Dianna Jones v. Currie A. McRee, IV and Ed Baranowski, Independent Co-Executors of the Estate of Harold John Brelsford , 2012 Tex. App. LEXIS 7692 ( 2012 )


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  • Opinion issued August 30, 2012.
    In The
    Court of Appeals
    For The
    First District of Texas
    ————————————
    NO. 01-11-00265-CV
    NO. 01-11-00266-CV
    ———————————
    DIANNA JONES, Appellant
    V.
    HAROLD PETSCH BRELSFORD, SUSANNA MELISSA BRELSFORD,
    JOHN PETSCH BRELSFORD, GEORGANNA BRELSFORD, EDYTH
    BRELSFORD, JEFFERSON BRELSFORD, AND JOSEPH BRELSFORD,
    Appellees
    On Appeal from the Probate Court No. Two
    Harris County, Texas
    Trial Court Cause Nos. 380,313-401 and 380,313-402
    OPINION ON REHEARING
    In this dispute with her siblings—Harold Brelsford, Susanna Brelsford, and
    John Brelsford—over the division of their deceased parents’ estates, Dianna Jones
    brings an interlocutory appeal of the probate court’s orders (1) denying
    confirmation of an arbitration award in her favor and instead, vacating the award
    and (2) appointing a new arbitrator. Because the arbitration award also affected the
    property interests of another of Dianna’s siblings, Georganna (Madge) Brelsford,
    and three of the decedents’ grandchildren, Edyth Brelsford, Jefferson Brelsford,
    and Joseph Brelsford, they are also parties to the appeal. We previously issued an
    opinion and judgment affirming the vacatur of the arbitration award, reversing the
    appointment of a new arbitrator, and remanding for further proceedings. Harold,
    Susanna, and John have moved for rehearing on the ground that we lack
    jurisdiction to review the appointment of a new arbitrator. After review of the
    argument and authorities cited in the rehearing motion, we agree with Harold,
    Susanna, and John. Accordingly, we grant the rehearing motion to explain the
    scope of our jurisdiction under section 171.098 of the Texas Civil Practice and
    Remedies Code,1 withdraw our prior opinion and judgment, and substitute the
    following in their stead.
    1
    See TEX. CIV. PRAC. & REM. CODE ANN. § 171.098(a) (West 2011) (listing five
    arbitration-related orders from which parties may have interlocutory appeal).
    2
    Background
    Harold John Brelsford had five children—Harold, Susanna, John, Dianna,
    and Madge—and four grandchildren—Edyth, Jefferson, Joseph, and Currie. Upon
    Harold John’s death, his children and grandchildren inherited interests in certain
    family properties, including a ranch and an apartment complex. Three of the
    children—Harold, Susanna, and John—filed two lawsuits against their father’s
    estate: one in their individual capacities and one as co-trustees of family trusts they
    alleged their father had mismanaged.2 Dianna and Madge joined these lawsuits as
    necessary parties. One of the grandchildren, Currie, also participated as a co-
    executor of the estate; however, the remaining three grandchildren, who were not
    beneficiaries of the trusts, did not participate. At some point during the pendency
    of the lawsuits, joint ownership of the ranch and apartments became problematic,
    and the parties were sent to mediation before the Honorable Carolyn Garcia.
    At mediation, the parties reached settlement. The estate, Harold, Susanna,
    John, Dianna, and Madge signed a document titled “Mediated Settlement
    Agreement” (MSA), attached to which were terms and additional agreements. In
    2
    The parties have treated the two underlying lawsuits as having been consolidated
    by the probate court. These two lawsuits were assigned separate cause numbers in
    this Court, Nos. 01-11-00265-CV and 01-11-00266-CV. Dianna filed an
    unopposed motion to consolidate the appeal, and we granted the parties leave to
    file a single record for both cases. When we set these cases for submission, we
    informed the parties that we would consider the two appeals together and consider
    the briefing filed in No. 01-11-00265-CV as having been filed in 01-11-00266-
    CV. No party objected to this manner of submission.
    3
    the MSA, the estate agreed to transfer certain interests in the ranch and the
    apartments to Harold, Susanna, and John as co-trustees of the family trusts and to
    Edyth, Jefferson, and Joseph individually (these three, to the exclusion of Currie,
    are referred to hereinafter collectively as the “grandchildren”). Upon execution of
    the settlement, the estate was relieved of any and all management responsibility,
    right of control, and liability for the ranch and the apartments. The MSA also
    provided that “any dispute as to interpretation of terms of this agreement shall be
    submitted to binding arbitration with [Judge] Garcia as mediator.”
    Most relevant to this appeal are the two additional agreements attached to
    the MSA, each of which is two-pages in length. The first agreement is between (1)
    Dianna and (2) Harold, Susanna, and John. The second agreement is between (1)
    Madge and (2) Harold, Susanna, and John. Dianna and Madge individually agreed
    to transfer their interests in family properties, including the ranch, to Harold,
    Susanna, and John in exchange for payment. Other than the parties’ names, these
    agreements contain identical terms describing the amount and method of payment
    as follows:
    At the closing of the transaction contemplated by this Mediation
    Agreement, [Harold, Susanna, and John] shall deliver a cashier[’]s
    check in the amount of $15,000 together with a promissory note (the
    “Note”) in the principal amount of $480,000. The Note shall bear
    interest at 6% per annum, and [Harold, Susanna, and John] shall make
    monthly payments of interest only on the unpaid balance to [Dianna
    or Madge, accordingly], over a 12 month period. Monthly payments
    shall commence on January 1, 2010 and shall be due and payable on
    4
    the first of the month thereafter. A balloon payment of all remaining
    principal and interest amounts due shall be paid on January 1, 2011.
    A first lien deed of trust on the ranch secured the note to Dianna, and a first lien
    deed of trust on the apartments secured the note to Madge.
    The agreements further provide for an identical two-step process in the event
    of future disputes: “attend a ½ day mediation with Judge Garcia; if no agreement,
    then Judge Garcia shall serve as arbitrator, and she shall rule in a manner that she
    believes is fair and just, and her decision is non-appealable and final.” If Judge
    Garcia was unwilling or unable to serve, then a new arbitrator would be “chosen by
    unanimous consent of the parties.” Failing the parties’ agreement, they would
    petition the “Administrative Judge of Harris County” for appointment of a new
    arbitrator.
    The five siblings thereafter disagreed about the terms of portions of the
    MSA, and they, along with the estate, participated in further mediation. That
    mediation resulted in certain agreed clarifications for performance of the MSA but
    did not resolve all the parties’ disputes. Consequently Judge Garcia, acting in her
    role as arbitrator, decided the remaining matters and issued the first arbitration
    award in this case. That arbitration award is not the subject of this appeal.
    When Harold, Susanna, and John failed to make the payment due under their
    agreement with Dianna, Dianna demanded a second mediation and arbitration. In
    her demand letter, Dianna requested enforcement of her rights under her agreement
    5
    with Harold, Susanna, and John, “including without limitation, judicial foreclosure
    and/or damages for breach of contract.” A dispute arose between the parties as to
