Maldonado v. FirstService Residential, Inc.

IN THE UNITED STATES DISTRICT COURT March 15, 2021

FOR THE SOUTHERN DISTRICT OF TEXAS Nathan Ochsner, Clerk

HOUSTON DIVISION

JOSE A. MALDONADO, et al., §

§

Plaintiff, §

§

VS. § CIVIL ACTION NO. H-20-1484

§

FIRSTSERVICE RESIDENTIAL, INC., §

et al., §

§

Defendant. §

MEMORANDUM AND ORDER

This is a dispute among neighbors and a neighborhood association. The issue is parking.

Jose and Maria Maldonado want to park a Ford Transit van and trailer in their driveway. The

defendants—FirstService Residential, Inc., Royal Brook Community Association, Inc.,

Friendswood Development Company, LLC, Natasha Brown, Jennifer McKenry, John H.

Palamidy, Jr., Cynthia A. Hill, and Korie Herold—want to keep the van and trailer out of the

subdivision. They allege that the Maldonados are violating deed restrictions by parking the van

and trailer in the neighborhood and are threatening the Maldanados with fines and legal action.

The Maldonados claim that the defendants are targeting them because they are Puerto Rican.

The Maldonados sued, alleging discrimination based on race and national origin and seeking

damages and injunctive relief. The court has previously addressed the request for an injunction,

and the parties agreed on a temporary order.

Five of the defendants—FirstService, Royal Brook, Friendswood, Brown, and

McKenry—moved to compel arbitration based on an arbitration clause in the subdivision’s deed

restrictions. The deed restrictions are clearly mentioned in the Maldonados’ deed and chain of

title. The arbitration clause, however, applies only to claims for damages, not injunctive relief.

Based on the pleadings, the motions and responses, and the relevant law, this court grants

the defendants’ motion to compel arbitration of the Maldonados’ damages claims. The reasons

are set out below.

I. Background

A. The Proceedings in Federal Court

In 2019, the Maldonados bought a house in the Royal Brook at Kingwood subdivision.

(Docket Entry No. 28 at ¶ 15). In April 2020, the Maldonados sued two sets of defendants: the

developer defendants, including Royal Brook, FirstService, the subdivision’s managing agent,

Friendswood, Jennifer McKenry, a Homeowners Association Board Member, and Natasha

Brown, a FirstService employee, and their neighbors, Palamidy, Hill, and Herold. (Docket Entry

No. 28 at ¶¶ 1–10). The Maldonados allege that the defendants conspired to discriminate and

harass them through the “unequal application” of deed restrictions related to parking. (Docket

Entry No. 28 at ¶ 59). They allege that Royal Brook does not apply these same deed restrictions

to non-Latino residents. (Id.). The Maldonados brought a multitude of federal and state claims,

including claims for race and national origin discrimination under 42 U.S.C. § 1981;

discriminatory interference with property rights under 42 U.S.C. § 1982; conspiracy to

discriminate under 42 U.S.C. § 1985; tortious interference; stalking; and intentional infliction of

emotional distress. (Id. at ¶¶ 112–154). They also moved for a temporary restraining order and

preliminary injunction to enjoin enforcement of the relevant deed restrictions. (Docket Entry

No. 11).

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In June 2020, the court held a temporary restraining order hearing and denied the

Maldonados’ application for a temporary restraining order. (Docket Entry No. 22). Royal Brook

counterclaimed for statutory damages and injunctive relief against the Maldonados for deed-

restriction violations. (Docket Entry No. 41). The developer defendants and neighbor

defendants have filed motions to dismiss, which the court has not yet addressed. (Docket Entry

No. 33).

In September 2020, the court held a hearing during which the parties agreed on a

temporary injunction that the court later approved. (Docket Entry Nos. 68, 101). Three days

after the hearing, the developer defendants moved to compel arbitration. (Docket Entry No. 69).

B. The Arbitration Clause

The Royal Brook subdivision is governed by the Royal Brook Declaration of Covenants,

Conditions and Restrictions. (Docket Entry No. 28 at ¶ 5). The subdivision developer filed the

Declaration in the Harris County property records. (Docket Entry No. 69-17). Additional filings

in the property records refer to the Declaration. (Docket Entry No. 69-18).

