SKV Announces Significant Appellate Victory

SKV partners Jeff Potts and Jarod Stewart announce a significant appellate victory for their clients relating to the arbitration of claims, and particularly the first known holding by an appellate court in Texas actually applying the doctrine of incorporation by reference to multiple agreements where only one contains an arbitration clause.  Plaintiffs sued SKV’s clients for fraud and other causes of action arising out of a transaction by which they sold their ownership interests in a radiology practice and converted to employees of the practice.  As part of that transaction, Plaintiffs simultaneously executed Membership Interest Transfer and General Release Agreements, which did not contain arbitration clauses, and Physician Employment Agreements which contained broad arbitration clauses.  The Court of Appeals held that the trial court committed error by denying SKV’s  clients‘ motion to compel arbitration because the Transfer Agreements incorporate by reference the Employment Agreements. The First Court of Appeals also stayed the claims by another Plaintiff relating to the decision not to make him a member of the radiology practice, finding that the Plaintiff’s claims involve the same operative facts and that the prosecution of his claims while the arbitration is proceeding could have a critical impact on the arbitration.