    the scope of the arbitrator’s authority in the second arbitration, and Dianna, Harold,
    Susanna, and John submitted the issue to the probate court. Before the hearing in
    the probate court, however, the parties agreed to the following order giving the
    arbitrator broad authority to decide their dispute:
    Dianna Jones on the one hand, and Susanna Brelsford, Harold
    Petsch Brelsford and John Brelsford in their individual [c]apacities on
    the other hand, collectively referred to as (the “Parties”), agreed to
    enter into this Agreed Order as to the following. Therefore it is:
    ORDERED, ADJUDGED AND DECREED that the Parties
    shall submit to full merits arbitration of any and all issues and/or
    disputes related to the above causes of action and any and all issues or
    disputes with regard to any mediation agreement and/or settlement
    agreement executed by and between the Parties. The Honorable
    Carolyn Garcia shall serve as arbitrator and shall have full authority to
    rule and issue orders as to any and all issues and/or disputes related to
    the above causes of action and any and all issues or disputes with
    regard to any mediation agreement and/or settlement agreement
    executed by and between the Parties.
    The agreed order did not refer to and was not signed by Madge or the
    grandchildren or Harold, Susanna, and John in their capacities as co-trustees.
    On the eve of arbitration, Dianna and Harold, Susanna, and John exchanged
    their written submissions to the arbitrator. According to Harold, Susanna, and
    John, Dianna unfairly made the following “dramatic” changes to her claims:
     She asked the arbitrator to give her full ownership of the ranch, as
    opposed to the security interest granted as part of the settlement;
    6
     She complained that Harold, Susanna, and John “intended from the start
    to defraud” her and sought damages for fraud;
     She asked for specific performance and $300,000 from Harold, Susanna,
    and John as a “punitive measure”;
     She requested a preference in selecting her portion of other property (the
    “Llano property”) as additional punishment;
     She asked for an accounting; and
     She accused Harold, Susanna, and John of converting funds from the
    ranch and the apartments and asked for an order of disgorgement of those
    funds.
    Harold, Susanna, and John verbally requested postponement of the arbitration
    when the parties convened the next morning, but the arbitrator denied their request.
    The parties proceeded with arbitration.3
    After a full hearing with sworn testimony, exhibits, and arguments of
    counsel, the arbitrator found that Harold, Susanna, and John had repeatedly and
    intentionally breached their settlement with Dianna by failing “to make best efforts
    to sell [the ranch] so the proceeds would be used to pay Dianna and Madge” and
    by failing to sign documents necessary to the “closing of the partition that began
    3
    Neither Madge nor the grandchildren participated in the second arbitration. The
    award states that Madge was “informed of the mediation and arbitration and chose
    not to attend or participate in the arbitration as [she] reported settling any disputes
    with Harold, Susanna, and John.” With respect to the grandchildren, the order
    recites that they “personally and in writing to the [arbitrator], unconditionally
    authorized their parents to act in their behalf on all matters related to these estates,
    mediation and arbitration.”
    7
    with the MSA.” The arbitrator also found that Harold, Susanna, and John had
    fraudulently induced Dianna to enter the MSA and that their conduct warranted
    sanctions and punitive damages. With respect to damages, the arbitrator
    determined that Dianna was entitled to $1,056,000 in actual and punitive
    damages—specifically, “$456,000 on the [promissory] note, plus accrued interest;
    $250,000 in actual damages; and $350,000 in punitive damages and sanctions.”
    (Emphasis omitted). Having already found that the market value of the ranch at the
    time of the MSA was “just over $1 million dollars” and that Harold, Susanna, and
    John “still [did not have] funds or a commitment for funds to pay the note,”
    however, the arbitrator determined,
    [I]t is equitable that [the ranch] be awarded in fee simple as an
    exchange or partition in kind, and awarded to Dian[n]a in satisfaction
    of the debt and other damages found and awarded[.]
    All claims and losses raised in Arbitration by Dian[n]a will be
    paid in full and released by the transfer of [the ranch] to Dianna in this
    equitable disposition, except for attorney fees and costs.
    (Emphasis omitted). To give effect to the award, the arbitrator ordered that Harold,
    Susanna, John, and Madge “shall each execute the deeds . . . to transfer full
    ownership of [the ranch], its cattle and improvements to Dian[n]a[.]” 4 (Emphasis
    omitted).
    4
    We note that, in both the probate court and in this Court, the parties have asserted
    that the arbitrator awarded Dianna (1) the debt outstanding under the MSA, (2)
    additional actual damages, (3) punitive damages and sanctions, and (4) the ranch.
    8
    Dianna sought confirmation of the arbitration award in the probate court, but
    Harold, Susanna, John, Madge, and the grandchildren all filed motions to vacate.
    Harold, Susanna, and John’s motion alleged three statutory vacatur grounds: the
    arbitrator (1) refused to grant a continuance after a showing of sufficient cause for
    postponement of the arbitration hearing, (2) exceeded her power, and (3) refused to
    hear material evidence. By separate motion, Harold, Susanna, and John also
    requested appointment of a new arbitrator on the ground that the arbitrator’s
    actions during the second arbitration called into question her ability to fairly
    resolve the parties’ disputes. In their motions to vacate, Madge and the
    grandchildren asserted, among other things, that they had not agreed to arbitrate
    and that the arbitrator exceeded her powers by divesting them of their interests in
    the ranch.
    No record of the arbitration proceeding was presented to the probate court.
    Instead, the parties submitted the agreements to arbitrate, the written submissions
    to the arbitrator, the arbitration award, and the post-arbitration affidavits of their
    attorneys recounting what had occurred during the proceeding. After an oral
    hearing, the probate court denied confirmation of the arbitration award and instead,
    The arbitration award cannot be read in the manner asserted by the parties.
    Although the arbitrator determined Dianna was entitled to all of those things, she
    clearly and unequivocally awarded Dianna the ranch “in satisfaction of the debt
    and other damages found and awarded.” (Emphasis omitted). We do not read the
    arbitration award to impose upon Harold, Susanna, and John the obligation to pay
    the amounts awarded as actual, additional, or punitive damages.
    9
    vacated the award in its entirety. The same day, the probate court granted Harold,
    Susanna, and John’s motion to appoint a new arbitrator “to hear any present or
    future disputes arising out of” the MSA; Dianna’s agreement with Harold,
    Susanna, and John; and Madge’s agreement with Harold, Susanna, and John.
    Dianna seeks immediate appellate review of the trial court’s orders.
    Judicial Review of Arbitration Awards
    Texas law favors the arbitration of disputes. See E. Tex. Salt Water Disposal
    Co., Inc. v. Werline, 
    307 S.W.3d 267
    , 271 (Tex. 2010); Brazoria Cnty. v. Knutson,
    
