No Orders Compelling Arbitration in Rule 202 Proceeding (unless agreed by the parties)

Rule 202 petition does not confer jurisdiction on trial court to enter order compelling arbitration over objection of the other party, Dallas Court of Appeal says in case in which it also awards mandamus relief against the trial court's order permitting Rule 202 discovery (presuit discovery to investigate claim, here female attorney's sex discrimination claim against law firm in which she was partner on equal pay issue).


Patton Boggs, LLP v. Kate Moseley (Tex.App.- Dallas, Dec. 29, 2011)
   
EXCERPT FROM OPINION BY JUSTICE ROBERT M. FILLMORE
  
Appellant Patton Boggs filed this interlocutory appeal challenging the trial court's denial of its motion to compel arbitration. See Tex. Civ. Prac. & Rem. Code Ann. § 51.016 (West Supp. 2011) (appeal or writ of error to the court of appeals from the judgment or interlocutory order of a district court in a matter subject to Federal Arbitration Act); Tex. Civ. Prac. & Rem. Code Ann. § 171.098(a)(1) (West 2011) (party may appeal an order denying an pplication to compel arbitration under section 171.021); see Tex. Civ. Prac. & Rem. Code Ann. § 171.021(a) (West 2011) (court shall order parties to arbitration on application of a party showing an agreement to arbitrate and the opposing party's refusal to arbitrate). See Footnote 7 In its sole issue on appeal, Patton Boggs contends the trial court erred by denying Patton Boggs's motion to compel arbitration and to stay the rule 202 proceedings.
  
Moseley responds that the trial court lacked jurisdiction over Patton Boggs's motion to compel arbitration filed in the rule 202 proceeding. We agree. Because the only proceeding before the trial court was a rule 202 petition, the trial court had no jurisdiction to grant a motion to compel arbitration absent an agreement between the parties that the motion should be granted. See In re Southwest Sec., Inc., No. 05-99-01836-CV, 2000 WL 770117, at *2 (Tex. App.-Dallas, June 14, 2000, orig. proceeding.) (not designated for publication). The trial court lacked jurisdiction to compel arbitration in the rule 202 proceeding. Accordingly, we dismiss this interlocutory appeal for lack of jurisdiction. Tex. R. App. P. 42.3(a).
 
Conclusion
  
We conditionally grant the petition for writ of mandamus and order the trial court to vacate the portions of its August 15, 2011 order that grant Moseley's rule 202 request to take depositions and that grant in part Moseley's request for production of documents. A writ will issue only in the event the trial court fails to vacate the portions of its August 15, 2011 order that grant Moseley's rule 202 request to take depositions and that grant in part Moseley's request for production of documents in conjunction with those depositions.
We dismiss this interlocutory appeal for lack of jurisdiction.

SOURCE: DALLAS COURT OF APPEALS - 05-11-01097-CV  - 12/29/11

Sup. Ct. SCI Arbitration case decided: In Re Services Corporation International (Tex. 2011)(orig. proceeding)

       
In Re Service Corporation International (SCI) (Tex. 2011)
    
PER CURIAM OPINION OF THE TEXAS SUPREME COURT
 
This mandamus proceeding arises from an arbitration agreement governed by the Federal
Arbitration Act (FAA). The parties entered into a contract for interment rights and services. The
contract obligated the parties to arbitrate this dispute over the care and maintenance of the cemetery.
 
The arbitration agreement provides that an arbitrator would either be selected by mutual agreement
of the parties or appointed by the American Arbitration Association (AAA). The parties failed to
agree to an arbitrator and the trial court appointed an arbitrator without allowing a reasonable
opportunity to procure an appointment by AAA. We conclude that the trial court abused its
discretion and conditionally grant the petition for writ of mandamus.

SERVICE CORPORATION INTERNATIONAL
OFFICE TOWER IN HOUSTON

Relators Service Corporation International and SCI Texas Funeral Services, Inc. (jointly
SCI) entered into a written contract with Gabriel and Yolanda Serna for two burial plots in the
Magic Valley Memorial Gardens after the death of their son. The contract contained an arbitration
clause to be utilized for dispute resolution. Under the arbitration clause, the parties would choose
an arbitrator by mutual agreement. If the parties were unable to agree on an arbitrator, the AAA
would select the arbitrator upon application of one or both of the parties.
  
The Sernas filed a suit against SCI on March 19, 2009, alleging, among other things, that SCI
had misrepresented the cemetery as a licensed endowment-care facility and failed to properly
maintain the cemetery. In its original answer, SCI asserted that the dispute was bound for
arbitration. The parties were unable to agree on an arbitrator for several months. When the parties
eventually reached an agreement on an arbitrator on October 14, 2009, he was disqualified because
he represented employees of SCI in an unrelated case. On October 27, the Sernas asked the trial
court to appoint an arbitrator, arguing that SCI had waived its right to seek an appointment by the
AAA. On November 10, the trial court appointed former district judge Abel C. Limas to arbitrate
the case after concluding that the parties were unable to agree on an arbitrator and SCI had waived
the right to seek an AAA appointment. SCI filed a motion for rehearing arguing that the contractual
provision required that the AAA appoint the arbitrator, and that the Sernas were responsible for
initiating proceedings with the AAA. The trial court denied the motion for rehearing on December
15. SCI unsuccessfully sought a writ of mandamus from the court of appeals. In this Court, SCI
requests that we direct the trial court to vacate its order naming Limas as arbitrator.
  
