Arbitration denied because mediation had not been attempted

Context: Employment, Workplace Safety, Nonsubscriber, Negligence, Wrongful Death and Survivor Claims Arbitration agreement provided for disputes to be submitted to arbitration only if they could not be resolved through company's internal dispute resolution mechanism or mediation. Houston Court of Appeals does not reach the issue whether survivors are bound be deceased employee's agreement to arbitrate claims that could not be resolved internally or through mediation. Court declines to grant mandamus to set aside trial court's denial of employer's motion to compel arbitration. In Re Igloo Products Corp. , No. 14-07-00185-CV (Tex.App.- Houston [14th Dist.] Nov. 1, 2007)(Frost)(arbitration mandamus denied) Appeal from 155th District Court of Waller County (Judge Daniel R. Beck) IN RE IGLOO PRODUCTS CORP. AND JOSE RODRIGUEZ, Relators ORIGINAL PROCEEDING WRIT OF MANDAMUS OPINION BY JUSTICE KEM FROST In this original proceeding, relators Igloo Products Corporation and Jose Rodriguez seek a writ of mandamus directing the respondent, Dan R. Beck, presiding judge of the 155th District Court of Waller County, (1) to vacate his January 9, 2007 order denying relators' motion to compel arbitration, and (2) to grant relators' motion to compel arbitration of all claims pending in the action and to stay trial court proceedings pending such arbitration. We deny the petition for writ of mandamus. Underlying Facts and Procedural History Igloo Products Corporation is a manufacturing company in Houston, Texas. Igloo does not carry workers' compensation insurance and is thus not a subscriber to the Texas Workers' Compensation Act. Tex. Labor Code Ann. ' 406.002 (Vernon 2006). Igloo, however, has established the Igloo Products Corp. Employee Injury Benefit Plan ("the Plan") under the federal Employee Retirement Income Security Act ("ERISA"). See generally 29 U.S.C. '1001 et seq. The Plan specifies certain medical, wage-replacement, dismemberment, burial, and death benefits payable to participating employees in the event of injury or death suffered in the course and scope of employment with Igloo. Participation in the Plan is not a condition of employment with Igloo. To participate in the Plan and to secure the right to receive the specified benefits, an employee must execute an Election and Arbitration Agreement.[1] Joel Varela was fatally injured on June 23, 2006, during the course and scope of his employment with Igloo. Because Varela was a participating employee under the Plan, Igloo paid medical, funeral, and burial expense benefits to his surviving spouse. Thereafter, Varela's spouse and children (collectively "the Varelas") filed the underlying lawsuit against Igloo and its employee, relator Jose Rodriguez. (Igloo and Jose Rodriguez are hereinafter collectively referred to as "the Igloo Parties.") The Varelas alleged that Joel Varela's death resulted from the Igloo Parties' negligence and gross negligence. The Varelas assert claims under the Texas Wrongful Death Act.[2] See Tex. Civ. Prac. & Rem. Code Ann. '' 71.001 B .012 (Vernon 1997 and Supp. 2006). In the trial court, the Igloo Parties moved to compel arbitration of the Varelas' claims under the terms of the Election and Arbitration Agreement that Joel Varela had executed in connection with his participation in the Plan ("the Agreement"). The Agreement purports to bind Varela's "beneficiaries, heirs, children, spouse, parents and legal representatives." The Igloo Parties further asserted that by having accepted payment of benefits under the Plan, the Varelas were equitably estopped and contractually precluded from avoiding the Agreement's arbitration provision. The Varelas opposed the motion to compel arbitration, arguing that neither Joel Varela's execution of the Agreement nor Igloo's payment of benefits owing to his estate could bind them to arbitrate their individual, personal claims for Joel Varela's wrongful death. The Varelas also contended that, even if the Agreement applied to their wrongful death claims, the trial court should not compel arbitration because the parties have not mediated the Varelas' claims. The trial court denied the Igloo Parties' motion to compel arbitration, and the Igloo Parties have filed a petition for writ of mandamus in this court. Standard of Review The Igloo Parties assert, and the Varelas do not dispute, that the Agreement in this case is subject to the Federal Arbitration Act ("FAA"). See generally 9 U.S.C. '1 et seq. Mandamus relief is available when the trial court abuses its discretion by erroneously denying a party its contracted‑for arbitration rights under the FAA. See In re D. Wilson Const. Co., 196 S.W.3d 774, 780-81 (Tex. 2006) (orig. proceeding). Therefore, the Igloo Parties' right to mandamus relief hinges on whether the trial court's refusal to compel arbitration was an abuse of its discretion.[3] A party seeking to compel arbitration must establish that a valid arbitration agreement exists and that the claims asserted are within the scope of the agreement. See In re D. Wilson Construction Co., 196 S.W.3d at 781. If these two showings are made, the burden shifts to the party opposing arbitration to present a valid defense to the agreement. J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 227-28 (Tex. 2003). In the absence of evidence of a valid defense, the trial court has no discretion to exercise and must compel arbitration and stay its own proceedings. In re J.D. Edwards World Solutions Co., 87 S.W.3d 546, 549 (Tex. 2002) (orig. proceeding). The trial court denied the Igloo Parties' motion to compel arbitration. The trial court concluded that the Igloo Parties failed to prove that (1) there is a valid, enforceable arbitration agreement between the Igloo Parties and the Varelas and (2) the Varelas' claims are within the scope of a valid, enforceable arbitration agreement. Analysis Both the Plan and the Agreement address resolution of disputes between Igloo and those employees who choose to participate in the Plan. Pertinent portions of both documents are set forth below. ELECTION AND ARBITRATION AGREEMENT By signing this Election and Arbitration Agreement (hereinafter "Agreement"), I, the undersigned employee of Igloo Products Corp. (hereinafter "the Company"), voluntarily elect to participate in the Igloo Products Corp. Employee Injury Benefit Plan (hereinafter the "Plan") and agree with the Company to the following: * * * MUTUAL PROMISES TO RESOLVE CLAIMS BY BINDING ARBITRATION: I recognize that disputes may arise between the Company (or one of its affiliates) and me during or after my employment with the Company. I understand and agree that any and all such disputes that cannot first be resolved through the Company's internal dispute resolution procedures or mediation must be submitted to binding arbitration. I acknowledge and understand that by signing this Agreement I am giving up the right to a jury trial on all of the claims covered by this Agreement in exchange for eligibility for the Plan's medical, disability, dismemberment, death and burial benefits and in anticipation of gaining the benefits or a speedy, impartial, mutually-binding procedure for resolving disputes. Igloo Products Corp. Employee Injury Benefit Plan * * * Arbitration of Employment Disputes: By executing and agreeing to the Election and Arbitration Agreement, an Employee affirmatively agrees to submit to binding arbitration all claims or disputes covered by the Election and Arbitration Agreement. * * * B. Arbitration Procedures. The following provisions are incorporated by reference into, and made part of, the Election and Arbitration Agreement, the same as if they were set forth at length in the Election and Arbitration Agreement itself: * * * 3. Mediation: The Company (and each Employer) and I agree that the arbitration procedures described in this Paragraph B . . . and incorporated by reference into the Election and Arbitration Agreement shall not be invoked unless the party seeking arbitration has first mediated the dispute with the other party or parties . . . .[4] The Varelas concede that Joel Varela entered into a valid arbitration agreement with Igloo. They dispute, however, whether that agreement binds them to arbitrate their own personal claims for wrongful death of their husband and father. The Varelas assert that Joel Varela did not and could not bind his spouse and children to arbitrate rather than litigate their wrongful death claims against Igloo. The Igloo Parties assert that the Varelas' acceptance of medical, funeral, and burial benefits under the Plan independently binds them to the arbitration provision. However, we need not address these arguments because we conclude that, even presuming, without deciding, that the Varelas are bound to the arbitration provisions of the Agreement, the Varelas' claims are not within the scope of claims subject to arbitration under the Agreement. The Agreement requires that "any and all ... disputes that cannot first be resolved through the Company's internal dispute resolution procedures or mediation must be submitted to binding arbitration."[5] The Plan's arbitration procedures, which are incorporated by reference into the Agreement, "shall not be invoked unless the party seeking arbitration has first mediated the dispute with the other party."[6] Neither party has suggested the Plan or the Agreement is ambiguous, and we conclude that both documents unambiguously provide for the arbitration only of claims that cannot first be resolved through Igloo's internal dispute resolution procedures or mediation. The Igloo Parties admit that the Varelas' claims have not been mediated or otherwise submitted to Igloo's internal dispute resolution procedures. In their motion to compel arbitration, the Igloo Parties neither alleged nor presented any proof that (1) the Varelas' claims fell within the category of claims that could not be resolved through Igloo's internal dispute resolution procedures or through mediation or (2) the Varelas' claims had been subjected to Igloo's internal dispute resolution procedures or mediation. The Igloo Parties contend, however, that it is for the arbitrator, not the courts, to decide whether arbitration is precluded by there having been no prior mediation or internal dispute resolution procedures. In making this argument, the Igloo Parties rely primarily on Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 123 S. Ct. 588, 154 L. Ed. 2d 491 (2002). Howsam involved a dispute between a securities brokerage firm and its former customer. After the customer commenced arbitration proceedings under the arbitration clause of her brokerage account agreement, the firm filed suit in federal district court seeking a declaratory judgment that the dispute was ineligible for arbitration and an injunction prohibiting the customer's prosecution of the arbitration proceeding. The firm claimed that arbitration was precluded by the terms of the arbitration code of the National Association of Securities Dealers ("NASD"), under the auspices of which the customer had elected to arbitrate. The NASD code included a rule that no dispute "shall be eligible for submission [to arbitration] . . . where six (6) years have elapsed from the occurrence or event giving rise to the . . . dispute." Finding that the NASD arbitrator should interpret whether the NASD time-limit rule precluded prosecution of the arbitration, the district court dismissed the firm's action. On appeal, the Court of Appeals for the Tenth Circuit reversed, concluding that application of the NASD rule presented a question of the underlying dispute's arbitrability, which is presumptively for a court to decide. On certiorari, the United States Supreme Court stated that courts, rather than arbitrators, should decide "gateway" matters that "contracting parties would likely have expected a court to have decided . . . where they are not likely to have thought that they had agreed that an arbitrator would do so, and consequently, where reference of the gateway dispute to the court avoids the risk of forcing parties to arbitrate a matter that they may well not have agreed to arbitrate." Howsam, 537 U.S. at 83B84, 123 S. Ct. at 592. The Supreme Court stated that courts, rather than arbitrators, should decide gateway disputes as to whether parties are bound by a given arbitration clause or whether an arbitration agreement covers a particular kind of controversy. See id., 537 U.S. at 84, 123 S. Ct. at 592. On the other hand, matters of "procedural arbitrability," such as allegations of waiver, delay, or a similar defense to arbitrability, are presumptively for the arbitrator to decide. See id. However, this presumption may be overcome by language in the arbitration agreement reflecting an intent contrary to this presumption. See id. The agreement in Howsam did not exempt from the scope of the arbitration clause claims based on an event that occurred more than six years before the claim was submitted to arbitration. See id., 537 U.S. at 81B82, 123 S. Ct. at 591. The United States Supreme Court held that application of the NASD time-limit rule was the province of the arbitrator based on the arbitration agreement at issue. See id., 537 U.S. at 84-86, 123 S. Ct. at 592-3. Two of our sister courts have construed Howsam in the context of an agreement containing a mediation requirement. See In re Pisces Foods, L.L.C., 228 S.W.3d 349 (Tex. App.-Austin 2007, orig. proceeding); In re R&R Personnel Specialists of Tyler, Inc., 146 S.W.3d 699 (Tex. App.-Tyler 2004, orig. proceeding). In R&R Personnel Specialists, the party opposing arbitration argued that the movant had waived its right to arbitration by failing (1) to give timely notice of its underlying claim; (2) to give written notice of its intent to arbitrate the claim; and (3) to participate in mediation before seeking arbitration. Citing Howsam, but without quoting the contractual language on which any one of these purported requirements was based, the court of appeals characterized waiver as a question of procedural arbitrability for the arbitrator to decide. The court granted mandamus relief directing the trial court to vacate its order denying arbitration and to compel such arbitration. R&R Personnel Specialists, 146 S.W.3d at 704B05.[7] In Pisces Foods, the trial court denied an employer's motion to compel arbitration of an employee's personal injury claim. The arbitration agreement stated: Each Step [of this dispute resolution program] must be followed in sequence so that we have every opportunity to work together toward an agreeable resolution of the issue . . . . If you have a work-related problem that involves a legally protected right that could not be settled through Steps 1, 2 or 3 [internal dispute resolution procedures and mediation] of the Program, you may request arbitration. Pisces Foods, 228 S.W.3d at 351. Without deciding (1) the employee's claim that she was not bound by the agreement or (2) the employer's claim that the agreement had been wrongfully excluded from evidence at the hearing on the motion to compel arbitration, the court of appeals held that arbitration was not available under the agreement because no mediation had occurred. Id. Discussing both Howsam and R&R Personnel Specialists, as well as a number of decisions from other jurisdictions,[8] the Austin Court of Appeals held that the relator's right to arbitration had not yet accrued or been triggered because there was no proof that either party had requested or attempted mediation. Pisces Foods, 228 S.W.3d at 353-54. The Varelas do not contend (as did the employee in R&R Personnel Specialists) that failure to mediate the claims constitutes a waiver of the Igloo Parties' right to compel arbitration.[9] They assert that the Agreement has not yet been triggered and that the trial court thus properly declined to compel arbitration. If Joel Varela agreed to arbitrate all claims and disputes with Igloo without any reference to mediation but with separate arbitration procedures providing for prior submission of disputes to mediation, we might reach a different conclusion. In this case, however, the only claims that Joel Varela agreed to arbitrate were "disputes that cannot first be resolved through [Igloo's] internal dispute resolution procedures or mediation." Because arbitration is a matter of contract, a party cannot be required to submit to arbitration any dispute which he has not agreed to submit to arbitration. Howsam, 537 U.S. at 83, 123 S. Ct. at 591. Joel Varela agreed to arbitrate only disputes that were not resolved by Igloo's internal dispute resolution procedures or mediation. Therefore, the issue at hand is a "gateway dispute" as to whether the arbitration agreement covers a particular kind of controversy, and courts, rather than the arbitrator, must resolve this issue. See id., 537 U.S. at 84, 123 S. Ct. at 592; HIM Portland, LLC v. Devito Builders, Inc., 317 F.3d 41, 44 (1st Cir. 2003); Kemiron Atlantic, Inc. v. Aguakem International, Inc., 290 F.3d 1287, 1289-90 (11th Cir. 2002); Pisces Foods, 228 S.W.3d at 353-54; see also Allen v. Apollo Group, Inc., No. Civ.A.H-04-3041, 2004 WL 3119918, at *5-8 (S.D. Tex. Nov. 9, 2004) (Rosenthal, J.). Presuming, without deciding, that the Varelas are bound by the arbitration provisions in question, the trial court did not abuse its discretion by impliedly determining that the Igloo Parties did not prove that the Varelas' claims fall within the scope of the arbitration agreement because they are not "disputes that cannot first be resolved through [Igloo's] internal dispute resolution procedures or mediation." See Pisces Foods, 228 S.W.3d at 353-54.[10] Accordingly, we deny the Igloo Parties' petition for writ of mandamus and vacate our March 8, 2007 order staying proceedings in the trial court. /s/ Kem Thompson Frost Justice Petition Denied and Opinion filed November 1, 2007. Panel consists of Justices Frost, Seymore, and Guzman. [1] The Election and Arbitration Agreement specifically excludes criminal matters and claims for unemployment benefits from the arbitration requirement. [2] The Varelas previously asserted a claim under the Texas survival statute, but they no longer assert this claim. See Tex. Civ. Prac. & Rem. Code Ann. ' 71.021 (Vernon 1997). [3] In 1992, addressing whether a party is entitled to mandamus relief for wrongful denial of its arbitration rights under an agreement subject to the FAA, the Texas Supreme Court concluded that the Texas Arbitraton Act ("TAA") does not provide such a party the ability to assert an interlocutory appeal. See Jack B. Anglin, Inc. v. Tipps, 842 S.W.2d 266, 272-73 (Tex. 1992). In 2006, the Texas Supreme Court decided that such a party can file an interlocutory appeal of the trial court's denial of a motion to compel arbitration under an agreement governed by the FAA. See In re D. Wilson Const. Co., 196 S.W.3d 774, 778-80 (Tex. 2006). It might appear that the Igloo Parties are not entitled to mandamus relief in this case because the FAA governs the Agreement and, under In re D. Wilson Const. Co., they have an adequate remedy at law by interlocutory appeal. See id. However, the Texas Supreme Court reaffirmed in In re D. Wilson Const. Co. that mandamus remains available when a party is erroneously denied its contracted‑for arbitration rights under the FAA. See In re D. Wilson Const. Co., 196 S.W.3d at 780-81. Therefore, we conclude that mandamus relief is still potentially available to the Igloo Parties. [4] All boldface and underlining emphasis shown in the quoted material is contained in the original documentation. [5] Italic emphasis added; underlining in original. [6] All emphasis added. [7] See also In re Weekley Homes, 985 S.W.2d 111 (Tex. App.-San Antonio 1998, orig. proceeding) (holding, pre-Howsam, that whether party's failure to mediate before invoking arbitration provision releases other parties from obligation to arbitrate is procedural question for arbitrator to address in cases in which arbitration agreement did not exempt claims that had not been mediated). [8] See General Warehousemen & Helpers Union Local 767 v. Albertson's Distribution, Inc., 331 F.3d 485, 488 (5th Cir. 2003); HIM Portland, LLC v. Devito Builders, Inc., 317 F.3d 41, 44 (1st Cir. 2003); Kemiron Atlantic, Inc. v. Aguakem International, Inc., 290 F.3d 1287 (11th Cir. 2002); Allen v. Apollo Group, Inc., No. Civ.A.H-04-3041, 2004 WL 3119918 (S.D. Tex. Nov. 9, 2004) (unreported decision). [9] The Varelas assert a waiver argument, but it is based solely on the contention that by substantially invoking the judicial process, the Igloo Parties have waived the right to arbitrate. However, based on our disposition, we need not address the Varelas' argument in this regard. [10] This court relied on Howsam in granting mandamus relief directing the trial court to compel arbitration in In re Global Construction Company, L.L.C., 166 S.W.3d 795 (Tex. App.-Houston [14th Dist.] 2005, orig. proceeding). The question posed was whether "the underlying dispute, in which the real party in interest claims that arbitration is time-barred, is an issue of procedural arbitrability and thus for the arbitrator, or is an issue of substantive arbitrability for the court." Id. at 796 (citing Howsam). Under the contract at issue in that case, a demand for arbitration was required to be made "within 30 days after the date on which the party making the demand receives the final written decision [of the Architect]." The trial court "expressly found that [the party] waived its right to arbitrate those claims that had been submitted to the architect by failing to demand arbitration within thirty days." Id. at 797. We held that Aany contractual time limit on a request for arbitration is a matter for the arbitrator." Id. at 799. Although the contract in that case required mediation, the parties did not raise, and the court did not address, this requirement. Id. at 797-99. Indeed, in that case, the parties had agreed that the claims involved fell within the scope of the agreement. Id. at 798. In addition, unlike the Agreement in this case, the arbitration agreement in that case stated that '[a]ny claims arising out of or related to the Contract' are subject to arbitration." Id. at 796. Therefore, In re Global Construction Company is not on point.