The Maldonados’ deed states that it is “given and accepted subject to all and singular the

restrictions, covenants, conditions, limitations, easements and mineral reservations, if any,

applicable to and enforceable against the . . . property as reflected by the records of the county in

which it is located.” (Docket Entry No. 69-19 at 1). The Maldonados’ deed of trust also

contains a planned unit development rider that states that the “Borrower’s obligations” include

the obligations in the “Declaration.” (Docket Entry No. 69-20 at 15).

The Declaration states that “[a]ll Claims must be settled by binding arbitration.” (Docket

Entry No. 69-2 at § 13.07). “Claim” is defined as follows:

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(i) Claims relating to the rights and/or duties of Declarant or the Association

under the Restrictions.

(ii) Claims relating to the acts or omissions of the Declarant or Board members of

the Association and any claim asserted against the Declarant or any appointed

member of the ARC.

(iii) Claims relating to the design or construction of any Improvements by the

Declarant.

(Id. at § 13.01.1).

“Declarant” is defined as “Friendswood Development Company, LLC and its successors

and assigns.” (Id. at § 1.09). “Claimant” is defined as “any Party having a Claim against any

other Party.” (Id. at § 13.01.2). “Party” is defined as “[t]he Association, the Owners, Declarant,

all persons subject to this Declaration, and any person not otherwise subject to this Declaration

who agrees to submit to this Article.” (Id. at § 13.01). “Owner” is defined as “the record owner,

whether one or more persons or entities, of the fee simple title to the surface estate in any Lot or

Commercial Unit which is a part of the Property.” (Id. at § 1.16).

Parties may enforce the arbitration clause by bringing “an action in court to compel

arbitration.” (Id. at § 13.07). The arbitration clause permits parties to “seek, use, and employ

ancillary or preliminary remedies, judicial or otherwise, for the purposes of realizing upon,

preserving, or protecting upon any property, real or personal, that is involved in a Claim.” (Id. at

§ 13.08). The arbitration clause makes clear that the “institution and maintenance of an action

for judicial relief or pursuit of provisional or ancillary remedies or exercise of self-help remedies

shall not constitute a waiver of the right of any party to submit the Claim to arbitration.” (Id.).

II. Legal Standards

The Federal Arbitration Act, 9 U.S.C. § 1, et seq., permits a party to move to compel

arbitration when an opposing party refuses to arbitrate issues covered by a valid arbitration

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agreement. Am. Bankers Ins. Co. Fla. v. Inman, 436 F.3d 490, 493 (5th Cir. 2006)

(quoting Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 24 (1991)); 9 U.S.C. §§ 3, 4. To

rule on a motion to compel, a court must first decide if the dispute is arbitrable. See Papalote

Creek II, LLC v. Lower Colo. River Auth., 918 F.3d 450, 454 (5th Cir. 2019). This requires

deciding whether “(1) there is a valid agreement to arbitrate between the parties; and (2) whether

the dispute in question falls within the scope of that arbitration agreement.” Gross v. GGNSC

Southaven, LLC, 817 F.3d 169, 176 (5th Cir. 2016) (quoting Tittle v. Enron Corp., 463 F.3d 410,

418 (5th Cir. 2006)).

The party moving to compel arbitration has the burden of showing an arbitration

agreement under the applicable state contract law. See Halliburton Energy Servs., Inc. v.

Ironshore Specialty Ins. Co., 921 F.3d 522, 530 (5th Cir. 2019) (“Under the FAA, ordinary

principles of state contract law determine whether there is a valid agreement to arbitrate.”);

Huckaba v. Ref-Chem, LP, 892 F.3d 686, 688 (5th Cir. 2018) (“[T]he party moving to compel

arbitration must show that the agreement meets all of the requisite contract elements.”). The

court follows the federal policy of resolving “ambiguities in favor of arbitration” in “determining

the scope of a valid arbitration agreement.” Klein v. Nabors Drilling USA LP, 710 F.3d 234, 237

(5th Cir. 2013); see also Huckaba, 892 F.3d at 688.

If there is an enforceable agreement to arbitrate the dispute, the court must then

determine whether any federal statute or policy makes the claims nonarbitrable. Janvey v.

Alguire, 847 F.3d 231, 240 (5th Cir. 2017). If not, the FAA requires district courts to order

arbitration. See Pacheco v. PCM Const. Servs., LLC, 602 F. App’x 945, 947 (5th Cir. 2015) (“A

district court must compel arbitration if there is an agreement for arbitration and a party has

failed to comply with that agreement.”).

