marci-lujan-individually-and-on-behalf-of-the-estate-of-jamie-lujan-and ( 2015 )

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO.03-13-00558-CV
Marci Lujan, Individually and on Behalf of the Estate of Jamie Lujan, deceased,
and as next friend of S. L. and S. L., minors, Appellant
v.
Texas Bell Jeb Apartments LLC; Emerald Garden Apartments; DTI Investments, Inc.;
Bell Jeb Apartments LLC d/b/a Emerald Garden Apartments;
Party d/b/a Emerald Garden Apartments, and Debra Wacasey, Appellees
FROM THE DISTRICT COURT OF BELL COUNTY, 169TH JUDICIAL DISTRICT
NO. 245,138 C, HONORABLE GORDON G. ADAMS, JUDGE PRESIDING
MEMORANDUM OPINION
This is an appeal from an order of the district court of Bell County denying a motion
to vacate an arbitration award in a wrongful-death case. We will treat the court’s order as a judgment
confirming the arbitration award, and will affirm the judgment.1
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An order denying a motion to vacate an arbitration award is, in effect, an order
confirming the award. American Postal Workers Union, AFL-CIO v. United States Postal Serv.,
No. 3:09-CV-1084-B, 2010 WL 1962676, at *4 (N.D. Tex. May 14, 2010) (citing General Elec. Co.
v. Anson Stamping Co., 426 F. Supp. 2d 579, 591(W.D. Ky. 2006) (finding that a motion to dismiss
is the “practical equivalent” of a motion to confirm and treating it as such); Brown v. Bridgeport
Rolling Mills Co., 245 F. Supp. 41, 45 (D. Conn. 1965) (finding that judgment denying motion to
vacate “was in effect a judgment confirming the award”)).
In August 2008 appellee Emerald Garden hired Jamie Lujan to manage its
Temple apartments. Upon employment, he signed a “Mutual Agreement to Arbitrate.” Among other
things, that agreement provided that arbitration was mandatory for covered claims.
On August 28, 2008, Jamie Lujan was shot several times while opening the apartment
leasing office. He died several days later. Jamie Lujan’s widow, appellant Marci Lujan (hereinafter
Lujan), did not commence arbitration of her claim against Emerald Garden pursuant to the agreement
to arbitrate. Instead, on August 27, 2010, one day before the expiration of the two-year statute
of limitations, she filed suit against Emerald Garden in district court asserting negligence,
premises liability and gross negligence.2 On the same day Lujan requested service of citation upon
Emerald Garden and obtained service in five or six days.
Emerald Garden answered the suit subject to its motion to compel arbitration. On
July 15, 2011, the district court, upon agreement of the parties, ordered that Lujan’s claims be
referred to arbitration and that the lawsuit be abated. On March 22, 2012, about eight months after
the district court ordered the matter to arbitration, Lujan initiated arbitration proceedings by filing
her demand.
Emerald Garden then moved for summary judgment in the arbitration proceeding
asserting that Lujan’s claims were barred by the two-year statute of limitations. The arbitrator
agreed and entered an award granting summary judgment. The arbitrator concluded that by waiting
eight months to commence arbitration, Lujan failed to exercise due diligence so as to toll the running
2
Other appellees are: Texas Bell Jeb Apartments LLC; Emerald Garden Apartments;
DTI Investments, Inc.; Bell Jeb Apartments LLC d/b/a Emerald Garden Apartments; Party d/b/a
Emerald Garden Apartments, and Debra Wacasey.
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of limitations. In applying the “due diligence” standard, the arbitrator relied upon the rule in cases
concerning the tolling of limitations where a lawsuit is filed before limitation has run but process is
not served until after limitation has run. In such cases, merely filing suit does not toll limitations;
to toll the statute, diligence in processing issuance and service of citation is required. Proulx
v. Wells, 235 S.W.3d 213, 215 (Tex. 2007) (citing Gant v. DeLeon, 786 S.W.2d 259, 260
(Tex. 1990)); Rigo Mfg. Co. v. Thomas, 458 S.W.2d 180, 182 (Tex. 1970).
