr and the other federal cases cited in the previous paragraph.

It is unclear from the appellate court’s memorandum opinion in Mission Petroleum whether the health and safety plan was a condition of employment. The court did not consider whether the health and safety plan was a component of the employee’s contract of employment. Rather than looking to narrowly-focused state employment law to determine whether the Injury Benefit Plan is a contract of employment as that term is used in Texas, we believe the better approach in determining the meaning of a federal statute is to look at a broader definition as done by the federal courts in Can" and Shanks. Consequently, we decline to follow Mission Petroleum because we find the analy-ses in Carr and Shanks to be more persuasive.

Swift’s Injury Benefit Plan is a mandatory company policy and it includes an arbitration provision. Under the terms of the Plan, each “covered employee” becomes a participant in the Plan on April 1, 2005, or the time and date of his or her employment if employed after April 1, 2005, and it provides benefits tied to continued employment. According to Appendix B attached to the Plan, Valtierra accepted the mandatory arbitration provision on the date he became employed by Swift, August 31, 2005. We conclude that the Injury Benefit Plan is an employment contract within the meaning of Section 1 because the Plan and agreement to arbitrate are conditions of Valtierra’s employment and formed part of his at-will employment contract with Swift. The FAA is therefore inapplicable to the Plan’s arbitration provision.

APPLICABILITY OF TAA

Swift argued in the trial court that if the arbitration provision is not enforceable under the FAA, it should be enforced under the Texas General Arbitration Act (TAA). Valtierra maintains that the Texas Arbitration Act does not apply because this is a personal injury suit and he did not sign an agreement to arbitrate. Under the Texas Arbitration Act, an agreement to arbitrate a personal injury claim is enforceable only if each party to the claim agrees to arbitrate on the advice of counsel, and the agreement is signed by each party and each party’s attorney. Tex.Civ.Prac. & Rem.Code Ann. § 171.002(c)(Vernon 2005). The record does not contain a signed agreement to arbitrate. Accordingly, the Texas Arbitration Act does not apply.

TEXAS COMMON LAW

The inapplicability of the FAA and TAA does not automatically render the arbitration agreement unenforceable. Arbitration clauses may also be enforced under Texas common law. In re Green Tree Servicing LLC, 275 S.W.3d 592, 599 (Tex.App.-Texarkana 2008, orig. proceeding); see L.H. Lacy Company v. City of Lubbock, 559 S.W.2d 348, 351-52 (Tex.l977)(common law arbitration and statutory arbitration are “cumulative” and part of a “dual system”); Carpenter v. North River Insurance Company, 436 S.W.2d 549, 553 (Tex.Civ.App.-Houston [14th Dist.] 1969, writ ref d n.r.e.)(“In the many other states having arbitration statutes similar to our 1965 statute, it is almost uniformly held that the statutory remedy is cumulative and that the common law remedy remains available to those who choose to use it.”). Mandamus is the appropriate procedure by which we may review the trial court’s ruling on a motion to compel arbitration under the common law. See In re Paris Packaging, 136 S.W.3d 723, 727 & n. 7 (Tex.App.-Texarkana 2004, orig. proceeding).

Valtierra raised numerous arguments in the trial court by which he sought to establish that the arbitration agreement is invalid and unenforceable. In addition to asserting that there is no evidence he was ever aware of or accepted the arbitration agreement, Valtierra relied on Section 406.033 of the Texas Labor Code to argue that the arbitration agreement is void. That section provides:

A cause of action described in Subsection (a) may not be waived by an employee before the employee’s injury or death. Any agreement by an employee to waive a cause of action or any right described in Subsection (a) before the employee’s injury or death is void and unenforceable.

Tex.Lab.Code Ann. § 406.033(e)(Vernon 2006). Ordinarily, Section 406.033(e) is preempted by the FAA because it takes precedence over state attempts to undercut the enforceability of arbitration agreements. See In re Border Steel, Inc., 229 5.W.3d 825, 831-32 (Tex.App.-El Paso 2007, orig. proceedingXholding that Section 406.033(e) is preempted by FAA); In re R & R Personnel Specialists of Tyler, 146 S.W.3d 699, 703-04 (Tex.App.-Tyler 2004, orig. proceeding)(same). We have determined that the FAA is inapplicable to the arbitration clause at issue here. Applying Section 406.033(e) to this ease, we hold that Swift’s arbitration agreement with Valtierra is void and unenforceable. Because the trial court did not abuse its discretion by denying Swift’s motion to compel arbitration, we deny mandamus relief.

BARAJAS, C.J. (Ret.), sitting by assignment.

      . The Injury Benefit Plan at issue in Shanks appears to be the same Plan at issue in this case.

      . On issues of federal law, such as the proper interpretation of the FAA, we must follow the decisions of the United States Supreme Court and the Texas Supreme Court. See Roehrs v. FSI Holdings, Inc., 246 S.W.3d 796, 803 (Tex.App.-Dallas 2008, pet. denied). The decisions of other courts, by contrast, may be persuasive but are not binding on us. Id.

      .The Plan defines "covered employee” as an employee whose employment with Swift is principally located within Texas or whose assigned terminal is located within the state.

      . Even if we concluded that the TAA applied, mandamus review would be unavailable. A trial court’s order denying arbitration, if based upon the Texas Arbitration Act, is subject to interlocutory appeal. Tex.Civ.Prac. & Rem.Code Ann. § 171.098(a)(Vernon 2005).

