Tom Wright Construction, LLC D/B/A Built Wright Construction v. Bolton Steel Erectors ( 2022 )

Affirmed and Memorandum Opinion filed June 23, 2022.
In The
Fourteenth Court of Appeals
NO. 14-20-00649-CV
TOM WRIGHT CONSTRUCTION, LLC D/B/A BUILT WRIGHT
CONSTRUCTION, Appellant
V.
BOLTON STEEL ERECTORS, Appellee
On Appeal from the 506th Judicial District Court
Waller County, Texas
Trial Court Cause No. 17-02-24157
MEMORANDUM OPINION
Appellant Tom Wright Construction, LLC d/b/a Built Wright Construction
(“BWC”) appeals a judgment entered in favor of appellee Bolton Steel Erectors
(“Bolton Steel”). By two issues, BWC argues the trial court erred in entering
judgment in favor of Bolton Steel because (1) the arbitrator’s award was untimely
and not briefly reasoned, and (2) the parties’ agreement did not authorize the
recovery of attorney’s fees. We affirm.
I. BACKGROUND
In 2016, Texas Prairie View A&M University contracted Skanska USA
Building, Inc. (“Skanska”) to perform work at the University’s football stadium.
Skanska hired BWC as its subcontractor, and BWC subcontracted all of its work
and obligations to Bolton Steel by executing a written contract on June 17, 2015.
The subcontract between BWC and Bolton Steel contained an arbitration
agreement that, in the event of a dispute, gave BWC the sole right to invoke
binding arbitration and provided that the issues arbitrated “shall be decided by
arbitration in accordance with the Construction Industry Arbitration Rules of the
American Arbitration Association currently in effect, unless the parties mutually
agree otherwise.”
In February 2017, Bolton Steel filed suit against BWC, among others,
asserting claims for breach of contract, to collect on BWC’s payment bonds, and
recovery of attorney’s fees under section 38.001 of the Civil Practice and
Remedies Code and Texas Government Code Chapter 2253. See Tex. Civ. Prac. &
Rem. Code Ann. § 38.001; Tex. Gov’t Code Ann. § 2253.073. BWC filed an
answer, moved to compel arbitration, and requested attorney’s fees pursuant to
Texas Government Code § 2253.075 and chapter 38 of the Civil Practice and
Remedies Code. See Tex. Civ. Prac. & Rem. Code Ann. § 38.001; Tex. Gov’t
Code Ann. § 2253.075.1 Pursuant to the parties’ agreement, the trial court entered
an order compelling arbitration.
On July 1, 2019, the arbitrator entered a scheduling order, which provided in
relevant part:
1
Section 2253.075 of the Government Code provides “A third party to whom a claim is
assigned is in the same position as a payment bond beneficiary if notice is given as required by
this chapter.” Tex. Gov’t Code Ann. § 2253.075.
2
Award: Within thirty (30) days following the final hearing and post-
hearing briefing, if any, the Arbitrator shall prepare a briefly reasoned
award.
Except as indicated otherwise above, these deadlines and dates are
final unless the parties specifically agree otherwise, or unless the
Arbitrator modifies them in his discretion after good cause is shown.
The final arbitration hearing before the arbitrator occurred between November 18–
22, 2019, and post-hearing briefing was complete on February 13, 2020. On June
16, 2020, the arbitrator issued his final award. The arbitrator granted Bolton Steel’s
breach-of-contract claim against BWC and determined that the adjusted contract
amount was $937,137.00; that BWC was entitled to $386,392.65 in back charges;
and that the remainder that BWC owed Bolton Steel under the contract was
$359,791.35. The arbitrator also granted Bolton Steel $216,621.12 in attorney’s
fees, with an additional $10,000 to be awarded in the event of any challenge to the
award. Finally, the arbitrator denied BWC’s claims for breach of contract, fraud,
tortious interference with a contract, and attorney’s fees.
On June 26, 2020, BWC filed a motion asserting that the award was
insufficiently reasoned, requesting from the arbitrator further reasoning for the
award. On June 29, the arbitrator requested input from the parties, and on July 22,
the arbitrator informed the parties that he would “revisit the Award and provide
additional reasoning.” On July 31, BWC filed an objection to the length of time the
arbitrator was spending on the award, asserting that the arbitrator failed to timely
deliver a briefly reasoned award. BWC avers the delay caused BWC to incur
additional costs associated with payment of an additional bond premium and
litigation “on two fronts.” On August 3, 2022, the arbitrator issued an amended
award and a second amended final arbitration award, which provided for the same
relief but included additional reasoning for the award.
