Corpus Christi Appeals Court Affirms Arbitration Award

The Corpus Christi Court of Appeals has affirmed an arbitration award stemming from an irrevocable family settlement agreement.

In In re Cantu, No. 13-08-00708-CV, (Tex. App. — Corpus Christi, November 18, 2010), several disputes arose between the seven children of an elderly widow regarding her care and custody and the disposition of her estate. Following a court-ordered mediation, all seven of the widow’s children entered into an irrevocable family settlement agreement. The agreement contained an arbitration provision which stated the mediator would act as an arbitrator in the event “of any dispute regarding the interpretation and implementation of” the agreement. After a dispute arose, a trial court compelled arbitration. During the arbitration, “Appellants did not submit proposals, comments, or responses to the arbitrator regarding the issues subject to arbitration and did not personally appear at the arbitration, although they were represented by counsel at the hearing.” After “the arbitrator issued an eighteen page arbitration award, including extensive factual and legal conclusions, which generally collected and divided the estate,” the trial court confirmed the arbitration award.

On appeal, appellants argued the arbitration award was invalid “because the arbitrator exceeded his powers and the award was obtained by undue means.” The Court of Appeals rejected this argument because it was previously addressed by the court in In re Cantu, (Tex. App. — Corpus Christi 2009), and “no new or additional facts, legal analysis, or argument that would change the disposition of this issue,” were presented.

Appellants next argued:

(1) the award should be vacated because the arbitrator exceeded his authority by enforcing contractual provisions that are prohibited by law; and (2) the award should be vacated because the arbitrator exceeded his authority by issuing an award that violates public policy.

In addressing appellants’ first argument, the Appeals Court cited to Hall St. Assocs., L.L.C. v. Mattel, Inc., 552 U.S. 576 (2008):

In 2008, the United States Supreme Court held that the Federal Arbitration Act’s statutory grounds for vacating an arbitration award are the exclusive means to vacate an award, thus foreclosing any contractual ground for vacatur of an arbitration award.

After the Corpus Christi court stated the applicability of common law vacatur was not determinative in the case at hand, the court addressed “appellants’ second issue, that is, whether the arbitrator exceeded his authority, without deciding whether the common law doctrines referenced therein remain applicable.”

According to the court:

Because of the breadth of the arbitration agreement, we conclude that the arbitrator was authorized to determine that the property rights at issue herein arose out of or were related to the agreement or involved a common question of law or fact.

The court went on to hold that the arbitration agreement could not be overturned on public policy grounds.

Finally, the Court of Appeals held the arbitrator did not abuse his discretion when he denied appellants’ request to continue the arbitration despite that writs of attachment had issued and appellants were under threat of arrest because:

In requesting that the arbitrator continue the hearing, appellants did not argue that their presence and testimony at the arbitration was material, they made no offering of what testimony or evidence they planned to present, and they did not show that any such evidence could not be procured by means other than their attendance at arbitration. Further, as stated by the arbitrator, appellants had the opportunity to present testimony at the arbitration by affidavits, but failed to avail themselves of that opportunity.

The Corpus Christi Court of Appeals affirmed the judgment of the trial court.

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