      . Subsection (a) pertains to a cause of action against an employer who does not have workers’ compensation insurance coverage to recover damages for personal injuries or death sustained by an employee in the course and scope of the employment. Tex.Lab.Code Ann. § 406.033(a)(Vernon 2006).

      . The Legislature enacted Section 406.033(e) in 2001 in response to Lawrence v. CDB Servs., Inc., 44 S.W.3d 544, 551-53 (Tex. 2001), which rejected public-policy challenges to the validity of an employee’s pre-injury agreement to limit a nonsubscriber employer's liability in exchange for benefits. See Storage & Processors, Inc. v. Reyes, 134 S.W.3d 190, 192 (Tex.2004).


text:
    TIERRA SOL JOINT VENTURE and Samuel & Company, Inc., Appellants, v. The CITY OF EL PASO, Appellee.
    No. 08-07-00162-CV.
    Court of Appeals of Texas, El Paso.
    Aug. 28, 2009.

      Robert A. Skipworth, El Paso, TX, for Appellants.
    Kent M. Rider, Lindbarger, Heard, Gog-gan, Blair Graham, Pena & Sampson, Austin, TX, for Appellee.

      Before CHEW, C.J., McCLURE, and RIVERA, JJ.
   OPINION

ANN CRAWFORD McCLURE, Justice.

Tierra Sol Joint Venture and Samuel & Company, Inc. appeal from a judgment entered in favor of the City of El Paso. This is the second time the parties have been before this court. We consider here the proper interpretation of our opinion in Tierra Sol Joint Venture and Samuel & Company, Inc. v. The City of El Paso, 155 S.W.3d 503 (Tex.App.-El Paso 2004, pet. denied) which we shall refer to as Tierra Sol I. For the reasons that follow, we affirm.

FACTUAL AND PROCEDURAL SUMMARY

During the relevant time periods, Tierra Sol Joint Venture owned certain real property in El Paso. The property is identified as the A.F. Miller Survey 214, Abstract 3598, Tracts 15-A-3 and 15-A-4, but the parties refer to the two tracts by their corresponding tax account numbers or by the last four digits of those account numbers. We will adopt that nomenclature and refer to Tract 15-A-3 as “Tract 4530” and Tract 15-A-4 as “Tract 9625.” We will also refer to the corresponding tax accounts as “Account 4530” and “Account 9625.”

Ad valorem taxes on both tracts became delinquent beginning with tax year 1982 and continuing through tax year 1995. Sometime prior to February 21, 1990, the City filed suit seeking recovery of delinquent ad valorem taxes for tax years 1982 through 1989 on Tract 9625. On March 2, 1990, the County Court at Law No. 4 in El Paso County entered judgment in favor of the City awarding it recovery of the delinquent taxes, penalty and interest, and collection fees. As of January 23, 1990, the total delinquent taxes were $15,084.15, penalties and interest were $7,061.12, and the collection fees totaled $3,321.83, for a total of $25,467.10. Because Tierra Sol did not pay the judgment, penalties and interest continued to accrue.

In 1996, the City of El Paso filed suit seeking recovery of delinquent ad valorem taxes on Tract 4530 and Tract 9625. The City sought recovery of delinquent taxes for years 1989 through 1995 on Tract 4530 and for years 1990 through 1995 on Tract 9625. While the suit was pending, Appellants tendered two checks dated January 29, 1997 to the City Tax Assessor-Collector for payment of the delinquent taxes on the two tracts. The first check was in the amount of $46,083.50 and the memo line on the check contained the following: “PAID UNDER PROTEST PID #X214-999-000A-9625 Years 1982-1995 principle [sic] amount.” On January 30, 1997, the City Tax Office applied $44,982.82 of the funds from that check to satisfy the 1990 judgment plus penalties and interest. The City Tax Office applied the remaining amount of $1,100.68 as a partial payment on the penalties, interest, and taxes owed for tax year 1990 on Tract 9625. The second check is in the amount of $91,169.35 and the memo line contained the following: “PAID UNDER PROTEST PID #X214-999-000A-4530 Years 1982-1995 principle [sic] amount.” The City Tax Office applied the funds first to penalties, interest, and fees owed on Account 4530 and it applied the remainder to the delinquent taxes with the result that delinquent taxes remained due and owing on Tract 4530.

Appellants filed a counterclaim in the suit below seeking a declaratory judgment that the City could not recover interest and penalties for certain years because it had not sent the required tax notices to the true owner. The district court sustained the City’s special exception to Appellants’ counterclaim. Following a bench trial, the district court entered judgment in favor of the City. Appellants appealed and this Court ruled in their favor finding that the notices sent to Robert C. Samuel could not be imputed to Tierra Sol Joint Venture because the evidence was legally insufficient to prove that Samuel was a partner in the Joint Venture. Tierra Sol 1, 155 S.W.3d at 508. We concluded that the City’s failure to give the required tax notices mandated cancellation of penalties and interest on the taxes owed for the years 1989 through 1995 on Tract 4530 and from 1990 through 1995 on Tract 9625. Id. at 509. Further, we held that the trial court had erred by sustaining the City’s special exceptions to Appellants’ counterclaim. Id. at 510. We reversed the portion of the judgment awarding penalties and interest, and remanded the cause for further proceedings. Id.