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Bolton Steel then filed a motion with the trial court to confirm the second
amended arbitration award; BWC filed a motion to vacate the award. On August
19, 2020, the trial court confirmed the arbitrator’s second amended final arbitration
award, entered a judgment in favor of Bolton Steel, and denied BWC’s request for
vacatur. This appeal followed.
II. STANDARD OF REVIEW
We review de novo the trial court’s decision to confirm or vacate an
arbitration award. D.R. Horton-Tex., Ltd v. Bernhard, 423 S.W.3d 532, 534–35
(Tex. App.—Houston [14th Dist.] 2014, pet. denied). Texas law clearly favors
arbitration, and as a result, judicial review is extraordinarily narrow. Broemer v.
Hous. Lawyer Referral Serv., 407 S.W.3d 477, 480 (Tex. App.—Houston [14th
Dist.] 2013, no pet.).
III. TIMELINESS & REASONING OF AWARD
In its first issue, BWC argues the trial court erred by refusing to vacate the
arbitration award. BWC asserts that the arbitrator’s award failed to provide the
reasoning required and was untimely.
A. APPLICABLE LAW
The parties agree that the Texas Arbitration Act applies. The TAA provides
that an arbitrator shall make the award (1) within the time established by the
agreement to arbitrate; or (2) if a time is not established by the agreement, then
within the time ordered by the court on application of a party. Tex. Civ. Prac. &
Rem. Code Ann. § 171.053(c). The TAA further provides that “[a] party waives
the objection that an award was not made within the time required unless the party
notifies the arbitrators of the objection before the delivery of the award to that
party.” Id. § 171.053(e).
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An arbitrator may modify or correct an award based on the grounds listed in
§ 171.091 or to clarify an award.2 Id. § 171.054(a); see id. § 171.091(a). As
relevant to this case, a modification may be made only on application of a party.
See id. §§ 171.054(b)(1), 171.091(b). A party seeking to have the arbitrator modify
the award under § 171.091 must make such a request no later than twenty days
after the date the award is delivered. Id. § 171.054(c); see Teleometrics Int’l v.
Hall, 922 S.W.2d 189, 192 (Tex. App.—Houston [1st Dist.] 1995, writ denied).
1. Timeliness
Here, BWC objected to the timeliness of the award after the arbitrator issued
its award but before the arbitrator issued its amended awards; we therefore
conclude that BWC waived its complaint regarding the timeliness of the
arbitrator’s original award. See Tex. Civ. Prac. & Rem. Code Ann. § 171.053(e).3
As to the amended awards, BWC argues that the arbitrator “cannot modify
an award after a certain time.” BWC argues the arbitrator only has twenty days to
modify or clarify an award and that, “beyond this short window to correct minor
defects, the arbitrator is without authority to amend the award.” In support, BWC
points us to § 171.054 of the Civil Practice and Remedies Code and to Rule 51 of
the AAA Construction Rules. However, these authorities do not support BWC’s
arguments.
Section 171.054, titled Modification or Correction to Award, provides that
“[a] party may make an application under this section not later than the 20th day
after the date the award is delivered to the applicant.” Id. § 171.054(c). Contrary to
2
BWC does not rely on § 171.091 on appeal, nor did it rely on this statute at the trial
court.
“A party waives the objection that an award was not made within the time required
3
unless the party notifies the arbitrators of the objection before the delivery of the award to that
party.” Tex. Civ. Prac. & Rem. Code Ann. § 171.053(e).
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BWC’s argument, § 171.054 provides a deadline for an application to modify an
award by a party, not a deadline by which the arbitrator must deliver his amended
award. See id. There is no subsection in § 171.054 that imposes such a deadline.
See id.
The same is true of the AAA Construction Rules. Rule 51, titled
“Modification of Award,” provides a similar deadline for an application for
modification. See AM. ARBITRATION ASS’N, CONSTR. INDUS. ARBITRATION RULES
& MEDIATION R. 51(a) (eff. July 1, 2015) https://www.adr.org/sites/default/files/
Construction%20Rules.pdf (“Within 20 calendar days after the transmittal of an
award, the arbitrator on his or her initiative, or any party, upon notice to the other
parties, may request that the arbitrator correct clerical, typographical, technical or
computational errors in the award.”). Accordingly, BWC’s reliance on these
authorities is misplaced and we reject the argument that the arbitrator had no power
to enter the amended award after twenty days.
Additionally, we note that BWC’s request to provide an amended award
with additional reasoning did not request that the arbitrator provide the revision
within a specific timeframe, nor did BWC argue that the parties agreed to impose a
deadline for the arbitrator’s amended award. Finally, the arbitrator entered a ruling
rejecting BWC’s objection to the timeliness of the amended award, stating that the
arbitrator could modify the deadlines at his discretion, and noting in the second
amended award that the arbitrator modified the deadline for the final award “[a]s a
result of the COVID-19 pandemic, complexity of the issues, large volume of
exhibits and extensive briefing . . . .” BWC does not challenge this ruling on appeal
apart from the arguments rejected above.
