Spears Construction Management, LLC v. Physical Therapy Dynamics, PLLC JRAD Investments, LLC And First Guaranty Bank ( 2023 )

In the
Court of Appeals
Second Appellate District of Texas
at Fort Worth
___________________________
No. 02-22-00337-CV
___________________________
SPEARS CONSTRUCTION MANAGEMENT, LLC, Appellant
V.
PHYSICAL THERAPY DYNAMICS, PLLC; JRAD INVESTMENTS, LLC; AND
FIRST GUARANTY BANK, Appellees
On Appeal from the 348th District Court
Tarrant County, Texas
Trial Court No. 348-314885-20
Before Kerr, Bassel, and Womack, JJ.
Memorandum Opinion by Justice Bassel
MEMORANDUM OPINION
I. Introduction
This is an appeal from an order granting a motion to vacate an arbitration
award and denying a motion to confirm the award. In a single issue, Appellant Spears
Construction Management, LLC argues that the trial court erred by granting the
motion to vacate filed by Appellees Physical Therapy Dynamics, PLLC and JRAD
Investments, LLC (jointly, Defendants)1 because “no complete record exists or was
presented of the arbitration.” Because Defendants failed to request that a transcript
be made of the final arbitration hearing and the continuance hearing and because the
record contains no motion for continuance, Defendants have failed to bring forth a
sufficient record to vacate the arbitration award on the three grounds that they raised
in the trial court. In the absence of a record of the challenged proceedings, the trial
court therefore erred by vacating, rather than confirming, the arbitration award.
Accordingly, we reverse the trial court’s July 29, 2022 order granting Defendants’
1
Appellee First Guaranty Bank intervened in the suit after the arbitrator issued
the final arbitration award and claimed to have a senior lien on Defendants’
property—allegedly the same property that “Spears ha[d] asked that the [trial] [c]ourt
[to] permit it to foreclose on” in satisfaction of the arbitration award. Although
Spears filed a motion to strike the petition in intervention, no order deciding that
motion appears in the appellate record; the propriety of the intervention is therefore
not before us. And so for purposes of this opinion, we refer to First Guaranty Bank
as Intervenor and note that Intervenor “writes separately only to supplement the
arguments [made by Defendants] that support this [c]ourt’s affirming the trial judge’s
decision to vacate the arbitration award at issue.”
2
motion to vacate the arbitration award and denying Spears’s motion to confirm, and
we render judgment confirming the final arbitration award issued on January 5, 2022.
II. Background
On or about August 23, 2018, Spears and Defendants entered into an AIA
Document A101-2017 Standard Form of Agreement Between Owner and Contractor
(the Contract) for the completion of the Physical Therapy Dynamics New
Professional Facility (the Project) in Crowley. Pursuant to the Contract, Spears
provided construction management and general contracting services to the Project for
Defendants. The Contract contained a dispute resolution clause that provided that
any claim subject to, but not resolved by, mediation would be submitted to binding
arbitration.
Spears filed suit in January 2020, alleging causes of action for breach of
contract, violation of the Texas Prompt Payment Act, and violation of the Texas
Construction Trust Fund Act; seeking to enforce a lien; and alternatively seeking to
recover damages provided in quantum meruit. Spears also sought to recover its
attorney’s fees. Defendants answered and also filed a counterclaim alleging various
causes of action.
Nearly fourteen months after filing suit, Spears moved to compel arbitration.
The parties agreed to remove their respective claims to arbitration and to stay and
abate the case. The trial court signed an agreed order, ordering that Spears and
3
Defendants “and all of their claims be compelled jointly to one mandatory binding
arbitration in accordance with the Federal Arbitration Act and Texas law.”2
No transcript from the arbitration appears in the appellate record; instead, the
next document in the record is a motion dated February 2022 filed by Spears asking
the trial court to confirm the arbitration award. In the motion to confirm, Spears
states that it initiated an arbitration in April 2021 and that
the final hearing was conducted on November 8, 2021[,] remotely in
Texas. At the conclusion of the final hearing and final briefing of the
parties, on January 5, 2022, the arbitrator entered a final award in favor
of Spears and denying Defendants’ counterclaims and claims for fees
and costs in their entirety . . . .
