in the Guardianship of Raquel Cantu De Villarreal, an Incapacitated Person

NUMBER 13-08-00708-CV
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI - EDINBURG
IN THE GUARDIANSHIP OF RAQUEL CANTU DE VILLARREAL,
AN INCAPACITATED PERSON
On appeal from the County Court at Law No. 2
of Cameron County, Texas.
OPINION
Before Justices Yañez, Rodriguez, and Garza
Opinion by Justice Rodriguez
Appellants, Ignacio Villarreal Cantu, Fernando Villarreal Cantu, Martha
Guadalupe Villarreal Cantu, and Consuelo Villarreal Cantu, seek to reverse an order
confirming an arbitration award in favor of appellees, Raquel Villarreal Cantu,
individually and in her capacity as guardian of the person of Doña Raquel Cantu de
Villarreal, Marcelo Villarreal Cantu, and Carlos Villarreal Cantu. By three issues,
appellants contend that the award should be vacated because the arbitrator exceeded
his powers in several respects and refused to postpone the arbitration hearing. We
affirm.
I. BACKGROUND
Doña Raquel Cantu de Villarreal (“Doña Raquel”), an elderly widow, is the
mother of seven adult children, including appellants and appellees. Disputes between
the children regarding Doña Raquel’s care and custody and the disposition of her
sizeable estate have given rise to a series of highly contentious legal proceedings,
including four appeals and two original proceedings.1 We will not address the factual
and procedural underpinnings of these disputes except as necessary to address the
legal issues pertinent to this appeal. See TEX . R. APP. P. 47.1, 47.4.
Following a court-ordered mediation to resolve some of the familial disputes,
Doña Raquel’s children entered into an “Irrevocable Family Settlement Agreement,
Assignment, and Release and Rule 11 Agreement.” This agreement was entered into
and signed by all seven of the children. The agreement provides that it was made:
[F]or the purpose of settling the various claims, controversies, and
disputes, in Mexico and the United States, civil and criminal, among these
1
San Pedro Impulsora de Inmuebles Especiales, S.A., de C.V. v. Villarreal, No. 13-09-00226-CV,
2010 Tex. App. LEXIS ___ (Tex. App.–Corpus Christi Nov. 18, 2010, no pet. h.) (affirm ing the denial of a
corporation’s special appearance); In re De Villarreal, No. 13-08-00408-CV, 2009 Tex. App. LEXIS 2249, at
*11-12 (Tex. App.–Corpus Christi Apr. 2, 2009, pet. denied) (m em . op.) (affirm ing in part and dism issing in
part the appeal of Ignacio, Consuelo, Fernando, and Martha regarding two post-judgm ent orders enforcing
a judgm ent and issuing writs of attachm ent); In re Cantu, No. 13-08-00682-CV, 2009 Tex. App. LEXIS 2241,
at *1-2 (Tex. App.–Corpus Christi Apr. 2, 2009, orig. proceeding [m and. denied]) (m em . op.) (denying petition
for writ of m andam us filed by Consuelo contending that the trial court failed to satisfy “the m andatory and
jurisdictional notice requirem ents of the Texas Probate Code” because it held an initial guardianship hearing
and appointed a tem porary guardian “without giving the proposed ward prior notice as required by section 875
of the Texas Probate Code”); In re de Villarreal, No. 13-08-00707-CV, 2009 Tex. App. LEXIS 2233, at *1 (Tex.
App.–Corpus Christi Apr. 2, 2009, no pet.) (per curiam ) (m em . op.) (dism issing Ignacio’s appeal of an order
rem oving him as guardian of the person of Doña Raquel); In re Cantu, No. 13-08-00437-CV, 2008 Tex. App.
LEXIS 5795, at *1-2 (Tex. App.–Corpus Christi July 30, 2008, orig. proceeding [m and. denied]) (m em . op.)
(denying petition for writ of m andam us filed by Ignacio, Fernando, Consuelo, and Martha seeking to com pel
the trial court to vacate various orders pertaining to the guardianship of Doña Raquel).
2
parties arising out of the facts and circumstances relating directly or
indirectly to the transfer and/or gifting of property of [Doña Raquel] and/or
Ignacio Villarreal, the care and support of [Doña Raquel], and all other
claims, controversies, and disputes, civil and criminal, between the parties
arising prior to the date of this Agreement.
The agreement defines the scope of Doña Raquel’s estate and puts various properties
into “hotchpotch”2 for distribution to the seven children, and further includes provisions
pertinent to the guardianship, care, and welfare of Doña Raquel. The agreement
contains an arbitration provision and provides that Reynaldo Garza, Jr., the mediator for
the mediation resulting in the agreement, “shall be the arbitrator of any dispute
regarding the interpretation and implementation of this Agreement.” The agreement
expressly states that Garza’s “determination of any dispute regarding this Agreement
and its implementation . . . shall be final with no party having the right to appeal,” and
the “implementation of this [A]greement includes the manner in which the [h]otchpotch
is to be distributed to the seven children . . . .”
The trial court approved the settlement agreement and incorporated it into the
final judgment in the case by a first amended order signed on February 14, 2008. Soon
after the agreement was signed, however, the children began arguing about the
agreement’s implementation. Alleging that appellants breached the agreement and
failed to abide by the judgment, Raquel moved for an accounting, contempt, a
temporary restraining order, and temporary and permanent injunctions. The gravamen
of Raquel’s complaint was that appellants withdrew 34 million pesos, which was
2
“Hotchpotch” m ay be generally defined as “the blending of properties to secure equality of division.”