After remand, the City Tax Office removed the penalties, interest, and fees from Account 4530 for tax years 1982 through 1995 and it reallocated the 1997 payment made on Tract 4530 to delinquent taxes only which resulted in a zero balance on that account. With respect to Tract 9625, the City Tax Office removed the penalties, interest, and fees for tax years 1990 through 1995 and applied the partial payment to delinquent taxes owed for 1990. The City did not reallocate the portion of the payment applied to satisfy the 1990 judgment. Delinquent taxes remain due and owing on Tract 9625 for tax years 1990 through 1995 in the total amount of $28,387.97.

Both parties filed amended pleadings after remand. Appellants filed a counterclaim asserting that the City had failed to comply with the judgment issued in Tierra Sol I. Appellants did not allege or argue in the trial court, nor have they argued on appeal, that the check tendered as payment on Tract 9625 had been applied contrary to the instructions on the check. Following a bench trial, the district court sustained the City’s special exceptions to Appellants’ counterclaim and entered judgment in favor of the City awarding it recovery of $28,387.97 on Tract 9625 from Samuel & Company. The judgment also awarded foreclosure on the tax liens on Tract 9625 and ordered the property to be sold. The trial court filed findings of fact and conclusions of law.

Appellants bring three issues for review. In Issue One, they challenge the portion of the judgment awarding an in personam judgment against Samuel & Company. In Issue Two, they contend the trial court erred in sustaining the City’s special exceptions to the counterclaim because it prevented them from compelling the City to comply with Tierra Sol I. In Issue Three, Appellants challenge the legal and factual sufficiency of the evidence supporting the judgment in favor of the City.

TIERRA SOL I

All of the issues in this appeal revolve around the application of Tierra Sol I to the dispute between the parties. As might be expected, the parties have fundamentally different interpretations of that opinion. Throughout the trial below and in their brief on appeal, Appellants have asserted that Tierra Sol I holds that the City is not permitted to collect penalties and interest on both Tract 4530 and Tract 9625 for tax years 1982 through 1995. They reason that the City erred in applying the 1997 payment to satisfy the 1990 judgment which included penalties and interest on the delinquent taxes for tax years 1982 through 1989. On appeal, they urge that the amount found by the trial court to be due and owing on Tract 9625 is incorrect because the City did not apply the 1997 payment to the delinquent taxes in accordance with Tierra Sol I. The City, on the other hand, maintains that Tierra Sol I has no impact on the 1990 judgment but instead must be limited to its holding that the City could not collect penalties and interest on Account 4530 for tax years 1989 through 1995 and on Account 9625 for tax years 1990 through 1995. The City’s interpretation of Tierra Sol I is correct.

In the opening paragraph, the opinion recites that the City filed suit to collect delinquent taxes on Tract 4530 for tax years 1989 through 1995 and on Tract 9625 for tax years 1990 through 1995. Tierra Sol I, 155 S.W.3d at 505. We found that the notices sent to Robert C. Samuel could not be imputed to Tierra Sol Joint Venture because the evidence was legally insufficient to prove that Samuel was a partner in the joint venture. Id. at 508. Consequently, we concluded that the City’s failure to give the tax notices to Tierra Sol required that penalties and interest be canceled on “the taxes owed.” Id. at 509. Our reference to “the taxes owed” necessarily meant the taxes at issue in the case, namely, the delinquent taxes owed on Tract 4530 for tax years 1989 through 1995 and those owed on Tract 9625 for tax years 1990 through 1995. That the opinion is so limited is further illustrated by the final three sentences of the opinion:

Because the Court has determined there is no evidence that the Joint Venture received the delinquent tax notices and that the City is not entitled to penalties and interest on the taxes owed for the years 1989-1995 for #4530 and 1990-1995 for # 9625, Issue No. Three is sustained. The portion of the judgment awarding penalties and interest is reversed. We remand to the trial court for proceedings not inconsistent with this opinion.

Id. at 510. The opinion does not mention the 1990 judgment nor does it purport to hold that penalties and interest must be canceled on the taxes owed on Tract 9625 for tax years 1982-1989 because that issue simply was not before the Court. Further, this Court did not have the power to set aside any portion of the 1990 final judgment. With this understanding of Tierra Sol i, we proceed to review the issues presented in this appeal.

IN PERSONAM JUDGMENT

In Issue One, Appellants assert that the trial court’s judgment is invalid because it awards an in personam judgment against Samuel & Company, Inc. for the delinquent taxes when that entity was not a party to the suit at the time of trial and did not own either of the tracts. Appellants request that we reverse the trial court’s judgment and render judgment that the City take nothing as to both Appellants.

The judgment recites the following:
It is, therefore, ORDERED, ADJUDGED and DECREED that there is due, owing, and unpaid from Samuel & Company, Inc. to the City of El Paso the amount of $28,387.97 as delinquent taxes for the years 1990 through 1995 on the property described as 1.8507 acres, more or less, out of Tract 15-A, A.F. Miller Survey No. 214, described as Parcel 3A, an addition to the City of El Paso, being more particularly described by metes and bounds in Volume 1167, Page 613, Deed Records of El Paso County, Texas, and also identified by Tax Account No. X214-999-000A-9625.