Mandamus relief is appropriate when the trial court has abused its discretion and there is no
adequate remedy by appeal. In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 135–36 (Tex. 2004)
(citations omitted). When a trial court errs in determining the law or in applying the law to the facts,
it has abused its discretion. Id. at 135 (citations omitted). No adequate remedy by appeal exists
when a trial court erroneously appoints an arbitrator pursuant to section 5 of the Federal Arbitration
 

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Act because the FAA does not provide for review of the trial court’s actions in state court.1 See 9
U.S.C. § 5; In re La. Pac. Corp., 972 S.W.2d 63, 65 (Tex. 1998) (per curiam). Because the terms
of the contract require the parties to apply to the AAA to appoint an arbitrator upon their failure to
agree to an arbitrator, we conditionally issue a writ of mandamus.
 
The parties agree that this case is governed by the FAA, 9 U.S.C. §§ 1–16. Section 5 of the
FAA provides:
 

If in the agreement provision be made for a method of naming or appointing an
arbitrator or arbitrators or an umpire, such method shall be followed; but if no
method be provided therein, or if a method be provided and any party thereto shall
fail to avail himself of such method, or if for any other reason there shall be a lapse
in the naming of an arbitrator or arbitrators or umpire, or in filling a vacancy, then
upon the application of either party to the controversy the court shall designate and
appoint an arbitrator or arbitrators or umpire, as the case may require, who shall act
under the said agreement with the same force and effect as if he or they had been
specifically named therein . . . .

 
9 U.S.C. § 5 (emphasis added). The primary purpose of the FAA is to require enforcement of
arbitration agreements “according to their terms.” Volt Info. Scis. v. Bd. of Trs., 489 U.S. 468, 479
(1989). Before the trial court can intervene and appoint an arbitrator, section 5 requires that parties
follow the previously agreed method of arbitrator selection. CMH Homes v. Perez, 340 S.W.3d 444,
449 (Tex. 2011). Because the FAA requires the trial court to follow the arbitrator selection method
detailed in the contract, we first determine the method of appointment required by the contract.
 

Footnote 1 This case was filed prior to the 2009 addition of section 51.016 to the Texas Civil Practice and Remedies Code expanding state court interlocutory review of certain FAA arbitration matters. See CMH Homes v. Perez, 340 S.W.3d 444 (Tex. 2011) (discussing the appellate remedies available to parties in arbitration proceedings following the 2009 amendment).
 

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The contract signed by SCI and the Sernas outlined the following method of appointing an
arbitrator:
 

[T]he arbitrator shall be selected by mutual agreement of the parties. If the parties fail
to or are unable to agree on the selection of an appropriate arbitrator, the AAA shall
select the arbitrator pursuant to its rules and procedures upon the application of one
or both parties.

 
The agreement provides only two ways that the parties may select an arbitrator: (1) mutual
agreement, or (2) if the parties cannot agree, the AAA selects an arbitrator. When the parties failed
to agree on an arbitrator, the contract required petitioning the AAA to appoint an arbitrator. Because
the contract plainly requires the AAA to appoint an arbitrator when mutual agreement fails, the trial
court abused its discretion by appointing an arbitrator unless an exception under section 5 applies.
 
The parties contracted to this method of appointing an arbitrator. The trial court is permitted
to appoint an arbitrator under section 5 of the FAA only if one or both of the parties “fail[s] to avail”
itself of the agreed-upon arbitrator selection method, or there is a “lapse” in the selection of an
arbitrator. 9 U.S.C. § 5. The section 5 substitution process triggered by the “fail to avail” and
“lapse” language of the FAA should be invoked by the trial court when there is some “mechanical
breakdown in the arbitrator selection process” or “one of the parties refuses to comply, thereby
delaying arbitration indefinitely.” In re La. Pac. Corp., 972 S.W.2d at 64–65 (Tex. 1998) (citing
In re Salomon Inc., 68 F.3d 554, 560 (2d Cir. 1995) (interpreting “lapse” and “fail to avail” in
section 5 of the FAA)). The Sernas argue that SCI has forfeited its right to involve the AAA in the
arbitrator selection process because of a lapse due to the time that had passed, the failure of SCI to
 

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apply to the AAA, and a mechanical breakdown in the method of selecting an arbitrator. We do not
agree.
  
