Pettus v. Pettus

• Citation: 237 S.W.3d 405
• Decision Date: 13 September 2007
• Docket Number: No. 2-05-110-CV.,2-05-110-CV.
• Parties: Jo Ann Geurin PETTUS, Appellant/Appellee, v. Sherrill Iverson PETTUS, Marc Alloju, Russell Deck, Joey Harrison, Baldo Navarez, Janice Roberts, Curtis W. Martin, Charles E. Bearden, and Richard T. Sink, Appellees/Appellants.
• Court: Court of Appeals of Texas

237 S.W.3d 405 Jo Ann Geurin PETTUS, Appellant/Appellee,
v.
Sherrill Iverson PETTUS, Marc Alloju, Russell Deck, Joey Harrison, Baldo Navarez, Janice Roberts, Curtis W. Martin, Charles E. Bearden, and Richard T. Sink, Appellees/Appellants. No. 2-05-110-CV. Court of Appeals of Texas, Fort Worth. September 13, 2007. Rehearing and Rehearing En Banc Overruled October 25, 2007.

[237 S.W.3d 408]

Moses, Palmer & Howell, L.L.P., Shayne D. Moses, Gardner Aldrich, L.L.P., Robert E. Aldrich, Fort Worth, for Appellant/Appellee.

Stephens & Myers, L.L.P., Kerwin B. Stephens, Graham, Harris, Finley & Bogle, P.C., Russell R. Barton, Roland K. Johnson, and Shannon E. Goss, Fort Worth, Fort Worth, for Appellees/Appellants.

PANEL B: LIVINGSTON, WALKER, and McCOY, JJ.

OPINION

TERRIE LIVINGSTON, Justice.

INTRODUCTION

This appeal involves the trial court's decisions regarding an arbitration that occurred within the context of a complex divorce. Appellant and cross-appellee, Jo Ann Geurin Pettus, appeals the part of the trial court's divorce decree allowing a pending arbitration proceeding to continue after entry of the decree and the trial court's subsequent judgment ordering Southern Bleacher Co., Inc.—a closely held corporation that the trial court awarded solely to Jo Ann—to pay arbitrators' fees and attorneys' fees to appellees and cross-appellants, Curtis W. Martin, Charles E. Bearden, and Richard T. Sink. Appellees and cross-appellants, Marc Alloju, Russell Deck, Joey Harrison, Baldo Navarez, Janice Roberts (all employees of Southern Bleacher), and Sherrill Iverson Pettus (Jo Ann's ex-husband), appeal from the part of the trial court's judgment vacating the arbitrators' decision. In addition, Martin, Bearden, and Sink (the arbitrators) appeal the rate of pre- and post-judgment interest awarded by the trial court on their award of arbitrators' and attorneys' fees. We reverse and remand the part of the judgment awarding pre-and post-judgment interest, but we affirm the remainder of the judgment.

237 S.W.3d 409

FACTUAL AND PROCEDURAL BACKGROUND

During their marriage, Jo Ann and Sherrill jointly owned Southern Bleacher as a closely held Texas corporation. After Sherrill filed for divorce, they became "deadlocked" in managing Southern Bleacher as well as two other related companies, Southern Bleacher Construction Company, Inc. and Southern Bleacher Mfg. I, L.L.C. Jo Ann asked the trial court to enter temporary orders appointing a receiver for the companies. Instead, the parties entered into an agreement on the record, pursuant to which the trial court entered "Agreed Additional Temporary Orders."

In the agreed temporary orders, the trial court outlined procedures for, among other things, reviewing bids made by the companies, the signing of payroll and other checks, the management of meetings, and the determination of compensation for employees of the companies. The agreement also provided for certain matters to be arbitrated if Jo Ann and Sherrill could not agree. For instance, one provision of the agreed temporary orders provided that "[a]ny bonus payments or salary increases for any employee or officer of [the companies] must be determined jointly by Sherrill ... and Jo Ann.... In the event there is a disagreement between the two of them, then this issue shall be subject to arbitration as hereinafter provided." The agreed temporary orders also provided that no employee was to be retaliated against

by reason of any of them appearing in Court, for any action that has taken place in the past concerning testimony or proposed testimony in this case, or touching upon the divorce of the parties, or for any involvement in what has been referred to by the parties in their testimony ... as `corporate gamesmanship' and `jockeying for position.'

Under the agreed temporary orders, Southern Bleacher was to compensate the arbitrators for their services in accordance with the agreement. The temporary orders also stated that they were to "remain in effect until a final decree of divorce is signed in this cause of action or further order of this Court."

