Justia Texas Supreme Court Opinion Summaries

Articles Posted in Arbitration & Mediation
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The Supreme Court affirmed the decision of the court of appeals affirming the judgment of the trial court declining to compel arbitration of class claims under the parties' agreement in this case, holding that the lower courts applied the correct legal standards in declining to compel class arbitration. This arbitration dispute between homeowners and their home warranty company evolved into a putative class action complaining about releases the warranty allegedly demanded before making covered repairs. Plaintiffs demanded arbitration, asserting that Defendant was required to arbitrate the class claims under the arbitration provisions in the warranty. The trial court granted Defendant's motion to dismiss, concluding that the question of whether the parties agreed to class arbitration was a question of arbitrability for the court to make and that the warranty agreement did not permit class arbitration. The court of appeals affirmed. The Supreme Court affirmed, holding (1) arbitratibility of class claims is a gateway issue for the court unless the arbitration agreement clearly and unmistakably expresses a contrary intent; (2) an agreement to arbitrate class claims cannot be inferred from silence or ambiguity, but rather, an express contractual basis is required; and (3) the lower courts correctly determined that Defendant was not bound to arbitrate Plaintiffs' putative class claims. View "Robinson v. Home Owners Management Enterprises, Inc." on Justia Law

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The Supreme Court reversed the judgment of the court of appeals affirming the trial court’s denial of a motion to compel arbitration of a dispute over which of two orders approving a transfer of a payee’s structured-settlement-payment rights to another under the Structured Settlement Protection Act, Tex. Civ. Prac. & Rem. Code 141.004, controlled, holding that the court of appeals erred in determining that the dispute was one that could not be arbitrated. Specifically, the court of appeals concluded that the dispute over which order controlled was not an arbitrable issue even where an arbitration agreement included in the transfer agreement assigned issues of arbitrability to the arbitrator. The Supreme Court reversed, holding that because the parties agreed to have the arbitrator decide issues of arbitrability and because the courts below did not question the validity of the parties’ arbitration clause, this dispute must be sent to arbitration for the arbitrator to at least decide arbitrability. View "RSL Funding, LLC v. Newsome" on Justia Law

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Jefferson County v. Jefferson County Constables Ass’n, __ S.W.3d __, __ (Tex. 2018), in which the Supreme Court held that the Fire and Police Employee Relations Act applies to deputy constables because they qualify as “police officers” under the Act’s definition of that term, resolved the issue presented in this case and necessitated reversal of the court of appeals’ judgment. Petitioner was terminated from his employment as a deputy constable in Jefferson County and sued for a declaratory judgment and a writ of mandamus seeking to compel the County to participate in a binding arbitration under the terms of the applicable collective bargaining agreement between the County and its deputy constables’ bargaining association. The trial court granted Petitioner’s requests and ordered the parties to participate in binding arbitration. The court of appeals dismissed the case for want of jurisdiction, holding that deputy constables are not “police officers” under the Act and have no right to bargain collectively with their public employers. The Supreme Court reversed in part and remanded this case for further proceedings, holding that this issue was definitively resolved against the County in Jefferson County. View "Stines v. Jefferson County, Texas" on Justia Law

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The lower courts in this case erred by requiring a signatory to arbitrate its non-contractual claims against non-signatories. Jody James Farms, JV purchased a crop revenue coverage insurance policy from Rain & Hail, LLC through the Altman Group. The insurance policy contained an arbitration clause. Neither the Altman Group nor any of its employees signed the agreement. After Rain & Hail denied coverage for a grain sorghum crop loss suffered by Jody James and the parties arbitrated the dispute, Jody James sued the Altman Group and its agent (collectively, the Agency) for breach of fiduciary duty and deceptive trade practices. The Agency successfully moved to compel arbitration under the insurance policy. At arbitration, Jody James asserted that it had a right to proceed in court against the Agency because the Agency was a non-signatory to the arbitration agreement. The arbitrator resolved that issue and the merits of the dispute in the Agency’s favor. The trial court confirmed the award. The court of appeals affirmed. The Supreme Court reversed because (1) Jody James and the Agency did not agree to arbitrate any matter; and (2) Jody James may not be compelled to arbitrate under agency, third-party-beneficiary, or estoppel theories. View "Jody James Farms, JV v. Altman Group, Inc." on Justia Law

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In this dispute governed by a collective bargaining agreement between a county and its deputy constables, the Supreme Court affirmed the judgment of the court of appeals ruling that deputy constables are “police officers” entitled to enter into collective bargaining agreements (CBAs) with their public employers under Tex. Loc. Gov’t Code Ann. 174 and that the arbitrator did not exceed his authority in awarding relief to the deputy constables. The county petitioned to vacate the arbitrator’s award, arguing that the arbitrator exceeded his authority in concluding that the county violated the CBA by eliminating several deputy constable positions without regard to seniority and ordering the county to reinstate the deputies in order of seniority. The trial court granted the county’s motion for summary judgment and rendered final judgment in its favor. The court of appeals reversed. The Supreme Court affirmed, holding that deputy constables are “police officers” under the CBA, that the CBA was valid and enforceable, and that the arbitrator did not exceed his authority in ordering the deputies’ reinstatement on a seniority basis. View "Jefferson County v. Jefferson County Constables Ass’n" on Justia Law