    176 S.W.2d 740
    , 743 (Tex. 1943) (“Arbitration is a proceeding so favored by
    Texas law that both our Constitution and statutes provide for the submission of
    differences to arbitration.”). Consequently, judicial review of an arbitration award
    is extraordinarily narrow and focuses on the integrity of the process, not the
    propriety of the result. See Women’s Reg’l Healthcare, P.A. v. FemPartners of N.
    Tex., Inc., 
    175 S.W.3d 365
    , 36768 (Tex. App.—Houston [1st Dist.] 2005, no
    pet.); TUCO, Inc. v. Burlington N. R.R. Co., 
    912 S.W.2d 311
    , 315 (Tex. App.—
    Amarillo 1995), modified on other grounds, 
    960 S.W.2d 629
    (Tex. 1997). A
    reviewing court may not substitute its judgment for the arbitrator’s simply because
    that court would have reached a different result. Royce Homes, L.P. v. Bates, 
    315 S.W.3d 77
    , 85 (Tex. App.—Houston [1st Dist.] 2010, no pet.). We indulge every
    reasonable presumption to uphold an arbitrator’s decision. New Med. Horizons II,
    10
    Ltd. v. Jacobson, 
    317 S.W.3d 421
    , 428 (Tex. App.—Houston [1st Dist.] 2010, no
    pet.).
    The parties agree that the Texas General Arbitration Act (TAA) governs. See
    TEX. CIV. PRAC. & REM. CODE ANN. §§ 171.001.098 (West 2011). Under the
    TAA, a court must affirm an arbitration award unless a party establishes one of
    four statutory bases for vacating the award: (1) the award was procured by fraud,
    corruption, or other undue means; (2) there was evident partiality, corruption, or
    willful misconduct by the arbitrator that prejudices the rights of a party; (3) the
    arbitrator exceeded her power, refused to postpone a hearing on a showing of
    sufficient cause, or refused to hear material evidence; 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.”5 
    Id. §§ 171.087.088(a);
    see Women’s Reg’l
    