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III. Analysis

A. Valid Arbitration Agreement

Under Texas law, a party seeking to compel arbitration must show: (1) the existence of a

valid agreement to arbitrate; and (2) that the claims asserted by the party attempting to compel

arbitration are within the scope of the arbitration agreement. See Certain Underwriters at

Lloyd’s of London v. Celebrity, Inc., 950 S.W.2d 375, 377 (Tex. App.—Tyler 1996, writ dism’d

w.o.j).

The Maldonados do not dispute that they have a binding arbitration agreement with

Friendswood and Royal Brook. (Docket Entry No. 93 at 13). The Declaration, which contains

an arbitration clause, is referred to in their deed and is recorded in their chain of title. (Docket

Entry No. 28 at ¶ 5; Docket Entry Nos. 69-17, 69-18, 69-19). Instead, the Maldonados argue that

they do not have a binding arbitration agreement with McKenry, because she is their neighbor, or

with FirstService and Brown, neither of whom signed the Declaration. (Docket Entry No. 93 at

19).

McKenry may enforce the Declaration’s arbitration clause against the Maldonados. The

clause requires arbitration of claims “relating to the acts or omissions of the Declarant or Board

members of the Association.” (Docket Entry No. 69-2 at § 13.01.1). McKenry is a board

member for the Homeowner’s Association. (Docket Entry No. 28 at ¶ 10). The Maldonados’

claims against McKenry relate to her actions as a board member. The Maldonados’ claims

against McKenry fall within the Declaration’s arbitration clause.

FirstService and Brown are also entitled to enforce the arbitration clause against the

Maldonados. In general, a signatory’s agent may enforce an arbitration agreement against other

signatories. See In re Kaplan Higher Educ. Corp., 235 S.W.3d 206, 209 (Tex. 2007) (“[T]he

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agents of a signatory may sometimes invoke an arbitration clause even if they themselves are

nonsignatories and a claimant is not suing on the contract.”); In re Kellogg Brown & Root, Inc.,

166 S.W.3d 732, 739 (Tex. 2005) (“Federal courts have recognized six theories, arising out of

common principles of contract and agency law, that may bind nonsignatories to arbitration

agreements: . . . [including] agency.”). When parties agree to a broad arbitration clause, “they

generally intend to include disputes about their agents,” because “the actions of a corporate agent

on behalf of the corporation are [generally] deemed the corporation’s acts.” In re Vesta Ins.

Group, Inc., 192 S.W.3d 759, 763 (Tex. 2006) (quoting Holloway v. Skinner, 898 S.W.2d 793,

795 (Tex. 1995)).

The arbitration provision in the Declaration broadly defines “Claim” to include any claim

related to Royal Brook’s “rights and/or duties” and “acts or omissions.” (Docket Entry No. 69-2

at § 13.01.1). The Maldonados claim is that the developer defendants discriminatorily applied

the parking restrictions in the Declaration, the contract that contains the arbitration clause.

(Docket Entry No. 47-1 at ¶ 75); Grigson v. Creative Artists Agency LLC, 210 F.3d 524, 528 (5th

Cir. 2000) (compelling arbitration of a claim against a nonsignatory, in part because the

plaintiff’s claims depended on a contract with an arbitration clause); Griffin v. ABN Amro Mortg.

Grp. Inc., 378 F. App’x 437, 439 (5th Cir. 2010) (compelling a nonsignatory to arbitrate based

on a mortgage document containing an arbitration clause). These claims relate to Royal Brook’s

duties, acts, and omissions under the Declaration.

The Maldonados’ claims also implicate FirstService’s and Brown’s actions as agents for

Royal Brook. Royal Brook hired FirstService to be the “Managing Agent” of the Royal Brook

subdivision. (Docket Entry No. 69-11). FirstService is responsible for implementing the

“decisions and the policy established by” Royal Brook, including “the enforcement of” the

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parking restrictions in the Declaration. (Id. at 5). Brown is a FirstService employee and is

responsible for managing the Royal Brook subdivision on behalf of FirstService. (Docket Entry

No. 69-5 at ¶¶ 1–5). The Maldonados’ first amended complaint recognizes that FirstService and

Brown both work as agents for Royal Brook. (Docket Entry No. 28 at ¶¶ 3–4, 64). The

Maldonados also agree that FirstService and Brown are responsible for enforcing the Declaration

in the Royal Brook subdivision. (Id. at ¶ 64).