The City concedes that the portion of the judgment awarding it an in personam judgment against Samuel & Company is erroneous but it expressly represents in its brief that it releases Samuel & Company from all personal liability under the March 22, 2007 judgment. The City draws our attention to another paragraph in the judgment which awards an in rem judgment against Tract 9625:

It is further ORDERED, ADJUDGED and DECREED pursuant to Tex.Tax Code Ann. § 38.53(a) that the tax liens existing on the above-described property shall be foreclosed and the property sold in satisfaction of the amount of this judgment.

When a taxing unit files suit to collect a delinquent ad valorem tax it has the option of suing to “foreclose the lien securing payment of the tax, to enforce personal liability for the tax, or both.” Tex.Tax Code Ann. § 33.41(a) (Vernon 2008). The City pursued both remedies and the trial court granted both types of relief to the City. In addition to releasing Samuel & Company from personal liability under the judgment, the City represents that it will proceed only in rem against Tract 9625 by foreclosing the tax lien that exists on the property. Given its release of Samuel & Company from liability under the portion of the judgment awarding the City an in personam judgment, the City contends that the erroneous portion of the judgment is rendered moot and forms no basis for reversing the in rem judgment for foreclosure of the tax liens.

Generally, when an event occurs after a judgment that renders an issue before an appellate court moot, the court cannot decide the appeal. Miga v. Jensen, 96 S.W.3d 207, 223 (Tex.2002); General Land Office of Texas v. OXY U.S.A., Inc., 789 S.W.2d 569, 570-71 (Tex.1990); see also Camarena v. Texas Employment Commission, 754 S.W.2d 149, 151 (Tex.1988) (appellate courts cannot decide moot controversies). When there has ceased to be an active controversy, “the decision of an appellate court would be a mere academic exercise.” Hanna v. Godwin, 876 S.W.2d 454, 457 (Tex.App.-El Paso 1994, no writ). In this case, the City’s release of Samuel & Company from liability renders moot any dispute about the portion of the judgment establishing that defendant’s personal liability for the delinquent taxes. The City’s release of Samuel & Company does not render the entire appeal moot but does preclude our review of Issue One.

Even if the City’s release of Samuel & Company does not render the erroneous portion of the judgment moot, Appellants have provided no argument or authority in support of their argument that the entire judgment must be reversed and judgment must be rendered in their favor. The appropriate remedy in such a case would be to modify the trial court’s judgment to delete the erroneous portion and affirm the judgment as modified. See Tex. R.App.P. 43.2(b) (court of appeals may enter a judgment modifying the trial court’s judgment and affirming as modified); Tex. R.App.P. 44.1(b) (providing that if an error affects only part of the matter in controversy and is separable, the court of appeals must reverse only as to the part affected by the error). We overrule Issue One.

SUFFICIENCY OF THE EVIDENCE

In Issue Three, Appellants contend that the evidence is legally and factually insufficient to support the judgment entered in favor of the City in the amount of $28,387.97 because the City failed to reallocate the 1997 payment in compliance with Tierra Sol I. We have determined that Appellants’ complaint about the in person-am judgment against Samuel & Company is moot. Therefore, it is unnecessary to review the sufficiency of the evidence supporting that portion of the judgment. The trial court also awarded the City an in rem judgment against Tract 9625 “for the amount of the taxes, interest, penalties, and costs of court found to be due on that property” and it ordered that the tax liens be foreclosed and the property sold in satisfaction of the amount of this judgment. We proceed to consider Appellant’s argument that the amount of delinquent taxes found by the trial court to be owed on Tract 9625 is not supported by legally and factually sufficient evidence. As part of this argument, we consider Appellants’ assertion that the City failed to reallocate the 1997 payment made on Account 9625 to delinquent taxes only.

Standards of Review

A “no evidence” or legal insufficiency point is a question of law which challenges the legal sufficiency of the evidence to support a particular fact finding. Serrano v. Union Planters Bank, N.A., 162 S.W.3d 576, 579 (Tex.App.-El Paso 2004, pet. denied). There are two separate “no evidence” claims. Id. When the party having the burden of proof suffers an unfavorable finding, the point of error challenging the legal sufficiency of the evidence should be that the fact or issue was established as “a matter of law.” Id. When the party without the burden of proof suffers an unfavorable finding, the challenge on appeal is one of “no evidence to support the finding.” Id.; In re Estate of Livingston, 999 S.W.2d 874, 879 (Tex.App.-El Paso 1999, no pet.). In this case, the City had the burden to establish the amount of delinquent taxes owed on Tract 9625.

Findings of fact in a bench trial have the same force and dignity as a jury’s verdict upon questions and are reviewed for legal and factual sufficiency of the evidence by the same standards. Ortiz v. Jones, 917 S.W.2d 770, 772 (Tex.1996); Anderson v. City of Seven Points, 806 S.W.2d 791, 794 (Tex.1991). However, the findings are not conclusive when, as in this case, a complete reporter’s record appears in the record. See Tucker v. Tucker, 908 S.W.2d 530, 532 (Tex.App.-San Antonio 1995, writ denied). We review the trial court’s legal conclusions de novo. BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex.2002).