The Sernas contend that a time lapse in applying to the AAA triggered the trial court’s
authority to appoint an arbitrator under section 5 of the FAA. It is important to remember that the
FAA disfavors waiver and similar forfeitures of arbitration rights, and there is a strong presumption
against them. Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24–25 (1983)
(observing that, under the FAA, any doubts concerning “an allegation of waiver, delay or a like
defense to arbitrability” should be “resolved in favor of arbitration”); Prudential Secs. Inc. v.
Marshall, 909 S.W.2d 896, 898 (Tex. 1995) (noting the presumption, under both federal and state
law, against waiver of a contractual right to arbitration). We have observed that “one of the central
purposes of the FAA has been to allow the parties to select their own arbitration panel if they choose
to do so.” In re La. Pac. Corp., 972 S.W.2d at 65. However, section 5 tempers the principle that
parties are free to make – and enforce – their arbitration agreements as they see fit, with the
countervailing grant of authority to a district court to intercede and “spur the arbitral process
forward” when the parties reach a stalemate in naming an arbitrator. Pac. Reins. Mgmt. Corp. v.
Ohio Reins. Corp., 814 F.2d 1324, 1329 (9th Cir. 1987).
 
In Pacific Reinsurance, a district judge appointed an umpire, notwithstanding the parties’
arbitration agreement, under circumstances in which the litigants had “tried and failed” to name an
umpire. Id. at 1329. Finally, after “five months of impasse,” the trial court appointed an umpire on
motion of one of the parties. Id. The Court affirmed the appointment on failure-to-avail and lapse
grounds, holding that section 5 may properly be invoked when the parties’ “impasse” had lasted for
 

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five months. Id. The Court explained that while parties should be afforded every reasonable
opportunity “to comply with their agreement,” section 5 may be invoked by a trial court to appoint
an arbitrator where the arbitration process “stagnate[s] into endless bickering over the selection
process.” Id.
 
This is not such a case. The contract provides consensual methods for appointment of an
arbitrator, and the court must allow the parties sufficient time to utilize the contractual method
before intervening to appoint an arbitrator. An unreasonable delay in such an appointment,
sufficient to constitute a lapse or failure to avail, should be measured from the point when mutual
agreement failed. See id.; cf. In re Universal Underwriters of Tex. Ins. Co., 345 S.W.3d 404, 409
(Tex. 2011) (holding, in the context of the right to an appraisal under an insurance contract, that an
unreasonable delay sufficient to invoke waiver must be measured from the point of impasse – the
point at which the parties become aware of the futility of further negotiations). Seven months
elapsed from SCI’s motion to compel arbitration in April 2009 to the time the trial court appointed
an arbitrator in November. The Sernas argue the seven-month period establishes a deadlock or
impasse between the parties justifying the trial court’s intervention. On the contrary, that sevenmonth
period includes the time the parties worked to reach a mutual agreement and did agree on an
arbitrator, only to have him recused on conflict-of-interest grounds. The arbitration clause
contemplated efforts to reach such an agreement. The applicable delay is the time after an impasse
or deadlock is reached. See Pac. Reins., 814 F.2d at 1329.
 
An impasse, if any, occurred after the agreed arbitrator was disqualified. Acting on the Sernas’ motion, filed less than two weeks after the agreed arbitrator was disqualified, the trial court
 

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appointed an arbitrator, notwithstanding the contract. This appointment occurred just one month
after the parties had been in apparent agreement on an arbitrator. Thus, the disagreement of the
parties as to the selection of the arbitrator was at most one month old. We are unable to locate any
instance in which a federal court held that a delay in appointing an arbitrator as short as one month
constituted a lapse under section 5. In the instances in which courts have found a lapse, the periods
between the impasse and the appointment of an arbitrator are significantly longer than one month.
See e.g., Pac. Reins. Mgt. Corp., 814 F.2d at 1328 (concluding that a five-month “impasse” between
the parties resulted in both a “lapse” and “fail[ure] to utilize” the agreed-to umpire-selection
method); Trustmark Ins. Co. v. Clarendon Nat’l Ins. Co., No. 09 C 6169, 2010 U.S. Dist. LEXIS
8078, at *14 (N.D. Ill. Feb. 1, 2010) (holding that a four-month delay, measured from the time the
defendants sent a list of potential umpires to the plaintiffs with no response to the time the
defendants asked the trial court to appoint an umpire, constituted a lapse). As a matter of law, a one month interval following an impasse, by itself, cannot reasonably be construed as a lapse in
appointing an arbitrator. The parties had reached an agreement previously; both their contract and
section 5 entitled them to a reasonable opportunity to do so again.
 
Arguing a failure-to-avail point, the Sernas assert that it was clear that neither party intended
to apply to the AAA and, further, SCI’s position was that it did not have the obligation to petition
the AAA for appointment of an arbitrator. Again relying on the seven-month period from the filing
of SCI’s motion to compel through the time the trial court appointed an arbitrator, the Sernas
contend that a stalemate had been reached. Reiterating, the period of time during which the parties
are in discussions or negotiations toward mutual selection of an arbitrator does not count as delay
 

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after an impasse. See generally In re Universal Underwriters of Tex. Ins. Co., 345 S.W.3d at
408–09. As a matter of law, we conclude that under section 5 a one-month halt in negotiations
between the parties does not in itself constitute a failure to avail by SCI of its contractual right to
have the AAA select the arbitrator, irrespective of whether one or both parties had the contractual
burden to pursue AAA appointment.
 
