Homes v. Perez

• Decision Date: 27 May 2011
• Docket Number: No. 10–0688.,10–0688.
• Parties: CMH HOMES, et al., Petitioners,v.Adam PEREZ, Respondent.
• Court: Texas Supreme Court

340 S.W.3d 444

54 Tex. Sup. Ct. J. 1098

CMH HOMES, et al., Petitioners,

v.Adam PEREZ, Respondent.

No. 10–0688.

Supreme Court of Texas.

Argued Feb. 3, 2011.Decided May 27, 2011.

Brendan K. McBride, The McBride Law Firm, Rio Grande City, David L. Rumley, Wigington Rumley Dunn LLP, Corpus Christi, and Baldemar Gutierrez, Law Offices of Baldemar Gutierrez, Alice, for Adam Perez.Scott A. Brister, Lino Mendiola, Andrews & Kurth L.L.P., Austin, Jorge C. Rangel, The Rangel Law Firm, P.C., Corpus Christi, for CMH Homes, Inc.Augustin Rivera Jr., Dunn Weathered Coffey Rivera & Kapertism, P.C., Corpus Christi, for Bruce Robin Moore, Jr.Justice WAINWRIGHT delivered the opinion of the Court.

Once more, this Court is presented with a question of the availability of judicial review of an interlocutory arbitration order. In this consumer dispute, CMH Homes, Inc. and Adam Perez agreed to submit their claims to arbitration but could not agree on an arbitrator. Because of this disagreement, the trial judge intervened and appointed an arbitrator to preside over their dispute. CMH Homes filed an interlocutory appeal challenging this appointment, requesting in the alternative that its appeal be treated as a mandamus petition. The court of appeals determined it was without jurisdiction and dismissed the appeal. We agree with the court of appeals' determination that Texas Civil Practice and Remedies Code section 51.016 does not allow an interlocutory appeal of an order appointing an arbitrator. However, under these circumstances, CMH Homes's appeal may properly be considered as a petition for writ of mandamus. We remand for the court of appeals to consider this appeal as a petition for writ of mandamus.

I. Background

A. Facts and Procedure

On October 2, 2002, Adam Perez purchased a manufactured home from CMH Homes, with the help of salesman Bruce Robinson Moore Jr. Vanderbilt Mortgage and Finance provided financing for the purchase. The retail installment contract between CMH Homes and Perez contained an arbitration clause which provides:

All disputes, claims or controversies arising from or relating to this contract ... shall be resolved by mandatory binding arbitration by one arbitrator selected by Seller with Buyer's consent.

On November 2, 2009, Perez sued CMH Homes, Inc., Vanderbilt Mortgage and Finance, Inc., and Bruce Robinson Moore Jr. (hereinafter “CMH Homes”) for fraud and violations of the Texas Debt Collection Act in the financing of his manufactured home. Perez filed a motion to compel arbitration on January 13, 2010. Although the parties agreed that the contract was governed by the Federal Arbitration Act and agreed to submit to arbitration, they could not agree to an arbitrator. After two months of disagreement, with both parties suggesting arbitrators in various correspondence, Perez's attorney declared an impasse.¹ On March 8, 2010, after a hearing, the trial court issued an order appointing Gilberto Hinojosa as arbitrator. Although the order was titled “Order on Plaintiff's Motion to Compel Arbitration,” the only directive in the order was to name an arbitrator to preside over the dispute.

CMH Homes filed an interlocutory appeal pursuant to Texas Civil Practice and Remedies Code section 51.016, challenging the court's appointment of Gilberto Hinojosa as arbitrator. CMH Homes did not file a separate mandamus petition, but asked the court of appeals in the alternative to consider its appeal as a mandamus proceeding. See CMH Homes, Inc. v. Perez, 328 S.W.3d 592, 594 (Tex.App.-San Antonio 2010, pet. granted). The court of appeals determined that interlocutory appeal was unavailable under Civil Practice and Remedies Code section 51.016 and dismissed the appeal for want of jurisdiction. Id. at 593.

B. Jurisdiction and Standard of Review

This court has jurisdiction to determine whether the court of appeals correctly decided its jurisdiction. See Badiga v. Lopez, 274 S.W.3d 681, 682 n. 1 (Tex.2009) (citing Tex. Dep't of Crim. Justice v. Simons, 140 S.W.3d 338, 343 n. 13 (Tex.2004)). We review the court of appeals' determination of its jurisdiction de novo. Villafani v. Trejo, 251 S.W.3d 466, 467 (Tex.2008).

Unless a statute authorizes an interlocutory appeal, appellate courts generally only have jurisdiction over final judgments. See Lehmann v. Har–Con Corp., 39 S.W.3d 191, 195 (Tex.2001); see also Jack B. Anglin Co., Inc. v. Tipps, 842 S.W.2d 266, 272 (Tex.1992) (“Interlocutory orders may be appealed only if permitted by statute.” (citations omitted)). We strictly apply statutes granting interlocutory appeals because they are a narrow exception to the general rule that interlocutory orders are not immediately appealable. See, e.g., Tex. A & M Univ. Sys. v. Koseoglu, 233 S.W.3d 835, 841 (Tex.2007); Bally Total Fitness Corp. v. Jackson, 53 S.W.3d 352, 355 (Tex.2001) (citation omitted).