An appellate court will sustain a legal sufficiency or “no-evidence” challenge if the record shows: (1) the complete absence of a vital fact, (2) the court is barred by rules of law or evidence from giving weight to the only evidence offered to prove a vital fact, (3) the evidence offered to prove a vital fact is no more than a scintilla, or (4) the evidence establishes conclusively the opposite of the vital fact. City of Keller v. Wilson, 168 S.W.3d 802, 810 (Tex.2005); El Paso Independent School District v. Pabon, 214 S.W.3d 37, 41 (Tex.App.-El Paso 2006, no pet.). In conducting our review, we consider the evidence in the light most favorable to the verdict and indulge every reasonable inference that would support it. City of Keller, 168 S.W.3d at 822. Even if evidence is undisputed, it is the province of the trier of fact to draw from it whatever inferences it wishes so long as more than one inference is possible. Id. at 821. But if the evidence allows only one inference, neither the trier of fact nor the reviewing court may disregard it. Id. We are also mindful that the trier of fact is the sole judge of the credibility of the witnesses and the weight to be given their testimony. Id. at 819. When there is conflicting evidence, it is the province of the trier of fact to resolve such conflicts. Id. at 820. In every circumstance in which a reasonable trier of fact could resolve conflicting evidence either way, the reviewing court must presume it did so in favor of the prevailing party, and disregard the conflicting evidence in its sufficiency review. Id. at 821. If the evidence at trial would enable reasonable and fair-minded people to differ in their conclusions, then the trier of fact must be allowed to do so. Id. at 822. So long as the evidence falls within this zone of reasonable disagreement, we may not substitute our judgment for that of the trier-of-fact. Id. The ultimate test for legal sufficiency is whether the evidence at trial would enable reasonable and fair-minded people to reach the verdict under review. Id. at 827.

When reviewing a challenge to the factual sufficiency of the evidence, we examine the entire record, considering both the evidence in favor of, and contrary to, the challenged finding. See Cain v. Bain, 709 S.W.2d 175, 176 (Tex.1986). After considering and weighing all the evidence, we set aside the fact finding only if it is so contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust. Pool v. Ford Motor Co., 715 S.W.2d 629, 635 (Tex.1986). In our review, we may not substitute our own judgment for that of the trier of fact or pass upon the credibility of the witnesses. See Maritime Overseas Corporation v. Ellis, 971 S.W.2d 402, 407 (Tex.1998).

Applicable Law

Generally, property taxes are the personal obligation of the person who owns or acquires the property on January 1 of the year for which the tax is imposed, and a person is not relieved of the obligation because he or she no longer owns the property. Tex.Tax Code Ann. § 32.07 (Vernon 2008). Chapter 33 of the Tax Code authorizes a taxing unit to sue for delinquent taxes. See Tex.Tax Code Ann. §§ 33.01-33.95 (Vernon 2008). At any time after its tax on property becomes delinquent, a taxing unit may file suit to enforce personal liability for the tax. Tex. Tax Code Ann. § 33.41(a). It may also an also bring an action to foreclose the lien securing the taxes, or it may seek both types of relief. Id. Tax liens attach upon the land rather than upon the person, and a foreclosure suit is a proceeding “in rem ” rather than “in personam.” Nickey v. State of Mississippi, 292 U.S. 393, 397, 54 S.Ct. 743, 78 L.Ed. 1323 (1934); Richey v. Moor, 112 Tex. 493, 249 S.W. 172, 173-74 (1923). In a suit to collect a delinquent tax, the taxing unit’s current tax roll and delinquent tax roll or certified copies of the entries showing the property and the amount of the tax and penalties imposed and interest accrued constitute prima fa-cie evidence that each person charged with a duty relating to the imposition of the tax has complied with all requirements of law and that the amount of tax alleged to be delinquent against the property and the amount of penalties and interest due on that tax as listed are the correct amounts. Tex.Tax Code Ann. § 33.47(a)(Vernon 2008).

The Relevant Findings of Fact and Conclusions of Law

The following findings are pertinent to the issue presented:

1. The Tax Office of the City of El Paso has complied with the holding in Tierra Del Sol Joint Venture v. City of El Paso, 155 S.W.3d 503 (Tex.App.-El Paso 2004, pet. denied) that the tender of $91,169.35 made by and on behalf of Tierra Del [sic] Sol Joint Venture in 1997 on Account No. X214-999-000A-4530 be applied only to payment of taxes, and that no interest or penalties or interest are recoverable on Account No. X214-999-000A-9625 for 1990 through 1995.
* * * * * *
11. This dispute originally involved delinquent taxes, interest and penalties owing to two separate parcels of land bearing tax account numbers X214-999-000A-4530 and X214-999-000A-9625, for years 1990 through 1995 for parcel # 4530 and for years 1989 through 1995 for parcel # 9625.
12. On January 29, 1997 Defendants tendered $91,169.35 to Plaintiff as payment toward what was owed on those two accounts.
14. Of the January 29, 1997 tender, $46,083.50 was tendered to pay what was owed for years 1982 through 1995 on account X214-999-OOOA-9625.
15. On March 2, 1990, the 205th District Court of El Paso County, Texas, Honorable Sam Callan [sic] presiding, entered a Judgment in Cause No. 86-5330, which awarded a judgment in favor of the City of El Paso for delinquent taxes, interest, penalties and costs on account X214-999-000A-9625 for years 1982 through 1989.
16. Upon receiving that payment of $46,083.50 the Plaintiff applied it first to pay the taxes, interest, penalties and costs which had accrued on the judgment in Cause No. 86-5330. That amount was sufficient to pay the judgment in full and to make a partial payment on taxes assessed for 1990.

