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ADR Section Roadshow at St. Mary's Law School

The Alternative Dispute Resolution Section is pleased to announce the State Bar of Texas ADR Section Roadshow: Mediation, Arbitration, Ethics, and More at St. Mary's University!

St. Mary's Law School - Room LC105

September 19, 2016

Noon-2:15 p.m.

Lunch will be provided. Sponsored by the ADR Section of the State Bar of Texas along with the San Antonio Bar Association's Alternative Dispute Resolution Section. Presented by Co-Chairs: Lionel Schooler and Jerry King, Chair of the San Antonio ADR section. Law students are welcome! Attendees will receive State Bar CLE ethics credit.

Please confirm your attendance by RSVP to Linda McLain. The sooner you RSVP, the better! This will allow us to get an accurate headcount for lunch.


We hope to see you there!

Lionel Schooler, Chair
Alternative Dispute Resolution Section
State Bar of Texas

Texas: Arbitrator should have decided gateway issues, not trial court judge

In T.W. Odom Management Services, Ltd. v. Williford, the Ninth District Court of Appeals reversed the trial court's order denying arbitration and remanded the matter with instruction to enter an order granting the motion to compel arbitration. At issue is whether the trial court or the arbitrator had the power to determine gateway issues, such as the interpretation, applicability, or enforceability of the agreement. Willford worked for Odom, becoming a participant in a workplace injury benefit plan that provided non-subscriber compensation benefits to employees injured on the job. Williford was injured and collected non-subscriber compensation benefits. Williford also filed a negligence suit for the injuries he allegedly sustained on the job. Williford's employer moved to compel arbitration, pursuant to an agreement as a condition of Williford's employment. Williford objected to the motion to arbitrate because the claims were excluded non-subscriber compensation benefits and not tort claims (that were includ ...

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Texas: Arbitration agreement wasn't illusory

In NACE International v. Johnson, the Court of Appeals for the First District in Texas reversed the trial court's order denying a motion to compel arbitration, remanding the case for entry of an order compelling arbitration. This case involves a construction dispute where one of the parties allegedly failed to pay the outstanding balance for work performed.  NACE moved to compel arbitration and in response, the argument was made that the arbitration agreement was illusory and, therefore, unenforceable. The arbitration agreement provided that any claims subject to mediation and not resolved by that process is subject to binding arbitration and "if a satisfactory settlement is not reached in the arbitration process, [NACE] retains the right to pursue litigation in a court to resolve any such issue."  The Court of Appeals held that "arbitration agreements that bind parties to only arbitrate certain claims to the exclusion of others are not necessarily illusory" and that "one-sided arbitration agreeme ...

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Texas: Arbitrator did not exceed authority by awarding damages not encompassed by arbitration agreement

In Patel v. Moin, the Fourteenth Court of Appeals affirmed the trial court's judgment confirming an arbitration award. The arbitrator did not exceed her authority by awarding damages that were not encompassed by the arbitration agreement. This arbitration started with an agreement that was part of the operating agreement for a health center. After a lawsuit was underway, the parties signed a one-page "Agreement for Binding Arbitration" that included other parties.  The arbitration commenced and the arbitrator did not award damages for lost profits (because those damages were "too speculative") but did award damages for breach of contract, including an award of attorney's fees. The arbitrator also awarded arbitration costs and attorney's fees to a party finding that certain claims were groundless and brought in bad faith. The arbitration agreement encompassed all claims and counterclaims then pending before the trial court. When the arbitrator awarded breach of contract damages, the movants for va ...

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Texas: Arbitrator did not exceed scope and "violation of public policy" is not a grounds for vacatur

In Infinity Capital II, LLC v. Strasburger & Price, LLP, the First District Court of Appeals held that the trial court properly confirmed an arbitration award, in spite of a motion to vacate that argued the underlying settlement agreement was not valid, the arbitrator exceeded his powers, and the final award violated public policy. The parties had agreed to a transfer of real properties to Strasburger. Strasburger alleged that the transfer did not take place and the properties were fraudulently transferred to another entity. The earlier settlement agreement contained an arbitration provision and named the arbitrator. The Court of Appeals affirmed the arbitration award, finding that (1) an attack on the entire settlement agreement was not a sufficiently specific objection on the arbitration agreement; (2) the arbitrator did not exceed his powers as all disputes were to be resolved by him; and (3) "violation of public policy" is not an authorized ground for vacatur under the Texas Civil Practice and Remed ...