2. Did The Arbitrator Issue A “Briefly Reasoned Award”?
BWC argues next that the arbitration award is not “briefly reasoned,” as
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required by the parties’ agreement in this case. BWC’s argument, however, is
based on BWC’s premise that the arbitrator was without power to enter the second
amended award, an argument we have rejected. We also note that the arbitrator’s
second amended award, which is the award on which the trial court entered
judgment, provided sufficient reasoning. We therefore reject BWC’s argument that
the arbitration award should be vacated because it was insufficiently reasoned.
We overrule BWC’s first issue.
IV. ATTORNEY’S FEES
In its second issue, BWC avers that the trial court erred in enforcing the
arbitrator’s award granting attorney’s fees to Bolton Steel because neither the
arbitration agreement nor the law provides the arbitrator the authority to award
attorney’s fees to Bolton.
A. APPLICABLE LAW
The TAA provides that a court must vacate an award if, among other
grounds, the arbitrator exceeded his powers. Tex. Civ. Prac. & Rem. Code Ann.
§ 171.088(a)(3)(A). “In arbitration conducted by agreement of the parties, the rule
is well established that an arbitrator derives his power from the parties’ agreement
to submit to arbitration.” Nafta Traders, Inc. v. Quinn, 339 S.W.3d 84, 89–91 (Tex.
2011). As with any contract, the parties’ intentions control, and courts and
arbitrators must give effect to the contractual rights and expectations of the parties.
Id. Therefore, an arbitrator exceeds his authority when he disregards the contract
and dispenses his own idea of justice. D.R. Horton-Tex., 423 S.W.3d at 535.
However, an arbitrator does not exceed his authority simply because he may
have misinterpreted the contract or misapplied the law. Id. An arbitrator does not
exceed his authority by committing a mistake of law, but instead by deciding a
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matter not properly before him. Id.; see also City of Houston v. Hous. Prof’l Fire
Fighters’ Ass’n, Local 341, No. 14-18-00418-CV, 2020 WL 1528078, at *4 (Tex.
App.—Houston [14th Dist.] Mar. 31, 2020, pet. denied) (mem. op.) (noting that the
“contention that the arbitrator got the law wrong” “is beyond the scope of our
review”); LeFoumba v. Legend Classic Homes, Ltd., No. 14-08-00243-CV, 2009
WL 3109875, at *3 (Tex. App.—Houston [14th Dist.] Sept. 17, 2009, no pet.)
(mem. op.) (“Thus, the appropriate inquiry is not whether the arbitrator decided an
issue correctly, but instead whether she had the authority to decide the issue at
all.”).
An arbitrator shall award attorney’s fees as additional sums required to be
paid under the award, only if the fees are provided for in the agreement to arbitrate
or by law for a recovery in a civil action in the district court on a cause of action on
which any part of the award is based. Tex. Civ. Prac. & Rem. Code Ann.
§ 171.048(c).
B. ANALYSIS
Here, the agreement provides that all disputes between BWC and Bolton
Steel are to be submitted to arbitration if BWC invokes arbitration. Bolton Steel’s
petition and BWC’s answer both sought recovery of attorney’s fees. Furthermore,
the parties’ agreement states that the Construction Industry Arbitration Rules of the
American Arbitration Association govern the claims between BWC and Bolton
Steel. Rule 48(d)(ii) provides that an arbitrator may include “an award of
attorneys’ fees if all parties have requested such an award . . . .” See AM.
ARBITRATION ASS’N, CONSTR. INDUS. ARBITRATION RULES & MEDIATION, R.
48(d)(ii) (eff. July 1, 2015) https://www.adr.org/sites/default/files/Construction
%20Rules.pdf.
The record shows that both BWC and Bolton Steel requested an award of
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attorney’s fees from the arbitrator. Accordingly, the arbitrator did not exceed his
powers when he awarded attorney’s fees to Bolton Steel because the parties’
agreement provided that the Construction Industry Arbitration Rules of the
American Arbitration Association applied. See Nafta Traders, Inc., 339 S.W.3d at
89–91; D.R. Horton-Tex., 423 S.W.3d at 535; AM. ARBITRATION ASS’N, CONSTR.
INDUS. ARBITRATION RULES & MEDIATION, R. 48(d)(ii) (eff. July 1, 2015)
https://www.adr.org/sites/default/files/Construction%20Rules.pdf.