Defendants filed a motion to vacate or correct the arbitration award and a
response to Spears’s motion for entry of judgment. Defendants argued that if the
arbitration award were confirmed, Spears would obtain a double recovery of
$145,393.203 that had been previously paid. Defendants raised the following vacatur
Although the trial court did not make a finding as to whether the arbitration
2
was governed by the Federal Arbitration Act or the Texas General Arbitration Act,
the parties seem to agree that the TGAA governs. Moreover, “[b]ecause the
substantive principles applicable to the analysis in this appeal and the available
grounds to review an arbitration award are the same under both the FAA and the
TGAA, we may find guidance in court decisions arising under either act.” Howerton v.
Wood, No. 02-15-00327-CV, 2017 WL 710631, at *2 (Tex. App.—Fort Worth Feb. 23,
2017, no pet.) (mem. op.).
Defendants explained the amount as follows:
3
Spears claimed that two allegedly unpaid invoices and corresponding Pay
Applications[—]Invoice 50/Pay Application 5 for $94,221.00 dated May
13, 2019[,] and . . . Invoice 67/Pay Application 7 for $51,172.20 dated
4
grounds: the award was obtained by fraud or other undue means; the arbitrator
refused to postpone the final hearing after a showing of sufficient cause; and the
arbitrator both refused to hear material evidence and denied Defendants the
opportunity to present material evidence.
After the motion to confirm and the motion to vacate were filed, the parties
filed numerous responses and replies. Spears filed a response to Defendants’ motion
to vacate, arguing that months before the final hearing, Defendants had all evidence in
their possession to assert affirmative defenses of payment and waiver but did not do
so until four days before the final hearing4 and that Defendants never filed an actual
motion for continuance but instead requested an emergency hearing. Defendants
filed a reply brief in support of their motion to vacate and later filed a supplement to
their motion to vacate, attaching bank statements from Spears’s bank and emails
about the missing payments. Spears filed a response to Defendants’ supplement.
September 18, 2019[—]were not paid and sought prompt pay interest on
those amounts.
. . . [Defendants’] construction loan lender, Intervenor . . . paid
these invoices and corresponding Pay Applications. [References to
exhibits omitted.]
4
In April 2022, which was three months after the final arbitration award was
signed, Defendants filed their second amended answer and affirmative defenses to
add the affirmative defense of payment. Later that same month, Defendants filed
their third amended answer and affirmative defenses and attached as an exhibit a chart
showing payments to support their affirmative defense of payment.
5
Defendants then filed a second reply brief and supplement in support of their motion
to vacate the arbitration award.
Intervenor also filed a response to Spears’s motion to confirm the arbitration
award and incorporated by reference the arguments made in Defendants’ motion to
vacate or correct the arbitration award and later supplemented its response.
Intervenor filed a motion for sanctions and request for attorney’s fees to which Spears
responded. The trial court denied Intervenor’s request for sanctions and attorney’s
fees.
At the hearing on the competing motions, Defendants argued that the bank
statements produced by Spears were different than those that Defendants had
obtained from Spears’s bank and were therefore evidence of fraud. Spears argued
that with “a motion to vacate, courts are unanimous that it’s not time to relitigate
what was hashed out and brought forth . . . to the arbitrator” and that “there was no
transcript and no record in this case of the actual final hearing.” After hearing the
parties’ arguments,5 the trial court granted Defendants’ motion to vacate, denied
Spears’s motion to confirm the arbitration award, vacated the award, and ordered the
matter to be reheard before the arbitrator who had made the award or his successor
appointed as specified in the parties’ agreement to arbitrate. This appeal followed.
No evidence was admitted during the hearing, and the record from the hearing
5
is only thirty pages.
6
III. Analysis
In its sole issue, Spears argues that the trial court erred by vacating the
arbitration award when there was no record of the arbitration hearing or the
continuance hearing. Spears argues that
[w]ithout a record of the [f]inal [h]earing, [Defendants’] [v]acatur
[g]rounds are conjecture. Without a record, the trial court has no idea
what testimony was presented to the arbitrator and what he took into
consideration in rendering the [a]ward, other than what the arbitrator
himself discussed in the [a]ward – which addressed [Defendants’]
[v]acatur [g]rounds allegations. Given what is detailed in the [a]ward,
Texas [c]ourts must presume that . . . the evidence was adequate to
support the [a]ward. [Record reference omitted.]
