Petition for Review Filed Over $460K Legal Malpractice Arbitration Award

Earlier this month, the Supreme Court of Texas was asked to consider whether the Beaumont Court of Appeals committed error when it refused to vacate an arbitrator’s $460,000 legal malpractice award.  In Midani and Midani, Hinkle & Cole, LLP v. Smith, No. 09-18-00009-CV (Tex. App. – Beaumont, November 1, 2018), a woman, Smith, hired a Houston law firm, Midani, Hinkle & Cole (“MHC”), to represent her in a dental malpractice case.  Smith signed a representation agreement that included a binding arbitration provision requiring any disputes between Smith and the firm to be settled via arbitration and according to Texas law.

While Smith’s dental malpractice case was pending, one of the two attorneys handling her case, Hutchins, left MHC.  A second attorney, Midani, remained at the firm.  MHC never formally withdrew from representing Smith.

Later, Smith’s dental malpractice case was dismissed due to Hutchins’ failure to appear in court.  Smith then retained new counsel and filed a legal malpractice claim against Midani and MHC in Jefferson County, Texas.  The defendants responded to Smith’s lawsuit by filing a motion to compel arbitration.  The trial court ordered the dispute to arbitration and an arbitrator issued an award of almost $460,000 in favor of Smith. The trial court confirmed the arbitrator’s award and Midani and MHC filed an appeal with the Ninth District Court of Appeals in Beaumont.

On appeal, the court dismissed Midani and MHC’s argument that the arbitration award should have been vacated since “the arbitrator incorrectly decided the case because he failed to properly apply the law.”  According to the court, such a contention did not provide sufficient grounds on which to vacate the arbitration award.  In addition, the Beaumont court overruled Midani and MHC’s claim the arbitrator exceeded his powers after determining all matters decided during the arbitration proceedings fell within the scope of the arbitral provision at issue.  Finally, the appellate court held Midani’s due process rights were not violated when the trial court confirmed the arbitration award.

Unsatisfied with the Beaumont appellate court’s decision, Midani and MHC filed a Petition for Review with the Supreme Court of Texas.  According to their petition, the Issues Presented in the case are:

1. Did the Ninth Court of Appeals err when it held that the arbitration clause found in the legal services agreement between Petitioners and Respondent did not limit the powers of the arbitrator and allow for expanded judicial review of the arbitrator’s award.

2. Did the trial court violate Petitioner Mark O. Midani’s due process rights when it entered judgment against him on an arbitration award that contained clear errors under Texas law and the arbitration provision required the arbitrator to follow Texas law.

On January 15^th, the case was forwarded to the court.  The parties’ Petition for Review is currently being considered by the Justices.

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