B R YAN A. G ARN ER , A D IC TIO N AR Y OF M O DER N L EG AL U SAGE 408 (2d ed. 1995); see also In the Guardianship
of De Villarreal, No. 13-08-00408-CV, 2009 Tex. App. LEXIS 2249, at*4-5 n.3 (Tex. App.–Corpus Christi Apr.
2, 2009, pet. denied) (m em . op.).
3
referenced in and allocated by the settlement agreement, from the possession of a
Mexican court, but failed to deposit the monies into a Mexican trust as required by the
agreement and judgment.
On June 11, 2008, the trial court entered an order granting Raquel’s motion and:
ordering appellants to deposit the money into an account created for the benefit of the
trust referenced in the agreement and to provide a detailed accounting regarding the
money; enjoining appellants from selling, encumbering, or otherwise transferring any of
the real estate properties described in the agreement in any manner inconsistent with
the agreement; setting a final hearing for June 27, 2008; and ordering appellants to
appear at that time “to show their compliance with this Court’s Order herein to show
why this Court’s Order should be vacated.” On June 27, Ignacio, Fernando, Consuelo
and Martha failed to appear, and accordingly, the trial court entered an order for
issuance of writs of attachment against them.
On June 9, 2008, the trial court entered an order clarifying some of its previous
orders and compelling arbitration. The matter was arbitrated on August 18, 2008.
Appellants did not submit proposals, comments, or responses to the arbitrator
regarding the issues subject to arbitration and did not personally appear at the
arbitration, although they were represented by counsel at the hearing. On September
25, 2008, the arbitrator issued an eighteen page arbitration award, including extensive
factual and legal conclusions, which generally collected and divided the estate of Doña
Raquel and provided for her care. After appellees moved to confirm the award and
4
appellants moved to vacate it, the trial court entered an order confirming the award.
This appeal ensued.
II. STANDARD AND SCOPE OF REVIEW
Review of a trial court’s decision as to vacatur or confirmation of an arbitration
award is de novo and the appellate court reviews the entire record. Chestnut Energy
Partners v. Tapia (In re Chestnut Energy Partners, Inc.), 300 S.W.3d 386, 397 (Tex.
App.–Dallas 2009, pet. denied); Statewide Remodeling, Inc. v. Williams, 244 S.W.3d
564, 567 (Tex. App.–Dallas 2008, no pet.); see Hisaw & Assocs. Gen. Contractors, Inc.
v. Cornerstone Concrete Sys., Inc., 115 S.W.3d 16, 18 (Tex. App.–Fort Worth 2003,
pet. denied).
III. VACATUR OF ARBITRATION AWARD
Because Texas law favors arbitration, judicial review of an arbitration award is
extraordinarily narrow. E. Tex. Salt Water Disposal Co. v. Werline, 307 S.W.3d 267,
271 (Tex. 2010); see CVN Group, Inc. v. Delgado, 95 S.W.3d 234, 238 (Tex. 2002);
Statewide Remodeling, Inc., 244 S.W.3d at 568; GJR Mgmt. Holdings, L.P. v. Jack
Raus, Ltd., 126 S.W.3d 257, 263 (Tex. App.–San Antonio 2003, pet. denied);
IPCO-G.&C. Joint Venture v. A.B. Chance Co., 65 S.W.3d 252, 256 (Tex.
App.–Houston [1st Dist.] 2001, pet. denied). “Subjecting arbitration awards to judicial
review adds expense and delay, thereby diminishing the benefits of arbitration as an
efficient, economical system for resolving disputes.” CVN Group, Inc., 95 S.W.3d at
238. But see Morrison v. Circuit City Stores, 317 F.3d 669, 669-70 (6th Cir. 2003)
(noting that arbitration can often be much more expensive for consumers than a
5
comparable case in litigation); Eagle v. Fred Martin Motor Co., 809 N.E.2d 1177,
1178-84 (Ohio App. Div. 2004) (discussing prohibitive costs of arbitration compared to
litigation for many consumers); see also Richard M. Alderman, Why We Really Need
the Arbitration Fairness Act, It’s All About Separation of Powers, 12 J. CONSUMER &
COM . L. 151, 154 n. 55 (2009) (“Although most small claims courts provide a judge and
jury for less than $100, the costs of arbitration far exceed this amount. A recent study
by Public Citizen concludes that the costs of arbitration almost always exceed the costs
of litigation.”); Theodore Eisenberg, Geoffrey P. Miller & Emily Sherwin, Arbitration’s
Summer Soldiers: An Empirical Study of Arbitration Clauses in Consumer and
Nonconsumer Contracts, 41 U. MICH . J.L. REFORM 871, 895 (2008) (stating that
“corporations’ selective use of arbitration clauses against consumers, but not against
each other, suggests that their use of mandatory arbitration clauses may be based
more on strategic advantage” in defending against consumer claims); Mark Budnitz,
The High Cost of Mandatory Consumer Arbitration, 67 LAW & CONTEMP. PROBS . 133,
133 (2004) (concluding that the cost of mandatory arbitration is often prohibitively high).