For the reasons discussed below, we agree.
A. Our Review
This court has previously set forth the review we give to arbitration awards,
and we borrow from a prior opinion setting forth that review:
An arbitration award is conclusive on the parties as to all matters of fact
and law submitted to the arbitrator and has the effect of a judgment of a
court of last resort. See CVN Grp., Inc. v. Delgado, 95 S.W.3d 234, 238
(Tex. 2002). Accordingly, judicial review of an arbitration award is
extraordinarily narrow, and we may vacate an arbitration award only in
very unusual circumstances. See Oxford Health Plans LLC v. Sutter, [569
U.S. 564, 568,] 133 S. Ct. 2064, 2068 (2013); Rain CII Carbon, LLC v.
ConocoPhillips Co., 674 F.3d 469, 472 (5th Cir. 2012); E. Tex. Salt Water
Disposal Co. v. Werline, 307 S.W.3d 267, 271 (Tex. 2010).
To protect the strong deference accorded to arbitration awards,
we review a trial court’s ruling to vacate or confirm an arbitration award
de novo based on the entire record. See Denbury Onshore, [LLC v. Texcal
Energy S. Tex., L.P., 513 S.W.3d 511, 515 (Tex. App.—Houston [14th
Dist.] 2016, no pet.)]; Royce Homes, L.P. v. Bates, 315 S.W.3d 77, 85 (Tex.
App.—Houston [1st Dist.] 2010, no pet.). All reasonable presumptions
7
are indulged in favor of the award, and the challenging party bears the
burden to establish an allowable ground for vacatur. See Denbury Onshore,
[513 S.W.3d at 515]; Amoco D.T. Co. v. Occidental Petroleum Corp., 343
S.W.3d 837, 841 (Tex. App.—Houston [14th Dist.] 2011, pet. denied).
We must focus on the integrity of the process, not the propriety of the
result. See Ancor Holdings, LLC v. Peterson, Goldman & Villani, Inc., 294
S.W.3d 818, 826 (Tex. App.—Dallas 2009, no pet.).
Howerton, 2017 WL 710631, at *3.
Additionally, the Texas Supreme Court has stated the requirements for the
record and for demonstrating error in an arbitration award:
A court must have a sufficient[6] record of the arbitral proceedings, and
complaints must have been preserved, all as if the award were a court
judgment on appeal. For efficiency’s sake, arbitration proceedings are
often informal; procedural rules are relaxed, rules of evidence are not
followed, and no record is made. These aspects of arbitration, which are
key to reducing costs and delay in resolving disputes, must fall casualty
to the requirements for full judicial review. The parties can decide for
themselves whether the benefits are worth the additional cost and delay,
but the only review to which they can agree is the kind of review courts
conduct. If error cannot be demonstrated, an award must be presumed
correct.
Nafta Traders, 339 S.W.3d at 101–02 (footnotes omitted).
B. The Grounds for Vacatur
Allowable grounds for vacatur include the following:
(a) On application of a party, the court shall vacate an award if:
6
Throughout Spears’s brief, it argues that the party challenging an arbitration
award must bring forth a complete record. The Texas Supreme Court, however, has
stated that a sufficient record is necessary. See Nafta Traders, Inc. v. Quinn, 339 S.W.3d
84, 101 (Tex. 2011). Here, where no record was taken, the distinction does not come
into play, but we note the correct terminology and standard stated in Nafta Traders.
8
(1) the award was obtained by corruption, fraud, or other undue
means;
(2) the rights of a party were prejudiced by:
(A) evident partiality by an arbitrator appointed as a neutral
arbitrator;
(B) corruption in an arbitrator; or
(C) misconduct or [willful] misbehavior of an arbitrator;
(3) the arbitrators:
(A) exceeded their powers;
(B) refused to postpone the hearing after a showing of
sufficient cause for the postponement;
(C) refused to hear evidence material to the controversy; or
(D) conducted the hearing, contrary to Section 171.043,
171.044, 171.045, 171.046, or 171.047, in a manner that
substantially prejudiced the rights of a party; or
(4) there was no agreement to arbitrate, the issue was not
adversely determined in a proceeding under Subchapter B, and the
party did not participate in the arbitration hearing without raising
the objection.
