Texas’ Fourth Court of Appeals in San Antonio has affirmed a trial court’s order confirming an arbitrator’s award in a work injury dispute. In Saiz v. Susser Holdings Corp. and Stripes LLC, No. 04-14-00487-CV (Tex. App. – San Antonio, March 11, 2015), a worker, Saiz, was injured in a 2010 workplace accident. At the time, her employer, Susser Holdings Corp. and Stripes LLC (‘the Companies”), did not carry workers’ compensation insurance under the Texas Workers’ Compensation Act. In lieu of purchasing such insurance, the Companies adopted a voluntary employee benefit plan (“the Plan”) that provided medical, disability, and other benefits to workers who elected to participate. Each participant in the Plan, including Saiz, was required to sign an election form and an agreement to arbitrate any future disputes with the Companies through binding arbitration. In addition, the arbitral agreement stated “the party seeking arbitration must make a written demand for arbitration on the other party within the applicable statute of limitations” and “[n]either filing nor serving a lawsuit stops the applicable statute of limitations from continuing to run.”
Following her workplace injury, Saiz received benefits under the Plan. Nearly two years after her accident, however, Saiz filed a lawsuit against the Companies in Uvalde County, Texas. The Companies responded to the lawsuit by filing a motion to compel arbitration pursuant to the agreement the woman signed. Next, Saiz agreed to stay the case pending arbitration. About nine months later, Saiz filed an arbitration demand against the Companies. Because Saiz filed her demand after the applicable two-year statute of limitations expired, the Companies filed a motion for summary judgment. Following a hearing, an arbitrator found that the worker’s claims were time-barred. He then issued a final award granting the Companies’ motion for summary judgment.
Next, Saiz asked the trial court to vacate the arbitral award. In her motion, the worker claimed the arbitrator violated her “rights under the Texas Labor Code and the Texas and United States Constitutions” when he found that her arbitration demand was time-barred. Despite this, Saiz failed to provide the court with a record of the arbitral proceedings.
In response to the worker’s motion, the Companies asked the Uvalde County court to confirm the arbitrator’s award. In their request, the Companies alleged that Saiz provided no evidence to support vacating the arbitrator’s award. After the trial court confirmed the arbitral award, Saiz appealed her case to Texas’ Fourth Court of Appeals in San Antonio.
First, the San Antonio court stated it was undisputed that the Federal Arbitration Act (“FAA”) applied to the parties’ dispute. The court then addressed the employee’s claim that the arbitrator’s award should be vacated under Section 10 of the FAA. According to the Court of Appeals:
“[A] party seeking to vacate an arbitration award must present any grounds for doing so to the trial court.” Black v. Shor, 443 S.W.3d 154, 163 (Tex. App.—Corpus Christi 2013, pet. denied). Any ground for vacatur not presented to the trial court is waived and cannot be argued on appeal. Black, 443 S.W.3d at 163; see also Ewing v. Act Catastrophe-Tex. L.C., 375 S.W.3d 545, 549 (Tex. App.—Dallas 2012, pet. denied) (holding party must present ground for vacating arbitration award to the trial court or error is not preserved); Kline v. O’Quinn, 874 S.W.2d 776, 790-91 (Tex. App.—Houston [14th Dist.] 1994, writ denied) (holding party seeking to vacate arbitrators’ award must establish basis for vacating in the trial court and waives any grounds not presented to the trial court) (op. on reh’g).
Saiz did not present any of the grounds listed in section 10 in the motions she filed in the trial court. Accordingly, she has waived her complaint on appeal that the arbitrator’s award violated the third and fourth grounds listed in section 10 of the FAA.
Next, the court said it was significant that Saiz failed to provide the court with a record of the arbitration hearing:
Even if Saiz had preserved her complaint for this court’s review, Saiz, as the non-prevailing party, had the “burden in the trial court of bringing forth a complete record that establishes [the] basis for vacating the award.” Statewide Remodeling, Inc. v. Williams, 244 S.W.3d 564, 558 (Tex. App.—Dallas 2008, no pet.); see also GJR Mgmt. Holdings, L.P. v. Jack Raus, Ltd., 126 S.W.3d 257, 263-64 (Tex. App.—San Antonio 2003, pet. denied); Kline, 874 S.W.2d at 190. “Many Texas courts have held without a complete record of the evidence presented to the arbitrator at the arbitration proceedings, there can be no appellate review of the arbitrator’s decision.” Statewide Remodeling, Inc., 244 S.W.3d at 568-69; see also Gumble v. Grand Homes 2000, L.P., 334 S.W.3d 1, 4 (Tex. App.—Dallas 2007, no pet.); Grand Homes 96, L.P. v. Loudermilk, 208 S.W.3d 696, 706 (Tex. App.—Fort Worth 2006, pet. denied). Accordingly, even if Saiz had preserved her complaint for this court’s review, we question whether we could review her issues in the absence of a complete record of the arbitration proceedings.
According to the appeals court, Texas law favors arbitration and judicial review of an arbitrator’s decision is extremely limited. The court added that a “mere mistake of law or fact is insufficient to set aside an arbitration award.” The appellate court then turned to the worker’s claims that (1) the arbitral agreement was void and unenforceable under the Texas Labor Code because it constituted a pre-injury waiver, and (2) the agreement was illusory.
The San Antonio court stated:
The issue of whether the arbitration agreement was an impermissible pre-injury waiver involves questions of contract interpretation and statutory construction, which are both questions of law. See Moayedi v. Interstate 35/Chisam Road, L.P., 438 S.W.3d 1, 7 (Tex. 2014) (noting interpretation of contract is a question of law); Texas West Oaks Hosp., LP v. Williams, 371 S.W.3d 171, 177 (Tex. 2012) (noting statutory construction is a legal question); see also In re Golden Peanut Co., LLC, 298 S.W.3d 629, 631 (Tex. 2009) (“[A]n agreement to arbitrate is a waiver of neither a cause of action nor the rights provided under section 406.033(a) [of the Texas Labor Code], but rather an agreement that those claims should be tried in a specific forum. Accordingly, section 406.033(e) does not render the arbitration agreement void.”). Similarly, whether an arbitration agreement is illusory also is a question of law. In re 24R, Inc., 324 S.W.3d 564, 566-67 (Tex. 2010). The arbitrator’s written decision establishes that both of these legal questions were addressed and resolved by the arbitrator. Even if the arbitrator mistakenly resolved those issues, a mistake of law is not a sufficient basis for vacating an arbitration award. City of Laredo, 399 S.W.3d at 195; Grand Homes 96, L.P., 208 S.W.3d at 705; see also Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662, 671-72 (2010) (noting decision may not be vacated under §10(a)(4) of the FAA because an arbitrator “committed an error —or even a serious error”); SSP Holdings Ltd. P’ship v. Lopez, 432 S.W.3d 487, 497 (Tex. App.—San Antonio 2014, pet. denied) (“‘To constitute misconduct requiring vacation of an award [under § 10(a)(3) of the FAA], an error in the arbitrator’s determination must be one that is not simply an error of law . . . .’”) (quoting Laws v. Morgan Stanley Dean Witter, 452 F.3d 398, 399 (5th Cir. 2006)). Accordingly, even if Saiz had preserved these issues for our review and had provided a complete record of the arbitration proceeding, the issues do not present grounds to support a vacatur under the FAA.
Finally, Texas’ Fourth District Court of Appeals in San Antonio affirmed the trial court’s order confirming the arbitrator’s award.