Opinion
Civil No. 3:03-CV-0399-H
September 29, 2003
MEMORANDUM OPINION AND ORDER
Before the Court is Plaintiff Robert R. Hawk's ("Hawk") Motion to Modify Court Order of May 1, 2003, filed September 4, 2003, and Defendant Consolidated Restaurant Operations, Inc.'s ("CRO"), Response, filed September 23, 2003. Upon review of the pleadings, briefs, and relevant authorities, the Court is of the Opinion for the reasons stated below that Plaintiffs Motion to Modify Court Order should be DENIED.
I. BACKGROUND
Plaintiff is the founder and retired president of the Spaghetti Warehouse restaurant chain. Plaintiff claims, in his state court petition, that when he retired, he entered into an agreement with Defendant Spaghetti Warehouse Restaurants, Inc. ("SWRI"), for the continuation of certain employment benefits like health insurance. He alleges that SWRI breached this contract by terminating his receipt of the benefits and that CRO tortiously interfered with the contract by inducing SWRI to breach. Defendant CRO removed the case to this Court claiming federal jurisdiction pursuant to ERISA. (Notice of Removal at 3).
Plaintiff acknowledges that CRO was not a signatory to the employment agreement, but argues that through its later actions CRO impliedly adopted the terms and conditions of the employment agreement.
After removal, Defendant SWRI filed a Motion to Compel Arbitration based on a provision in the employment agreement; CRO did not join in or adopt the Motion to Compel Arbitration. (Mot. at 2). The Court granted the Motion to Compel Arbitration by Memorandum Opinion and Order, entered May 1, 2003. At the same time, the Court abated further proceedings in the case pending the outcome of the arbitration.
In his Motion to Modify Court Order, Plaintiff Hawk moves the Court for modification of the Memorandum Opinion and Order, entered May 1, 2003, to allow the case to proceed as against Defendant CRO. Hawk argues that the case should be allowed to proceed against CRO because there is no rationale for CRO to "occupy a privileged, insulated position in this litigation." (Mot. at 4). Hawk claims that because his claims against CRO are for tortious interference with a contract, and not breach of contract, recovery is not dependant on the outcome of the arbitration. He argues that because he could have filed suit against CRO without naming SWRI as a defendant, that case should be allowed to proceed. (Mot. at 4-5).
After May 1, 2003, CRO objected to responding to Hawk's Request for Production of Documents, because the case had been abated by the Court's Order. (PL's App. at 17).
Defendant CRO opposes the motion and asks the Court to continue its stay of the entire proceeding pending outcome of the arbitration between Hawk and SWRI. CRO contends that although CRO was not a party to the employment agreement, the Court's abatement of the entire case is proper. (Resp. at 1). CRO argues that the outcome of the arbitration is relevant because, under Texas law, a claim for tortious interference with a contract cannot be maintained if the contract is void or illegal. (Resp. at 2-3). CRO further argues that because the principle of collateral estoppel applies to arbitration decisions, the outcome of the arbitration on the overlapping issue of enforceability of the employment agreement could be relevant to the case against CRO. (Mot. at 2).
II. ANALYSIS
Under Texas law, a claim for tortious interference with a contract cannot be maintained if the contract upon which the claim is based is found to be void or illegal. See Juliette Fowler Homes, Inc. v. Welch Assoc., Inc., 793 S.W.2d 660, 664 (Tex. 1990); Clements v. Withers, 437 S.W.2d 818, 821 (Tex. 1969). However, the mere unenforceability of a contract, rather than the voidness or illegality of a contract, does not serve as a defense to a tortious interference action. See Clements, 437 S.W.2d at 821.
The Court concludes that because there are common issues in Plaintiff's cases against both SWRI and CRO, and that arbitration may resolve one of these issues and could have a preclusive effect in this Court, abatement should continue as to all Defendants. See Universal American Barge Corp. v. J-Chem, Inc., 946 F.2d 1131, 1137 (5th Cir. 1991) (holding the "application of collateral estoppel from arbitral findings is a matter within the broad discretion of the district court"). The Court DENIES Plaintiff's Motion to Modify Court Order.
III. CONCLUSION
For the reasons stated above, Plaintiff's Motion to Modify Court Order is DENIED.
SO ORDERED.