No interlocutory appeal of order denying confirmation of arbitration award and directing rehearing

Houston's First Court of Appeals holds that it lacks jurisdiction to consider interlocutory appeal of trial court’s order denying confirmation of arbitration award, vacating the award, and directing rehearing by a different arbitrator. Appeal dismissed. Mandamus denied. Thrivent Financial for Lutherans v. Colin K. Brock, No. (Tex.App.- Houston [1st Dist.] Nov. 1, 2007)(Opinion by Justice Higley )(arbitration award vacated Appeal from County Court of Austin County Original Proceeding on Petition of Writ of Mandamus O P I N I O N This interlocutory appeal and original proceeding arise from a dispute between Colin Brock and his insurer, Thrivent Financial for Lutherans (“Thrivent”) over nonpayment of disability benefits, which Brock claims Thrivent owes him under a Thrivent insurance policy. As required by the policy, the trial court compelled the parties to arbitrate. Following an evidentiary hearing, the arbitrator denied Brock’s claims. Thrivent moved the trial court to confirm the arbitration award. In turn, Brock requested the trial court to vacate the arbitration award on the ground that the award was obtained “by fraud, corruption, or other undue means.” The trial court signed an order denying Thrivent’s motion to confirm the award, vacating the arbitration award, and directing a rehearing before a new arbitrator. Thrivent appeals the order and also seeks review by way of a petition for writ of mandamus. Brock contends that we have no appellate jurisdiction over the interlocutory order and requests that the petition for mandamus be denied. We dismiss Thrivent’s interlocutory appeal for lack of jurisdiction and deny its petition for writ of mandamus. Interlocutory Appeal Appellate courts have jurisdiction to consider immediate appeals of interlocutory orders, such as the one in this case, only if a statute explicitly provides appellate jurisdiction. 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). Texas courts strictly construe statutes authorizing interlocutory appeals because a statute authorizing an appeal from an interlocutory order is in derogation of the general rule that only final judgments are appealable. Walker Sand, Inc. v. Baytown Asphalt Materials, Ltd., 95 S.W.3d 511, 514 (Tex. App.—Houston [1st Dist.] 2002, no pet.). The Texas Arbitration Act (TAA) permits interlocutory appeals of certain orders relating to the arbitration process. Specifically, TAA section 171.098 permits appeals from orders (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) (Vernon 2005). Brock contends that Thrivent’s appeal should be dismissed because the trial court’s order vacates the arbitration award and directs rehearing. Brock points out that such an order is not appealable under section 171.098. Brock notes that subsection 171.098(a)(5) permits an appeal of an ordering vacating an award when no rehearing is directed, but no provision permits an appeal when a rehearing is directed. Thrivent responds that the order is appealable because it also denies confirmation of the arbitration award. Thrivent cites subsection 171.098(a)(3), which permits an appeal from an order denying confirmation of an award. Thus, we must determine whether an order denying confirmation of an arbitration award, vacating the award, and directing rehearing is an appealable order. In Stolhandske v. Stern, we held that an order vacating an arbitration award and ordering rehearing was not an appealable interlocutory order. 14 S.W.3d 810, 815 (Tex. App.—Houston [1st Dist.] 2000, no pet.). We based this holding, in part, on the language of subsection 171.098(a)(5), which limits the review of orders vacating arbitration awards to those in which the trial court did not order a rehearing. See id. at 813. We contrasted the Federal Arbitration Act, which permits the appeal of all orders vacating arbitration awards, without specifically limiting the right of appeal to those orders that do not direct a rehearing. Id. at 814 (citing 9 U.S.C. § 16(a)(1)(E)). We also concluded that an order vacating an arbitration award is not appealable under section 171.098(a)(3) as an implicit order denying confirmation of an award. Id. at 813–14. We reasoned, “The vacating of an arbitration award does not [automatically] deny a motion to confirm, but renders the consideration of an application to confirm moot.” Id. at 815 (citing North Carolina v. Davidson & Jones Constr. Co., 323 S.E.2d 466, 469 (N.C. Ct. App. 1984)). Lastly, in Stolhandske, we noted that the TAA is based on the Uniform Arbitration Act and looked to case law of other states, which have also adopted the uniform act. See id. at 814 (citing Tex. Civ. Prac. & Rem. Code Ann. § 171.003 (providing, “This chapter shall be construed to effect its purpose and make uniform the construction of other states’ law applicable to an arbitration.”)). Citing cases from Maine, Minnesota, and Florida, we concluded, “[A]n order vacating an award and directing a rehearing is the functional equivalent of an order granting a new trial. Accordingly, such an order is not subject to direct appellate review.” Id. (citing Maine Dep’t of Transp. v. Maine State Employees Ass’n, 581 A.2d 813, 814 (Me. 1990); Minnesota Teamsters Pub. & Law Enforcement Employees Union, Local No. 320 v. County of Carver, 571 N.W.2d 598, 599 (Minn. Ct. App. 1997); Carner v. Freedman, 175 So.2d 70, 71 (Fla. 3rd Dist. Ct. App. 1965)). In Stolhandske, we also discussed National Avenue Building Co. v. Stewart, 910 S.W.2d 334 (Mo. Ct. App. 1995), in which the Missouri Court of Appeals determined that it did not have jurisdiction to review an order that (1) specifically denied a motion to confirm an award; (2) vacated the award; and (3) directed a rehearing. 14 S.W.3d at 814–15. We noted that the court in Stewart decided that it had jurisdiction because the order appealed from specifically denied a motion to confirm and because Missouri law permits appeals from orders granting new trials. Id. at 815 (citing Stewart, 910 S.W.2d at 338–39). In dismissing the appeal in Stolhanske, we found Stewart to be inapposite. We cited the fact that the order at issue in Stewart specifically denied a motion to confirm an arbitration award. Id. In contrast, the order in Stolhanske did not deny a motion to confirm; it only vacated the award and directed a rehearing. Id. We also noted that Texas, unlike Missouri, does not allow appeals from orders granting new trials. Id. In contrast to the order in Stolhanske, the order signed by the trial court in the instant case denied Thrivent’s motion to confirm the arbitration award in addition to vacating the award and directing a rehearing. We specifically stated in Stolhanske that we were not determining whether we would have jurisdiction to decide an appeal of such an order. Id. at 815 n.1. Thus, while it is instructive, our holding in Stolhandske is not controlling. Since we issued our opinion in Stolhanske, we have not had an opportunity to determine whether we have jurisdiction to hear an appeal of an order that denies a motion to confirm an arbitration award, vacates the award, and directs a rehearing. As noted by the parties, a split in authority exists on this issue in Texas and nationally. In Prudential Securities, Inc. v. Vondergoltz, the Fourteenth Court of Appeals held that section 171.098(a) did not authorize the appeal of an order denying confirmation of an arbitration award, vacating the award, and directing a rehearing. 14 S.W.3d 329, 331 (Tex. App.—Houston [14th Dist.] 2000, no pet.). The Vondergoltz court recognized that, in Stewart, the Missouri Court of Appeals held a similar order to be appealable, but disagreed with the Stewart court’s analysis. Id. The Vondergoltz court noted that the Stewart court had reasoned that the Missouri legislature “could easily have added a proviso to subdivision (3) stating ‘without directing a rehearing,’” as it had added to subdivision (5), if it had intended an order denying the confirmation of an award not be appealable when rehearing is directed. Id. (citing Stewart, 910 S.W.2d at 341). Rejecting this reasoning, the Fourteenth Court of Appeals in Vondergoltz determined that “an order denying confirmation of an arbitration award is the functional equivalent of an order vacating an award.” Id. On this basis, the court concluded, [W]here appeals are expressly provided in a statute for orders (a) denying confirmation of an award and (b) vacating an award without directing a rehearing, it most logically follows that an appeal is not allowed for orders denying confirmation or vacating an award where rehearing is directed as to either. To hold otherwise would render the language “without directing a rehearing” without effect and would elevate form over substance by allowing an appeal where rehearing is directed in denying a request for confirmation but not in granting a request to vacate an award. Id. (footnote omitted). Lastly, the Vondergoltz court reasoned that “to the extent an order directing rehearing of an arbitration is analogous to an order granting a motion for new trial, the rule in Texas that the latter is not final or appealable dictates a result contrary to that reached in Stewart by reference to the opposite rule.” Id. (footnote omitted). In addition to the Fourteenth Court of Appeals, courts in Minnesota and the District of Columbia, when interpreting statutes nearly identical to section 171.098(a), have also held that an order like the one at issue are not appealable. As here, in Kowler Associates v. Ross, the appellant argued that the order was appealable because it not only vacated the award and directed rehearing, but also denied the confirmation, which the appellant characterized as “a separate basis for the appeal,” under the third subsection of Minnesota Statute section 572.26. 