Dianna Jones v. Currie A. McRee, IV and Ed Baranowski, Independent Co-Executors of the Estate of Harold John Brelsford

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