    Healthcare, 175 S.W.3d at 367
    . Our review of an order vacating an arbitrator’s
    award for any of these reasons is de novo. See Grand Homes 96, L.P. v.
    Loudermilk, 
    208 S.W.3d 696
    , 705 (Tex. App.—Fort Worth 2006, pet. denied).
    Order Denying Confirmation and Vacating Arbitration Award
    Dianna’s complaints about the probate court’s order vacating the arbitration
    award are divided into six sub-issues, each addressing a vacatur ground asserted by
    5
    Subchapter B governs motions and proceedings to compel or stay arbitration. See
    TEX. CIV. PRAC. & REM. CODE ANN. §§ 171.021.026 (West 2011).
    11
    her siblings—Harold, Susanna, John, and Madge—or the grandchildren. We begin
    with Dianna’s sixth sub-issue—which challenges the vacatur grounds asserted by
    Madge in her motion attacking “the portions of the arbitration award that require
    Madge to sign over her interests in real estate to Dianna Brelsford and to appear
    and sign transfer documents”—because it is dispositive of this appeal.
    Madge argues that the arbitrator’s award divesting her of a property interest
    in the ranch subjected her to an arbitration to which she did not agree and in which
    she did not participate. She asserts that, under these circumstances, the probate
    court properly vacated the award under sections of the Civil Practice and Remedies
    Code providing for vacatur if the arbitrator exceeded her powers or if there was no
    agreement    to   arbitrate.   See   TEX. CIV. PRAC. & REM. CODE ANN.
    § 171.088(a)(3)(A), (a)(4). Dianna asserts that Madge’s complaints about the
    arbitration award are merely “ministerial” and “not a basis to vacate” because
    Madge had already agreed to transfer her interests to Harold, Susanna, and John.
    We disagree with Dianna.
    We look to the parties’ various provisions for dispute resolution to determine
    the arbitrator’s authority to order Madge, a non-participant in the second
    arbitration, to convey her property interest in the ranch to Dianna instead of
    Harold, Susanna, and John. See Baker Hughes Oilfield Operations, Inc. v. Hennig
    Prod. Co., Inc., 
    164 S.W.3d 438
    , 443 (Tex. App.—Houston [14th Dist.] 2005, no
    12
    pet.). Attached to the MSA, which is a global document signed by all of the
    siblings, the trusts, and the estate, are (1) Dianna’s agreement with Harold,
    Susanna, and John and (2) Madge’s agreement with Harold, Susanna, and John.
    The MSA and the attached agreements contain different provisions for dispute
    resolution. The MSA provided “that any dispute as to interpretation of terms of this
    agreement shall be submitted to binding arbitration[.]” In the attached agreements,
    which the parties treat as separate and distinct agreements, Dianna and Madge
    individually agreed to transfer their interests in family properties, including the
    ranch, to Harold, Susanna, and John in exchange for payment. They both also
    agreed to a two-step process in the event of future disputes: “attend a ½ day
    mediation with Judge Garcia; if no agreement, then Judge Garcia shall serve as
    arbitrator, and she shall rule in a manner that she believes is fair and just, and her
    decision is non-appealable and final.”
    Although Dianna’s and Madge’s individual agreements incorporated nearly
    identical terms for resolving their disputes with their siblings, Dianna did not sign
    Madge’s agreement with Harold, Susanna, and John, and Madge did not sign
    Dianna’s agreement with Harold, Susanna, and John. Madge is also not a signatory
    to the agreement entered on the eve of the second arbitration, granting the
    arbitrator broad authority to decide “any and all issues and/or disputes related to
    the above causes of action and any and all issues or disputes with regard to any
    13
    mediation agreement and/or settlement agreement.” Only Harold, Susanna, John,
    and Dianna signed that agreement. Thus, the only agreement to arbitrate signed by
    both Dianna and Madge is the agreement to submit to arbitration “any dispute as to
    interpretation of terms of” the MSA between the siblings, the trusts, and the estate.
    Considering the written submissions to the arbitrator, we note that Madge
    did not have a dispute with either Dianna or her other siblings “as to interpretation
    of terms” of their settlement agreement with the trusts and the estate, and Dianna
    did not allege any such dispute with Madge. In fact, Dianna did not allege any
    dispute with Madge or any dispute as to the MSA between the siblings, the trusts,
    and the estate. Although she requested an award of the entire ranch, Dianna’s
    written submission focused exclusively on Harold, Susanna, and John’s non-
    performance and alleged fraudulent inducement of her individual settlement
    agreement with them. The arbitrator specifically noted in the award that Madge did
    not participate in the second arbitration because she had settled her disputes with
    Harold, Susanna, and John. The arbitrator found that “an award of 100% of [the
