Beldon Roofing Co. v. Sunchase IV Homeowners' Ass'n, Inc.

• Decision Date: 04 June 2015
• Docket Number: NUMBER 13–14–00343–CV
• Citation: 494 S.W.3d 231
• Parties: Beldon Roofing Company, Appellant, v. Sunchase IV Homeowners' Association, Inc., Appellee.
• Court: Texas Court of Appeals

494 S.W.3d 231

Beldon Roofing Company, Appellant,

v.Sunchase IV Homeowners' Association, Inc., Appellee.

NUMBER 13–14–00343–CV

Court of Appeals of Texas, Corpus Christi-Edinburg.

Delivered and filed June 4, 2015

Brian C. Miller,Royston, Rayzor, Vickery & Williams, LLP, Corpus Christi, for Appellant.

William J. Chriss, Corpus Christi, for Appellee.

Before Chief Justice Valdez and Justices Rodriguez and Longoria

OPINION

Opinion by Justice Longoria

Beldon Roofing Company appeals the district court's order denying its motion to compel arbitration pursuant to the Federal Arbitration Act (FAA). See generally 9 U.S.C. §§ 1

–16 (West, Westlaw through P.L. 113–296 ). By one issue, Beldon contends that it has the legal right to arbitrate pursuant to its original contract. We affirm.

I. BACKGROUND

In 2008, appellee Sunchase IV Homeowner Association, Inc., hired appellant Beldon Roofing Company to repair damage caused by Hurricane Dolly to roofs at Sunchase's condominium complex. The contract between the parties consisted of three documents, each of which contained an identical clause providing that “any claim or controversy arising out of or relating to this Agreement or breach thereof, or to any action by an employee or agent of Beldon, shall be settled by arbitration in accordance with the Federal Arbitration Act and the Construction Industry Arbitration Rules of the American Arbitration Association.”

In June of 2009, Beldon filed a sworn suit on an account alleging that Sunchase had not paid for the repair work that Beldon performed pursuant to the parties's contract. Beldon's petition requested that the court “order and administer arbitration of the subject claims to the extent set forth in the agreement of the parties.”

Sunchase filed a sworn denial of the account asserting the defenses of waiver, estoppel, and that the arbitration clause was not supported by independent consideration. Sunchase also countersued, alleging that Beldon performed substandard work and that all of Beldon's repairs failed in whole or in part in less than one year. Sunchase asserted a variety of causes of action for violations of the Texas Deceptive Trade Practice Act, negligence, breach of express and implied warranties, unspecified statutory violations, breach of contractual duties or duties “otherwise voluntarily assumed,” breach of the duty to perform the repair work in a good and workmanlike manner, and fraud in the inducement.

While Beldon's request to compel arbitration pursuant to the parties's contract was still pending, an agreed order was entered into on December 7, 2010, signed by the court and all the parties. The agreed order provided that “[t]he issues between the parties raised in the above-captioned cause, including any issues with respect to the arbitrability of the case or any issue therein, shall be resolved by and are referred to arbitration, pursuant to Chapter 154, et seq., TEX. CIV. [sic ] P. & Rem.Code. ” The order specifically provided that the Texas Rules of Civil Procedure should be followed in the arbitration except as modified by a subsequent order of the court or by a Rule 11 agreement of the parties. See TEX.R. CIV. P. 11

. Thereafter, on September 29, 2011, the trial court issued a second agreed order which contained all the terms of the first agreed order and also appointed the Honorable Robert Garza of Brownsville, Texas, as the arbitrator (the “Garza Arbitration”).¹

The record does not reflect any activity in the case between the date of the second agreed order and a May 15, 2013 status hearing. Following the status hearing, the arbitration before Garza was set for November 19, 2013. On October 13, 2013, Beldon faxed a motion to Garza requesting to continue the arbitration hearing. This document was never filed with the trial court and is not part of the record. See Guajardo v. Conwell, 46 S.W.3d 862, 864 (Tex.2001)

(per curiam) (refusing to consider an order that was not in the clerk's record). However, we infer from the text of Sunchase's response that Beldon requested arbitration pursuant to the terms of the original contract rather than the agreed orders. Specifically, Beldon requested that Garza appoint a panel of three neutral construction-industry experts to decide the case. The American Arbitration Association's Construction Industry Arbitration Rules, which the parties's original contract specified would govern any arbitration between them, provide that all disputes where the claimed damages exceed one million dollars exclusive of interest, attorneys's fees, arbitration fees, and costs must be decided by such a panel. Sunchase disputed in its response that the amount of damages it claimed changed from the beginning of the case but expressly stipulated that it was not seeking recovery on its counterclaim in excess of $999,999.99, exclusive of interest, attorneys's fees, arbitration fees, and costs. Garza never ruled on Beldon's motion, and it was never filed with the trial court.

