Cardwell v. Whataburger Restaurants, LLC

Supreme Court of Texas, No. 14-1019 (February 26, 2016)

Per curiam Opinion

Injured on the job, Cardwell sued her employer, Whataburger, which then moved to compel arbitration. Cardwell argued the arbitration agreement was illusory, unconscionable for a variety of reasons, and otherwise unenforceable. The trial court denied the motion to compel arbitration and filed findings and conclusions characterizing the agreement as unconscionable based on some of the grounds urged by Cardwell (as well as commentary of its own), but saying nothing about Cardwell’s other arguments about why the arbitration agreement was unenforceable. Whataburger appealed. The parties briefed all of Cardwell’s arguments against enforceability, those the trial court had addressed and those it had not. The court of appeals reversed, and remanded with instructions that the case be ordered to arbitration. But the appeals court focused only on the arguments and grounds addressed by the trial court in its findings below. It did not deal with the other arguments asserted by Cardwell, reasoning that, “as the trial court did not base its determination of unconscionability on those grounds, we need not consider them.”

Not so fast, said the Supreme Court. Texas Appellate Rule 47.1 requires an appeals court to “address[] every issue raised and necessary to final disposition of the appeal.” Because other issues raised by Cardwell at trial and on appeal could have supported denial of the motion to compel arbitration and were fully briefed on appeal, the “court of appeals could not order arbitration without either addressing Cardwell’s arguments or remanding the case to the trial court to address them.” Moreover, because the trial court had ruled in Cardwell’s favor—albeit without endorsing or addressing every ground she urged—she was not required to cross-appeal to preserve those unaddressed arguments. So, the Supreme Court reversed and remanded to the court of appeals for further proceedings.