544 N.W.2d 800, 801 (Minn. Ct. App. 1996) (citing Minn. Stat. § 572.26 subd. 1(3)). The Minnesota Court of Appeals disagreed. The Kowler court cited a provision of the Minnesota arbitration act requiring a court to confirm an arbitration award, unless grounds are offered to vacate or modify the award. As discussed infra, the TAA contains a similar provision, specifically, section171.087. Tex. Civ. Prac. & Rem. Code Ann. § 171.087 (Vernon 2005) (providing,“Unless grounds are offered for vacating, modifying, or correcting an award underSection 171.088 or 171.091, the court, on application of a party, shall confirm theaward.”). Id. (citing Minn. Stat. § 572.18). The court noted that the Minnesota act, in section 572.19, contained a separate provision governing the vacatur of arbitration awards. See id. Because the respondent had moved to vacate the award, the Kowler court reasoned that “the separate procedure for determining whether the award should be vacated applied.” Id. (citing Minn. Stat. § 572.19). The court continued, “The underlying action is a proceeding to vacate the award, and the decision to confirm the award depends on determination of the application to vacate.” Id. On this basis, the court concluded, “[T]he order denying confirmation of the award is not appealable unless there is a basis for appeal of the prerequisite order vacating the award.” Id. The Kowler court also relied on rules of statutory construction to support its decision that the order was not appealable. The court opined, “[I]f an order that vacates an award and directs rehearing were construed to be appealable as an order denying confirmation of the award, then section 572.26, subd. 1(5), would be of no effect and an order vacating an award always would be appealable, even if a rehearing has been directed.” Id. The court reasoned, “Such a construction would be inconsistent with the rules of statutory interpretation and the statutory prohibition against appeals from orders directing a rehearing.” Id. In support of its holding, the Kowler court made two final points. First, the court pointed out that “[a]n appeal may be taken from an order that denies confirmation, if the order also vacates the award without a rehearing.” Id. at 802. Second, the court observed, “[W]hen a rehearing is directed, appellate review is premature because the arbitration process has not been completed.” Id. In Connerton, Ray & Simon v. Simon, the District of Columbia Court of Appeals also held that it had no jurisdiction to review an order such as the one at issue in this case. 791 A.2d 86, 88 (D.C. 2002). The court concluded that the axioms of statutory construction dictated that the order was not appealable. As did the Fourteenth Court of Appeals and the Minnesota Court of Appeals, the District of Columbia Court of Appeals reasoned that, if it were to hold that the order was appealable because it in part denied confirmation of an award, then subpart five of the jurisdictional statute, specifying that only orders vacating an award “without directing a rehearing” are appealable, would be “rendered superfluous.” Id. at 87–88 (discussing D.C. Code § 16–4317(a)(5)). The court opined that such a reading violates the basic principle of statutory construction that each provision of a statute should be construed to give effect to all of the statute’s provisions and not to render any provision superfluous. Id. at 88. The Simon court also relied on the tenet of statutory construction that, “[w]hen a statute contains potentially inconsistent provisions, the more specific provision must govern or control, as a clearer and more definite expression of the legislative will.” Id. (internal quotation omitted). The court noted that “D.C. Code 16-4317(a)(5) specifically addresses the jurisdictional impact of ordering a new hearing, whereas 16-4317(a)(3) is more general.” Id. Taking the opposite position from the above cases, the Texarkana Court of Appeals, in Werline v. East Texas Salt Water Disposal Co., held that section 171.098(a)(3) permited an appeal to review an order such as the one at issue. 209 S.W.3d 888, 896 (Tex. App.—Texarkana 2006, pet. filed). In so doing, the Werline court roundly criticized the Fourteenth Court of Appeals’s opinion in Vondergoltz and agreed with the reasoning of the Missouri Court of Appeals in Stewart. Id. at 895–96. According to the Werline court, Vondergoltz “is contrary to the plain language of the statute, and in essence, rewrites it.” Id. at 895. The Texarkana Court of Appeals assailed Vondergoltz by stating that the opinion renders subsection (a)(3) “essentially meaningless” because Vondergoltz’s interpretation “adds the phrase ‘without directing a rehearing’ into subsection (a)(3), and thereby rewrites the statute.” Id. The Werline court pointed out that the TAA requires a court to confirm an award unless grounds exist for vacating, modifying, or correcting an arbitration award and reasons that “unless the trial court fails to follow the statutory procedures, a denial of an application to confirm must be accompanied by a vacatur or other order.” Id. (citing Tex. Civ. Prac. & Rem. Code Ann. § 171.087 (Vernon 2005)). With this as background, Werline offers the following critique: Under Vondergoltz, an interlocutory appeal would only be authorized under subsection (a)(3) in the rare situation when the trial court denies a motion to confirm, but fails to vacate the award. Thus, only if the trial court refuses to follow the statutory procedures would an interlocutory appeal be available under subsection (a)(3). Vondergoltz renders subsection (a)(3) meaningless under the guise of preventing subsection (a)(5) from being meaningless. Id. The Werline court further criticized Vondergoltz by charging that it “destroys the benefits of the arbitral process” and creates the possibility that appeal will be denied indefinitely. Id. The court cautioned that the arbitration process could “continue ad infinitum” and warned that “[t]he trial court could continue to grant vacatur multiple times until the result it desires is reached or one of the party’s resources are exhausted.” Id. at 895, 896. The Werline court opined that subsections (a)(3) and (a)(5) of section 171.098 can be harmonized under the plain language of the statute to give effect to each. Id. at 896. Specifically, the court commented that, under the statute’s plain language, “a party can appeal the denial of an application to confirm, but is prohibited from appealing from the granting of a vacatur which directs a rehearing.” Id. The court concluded, “We agree with Stewart that the trial court’s order granting a motion to vacate and directing a rehearing does not extinguish a party’s right to appeal the denial of its motion to confirm.” Id. (footnote omitted). The Texarkana Court of Appeals’s opinion is thoughtful; however, we do not agree with its holding and offer the following observations. First, the impact of the Werline court’s admonition that the arbitration process could “continue ad infinitum” under Vondergoltz’s holding is weakened by the fact that an order vacating an arbitration order and ordering rehearing, without denying the confirmation, could also in theory result in perpetual arbitration. We assume that the legislature considered this when enacting TAA section 171.098(5), which by implication does not permit an appeal of such an order, as we held in Stolhandske. See Tex. Civ. Prac. & Rem. Code Ann. § 171.098(a)(5); Stolhandske, 14 S.W.3d at 813. Regarding the Werline court’s comment that, “[u]nder Vondergoltz, an interlocutory appeal would only be authorized under subsection (a)(3) in the rare situation when the trial court denies a motion to confirm, but fails to vacate the award,” we note that perhaps the legislature foresaw such a “rare situation” and enacted subsection (a)(3) to cover it. 209 S.W.3d at 895. Moreover, as pointed out by the Minnesota Court of Appeals in Kowler, “[a]n appeal may be taken from an order that denies confirmation, if the order also vacates the award without a rehearing.” 544 N.W.2d at 802 (citing subsections (3) and (5) of the comparable Minnesota statute). Taking the relevant legal authorities into due consideration, we next determine whether we have jurisdiction to determine Thrivent’s appeal. We begin by noting that the substance and function of an interlocutory order, when viewed in the context of the record, controls our jurisdiction. See Walker Sand, 95 S.W.3d at 515. Here, the governing statutory procedure and the record shows that the proceeding was predominantly one to vacate the arbitration award. That is, vacatur of the award was the paramount consideration of the trial court and controls jurisdiction in this case. As discussed, TAA section 171.087 provides, “Unless grounds are offered for vacating, modifying, or correcting an award under Section 171.088 or 171.091, the court, on application of a party, shall confirm the award.” Tex. Civ. Prac. & Rem. Code Ann. § 171.087 (Vernon 2005). In accordance with this provision, the trial court’s decision to confirm or deny the award in this case depended on its decision whether to vacate the award. See Kowler, 544 N.W.2d at 801. The record reflects that Brock asserted that the award should be vacated and confirmation denied because the award was obtained “by fraud, corruption, or other undue means,” one of the grounds expressly identified in section 171.088 to support vacatur. See Tex. Civ. Prac. & Rem. Code Ann. § 171.088(a)(1) (Vernon 2005); see also 9 U.S.C.S. § 10(a) (Lexis Supp. 2007) (providing, in Federal Arbitration Act, that award procured by fraud, corruption, or undue means may be vacated). The record reflects that the underlying proceeding focused on whether Brock’s allegations regarding “fraud, corruption, or undue means” were correct. Thus, the trial court’s denial of the confirmation was subsidiary to the trial court’s vacatur of the award. Moreover, the trial court’s vacatur of the award rendered moot the trial court’s decision to deny confirmation of the award. See Stolhandske, 14 S.W.3d at 815. In any event, the determinative ruling is the vacatur of the award, and the order at issue here is not subject to appeal unless the vacatur is appealable. See Kowler, 544 N.W.2d at 801. As discussed, an order vacating an award and ordering rehearing, such as the one in this case, is not an appealable order. See Tex. Civ. Prac. & Rem. Code Ann. § 171.098(a)(5); Stolhandske, 14 S.W.3d at 813. In addition, an order directing a rehearing, like the one at issue, does not have the indicia of finality that the other types of orders listed in section 171.098(a) possess. See Tex. Civ. Prac. & Rem. Code Ann. § 171.098(a). For example, orders denying an application to arbitrate or confirming an arbitration award are final as to the merits of the issue being decided and are ripe for appeal. See id. This can also be said of an order that simply denies an award or vacates it. In contrast, an order directing rehearing of the arbitration contemplates the continuation of the arbitration process and leaves unresolved disputed issues. Bison Building Materials, Ltd. v. Aldridge, No. 01–05–00330–CV, 2006 WL 2641280, at *5 (Tex. App.—Houston [1st Dist.] 2006, pet. filed) (holding that order confirming arbitration award in part, vacating award it in part, and implicitly directing rehearing is not appealable interlocutory order); Brooks v. Pep Boys Auto. Supercenters, 104 S.W.3d 656, 660 (Tex. App.—Houston [1st Dist.] 2003, no pet.) (explaining that orders compelling arbitration are interlocutory per se because they contemplate continuing resolution of issues through arbitral process). Orders, such as the one at issue, do not possess the attribute of finality underlying TAA section 171.098, including subsection 171.098(a)(3). See Simon, 791 A.2d at 88. Strictly construing TAA section 171.098, as we must, we conclude that we lack jurisdiction to consider Thrivent’s interlocutory appeal of the trial court’s order denying the arbitration award, vacating the award, and directing rehearing. Accordingly, we dismiss Thrivent’s interlocutory appeal for lack of jurisdiction. Petition for Writ of Mandamus By petition for writ of mandamus, Thrivent also challenges the trial court’s order denying the arbitration award, vacating the award, and directing rehearing. Thrivent requests that we “order the trial court to reverse its ruling and render judgment confirming the January of 2007 arbitration award that Brock take nothing.” We deny Thrivent’s petition for writ of mandamus. Conclusion We dismiss the appeal in appellate cause number 01–07–00356–CV for lack of jurisdiction. We deny Thrivent’s petition for writ of mandamus in appellate cause number 01–07–00484–CV. Laura Carter Higley Justice Panel consists of Justices Taft, Hanks, and Higley.

