In re FirstMerit Bank

In In re FirstMerit Bank, N.A., 52 S.W.3d 749, 758, 44 Tex. Sup. Ct. J. 900 (Tex. 2001), the purchasers of a mobile home signed a retail installment financing agreement. See FirstMerit Bank, 52 S.W.3d at 752. The agreement contained an "Arbitration Addendum," which required arbitration of any disputes. Id. at 752-53. When the mobile home was delivered, the purchasers attempted to revoke their acceptance. They claimed the home was defective and promised repairs were not made. Id. at 753. In determining the purchasers' defenses did not defeat arbitration, the Supreme Court held the defenses "must specifically relate to the Arbitration Addendum itself, not the contract as a whole, if they are to defeat arbitration." Id. at 756. The Supreme Court held: Once the trial court concludes that the arbitration agreement encompasses the claims, and that the party opposing arbitration has failed to prove its defenses, the trial court has no discretion but to compel arbitration and stay its own proceedings. Id. at 753-54.