II. Discussion

First, we must determine whether the court of appeals lacked jurisdiction under Texas Civil Practice and Remedies Code section 51.016 of an interlocutory appeal of an order appointing an arbitrator. If section 51.016 does not provide jurisdiction, we then decide whether the court of appeals should have considered CMH Homes's interlocutory appeal as a petition for writ of mandamus.

A. Texas Civil Practice and Remedies Code Section 51.016

Prior to the Legislature's 2009 amendment to the Texas Arbitration Act (TAA), parties seeking to appeal an order refusing to compel arbitration would commonly file two separate appellate proceedings. Under the TAA, a party could bring an interlocutory appeal of an order denying arbitration. See Tex. Civ. Prac. & Rem.Code § 171.098. Under the Federal Arbitration Act (FAA), a party could only challenge an order denying arbitration by mandamus. Jack B. Anglin, 842 S.W.2d at 271–72. As a result, parallel proceedings were the norm in Texas arbitration disputes where parties were unsure which arbitration act applied. Although “unnecessarily expensive and cumbersome,” such parallel proceedings were required. Id. at 272. Twice, this Court requested that the Legislature “consider amending the Texas Act to permit interlocutory appeals of orders issued pursuant to the Federal Act.” Id.; In re D. Wilson Constr. Co., 196 S.W.3d 774, 780 n. 4 (Tex.2006) (quoting Jack B. Anglin, 842 S.W.2d at 272). In response, the Legislature added section 51.016 to the Civil Practice and Remedies Code in 2009. Act of May 27, 2009, 81st Leg., R. S., ch. 820, §§ 1, 3, 2009 Tex. Gen. Laws 2061 (codified at Tex. Civ. Prac. & Rem.Code § 51.016). This is our first opportunity to construe the scope of the Legislature's remedial action.

Section 51.016 provides that a party may appeal a judgment or interlocutory order “under the same circumstances that an appeal from a federal district court's order or decision would be permitted by 9 U.S.C. Section 16.” Tex. Civ. Prac. & Rem.Code § 51.016. Section 16 of the FAA provides:

(a) An appeal may be taken from—

(1) an order—

(A) refusing a stay of any action under section 3 of this title,

(B) denying a petition under section 4 of this title to order arbitration to proceed,

(C) denying an application under section 206 of this title to compel arbitration,

(D) confirming or denying confirmation of an award or partial award, or

(E) modifying, correcting, or vacating an award;

(2) an interlocutory order granting, continuing, or modifying an injunction against an arbitration that is subject to this title; or

(3) a final decision with respect to an arbitration that is subject to this title.

(b) Except as otherwise provided in section 1292(b) of title 28, an appeal may not be taken from an interlocutory order—

(1) granting a stay of any action under section 3 of this title;

(2) directing arbitration to proceed under section 4 of this title; (3) compelling arbitration under section 206 of this title; or

(4) refusing to enjoin an arbitration that is subject to this title.

9 U.S.C. § 16. Civil Practice and Remedies Code section 51.016 expressly incorporates federal law. Thus, an interlocutory appeal in this case is permitted only if it would be permitted under the same circumstances in federal court under section 16. See Little v. Tex. Dep't of Crim. Justice, 148 S.W.3d 374, 381–82 (Tex.2004) (examining federal law when interpreting state statute that incorporated federal statute).In considering the scope of section 16's jurisdictional grant, we first determine the nature of the order being appealed. The order at issue is entitled “Order on Plaintiff's Motion to Compel Arbitration” and appoints Gilberto Hinojosa as arbitrator. Although Perez's motion to compel arbitration did not request that the trial court appoint an arbitrator, Perez submitted letters to the court administrator declaring an impasse and requesting the trial judge appoint an arbitrator.

At first glance, this order may appear to fit within section 16(b)(2) as an order “directing arbitration to proceed.” 9 U.S.C. § 16(b)(2). The “Order on Plaintiff's Motion to Compel Arbitration” was issued in response to Perez's motion requesting that the trial court compel arbitration. But the substance of the order is the appointment of Gilberto Hinojosa as arbitrator. See Del Valle Indep. Sch. Dist. v. Lopez, 845 S.W.2d 808, 809 (Tex.1992) (“[I]t is the character and function of an order that determine its classification.”). While it may be argued that by appointing an arbitrator the order implicitly compels the parties to arbitration, the order does not explicitly grant Perez's motion to compel and does not explicitly compel the parties to arbitrate their dispute. There is no question that both parties agreed to arbitrate their dispute; the open question remaining was who would serve as the arbitrator. The purpose of the order was to answer that question.

Section 5 of the FAA explicitly permits a trial court to appoint an arbitrator under certain circumstances. 9 U.S.C. § 5. Where the parties have previously agreed to a method...