The Maldonados’ claims against FirstService and Brown are based on their role as Royal

Brook’s agents seeking to enforce the restrictions in the Declaration. These claims depend on

the Declaration and are subject to the arbitration clause. See In re Wells Fargo Bank, N.A., 300

S.W.3d 818, 825 (Tex. App.—San Antonio 2009) (“Because the parties in this court do not

dispute that the nonsignatories were acting as agents of [the defendant] and each of their

allegedly wrongful acts relate to their behavior as agents of [the defendant], we conclude relators

were entitled to enforce the arbitration agreement.”); see also In re Media Arts Group, Inc., 116

S.W.3d 900, 905 n.4, 908 (Tex. App.—Houston [14th Dist.] 2003, orig. proceeding) (compelling

arbitration of suit brought by one signatory against employees and affiliates of the other);

Williams Indus., Inc. v. Earth Dev. Sys. Corp., 110 S.W.3d 131, 137–38 (Tex. App.—Houston

[1st Dist.] 2003, no pet.) (compelling arbitration of suit by one signatory against employees and

subcontractors of the other); In re EGL Eagle Global Logistics, LP, 89 S.W.3d 761, 765–66

(Tex. App.—Houston [1st Dist.] 2002, orig. proceeding) (compelling arbitration of suit by one

signatory against subsequent employer of signatory employee, and its employees).

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B. Waiver

The Maldonados argue that the defendants waived their right to arbitrate by moving to

dismiss, filing counterclaims, and seeking a temporary restraining order and preliminary

injunction. The court disagrees.

A party waives its right to arbitration by substantially invoking the judicial process, to the

detriment or prejudice of the other party. Pacheco v. PCM Const. Servs., LLC, 602 F. App’x

945, 948 (5th Cir. 2015). To substantially invoke the judicial process, a party “must, at the very

least, engage in some overt act in court that evinces a desire to resolve the arbitrable dispute

through litigation rather than arbitration.” In re Mirant, 613 F.3d 584, 589 (5th Cir. 2010)

(quoting Subway Equip. Leasing Corp. v. Forte, 169 F.3d 324, 326 (5th Cir. 1999)). To show

prejudice requires showing “inherent unfairness in terms of delay, expense, or damage to a

party’s legal position that occurs when the party’s opponent forces it to litigate an issue and later

seeks to arbitrate that same issue.” Republic Ins. Co. v. PAICO Receivables, LLC, 383 F.3d 341,

346 (5th Cir. 2004) (citation and quotation marks omitted). “The question of what constitutes a

waiver of the right of arbitration depends on the facts of each case.” Tenneco Resins, Inc. v.

Davy Int’l, AG, 770 F.2d 416, 420 (5th Cir. 1985). There is “a strong presumption against

finding a waiver of arbitration, and the party claiming that the right to arbitrate has been waived

bears a heavy burden.” PAICO Receivables, LLC, 383 F.3d at 344.

The defendants did not substantially invoke the legal process. FirstService, Royal Brook,

Brown, and McKenry filed a joint motion to dismiss and a second joint motion to dismiss after

the Maldonado’s filed their first amended complaint. (Docket Entry Nos. 18, 33). Royal Brook

filed a counterclaim seeking damages and injunctive relief and participated in the preliminary-

injunction hearing. (Docket Entry No. 24). Friendswood answered the complaint and asserted

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its rights to arbitration. (Docket Entry No. 34). These acts, considered alone or together, do not

amount to substantial invocation of the judicial process.

Filing a counterclaim is not a substantial invocation of the judicial process that triggers

waiver. See Williams v. Cigna Fin. Advisors, Inc., 56 F.3d 656, 661–62 (5th Cir. 1995) (no

waiver when the defendant removed and filed motions to dismiss and to stay proceedings,

answered the complaint, asserted counterclaims, and exchanged discovery, both before and after

moving to compel arbitration). Nor does seeking injunctive relief qualify as substantial

invocation, see DRW Tex. LLC v. McGrew, No. 19-CV-00830, 2019 WL 7761812, at *5 (W.D.

Tex. Oct. 31, 2019) (no substantial invocation even though the party opposing arbitration filed a

motion for preliminary injunctive relief); Custom Teleconnect, Inc. v. Billing Concepts, Inc., No.

