CAUSE NO.

16-1248-C26

PAMELA BOEVE, §
§ IN THE DISTRICT COURT
Plaintiff, §
§
-v- § 26st JUDICIAL DISTRICT
§
INSURAPRISE, INC. § WILLIAMSON COUNTY,
§ TEXAS
§
Defendant. §

PLAINTIFF’S MOTION FOR DEFAULT JUDGMENT &

TO DISMISS DEFENDANT’S CLAIMS WITH PREJUDICE

TO THE HONORABLE DISTRICT COURT JUDGE:

Plaintiff moves for default judgment because Defendant has failed to pay its

arbitration fees as required by the arbitration agreement. A defendant cannot escape

liability by moving to compel arbitration and then failing to arbitrate. Under the

Federal Arbitration Act and Texas law, a defendant that fails to pay its required

arbitration fee is subject to default judgment. Plaintiff moves that judgment be

entered in Plaintiff’s favor and that all affirmative defenses and counter claims

against Plaintiff be struck and dismiss.

I.
BACKGROUND

On, January 20, 2017, Defendant moved to compel arbitration in accordance

with the arbitration agreement. (Ex. A). On, April 12, 2017, this Court compelled the

parties to arbitrate under the agreement. In pertinent part, the agreement called for

Defendant to pay for arbitrator’s fees. On June 20, 2018, Defendant, through its

PLAINTIFF’S MOTION FOR DEFAULT JUDGMENT AND TO DISMISS DEFENDANT’S CLAIMS

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attorney, informed the arbitrator it would not pay arbitration fees via Email. (Ex. B).

On June 25, 2018, Defendant once again maintained that they refused to pay the

arbitration fees in an administrative hearing with the Arbitrator’s case manager.

This outright refusal caused the arbitration proceedings to be terminated and the

case to close. (Ex. C)

In contrast, Plaintiff has complied in full with the order compelling arbitration.

Plaintiff has fully paid her share of the arbitration fee. Plaintiff’s attorney has spent

over 400 hours of time arbitrating the case.

II.
ARGUMENT

Plaintiff asks the Court to enter a default against the Defendant and dismiss

Defendant’s claims and defenses against Plaintiff with prejudice. Courts have upheld

a trial court’s decision to dismiss claims for failure to participate in arbitration

because a party did not pay the arbitrator’s fees.

By way of example in Critten v. Int'l Bank of Commerce, the parties were each

required to pay a portion of the fees. Critten failed to pay. As a result, Critten’s

claims were dismissed:

…IBC moved to dismiss the Crittens lawsuit for failure to pay the
arbitration fees in violation of the agreement and the trial court's order
compelling arbitration. On February 29, 1996, the trial court heard the
motion to reconsider, orally denied the motion and ordered arbitration
within sixty days. On April 16, 1996, the Crittens moved to extend time
to arbitrate, alleging that they had terminated their attorneys and
needed an additional sixty days to arbitrate. The trial court heard the
motion to extend arbitration on April 26, 1996, and signed an April 29,
1996, order requiring the dispute to be arbitrated by April 30, 1996, or
it would be dismissed. On September 30, 1996, the trial court signed an

PLAINTIFF’S MOTION FOR DEFAULT JUDGMENT AND TO DISMISS DEFENDANT’S CLAIMS

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 order finally dismissing the Crittens’ claims for failure to complete
arbitration… The judgment of the trial court is AFFIRMED.

Critten v. Int'l Bank of Commerce, 13-96-402-CV, 1998 WL 35277001, at *1 (Tex. App.

– Corpus Christi June 4, 1998, pet. denied)(not designated for publication).

Importantly, the appellate court noted that the time to bring a defense base on

inability to pay is at the of the motion to compel arbitration. [Id. at *2. (“even if

inability to pay might be a defense to arbitration or implicate constitutional rights to

due process, equal protection and open courts, it must still be raised properly and

proven as any other defense to arbitration.”)] Afterwards is simply too late. In this

case, not only did the Defendant fail to raise the issue of ability to pay, but the

Defendant itself moved for arbitration.