The City introduced into evidence certified delinquent tax statement details for both Tract 4530 and Tract 9625. Plaintiffs Exhibit 1 pertains to Tract 4530 and reflects that there were no delinquent taxes due on that property. Plaintiffs Exhibit 2, which pertains to Tract 9625, reflects that there were delinquent taxes due in the total amount of $28,378.97 on that account for tax years 1990 through 1995. Pursuant to Section 33.47(a), the certified delinquent tax statement details constituted prima facie evidence that the amount of delinquent taxes due on Account 9625 for tax years 1990 through 1995 were $28,378.97.

In an apparent effort to show that the amount of delinquent taxes found by the court to be owed was incorrect and the City had not complied with Tierra Sol I, Appellants offered into evidence a copy of the 1990 judgment. It is undisputed that the judgment had not been paid when Appellants tendered payment on Accounts 4530 and 9625 in 1997. Appellants tendered two separate checks, one in the amount of $91,169.35 to be applied to delinquent taxes owed on Tract 4530 for tax years 1982 through 1995 and a second check in the amount of $46,083.50 to be applied to delinquent taxes owed on Tract 9625 for tax years 1982 through 1995. Copies of the two checks were admitted into evidence. The evidence does not support Finding of Fact # 12 that only a single payment of $91,169.35 was tendered for payment on both accounts, but other findings support the trial court’s finding that the City complied with Tierra Sol I. The evidence supports the court’s conclusion that $46,083.50 was tendered by Appellants to pay what was owed for years 1982 through 1995 on account X214-999-000A-9625. The evidence also supports Finding of Fact # 16 because it shows that in 1997, the City Tax Office applied the payment of $46,083.50 to pay the taxes, interest, penalties and costs which had accrued on the judgment in Cause No. 86-5330. The remainder was applied toward penalties and interest on the delinquent taxes owed for tax year 1990. Thus, a partial payment was made on the 1990 taxes. After remand and in accordance with Tierra Sol, the City Tax Office removed the penalties and interest on the taxes owed on Tract 9625 for tax years 1990 through 1995 and it reallocated the partial payment which had previously been applied to penalties and interest associated with tax year 1990 and applied it to solely to delinquent taxes for that tax year. The opinion and judgment in Tierra Sol I held that the City could not collect penalties and interest on delinquent taxes owed on Tract 9625 for tax years 1990 through 1995, but it did not hold that the City could not apply the payment of $46,083.50 to the unpaid 1990 judgment nor did it direct the City to apply that payment in any particular manner.

We find that the evidence is legally and factually sufficient to support the relevant findings of fact. Further, the trial court correctly concluded that there were delinquent taxes owed on Account 9625 in the amount of $28,378.97. Issue Three is overruled.

THE DECLARATORY JUDGMENT COUNTERCLAIM

In Issue Two, Appellants maintain that the trial court erred by sustaining the City’s special exceptions because that ruling had the effect of dismissing their counterclaim. A trial court’s ruling on special exceptions is reviewed under an abuse of discretion standard. A trial court’s ruling on special exceptions is reversed only if there has been an abuse of discretion. Martin v. McDonnold, 247 S.W.3d 224, 237 (Tex.App.-El Paso 2006, no pet.); Adams v. First National Bank of Bells/Savoy, 154 S.W.3d 859, 876 (Tex.App.-Dallas 2005, no pet.). A trial court abuses its discretion if its action is arbitrary, unreasonable, and without reference to any guiding rules or principles. Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-2 (Tex.1985).

After remand, Appellants filed their fourth amended counterclaim, which sought a declaratory judgment that the payment of $91,169.35 must be applied to the tax levies for 1982 through 1995. The counterclaim did not address Tract 9625 or the 1997 payment made on that account. As it had done in Tierra Sol I, the City filed a special exception to the declaratory judgment counterclaim asserting that it had been filed for the sole purpose of recovering attorney’s fees when attorney’s fees would not otherwise be recoverable. With permission of the trial court, Appellants filed a trial amendment which sought a declaration that the payment of $46,083.50 made in 1997 must be applied to the tax levies on Tract 9625 for 1982 through 1995. The City did not obtain a ruling on its special exceptions prior to trial but instead raised the issue with the trial court when Appellants requested permission to file the trial amendment. The trial court did not immediately rule on the special exceptions, but the court sustained them after the final judgment had been entered by making the following additional conclusion of law:

9. The special exceptions filed by the Plaintiff in response to the Defendants’ Fourth Amended Counterclaim are sustained.

The court made the following findings of fact relevant to Appellants’ defense and counterclaim:

4. Between the filing of the original answers of Tierra Del [sic] Sol Joint Venture, Samuel & Company, Inc. and Robert C. Samuel and the rendition of the opinion and judgment in Tierra Del [sic] Sol Joint Venture v. City of El Paso in November 2004, the relief being requested by way of a declaratory judgment included the same relief which those parties were seeking by way of their several answers, being a ruling that they were not liable for any interest or penalties on the taxes assessed between 1982 and 1995.
⅜ ¾* ⅝ ⅜ ⅜ ⅜
16. Upon receiving that payment of $46,088.50 the Plaintiff applied it first to pay the taxes, interest, penalties and costs which had accrued on the judgment in Cause No. 86-5330. That amount was sufficient to pay the judgment in full and to make a partial payment on taxes assessed for 1990.

