Rosales v. Lone Star Corrugated Container Corp.
| Decision Date | 27 January 2020 |
| Docket Number | No. 05-19-00183-CV,05-19-00183-CV |
| Parties | SANTOS NAVARRO ROSALES, Appellant v. LONE STAR CORRUGATED CONTAINER CORPORATION, Appellee |
| Court | Texas Court of Appeals |
On Appeal from the 95th District Court Dallas County, Texas
Before Justices Myers, Osborne, and Nowell
Opinion by Justice Myers
This is an accelerated, interlocutory appeal from an order vacating an arbitration award in favor of appellant Santos Navarro Rosales. In four issues, Rosales argues that (1) the trial court erred by vacating the arbitration award for arbitrator misconduct; (2) the trial court's order vacating the award is void because the trial judge had no jurisdiction to hear the case; (3) the trial court erred in vacating the award because appellee Lone Star Corrugated Container Corporation's motion to vacate was untimely; and (4) the trial court erred in ordering unrequested relief. We reverse the trial court's order and render judgment confirming the arbitrator's final award.
On November 7, 2015, Rosales filed this negligence lawsuit against Lone Star. Rosales had worked there for approximately thirty-five years as a machine operator helper, which required heavy lifting, bending and twisting. Rosales suffered a workplace injury to his back, and he alleged that Lone Star failed to maintain a safe and healthful workplace and that it failed to train employees on safety measures and lifting techniques. Lone Star filed an answer.
On March 11, 2016, a Rule 11 agreement between the parties was filed with the district court stipulating to arbitration. On March 22, the parties filed an agreed motion to refer to arbitration and for abatement of proceedings. Three days later, on March 25, the trial judge signed an order abating the case until further order of the court.
Judge Nancy A. Thomas (the "arbitrator") was appointed the arbitrator by agreement of the parties. The arbitration was conducted pursuant to the Lone Star Dispute Resolution Plan (DRP) and the Dispute Resolution rules and procedures. The DRP also provided the arbitration would be governed by the Federal Arbitration Act (FAA).
The arbitration hearing occurred over a four-day period, from February 27 to March 2, 2018, in Dallas, Texas. On July 16, 2018, the arbitrator made an interim award in favor of Rosales on the issue of liability and reopened the hearing on the issue of damages. The arbitrator conducted a telephonic hearing on damages on July 24, at which counsel for both parties participated. On September 17, 2018, the arbitrator signed a twenty-four page final award in favor of Rosales.
On October 29, 2018, Rosales filed a motion to lift the abatement order and to confirm the arbitration award. On December 7, Lone Star filed a response and countermotion to vacate the arbitration award, arguing the award should be vacated because the arbitrator prejudiced Lone Star by refusing to hear testimony, i.e., allowing no redirect examination of its corporate representative, Paul McLeod. The agreed order lifting abatement was signed on December 25, 2018. On January 6, 2019, Rosales filed a response to Lone Star's motion to vacate.
The hearing on Rosales's motion to confirm and Lone Star's motion to vacate was held on January 23, 2019. By that time, the trial judge that had signed the abatement order was no longer the sitting judge of the 95th Judicial District Court, and a visiting judge was assigned to the case.Lone Star, however, objected to the motions being heard by a visiting assigned judge. The case was then reassigned to another visiting judge, who presided over the hearing. After listening to the parties' arguments, the assigned judge asked for half an hour to review the parties' filings. When she returned to the bench she denied the motion to confirm and granted the motion to vacate. The written order signed that same day vacated the September 17, 2018 final arbitration award and ordered a new hearing before a different arbitrator.
On February 12, 2019, Rosales filed a motion for new trial and a plea to the jurisdiction. Rosales also requested findings of fact and conclusions of law, and filed a notice of expedited appeal from an interlocutory order. On March 7, the assigned judge signed her findings of fact and conclusions of law, concluding in part as follows: Lone Star responded to the motion for new trial and the plea to the jurisdiction, and a hearing on the motion for new trial was held on March 28. During that hearing, Rosales objected to the assigned judge that had heard the motion to confirm and the motion to vacate. On that same day, the presiding judge signed an order overruling Rosales's objections to the assigned judge. An order denying the motion for new trial was signed by the assigned judge on April 11, 2019.