Motion to compel arbitration denied - No duty to arbitrate shown

In Re: Energy Maintentance Services Group LLC, No. (Tex.App. - Houston, Feb. 27, 2007)(Per Curiam)(mandamus to compel arbitration denied)(Before Justices Anderson, Hudson and Guzman) Appeal from 400th District Court of Fort Bend County (Hon. Vacek) ORIGINAL PROCEEDING WRIT OF MANDAMUS M E M O R A N D U M O P I N I O N On December 5, 2006, relator Energy Maintenance Services Group, L.L.C. filed a petition for writ of mandamus in this court. See Tex. Gov't Code Ann. ' 22.221 (Vernon 2004); see also Tex. R. App. P. 52. On December 7, 2006, relator also filed a motion for temporary relief seeking a stay of proceedings in the district court. In the petition and stay, relator asked this court to compel the Honorable Clifford Vacek, presiding judge of the 400th Judicial District Court of Fort Bend County, to stay all proceedings in the trial court, to set aside the ruling denying arbitration, and to compel arbitration of the claims of real parties Jim Sandt and Roxanne Sandt. Relator has not established that real parties have a duty to arbitrate the claims asserted in this case. We accordingly deny relator's petition for writ of mandamus and relator's motion for temporary relief. PER CURIAM Petition Denied and Memorandum Opinion filed February 27, 2007. Panel consists of Justices Anderson, Hudson, and Guzman.

Tan v. Lee (Tex.App.- Houston, 2007)

Fourteenth Court of Appeals affirms arbitration award, overrules due process challenge predicated on defective notice of hearing. Ying Chun Tan v. Hung Pin Lee, No. (Tex.App. - Houston [14th Dist.] Feb. 27, 2007)(Opinion by Chief Justice Hedges)(suit to confirm arbitration award) Full style of case: Ying Chun Tan v. Hung Pin Lee Appeal from 55th District Court of Harris County (Hon. Jeff Brown, District Judge) Disposition: Trial court's confirmation of arbitration award affirmed

YING CHUN TAN, Appellant,
v.
HUNG PIN LEE, Appellee.

No. 14-06-00319-CV.

Court of Appeals of Texas, Fourteenth District, Houston.

Opinion filed February 27, 2007.

Panel consists of Chief Justice HEDGES and Justices FOWLER and EDELMAN.

MEMORANDUM OPINION

ADELE HEDGES, Chief Justice.

Ying Chun Tan appeals from the trial court's final judgment confirming an arbitration award favoring Hung Pin Lee. In her sole issue, Tan contends that the trial court erred in confirming the award because she did not receive notice of the arbitration hearing. We affirm.

Background

Lee brought his arbitration action against Tan and several other defendants asserting securities fraud and related claims. He filed the action with the National Association of Securities Dealers, Inc. (NASD) by filing a Statement of Claim on July 11, 2001. All parties, including Tan, signed a Uniform Submission Agreement, which stipulated that the arbitration was to be conducted under the NASD Code of Arbitration Procedure. Tan subsequently filed a Statement of Answer on September 5, 2001. Three pre-hearing conferences were held before either the whole panel or the chairperson.^[1] Tan averred that these were telephone conferences and acknowledged participating in them.^[2] She stated that during the final pre-hearing conference, she was told that the arbitrators would be in touch with her to let her know when the arbitration hearing would take place. The record contains two letters, dated April 17, 2003, and August 28, 2003, from a NASD staff attorney to Tan stating that the arbitration hearing would commence on September 30, 2003, and that additional sessions may occur on October 1 and 2, 2003. Also in the record is a separate letter from a different NASD staff attorney, stating that a hearing notification letter was mailed to Tan on August 28, 2003, and that the letter was not returned as undelivered.