The Texas Supreme Court has “long held that ‘an award of arbitrators upon
matters submitted to them is given the same effect as the judgment of a court of last
resort. All reasonable presumptions are indulged in favor of the award, and none
against it.’” CVN Group, Inc., 95 S.W.3d at 238 (quoting City of San Antonio v.
McKenzie Constr. Co., 136 Tex. 315, 150 S.W.2d 989, 996 (Tex. 1941) (“The courts will
not overthrow an award such as this, except in a very clear case.”)). Review of an
arbitration award is so limited that an award may not be vacated even if there is a
6
mistake of fact or law. Univ. Comp. Sys., Inc. v. Dealer Solutions, L.L.C., 183 S.W.3d
741, 752 (Tex. App.–Houston [1st Dist.] 2005, pet. denied); Stieren v. McBroom, 103
S.W.3d 602, 605 (Tex. App.–San Antonio 2003, pet. denied); Vernon E. Faulconer, Inc.
v. HFI, Ltd. P’ship, 970 S.W.2d 36, 39 (Tex. App.–Tyler 1998, no pet.). The arbitrator’s
award is “conclusive on the parties as to all matters of fact and law.” Pheng Invs., Inc.
v. Rodriquez, 196 S.W.3d 322, 328 (Tex. App.–Fort Worth 2006, no pet.). Where there
is no allegation of a statutory or common law ground to vacate or modify the arbitration
award, we lack jurisdiction to review the arbitrator’s decision. Fogal v. Stature Constr.,
Inc., 294 S.W.3d 708, 721 (Tex. App.–Houston [1st Dist.] 2009, pet. denied); Providian
Bancorp Servs. v. Thomas, 255 S.W.3d 411, 415 (Tex. App.–El Paso 2008, no pet.);
Pettus v. Pettus, 237 S.W.3d 405, 418 (Tex. App.–Fort Worth 2007, pet. denied).
The Texas Civil Practice and Remedies Code dictates that, unless grounds are
offered for vacating, modifying, or correcting an award under other specified sections of
the code, the court, on application of a party, shall confirm the award. See TEX . CIV.
PRAC . & REM . CODE ANN . § 171.087 (Vernon 2005). Thus, “confirmation is the default
result unless a challenge to the award has been or is being considered.” Hamm v.
Millennium Income Fund, L.L.C., 178 S.W.3d 256, 262 (Tex. App.–Houston [1st Dist.]
2005, pet. denied). The grounds for vacating an award under the code are set out in
section 171.088(a), which states:
On application of a party, the court shall vacate an award if:
(1) the award was obtained by corruption, fraud, or other undue
means;
(2) the rights of a party were prejudiced by:
7
(A) evident partiality by an arbitrator appointed as a neutral
arbitrator;
(B) corruption in an arbitrator; or
(C) misconduct or wilful 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) (Vernon 2005). “These grounds reflect
severe departures from an otherwise proper arbitration process and are of a completely
different character than ordinary legal error.” Centex/Vestal v. Friendship W. Baptist
Church, 314 S.W.3d 677, 684 (Tex. App.–Dallas 2010, no pet.) (quoting Quinn v. Nafta
Traders, Inc., 257 S.W.3d 795, 798 (Tex. App.–Dallas 2008, pet. granted)). The
grounds for modifying or correcting an award are set out in section 171.091 (a), which
states:
On application, the court shall modify or correct an award if:
(1) the award contains:
(A) an evident miscalculation of numbers; or
8
(B) an evident mistake in the description of a person, thing, or
property referred to in the award;
(2) the arbitrators have made an award with respect to a matter not
submitted to them and the award may be corrected without
affecting the merits of the decision made with respect to the issues
that were submitted; or
(3) the form of the award is imperfect in a manner not affecting the
merits of the controversy.
TEX . CIV. PRAC . & REM . CODE ANN . § 171.091(a) (Vernon 2005).
IV. THE ARBITRATOR ’S AUTHORITY OVER VOID ORDERS
AND AWARD OBTAINED BY UNDUE MEANS
In their first issue, appellants claim that the arbitration award is the product of a
series of trial court orders that are void because the trial court failed to comply with the
notice and hearing requirements in section 875(e) of the Texas Probate Code. See
TEX . PROB. CODE ANN . § 875(e) (Vernon Supp. 2009). According to appellants, the
arbitration award should be vacated because the arbitrator exceeded his powers and
the award was obtained by undue means. See TEX . CIV. PRAC . & REM . CODE ANN . §
171.088(a)(1), (a)(3)(a). In two sub-issues, appellants contend that: (1) the award
should be vacated because the arbitrator had no authority to decide issues submitted
by a void court order arising out of a settlement agreement that is the product of other
void court orders; and (2) the award should be vacated because it was obtained by
undue means. Appellants’ argument that the arbitration award was obtained by “undue
means’” is merely an argument that it was obtained as a result of “the coercive power of
a court lacking jurisdiction.”
9
Appellees contend, in contrast, that: (1) the trial court and this Court have
already determined and rejected appellants’ jurisdictional arguments; (2) further review
of this matter is blocked by law of the case and/or judicial estoppel; and (3) the parties’
settlement agreement requires that certain issues be arbitrated without appeal.
In cause number 13-08-00682-CV, appellant herein, Consuelo Villarreal Cantu,
argued that the trial court failed to satisfy “the mandatory and jurisdictional notice
requirements of the Texas Probate Code” because it held an initial guardianship
hearing and appointed a temporary guardian “without giving the proposed ward prior
notice as required by section 875 of the Texas Probate Code.” In re Cantu, No.