The holding in Critten follows the general rule that a party’s claims may be

dismissed claims with prejudice for failing to participate in arbitration.

In the absence of an agreement providing otherwise, the burden to

initiate arbitration proceedings rests on the party seeking
relief. Mamlin v. Susan Thomas, Inc., 490 S.W.2d 634, 639
(Tex.Civ.App.-Dallas 1973, no writ). A trial court may dismiss a
party’s claims with prejudice when the trial court orders the
party to arbitrate its claims and the party seeking relief fails to
do so. Id.

Sabine Syngas, Ltd. v. Port of Port Arthur Nav. Dist. of Jefferson County, Tex., 09-09-

00331-CV, 2011 WL 192756, at *5 (Tex. App. – Beaumont Jan. 13, 2011, no pet.)

(citing Mamlin v. Susan Thomas, Inc., 490 S.W.2d 634, 639 (Tex. Civ. App. – Dallas

1973, no writ)(emphasis added)).

Similarly, federal courts in Texas have held that defendants default when they

refuse to participate in arbitration.

PLAINTIFF’S MOTION FOR DEFAULT JUDGMENT AND TO DISMISS DEFENDANT’S CLAIMS

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 There are few cases dealing with default or waiver in the context of a
party’s refusal to participate in arbitration and a subsequent attempt to
compel arbitration. But one court has stated that “a party who, when
requested, has refused to go to arbitration or who has refused to proceed
with the hearing before the arbitrators once it has commenced” has
defaulted. Kulukundis Shipping Co. v. Amtorg Trading Corp.,126 F.2d
978, 989 (2d Cir.1942).

Youngs v. Haugh, 4:08-CV-528-Y, 2009 WL 701013, at *4 (N.D. Tex. Mar. 18, 2009).

III.
CONCLUSION & PRAYER

Because Defendant has failed to participate in arbitration by refusing to pay

the arbitrator’s fees, the Court should:

A. Enter default judgment on the following claims:

1. Breach of contract;

2. Fraud;

3. Quantum Meruit; and

4. Declaratory relief.

B. Dismiss with prejudice the following claims against Plaintiff:

1. Breach of contract;

2. Fraud;

3. Fraudulent concealment;

4. Misrepresentation;

5. Violations of Trade Secrets agreement;

6. Violations of revealing confidential information;

7. Any issues of alleged non-payment;

PLAINTIFF’S MOTION FOR DEFAULT JUDGMENT AND TO DISMISS DEFENDANT’S CLAIMS

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 8. Violation of non-compete.

C. Enter an award of damages as follows:

1. $191,395.89 for unpaid vested commissions. Ex. D;

2. $160,450.50 for attorney’s fees. Ex. E; and

3. $1,411.50 for costs associated with the case. Ex. E.

Additionally, we ask this Court to award all relief available to Plaintiff

under the law, including but not limited to pre-judgment interest.

Respectfully submitted,

/s/ Jairo Castellanos

Robert J. Wiley*
Texas Bar No. 24013750
Colin Walsh*
Texas Bar No. 24079538
*Board Certified in Labor and Employment Law by
the Texas Board of Legal Specialization
Jairo Castellanos
Texas Bar No. 24089264

Wiley Walsh, P.C.

1011 San Jacinto Blvd, Ste 401
Austin, TX 78701
Telephone: (512) 271-5527
Facsimile: (512) 287 3084
cwalsh@robwiley.com
ATTORNEYS FOR PLAINTIFF

CERTIFICATE OF CONFERENCE

I hereby certify on July 17, 2018 Attorneys for Plaintiff and Defendant conferred

about the subject matter of this motion but were unable to reach agreement.

/s/Jairo Castellanos

PLAINTIFF’S MOTION FOR DEFAULT JUDGMENT AND TO DISMISS DEFENDANT’S CLAIMS

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 Jairo Castellanos

CERTIFICATE OF SERVICE

I hereby certify that on July 17, 2018 I served a copy of the foregoing on counsel

for Defendant via Efile.

/s/ Jairo Castellanos

Jairo Castellanos

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