The Sernas also argue that an ambiguity in the contract resulted in a mechanical breakdown
in the selection of an arbitrator. The contract states that “in the absence of [applicable state laws
governing arbitration], the arbitration proceedings shall be conducted in accordance with the
applicable rules of the [AAA]; provided, however, that the foregoing reference to the AAA rules
shall not be deemed to require any filing with that organization . . . .” The Sernas argue that these
provisions are contradictory and ambiguous and should be construed against the contract drafter,
SCI. When interpreting a contract, our primary concern is to ascertain and give effect to the intent
of the parties as expressed in the contract. Seagull Energy E & P, Inc. v. Eland Energy, Inc., 207
S.W.3d 342, 345 (Tex. 2006) (citations omitted). “To discern this intent, we ‘examine and consider
the entire writing in an effort to harmonize and give effect to all the provisions of the contract so
that none will be rendered meaningless. No single provision taken alone will be given controlling
effect; rather, all the provisions must be considered with reference to the whole instrument.’”Id.
(citations omitted).
 
The provisions that the Sernas argue are ambiguous simply define the rules applicable to
arbitration proceedings and do not conflict with other portions of the arbitration agreement. Because
the contract allows for the appointment of an arbitrator without the involvement of the AAA, the
 

-8-

 
contract provides that, although the parties may use AAA rules to govern their dispute, no filing with
the AAA is required when the parties mutually agree. However, if the parties cannot agree, then
either party may apply to have an arbitrator appointed through the AAA’s procedures. We conclude
that the contract is not ambiguous on this point. If the parties cannot agree on an arbitrator, the
contract requires that they use AAA to appoint the arbitrator.
 
Accordingly, without hearing oral argument, we conditionally grant mandamus relief to SCI
and direct the trial court to vacate its prior order appointing an arbitrator and allow the parties a
reasonable opportunity to select an arbitrator pursuant to their agreement. TEX. R. APP. P. 59.1,
52.8(c). We are confident the trial court will comply, and the writ will issue only if it fails to do so.
 
OPINION DELIVERED: December 16, 2011
 

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FULL STYLE AND CASE DETAILS
 
IN RE SERVICE CORPORATION INTERNATIONAL AND SCI TEXAS FUNERAL SERVICES, INC. D/B/A MAGIC VALLEY MEMORIAL GARDENS; from Hidalgo County; 13th district (13-09-00681-CV, ___ SW3d ___, 02-17-10) stay order issued March 12, 2010, lifted
Pursuant to Texas Rule of Appellate Procedure 52.8(c), without hearing oral argument, the Court conditionally grants the writ of mandamus.
Per Curiam Opinion
 
Click below to read the opinion of the Corpus Christi Court of Appeals:
IN RE SERVICE CORPORATION INTERNATIONAL, Tex: Court of Appeals, 13th Dist. 2010

Americo Life, Inc. v. Robert L. Myer, No. 10-0734 (Tex. 2011)

Americo Life, Inc. v. Myer, No. 10-0734 (Tex. Dec. 16, 2011)

PER CURIAM OPINION OF THE TEXAS SUPREME COURT
   
This case concerns an arbitration provision that allows each party to appoint one arbitrator to a panel, subject to certain requirements. At issue is whether Americo Life, Inc. waived its objection to the removal of the arbitrator it selected. The underlying dispute concerned the financing mechanism for Americo’s purchase of several insurance companies from Robert Myer. FN1 Pursuant to the financing agreement, Americo and Myer submitted their dispute to arbitration under American Arbitration Association (AAA) rules. The arbitrators found in favor of Myer, and Americo filed a

FN 1: Petitioners Americo Life, Inc., Americo Financial Life and Annuity Insurance Company, Great Southern Life Insurance Company, the Ohio State Life Insurance Company, and National Farmers’ Union Life Insurance Company are referred to as Americo. Respondents Robert L. Myer and Strider Marketing Group, Inc. are referred to as Myer.

motion to vacate the award. The trial court granted the motion. It held that Americo was entitled to any arbitrator that met the requirements set forth in the financing agreement and that the arbitrator removed by the AAA met those requirements. The court of appeals reversed, holding that Americo had waived these arguments by not presenting them to the AAA. Because the record demonstrates otherwise, we reverse the court of appeals’ judgment and remand the case to the court of appeals for further proceedings.