On November 15, 2013, a third agreed order signed by both the trial judge and Garza granted Sunchase's request that it have the option to withdraw its stipulation regarding the amount of damages it was seeking “in the event significant damage to the Sunchase condominium complex occurs that is unknown at this time.” However, the third agreed order provided that the stipulation would remain in force until Sunchase chose to withdraw it. Sunchase has not exercised its right under the third agreed order.

On November 14, 2013, Beldon filed a combined motion to stay the arbitration and a motion for leave to designate as a responsible third party Duro–Last Roofing, Inc., the manufacturer of the roofing materials that Beldon installed on Sunchase's property. See Tex. Civ. Prac. & Rem.Code Ann. § 33.004(a)

(West, Westlaw through 2013 3d C.S.). Beldon's motion cited reports prepared by experts hired by Sunchase which, according to Beldon, challenged the manufacture, design, and inspection of the roofing system rather than the quality of the repair work Beldon performed, which Beldon asserted had earlier been the focus of Sunchase's claims. A fourth agreed order signed by both the trial judge and the arbitrator on November 22, 2013 granted Beldon's motion. Beldon successfully joined Duro Last as a third party.

On November 22, 2013, a fifth order signed by the trial judge, the arbitrator, and counsel for Beldon and Sunchase granted Beldon's motion that sought to continue the arbitration hearing, dismiss Beldon's claims against Sunchase with prejudice, and realign the parties so that Sunchase became the plaintiff and Beldon the defendant. Following the realignment, Sunchase amended its pleadings to add claims for negligence, strict product liability, and other claims against Duro Last.

On May 13, 2014, Beldon filed a motion with the trial court requesting a continuance of the arbitration hearing. Beldon argued that the interests of justice required the court to appoint a panel of three construction-industry experts to arbitrate the dispute as required by the Construction Industry Arbitration Rules “to give effect to the express requirements of the binding arbitration clause that governs the parties' claims.” Alternatively, Beldon stated in the motion that it was withdrawing its consent to the agreed orders referring the parties to arbitration. The trial court did not rule on the motion, and there is no evidence that Beldon ever requested a ruling or objected to the court's failure to rule.

On June 6, 2014, Beldon filed another motion again seeking to compel arbitration pursuant to the parties's original contract. This motion made substantively the same arguments as the motion of May 13, 2014, and requested the same relief except that Beldon also requested, in the alternative, that the court submit the case for a jury trial. Over Beldon's objections, this motion was submitted to Garza. Garza signed an order denying Beldon's motion. The trial judge signed the same order issued by Garza.

Beldon filed a notice of appeal of the order denying Beldon's motion of June 6th seeking to compel arbitration pursuant to the original contract. See id. § 51.016 (West, Westlaw through 2013 3d C.S.) (authorizing an interlocutory appeal in the same circumstances in which the FAA would permit an appeal of a federal district court's order). Sunchase moved to dismiss Beldon's appeal for lack of appellate jurisdiction. By an order dated July 30, 2014, this Court denied Sunchase's motion to dismiss for lack of jurisdiction and granted Beldon's motion to stay all proceedings in the trial court, including the Garza Arbitration.

II. JURISDICTION

We first address Sunchase's argument that this Court lacks jurisdiction because Beldon's appeal is untimely. See Alfonso v. Skadden, 251 S.W.3d 52, 55 (Tex.2008)

(per curiam) (holding that a court may consider its own subject matter jurisdiction at any time).

A. Standard of Review and Applicable Law

Appellate courts generally only have jurisdiction over final judgments, but the Texas Legislature has provided by statute that a party may appeal from certain interlocutory orders. Bally Total Fitness Corp. v. Jackson, 53 S.W.3d 352, 355 (Tex.2001)

. We strictly construe such statutes as narrow exceptions to the general rule that only final judgments are appealable. CMH Homes v. Perez, 340 S.W.3d 444, 447 (Tex.2011). In a case where the FAA applies, a party may appeal an interlocutory order in the same circumstances that the FAA would permit an interlocutory appeal of a federal district court's order. Tex. Civ. Prac. & Rem.Code Ann. § 51.016. Whether the order denies a motion to arbitrate is determined by the substance and function of the order and not its caption. ReadyOne Indus., Inc. v. Torres, 394 S.W.3d 720, 722 (Tex.App.–El Paso 2012, no pet.). As relevant here, a party may appeal an order denying a motion to compel arbitration. Acad., Ltd. v.

Miller, 405 S.W.3d 152, 154 (Tex.App.–Houston [1st Dist.] 2013, no pet.). To do so, a...