BWC argues in its reply brief that Rule 48(d)(ii) is inapplicable because it
conflicts with the express terms of the parties’ agreement. See Americo Life, Inc. v.
Myer, 440 S.W.3d 18, 24 (Tex. 2014) (“When an arbitration agreement
incorporates by reference outside rules, ‘the specific provisions in the arbitration
agreement take precedence and the arbitration rules are incorporated only to the
extent that they do not conflict with the express provisions of the arbitration
agreement.”). BWC argues that the only fee-shifting provision in the contract
between BWC and Bolton Steel which allows for the recovery of attorney fees
provides that, in the event of Bolton Steel’s default or termination, BWC may
recover fees.
However, BWC did not challenge Rule 48(d)(ii) as a basis for the
arbitrator’s award of attorney’s fees in the trial court, nor did it argue in its brief
that Rule 48(d)(ii) conflicted with the express terms of the parties’ agreement.
Consequently, this argument is waived. See Tex. R. App. P. 33.1(a); see, e.g.,
QTAT BPO Solutions, Inc. v. Lee & Murphy Law Firm, G.P., 524 S.W.3d 770, 779
(Tex. App.—Houston [14th Dist.] 2017, pet. denied) (concluding that argument
was waived because it was not raised in the trial court, but raised for the first time
in a reply brief on appeal); Tex. Ear Nose & Throat Consultants, PLLC v. Jones,
470 S.W.3d 67, 84 n.15 (Tex. App.—Houston [14th Dist.] 2015, no pet.) (same).
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Nevertheless, we observe that the provision BWC references does not state that
Bolton Steel is precluded from recovering attorney’s fees, nor have we found any
other provision in the contract that provides such a limitation. And as previously
noted, the arbitration agreement expressly provides that the Construction Industry
Arbitration Rules are to apply in the arbitration proceedings, which permits the
arbitrator to award attorney’s fees if requested by both parties.4
Finally, “[b]y submitting issues for an arbitrator’s consideration, parties may
agree to arbitrate disputes that they were not otherwise contractually compelled to
arbitrate.” Miller v. Walker, 582 S.W.3d 300, 305 (Tex. App.—Fort Worth 2018,
no pet.) (citing OMG, L.P. v. Heritage Auctions, Inc., 612 Fed. App’x 207, 210
(5th Cir. 2015) (per curiam)); see Kosty v. S. Shore Harbour Cmty. Ass’n, Inc., 226
S.W.3d 459, 465 (Tex. App.—Houston [1st Dist.] 2006, pet. denied). As noted, the
agreement provides that all disputes between BWC and Bolton Steel are to be
submitted to arbitration if BWC invokes arbitration. Because both BWC and
Bolton Steel submitted the issue of attorney’s fees to the arbitrator, and because the
arbitration agreement did not expressly prohibit the arbitrator from awarding fees,
we cannot conclude that the trial court erred when it entered judgment for
attorney’s fees in favor of Bolton Steel. See Forest Oil Corp. v. El Rucio Land &
Cattle Co., 518 S.W.3d 422, 431 (Tex. 2017) (“In determining whether an
arbitrator has exceeded his authority, the proper inquiry is not whether the
4
We note that “[p]arties are free to contract for a fee-recovery standard either looser or
stricter than Chapter 38’s.” Peterson Grp., Inc v. PLTQ Lotus Grp., L.P., 417 S.W.3d 46, 60
(Tex. App.—Houston [1st Dist.] 2013, pet. denied) (citing Intercontinental Grp. P’ship v. KB
Home Lone Star, L.P., 295 S.W.3d 650, 653 (Tex. 2009)). “When parties include such provision
in a contract, the language of the contract controls, rather than the language of the statute.” Id.“In light of this difference in application of statutory and contractual attorney’s fees, and because
a court’s judgment must conform with the pleadings, see Tex. R. Civ. P. 301, a party who pleads
for attorney’s fees only under Chapter 38 waives its claims for attorney’s fees under a
contractual provision.” Id. BWC does not argue that the trial court’s judgment does not conform
with Bolton Steel’s pleading.
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arbitrator decided the issue correctly, but rather, whether he had the authority to
decide the issue at all.”); New Med. Horizons II, Ltd. v. Jacobson, 317 S.W.3d 421,
429 (Tex. App.—Houston [1st Dist.] 2010, no pet.) (“An arbitrator’s jurisdiction is
defined by the contract containing the arbitration clause and by the issues actually
submitted to arbitration.”).
We overrule BWC’s second issue.
V. CONCLUSION
We affirm the trial court’s judgment.
/s/ Margaret “Meg” Poissant
Justice
Panel consists of Justices Jewell, Bourliot, and Poissant.
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