The parties entered into a financing agreement for Americo’s purchase of several insurance
companies from Myer. This agreement provides that any disputes “shall be referred to three
arbitrators.” It further provides that “Americo shall appoint one arbitrator and Myer shall appoint
one arbitrator and such two arbitrators to select the third.” The financing agreement provides that
each arbitrator “shall be a knowledgeable, independent businessperson or professional.”
However, the contract also provides that, subject to exceptions not at issue here, the
proceedings “shall be conducted in accordance with the commercial arbitration rules of the
American Arbitration Association.” At the time the parties entered into the financing agreement,
the AAA rules provided that its “rules and any amendment of them shall apply in the form in effect
at the time the administrative filing requirements are met for a demand for arbitration or submission
agreement received by the AAA.” At the time of the demand for arbitration between the parties, the
AAA rules provided that “[a]ny arbitrator shall be impartial and independent . . . and shall be subject
to disqualification for (i) partiality or lack of independence . . . .”

Here, Myer argued to the AAA that Americo’s selected arbitrator, Ernest Figari, Jr., was not
impartial and therefore should be removed. Americo responded that Figari was, in fact, impartial.

-- Page 2 end --

The parties dispute whether Americo additionally responded that its selected arbitrator need only
meet the “independent” and “knowledgeable” requirements from the financing agreement.
The AAA agreed with Myer and removed Figari from the arbitration panel. Americo
asserted a standing objection to the continuation of the arbitration without Figari. Americo also
stated that it would proceed to arbitrate without waiving its objection and without waiver of the right
to appeal any decision based on the removal of Figari. Americo subsequently selected another
arbitrator.

The arbitration panel rendered a unanimous decision awarding Myer declaratory relief,
breach of contract damages of $9.29 million, $15.8 million in damages for wrongfully withheld
payments under the financing agreement, and $1.29 million in attorney’s fees and costs. Myer filed
a petition to confirm the award in the district court and Americo filed a motion to vacate or modify
the award. Americo argued that, inter alia, the award was not made by arbitrators selected under
the financing agreement’s requirements and was therefore void.2 The court granted Americo’s
motion to vacate and found that the AAA failed to follow the arbitration selection method contained
in the financing agreement, that the AAA had no authority to strike Figari, and that the award was
void because it was issued by an improperly appointed panel.

The court of appeals reversed. It held that:

After arbitration, appellees argued to the trial court the award should be
vacated under section five of the Federal Arbitration Act because the award was not
made by arbitrators who were appointed under the method provided in the

 
FN 2: Americo’s motion to vacate or modify the award was pursuant to section five of the Federal Arbitration Act (FAA), which provides: “If in the agreement provision be made for a method of naming or appointing an arbitrator or arbitrators or an umpire, such method shall be followed . . . .” 9 U.S.C. § 5.
    
-- Page 3 end --
 

[financing] agreement. In their brief in support of their motion to vacate the
arbitration award, appellees further explained their argument to mean the [financing]
agreement did not require the party-appointed arbitrators to be “independent and
impartial. Nor does the Agreement allow the AAA to disqualify a party’s appointed
arbitrator for partiality, bias, or any other basis.” They continued to argue that
because their right to select an arbitrator was governed by the standards in the
[financing] agreement, the impartiality standard set out in the AAA rules was
inapplicable. Essentially, appellees argued to the trial court they had a right to a
non-neutral arbitrator. This, however, is not the argument they raised to the AAA
in response to appellants’ objection to Figari.

315 S.W.3d 72, 75 (Tex. App.—Dallas 2009, pet. filed) (emphasis in original) (footnote omitted).

We have held that “appellate courts should reach the merits of an appeal whenever
reasonably possible.” Perry v. Cohen, 272 S.W.3d 585, 587 (Tex. 2008) (citing Verburgt v. Dorner,
959 S.W.2d 615, 616 (Tex. 1997)). Here, the record demonstrates that Americo argued to both the
AAA and the district court that it was entitled to any arbitrator who met the requirements set forth
in the financing agreement, regardless of the AAA’s requirements.

In response to Myer’s objection to Figari, Americo argued to the AAA that Figari was
neutral. However, Americo also asserted:

Finally, an argument can be made that the AAA rules do not govern the
selection of and qualifications for arbitrators in this proceeding. . . . The Agreement
states that “[e]ach arbitrator shall be a knowledgeable, independent businessperson
or professional.” . . .

As long as Mr. Figari is “a knowledgeable, independent businessperson or
professional,” he is an acceptable designee for the arbitration panel hearing this
matter, irrespective of the AAA rules. . . . Here, the parties’ arbitration agreement
plainly provides the method for selecting arbitrators for the three-person panel and
establishes the qualifications for serving on the panel. . . . Mr. Figari possesses the
requisite qualifications and the fact that he has served previously and is now serving
as a member of a panel considering a dispute between some of these same parties
does not change that fact. There has been—and can be—no allegation that Mr.
Figari has been anything but knowledgeable and independent in his performance on
the panels in Myer I and Myer II.

