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Texas: Trial Court Properly Set Aside Arbitrator's Sanctions Orders Based on Evident Partiality

In Builders First Source-South Texas, LP v. Ortiz, the Fourteenth Court of Appeals held, in an interlocutory appeal, that the trial court had jurisdiction to set aside an arbitrator's sanctions orders on the basis of evident partiality. The trial court also had jurisdiction to require arbitration before a new arbitrator, but the parties had to go through the AAA process for the appointment. The trial court erred to stay the proceedings pending completion of arbitration. According to the court's opinion, Ortiz allegedly suffered workplace injuries. An arbitration provision was contained in his employment agreement with Builders First. The AAA appointed an arbitrator who submitted a sworn disclosure to the effect that none of the parties, lawfirms, or party representatives appeared before her in past arbitrations. The disclosure confirmed that the arbitrator checked for conflicts. About a year later, the parties conducted a telephone hearing with the arbitrator. The arbitrator and counsel for Bu ...

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Texas: Mediated Settlement Agreement is a Contract and Should be Interpreted under Contract Law

In Loya v. Loya, the Texas Supreme Court faced the question of whether a mediated settlement agreement partitioned an employee bonus that was received nine months after the divorce decree was entered. According to the court's opinion, the divorce litigation lasted over two years. The trial court ordered mediation, resulting in an MSA signed by the parties and their attorneys.The MSA stated that it served as a partition of all property and any disputes relating to drafting or interpretation would be arbitrated. The trial court rendered an oral judgment on the MSA the day after it was signed. The parties then drafted a decree and agreement incident to divorce, where disagreements arose. Those disputes were arbitrated, with the arbitrator ruling that the MSA language on "all future income and earnings" of the husband would be placed in the AID. After arbitration, the wife moved to set aside the MSA, arguing that there was no mutual assent because the parties did not reach agree ...

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Texas: Parties Agreed to Arbitration Despite Allegations of a "Frankenstein" Contract

In Kreit and Kreit v. Brewer & Pritchard, PC, the Fourtheent Court of Appeals held that the trial court properly ruled that the Kreit brothers agreed to arbitration in their engagement agreement with the law firm of Brewer & Pritchard.  In dispute is whether the firm represented the brothers (who are medical doctors) in their individual capacities or Cleveland Imaging and Surgical Hospital, LLC. According to the court's opinion, the Kreit brothers contend they only intended to obtain representation on behalf of the LLC. The brother further contend irregularities with the law firm's fee agreement: that the firm "co-mingled individual pages from separate proposals to create a 'Frankenstein' contract to which the [brothers] never agreed as a whole." An arbitration was conducted in accordance with the rulese for expedited, documents-only proceeding, after the firm sought payment of $40,000.00 in fees and $1,175.00 in expenses. The brothers appeared pro s ...

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Texas: Law firm failed to provide sufficient notice of its arbitration agreement

In Alexander Dubose Jefferson & Townsend, LLP v. Vance, the United States District Court (Western District, Austin) held that a law firm did "fairly suggest to employees that the firm was implementing a mandatory, binding arbitration policy" and denied the firm's motion to compel arbitration. According to the decision, ADJT terminated Vance's employement with the firm. The firm sued Vance on causes of action including the Computer Fraud and Abuse Act, the Texas Uniform Trade Secrets Act, and the Texas Theft Liability Ace. Vance, a non-equity partner, counterclaimed for conversion, breach of contract, negligence, and violations of Title VII and the Age Discrimination in Employment Act. ADJT moved to compel all claims to arbitration. Vance responded that there was no valid arbitration agreement. The court found that ADJT emailed its employees, under the subject line "Firm Policies" that it was "organizing, updating, and supplementing the firm's employeee and p ...

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Sitting with, or Running from, Conflict

Our friends at the State Bar's Collaborative Law Section invites members of the ADR Section to their program at the SBOT Annual meeting in June. 

On Friday, June 23, from 9:00 until 11:00, the Collaborative Law Section is hosting "Sitting With, or Running From, Conflict".  The speaker is renowned collaborative MHP (mental health practitioner) Linda Solomon, LPC, LCDC, LMFT, of Dallas.

