Baker Hughes Oilfield v. Hennig Production

• Decision Date: 24 March 2005
• Docket Number: No. 14-04-00009-CV.,14-04-00009-CV.
• Citation: 164 S.W.3d 438
• Parties: BAKER HUGHES OILFIELD OPERATIONS, INC., Appellant, v. HENNIG PRODUCTION CO., INC., Appellee.
• Court: Texas Supreme Court

164 S.W.3d 438

BAKER HUGHES OILFIELD OPERATIONS, INC., Appellant, v. HENNIG PRODUCTION CO., INC., Appellee.

No. 14-04-00009-CV.

Court of Appeals of Texas, Fourteenth District, Houston.

March 24, 2005.

COPYRIGHT MATERIAL OMITTED

Geoffrey H. Bracken, Stacy R. Obenhaus, Houston, Cynthia Hollingsworth, Dallas, for appellant.

David W. Pace, Houston, for appellee.

Panel consists of Justices YATES, EDELMAN, and GUZMAN.

OPINION

EVA M. GUZMAN, Justice.

In this arbitration case, Baker Hughes Oilfield Operations appeals from a summary judgment in favor of Hennig Production Company confirming an arbitration award and from the trial court's order denying Baker Hughes' request to vacate or modify the award. Baker Hughes argues the trial court erred in (1) granting summary judgment because the arbitrators allegedly exceeded their powers; (2) modifying the arbitration award; and (3) failing to issue findings of fact. We hold the arbitrators did not exceed their powers and the trial court did not otherwise err, accordingly we affirm the trial court's judgment.

I. FACTS AND PROCEDURAL BACKGROUND

Hennig contacted Baker Hughes about perforating a formation in a well Hennig was operating. On July 30, 2001, Baker Hughes' employees came to the well site and fired the perforation charges; however, the perforating tool — the "gamma gun" — collapsed in the well and Baker Hughes' employees were unable to remove it. They rigged down the service unit, leaving the tool in the well. Hennig subsequently performed "fishing" operations, attempting to retrieve the tool.

On September 12, 2001, Hennig signed Baker Hughes' field service order for "lost tools," and on September 28, Baker Hughes invoiced Hennig for the tool remaining in the well. Shortly thereafter, Hennig retrieved a part of the tool from the well and then refused to pay Baker Hughes' invoice, claiming the recovered part indicated the tool had collapsed because it did not conform to Hennig's pressure specifications.

Baker Hughes filed a demand for arbitration in accordance with the arbitration provision contained in its field service order, seeking damages from Hennig for lost tools, interest, and attorneys' fees. Hennig counterclaimed for damages to the well resulting from the collapse of the perforating tool. The arbitration lasted four days, during which time the panel received testimony from twelve witnesses, admitted twenty-nine exhibits from Baker Hughes, and fifty-eight exhibits from Hennig. The parties filed numerous arbitration pleadings, submitted post-hearing briefs and presented oral arguments. The panel found in favor of Hennig, awarding $351,090.43 in damages.

Hennig filed a motion to confirm and enforce the arbitration award in the trial court, but subsequently filed a motion for summary judgment seeking confirmation. Baker Hughes filed a motion to vacate the award or, alternatively, to modify it. The trial court considered both motions and signed a final summary judgment in favor of Hennig. This appeal ensued.

II. ANALYSIS

In its first appellate issue, Baker Hughes contends the arbitrators exceeded their powers and therefore, the trial court erred in confirming the arbitration award and in denying its motion to vacate. Baker Hughes asserts in its second issue that the trial court improperly modified the award by including a date for the accrual of prejudgment interest and, in its third issue, argues the trial court erred in failing to file findings of fact. We address Baker Hughes' third issue first because, should we sustain the issue, we must remand the case to the trial court.

A. Findings of Fact

Baker Hughes requests we abate this appeal and remand to the trial court for entry of findings of fact regarding the court's order denying Baker Hughes' motion to vacate or modify the arbitration award. Although the trial court rendered a summary judgment, Baker Hughes argues that findings of fact are required because the trial court signed a separate order denying its motion to vacate and the hearing on that motion was not a summary proceeding.

It is well settled that findings of fact are not proper in a summary judgment context. See, e.g., IKB Indus. (Nigeria) Ltd. v. Pro-Line Corp., 938 S.W.2d 440, 441-42 (Tex.1997); Golden v. McNeal, 78 S.W.3d 488, 495 (Tex.App.-Houston [14th Dist.] 2002, pet. denied). There cannot be a genuine issue as to any material fact for summary judgment to be properly rendered and the legal grounds are limited to those stated in the summary judgment motion and any response. IKB Indus., 938 S.W.2d at 441. Hence, there are no facts to find. Id. Because this case was disposed of through summary judgment, we conclude that findings of fact are not warranted under the circumstances of this case. Moreover, many of Baker Hughes' proposed findings and conclusions were contrary to the trial court's judgment and thus, were properly denied. See In re Marriage of Grossnickle, 115 S.W.3d 238, 254 (Tex.App.-Texarkana 2003, no pet.). Accordingly, we reject Baker Hughes' request for a remand to the trial court to issue findings of fact and overrule its third issue.