13-08-00682-CV, 2009 Tex. App. LEXIS 2241, at *1-2 (Tex. App.–Corpus Christi Apr.
2, 2009, orig. proceeding [mand. denied])3 (mem. op.); see generally TEX . PROB. CODE
ANN . § 875. Consuelo thus contended that the trial court’s jurisdiction over Doña
Raquel was never properly invoked, and consequently, all orders in the guardianship
proceeding were void. See In re Cantu, 2009 Tex. App. LEXIS 2241, at *1-2. The
Court requested and received a response to Consuelo’s petition for writ of mandamus
from the real parties in interest, and further received a reply thereto from the relator. Id.
After due consideration, we concluded that the trial court had acquired jurisdiction over
Doña Raquel at the time it signed the order appointing Raquel as her temporary
guardian, and therefore the order appointing Raquel as temporary guardian, and
subsequent orders in that matter, were not void. See id. at *8-10.
3
Currently pending before the Court is appellees’ “Motion to Take Judicial Notice,” by which appellees
request that this Court take judicial notice of the briefs that were filed in the Texas Suprem e Court in cause
num ber 09-0441. The Court received and reviewed the response to this m otion that was filed by appellants.
Given the current posture of this case, we dism iss appellees’ m otion as m oot.
10
A judgment or order is void when it is apparent that the court rendering it lacked
jurisdiction of either the parties or the subject matter of the lawsuit. See In re Mask,
198 S.W.3d 231, 235 (Tex. App.–San Antonio 2006, orig. proceeding); In re Bokeloh,
21 S.W.3d 784, 794 (Tex. App.–Houston [14th Dist.] 2000, orig. proceeding). For a trial
court to have jurisdiction over a party, the party must be properly before the court in the
pending controversy as authorized by procedural statutes and rules. Perry v. Ponder,
604 S.W.2d 306, 322 (Tex. Civ. App.–Dallas 1980, no writ). Generally, a trial court
does not have jurisdiction to enter a judgment or order against a respondent unless the
record shows proper service of citation on the respondent, or an appearance by the
respondent, or a written memorandum of waiver at the time the judgment or order was
entered. TEX . R. CIV. P. 124; Werner v. Colwell, 909 S.W.2d 866, 869-70 (Tex. 1995);
Autozone, Inc. v. Duenes, 108 S.W.3d 917, 920 (Tex. App.–Corpus Christi 2003, no
pet.). If a trial court enters a judgment before it acquires jurisdiction of the parties, the
judgment is void. In re Mask, 198 S.W.3d at 235; In re B.A.G., 794 S.W.2d 510,
511-12 (Tex. App.–Corpus Christi 1990, no writ) (citing Browning v. Placke, 698 S.W.2d
362, 363 (Tex. 1985)).
In our previous opinion, we considered that the record before us showed that:
(1) the trial court sent notice of the hearing by facsimile to an attorney who appeared at
the hearing on behalf of Doña Raquel’s Mexican counsel; (2) Doña Raquel’s attorney
ad litem, who had met with her prior to the hearing, appeared at the hearing on her
behalf; (3) Doña Raquel was present for some, if not all, of the proceedings attendant to
the hearing; (4) Doña Raquel was personally served with the application for
11
guardianship shortly after the hearing began; and (5) the trial court’s first order
appointing Raquel as temporary guardian was not entered until after Doña Raquel was
personally served with the application. In re Cantu, 2009 Tex. App. LEXIS 2241, at
*8-10. We thus concluded that the trial court had acquired jurisdiction over Doña
Raquel at the time it signed the order appointing Raquel as her temporary guardian,
and that the orders entered in the guardianship proceeding were not void. Id. at *10
(citing In re B.A.G., 794 S.W.2d at 511-12; Ortiz v. Gutierrez, 792 S.W.2d 118, 119
(Tex. App.–San Antonio 1989, writ denied) (holding that the personal service
requirement under the former guardianship statute was jurisdictional, and therefore, the
trial court properly dismissed a guardianship proceeding when the proposed ward had
not been personally served)).
Under the “law of the case” doctrine, questions of law decided on appeal to a
court of last resort will govern the case throughout its subsequent stages. Loram Maint.
of Way, Inc. v. Ianni, 210 S.W.3d 593, 596 (Tex. 2006) (citing Hudson v. Wakefield, 711
S.W.2d 628, 630 (Tex. 1986)). By narrowing the issues in successive stages of the
litigation, the doctrine is intended to achieve uniformity of decision as well as judicial
economy and efficiency. Briscoe v. Goodmark Corp., 102 S.W.3d 714, 716 (Tex.
2003). Appellants’ first issue in this appeal, in which they contend that the arbitration
award should be vacated because it is the product of a series of trial court orders that
are void and thus the arbitrator exceeded his powers or the award was obtained by
undue means, has already been addressed by this Court. See In re Cantu, 2009 Tex.