Sitting With, or Running From, Conflict
 
Conflict creates special challenges to resolving disputes in the legal process.  Conflict can arise in relationships with clients, other lawyers and/or third parties.  All of these can work against an efficient and effective resolution to the issues.   Many people are uncomfortable being exposed  to conflict or do not know how to deal successfully with it.  Understanding the conflicts and how to best manage the emotional throes that result will help all parties work toward the best resolution.

Texas: Vacatur Based Upon Arbitrator’s “Fraudulent Non-Disclosure of Information”

In Builders First Source-South Texas LP v. Ortiz, the Fourteenth Court of Appeals addressed the consequences of an arbitrator’s “fraudulent non-disclosure of information.”  The Court appears to be the first appellate court in Texas to adopt the phrase “fraudulent non-disclosure” in addressing vacatur of an arbitrator’s ruling because of the following circumstances. An individual employed by a company that was a non-subscriber to Texas workers compensation laws signed an agreement to participate in the company’s injury benefit Plan.  The Plan contained a clause requiring arbitration of any dispute over benefits.  When the individual was later injured on-the-job and the parties could not resolve the issue of benefits, an arbitration ensued.  The American Arbitration Association presented to the parties an individual as a candidate to be appointed as arbitrator, and the candidate submitted a required sworn disclosure stating, among other things, ...

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U.S. DOJ's Report on ADR Success

The United States Department of Justice, Office of Legal Policy's Office of Dispute Resolution released its "Fiscal Year 2016 Annual Report."  The report shows the effects of alternative dispute resolution processes as reported by DOJ attorneys. Among the findings: DOJ attorneys estimate they avoided litigation expenses of more than $70 million; Settlements were better than the expected value of trial in 72% of settled cases; Additional benefits--such as the resolution of discovery disputes--occurred even when cases did not ultimately settle. The DOJ's statistical summary shows that DOJ attorneys and staff saved 26,388 days of trial preparation, avoided 2,733 months of litigation (the amount of time cases would have remained on a docket), and saved 2,460 months of actual trial time in 2016 because of ADR. In those cases that did not resolve through ADR, DOJ attorneys reported that ADR was still beneficial: Improved understanding of issues--44% Pr ...

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What's in a name? Law schools settle naming dispute in mediation

The Houston Chronicle reports that the University of Houston and South Texas College of Law Houston settled a trademark dispute involving STCL-H's change of name to Houston College of Law. The mediation was conducted by U.S. Magistrate Judge Dena Hanovice Palermo, and according to the Houston Chronicle, lasted two days.

Additional background on this matter is found at the Houston Business Journal (here) and at TaxProf Blog (here).

Fifth Circuit: Court-Appointed Receiver may Avoid Arbitration

In Janvey v. Alguire, et al., the United States Court of Appeals for the Fifth Circuit held that the district court correctly denied motions to compel arbitration filed by employees of an alleged Stanford Ponzi scheme as to the receiver for the entities involved in the scheme. According to the court, in an effort to unwind the alleged Ponzi scheme, a receiver was appointed for Stanford-related entities to "preserve corporate resources and recover corporate assets that had been transferred in fraudulent conveyances." The receiver sued individuals employed by the entities to recover funds transferred by the entities to the employees. The employees moved for arbitration, relying upon arbitration agreements between the entities and the former employees. The receiver argued that (1) he (more specifically, a Stanford-related bank) did not agree to arbitrate; (2) the arbitration agreements should be rejected as part of the alleged fraudulent scheme; and (3) there is a conflict between arbitratio ...

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Texas: Arbitration provision did not confer personal jurisdiction

In Guam Industrial Services, Inc. v. Dresser-Rand Co., the First District Court of Appeals consdiered an accelerated interlocutory appeal from an order denying GIS's special appearance. Dresser-Rand and GIS had a contract for repair and restoration work, with Dresser-Rand suing GIS in district court. Dresser-Rand contended that the trial court had jurisdiction because the arbitration provision in the contract operated as a forum-selection clause where GIS consented to personal jurisdiction in Houston. In response, GIS filed a special appearance, which was denied. The First Court of Appeals reversed the trial court's order and rendered judgment granting the special appearance. The arbitration provision in the contract stated that "Judgment upon the award may be entered in any court having jurisdiction...The site of such arbitration shall be either in Buffalo, New York or Houston, Texas." In its opinion, the First Court of Appeals held that "an arbitration agreement is a typ ...

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