In his first issue, Rosales contends the trial court erred in vacating the arbitration award for arbitrator misconduct. Rosales argues that Lone Star failed to present a complete record of the arbitration proceeding, as required to support a vacatur, and that the elements required to support vacatur are not present here.
Review of a trial court's decision as to vacatur or confirmation of an arbitration award isde novo and the appellate court reviews the entire record. See In re Chestnut Partners, Inc., 300 S.W.3d 386, 397 (Tex. App.—Dallas 2009, pet. denied); Statewide Remodeling, Inc. v. Williams, 244 S.W.3d 564, 567 (Tex. App.—Dallas 2008, no pet.); see also Forsythe Int'l, S.A. v. Gibbs Oil Co. of Tex., 915 F.2d 1017, 1021 (5th Cir. 1990). All reasonable presumptions are indulged in favor of the award, and none against it. Statewide Remodeling, Inc., 244 S.W.3d at 568.
The parties in this case contractually agreed to arbitration under the Dispute Resolution Plan (DRP), and they agreed in the DRP that the arbitration would be governed by the Federal Arbitration Act (FAA). Under the FAA, an arbitration award is presumed to be valid. Myer v. Americo Life, Inc., 232 S.W.3d 401, 407 (Tex. App.—Dallas 2007, no pet.). Judicial review is "exceedingly deferential" and "extraordinarily narrow." Id. at 408 (citing Sarofim v. Trust Co., 440 F.3d 213, 216 (5th Cir. 2006)); see also Brabham v. A.G. Edwards & Sons, Inc., 376 F.3d 377, 380 (5th Cir. 2004).
An arbitration award governed by the FAA must be confirmed unless it is vacated, modified, or corrected under certain limited grounds. Amoco D.T. Co. v. Occidental Petroleum Corp., 343 S.W.3d 837, 841 (Tex. App.—Houston [14th Dist.] 2011, pet. denied); Prescription Health Network, LLC v. Adams, No. 02-15-00279-CV, 2017 WL 1416875, at *3 (Tex. App.—Fort Worth Apr. 20, 2017, pet. denied) (mem. op.). Section 10 of the FAA provides the only grounds upon which a reviewing court may vacate an arbitrative award. McKool Smith, P.C. v. Curtis Int'l, Ltd., 650 Fed. Appx. 208, 211 (5th. Cir. 2016) (quoting Brook v. Peak Int'l, Ltd., 294 F.3d 668, 672 (5th Cir. 2002)). Under section 10(a), a court may vacate an arbitration decision upon the application of any party to the arbitration:
9 U.S.C. § 10(a). Because the FAA does not include an additional ground to vacate an arbitration award based on mere errors in interpretation or application of the law, or mistakes in fact-finding, courts must not "conduct a review of an arbitrator's decision on the merits." Householder Grp. v. Caughran, 354 Fed. Appx. 848, 851 (5th Cir. 2009); see also Citigroup Glob. Mkts., Inc. v. Bacon, 562 F.3d 349, 358 (5th Cir. 2009); Hudgins v. Ameriprise Fin. Services, Inc., 3:17-CV-3125-S, 2018 WL 4717614, at *4 (N.D. Tex. Sept. 30, 2018). "Under the FAA, courts may vacate an arbitrator's decision 'only in very unusual circumstances.'" Oxford Health Plans, LLC v. Sutter, 569 U.S. 564, 568 (2013) (quoting First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 942 (1995)); see Rainier DSC 1, L.L.C. v. Rainier Capital Mgmt., L.P., 828 F.3d 362, 364 (5th Cir. 2016).
Additionally, the DRP between the parties adopted specific rules to be followed in the arbitration. Paragraph 22, entitled "Order of Proceedings," gave the arbitrator broad discretion regarding how to conduct the hearing. It states in part that the arbitrator has the authority to set the rules for the conduct of the proceedings, to exercise that authority to expedite the resolution of the dispute, to direct the order of proof, and to direct the parties to focus their presentations on the issues:
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