App. LEXIS 2241, at *8-10. We have been presented with no new or additional facts,
12
legal analysis, or argument that would change the disposition of this issue. Accordingly,
the law of the case doctrine precludes us from reconsidering these issues. See
Briscoe, 102 S.W.3d at 716. We overrule appellants’ first issue.4
V. ARBITRATOR ’S AUTHORITY TO ENFORCE CONTRACTS PROHIBITED BY LAW
OR ISSUE AN AWARD THAT VIOLATES PUBLIC POLICY
In their second issue, appellants argue that, although an arbitrator’s powers are
defined by contract, an arbitrator has no authority to enforce contractual provisions that
are prohibited by law or to issue an award that violates public policy. In two sub-issues,
appellants contend that: (1) the award should be vacated because the arbitrator
exceeded his authority by enforcing contractual provisions that are prohibited by law;
and (2) the award should be vacated because the arbitrator exceeded his authority by
issuing an award that violates public policy. Specifically, appellants contend that the
settlement agreement required the parties to divide assets that they did not own and
which instead belonged to their mother or a separate company, San Pedro Impulsora
De Inmuebles Especiales S.A. de C.V. (“San Pedro Impulsora”). Appellants also
contend that the arbitration award violates public policy because it requires the parties
not to act in the best interests of their mother insofar as it prevents their mother’s return
to Mexico until conditions precedent are met. In contrast, appellees claim that
appellants waived their illegality and public policy objections to the arbitration award by
4
W e further note that section 171.090 of the Texas Arbitration Act specifically provides that “[t]he fact
that the relief granted by the arbitrators could not or would not be granted by a court of law or equity is not a
ground for vacating or refusing to confirm the award.” See T EX . C IV . P RAC . & R E M . C O D E A N N . § 171.090
(Vernon 2005).
13
not raising them during the arbitration hearing and by failing to furnish a record of the
arbitration proceeding.
As an initial matter, we note that appellants’ second issue is phrased in terms of
both statutory grounds for vacatur, insofar as they contend that the arbitrator exceeded
his powers, and common law grounds, insofar as they invoke illegality and public policy
grounds for vacating the award. In 2008, the United States Supreme Court held that
the Federal Arbitration Act’s statutory grounds for vacating an arbitration award are the
exclusive means to vacate an award, thus foreclosing any contractual ground for
vacatur of an arbitration award. Hall St. Assocs., L.L.C. v. Mattel, Inc., 552 U.S. 576,
582 (2008). In rendering this decision, the supreme court “placed in doubt the
continued validity of common law grounds for vacatur . . . previously recognized by
Texas state and federal courts.” Townes Telecomms., Inc. v. Travis, Wolff & Co., 291
S.W.3d 490, 493 (Tex. App.–Dallas 2009, pet. denied) (finding it unnecessary to
address common law grounds for vacatur because appellants had shown a statutory
ground for vacatur of an arbitration award).
In decisions rendered prior to Hall, the Texas Supreme Court assumed, without
deciding, that common law grounds for vacating an award had not been preempted by
statute. See CVN Group, 95 S.W.3d at 238 (discussing illegality and public policy
grounds for vacatur and noting that the parties had not addressed whether common law
grounds for vacatur had been preempted by statutes governing arbitration); Callahan &
Assocs. v. Orangefield Indep. Sch. Dist., 92 S.W.3d 841, 844 (Tex. 2002) (“Similarly,
assuming without deciding that [appellee] may rely on the gross mistake standard under
14
the common law to attack the arbitrator’s award, an arbitrator does not violate the
common law simply by failing to award damages.”). Following Hall, several
intermediate appellate courts have limited review of an arbitration award under the
Federal Arbitration Act to statutory grounds. See, e.g., Allstyle Coil Co., v. Carreon,
295 S.W.3d 42, 44 (Tex. App.–Houston [1st Dist.] May 7, 2009, no pet.); Ancor
Holdings, LLC v. Peterson, Goldman, & Villani, Inc., 294 S.W.3d 818, 828 (Tex.
App.–Dallas 2009, no pet.); Fogal, 294 S.W.3d at 720; see also Petroleum Analyzer
Co. LP v. Olstowski, No. 01-09-00076-CV, 2010 Tex. App. LEXIS 5581, at *32-33 (Tex.
App.–Houston [1st Dist.] July 15, 2010, no pet.) (mem. op.); Lefoumba v. Legend
Classic Homes, Ltd., No. 14-08-00243-CV, 2009 Tex. App. LEXIS 7573, at *5-6 (Tex.
App.–Houston [14th Dist.] Sept. 17, 2009, no pet.) (mem. op.); Chandler v. Ford Motor
Credit Co., No. 04-08-00100-CV, 2009 Tex. App. LEXIS 1587, at *8-10 (Tex. App.–San
Antonio Mar. 4, 2009, no pet.) (mem. op.). Some courts, relying on the parallel
structures of the Federal Arbitration Act and the Texas Arbitration Act, have likewise
held that the Texas Arbitration Act’s statutory provisions for vacating an arbitration
award are exclusive, thus foreclosing the application of common law grounds for
vacatur. See Age Indus. v. Edwards, 318 S.W.3d 461, 463 (Tex. App.–El Paso 2010,
pet. dism’d); Quinn, 257 S.W.3d at 799.5 In contrast, some Texas courts continue to
apply statutory and common law grounds for vacating an award. See, e.g.,
Graham-Rutledge & Co. v. Nadia Corp., 281 S.W.3d 683, 688 (Tex. App.–Dallas 2009,
5
The com m on law and the Texas General Arbitration Act coexist as a dual system of arbitration, and
the TAA is “cum ulative” of the com m on law. L. H. Lacy Co. v. City of Lubbock, 559 S.W .2d 348, 351 (Tex.
