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Click here for the full text of this decision FACTS:J&S Air Inc. sued Bank One when Bank One honored checks totaling more than $33,000 that two J&S Air employees allegedly forged. After Bank One failed to answer the suit, J&S Air secured a default judgment. Bank One timely filed a motion to set aside the default judgment and obtain a new trial, which the trial court granted. Bank One then filed an answer, at which point further activity ceased on the suit until nearly eight months later. In August 2005, Bank One filed a motion to compel arbitration under the terms of its arbitration clause. The arbitration clause required arbitration for disputes “arising from or relating in any way to this Agreement or [the Customer's] Account.” The trial court denied the motion. Bank One petitioned the 2nd Court of Appeals for mandamus relief, but the 2nd Court denied the petition. HOLDING:The Texas Supreme Court granted the petition for mandamus relief and directed the trial court to vacate its order denying Bank One’s motion to compel arbitration and to enter a new order compelling arbitration. Mandamus relief is appropriate, the court stated, when a trial court denies a motion to compel arbitration and the underlying contract is governed by the Federal Arbitration Act (FAA), 9 U.S.C. ��1-16. The court found that a valid arbitration agreement existed and that the dispute fell within the scope of the agreement. The court found that the signature card signed by J&S Air’s representatives incorporated by reference an arbitration agreement, stating “[t]he Customer acknowledges receipt of the Bank’s Account Rules and Regulations including all applicable inserts and agrees to be bound by the agreements and terms contained therein.” The court presumed that “a party who signs a contract knows its contents.” Thus, the court held that the account signature card signed by J&S Air’s representatives incorporated the arbitration agreement by reference. Signature cards are valid contracts under Texas law, the court stated, and documents incorporated by reference in the signature card are part of the contract. Therefore, the arbitration agreement is valid, the court held. The court further held that the dispute at issue was within the scope of the arbitration agreement. The agreement between Bank One and J&S Air covered disputes “arising from or relating in any way to this Agreement or [the Customer's] Account.” The dispute between Bank One and J&S Air arose from checks that were allegedly forged and cashed from J&S Air’s accounts. Therefore, the dispute fell within the scope of the arbitration agreement. The court disagreed with J&S Air’s argument that Bank One waived its right to arbitration by invoking the judicial process to J&S Air’s detriment. There is a strong presumption against waiver, the court stated, and where it exists, waiver must be intentional. A party waives an arbitration clause when it substantially invokes the judicial process to the other party’s detriment, the court stated. Bank One’s motion to set aside the default judgment and request a new trial, the court held, did not substantially invoke the judicial process. OPINION:Per curiam.

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