Tex. Civ. Prac. & Rem. Code Ann. § 171.088(a) (footnote omitted). Of these
grounds, Defendants challenged the arbitration award on the grounds that the award
was obtained by fraud or other undue means, that the arbitrator refused to postpone
the final hearing after a showing of sufficient cause, and that the arbitrator refused to
hear material evidence. Because the trial court granted Defendants’ motion to vacate
9
without specifying the ground(s) on which it based its decision, we address each of
the grounds in turn.
1. Fraud or Other Undue Means
The thrust of Defendants’ motion to vacate was that Spears had obtained the
arbitration award “by fraud or undue means by withholding evidence and falsely
claiming [that] it was not paid amounts that it had been paid.” Defendants argued
that Spears, in support of its claim that Pay Apps 5 and 7 had not been paid,
“presented a misleading exhibit – Arbitration Exhibit 13 – which clearly had its
intended effect of misleading the [a]rbitrator to find that . . . Pay App 7 had not been
paid.” Defendants further claimed that “Spears may have produced altered or
incomplete bank records in support of its arguments that it was not paid.”
Defendants later filed a supplement to their motion to which various monthly
statements from Spears’s bank were attached in an attempt to show that the exhibit
that Defendants had allegedly offered during the final arbitration hearing (a half-page
bank statement covering 5/1/2019 to 5/31/2019) differed from the bank statement
(a two-page document covering that same period of time) that Defendants had
subpoenaed from Spears’s bank.
As noted above, no record was made of the arbitration hearing. Without a
record from the final hearing, we are to presume the evidence was adequate to
support the award. See Nafta Traders, 339 S.W.3d at 102; Shah v. Star Anesthesia, P.A.,
580 S.W.3d 260, 265 (Tex. App.—San Antonio 2019, no pet.) (“When there is no
10
transcript of the arbitration hearing, the appellate court will presume the evidence was
adequate to support the award.” (quoting GJR Mgmt. Holdings L.P. v. Jack Raus, Ltd.,
126 S.W.3d 257, 262–63 (Tex. App.—San Antonio 2003, pet. denied))).
Defendants do not argue that their vacatur grounds can be decided without a
record from the arbitration hearing7 but contend instead that they “submitted ample
evidence” to the trial court of an altered exhibit used at arbitration. They point to
their reply briefing, “subpoenaed complete bank records,” a business-records affidavit
for bank records, a document “showing Spears’[s] arbitration exhibit for [the] same
bank statement [that had] removed itemized entries,” and the affidavit of the attorney
who represented Defendants in the arbitration proceeding, and they quote a portion
from the record of the hearing on the motion to vacate during which the allegedly
fraudulent half-page bank statement was compared to the subpoenaed two-page bank
statement.
Defendants fail to point out, however, that no evidence was admitted or
attached to the record of the hearing on the motion to vacate. Additionally, counsel’s
statements in post-arbitration briefing and briefing in this court concerning what
occurred is not a substitute for a record of those proceedings. See Alia Realty LLC v.
Alhalwani, No. 05-21-00265-CV, 2021 WL 4316119, at *3 (Tex. App.—Dallas Sept.
7
See, e.g., Centex/Vestal v. Friendship W. Baptist Church, 314 S.W.3d 677, 685 (Tex.
App.—Dallas 2010, pet. denied) (considering pleadings and arbitration agreement in
deciding vacatur ground based on arbitrator exceeding his authority); Grand Homes 96,
L.P. v. Loudermilk, 208 S.W.3d 696, 706 (Tex. App.—Fort Worth 2006, pet. denied)
(same).
11
23, 2021, pet. denied) (mem. op.); see also Gordon v. Trucking Res. Inc., No. 05-21-00746-
CV, 2022 WL 16945913, at *6 (Tex. App.—Dallas Nov. 15, 2022, no pet.) (mem. op.)
(stating that there was no record of the arbitration proceedings except the arbitration
award and that although the motion to vacate purported to provide the background
and procedural history of the arbitration, that description did not constitute a record
of the documents and the proceedings before the arbitrator, nor was it evidence that
could be considered by the trial court or appellate court). Furthermore, Defendants
may not rely on exhibits attached to the pleadings before the trial court, or more
specifically their motion to vacate, for evidentiary purposes. See Shah, 580 S.W.3d at
265–66 (declining to consider exhibits attached to motion to vacate).