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Texas: Filing criminal complaint did not substantially invoke the judical process causing a waiver of an arbitration agreement

In Cash Biz, LP v. Henry, the San Antonio Court of Appeals held that a party who filed a criminal complaint against another did not substantially invoke the judicial process, otherwise acting as a waiver of an agreement to arbitrate. In this case, a payday lender entered into a credit service agreement that contained a "waiver of jury trial and arbitration provision" with its borrowers. When the borrowers' checks were declined for insufficient funds, Cash Biz contacted the local district attorney's office for the issuance of "bad checks and check fraud." Criminal charges were filed against the borrowers and those charges were eventually dismissed. Several of the borrowers were arrested and detained prior to the dismissal of the criminal charges.  The borrowers filed a class action suit alleging violations of the Texas Finance Code and the DTPA, amongst others. Cash Biz moved to compel arbitration under the loan contracts, which was denied by the trial court. In part, the trial court concluded ...

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Texas: Arbitrator's Receipt of Ex Parte Evidence does not Necessarily Rise to the Level of Misconduct

In Wright v. Menta, the Fifth District Court of Appeals considered whether the trial court erred by confirming an arbitration award based upon these points of error: (1) arbitrator misconduct by reviewing evidence submitted ex parte and in camera, (2) the arbitration award being unenforceable for vagueness, (3) the award of attorney's fees was outside the arbitrator's jurisdiction, and (4) the trial court unconstitutionally delegated its duty to the arbitrator. The Court of Appeals affirmed the trial court's confirmation of the arbitration award. The Court of Appeals held that the arbitrator--by reviewing in camera records relating to one side's attorney's fees--did not rise to the level of misconduct under Section 171.088 of the Texas Civil Practice and Remedies Code. Here, even if there was misconduct, it did not deprive the other party of a fair hearing because notice of the submission was made, the party objected to the arbitrator's consideration of the in camera, ex parte records, and the arbitrator ove ...

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Texas: Constables are police officers with standing to assert collective bargaining rights, arbitration award upheld

In Jefferson County Constables Association v. Jefferson County, Texas, the Corpus Christi-Edinburg Court of Appeals held that deputy constables are police officers within the meaning of the Fire and Police Employee Relations Act with standing to assert a violation of their collective bargaining rights. While Jefferson County sought to vacate an arbitration award in favor of the Jefferson County Constables Association relating to the collective bargaining agreement, the Court of Appeals held that the arbitrator did not exceed his jurisdiction, had power to issue an award, and the award did not violate the Local Government Code. The issue at arbitration was whether the county, when eliminating several deputy constable positions, violated the collective bargaining agreement. The arbitrator determined the county did violate the CBA and issued an award reinstating certain deputy constables based upon seniority. The Court of Appeals held that the arbitrator's award did not usurp the county's statutory autho ...

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Texas: TAA provides exclusive grounds for vacatur; extra-statutory grounds are not allowed

In Hoskins v. Colonel Clifton Hoskins and Hoskins, Inc., the Texas Supreme Court resolved a split of authority on the question of whether a party seeking to vacate an arbitration award under the Texas General Arbitration Act may invoke extra-statutory, common-law vacatur grounds.  According to the Court's opinion, a bankruptcy court ordered the parties to mediation, which was unsuccessful, and in accordance with a prior settlement agreement approved by the bankruptcy court, that court then appointed an arbitrator. The arbitrator issued an award and one of the parties filed a motion to vacate on several grounds, including that the "arbitrator demonstrated a manifest disregard of the law by ignoring the bankruptcy court's injunction."  The Texas Supreme Court held that in the absence of a restriction of the arbitrator's authority in the arbitration agreement, or the specific vacatur grounds set out in the TAA, a court "shall confirm the award." Thanks to Ronnie Hornberger for bringing this decision ...

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CFPB Seeks Comments on Proposed Rules Prohibiting Mandatory Arbitration in Consumer Financial Matters

The Consumer Financial Protection Bureau announced that it is seeking comments on proposed rules to prohibit mandatory arbitration clauses in many consumer financial products.

The proposed rules are here.

The CFPB's 2015 study on arbitration is here.

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