The court also made the following conclusions of law:

2. The primary relief sought by Tierra Del [sic] Sol Joint Venture, Samuel & Company, Inc. and Robert C. Samuel through their counterclaims in this case was received when the City of El Paso Tax Office complied with the ruling in Tierra Del Sol Joint Venture v. City of El Paso, 155 S.W.3d at 509, and credited the 1997 payment of $91,169.35 solely to taxes assessed on Account No. X214-999-000A-4530, and cancelled [sic] the interest and penalties that had previously appeared on that account and on Account No. X214-999-000A-9625.
⅝ :{: ⅜ i\i ⅜ ⅜
8. [Tierra Sol 7] did not affect the final judgment which was previously entered in Cause No. Cause No. [sic] 86-5330, which awarded a judgment in favor of the City of El Paso for delinquent taxes, interest, penalties and costs on account X214-999-OOOA-9625 for years 1982 through 1989.

Appellants argue that the trial court erroneously concluded that they could not maintain their counterclaim for declaratory judgment because they had raised the same arguments in the context of their affirmative defenses. Relying on Tierra Sol I, Appellants contend that their counterclaim is the only remedy by which they could compel the City to apply the payments made on Accounts 4530 and 9625 to the tax levies for tax years 1990 through 1995. We disagree. By the time the trial court ruled on the special exceptions, the court had fully considered, but rejected, Appellants’ defense that the 1997 payment on Account 9625 could not be applied to penalties and interest associated with tax years 1982 through 1989. We have already determined that the trial court did not err in that determination. Because Appellants were not entitled to the declarations they sought, the trial court did not abuse its discretion by sustaining the special exceptions. We overrule Issue Two and affirm the judgment of the trial court.

      . Samuel is not named as a party in the City's second or third amended petitions.

      . Tierra Sol was erroneously referred to as "Tierra Del Sol” numerous times during the proceeding below. The trial court acknowledged in its additional findings of fact that the correct name is "Tierra Sol Joint Venture.”

      . In the original, the trial court struck through the word “overruled” and wrote in "sustained.”


text:
    In the Matter of the EXPUNCTION OF Justin Patrick JONES.
    No. 08-08-00065-CV.
    Court of Appeals of Texas, El Paso.
    Sept. 30, 2009.

      Manuel Romero, Assistant Attorney, El Paso, TX, for Appellant.
    Cori A. Harbour, The Harbour Law Firm, PC., El Paso, TX, for Appellee.
    Before CHEW, C.J., McCLURE, and RIVERA, JJ.
   OPINION

ANN CRAWFORD McCLURE, Justice.

The County of El Paso appeals an order of expunction relating to an arrest for possession of marijuana under two ounces. For the reasons that follow, we reverse and render judgment denying the petition for expunction.

FACTUAL BACKGROUND

Justin Patrick Jones filed a petition to expunge the records of an arrest for possession of marijuana under two ounces. Pursuant to a plea agreement, the charges were to be dismissed upon his completion of a Pre-Trial Diversion Program. As a prerequisite to enrollment in the program, Jones signed a waiver of his right to ex-punction. The agreement was entitled, WAIVER OF SPEEDY TRIAL AND WAIVER OF RIGHT OF EXPUNCTION AND VOLUNTARY AGREEMENT TO PARTICIPATE IN THE PRE-TRIAL DIVERSION PROGRAM.

On March 7, 2007, Jones completed the program. On April 12, the county attorney’s office moved to dismiss the charges. The trial court dismissed the case that same date. On December 18, Jones filed a petition for expunction which was granted on January 28, 2008. Upon proper request, the court entered findings of fact and conclusions of law.

WAIVER OF RIGHT TO EXPUNCTION

In the County’s sole issue for review, it complains that the expunction order was erroneous because Appellee waived his right of expunction as part of the plea agreement. It also challenges the trial court’s specific finding that Appellee did not knowingly waive his right.

Standard of Review

Article 55.01 of the Texas Code of Criminal Procedure controls the right of a person who has been placed under arrest for either a felony or misdemeanor to have all records and files relating to the arrest expunged. Tex.Code Crim.Proc.Ann. art. 55.01 (a)(Vernon 2006). A statutory ex-punction proceeding is civil rather than criminal in nature, and the burden of proving compliance with the statutory conditions rests with the petitioner. Collin County Criminal Dist. Attorney’s Office v. Dobson, 167 S.W.3d 625, 627 (Tex.App.-Dallas 2005, no pet). Article 55.01 re quires strict compliance with conditions imposed by the statute; therefore, courts have no equitable power to expunge criminal records. Id.

We review a trial court’s ruling on a petition for expunction under an abuse of discretion standard. Ex parte Jackson, 132 S.W.3d 713, 715 (Tex.App.-Dallas 2004, no pet.); see also Tex. Dep’t of Pub. Safety v. J.H.J., 274 S.W.3d 803, 806 (Tex.App.-Houston [14th Dist.] 2008, no pet.).

A trial court abuses its discretion if it acts in an arbitrary or unreasonable manner without reference to any guiding rules or principles. Cire v. Cummings, 134 S.W.3d 835, 838-39 (Tex.2004); Bowie Memorial Hospital v. Wright, 79 S.W.3d 48, 52 (Tex.2002). When reviewing the trial court’s decision for an abuse of discretion, the reviewing court may not substitute its judgment for that of the trial court with respect to resolution of factual issues or matters committed to the trial court’s discretion. Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 242 (Tex.1985); see Walker v. Packer, 827 S.W.2d 833, 839 (Tex.1992).