Even assuming that the half-page bank statement was the complained-of
exhibit that was admitted during the final arbitration hearing and was discussed at the
vacatur hearing, that document and the two-page bank statement list the same
amounts for “OTHER CREDITS,” which is the line item where bank wires were
posted. None of the totals were fabricated. Instead, Defendants did not understand
Spears’s bank’s method of posting wire transfers as other credits instead of as
deposits. Additionally, the half-page document appears to be an enlargement of the
portion of the May 2019 bank statement’s “CHECKING SUMMARY.” And the
enlargement makes clear that it is “PAGE: 1 of 2,” though no page 2 was attached to
the half-page document. Defendants do not contend that they objected on the
ground of optional completeness or that they requested to have Spears admit the
12
complete document, nor would we be able to confirm any such objection due to the
lack of any transcript from the arbitration hearing. Moreover, the arbitrator’s final
award reflects that the arbitrator considered Defendants’ arguments related to the
bank statements:
Were Payments Made That Were Not Properly Credited?
[Defendants] argued that $145,393.[2]0 in payments were made to
[Spears] for which [Defendants] did not receive proper credit. On this
issue, the testimony varied widely at final hearing. [Defendants] testified
to a communication with [Spears’s] former bank that indicated receipt of
a wire payment from [Defendants’] bank, although no specific payment
amount was confirmed with the bank. [Defendants] introduced
evidence [that] they allege documents transfers from [Defendants] to
[Spears’s] former bank. [Spears] argues that this contention was only
made for the first time a few weeks prior to final hearing, a time that is
long after the commencement of the dispute. [Defendants] argued that
the copies of bank records furnished by [Spears] appeared to be altered
and were suspicious. [Spears] argued that the copies of the bank records
were true and correct when compared to originals. [Defendants] argued that
certain information on [Spears’s] bank records indicated receipt of payments while
[Spears] gave alternative explanations for that information.
[Defendants] made suggestions about how to resolve these
disputed facts. Although clarity would be welcome regarding whether
alleged payments were or were not actually made and received, the
Arbitrator was not convinced that [Defendants’] suggestions would
actually resolve the issue quickly or with certainty. The Arbitrator does
not want to create a windfall for one party or the other. However, this
dispute is approaching two years old and if the Project accounting is still
uncertain at this point, that is one of the matters that the Arbitrator will
have to decide based on the information furnished by the Parties at final
hearing.
Weighing all of the communications, information[,] and actions of
the Parties, the Arbitrator concludes that the alleged payments in the
amount of $145,393.[2]0 should not be credited against the balance
13
claimed by [Spears] or awarded under the partial summary judgment.[8]
[Emphasis added.]
Based on the arbitrator’s summary of the proceedings, he had evidence from
Defendants showing the wire transfers that they had made to Spears’s bank, as well as
testimony that “varied widely.” Indeed, the sentence that we have italicized in the
quote from the final award highlights that Defendants raised the issue before the
arbitrator that they now claimed was concealed—“certain information on [Spears’s]
bank records indicated receipt of payments.” This statement suggests that
Defendants both knew of and litigated the issue with the arbitrator that is the basis
for their vacatur ground of fraud.
The arbitrator, as the factfinder, was entitled to make credibility determinations
and to decide which testimony to believe. See Ouzenne v. Haynes, No. 01-10-00112-CV,
2012 WL 1249420, at *2 (Tex. App.—Houston [1st Dist.] Apr. 12, 2012, pet. denied)
(mem. op. on reh’g) (citing Xtria L.L.C. v. Int’l Ins. Alliance Inc., 286 S.W.3d 583, 597
(Tex. App.—Texarkana 2009, pet. denied)). As the Dallas Court of Appeals explained
in a similar case,
To the extent appellees assert [that] the arbitrator struggled to follow the
accounting and was “left searching” for the truth, we cannot agree.
First, as previously stated, we do not have a record of the arbitration
hearing and must presume the evidence adequately supports the award.
Second, the arbitration award states that the arbitrator’s facts and
Spears attached as an exhibit to its motion to confirm the arbitration award its
8
motion for partial summary judgment on its breach of contract and Prompt Payment
Act claims as to liability only. The record includes an order from the arbitrator
granting the partial summary judgment.