1977); Collins v. Tex Mall, L.P., 297 S.W .3d 409, 415 (Tex. App.–Fort W orth 2009, no pet.).
15
no pet.) (reviewing statutory grounds for vacating an award and stating that Texas
common law also provides that a binding arbitration award may be set aside if it is
tainted with “fraud, misconduct, or such gross mistake as would imply bad faith, or a
failure to exercise honest judgment”).
The parties to this appeal have not addressed the continued viability of common
law grounds for vacatur of an arbitration award under the Texas Arbitration Act, and
appellants’ issues are ostensibly couched in statutory terms for vacatur. Moreover, the
applicability, or lack thereof, of the common law doctrines for vacatur is not
determinative of this appeal. See generally TEX . R. APP. P. 47.1, 47.4. Thus, we
address appellants’ second issue, that is, whether the arbitrator exceeded his authority,
without deciding whether the common law doctrines referenced therein remain
applicable.
The authority of an arbitrator is derived from the arbitration agreement and is
limited to a decision of the matters submitted therein either expressly or by necessary
implication. Gulf Oil Corp. v. Guidry, 160 Tex. 139, 327 S.W.2d 406, 408 (Tex. 1959);
Allstyle Coil Co., 295 S.W.3d at 44 (stating scope of authority depends on the
agreement). An arbitrator exceeds his powers when he decides matters not properly
before him. Ancor Holdings, LLC v. Peterson, Goldman, & Villani, Inc., 294 S.W.3d
818, 829 (Tex. App.–Dallas 2009, no pet.); Barsness v. Scott, 126 S.W.3d 232, 241
(Tex. App.–San Antonio 2003, pet. denied). When determining whether an arbitrator
has exceeded his power, any doubts concerning the scope of what is arbitrable should
be resolved in favor of arbitration. See Myer v. Americo Life, Inc., 232 S.W.3d 401, 408
16
(Tex. App.–Dallas 2007, no pet.). It is only when the arbitrator departs from the
agreement and, in effect, dispenses his own idea of justice that the award may be
unenforceable. Centex/Vestal, 314 S.W.3d at 684.
In the instant case the arbitrator’s authority derives from the “Irrevocable Family
Settlement Agreement, Assignment, and Release and Rule 11 Agreement.” This
agreement was entered to settle “the various claims, controversies, and disputes”
among the parties “relating directly or indirectly to the transfer and gifting of property of
[Doña Raquel] and/or Ignacio Villarreal Villarreal, the care and support of [Doña
Raquel], and all other claims, controversies, and disputes, civil and criminal, between
the parties . . . .” The agreement states that “[a]ll parties agree that the estate of [Doña
Raquel] consists of the 34 million pesos . . . and whatever money that is in the
temporary guardian of the estate’s accounts in the United States.” The agreement
defines the properties that “belong to the seven children of [Doña Raquel]” and directs
that the properties “shall be placed into hotchpotch and distributed among and between
the seven children of [Doña Raquel].” The hotchpotch is expressly defined in the
agreement to include “all shares” and “any and all assets” of San Pedro Impulsora. The
agreement further repeatedly references the guardianship for Doña Raquel and
includes provisions for her care. As previously discussed, this document provides that
arbitrator shall arbitrate “any dispute regarding the interpretation and implementation of
this Agreement” including “the manner in which the [h]otchpotch is to be distributed to
the seven children of [Doña Raquel].”
17
Because of the breadth of the arbitration agreement, we conclude that the
arbitrator was authorized to determine that the property rights at issue herein arose out
of or were related to the agreement or involved a common question of law or fact. See
Centex/Vestal, 314 S.W.3d at 685; Hisaw & Assoc. Gen. Contractors, Inc., 115 S.W.3d
at 16. In short, the agreement at issue gave the arbitrator, either expressly or by
necessary implication, the authority to decide matters pertaining to Doña Raquel and
San Pedro Impulsora.6
Appellants further contend that the award is illegal because the arbitrator had no
authority to issue an award distributing assets owned by Doña Raquel and San Pedro
Impulsora because appellees do not have any justiciable interest in, or the legal
capacity to sue to recover, any asset in Doña Raquel’s estate or any asset belonging to
a third party such as San Pedro Impulsora.
As a threshold matter, when a non-prevailing party seeks to vacate an arbitration
award, it bears the burden in the trial court of bringing forth a complete record that
establishes its basis for vacating the award. Chestnut Energy Partners, 300 S.W.3d at
401; Statewide Remodeling, Inc., 244 S.W.3d at 568. When there is no transcript of
the arbitration hearing, as here, the appellate court will presume the evidence was
adequate to support the award. Chestnut Energy Partners, 300 S.W.3d at 401;
Statewide Remodeling, Inc., 244 S.W.3d at 568. The application of this general rule
6
In our evaluation of appellants’ argum ents regarding the scope of the arbitrator’s authority, we are
m indful of other courts’ cautions against a party’s “use of the authority argum ent as a ruse to induce the
reviewing court to redeterm ine the facts— even just a tiny bit—or reach a legal conclusion on them as found
or hoped for which differs from that of the arbitrators.” Centex/Vestal v. Friendship W . Baptist Church, 314
S.W .3d 677, 684 (Tex. App.–Dallas 2010, no pet.) (quoting Island on Lake Travis, Ltd. v. Hayman Co. Gen.