-- Page 4 end --

Furthermore, Americo wrote the AAA again after the AAA removed Figari but before the
arbitration, stating:

[T]he AAA Commercial Arbitration Rules do not govern the selection of and
qualifications for arbitrators to hear disputes between Americo and Myer. . . . The
Agreement states that “[e]ach arbitrator shall be a knowledgeable, independent
businessperson or professional.” . . .

Mr. Figari is “a knowledgeable, independent businessperson or professional”.
Therefore, he is a proper designee for the Panel to hear this matter.

In addition, Americo’s letter to the AAA cited Brook v. Peak International, Ltd., which discusses
the vacation of arbitration awards by arbitrators not appointed under the method provided by a
contract and the preservation of such a complaint by presenting it during arbitration. 294 F.3d 668,
673 (5th Cir. 2002). Americo reiterated this argument in the district court, stating that “the Award
must be vacated under FAA § 5 and applicable law, because the Award was not made by arbitrators
who were appointed under the method provided in the Agreement.”

The court of appeals is correct that Americo did not expressly state that arbitrators were not
required to be neutral. 315 S.W.3d at 75–76. However, Americo argued that the AAA requirements
did not apply, that the only applicable requirements were that they be knowledgeable and
independent businesspersons or professionals, and that Figari met these qualifications. Americo
properly preserved this argument. Therefore, without hearing oral argument, TEX. R.APP. P. 59.1,
we reverse the court of appeals’ judgment and remand the case to the court of appeals for further
proceedings consistent with this opinion.

OPINION DELIVERED: December 16, 2011

-- Page 5 end --

CASE DETAILS:
AMERICO LIFE, INC., AMERICO FINANCIAL LIFE AND ANNUITY INSURANCE COMPANY, GREAT SOUTHERN LIFE INSURANCE COMPANY, THE OHIO STATE LIFE INSURANCE COMPANY, AND NATIONAL FARMERS' UNION LIFE INSURANCE COMPANY v. ROBERT L. MYER AND STRIDER MARKETING GROUP, INC.; from Dallas County; 5th district (05-08-01053-CV, 315 SW3d 72, 10-22-09)

Pursuant to Texas Rule of Appellate Procedure 59.1, after granting the petition for review and without hearing oral argument, the Court reverses the court of appeals' judgment and remands the case to that court.

Per Curiam Opinion

Click below to read the Dallas Court of Appeal's Opinion: 315 S.W.3d 72 (2009)

Texas Supreme Court again addresses arbitration issues, hands down three arb-related decisions in one day

 
Among the opinions released by the Texas Supreme Court in almost a dozen cases decided today, Friday December 16, 2011, no less than three deal with arbitration, and all three relate in one way or another to the selection of arbitrators. Here is the list, with opinion excerpts:        
   
In re Service Corporation International, (Tex. 2011)
  
No. 10-0158 (Tex. Dec. 16, 2011)(appointment of arbitrator based on agreement on method, rather than selection by the trial court judge) (mandamus relief granted)
    
Norma Sandoval and her sister, Nora Martinez, jointly filed suit against Service Corporation International (SCI) alleging fraud, deceptive trade practices, and other tort claims arising from their respective interment rights and services contracts for family burial plots at Mont Meta Memorial Park.1 The parties agree the dispute was required to be arbitrated pursuant to the Federal Arbitration Act, 9 U.S.C. §§ 1-16.
 
SCI asserts that the trial court’s appointment of an arbitrator interfered with the contractual rights of the parties and was not authorized by the Federal Arbitration Act. Without reaching the parties’ arguments as to which party or parties have the burden of approaching the AAA to appoint an arbitrator, we agree with SCI that the trial court’s appointment was an abuse of discretion from which there is no adequate remedy by appeal. In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 135–36 (Tex. 2004). In a related case also decided today, In re Service Corp. International & SCI Tex. Funeral Services, Inc. d/b/a Magic Valley Memorial Gardens, we analyzed an identical arbitration provision. __ S.W.3d __ (Tex. 2011). Following the rationale in Magic Valley Memorial Gardens, we conclude the trial court abused its discretion by appointing an arbitrator instead of following the agreed-upon method of selection outlined in the contract. As a matter of law, the two month delay in the selection of an arbitrator in this case, by itself, does not establish a lapse or failure of the parties to avail themselves of the contractual selection method. See 9 U.S.C. § 5; Magic Valley Memorial Gardens, __ S.W.3d __ (Tex. 2011). Accordingly, without hearing oral argument, we conditionally grant SCI’s petition for writ of mandamus and direct the trial court to vacate its prior order appointing David Calvillo as arbitrator. TEX. R.APP. P. 59.1, 52.8(c). We are confident the trial court will comply, and the writ will issue only if it fails to do so.
 