    ranch] to Dianna is a partition in kind for her debt under the MSA, for actual and
    punitive damages from the intentional and repeated breaches of the MSA by
    Harold, Susanna, and John in the breaches described here.” The breaches described
    in the arbitration award related to breaches of Dianna’s settlement with Harold,
    Susanna, and John and no other agreement. To give effect to her award, however,
    14
    the arbitrator ordered Madge, along with Harold, Susanna, and John, to execute
    deeds transferring their interests in the ranch to Dianna. No findings were entered
    against Madge in the award. Nor can we find any evidence in this record that
    Harold, Susanna, and John paid Madge and therefore were entitled to demand
    transfer of Madge’s interest in the ranch.
    Even considering the presumptions in favor of arbitration, we agree with
    Madge that she did not agree to submit to arbitration of disputes arising from
    Dianna’s agreement with Harold, Susanna, and John. The arbitrator could not order
    Madge, as part of the second arbitration, to transfer her interest in the ranch to
    make Dianna whole from Harold, Susanna, and John’s breaches of an agreement to
    which Madge was not a party because any dispute as to Madge’s interest in the
    ranch was not properly before the arbitrator. We are not persuaded that simply
    because Madge had already agreed to transfer her interests to Harold, Susanna, and
    John, an order that she transfer her interests to Dianna instead is inconsequential.
    The arbitrator’s award required Madge to perform an act that contravened her
    settlement with Harold, Susanna, and John and undermined their obligation to pay
    Madge under that agreement. We therefore conclude that the probate court
    correctly vacated that part of the award giving Dianna full ownership of the ranch
    and ordering Madge to “execute the deeds . . . to transfer full ownership of [the
    ranch], its cattle and improvements to [Dianna]” under section 171.008(a)(4). See
    15
    TEX. CIV. PRAC. & REM. CODE ANN. § 171.088(a)(4) (allowing vacatur when “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”).
    Our conclusion that Madge did not agree to arbitrate the issues decided at
    the second arbitration renders our consideration of the other vacatur grounds raised
    by Harold, Susanna, John, and the grandchildren unnecessary. Although we have
    held invalid only those parts of the arbitrator’s award affecting Madge, the entire
    award must be set aside because, here, the invalid parts of the award are not
    “distinct and independent” from the remaining parts of the award. City of Waco v.
    Kelley, 
    309 S.W.3d 536
    , 551 (Tex. 2010) (“In an appeal from an arbitration award,
    if a portion of the award is invalid, the other portion will be unaffected only if the
    two parts are so distinct and independent that the valid part will truly express the
    judgment of the arbitrator. But if an invalid portion is not severable and distinct so
    that the remaining valid part of the award truly expresses the arbitrator’s judgment,
    the entire award is void.”); see Gulf Oil Corp. v. Guidry, 
    327 S.W.2d 406
    , 409
    (Tex. 1959). The arbitrator determined that it was equitable that Dianna be
    awarded 100 percent ownership of the ranch in satisfaction of the amounts owed
    by Harold, Susanna, and John for their breaches of contract and fraud. To affirm
    the remaining portions of the award ordering Harold, Susanna, and John to convey
    16
    their interests in the ranch would be to affirm an award to Dianna of less than 100
    percent ownership of the ranch. Such an award is less than what the arbitrator
    determined was equitable and would not “truly express the arbitrator’s judgment.”
    See 
    Kelley, 309 S.W.3d at 551
    . We therefore conclude that the entire arbitration
    award must be set aside and that Dianna’s dispute with Harold, Susanna, and John
    must be reheard. Accordingly, we overrule Dianna’s sixth sub-issue.
    Order Appointing New Arbitrator
    We next consider the issue of the identification of the arbitrator who will
    hear Dianna’s dispute with Harold, Susanna, and John. The probate court—in a
    separate order issued at the same time it vacated the arbitration award in Dianna’s
    favor—appointed a new arbitrator to “hear any present or future disputes arising
    out of” the MSA and Dianna’s and Madge’s agreements with Harold, Susanna, and
    John. In her second issue, Dianna contends that the appointment of a new arbitrator
    constitutes error. Harold, Susanna, and John respond that error, if any, resulting
    from the probate court’s appointment a new arbitrator is not subject to immediate
    review. On reconsideration of this issue, we agree that the appointment order is
    outside the scope of our jurisdiction in this interlocutory appeal.
    Generally, an appeal may be taken only from a final judgment. See TEX. CIV.
    PRAC. & REM. CODE ANN. § 51.012 (West Supp. 2012); Lehmann v. Har-Con
    Corp., 
    39 S.W.3d 191
    , 195 (Tex. 2001); see also Jack B. Anglin Co., Inc. v. Tipps,
    17
    