Contractors, 834 S.W .2d 529, 533 (Tex. App.–Austin 1992, writ granted, judgm ’t vacated w.r.m .)).
18
merely limits rather than forecloses our consideration of whether the arbitrator
exceeded his authority in this instance. Centex/Vestal, 314 S.W.3d at 685; see, e.g.,
Grand Homes 96, L.P. v. Loudermilk, 208 S.W.3d 696, 706 (Tex. App.–Fort Worth
2006, pet. denied) (noting that there was no record of the arbitration proceeding but
considering pleadings and agreement in concluding arbitrator did not exceed his
authority). Therefore, we consider the parties’ agreement and the matters submitted in
arbitration to determine whether the arbitrator exceeded his power. In so doing, we
presume any remaining evidence supports the award. See Centex/Vestal, 314 S.W.3d
at 685.
Because we do not have a record of the proceedings by which to consider
appellants’ complaints and we presume that the evidence was adequate to support the
arbitrator’s award, see Statewide Remodeling, Inc., 244 S.W.3d at 568, we have no
evidence before us to show that the property divided by agreement was actually held by
Doña Raquel and San Pedro Impulsora. We further note that the arbitrator stated in his
award that there was “substantial evidence” presented in the exhibits and at the
arbitration hearing that appellants control San Pedro Impulsora. Accordingly, we reject
appellants’ fundamental premise underlying this issue insofar as it depends on facts
which are unsupported by the record before us.
Moreover, appellants’ suggestion that the arbitrator lacked authority to divide
their mother’s estate is supported by citation to one case, Pike v. Crosby, 472 S.W.2d
588 (Tex. Civ. App.–Eastland 1971, no writ). They contend that this case stands for the
19
proposition that heirs have no justiciable interest in a decedent’s assets or the legal
capacity to sue to cancel the decedent’s conveyance of her assets to a trustee.
In Pike, Ora Badger conveyed all of her property to George Pike through a trust
conveyance, with the property to be held in trust for Badger’s benefit during her lifetime,
and with title to vest in Pike at Badger’s death. Id. at 588. After her death, her three
heirs at law and a principal devisee under her will brought suit to cancel the trust
conveyance. Id. The trial court granted a temporary injunction against Pike restraining
him from disposing of any of Badger’s estate pending final trial on the merits. Id. at
588-89. The court determined that the devisee under Badger’s will had no justiciable
interest or capacity to either bring or maintain the suit for cancellation of the
conveyance because Badger’s will was unprobated and thus, the devisee could not
demonstrate an interest in the property in question. Id. at 589-90. The court further
ruled that the decedent’s heirs at law lacked a justiciable interest in the property and did
not have legal capacity to maintain the suit because they could not allege, as required
by common law, that there was no administration of Badger’s estate pending, no
necessity for administration, and no will left by the decedent. Id. at 590-91. The court
held that, absent a right to maintain the underlying action, appellees were not entitled to
the temporary injunction. Id. at 591.
Pike does not control our analysis of the issue. This case concerns the estate of
a ward under guardianship where the assets of the estate were identified and divided
by agreement by the seven children of the ward. In this regard, we note that appellants
do not argue that imposition of a guardianship for Doña Raquel was error. Moreover, to
20
the extent that appellants’ contentions rely on the factual allegations that any property
at issue in the agreement belonged to Doña Raquel or San Pedro Impulsora, as stated
previously, we note that there is no evidence in the record supporting these allegations.
Appellants further argue that the arbitrator exceeded his authority in issuing an
award that violates public policy because it requires appellants not to act in the best
interest of their mother. Appellants point out that they lack the ability to determine their
mothers’ residence and state that, under the terms of the award, Doña Raquel cannot
be returned to her home in Mexico until appellants comply with the terms of the award.
“[A]n arbitration award cannot be set aside on public policy grounds except in an
extraordinary case in which the award clearly violates carefully articulated, fundamental
policy.” CVN Group, 95 S.W.3d at 239. “[A]ny claimed violation of such public policy
must be carefully scrutinized to protect the arbitration award from unwarranted judicial
interference.” Id. Although public policy considerations may underlie the parent-child
relationship, particularly where the parent is under guardianship, we conclude that the
arbitration award in this case did not in any way impugn that relationship. Appellants’
contentions are generally belied by the terms of the agreement and award. The
agreement contains specific and detailed provisions regarding the care, custody, and
control of Doña Raquel and attempts to ensure that all of her children have access to
her. Moreover, as stated, all parties signed the agreement. The award cannot be said
to “clearly” violate “carefully articulated, fundamental policy.” See id. Accordingly, we
overrule appellants’ second issue.
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VI. CONDUCT OF ARBITRATION HEARING
In their third issue, appellants assert that the arbitration award must be vacated
because the arbitrator refused to postpone the arbitration hearing after a showing of
sufficient cause and, accordingly, conducted the hearing in a manner that substantially
prejudiced appellants’ rights. Stated otherwise, appellants contend that the award
should be vacated because the arbitrator refused to postpone the arbitration hearing
even though appellants could not appear. Specifically, appellants assert that they were
unable to attend the arbitration hearing because the trial court’s order granting a
temporary injunction, and a related order enforcing the temporary injunction and issuing
writs of attachment, were under appeal. “Because the writs of attachment had issued,
[appellants] were under threat of arrest and could not enter the United States to
participate in the arbitration hearing.” Appellees, in contrast, assert that this excuse
does not constitute “sufficient cause” to postpone the arbitration.