The arbitration award states that hearing sessions occurred on September 30 and October 1, 2003. The arbitrators found that although Tan was properly served with the Statement of Claim and with due notice of the hearing, she failed to appear at the hearing and, pursuant to the NASD Code of Arbitration Procedure, the hearing proceeded without her. The arbitrators determined that Tan and one other defendant were liable to Lee and ordered them, jointly and severally, to pay him $100,265.68 in compensatory damages and $22,925 in attorney's fees, witness' fees, and costs.

Lee subsequently filed his application for confirmation of the award with the district court. Tan answered, alleging, among other things, that the lack of notice of the arbitration hearing: (1) violated NASD rules, (2) violated her right to due process under the United States and Texas constitutions, and (3) runs counter to the concept of notice embodied in the Texas Rules of Civil Procedure.^[3] Tan then filed a Motion for Summary Judgment, raising the same notice arguments as raised in her answer. The only evidence attached to Tan's motion was an excerpt from the NASD Code regarding notice and Lee's responses to the requests for admissions, wherein Lee admitted that he did not give notice to Tan of the arbitration hearing.^[4]Lee meanwhile filed a Motion to Confirm Arbitration Award. In its final judgment, the trial court denied Tan's Motion for Summary Judgment and granted Lee's Motion to Confirm the Arbitration Award. The trial court awarded damages to Lee precisely as the arbitration award had: $100,265.68 in compensatory damages and $22,925 in attorney's fees, witness' fees, and costs.

In her Motion for New Trial, Tan repeated her summary judgment arguments, and she again attached the NASD Code excerpt and Lee's responses to the requests for admissions. She additionally attached her own affidavit, stating that she never received notice of the arbitration hearing date from either NASD or Lee's attorney. She said that she "would not have defaulted on the arbitration hearing if she had known about it." At a hearing on the motion, Tan further testified that she moved five or six months before the hearing date. She said that she left a forwarding address with the post office to have her mail sent to a P.O. Box. She further asserted that she knows that some of her mail was not forwarded because certain bills she did not receive became past due. She acknowledged that she never informed NASD of her move or her new address. At the close of the hearing, Tan's attorney argued that notice of the hearing was improper under the Texas Arbitration Act ("TAA"). TEX. CIV. PRAC. & REM. CODE ANN. § 171.001-.098 (Vernon 2005). Defense counsel objected that this argument had not been previously made. The trial court indicated that it would take the issue under advisement. The court denied the Motion for New Trial.

Analysis

In her single issue on appeal, Tan contends that the trial court erred in confirming the arbitration award because she did not receive notice of the hearing date as required by the TAA and the NASD Code of Arbitration Procedure. She further argues that the lack of notice violated her due process rights under the 14th Amendment to the United States Constitution. U.S. CONST. amend. XIV. We review a trial court's order confirming an arbitration award under a de novo standard. GJR Mgmt. Holdings, L.P. v. Jack Raus, Ltd., 126 S.W.3d 257, 262-63 (Tex. App.-San Antonio 2003, pet. denied). The scope of our review is extraordinarily narrow, and we indulge every reasonable presumption in favor of upholding the arbitration award. Id.

We begin by noting that because the parties entered into the Uniform Submission Agreement, thereby agreeing to proceed under NASD procedures, the hearing notice provision of the TAA, section 171.044, does not apply to this case. The section itself begins: "Unless otherwise provided by the agreement to arbitrate, the arbitrators shall set a time and place for the hearing and notify each party." Tex. Civ. Prac. & Rem. Code Ann. § 171.044(a).^[5] Additionally, section 171.001 provides generally that written agreements to arbitrate are valid and enforceable. Id. § 171.001(a). Indeed, courts have consistently held that when parties agree to arbitrate under certain rules, they are bound by those rules. See, e.g., In re Oakwood Mobile Homes, Inc., 987 S.W.2d 571, 574 (Tex. 1999) (orig. proceeding) (holding that by agreeing to arbitrate under certain rules the parties were bound by those rules); In re Scott, 100 S.W.3d 575, 579 (Tex. App.-Fort Worth 2003, orig. proceeding) (holding that agreement to abide by NASD arbitration rules obligated party to arbitrate under those rules); In re Neutral Posture, Inc., 135 S.W.3d 725, 729 (Tex. App.-Houston [1st Dist.] 2003, orig. proceeding) ("The choice of particular arbitration rules by the parties in an agreement to arbitrate binds the parties to the provisions of those rules . . . ."); In re John M. O'Quinn, P.C., 155 S.W.3d 195, 201 (Tex. App.-Tyler 2003, orig. proceeding) ("Once the parties specify which rules govern arbitration, they are bound by those rules. Furthermore, the trial court has no discretion to modify or otherwise contravene the specified rules.").^[6] Here, the parties all signed the Uniform Submission Agreement, thereby agreeing to arbitrate under the NASD Code of Arbitration Procedure. As will be discussed below, the NASD Code contains its own rules regarding notice. Accordingly, the hearing notice issue was not governed by the TAA.

We next turn to the NASD Code of Arbitration Procedure. Tan contends that section 10315(a) of the NASD Code requires notice of hearing by personal service, registered mail, or certified mail. We read the section in question as more specific. It states in relevant part:

The Director shall determine the time and place of the first meeting of the arbitration panel and the parties, whether the first meeting is a pre-hearing conference or a hearing, and shall give notice of the time and place at least 15 business days prior to the date fixed for the first meeting by personal service, registered or certified mail to each of the parties unless the parties shall, by their mutual consent, waive the notice provisions under this Rule. The arbitrators shall determine the time and place for all subsequent meetings, whether the meetings are pre-hearing conferences, hearings, or any other type of meetings, and shall give notice as the arbitrators may determine. Attendance at a meeting waives notice thereof.

NASD CODE OF ARBITRATION PROCEDURE § 10315(a). In her affidavit, Tan acknowledged that she participated in the first three meetings, which were apparently pre-hearing conferences conducted by telephone conference call.^[7]Thus, under section 10315(a), notice of the hearing itself was to be given as determined by the arbitrators. Lee contendsCand the record supports the conclusionCthat the arbitrators determined to give notice by regular mail. The record further supports the conclusion that such notice was given. Specifically, the record contains not only the aforementioned language in the award but also two letters from NASD to Tan informing her of the hearing dates and a third letter from NASD explaining that a hearing notification letter was mailed to Tan and was not returned as undelivered. In the award, the arbitrators found that Tan "received due notice of the hearing." See Brozo v. Shearson Lehman, Hutton, Inc., 865 S.W.2d 509, 511 (Tex. App.-Corpus Christi 1993, no pet.) (deferring to arbitrators' finding regarding whether notice was sufficient under New York Stock Exchange arbitration rules). Accordingly, we find that notice was properly provided under the NASD Code.

Tan additionally argues that the evidence regarding notice being sent by regular mail creates only a rebuttable presumption of notice. She asserts that once she denied ever having received notice, the presumption vanished. In making this argument, she references two cases discussing Rule 4(a)(6) of the Federal Rules of Appellate Procedure; (Nunley v. City of Los Angeles, 52 F.2d 792 (9th Cir. 1995), and Cote v. Chase, 914 F. Supp. 739 (D.N.H. 1996)); a case involving mailed notice of a product defect (Warfield v. Byron, 436 F.3d 551 (5th Cir. 2006)); and a case involving a cancellation notice from an insurance company (Anchor Cas. Co. v. Crisp, 346 S.W.2d 364 (Tex. Civ. App.-Amarillo 1961, no writ)). We do not believe these cases to be sufficiently on point to be persuasive. Other authority, more directly on point, holds that notice of an arbitration hearing by regular mail is sufficient to demonstrate that due notice was given when the arbitration rules permit such service, even in light of a party's denial that notice was received. See Gingiss Intern'l, Inc., v. Bormet, 58 F.3d 328, 332-33 (7th Cir. 1995)^[8] ; see also Brozo, 865 S.W.2d at 511 (rejecting claim that notice to attorney was insufficient even in light of claim that party did not receive notice); Gen. Universal Sys., Inc. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., No. 14-01-00509-CV, 2003 WL 1884198, at *1-2 (Tex. App.-Houston [14th Dist.] 2003, no pet.) (rejecting claim that notice by regular mail was insufficient under applicable arbitration rules, but it is unclear whether party received actual notice). Furthermore, the notion that service under the chosen rules creates only a rebuttable presumption of notice runs counter to the widely cited principle that once parties choose certain arbitration rules, they are bound by those rules. See, e.g., In re Oakwood Mobile Homes, 987 S.W.2d at 574; In re John M. O'Quinn, P.C., 155 S.W.3d at 201. Accordingly, we hold that Tan's denial of receipt did not render service by regular mail insufficient.

Lastly, we address Tan's assertion that the manner of notice violated her constitutional rights to due process. We recognize that "[a]n elementary and fundamental requirement of due process in any proceeding which is to be accorded finality is notice reasonably calculated, under the circumstances, to apprise interested parties of the pendency of the action and afford them the opportunity to present their objections." Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950). However, we do not believe that this general statement of legal principles applies to this notice of an arbitration hearing; the parties agreed to be bound by a particular set of rules, and notice was effected according to those rules. See Brozo, 865 S.W.2d at 511. Tan does not make any specific arguments regarding whether the notice in this case was reasonably calculated to apprise her of the suit. Instead, she appears to rely on her contention that because the notice did not satisfy the requirements of the TAA and the NASD Code, her due process rights were violated.^[9] Because we hold above that the TAA does not apply to this case and notice was sufficient under the NASD Code, we find Tan's due process arguments to be without merit. Accordingly, we overrule Tan's sole issue.^[10]

We affirm the trial court's judgment.

[1] The arbitration award reflects that these conferences occurred on March 20, 2002, October 10, 2002, and April 16, 2003.

[2] Tan made these statements in an affidavit attached to her Motion for New Trial.

[3] The arbitration co-defendant, who was also held liable, also answered in the trial court but is not a party to this appeal.

[4] In the motion, Tan argued that under NASD rules, plaintiff's counsel is responsible for notifying the defendants of the continuation of a hearing. Tan does not make this argument on appeal.

[5] The majority of the sections of the TAA governing arbitration proceduresCas opposed to governance of trial court proceedings to compel or stay arbitration or to confirm, modify, or vacate an arbitration awardCcontain similar language deferring to the parties' agreement in the event that it references different procedures. See TEX. CIV. PRAC. & REM. CODE ANN. § 171.041, .042, .043, .045, .046, .047, .053, .055. The remaining sections governing arbitration procedure primarily either grant certain power to the arbitrators (see sections 171.049 (arbitrators may administer witness oaths), 171.050 (arbitrators may authorize depositions), 171.051 (arbitrators may issue subpoenas), and 171.054 (arbitrators may modify or correct an award)); or protect certain rights (see sections 171.048 (ensuring a party's right to be represented by an attorney) and 171.052 (requiring fees for third-party witnesses)). This statutory scheme evidences a clear legislative intention to defer to the parties' agreement in matters of arbitration procedure, with parties free to choose the TAA as controlling, to choose other law as controlling, or to not choose and allow the TAA (or other law) to control by default.