    842 S.W.2d 266
    , 272 (Tex. 1992); Bison Bldg. Materials, Ltd. v. Aldridge, 
    263 S.W.3d 69
    , 73 (Tex. App.—Houston [1st Dist.] 2006), aff’d on other grounds, No.
    06-1084, 
    2012 WL 1370859
    , at *3 (Tex. Apr. 20, 2012). A judgment is final for
    purposes of appeal “if and only if either it actually disposes of all claims and
    parties then before the court, regardless of its language, or it states with
    unmistakable clarity that it is a final judgment as to all claims and all parties.”
    
    Lehmann, 39 S.W.3d at 192
    −93. The probate court’s order appointing a new
    arbitrator is not a judgment that contains finality language. Nor does it dispose of
    all claims and parties. In fact, the order contemplates exactly the opposite
    disposition. By appointing an arbitrator to rehear the parties’ “present” dispute as
    well as to decide any “future” disputes, the order anticipates “continuing resolution
    through the arbitration process.” Brooks v. Pep Boys Auto. Supercenters, 
    104 S.W.3d 656
    , 660 (Tex. App.—Houston [1st Dist.] 2003, no pet.). Thus, the order is
    interlocutory, and we must determine whether we are authorized to consider it as
    part of this appeal.
    We have jurisdiction to consider immediate appeals of interlocutory orders
    only if a statute explicitly confers appellate jurisdiction. See Stary v. DeBord, 
    967 S.W.2d 352
    , 352−53 (Tex. 1998); Eichelberger v. Hayton, 
    814 S.W.2d 179
    , 182
    (Tex. App.—Houston [1st Dist.] 1991, writ denied); see also TEX. CONST. art. V, §
    6; TEX. GOV’T CODE ANN. § 22.220 (West Supp. 2012). In section 171.098(a) of
    18
    the TAA,6 the Legislature statutorily extended the courts of appeals’ jurisdiction to
    certain types of interlocutory orders relating to arbitration proceedings,
    specifically:
    (a)         A party may appeal a judgment or decree entered under this
    chapter or an order:
    (1)     denying an application to compel arbitration made under
    Section 171.021;
    (2)     granting an application to stay arbitration made under
    Section 171.023;
    (3)     confirming or denying confirmation of an award;
    (4)     modifying or correcting an award; or
    (5)     vacating an award without directing a rehearing.
    TEX. CIV. PRAC. & REM. CODE ANN. § 171.098(a)(1)−(5) (West 2011). Because
    section 171.098(a) is in derogation of the general rule that only final judgments are
    appealable, we strictly construe it. See CMH Homes v. Perez, 
    340 S.W.3d 444
    , 447
    (Tex. 2011) (“We strictly apply statutes granting interlocutory appeals because
    they are a narrow exception to the general rule that interlocutory orders are not
    6
    This is the only applicable statute that could make the trial court’s order
    appointing a new arbitrator appealable. The general Texas statute permitting
    appeals from interlocutory orders does not include an order appointing a new
    arbitrator, or any other trial court order relating to arbitration proceedings, as one
    of those interlocutory trial court orders from which a party may appeal. See TEX.
    CIV. PRAC. & REM. CODE ANN. § 51.014(a)(1)−(11) (West Supp. 2012) (setting
    forth eleven types of appealable interlocutory orders).
    19
    immediately appealable.”); Tex. A & M. Univ. Sys. v. Koseoglu, 
    233 S.W.3d 835
    ,
    841 (Tex. 2007); Tex. S. Univ. v. Gilford, 
    277 S.W.3d 65
    , 71 (Tex. App.—Houston
    [1st Dist.] 2009, pet. denied); Walker Sand, Inc. v. Baytown Asphalt Materials,
    Ltd., 
    95 S.W.3d 511
    , 514 (Tex. App.—Houston [1st Dist.] 2002, no pet.).
    The appointment order about which Dianna complains is not one of the five
    appealable orders specifically enumerated in section 171.098(a). Nevertheless,
    Dianna urges that the appointment order is appealable under the Texas Supreme
    Court’s holding in East Texas Salt Water Disposal Co., Inc. v. Werline, 
    307 S.W.3d 267
    (Tex. 2010). There, the parties submitted an employment dispute to
    final and binding arbitration at which the employee prevailed. 
    Id. at 268.
    The trial
    court, after considering competing motions for confirmation and vacatur of the
    arbitration award, found that the “the material factual findings in the [a]ward
    [were] so against the evidence . . . that they manifest[ed] gross mistakes in fact and
    law.” 
    Id. at 269.
    The trial court consequently issued a single order denying
    confirmation of the arbitration and instead, vacating the award and directing
    rehearing before a new arbitrator. 
    Id. Because section
    171.098(a) allows appeals
    from orders “confirming or denying confirmation of an award” and “vacating an
    award without directing a rehearing” but does not expressly allow appeals from
    orders vacating an award and directing a rehearing, the issues presented for