By her first issue Lujan claims that in granting summary judgment based upon
limitations, the arbitrator exceeded the authority conferred by the arbitration agreement. This is so,
she insists, because she timely filed suit in district court and timely obtained service, thereby tolling
limitations. Since the statute was tolled, her argument continues, the arbitrator was not empowered
to conclude that her claim was barred by her failure to diligently initiate arbitration. Lujan’s issue
is without merit.
The parties’ arbitration agreement provides that “All parties are entitled to file
any motions, including dispositive motions, set forth in the Texas Rules of Procedure.” It further
provides that “All parties are entitled to allege any claim, obtain any remedy and assert any legal or
equitable defense that the party could allege, obtain, or assert in a Texas state or federal court.”
Texas substantive law has long favored arbitration. See Brazoria Cnty. v. Knutson,
176 S.W.2d 740, 743 (Tex. 1943). Judicial review of an arbitration award is exceedingly deferential,
Brabham v. A.G. Edwards & Sons, Inc., 376 F.3d 377, 380 (5th Cir. 2004), and is “extraordinarily
narrow,” Brook v. Peak Int’l, Ltd., 294 F.3d 668, 672 (5th Cir. 2002), opinion modified on reh’g
(July 9, 2002). A reviewing court examining whether an arbitrator exceeded his powers must resolve
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all doubts in favor of arbitration. Id. at 672. An arbitration award may not be vacated for errors in
interpretation or application of the law. Ancor Holdings, LLC v. Peterson, Goldman & Villani, Inc.,
294 S.W.3d 818, 830 (Tex. App.—Dallas 2009, no pet.). A complaint that the arbitrator decided
the issue incorrectly or made a mistake of law is not a complaint that the arbitrator exceeded his
powers. Id.
We are satisfied that the arbitration agreement authorized the arbitrator to entertain
the summary judgment and to consider the limitation defense. The arbitration agreement, quoted
above, plainly confers upon the parties the right to file dispositive motions and to assert any claim,
obtain any remedy, and to assert any legal or equitable defense that they could allege, obtain or assert
in a Texas court. The statute of limitation is such a defense and a summary-judgment motion is
one seeking such a remedy. Although Lujan’s argument is stated in terms of whether the arbitrator
exceeded his authority or powers, her complaint is no more than that he erred in entertaining the
motion for summary judgment and in concluding that she had a duty to diligently initiate arbitration.
A complaint that the arbitrator made a mistake of law is not one that the arbitrator exceeded his
power or authority. Id.
By her final argument, Lujan claims that section 5 of the Federal Arbitration Act
supports her claim that the arbitrator did not have the power to determine the summary judgment
based on limitations.
Section 5 provides:
If in the agreement provision be made for a method of naming or appointing an
arbitrator or arbitrators or an umpire, such method shall be followed; but if no
method be provided therein, or if a method be provided and any party thereto shall
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fail to avail himself of such method, or if for any other reason there shall be a lapse
in the naming of an arbitrator or arbitrators or umpire, or in filling a vacancy, then
upon the application of either party to the controversy the court shall designate and
appoint an arbitrator or arbitrators or umpire, as the case may require, who shall act
under the said agreement with the same force and effect as if he or they had been
specifically named therein; and unless otherwise provided in the agreement the
arbitration shall be by a single arbitrator.
9 U.S.C. § 5.
Lujan did not make the section 5 argument during the arbitration. See Tex. R. App.
P. 33.1(a)(1); Nafta Traders, Inc. v. Quinn, 339 S.W.3d 84, 101 (Tex. 2011) (party challenging
arbitration award must have properly preserved its complaint just as if award were a trial court’s
judgment on appeal). In any event, section 5 is irrelevant here. Section 5 is concerned with the
appointment or selection of an arbitrator. See In re Service Corp., Int’l, 355 S.W.3d 655, 658–59
(Tex. 2011); In re Louisiana Pac. Corp., 972 S.W.2d 63, 64 (Tex. 1998). In this case, there was no
issue with arbitrator selection; rather, the problem had to do with Lujan’s failure to timely commence
the arbitration process.
The judgment is affirmed.
__________________________________________
Bob E. Shannon, Justice
Before Justices Pemberton, Bourland, and Shannon*
Affirmed
Filed: June 30, 2015
* Before Bob E. Shannon, Chief Justice (retired), Third Court of Appeals, sitting by assignment.
See Tex. Gov’t Code § 74.003(b).
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