[6] Lee suggests that because this case involves securities transactions, the arbitration was governed by the Federal Arbitration Act ("FAA") instead of the TAA. 9 U.S.C.A. § 1-16 (West 1999). However, federal courts are consistent in holding that FAA procedures do not apply when the parties have agreed to arbitrate under other rules. See, e.g., Volt Info. Sciences, Inc. v. Board of Trustees of Leland Stanford Junior Univ., 489 U.S. 468, 479 (1989) ("[P]arties are generally free to structure their arbitration agreements as they see fit. . . . [They may] specify by contract the rules under which that arbitration will be conducted.");Gingiss Intern'l, Inc., v. Bormet, 58 F.3d 328, 332-33 (7th Cir. 1995) (holding that notice of hearing sent via regular mail was sufficient under American Arbitration Association's Commercial Arbitration Rules, which the parties had agreed to be bound by, despite the fact that state law required notice by registered mail or personal service).

[7] The NASD Code expressly permits pre-hearing conferences to be conducted by conference call. See NASD CODE OF ARBITRATION PROCEDURE § 10321(d)(1).

[8] Tan argues that Gingiss is distinguishable from the present case because, according to Tan, the appellants in Gingiss argued that they did not receive proper notice while Tan asserts that she did not receive any notice at all. However, the court in Gingiss clearly points out that the appellants claimed to have not received "actual notice"; thus, Tan is incorrect about the facts of the case. 58 F.3d at 332. Tan further asserts that Gingiss is distinguishable because four mailings were sent to the appellants in that case and Tan asserts here that only one mailing was attempted. We are unpersuaded by this distinction. First, the record reflects that two letters were sent to Tan regarding the hearing date. Second, the court in Gingiss does not rely on the number of attempts in holding that sufficient notice was undertaken.

[9] None of the due process cases cited by Tan are particularly relevant to the issues in the present case. See Villareal v. San Antonio Truck and Equip., 994 S.W.2d 628, 630-33 (Tex. 1999) (reversing dismissal for want of prosecution where notice of hearing did not adequately apprise party of intent to dismiss); LBL Oil Co. v. Int'l Power Serv., Inc., 777 S.W.3d 390, 390-91 (Tex. 1989) (reversing default judgment because party had no actual or constructive notice of trial setting); Hubert v. Ill. State Assistance Comm'n, 867 S.W.2d 160, 163 (Tex. App.-Houston [14th Dist.] 1993, no writ) (reversing dismissal for want of prosecution where record did not reflect notice and party denied receipt of notice without contradiction).

[10] Because of our holding on Tan's substantive issue, we need not consider Lee's appellate contention that Tan failed to timely apply to vacate the arbitration award.

Supreme Court compels homeowners to arbitrate construction defect claim against builder

In Re U.S. Home Corp., Lennar Corp. et al, No. 03-1080 (Tex. Oct. 12, 2007)(per curiam)(arbitration home owners, builder, contractors, residential construction defect) 03-1080 IN RE U.S. HOME CORPORATION, LENNAR CORPORATION, DAVID GARCIA, FABIAN DIAZ AND SHELDON MOORE; from Cameron County; 13th district (13-03-00598-CV, ___ S.W.3d ___, 11/10/03). Pursuant to Texas Rule of Appellate Procedure 52.8(c), without hearing oral argument, the Court conditionally grants the petition for writ of mandamus. Per Curiam Opinion In Re U.S. Home Corporation, Lennar Corporation, David Garcia, Fabian Diaz and Sheldon Moore, Relators ════════════════════════════════════ On Petition for Writ of Mandamus ════════════════════════════════════ Two couples brought claims on behalf of themselves and others similarly situated alleging their homes were built without shower pans. They concede their contracts contained broad arbitration clauses governed by the Federal Arbitration Act, and do not dispute that their claims fall within the scope of those clauses. Instead, they raise seven contract defenses to enforcement, five of which the trial court cited in refusing to compel arbitration. As there is no evidence to support any of the seven grounds, we conditionally grant mandamus relief. See In re Weekley Homes, L.P., 180 S.W.3d 127, 130 (Tex. 2005) (“Mandamus relief is proper to enforce arbitration agreements governed by the FAA.”). In the sales contracts Luis and Norma Cano and Mark and Gloria Schlatter signed with U.S. Home Corporation, the parties agreed to mediate and arbitrate all controversies that might arise related to the agreement: Any controversy or claim arising under or related to this Agreement . . . shall be determined by mediation or by binding arbitration as provided by the Federal Arbitration Act (9 U.S.C. Sections 1–14) and similar state statutes and not by a court of law. The claim will first be mediated in accordance with the Commercial or Construction Industry Arbitration Rules, as appropriate, of the American Arbitration Association. If not resolved by mediation, the claim will be settled in accordance with the Commercial or Construction Industry Arbitration Rules, as appropriate, of the American Arbitration Association . . . . Written warranties for both homes also provided for arbitration (but not mediation) of any disputes about whether warranty repairs were necessary. Several years after closing, the buyers asserted that a shower in each home had no pan or lining, and alleged claims for repairs, mold remediation, medical bills, and mental anguish. Finding U.S. Home’s remediation plan inadequate, they filed suit in Cameron County against U.S. Home, Lennar Corporation, and three U.S. Home employees.[1] The defendants moved to compel arbitration, and the plaintiffs moved to certify their class claims. The trial court denied the former and granted the latter in a half-day hearing. First, the trial court found the arbitration clauses were contracts of adhesion and thus procedurally unconscionable. “Adhesion contracts are not automatically unconscionable, and there is nothing per se unconscionable about arbitration agreements.” In re AdvancePCS Health L.P., 172 S.W.3d 603, 608 (Tex. 2005) (per curiam); see also In re Palm Harbor Homes, Inc., 195 S.W.3d 672, 678 (Tex. 2006). Here, the plaintiffs proved only that U.S. Home refused to contract with them unless they agreed to arbitration. This is not enough. Palm Harbor, 195 S.W.3d at 678–79; AdvancePCS, 172 S.W.3d at 608; In re Halliburton Co., 80 S.W.3d 566, 572 (Tex. 2002); In re FirstMerit Bank, N.A., 52 S.W.3d 749, 758 (Tex. 2001). Second, the trial court found the arbitration agreements were procured by fraud. The plaintiffs pointed to no evidence of misrepresentations, scienter, or reliance, instead arguing only that the arbitration clause was on the back of their single-sheet contract. As they concede no one prevented them from reading both sides, this is not fraud. Like any other contract clause, a party cannot avoid an arbitration clause by simply failing to read it. In re Merrill Lynch Trust Co. FSB, ___ S.W.3d ___, ___ (Tex. 2007); AdvancePCS, 172 S.W.3d at 608; EZ Pawn Corp. v. Mancias, 934 S.W.2d 87, 90 (Tex. 1996). Third, the trial court found the arbitration clauses were not supported by mutual consideration. As both parties agreed to arbitration, this is again simply wrong. Palm Harbor, 195 S.W.3d at 676; AdvancePCS, 172 S.W.3d at 607. The plaintiffs point to two contractual provisions allowing U.S. Home to terminate the agreement if their home was damaged before closing, or if the buyers failed to pay. Neither of these provisions allowed U.S. Home to cancel the contracts at will, or to opt out of arbitration if there was a dispute regarding whether it had properly done so. See Halliburton, 80 S.W.3d at 569 (noting that even if employer terminated contract, it would be bound to arbitrate resulting disputes). Fourth, the trial court found arbitration would be unduly burdensome and costly. To sustain such a defense, both the United States Supreme Court and this Court require specific evidence that a party will actually be charged excessive arbitration fees. Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79, 90–91 (2000); FirstMerit Bank, 52 S.W.3d at 757. Here, the plaintiffs presented no evidence other than a schedule of the American Arbitration Association’s usual fees. This is not enough. Green Tree, 531 U.S. at 90 n.6; FirstMerit Bank, 52 S.W.3d at 757. Fifth, the trial court found that mediation was a condition precedent to arbitration, and the former having yet to occur the latter could not be compelled. But while the parties’ agreements clearly contemplated mediation before arbitration, there is no indication they intended to dispense with arbitration if mediation did not occur first. To the contrary, the warranty agreements that form part of the same transaction require arbitration without any mention of mediation, indicating the parties intended to arbitrate regardless. The plaintiffs allege no damage from U.S. Home’s failure to invoke mediation first, and are hardly in a position to do so as (1) they too did not bother with mediation before seeking class certification, and (2) they concede mediation has taken place while this case was under review. Although the plaintiffs could have asked the trial court to delay arbitration pending mediation, there was no basis for asking the trial court to cancel it entirely. On appeal, the plaintiffs claim arbitration was not mandatory because while the sales agreements required arbitration, the Canos’ warranty book said only that either party “may request” arbitration. We disagree that this renders the contracts ambiguous. We must construe the parties’ contracts together if we can, rather than allowing one to cancel the other as the plaintiffs suggest. In re AdvancePCS Health L.P., 172 S.W.3d 603, 606 (Tex. 2005) (per curiam) (holding series of agreements must be construed together in determining whether parties agreed to arbitration). While the warranty’s clause allowed either party to request arbitration, nothing in it suggests arbitration was optional if either did; to the contrary, the clause constituted a binding promise to arbitrate if either party requested it. See Local 771, I.A.T.S.E., AFL-CIO v. RKO Gen., Inc. WOR Div., 546 F.2d 1107, 1115–16 (2d Cir. 1977) (holding contract that provided “parties may submit to arbitration . . . upon written request of either party” did not make arbitration optional). U.S. Home having done so, the Canos could not opt out thereafter. Additionally, on appeal the plaintiffs argue they do not have to arbitrate with the individual defendants, as only U.S. Home signed the agreement. Assuming this argument can be raised for the first time on appeal, we find it without merit. None of these individuals had a duty to supply shower pans but for the plaintiffs’ contracts with U.S. Home. “[A] litigant who sues based on a contract subjects him or herself to the contract’s terms.” In re FirstMerit Bank, N.A., 52 S.W.3d 749, 755 (Tex. 2001). As the nonsignatories’ liability arises from and must be determined by reference to the parties’ contract rather than general obligations imposed by law, the suit is subject to the contract’s arbitration provisions. In re Weekley Homes, L.P., 180 S.W.3d 127, 131–32 (Tex. 2005); see also In re Vesta Ins. Group, Inc., 192 S.W.3d 759, 762 (Tex. 2006) (“When contracting parties agree to arbitrate all disputes ‘under or with respect to’ a contract (as they did here), they generally intend to include disputes about their agents’ actions . . . .”). Finally, the defendants request that we reverse the trial court’s class certification order as well, pointing out that the United States Supreme Court has expressly held an arbitration clause covering “all disputes relating to a contract” includes disputes about class certification. See Green Tree Fin. Corp. v. Bazzle, 539 U.S. 444, 451 (2003). As the certification order is apparently pending but abated in the Thirteenth Court of Appeals, we decline the invitation as premature. Accordingly, without hearing oral argument, Tex. R. App. P. 52.8(c), we conditionally grant relators’ petition for writ of mandamus and direct the trial court to grant their motion to compel arbitration. We are confident the court will comply promptly, and our writ will issue only if it does not. OPINION DELIVERED: October 12, 2007 [1] The individual defendants are David Garcia, Fabian Diaz, and Sheldon Moore. The plaintiffs also sued Bill Armstrong and Adalberto Gutierrez, neither of which has apparently answered, and thus are not parties in this proceeding.