11-CV-204, 2011 WL 13324085, at *12 (W.D. Tex. July 20, 2011) (no substantial invocation

even though the party opposing arbitration filed a motion for injunctive relief), especially when,

as here, the arbitration clause allows the parties to seek injunctive relief in court while

simultaneously pursuing damages claims in arbitration. (Docket Entry No. 69-2 at § 13.08); see

Amegy Bank Nat. Ass’n v. Monarch Flight II, LLC, 870 F. Supp. 2d 441, 450 (S.D. Tex. 2012)

(“Given this clear language [allowing the partis to pursue injunctive claims in court], any claim

by [the plaintiff] for permanent injunctive relief . . . would not affect [the defendants’] rights to

compel arbitration of arbitrable claims.”).

Filing a motion to dismiss does not always qualify as substantial invocation. See In re

Mirant, 613 F.3d at 589 (“In this Circuit, a bright-line rule is inappropriate for deciding whether

a party has waived its right to arbitration.”). Courts distinguish between perfunctory motions to

dismiss that raise procedural concerns and motions to dismiss that seek a full decision on the

merits. See Electrostim Med. Servs., Inc. v. Health Care Serv. Corp., No. 11-CV-2745, 2012

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WL 5373462, at *6 (S.D. Tex. Oct. 30, 2012). Courts also recognize a difference between

parties who move to compel arbitration before a merits ruling and those who move after. See

Forby v. One Techs., L.P., 909 F.3d 780, 784 (5th Cir. 2018) (distinguishing cases in which “the

party seeking arbitration did not wait for the court’s merit ruling . . . before moving to compel

arbitration.”). Parties who move to compel arbitration before receiving a merits ruling do not

“get a sense of the court’s view of the case.” Id. An unruled-on motion to dismiss typically does

not qualify as substantial invocation. See Pacheco v. PCM Const. Servs., LLC, 602 F. App’x

945, 948 (5th Cir. 2015) (motions to dismiss dealt with narrow ancillary issues and had not been

ruled on when the motion to compel arbitration had been filed.); see also Keytrade USA, Inc. v.

Ain Temouchent M/V, 404 F.3d 891, 897 (5th Cir. 2005) (motion for summary judgment filed

concurrently with motion to compel arbitration).

While Royal Brook, Brown, and McKenry filed a motion to dismiss and sought a ruling

on the merits, they moved to compel arbitration shortly after moving to dismiss and before

receiving a merits ruling. (Docket Entry Nos. 33, 69). The motion to dismiss targeted the claims

for damages and injunctive remedies, which the Maldonados are permitted to pursue in federal

court. See In re Mirant, 613 F.3d at 591–92 (“[In a] case involv[ing] several claims that were

non-arbitrable . . . , a motion to dismiss may not be inconsistent with a right to arbitrate.”

(citation and quotation marks omitted)); see also Sweater Bee by Banff, Ltd. v. Manhattan Indus.,

Inc., 754 F.2d 457, 463 (2d Cir. 1985) (“Plainly, the portions of the motion [to dismiss]

addressed to nonarbitrable claims do not constitute a waiver. And where, as here, a plaintiff files

an intricate complaint, setting forth numerous claims outside the scope of, though partially

related to, the arbitrable claims, he should not be altogether surprised that a defendant takes the

protective step of filing a motion to dismiss.” (citation omitted)). The motion to dismiss did not

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substantially invoke the judicial process. This conclusion is bolstered by cases finding waiver,

which typically involve parties that have engaged in far more extensive litigation conduct.1

The Maldonados also failed to establish prejudice. Courts look to three facts to

determine whether a plaintiff was prejudiced: “(1) whether discovery occurred relating to

arbitrable claims; (2) the time and expense incurred in defending against a motion for summary

judgment; and (3) a party’s failure to timely assert its right to arbitrate.” Petroleum Pipe, 575

F.3d at 480.

The parties have not yet engaged in extensive discovery. Pacheco, 602 F. App’x at 949

(“Further, while [the plaintiffs] had sent out discovery, [the defendant] had not yet responded or

propounded its own discovery requests prior to moving to compel arbitration, a factor we have

considered relevant in prior cases.”); Tenneco Resins, 770 F.2d at 421 (“However, when only a

minimal amount of discovery has been conducted, which may also be useful for the purpose of

arbitration, the court should not ordinarily infer waiver based upon prejudice to the party

opposing the motion to stay litigation.”). The only discovery that has occurred was relevant to

the preliminary-injunction hearing. See Superior Oil Co. v. Transco Energy Co., 616 F. Supp.

