Gregory S. Thomas and T-4 Farm, LLC v. Brian C. Thomas, Individually and on Behalf of Post Oak Oil & Gas, LP and Post Oak Oil & Gas GP, LLC

In the Court of Appeals Second Appellate District of Texas at Fort Worth ___________________________ No. 02-25-00085-CV ___________________________ GREGORY S. THOMAS AND T-4 FARM, LLC, Appellants V. BRIAN C. THOMAS, INDIVIDUALLY AND ON BEHALF OF POST OAK OIL & GAS, LP AND POST OAK OIL & GAS GP, LLC, Appellees On Appeal from the 17th District Court Tarrant County, Texas Trial Court No. 17-360705-25 Before Sudderth, C.J.; Bassel and Walker, JJ. Memorandum Opinion by Chief Justice Sudderth  MEMORANDUM OPINION The question in this interlocutory appeal is one of contract interpretation: Did the parties agree to arbitrate the present dispute? Appellants Gregory S. Thomas and T-4 Farm, LLC answer “yes,” pointing to arbitration language in two separate contracts and claiming that the trial court erred by denying their motion to compel arbitration and to stay the trial court proceedings. But because the answer is “no”— the parties did not agree to arbitrate the present dispute—we will affirm. I. Background The underlying lawsuit stems from Gregory’s misappropriation of funds from Appellees Post Oak Oil & Gas, LP and Post Oak Oil & Gas GP, LLC (the Post Oak Entities), two oil-and-gas companies that Gregory owns with his brother, Appellee Brian Thomas.1 The brothers share other businesses as well—including several oil- and-gas companies that they co-own with another family, the Kidds (the T&K Entities)—but those businesses are not parties to this litigation. Nonetheless, the T&K Entities’ business plan (the Updated Business Plan) is one of the two contracts at the center of this appeal. A. Updated Business Plan In 2014, Gregory, Brian, and the other owners of the T&K Entities executed a three-page Updated Business Plan, which grouped the T&K Entities into two Post Oak Oil & Gas GP, LLC serves as Post Oak Oil & Gas, LP’s general 1 partner. Brian appears as a representative of both entities in this litigation. 2 divisions—Denver City and Breckenridge—and provided a high-level summary of each division’s day-to-day management.2 It also contained an arbitration provision for each division: The undersigned Parties agree to submit any and all disputes, claims or controversies regarding the operation of the [relevant] Division or any other matters involving, or related to, any Thomas & Kidd business or any of its owners to binding Arbitration . . . .3 The Updated Business Plan further provided that “all existing agreements to which the undersigned are a party are hereby amended as necessary to incorporate the terms of th[e] Updated Business Plan[].” Gregory and Brian signed the Updated Business Plan “[i]ndiviudally and in all other ownership, fiduciary or beneficial interest capacities with respect to the ownership or operation of the Denver City or Breckenridge Divisions.” B. Protocol Agreement Years later, Gregory was accused of stealing from various entities, including many of the T&K Entities and the Post Oak Entities. As a result, Gregory, Brian, and a representative from the Kidd family executed an agreement that established an The Updated Business Plan identifies Gregory as the manager of the 2 Breckenridge Division. The Updated Business Plan contains a substantially similar one-page 3 agreement for each of the two divisions, and each one-page agreement includes the quoted arbitration provision. 3 investigation and repayment procedure. That agreement—the Protocol Agreement— is the second contract at issue in this appeal. The Protocol Agreement provided for an accounting firm’s review of the compiled financial statements for the parties’ businesses4 and further provided that, should the parties dispute the accounting firm’s findings regarding Gregory’s unauthorized transactions, then they “agree[d] to participate in a mediation with JAMS before commencing arbitration.” The parties also “agree[d] not to commence arbitration during the activities to be conducted under the Protocol [Agreement]” and “agree[d] that none of the actions described [in the Protocol Agreement would] constitute a waiver of any privilege or other protection, or of any objection to admissibility of evidence in any future arbitration.” Despite these references to arbitration, the agreement fell short of requiring it. The Protocol Agreement did not contain a standard arbitration provision comparable to that in the Updated Business Plan, and in another section of the Protocol Agreement, the parties agreed “not to disclo