14
conclusions were “established by the evidence to be true and necessary
to the Award” based on the parties’ offers of proof, evidence submitted,
and counsels’ arguments. The arbitrator made credibility determinations
when the parties’ positions differed. As such, despite any questions or
concerns regarding the accounting, the arbitrator ultimately considered
the evidence, made credibility determinations, and found in favor of
appellants.
Alia Realty, 2021 WL 4316119, at *4 (citation omitted).
Here, the arbitrator’s statement suggests that he considered the very issue that
Defendants now rely on to vacate the award. They bring us no record to undermine
the view that the arbitrator simply resolved the payment issue adversely to
Defendants’ contention that payment was made. Thus, it appears that Defendants are
using the motion to vacate not in reality to raise a fraud claim but in an effort to end
run their inability to challenge an adverse ruling by the arbitrator.
Nor do Defendants explain why the arbitrator erred by resolving an issue so
central to their controversy—documenting what payments were made—that was left
uncertain two years into the controversy. What payments Spears’s bank records
reflected that it had received would seem to be an obvious source of evidence on the
question. And with no sufficient record to challenge his action, Defendants fail to
explain why the arbitrator acted improperly by proceeding to resolve the dispute that
had been pending for two years when he noted the accounting of what payments had
been made remained uncertain and that it was unclear that what the Defendants
proposed would clarify the record. Again, the Defendants appear to simply want to
relitigate an issue the arbitrator considered but resolved adversely to them.
15
Moreover, to vacate an arbitration ruling because of fraud, the movant must
establish (1) fraud by clear and convincing evidence, (2) the fraud must not have been
discoverable upon the exercise of due diligence prior to or during the arbitration, and
(3) the person seeking to vacate the award must demonstrate that the fraud materially
related to an issue in the arbitration. Las Palmas Med. Ctr. v. Moore, 349 S.W.3d 57, 67
(Tex. App.—El Paso 2010, pet. denied). Here, Defendants failed to establish by clear
and convincing evidence that the alleged fraud was not discoverable prior to the final
arbitration as they raised it as a ground to postpone the final hearing and raised it
again at the final hearing. See Petrobras Am., Inc. v. Astra Oil Trading NV, No. 01-11-
00073-CV, 2012 WL 1068311, at *19 (Tex. App.—Houston [1st Dist.] Mar. 29, 2012,
no pet.) (mem. op.) (stating that “[r]egardless of the propriety of these allegations,
[appellant] made no showing that the fraud was not discoverable on the exercise of
due diligence before or during arbitration” and that “[t]o the contrary, documents
submitted by [appellee] in response to the vacatur motion show that, before the
arbitration, [appellant] was aware that the funds had been wire transferred”); Good
Times Stores, Inc. v. Macias, 355 S.W.3d 240, 245 (Tex. App.—El Paso 2011, pet. denied)
(“[Appellee] has not shown that [appellant’s] conduct was not discoverable by due
diligence during the arbitration hearing as it was an issue addressed by the parties
during the arbitration proceedings.”); Las Palmas Med. Ctr., 349 S.W.3d at 68 (holding
that appellees failed to establish by clear and convincing evidence that the alleged
fraud by nondisclosure was not discoverable prior to or during the arbitration where
16
the record showed that they had discovered the information prior to the final
arbitration hearing). And despite Defendants’ discovery of the alleged fraud prior to
the final hearing, Defendants failed to request that a transcript be made of the final
hearing. Defendants took that risk and now “must fall casualty to the requirements
for full judicial review.” See Nafta Traders, 339 S.W.3d at 101.
We must indulge all reasonable presumptions in favor of the award, and in the
absence of any record of the final arbitration hearing—much less a sufficient
record—we presume that the evidence supports the award. See id. at 102; Alia Realty,
2021 WL 4316119, at *4; Howerton, 2017 WL 710631, at *3; cf. ZTE Corp. v. Universal
Tel. Exch., Inc., No. 05-17-00781-CV, 2018 WL 6039694, at *5–6 (Tex. App.—Dallas
Nov. 19, 2018, pet. denied) (mem. op.) (“Where, as here, there is no transcription or
record of the arbitration hearing, [appellee] cannot establish the arbitration award was
procured by [undue means]” when appellee alleged that appellant had intentionally
withheld or destroyed information pertaining to the transactions involved in the
arbitration).