    appellate review included the existence of interlocutory jurisdiction. TEX. CIV.
    20
    PRAC. & REM. CODE ANN. § 171.098(a)(3), (5) (emphasis added); see 
    Werline, 307 S.W.3d at 268
    ; Werline v. E. Tex. Salt Walter Disposal Co., Inc., 
    209 S.W.3d 888
    ,
    893−96 (Tex. App.—Texarkana 2006), 
    aff’d, 307 S.W.3d at 274
    . The Court
    affirmed the existence of jurisdiction, concluding that (1) the order was not
    “insulated   from    appellate   review    expressly    conferred    under   [section
    171.098(a)(3)]”—orders denying confirmation of an arbitration award—“merely
    because the trial court also vacated the award and directed a rehearing,” 
    Werline, 307 S.W.3d at 270
    ; (2) under circumstances in which the trial court clearly rejects
    the award in its entirety and is not directing rehearing as a preface to confirmation,
    a vacatur with rehearing is the equivalent of a denial of confirmation under section
    171.098(a)(3), id.; and (3) limitations on judicial review of arbitration awards
    would be “circumvented if re-arbitration could be ordered for reasons that would
    not justify denying confirmation, and appeal thereby delayed,” 
    id. at 271.
    Contrary to Dianna’s suggestion, the Werline jurisdictional holding does not
    compel a conclusion that the probate court’s separate appointment order is within
    the scope of our jurisdiction here. First, the appointment of a new arbitrator was
    not at issue (or even discussed) in Werline. After determining that it had
    jurisdiction, the court of appeals reversed the vacatur order and rendered judgment
    confirming the arbitration award, making any issue regarding the appointment of a
    new arbitrator moot. 
    Werline, 209 S.W.3d at 896
    −901. And the Texas Supreme
    21
    Court’s holding was only a jurisdictional holding; the Court affirmed the court of
    appeals’s judgment confirming the arbitration award without any discussion of the
    merits. Second, the Werline court reasoned that the vacatur order directing a
    rehearing was subject to interlocutory review because it was, in effect, a denial of
    confirmation, and the denial of confirmation may be appealed under section
    171.098(a)(3). 
    Werline, 307 S.W.3d at 270
    −71. The same is not true here. The
    probate court’s separate appointment order does only one thing: it appoints a new
    arbitrator. Thus, the appointment order is exactly what it purports to be, and what it
    purports to be is not an order from which an interlocutory appeal may be had under
    section 171.098(a). We decline to extend Werline to authorize interlocutory
    appeals from a separate order appointing a new arbitrator. Instead, because our
    jurisdiction in this interlocutory appeal is endowed by section 171.098(a) and the
    appointment order is not among the orders listed in that section from which a party
    can appeal, we conclude on rehearing that we are not statutorily authorized to
    consider Dianna’s complaints regarding the appointment. See TEX. CIV. PRAC. &
    REM. CODE ANN. § 171.098(a)(1)−(5); cf. CMH Homes v. Perez, 
    340 S.W.3d 444
    ,
    453−54 (Tex. 2011) (observing that order appointing arbitrator may be subject to
    mandamus review).7
    7
    We note that in CMH Homes, the Texas Supreme Court held that an appellant who
    filed an appeal from an unappealable order was nevertheless entitled to have its
    appeal treated as a petition for writ of mandamus because the appellant
    22
    Accordingly, we do not reach Dianna’s second issue because it is outside the
    scope of our jurisdiction in this interlocutory appeal.
    Conclusion
    We affirm the probate court’s order vacating the arbitration award.
    Harvey Brown
    Justice
    Panel consists of Justices Jennings, Sharp, and Brown.
    specifically requested mandamus relief and because requiring the appellant to file
    a separate document entitled “petition for writ of mandamus” would
    “unnecessarily waste the parties’ time and further judicial 
    resources.” 340 S.W.3d at 543
    . Thus, in an appropriate case, we may treat an appeal as a petition for writ
    of mandamus, and an appellant who specifically requests that her appeal be treated
    as a mandamus petition invokes this Court’s original jurisdiction. See id.; see also
    In re D & KW Family, L.P., No. 01-11-00276-CV, 
    2012 WL 3252683
    , at *4 (Tex.
    App.—Houston [1st Dist.] Aug. 9, 2012, orig. proceeding) (mem. op.). Dianna,
    however, did not invoke our original jurisdiction because she did not request—in
    either her original briefing or in her response to Harold, Susanna, and John’s
    motion for rehearing—that her issue challenging the appointment of a new
    arbitrator be construed as a request for mandamus relief should this Court
    determine that the issue is outside the scope of our jurisdiction in this interlocutory
    appeal.
    23
    

