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Lizalde v. Vista Quality Markets

United States Court of Appeals, Fifth Circuit

March 25, 2014

JORGE LIZALDE, Plaintiff -- Appellee
v.
VISTA QUALITY MARKETS, Defendant -- Appellant

Appeal from the United States District Court for the Western District of Texas.

For JORGE LIZALDE, Plaintiff - Appellee: Joseph G. Isaac, Attorney, Scherr, Legate & Ehrlich, El Paso, TX.

For VISTA QUALITY MARKETS, Defendant - Appellant: Steven Lee Hughes, Mounce, Green, Myers, Safi, Paxson & Galatzan, El Paso, TX.

Before STEWART, Chief Judge, and JOLLY and SMITH, Circuit Judges.

OPINION

Page 223

E. GRADY JOLLY, Circuit Judge

The defendant, Vista Quality Markets (" Vista" ), the employer of the plaintiff, appeals the judgment of the district court denying Vista's motion to compel arbitration of this on-the-job injury claim. The district court denied the motion, agreeing with the plaintiff, Jorge Lizalde, that the Mutual Agreement to Arbitrate Claims (the " Arbitration Agreement" ) between him and Vista is illusory because, as the district court interpreted the Arbitration

Page 224

Agreement, it provided Vista the unrestrained right to unilaterally terminate the Arbitration Agreement. We hold that the Arbitration Agreement is not illusory under Texas law. We therefore REVERSE the judgment of the district court and REMAND for the entry of an order compelling arbitration.

I.

Lizalde works for Vista as a meat-cutter. Pursuant to this employment, Lizalde and Vista entered into two agreements that are relevant to this appeal: the Arbitration Agreement, and the Employment Injury Benefit Plan (the " Benefit Plan" ).

In the Arbitration Agreement, the parties agreed to submit to an arbitrator all claims which arise from " [a]ny injury suffered by Claimant while in the Course and Scope of Claimant's employment with Company." The Arbitration Agreement is terminable by Vista, but this termination ability has some constraints. " Company shall have the right to prospectively terminate [the Arbitration Agreement]. Termination is not effective for Covered Claims which accrued or occurred prior to the date of the termination. Termination is also not effective until ten (10) days after reasonable notice is given to Claimant." So by the terms of this termination provision in the Arbitration Agreement, a termination by Vista is only effective ten days after notice has been given to an employee and only as to prospective claims. Finally, the Arbitration Agreement also contains a provision recognizing its connection with the Benefit Plan. Specifically, the Arbitration Agreement states, " this Agreement is presented in connection with Company's [Benefit Plan]. Payments made under [the Benefit Plan] also constitute consideration for this Agreement."

As relevant to this appeal, the Benefit Plan itself also contains a termination provision providing that Vista " may terminate [the Benefit Plan] by executing and delivering to the Plan Administrator a notice of termination specifying the date of termination." Notably, this termination power under the Benefit Plan is completely unconstrained. These two different termination clauses present one of the complexities of this appeal.

Finally, Lizalde signed a document in which he acknowledged that upon employment, he had received and read both the ...


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