2. Remaining Vacatur Grounds
Defendants and Intervenor argue that we should uphold the order vacating the
arbitration award because Spears did not challenge the merits of the vacatur grounds
and therefore waived them. We disagree. Spears’s argument, which is grounded on
the lack of a record from the final arbitration hearing and the continuance hearing,
undermines all of the vacatur grounds that Defendants raised in their motion to
17
vacate, including that the arbitrator refused to postpone the final hearing after a
showing of sufficient cause and that the arbitrator refused to hear material evidence.
We discuss each of these below.
a. Refusal to Postpone the Final Hearing
In addition to fraud, Defendants argued that the arbitration award should be
vacated because the arbitrator refused to postpone the final hearing after a showing of
sufficient cause. The record, however, does not contain any motion or affidavit to
support Defendants’ request for a continuance.9 This court has previously
summarized the standard for granting a continuance as follows:
A trial court may grant a continuance only upon “sufficient cause
supported by affidavit, or by consent of the parties, or by operation of
law.” Tex. R. Civ. P. 251; see also Tex. R. Civ. P. 252. [Appellant’s]
postponement requests were not verified or supported by affidavit; thus,
we may presume that the arbitrator did not abuse his discretion by
denying his requests. See Cheng Copeland, PLLC v. Chenevert, No. 01-15-
01076-CV, 2016 WL 3222936, at *4 (Tex. App.—Houston [1st Dist.]
June 9, 2016, no pet.) (mem. op.).
9
The only documents in the record pertaining to the continuance of the
arbitration proceeding are as follows:
(1) an email dated November 4, 2021, from Defendants’ counsel to the
American Arbitration Association and to Spears’s counsel requesting an
emergency conference that same day or the next day with the arbitrator to seek
a continuance of the final hearing that was scheduled for the following week;
and
(2) a November 4, 2021 “Order On Motion For Continuance,” which states
that “[t]he Parties conducted an oral argument call on November 4, 2021, to
consider a [m]otion for [c]ontinuance” and that after considering the oral
arguments of counsel, the arbitrator denied the motion.
18
Howerton, 2017 WL 710631, at *4. Because the record before us lacks a motion for
continuance that complies with Rule 251 and any transcription of the hearing on the
request for a continuance, we may presume that the arbitrator did not abuse his
discretion by denying Defendants’ request. See Tex. R. Civ. P. 251; Howerton, 2017
WL 710631, at *4.
b. Refusal to Hear Material Evidence
As their final vacatur ground, Defendants argued that the arbitrator refused to
hear material evidence and denied Defendants the opportunity to present material
evidence. We are at a loss for how Defendants expect us to review this ground
without a record of the arbitration hearing. As the Dallas Court of Appeals stated in
ZTE Corp., “Again, with no record of the arbitration hearing proceedings before us,
we do not know what evidence [appellee] presented to the arbitrator nor can we
review the arbitrator’s conduct in connection with this complaint [that the arbitrator
refused to consider relevant and material evidence].” 2018 WL 6039694, at *6. Thus,
we must presume that the arbitration award is correct.
C. Outcome
Because none of the vacatur grounds alleged by Defendants are supported by a
record from the arbitration proceeding or the record that we have before us,10 the trial
10
Based on our holding, we need not address Defendants’ alternative argument
contending that there is a miscalculation in the award due to the alleged “double
recovery” caused by the arbitrator’s not subtracting from the award the Pay App 5
19
court was required to confirm the arbitration award. See Tex. Civ. Prac. & Rem. Code
Ann. § 171.087; Las Palmas Med. Ctr., 349 S.W.3d at 73. We therefore conclude that
the trial court erred by vacating, rather than confirming, the arbitration award.
Accordingly, we sustain Spears’s sole issue.
IV. Conclusion
Having sustained Spears’s sole issue, we reverse the trial court’s July 29, 2022
order granting Defendants’ motion to vacate the arbitration award and denying
Spears’s motion to confirm, and we render judgment confirming the final arbitration
award issued on January 5, 2022.
/s/ Dabney Bassel
Dabney Bassel
Justice
Delivered: February 9, 2023
and 7 payments totaling $145,393.20 and seeking a rendition of a corrected award or a
remand to have the trial court recalculate the damages. See Tex. R. App. P. 47.1.
20