OPINION DELIVERED: December 16, 2011

Pursuant to Texas Rule of Appellate Procedure 52.8(c), without hearing oral argument, the Court conditionally grants the writ of mandamus.
Per Curiam Opinion
Links to pdf version of opinion and to Electronic Briefs in this case can be found on the Texas Supreme Court's web site

Full case style and lower-court info: IN RE SERVICE CORPORATION INTERNATIONAL AND SCI TEXAS FUNERAL SERVICES, INC., JOINTLY D/B/A MONT META MEMORIAL GARDENS; from Cameron County; 13th district (13-10-00026-CV, ___ SW3d ___, 02-23-10)

 
In Re SCI, (Tex. 2011)
   
No. 10-0155 (Tex. Dec. 16, 2011)(arbitration, procedure to select arbitrator)(mandamus relief granted)

This mandamus proceeding arises from an arbitration agreement governed by the Federal Arbitration Act (FAA). The parties entered into a contract for interment rights and services. The contract obligated the parties to arbitrate this dispute over the care and maintenance of the cemetery.
 
The arbitration agreement provides that an arbitrator would either be selected by mutual agreement of the parties or appointed by the American Arbitration Association (AAA). The parties failed to agree to an arbitrator and the trial court appointed an arbitrator without allowing a reasonable opportunity to procure an appointment by AAA. We conclude that the trial court abused its discretion and conditionally grant the petition for writ of mandamus.
 
We conclude that the contract is not ambiguous on this point. If the parties cannot agree on an arbitrator, the contract requires that they use AAA to appoint the arbitrator.
 
Full case style and lower-court info: IN RE SERVICE CORPORATION INTERNATIONAL AND SCI TEXAS FUNERAL SERVICES, INC. D/B/A MAGIC VALLEY MEMORIAL GARDENS; from Hidalgo County; 13th district (13-09-00681-CV, ___ SW3d ___, 02-17-10) stay order issued March 12, 2010, lifted
 Pursuant to Texas Rule of Appellate Procedure 52.8(c), without hearing oral argument, the Court conditionally grants the writ of mandamus.
Per Curiam Opinion
Links to pdf version of opinion and to Electronic Briefs in this case can be found on the Texas Supreme Court's web site

 
Americo Life, Inc. v. Myer, (Tex. 2011)
  
No. 10-0734 (Tex. Dec. 16, 2011)(selection of arbitrators on panel, issue of neutrality of chosen arbitrator)
 
This case concerns an arbitration provision that allows each party to appoint one arbitrator to a panel, subject to certain requirements. At issue is whether Americo Life, Inc. waived its objection to the removal of the arbitrator it selected. The underlying dispute concerned the financing mechanism for Americo’s purchase of several insurance companies from Robert Myer.1 Pursuant to the financing agreement, Americo and Myer submitted their dispute to arbitration under American Arbitration Association (AAA) rules. The arbitrators found in favor of Myer, and Americo filed a motion to vacate the award. The trial court granted the motion. It held that Americo was entitled to any arbitrator that met the requirements set forth in the financing agreement and that the arbitrator removed by the AAA met those requirements. The court of appeals reversed, holding that Americo had waived these arguments by not presenting them to the AAA. Because the record demonstrates otherwise, we reverse the court of appeals’ judgment and remand the case to the court of appeals for further proceedings.
  
The court of appeals is correct that Americo did not expressly state that arbitrators were not required to be neutral. 315 S.W.3d at 75–76. However, Americo argued that the AAA requirements did not apply, that the only applicable requirements were that they be knowledgeable and independent businesspersons or professionals, and that Figari met these qualifications. Americo properly preserved this argument. Therefore, without hearing oral argument, TEX. R.APP. P. 59.1, we reverse the court of appeals’ judgment and remand the case to the court of appeals for further proceedings consistent with this opinion.
 
OPINION DELIVERED: December 16, 2011
  
Full case style and lower-court info: AMERICO LIFE, INC., AMERICO FINANCIAL LIFE AND ANNUITY INSURANCE COMPANY, GREAT SOUTHERN LIFE INSURANCE COMPANY, THE OHIO STATE LIFE INSURANCE COMPANY, AND NATIONAL FARMERS' UNION LIFE INSURANCE COMPANY v. ROBERT L. MYER AND STRIDER MARKETING GROUP, INC.; from Dallas County; 5th district (05-08-01053-CV, 315 SW3d 72, 10-22-09)
Pursuant to Texas Rule of Appellate Procedure 59.1, after granting the petition for review and without hearing oral argument, the Court reverses the court of appeals' judgment and remands the case to that court.
Per Curiam Opinion
Links to pdf version of opinion and to Electronic Briefs in this case can be found on the Texas Supreme Court's web site

Interpretation of disputed provision of MSA in divorce case left to discretion of mediator, given the parties agreement to that effect

  
Houston Court of appeals reverses trial court for deciding dispute over a specific provision of a mediated stettlement agreement in a divorce case based on parties' agreement to have the mediator decide such dispute and - in effect - act as arbitrator. Court would ordinarily have role in construction of mediated settlement agreement (MSA) as a contract, but not where - as here - the parties put the mediator in charge of arbitrating subsequent disagreements.