In correspondence to the arbitrator, appellants argued that “[i]mproperly obtained
writs of attachment preclude any meaningful arbitration and arbitration should be
continued until [the] interlocutory appeal is decided.” Appellants further stated that:
As you are aware, [the trial court] issued writs of attachment for my
client as well as his brother Fernando and Consuelo for supposedly
violating a temporary injunction, which was granted on June 9, 2008.
Those writs were issued on June 27, 2008 in contravention of [Texas Rule
of Appellate Procedure] 29.4 because the temporary injunction was on
appeal when the judge issued those writs. As I stated in my prior letter of
August 4, 2008 my client will not appear at a hearing only to be arrested
when he shows up at your office. Furthermore, attempting to proceed
with a hearing under these circumstances would subject any potential
award to being vacated under the provisions of [section] 171.088 of the
[Texas] Civil Practice and Remedies Code. Therefore we object to the
hearing and request that it be postponed until such time as the validity of
22
the injunction and the writs of attachment are decided by the court of
appeals or supreme court.
The arbitration proceeded as scheduled on August 18, 2008. Appellants did not
appear at the arbitration; however, their attorneys appeared on their behalf. In the
arbitration award, the arbitrator addressed appellants’ objection to the arbitration as
follows:
Objection No. 1: Improperly obtained writs of attachment preclude
any meaningful arbitration and arbitration should be continued until
interlocutory appeal is decided.
The Court of Appeals and the Supreme Court have denied any
temporary relief or stay to the [appellants]. The “ground rules” for the
Arbitration permitted the [appellants] parties to testify [through] Affidavits.
The [appellants] did not avail themselves of the opportunity to present,
[through] their Attorneys, proposals, comments, responses, other
witnesses, Affidavits or Exhibits (other than Exhibit [Numbers] 1, 2 & 24).
Objection No. 1 is overruled.
As stated previously, under the civil practice and remedies code, “the court shall
vacate an award if . . . the arbitrator . . . refused to postpone the hearing after a
showing of sufficient cause for the postponement.” TEX . CIV. PRAC . & REM . CODE ANN . §
171.088(a)(3)(B). In determining what constitutes a “sufficient cause for postponement”
under section 171.088(a)(3)(B), we may examine the grounds a court would find
sufficient to support a motion for continuance in a trial court. Hoggett v. Zimmerman,
63 S.W.3d 807, 811 (Tex. App.–Houston [14th Dist.] 2001, no pet.).
Texas Rule of Civil Procedure 251 provides that a motion for continuance cannot
be granted “except for sufficient cause supported by affidavit, or by consent of the
parties, or by operation of law.” TEX . R. CIV. P. 251. Appellants have alleged that the
arbitration should have been continued because they were unable to be present.
23
However, a trial court is not required to grant a motion for continuance just because a
party is unable to be present at trial. Ngo v. Ngo, 133 S.W.3d 688, 693 (Tex.
App.–Corpus Christi 2003, no pet.); Briscoe v. Goodmark Corp., 130 S.W.3d 160, 169
(Tex. App.–El Paso 2003, no pet.); Hawthorne v. Guenther, 917 S.W.2d 924, 929 (Tex.
App.–Houston [1st Dist.] 1996, writ denied); Humphrey v. Ahlschlager, 778 S.W.2d 480,
483 (Tex. App.–Dallas 1989, no writ); Brown v. Brown, 599 S.W.2d 135, 137 (Tex. Civ.
App.–Corpus Christi 1980, no writ). When a continuance is sought because of the
unavailability of a party, we examine Texas Rule of Civil Procedure 252. Hawthorne,
917 S.W.2d at 929. This rule states:
If the ground of such application be the want of testimony, the party
applying therefor shall make affidavit that such testimony is material,
showing the materiality thereof, and that he has used due diligence to
procure such testimony, stating such diligence, and the cause of failure, if
known; that such testimony cannot be procured from any other source;
and, if it be for the absence of a witness, he shall state the name and
residence of the witness, and what he expects to prove by him; and also
state that the continuance is not sought for delay only, but that justice may
be done; provided that, on a first application for a continuance, it shall not
be necessary to show that the absent testimony cannot be procured from
any other source.
TEX . R. CIV. P. 252; see Duerr v. Brown, 262 S.W.3d 63, 78-79 (Tex. App.–Houston
[14th Dist] 2008, no pet.) (stating that a movant for continuance based on the need for
testimony must identify the witness and the evidence that the testimony is expected to
demonstrate).
In requesting that the arbitrator continue the hearing, appellants did not argue
that their presence and testimony at the arbitration was material, they made no offering
of what testimony or evidence they planned to present, and they did not show that any
24
such evidence could not be procured by means other than their attendance at
arbitration. Further, as stated by the arbitrator, appellants had the opportunity to
present testimony at the arbitration by affidavits, but failed to avail themselves of that
opportunity. Under the foregoing circumstances, we cannot conclude that the arbitrator
abused his discretion in denying appellants’ request to continue the arbitration. We
overrule appellants’ third issue.
VII. CONCLUSION
Having overruled each of appellants’ issues, we affirm the judgment of the trial
court.
NELDA V. RODRIGUEZ
Justice
Delivered and filed the 18th
day of November, 2010.
25