A trial court’s conclusions of law are also reviewable to determine whether the law was incorrectly applied to the facts. See Heritage Resources, Inc. v. Hill, 104 S.W.3d 612, 619 (Tex.App.-El Paso 2003, no pet.). Conclusions of law are reviewed de novo as legal questions. Hitzelberger v. Samedan Oil Corporation, 948 S.W.2d 497, 503 (Tex.App.-Waco 1997, writ denied).

Waiver/Principles of Contract

A defendant has a statutory right to “waive any rights secured him by law” under Article 1.14(a) of the Texas Code of Criminal Procedure, and such a waiver is judicially enforceable unless the waiver is not “knowingly and intelligently made.” Blanco v. State, 18 S.W.3d 218, 219 (Tex.Crim.App.2000). “‘[C]ourts indulge every reasonable presumption against waiver’ and ... ‘do not presume acquiescence in the loss of fundamental rights.’” Williams v. State, 252 S.W.3d 353, 356 (Tex.Crim.App.2008), citing Johnson v. Zerbst, 304 U.S. 458, 464, 58 S.Ct. 1019, 82 L.Ed. 1461 (1938). The trial judge is responsible for determining whether a defendant’s waiver is knowing, intelligent, and voluntary. Id. To assess whether a waiver is effective, courts consider the totality of the circumstances. This means that courts must examine “the particular facts and circumstances surrounding that case, including the background, experience, and conduct of the accused.” Id.

One who signs a contract “must be held to have known what words were used in the contract and to have known their meaning, and he must also be held to have known and fully comprehended the legal effect of the contract.” Nguyen Ngoc Giao v. Smith & Lamm, P.C., 714 S.W.2d 144, 146 (Tex.App.-Houston [1st Dist.] 1986, no writ). Illiteracy thus does not relieve a contracting party of the consequences of his agreement. Id.; Vera v. North Star Dodge Sales, Inc., 989 S.W.2d 13, 17 (Tex.App.-San Antonio 1998, no pet.); Brown v. Aztec Rig Equip., Inc., 921 S.W.2d 835, 846 (Tex.App.-Houston [14th Dist.] 1996, writ denied). Indeed, “[absent proof of mental incapacity, a person who signs a contract is presumed to have read and understood the contract, unless he was prevented from doing so by trick or artifice.” Vera, 989 S.W.2d at 17.

This court has previously addressed a waiver of the right of expunction. See In the Matter of the Expunction of Robert Craig Arnold, 34 S.W.3d 583 (Tex.App.-El Paso 2000). There, we held that (1) the agreement for waiver of expunction rights was not ambiguous; (2) the plain language of the statute governing expunction established that the statute applied to records of misdemeanor cases; and (3) the arres-tee sufficiently expressed in the agreement his intent to waive expunction rights in exchange for opportunity to participate in pretrial diversion program. Id. In reviewing the plea agreement, we applied basic principles of contract law. Id. at 585.

Arnold had argued that the waiver agreement could not be used to justify the denial of his expunction request because he was not adequately informed of its effect. Id. at 586. We first noted that Arnold was not challenging the voluntariness of his plea. Instead, he argued that the plea agreement was not a valid contract because it did not reflect his intent to forego his expunction rights in exchange for permission to participate in the pretrial diversion program. Id. Arnold pointed to his own testimony suggesting that he did not understand the word “expunction” as it was used in the agreement, and that he felt somewhat coerced into signing it because if he didn’t, he would not have been permitted to participate ’ in the program. We concluded, however, that there is no clearer manifestation of an intent to waive expunction rights than placing one’s signature on a document entitled “WAIVER OF SPEEDY TRIAL AND WAIVER OF RIGHT OF EXPUNCTION AND VOLUNTARY AGREEMENT TO PARTICIPATE IN THE PRE TRIAL DIVERSION PROGRAM.” Id.

Analysis

The County contends that Arnold rightfully applies here. Jones responds that Arnold is distinguishable because he is not arguing that the document was signed involuntarily.

Although Arnold did not address whether the waiver was signed “knowingly,” we concluded that the signature on the waiver clearly expressed an “intent” to waive the right to expunction. Arnold, 34 S.W.3d at 586. As we said in Arnold, we analyze the waiver agreement under the basic principles of contract law. One of those principles is that one who signs a contract “must be held to have known what words were used in the contract and to have known their meaning, and he must also be held to have known and fully comprehended the legal effect of the contract.” Nguyen Ngoc Giao, 714 S.W.2d at 146. Absent proof of mental incapacity, a person who signs a contract is presumed to have read and understood the contract, unless he was prevented from doing so by trick or artifice. Vera, 989 S.W.2d at 17.

Here, the trial court found that (1) Jones was given the opportunity to read the plea document and to ask any questions prior to signing; (2) he was twenty-five years of age at the time he signed the plea agreement; and (3) he was an adult fully capable of speaking, reading, writing, and understanding the English language. Giving deference to these findings under the appropriate standard of review, we must conclude that the trial court erred in its application of the law to the facts. Jones knowingly entered into the waiver agreement waiving his right to an expunction. The fact that he didn’t read it or understand the word “expunction” does not excuse him from the legal effect of the contract. Accordingly, we reverse and render judgment denying Jones’ petition for expunction.