Entry of Judgment on the Mediated Settlement Agreement
 
Texas public policy encourages the peaceable resolution of disputes, particularly those involving the parent-child relationship, and the early settlement of pending litigation through voluntary settlement procedures. Tex. Civ. Prac. & Rem. Code Ann. § 154.002 (West 2011).
  
The Family Code furthers this policy by providing alternative dispute resolution procedures through which parties may settle a suit for dissolution of a marriage. See, e.g., Tex. Fam. Code Ann. §§ 6.601-.604 (West 2006). One such procedure is mediation. See id. § 6.602.
  
A mediated settlement agreement is binding under section 6.602 of the Family Code if the agreement:
 
(1) provides, in a prominently displayed statement that is in boldfaced type or capital letters or underlined, that the agreement is not subject to revocation;

(2) is signed by each party to the agreement; and

(3) is signed by the party’s attorney, if any, who is present at the time the agreement is signed.

Id. § 6.602(b).

Settlement agreements complying with section 6.602 are immediately enforceable, not subject to repudiation by a party, and, with certain limited exceptions, binding on the trial court without approval or determination of whether the agreement’s terms are just and right. See In re Joyner, 196 S.W.3d 883, 889 (Tex. App.—Texarkana 2006, orig. proceeding); Cayan v. Cayan, 38 S.W.3d 161, 164-66 (Tex. App.—Houston [14th Dist.] 2000, pet. denied); see also Spiegel v. KLRU Endowment Fund, 228 S.W.3d 237, 242 (Tex. App.—Austin 2007, pet. denied) (noting that when MSA meets section 6.602’s requirements, “it must be enforced in the absence of allegations that the agreement calls for the performance of an illegal act or that it was ‘procured by fraud, duress, coercion, or other dishonest means.’”) (quoting Boyd v. Boyd, 67 S.W.3d 398, 403 (Tex. App.—Fort Worth 2002, no pet.). “After all, the purpose of mediation is to let parties settle their property as they see fit, keeping those matters out of the courtroom.” Joyner, 196 S.W.3d at 889. A trial court has no authority to enter a judgment that varies from the terms of a mediated settlement agreement. Cf. Garcia-Udall v. Udall, 141 S.W.3d 323, 332 (Tex. App.—Dallas 2004, no pet.) (concluding that trial court abused its discretion under Tex. Fam. Code Ann. § 153.0071 (West 2002) by entering judgment not conforming with MSA in suit affecting parent-child relationship).
 
Neither WIFE nor HUSBAND disputes that the MSA here meets the requirements of section 6.602. Likewise, they do not dispute that the MSA is enforceable; there is no allegation that the agreement requires the performance of an illegal act or was procured by fraud, duress, or coercion. Rather, the parties’ only dispute is with respect to the meaning of that part of the MSA dividing HUSBAND’s “future retirement disbursements” equally and whether future distributions from HUSBAND’s ESOP are included within its scope.
  
Ordinarily, if the terms of the MSA could be given a certain or definite meaning, we would construe the agreement as a matter of law to determine whether WIFE’s or HUSBAND’s construction is correct. See Garcia-Udall, 141 S.W.3d at 328. But, this case presents a unique circumstance in that the parties agreed in the MSA to submit “(a) all drafting disputes[,] (b) all issues regarding the interpretation of [the MSA,] and (c) all issues regarding the intent of the parties as reflected in the [MSA]” to the mediator and to make his decision on these matters binding. Thus, by their agreement, WIFE and HUSBAND removed the resolution of their dispute from the province of the courts and assigned that responsibility to the mediator. Absent some allegation that the MSA requires an illegal act or was procured by fraud, duress, coercion, or other dishonesty, the trial court was obligated to enforce their agreement. See id. at 332; Spiegel, 228 S.W.3d at 242.
  
We reject HUSBAND’s contention that the mediator’s “flip-flopping” somehow nullifies his decision regarding the parties’ intended division of HUSBAND’s “future retirement disbursements.” HUSBAND has offered no reason why a mediator should not have the same discretion afforded trial courts to reconsider a ruling. See generally Fruehauf Corp. v. Carrillo, 848 S.W.2d 83, 84 (Tex. 1993) (noting that trial court has power to set aside interlocutory orders at any time before a final judgment is entered). The record we have of the parties’ dispute before the mediator is limited, consisting only of the MSA, counsels’ representations at the hearing on the entry of judgment, and the three letters issued by the mediator. We will not speculate about the reasons for the mediator’s reconsideration of his initial determination nor the arguments presented to him by the parties. We note only that the mediator acknowledged the parties’ continuing dispute and professed an understanding of their “concerns and the practical effect that certain language may or may not have” in his third letter. We conclude that letter, being the last of the mediator’s communications, constitutes the final expression of his decision with respect to the division of HUSBAND’s “future retirement benefits.”
  
Moore v. Moore, No. 01-11-00163-CV (Tex.App.- Houston [1st Dist.] Dec. 8, 2011)
 
Click below to read the opinion (names of parties replaced by designations HUSBAND and WIFE)