Citizens Bank v. Bryce: Trustee waived arbitration

Citizens Bank v. Bryce: Trustee waived arbitration

Texas courts have eagerly enforced arbitration clauses, despite their typical unfairness to consumers and small businesses.  The Texas Supreme Court opened the door somewhat to challenging arbitration clauses when it overturned a large arbitration award against mega donor Bob Perry.

In Citizens National Bank v. Bryce, the Tyler Court of Appeals relied on the Perry decision and found that the bank, sued as trustee for breach of fiduciary duty, waited too long to compel arbitration.  Specifically, the decision noted that the bank had participated in and sought discovery for twenty months prior to seeking to compel arbitration. It appeared that the bank wanted the benefits of full discovery allowed under the Texas procedure rules, while also enjoying the advantage of having arbitrators instead of Texas citizens deciding the case.

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