B. Arbitration Proceedings

Baker Hughes also argues the arbitrators exceeded their powers by deciding an issue that was not submitted to them and, further, they committed a "gross mistake" that requires vacating the arbitration award. Both parties agree the suit is governed by the Texas Arbitration Act ("TAA"),¹ and we examine Baker Hughes' arguments with reference to that statute when necessary.

1. Standard of review

Texas substantive law favors arbitration. Crossmark, Inc. v. Hazar, 124 S.W.3d 422, 429 (Tex.App.-Dallas 2004, pet. denied). An arbitration award has the same effect as the judgment of a court of last resort, and a court reviewing the award may not substitute its judgment for that of the arbitrators merely because it would have reached a different result. Id. Nor may a reviewing court set aside an arbitration award for a mere mistake of fact or law. Id.; Anzilotti v. Gene D. Liggin, Inc., 899 S.W.2d 264, 266 (Tex.App.-Houston [14th Dist.] 1995, no writ). A reviewing court lacks jurisdiction to review complaints that do not assert statutory, common law, or public policy grounds to vacate or modify the award. Crossmark, 124 S.W.3d at 429 (citing CVN Group, Inc. v. Delgado, 95 S.W.3d 234, 239 (Tex.2002)).

Under the TAA, upon application by a party, the trial court "shall" confirm an arbitration award unless the party opposing confirmation presents grounds for vacating, modifying, or correcting the award. Tex. Civ. Prac. & Rem.Code Ann. § 171.087. An application under the Act is heard in the same manner and on the same notice as a motion in a civil case. Id. § 171.093. Generally, a summary judgment motion is not required for the trial court to confirm, modify, or vacate an arbitration award, but if a party chooses to pursue confirmation of the award through summary judgment proceedings rather than the motion procedure under the TAA, that party assumes the traditional burdens and requirements of summary judgment practice. Crossmark, 124 S.W.3d at 430 (citing Mariner Fin. Group, Inc. v. Bossley, 79 S.W.3d 30, 32, 35 (Tex.2002)). Therefore, although we apply the standards of review for arbitrations, we also apply those for summary judgments. See id. at 430-31; Teleometrics Int'l, Inc. v. Hall, 922 S.W.2d 189, 193 (Tex.App.-Houston [1st Dist.] 1995, writ denied). To the extent presumptions in favor of an arbitration award conflict with summary judgment standards of review, the arbitration rules "must yield to ... the presumptions in favor of a non-movant." Tuco Inc. v. Burlington N. R.R. Co., 912 S.W.2d 311, 315 (Tex.App.-Amarillo 1995), aff'd as modified, 960 S.W.2d 629 (Tex.1997). Where the parties do not dispute the facts, review of a summary judgment properly focuses on whether the trial court correctly applied the law to the facts. Crossmark, 124 S.W.3d at 431. Any error of law made by the arbitrators, however, cannot be reviewed by a court confirming the award. Id. at 434.

Here, Hennig sought to confirm the arbitration award through summary judgment and thus, it had the burden to show there were no genuine issues of material fact prohibiting confirmation of the award, that is, no material facts regarding the grounds asserted by Baker Hughes to vacate, modify, or correct the award. See Crossmark, 124 S.W.3d at 431; Brozo v. Shearson Lehman Hutton, Inc., 865 S.W.2d 509, 510-11 (Tex.App.-Corpus Christi 1993, no writ); see also Tex. Civ. Prac. & Rem.Code Ann. § 171.087 (Vernon Supp.2004-05) ("Unless grounds are offered for vacating, modifying, or correcting an award ... the court, on application of a party, shall confirm the award."); Mariner, 79 S.W.3d at 32.

Baker Hughes relies on two statutory grounds for relief from the arbitration award: Sections 171.088 and 171.091 of the Civil Practice and Remedies Code. See Tex. Civ. Prac. & Rem.Code Ann. §§ 171.088(a)(3)(A), 171.091(a)(2).² We examine Baker Hughes' claims.

2. Baker Hughes'"exceeded powers" claims

Baker Hughes acknowledges the arbitrators' authority is derived from the arbitration agreement and is limited to a decision of the matters submitted therein, either expressly or by necessary implication. Gulf Oil Corp. v. Guidry, 160 Tex. 139, 327 S.W.2d 406, 408 (1959); J.J. Gregory Gourmet Servs., Inc. v. Antone's Import Co., 927 S.W.2d 31, 35 (Tex.App.-Houston [1st Dist.] 1995, no writ). Here, Baker Hughes' field service order contained the agreement to arbitrate,³ stating the parties would arbitrate "any controversy or claim arising out of or relating to the Agreement or to [Baker Hughes'] services, equipment, or products provided to Customer." This is, by its plain language, a broad arbitration provision and subsumes any controversy or claim arising out of or relating to Baker Hughes' services. See Babcock & Wilcox Co. v. PMAC, Ltd., 863 S.W.2d 225, 231 (Tex.App.-Houston [14th Dist.] 1993, writ denied)....