The parties also had difficulty agreeing on matters related to arbitrations occurring under the agreed temporary orders. Accordingly, the trial court modified those orders by specifying how arbitration requests and proceedings were to occur. A couple of months later, after one of the parties had filed a motion to vacate an arbitration, the trial court signed an "Order Providing Procedures for Submission of Arbitration Disputes." In this order, the trial court confirmed the appointment by each party of an arbitrator and appointed a third arbitrator to complete an arbitration panel that would handle all future arbitrations. The order also specified procedures for arbitrations, scheduling of arbitrations, and compensation of the arbitrators. It also provided that in its deliberations and decisions, the arbitration panel would be guided by the best interest of the company concerned. The order further provided that "[a]ny disputes or issues concerning arbitrator compensation shall be referred to the Court for resolution" and that a decision "will be effective and binding when counterparts of the award have been signed by the three-person Arbitration Panel, or if a non-unanimous decision, by the two arbitrators agreeing to the decision, and delivered or faxed to each of the parties."

On March 25, 2004, the arbitrators issued a decision in a dispute that was referred to as "Impasse 8." In their decision, the arbitrators stated that "Sherrill

237 S.W.3d 410

... and Jo Ann ... have requested a decision from the Arbitration Panel ... concerning the management of the business or the Companies" and that Sherrill had raised "issues concerning bonus payments, commissions and/or severance compensation for employees in the event of their termination arising out of a change in ownership or management [of the companies] in connection with the divorce proceedings." [Emphasis added.] The decision stated that if an employee of the companies was terminated before a change in ownership or management, then Jo Ann and Sherrill would agree on "an appropriate bonus, commission, and/or severance payment" for the employee, or if they could not agree, they would submit the matter for arbitration. It also directed that "immediately prior to any change in management or ownership, if [Jo Ann or Sherrill] believes that an employee is at risk of termination arising out of that change, then [the complaining party] shall identify such employee(s), and propose an appropriate bonus, commission, and/or severance payment for each such employee." Jo Ann and Sherrill were then to attempt to agree on the matter, but if they could not, the decision directed them to submit the matter for arbitration. At such an arbitration, the parties were to "offer each ... affected employee the opportunity to be a party to the arbitration concerning his/her compensation, provided that the employee agrees to be bound by (and limited to) the decision of the arbitration." The arbitrators later explained that in ruling on Impasse 8, they were concerned about the companies' ability to retain employees during the divorce proceedings and that a change in management because of the divorce could result in the termination of certain employees. Jo Ann has never challenged this decision. See TEX. CIV. PRAC. & REM.CODE ANN. § 171.088(a)(1), (b) (Vernon 2005) (providing that motion to vacate arbitration award must be filed within ninety days after delivery of a copy of the award to the applicant, or within ninety days after the grounds for the motion are known if those grounds are "corruption, fraud, or other undue means").

On February 23, 2005—after a jury trial on most of the divorce issues and a bench trial on the remaining issue, a licensing matter—the trial court issued a letter ruling granting the divorce, outlining the property division, and awarding Jo Ann both parties' community interest in the companies, for which she was to pay Sherrill $24,000,000 "as soon as possible but in no event later than 45 days from the date" of the signing of a decree. Although the letter contained the trial court's ruling on the divorce issues, it also stated that

[t]his matter should be completed as soon as possible consistent with the rights of the parties. There is no doubt that I have overlooked something(s) [sic] and ask that you notify me of my omissions as soon as possible. Mr. Moses and/or Mr. Aldridge [sic] are directed to prepare a proposed Decree consistent with this ruling and submit it to other counsel of record for review.

On February 25, 2005, the trial court issued another letter stating that "[a]lthough not specifically stated in the letter ruling, there should be no question but that the Temporary Orders in this case will remain in effect until entry of a Decree. No party will engage in any actions that are contrary to those Temporary Orders." Thereafter, on February 28, 2005, Sherrill initiated Impasse 27 arising out of Impasse 8 and Sherrill's and Jo Ann's "opposing views on ... whether certain employees have been terminated or constructively terminated and the amount of payment (if any) that should be made to those employees as severance, commission and/or pro rata bonus." Neither party

237 S.W.3d 411

adopted a suggestion made by the arbitrators in Impasse 8 to afford the affected employees the opportunity to be parties to the arbitration.¹ The trial court signed a "Final Decree of Divorce" on March 22, 2005. In it, the trial court dissolved the marriage and divided the parties' property, including a comprehensive listing of the items to be divided. In accordance with its February 23, 2005 letter ruling, it awarded Jo Ann the entire community interest in Southern Bleacher and the other companies in exchange for the payment of $24,000,000 cash to Sherrill. The decree also included the following provision regarding Impasse 27:

The...