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In this case involving an arbitration provision in short-term loan contracts the Supreme Court affirmed the judgment of the court of appeals ruling (1) the borrowers’ claims against the lender came within the arbitration provision, and (2) the lender did not waive its right to arbitrate by providing information to the district attorney that checks written to the lender by the borrowers had been returned for insufficient funds. The borrowers sued the lender, claiming that the lender wrongfully used the criminal justice system to collect unpaid loans by filing false charges against them. The lender responded by filing a motion to compel arbitration. The trial court denied the motion, concluding that the arbitration clause was inapplicable because the borrowers' claims related solely to the lender’s illegal use of the criminal justice system and that the lender waived its right to arbitration by substantially invoking the judicial process. The court of appeals reversed. The Supreme Court affirmed, holding (1) the borrowers’ claims were within the scope of the arbitration provision; and (2) the lender did not substantially invoke the judicial process, and therefore, there was no evidence to support the trial court’s finding the the lender waived its right to arbitrate. View "Henry v. Cash Biz, LP" on Justia Law

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In this case involving an arbitration provision in short-term loan contracts the Supreme Court affirmed the judgment of the court of appeals ruling (1) the borrowers’ claims against the lender came within the arbitration provision, and (2) the lender did not waive its right to arbitrate by providing information to the district attorney that checks written to the lender by the borrowers had been returned for insufficient funds. The borrowers sued the lender, claiming that the lender wrongfully used the criminal justice system to collect unpaid loans by filing false charges against them. The lender responded by filing a motion to compel arbitration. The trial court denied the motion, concluding that the arbitration clause was inapplicable because the borrowers' claims related solely to the lender’s illegal use of the criminal justice system and that the lender waived its right to arbitration by substantially invoking the judicial process. The court of appeals reversed. The Supreme Court affirmed, holding (1) the borrowers’ claims were within the scope of the arbitration provision; and (2) the lender did not substantially invoke the judicial process, and therefore, there was no evidence to support the trial court’s finding the the lender waived its right to arbitrate. View "Henry v. Cash Biz, LP" on Justia Law

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Respondent, who owned a ranch, sued Petitioner, which produced natural gas on the ranch, for underpayment of royalties and underproduction of its lease. The parties resolved their dispute with two agreements that contained an arbitration provision. Respondent later sued Petitioner for environmental contamination and improper disposal of hazardous materials on the ranch. Before arbitration commenced, Respondent asked the Railroad Commission (RRC) to investigate contamination of the ranch by Petitioner. Meanwhile, an arbitration panel awarded Respondent $15 million for actual damages and $500,000 for exemplary damages. At issue on appeal was whether the RRC had exclusive or primary jurisdiction over Respondent’s claims, precluding the arbitration, and whether the arbitration award should be vacated for the evident partiality of a neutral arbitrator or because the arbitrators exceeded their powers. The Supreme Court answered in the negative, holding (1) because Respondent’s claims were inherently judicial, the doctrine of primary jurisdiction did not apply, and vacatur was not warranted for failure to abate the arbitration hearing; and (2) the arbitrators did not exceed their authority. View "Forest Oil Corp. v. El Rucio Land & Cattle Co." on Justia Law

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RSL Funding, LLC had arbitration agreements with three individuals (collectively, Individuals) who owned annuity contracts they agreed to sell to RSL or its designee. Neither RSL nor the Individuals had arbitration agreements with the companies that wrote the annuity contracts (collectively, MetLife). After MetLife refused to honor contracts by which the Individuals sold their annuities, RSL sued MetLife and the Individuals in the County Court at Law (CCL) for a declaratory judgment. A district court suit was also initiated involving the same parties and subject matter. The Individuals initially joined forces with RSL but disputes subsequently arose. RSL initiated arbitration with the Individuals and moved to stay the CCL suit pending completion of arbitration. The CCL denied the motion. The court of appeals affirmed, concluding that RSL waived its right to arbitrate through its litigation conduct in the trial courts. The First Circuit affirmed but on different grounds, holding (1) the court of appeals erred by determining that RSL waived its right to arbitrate by litigation conduct; but (2) RSL did not challenge a separate ground on which the trial court court have denied RSL’s motion to stay the litigation - that RSL failed to join its assignees in the arbitration. View "RSL Funding, LLC v. Pippins" on Justia Law

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The parties were litigating a dispute involving an estate and family trusts when a family corporation filed for bankruptcy. The parties signed an agreement with a provision stating that they would attempt to settle any disputes by mediation and, if unsuccessful, by binding arbitration. The bankruptcy court’s order approving the settlement contained a permanent injunction prohibiting the parties from suing each other “on subjects pertaining to the subject matter of this litigation” without first obtaining its permission to do so. Later, that court denied Leonard permission to file suit and ordered the parties to comply with the agreement. The parties signed an arbitration agreement and “agreed to a resolution through arbitration pursuant to the provisions of the Texas General Arbitration Act.” Leonard subsequently filed a Complaint in Arbitration, alleging fraudulent conveyance and breach of fiduciary duties. After a hearing, the arbitrator dismissed most of the claims, stating that his ruling was based both on the statute of limitations and lack of standing Other parties sought to confirm the arbitration award; Leonard moved to vacate, alleging the arbitrator manifestly disregarded the law. Manifest disregard is not a ground for vacatur under the Act. The court of appeals held, and the Texas Supreme Court affirmed, that the TAA’s enumerated vacatur grounds (TEX. CIV. PRAC. & REM. CODE 171.087) are exclusive. View "Hoskins v. Hoskins" on Justia Law