City of Weslaco, Texas v. Castillo (Tex.App.- Corpus Christi, Sep. 27, 2007)

CITY OF WESLACO, TEXAS v. BAUDELIO CASTILLO, ET AL, No. (Tex.App.- Sep. 27, 2007)(Opinion by Justice Yanez)(Before Justices Yanez, Rodriguez and Garza) Appeal from 332nd District Court of Hidalgo County Dsposition: Affirmed as modified Memorandum Opinion by Justice Yañez Appellant, the City of Weslaco, Texas ("the City"), appeals from the confirmation of an arbitration award in favor of appellees, Baudelio Castillo, David Gamez, Jose Angel Rodriguez, Brent Kennedy, and Adan Sanchez. (1) In two issues, the City contends the trial court erred in (1) confirming the award because the arbitration panel exceeded its authority under the collective bargaining agreement ("CBA"), and (2) awarding attorneys' fees to appellees. We modify the judgment and, as modified, affirm. Background In 1998, appellees presented numerous complaints to the City regarding alleged acts of harassment, official oppression, retaliation and discrimination against them by then-Police Chief, J. D. Martinez, and other senior police department personnel. Appellees alleged that certain actions taken against them by Chief Martinez and others were in violation of the CBA between the parties. (2) On February 25, 1999, the parties signed an agreement to arbitrate the claims under the Uniform Arbitration Act. The agreement provides that the written decision of the two arbitration judges "shall be binding upon the sides." (3) The arbitration panel heard sworn testimony from approximately thirty witnesses in seventeen days of hearings held over several months, from February to June 1999. On August 30, 1999, the panel issued its decision. Among other things, the panel found that senior police officers had engaged in "intentional, oppressive and harmful acts" against appellees, that Chief Martinez "knew or should have known" of the senior officers' misconduct, and that by "fail[ing] to stop" the officers' abuse of their authority, Chief Martinez sanctioned the misconduct. The arbitration award also (1) awarded monetary damages to appellees, (4) (2) awarded appellees $20,000.00 in attorneys' fees, and (3) ordered the removal of certain written reprimands or charges from appellees' personnel files. On September 14, 1999, the City filed suit, seeking a declaratory judgment that the arbitration panel had exceeded its authority under the CBA and chapter 143 of the local government code. (5) Appellees answered and filed a counter-claim, seeking confirmation of the arbitration award. On November 20, 2000, appellees filed a motion for summary judgment, contending that the City, as the losing party seeking to vacate the arbitration award, had the burden to bring forth a complete record that would warrant vacating the award, and noting that it is undisputed that no complete record of the arbitration proceedings exists. On March 11, 2004, the City filed a motion for summary judgment, contending that the arbitration panel exceeded its authority under the CBA and chapter 143 of the local government code. The parties filed several supplemental answers and responses. On May 25, 2004, the trial court granted appellees' motion for summary judgment and affirmed the arbitration award. The May 25, 2004 order did not address the City's claims or the issues of attorneys' fees and interest. On December 13, 2005, the trial court issued an order, in which it (1) took notice that appellees had established attorneys' fees and expenses in the amount of $47,652.77, and (2) awarded appellees attorneys' fees in the amount of $40,000 (plus attorneys' fees in the event of appeal), plus pre- and post-judgment interest. This appeal ensued. Standard of Review and Applicable Law Where a party appeals a grant of summary judgment in a suit to vacate an arbitration award, we review the district court's ruling de novo. (6) As "long as the arbitrator's decision draws its essence from the collective bargaining agreement and the arbitrator is not fashioning his own brand of industrial justice," we will decline to vacate the award. (7) In applying the "essence" test, an arbitration award "must have a basis that is at least rationally inferable, if not obviously drawn, from the letter or purpose of the collective bargaining agreement. . . . The award must, in some logical way, be derived from the wording or purpose of the contract." (8) Although we accord an arbitrator's decision considerable deference regarding the merits of the controversy, the CBA circumscribes his jurisdiction. (9) An arbitrator may look beyond the written contract when interpreting a collective bargaining agreement if the instrument is ambiguous or silent upon a precise question. (10) Where the arbitrator exceeds the express limitations of his contractual mandate, judicial deference ends and vacatur or modification of the award is an appropriate remedy. (11) Jurisdiction Initially, we address appellees' "motion to determine jurisdiction," in which they seek dismissal of the City's appeal, contending that: (1) the trial court's May 25, 2005 order disposes of all parties and issues and is therefore a final order, (2) the December 13, 2005 order is a nullity because the court's plenary power had expired, and (3) therefore, the City's filing of its notice of appeal was untimely. The City argues that the May 25, 2005 order "addressed the merits of the case but did not resolve the issue of attorneys['] fees and interest," and that the December 13, 2005 order "disposed of all issues as to all parties" and became the court's final judgment, from which the City timely appealed. A judgment is not final unless it disposes of all pending parties and claims in the record. (12) There can be no presumption that a motion for summary judgment addresses all of the movant's claims. (13) In cases in which only one final and appealable judgment can be rendered, a judgment issued without a conventional trial is final for purposes of appeal if and only if it either states with unmistakable clarity that it is a final judgment or actually disposes of all claims and parties then before the court, regardless of its language. (14) The law does not require that a final judgment be in any particular form. (15) Therefore, whether a summary-judgment order is a final judgment must be determined from its language and the record in the case. (16) Here, the May 25, 2005 order, entitled "Judgment Confirming Award," (1) states that appellees "are entitled to Summary Judgment and a judgment confirming the award of the arbitrator," and (2) orders that appellees "have judgment as specified in the Arbitrator's Order of August 30, 1999." It neither addresses the City's request for declaratory relief and attorneys' fees, nor does it contain a "Mother Hubbard" clause, stating that "all relief not expressly granted is denied." The December 13, 2005 order, entitled "Order Granting Defendants' Attorney's Fees and Interest on Judgment," (1) notes that both the City and appellees sought attorneys' fees under the Declaratory Judgment Act, (17) and (2) awards appellees attorneys' fees (including attorneys' fees on appeal) and pre- and post-judgment interest. The order further states that "[a]ll writs and processes for the enforcement and collection of this judgment or the costs of court may issue as necessary" and "[a]ll further relief not expressly granted in this judgment is hereby DENIED." We conclude that because the May 25, 2005 order did not dispose of the City's claims for declaratory judgment or attorneys' fees, it was not a final appealable order. In addition, although we recognize that a "Mother Hubbard" clause alone does not indicate that a judgment rendered without a conventional trial is final, (18) we nonetheless conclude that based on the language of the order and the record in this case, the December 13, 2005 order is a final, appealable order. Accordingly, we hold the City's notice of appeal was timely filed. Appellees' Motion for Summary Judgment In its first issue, the City complains the trial court erred in confirming the arbitration award because the arbitrators exceeded the scope of their authority under the CBA. Article I of the CBA states that the purpose of the agreement is "to provide for an equitable and orderly process that addresses salaries, working conditions, and employee-employer working relations that may arise" during the term of the agreement. Article XXII, section 7 of the CBA provides, in pertinent part, "[n]o police officer shall be discriminated against in any way because of activity on behalf of the Union." Article XXVII, entitled "Grievance Procedures," provides for arbitration of grievances. Subparagraph (2) of this section provides: The hearing on the grievance shall be informal and the rules of evidence shall not apply. The Arbitrator shall not have the power to add to, subtract from, to modify, the provisions of this agreement in arriving at a decision on the issue or issues presented; and shall confine his decision solely to the precise issue or issues submitted for arbitration, and shall have no authority to determine any other issues not directly presented in the grievance. The decision of the Arbitrator shall be final and binding upon the grievant and the City. Paragraph II of the arbitration award states that from November 1997 to August 1999, appellees were "harassed, intimidated, embarrassed, cajoled, denied advancement, suspended, removed from work positions within the Police department, forced to suffer monetary damage, suffered violations of their civil rights, and were publicly humiliated" by Chief Martinez and other senior police officers. In Paragraph VI(A), in which the arbitration panel offers its "Conclusion[s]," the award states that the City, through its senior police officers, engaged in "official oppression, discrimination, and punitive retaliation" against appellees in violation of section 7 of the CBA. As noted above, section 7 of Article XXII of the CBA prohibits discrimination against officers because of Union activity. We find no other reference in the arbitration award to a specific section of the CBA. Accordingly, we conclude that the award is based on the arbitrators' conclusion that the City and its senior officers discriminated against appellees because of their Union activities. In their motion for summary judgment, appellees contend they are entitled to judgment because as the losing party seeking to vacate the award, the City has the burden to produce a complete record establishing a basis for modifying or vacating the award, and no such record exists. Appellees note that in Article XXIV of the CBA, providing for arbitration of disciplinary actions against police officers, paragraph six of section three provides: A stenographic transcription of the [arbitration] proceeding shall be made only upon written agreement of the parties prior to commencement of the hearing. Should there be no agreement, the party desiring the transcript may have the transcript made at its sole expense. Hearings may be recorded by audio tape by either party and a copy of the audio recording shall be made available to the other party upon request. In support of their motion, appellees presented the following summary judgment evidence: (1) a copy of the City's Motion to Continue (in which the City admits that it has the burden to bring forth a complete record of the proceedings giving rise to the adverse award); (2) affidavits of the arbitrators, appellees' counsel, and one of the appellees, all of which state that no complete record of the arbitration proceedings exists; and (3) a copy of the CBA. In support of its argument, appellees cite Eurocapital Group Ltd. v. Goldman Sachs & Co., 17 S.W.3d 426, 429 (Tex. App.-Houston [1st Dist.] 2000, no pet.); Kline v. O'Quinn, 874 S.W.2d 776, 790-91 (Tex. App.-Houston [14th Dist.] 1994, writ denied) (op. on motions for reh'g); and Atrium Westwood VIII Venture v. Barrick Westwood Ltd. P'ship, 693 S.W.2d 699, 700-01 (Tex. App.-Houston [14th Dist.] 1985, no writ). We agree that these cases support appellees' argument that the City had the burden to bring forth a complete record establishing a basis for vacating or modifying the award. (19) Without a record, we presume that adequate evidence was presented to support the arbitrator's award. (20) The burden is on the City to establish that the arbitrators exceeded their authority; the City has not met its burden. The record before us does not include any evidence that the arbitrators exceeded their authority. We overrule the City's first issue and affirm the trial court's order confirming the arbitration award. Attorneys' Fees In its second issue, the City contends the trial court erred in awarding attorneys' fees to appellees because the CBA contains no provision authorizing the award of attorneys' fees. Appellees argue that "[w]here the CBA is silent, the arbitrator is presumed to have authority if it is necessarily implied by the authority to address the subject matter." The trial court's December 13, 2005 order granting appellees attorneys' fees notes that the City requested relief under the Declaratory Judgment Act and that appellees' request for attorneys' fees was also based on the Declaratory Judgment Act. (21) The order notes that the following cases "concerning the Declaratory Judgment Act" support appellees' request for attorneys' fees: Tex. Educ. Agency v. Leeper, 893 S.W.2d 432 (Tex. 1995); Farnsworth v. Deaver, 147 S.W.3d 662 (Tex. App.-Amarillo 2004, no pet.); Agan v. Comm'rs Court of Titus Co., 922 S.W.2d 640 (Tex. App.-Texarkana 1996), aff'd in part, rev'd in part, 940 S.W.2d 77 (Tex. 1997); City of El Paso v. Crum Const. Co., 864 S.W.2d 153 (Tex. App.-El Paso 1993, writ denied); and Knighton v. Int'l Bus. Machs. Corp., 856 S.W.2d 206 (Tex. App.-Houston [1st Dist.] 1993, writ denied). Although the cases cited in the trial court's December 13, 2005 order "concern" the Declaratory Judgment Act, the only case that involves arbitration is City of El Paso, and it is inapposite. (22) This Court has held that there is "no basis for recovery of attorneys' fees in a successful defense against an action to vacate an arbitration award." (23) In Int'l Bank of Commerce-Brownsville, we also rejected the argument (apparently relied on by the trial court in this case) that a party is entitled to attorneys' fees because it sought a declaratory judgment from the trial court. (24) Because we conclude the trial court erred in awarding appellees attorneys' fees, we sustain the City's second issue. (25) Conclusion We modify the trial court's judgment to delete the trial court's award of $40,000.00 in additional attorneys' fees for enforcing the arbitration award, plus the additional attorneys' fees for appealing to this Court, and for potentially appealing to the supreme court. (26) As modified, we affirm the trial court's judgment confirming the arbitration award. LINDA REYNA YAÑEZ, Justice Memorandum opinion delivered and filed this the 27th day of September, 2007. 1. Appellees are police officers (or former officers) for the City of Weslaco. At the time of the arbitration, they were members of the Weslaco Municipal Police Union ("the Union"), then the bargaining agent for Weslaco police officers. 2. The applicable CBA was in effect from October 1, 1997, through September 30, 1999. 3. Emphasis in original. 4. The arbitration panel awarded monetary damages to appellees in the following amounts: (1) $10,170 to Baudelio Castillo, (2) $4,000 to Adan Sanchez, (3) $2,500 to Jose Angel Rodriguez, (4) $2,500 to David Gamez, and (5) $4,000 to "Bruce" [Brent] Kennedy. 5. See Tex. Loc. Gov't Code Ann. §§ 143.001-.363 (Vernon 1999 & Supp. 2006). 6. Houston Lighting & Power Co. v. Int'l Bhd. of Elec. Workers, Local Union No. 66, 71 F.3d 179, 181 (5th Cir.1995). 7. Id. at 182 (quoting Delta Queen Steamboat Co. v. Dist. 2 Marine Eng'rs Beneficial Ass'n, 889 F.2d 599, 602 (5th Cir. 1989)). 8. Executone Info. Sys., Inc. v. Davis, 26 F.3d 1314, 1325 (5th Cir.1994) (citation omitted). 9. Delta Queen Steamboat Co. v., 889 F.2d 599 at 602. 10. Id. 11. Id. 12. Cartwright v. Cologne Prod. Co., 182 S.W.3d 438, 443 (Tex. App.-Corpus Christi 2006, pet. denied) (citing Guajardo v. Conwell, 46 S.W.3d 862, 863-64 (Tex. 2001) (per curiam); Garcia v. Comm'rs Court, 101 S.W.3d 778, 784 (Tex. App.-Corpus Christi 2003, no pet.)). 13. Id. (citing McNally v. Guevara, 52 S.W.3d 195, 196 (Tex. 2001) (per curiam)). 14. Id. (citing Lehmann v. Har-Con Corp., 39 S.W.3d 191, 204 (Tex. 2001); Garcia, 101 S.W.3d at 784). 15. Id. (citing Lehmann, 39 S.W.3d at 195; Garcia, 101 S.W.3d at 784). 16. Id. (citing Lehmann, 39 S.W.3d at 195; Garcia, 101 S.W.3d at 784). 17. See Tex. Civ. Prac. & Rem. Code Ann. § 37.009 (Vernon 1997). 18. See First Nat'l Bank v. DeVillagomez, 54 S.W.3d 345, 348 (Tex. App.-Corpus Christi 2001, pet. denied). 19. See GJR Mgmt. Holdings, L.P. v. Raus, 126 S.W.3d 257, 263 (Tex. App.-San Antonio 2003, pet. denied); Anzilotti v. Gene D. Liggin, Inc., 899 S.W.2d 264, 267 (Tex. App.-Houston [14th Dist.] 1995, no pet.). 20. Anzilotti, 899 S.W.2d at 267; Kline v. O'Quinn, 874 S.W.2d 776, 783 (Tex. App.-Houston [14th Dist.] 1994, writ denied) (holding that without a transcription of the arbitration proceedings, we must presume adequate evidence to support the award); House Grain Co. v. Obst, 659 S.W.2d 903, 906 (Tex. App.-Corpus Christi 1983, writ ref'd n.r.e.) (same). 21. See Tex. Civ. Prac. & Rem. Code Ann. § 37.009 (Vernon 1997) (providing that a court may award costs and reasonable and necessary attorneys' fees in proceeding under Declaratory Judgment Act). 22. The court in City of El Paso held that municipal corporations may be held liable for attorneys' fees in declaratory judgment actions. City of El Paso v. Croom Const. Co., Inc., 864 S.W.2d 153, 155 (Tex. App.-El Paso 1993, writ denied). 23. Int'l Bank of Commerce-Brownsville v. Int'l Energy Dev. Corp., 981 S.W.2d 38, 54 (Tex. App.-Corpus Christi 1998, pet. denied) (rejecting trial court's award of additional attorneys' fees in arbitration award under the FAA); see also Perry Homes v. Cull, 173 S.W.3d 565, 574 (Tex. App.-Ft. Worth- 2005, pet. granted) (noting a trial court may not add post-arbitration attorneys' fees to the arbitration award); Crossmark, Inc. v. Hazar, 124 S.W.3d 422, 436 (Tex. App.-Dallas 2004, pet. denied) (noting, in reviewing arbitration award under TAA, that "If an arbitration award includes an award of attorneys' fees, a trial court may not award additional attorney fees for enforcing or appealing the confirmation of the award, unless the arbitration agreement provides otherwise."); Cooper v. Bushong, 10 S.W.3d 20, 26 (Tex. App.-Austin 1999, pet. denied) (noting, in challenge to arbitrator's decision pursuant to the TAA, that absent evidence to support modification of arbitrator's award, a court must confirm the award). 24. See Int'l Bank of Commerce-Brownsville, 981 S.W.2d at 54. 25. We note that although the arbitration award is silent as to pre- and post-judgment interest and costs, appellees' pleadings include a request for the award of interest and costs. The trial court's December 13, 2005 order awards pre- and post-judgment interest to appellees and adjudges all costs against the City. The City does not challenge the trial court's award of interests and costs, and accordingly, those elements of the trial court's judgment remain intact. 26. See Crossmark, 124 S.W.3d at 437.