98, 104 (W.D. La. 1985) (“Discovery was necessary in order to . . . defend against [the

1 See Petroleum Pipe Americas Corp. v. Jindal Saw, Ltd., 575 F.3d 476, 481 (5th Cir. 2009) (the

defendant removed the case to federal court; filed counterclaims; participated in discovery and numerous

discovery meetings; and sought a ruling from the district court on the interpretation of the contract at

issue); PAICO Receivables, LLC, 383 F.3d at 345 (the defendant answered; filed counterclaims;

conducted full-fledged discovery, including four depositions; amended its complaint; filed the required

pretrial materials; and filed numerous other motions, including two motions to compel discovery, a

motion for summary judgment, and a motion in limine attempting to limit the evidence that the plaintiff

could produce at trial); Price v. Drexel Burnham Lambert, Inc., 791 F.2d 1156, 1159 (5th Cir. 1986)

(across seventeen months, the defendant initiated extensive discovery, answered twice, filed motions to

dismiss and for summary judgment, filed and obtained two extensions of pretrial deadlines, without

demanding arbitration).

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plaintiff’s] request for a preliminary injunction.”). As noted above, the arbitration clause permits

the parties to pursue injunctive relief in court without waiving their rights to arbitration.

The Maldonados have spent time and incurred some expenses defending against the

developer defendants’ motion to dismiss. But their briefs and discovery are likely to be relevant

in the arbitration proceedings. In addition, the Maldonados had to respond to the neighbor

defendants’ motions to dismiss, which raised similar issues. See In re Trevino, No. 10-CV-

70594, 2018 WL 5994753, at *6 (Bankr. S.D. Tex. Nov. 14, 2018) (“The expenses incurred by

Plaintiffs [responding to a motion to dismiss] do not rise to a level sufficient enough to constitute

a finding of prejudice.”); Rugg v. FMR Co., No. 09-CV-1952, 2010 WL 3733901, at *5 (W.D.

La. Sept. 20, 2010) (“[P]laintiffs likely would have incurred these costs [responding to a motion

to dismiss] in any event to support their claims in arbitration.”); Price, 791 F.2d at 1162

(distinguishing the expense of responding to a summary judgment motion and “a motion to

dismiss before answering”).

The litigation proceeded for only five months before the developer defendants moved to

compel arbitration. Compare Williams v. Fid. Warranty Servs., Inc., No. 19-CV-1537, 2020 WL

2086655, at *3 (S.D. Tex. Apr. 30, 2020) (“Defendant filed its Motion to Compel Arbitration

less than six months after removing the case.”), and Tenneco Resins v. Davy Int’l, AG, 770 F.2d

416, 420–21 (5th Cir. 1989) (no prejudice when the defendant sought arbitration less than five

months after filing its answer), with Price, 791 F.2d at 1159 (finding prejudice, in part, because

the defendant waited 17 months before moving to compel arbitration).

The developer defendants did not waive their right to arbitrate.2

2 The Maldonados also argue that the arbitration clause is unconscionable because they were the weaker

party in the bargaining process and because enforcing the right would cause them to lose their right to a

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IV. Conclusion

While the Maldonados have a valid arbitration agreement with the developer defendants,

that agreement covers only their claims for damages. The agreement does not require arbitration

of their claims for injunctive relief. The motion to compel arbitration, (Docket Entry No. 69), is

granted as to the Maldonados’ damages claims against the developer defendants. The court

retains jurisdiction over the Maldonados’ claims for injunctive relief.*

SIGNED on March 15, 2021, at Houston, Texas.

LW Cvrteo

Lee H. Rosenthal

Chief United States District Judge

jury trial. Having a weaker bargaining position does not make an arbitration clause unconscionable or

unenforceable. See Hafer v. Vanderbilt Mortg. & Finance, Inc., 793 F. Supp. 2d 987, 1002 (S.D. Tex.

2011) C‘[T]he Fifth Circuit has repeatedly rejected the argument that the imbalance of power between the

parties alone makes an adhesion contract unconscionable.”). And all arbitration agreements result in a

party bargaining away its right to a jury trial. See Marsh v. First USA Bank, N.A., 103 F. Supp. 2d 909,

922 (N.D. Tex. 2000) (“Plaintiffs agreed to resolve their disputes with Defendant through arbitration.

Accordingly, they validly waived their rights to a judicial forum, including the corollary right to a trial by

jury.”).

3 The neighbor defendants, John H. Palamidy, Jr., Cynthia A. Hill, and Korey Herold, did not move to

compel arbitration. The Maldonados’ claims against the neighbor defendants remain in federal court.

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