Document Info

Docket Number: 01-11-00265-CV, 01-11-00266-CV

Citation Numbers: 390 S.W.3d 486, 2012 Tex. App. LEXIS 7692

Judges: Jennings, Sharp, Brown

Filed Date: 8/30/2012

Precedential Status: Precedential

Modified Date: 11/14/2024

Authorities (19)

CMH HOMES v. Perez , 54 Tex. Sup. Ct. J. 1098 ( 2011 )

Stary v. DeBord , 41 Tex. Sup. Ct. J. 456 ( 1998 )

Eichelberger v. Hayton , 814 S.W.2d 179 ( 1991 )

Women's Regional Healthcare, P.A. v. FemPartners of North ... , 2005 Tex. App. LEXIS 1155 ( 2005 )

Brooks v. Pep Boys Automotive Super-Centers , 2003 Tex. App. LEXIS 2247 ( 2003 )

East Texas Salt Water Disposal Co. v. Werline , 53 Tex. Sup. Ct. J. 410 ( 2010 )

Lehmann v. Har-Con Corp. , 44 Tex. Sup. Ct. J. 364 ( 2001 )

Jack B. Anglin Co., Inc. v. Tipps , 36 Tex. Sup. Ct. J. 205 ( 1992 )

TUCO Inc. v. Burlington Northern Railroad , 912 S.W.2d 311 ( 1995 )

Grand Homes 96, L.P. v. Loudermilk , 2006 Tex. App. LEXIS 9787 ( 2006 )

New Medical Horizons II, Ltd. v. Jacobson , 317 S.W.3d 421 ( 2010 )

Royce Homes, L.P. v. Bates , 2010 Tex. App. LEXIS 389 ( 2010 )

Gulf Oil Corporation v. Guidry , 160 Tex. 139 ( 1959 )

Burlington Northern Railroad v. TUCO Inc. , 960 S.W.2d 629 ( 1997 )

Baker Hughes Oilfield Operations, Inc. v. Hennig Production ... , 2005 Tex. App. LEXIS 2304 ( 2005 )

Texas a & M University System v. Koseoglu , 50 Tex. Sup. Ct. J. 1213 ( 2007 )

Texas Southern University v. Gilford , 2009 Tex. App. LEXIS 66 ( 2009 )

City of Waco v. Kelley , 53 Tex. Sup. Ct. J. 338 ( 2010 )

Walker Sand, Inc. v. Baytown Asphalt Materials, Ltd. , 2002 Tex. App. LEXIS 8495 ( 2002 )

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