In re Merrill Lynch Trust Company (Tex., Aug. 31, 2007)

Texas Supreme Court grants mandamus to force financial services customer to arbitrate all claims. In re Merrill Lynch Trust Co., No. 03-1059 (Tex. Aug 31, 2007)(per curiam)(arbitration mandamus, financial services) In re Merrill Lynch Trust Company FSB, Henry Medina, and Medina & Medina Group, Relators ═════════════════════= On Petition for Writ of Mandamus ══════════════════════ After Chris Pereyra recovered $2 million in a personal injury settlement, she retained Merrill Lynch, Pierce, Fenner & Smith Inc. and its employee Henry Medina as her financial advisors. Her agreement with Merrill Lynch contained a broad arbitration clause: I agree that all controversies which may arise between us, including but not limited to those involving any transaction or the construction, performance, or breach of this or any other agreement between us, whether entered into prior, on or subsequent to the date hereof, shall be determined by arbitration. Among other investments, Medina advised Pereyra to set up a trust account and name Merrill Lynch Trust Company of Texas as trustee. The sole asset of the trust is a variable life policy bought from Merrill Lynch Life Insurance Company. Both of these Merrill Lynch affiliates – ML Trust and ML Life – had their own contracts with Pereyra, neither of which contained an arbitration clause. In September 2002, Pereyra initiated an arbitration proceeding against Merrill Lynch, Merrill Lynch & Co., Henry Medina, and Medina & Medina Group,[1] alleging breach of fiduciary duty, fraud, and other claims related to the financial services she received. Pereyra also filed this lawsuit against Medina, Medina & Medina, and ML Trust asserting several torts as well as violations of the Texas Trust Code and Texas Insurance Code. Medina and Merrill Lynch filed a motion to compel arbitration and stay litigation. The trial court denied the motion, and the court of appeals denied mandamus relief. __ S.W.3d __ (Tex. App.—San Antonio 2003). For the reasons stated in an almost identical case, In re Merrill Lynch Trust Co., __ S.W.3d__ (Tex. [Aug. 24] 2007), we hold the trial court abused its discretion in refusing to compel arbitration with the Medina parties, and in refusing to stay the litigation against ML Trust. Accordingly, without hearing oral argument, see Tex. R. App. P. 52.8(c), we conditionally grant the writ of mandamus and order the trial court to vacate its order and enter a new order in accordance with this opinion. We are confident the trial court will comply, and our writ will issue only if it does not. OPINION DELIVERED: August 31, 2007 [1] Merrill Lynch & Co. is the parent company of Defendant Merrill Lynch, Pierce, Fenner & Smith, Inc. Medina & Medina is a trade name used by Defendant Henry Medina. ------- Texas Supreme Court Cause No. 03-1059 IN RE MERRILL LYNCH TRUST COMPANY FSB, HENRY MEDINA, AND MEDINA & MEDINA GROUP; from Duval County; 4th district (04‑03‑00424‑CV, 123 SW3d 549, 10‑29‑03)stay order issued November 20, 2003, liftedmotion for leave to file supplement brief on the merits, denied Pursuant to Texas Rule of Appellate Procedure 52.8(c), without hearing oral argument, the Court conditionally grants the petition for writ of mandamus.Per Curiam Opinion (Justice Green not sitting)