COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH
NO. 2-07-208-CV
RON W. MAULDIN APPELLANT
V.
MBNA AMERICAN BANK, N.A. APPELLEE
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FROM COUNTY COURT AT LAW NO. 2 OF TARRANT COUNTY
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MEMORANDUM OPINION 1
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Appellant Ron W. Mauldin, pro se, appeals the trial court’s judgment
confirming an arbitration award in favor of Appellee MBNA American Bank,
N.A. We affirm.
1
… See Tex. R. App. P. 47.4.
Background
MBNA initiated an arbitration proceeding against Mauldin in August 2004,
alleging that Mauldin had entered into a credit agreement with MBNA, that he
was in default under the terms of the agreement, that he was indebted to
MBNA for $18,400.31, and that the credit agreement contained a mandatory
arbitration agreement under the Rules of the National Arbitration Forum
(“NAF”).2 On February 3, 2005, an NAF arbitrator found that the parties had
entered into a binding arbitration agreement and awarded MBNA $22,163.80.
The arbitrator’s notice of award certifies that a copy was mailed to Mauldin. 3
On June 22, 2006, MBNA filed a petition to confirm the arbitration award
in County Court at Law No. 2 of Tarrant County. Mauldin filed an answer,
alleging that MBNA fraudulently obtained the arbitration award because Mauldin
did not agree to arbitration and had no knowledge of the arbitration proceeding.
MBNA filed a motion to confirm the award in December 2006. In response,
2
… In its brief, MBNA alleges extensive facts regarding the credit
agreement between the parties, but the allegations have no support in the
record, and Mauldin challenges the truth of the allegations. This court must
hear and determine a case based on the record as filed. Till v. Thomas, 10
S.W.3d 730, 733 (Tex. App.—Houston [1st Dist.] 1999, no pet.). Therefore,
the facts alleged by MBNA and unsupported by the record play no part in our
decision. We deny Mauldin’s motion to require MBNA to rebrief, in which
Mauldin challenges MBNA’s unsupported factual allegations.
3
… Mauldin’s address as recited on the arbitrator’s award is the same
address recited on Mauldin’s original answer in the trial court and other
documents.
2
Mauldin filed a motion to vacate the arbitration award, arguing that MBNA’s
petition to confirm the arbitration award—filed more than a year after the
arbitrator made the award—was time-barred by section 9 of the Federal
Arbitration Act (“FAA”); that MBNA procured the award by undue means
because it failed to present a credit agreement and an arbitration agreement
signed by Mauldin and failed to prove service on Mauldin of notice of the
arbitration proceeding or the arbitration award; and that the arbitration
agreement “simply does not exist.”
The trial court held a hearing on both motions; Mauldin did not attend the
hearing. The trial court rendered judgment for MBNA for $18,400.31 plus
court costs and postjudgment interest. Thereafter, Mauldin filed a motion for
new trial, two motions to dismiss for lack of jurisdiction, and three requests for
findings of fact and conclusions of law. The record does not reflect any action
by the trial court in response to Mauldin’s postjudgment filings except for his
second motion to dismiss for lack of jurisdiction, which the court denied.
Eventually, Mauldin filed a timely notice of appeal. Mauldin subsequently
removed the case to federal court, but the federal district court remanded the
case for lack of jurisdiction.
Standard of Review
The parties agree that the arbitration agreement relied on by MBNA states
that it shall be governed by the FAA. See 9 U.S.C.A. §§ 1–9, 11–16 (West
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1999); § 10 (Supp. 2008). We review a trial court’s confirmation of an
arbitration award under the FAA de novo. Tanox, Inc. v. Akin, Gump, Strauss,
Hauer & Feld, L.L.P., 105 S.W.3d 244, 250 (Tex. App.—Houston [14th Dist.]
2003, pet. denied). We also review de novo the trial court’s determination of
an arbitration agreement’s validity. J.M. Davidson, Inc. v. Webster, 128
S.W.3d 223, 227 (Tex. 2003).
Review of an arbitration award under the FAA is very limited and
“exceedingly deferential” regardless of whether a trial court or an appellate
court is reviewing the award. Kergosien v. Ocean Energy, Inc., 390 F.3d 346,
352 (5th Cir. 2004); see also Myer v. Americo Life, Inc., 232 S.W.3d 401,
407–08 (Tex. App.—Dallas 2007, no pet.). Under the FAA standard, a court
“may not review the arbitrators’ decision on the merits even if it is alleged that
the decision is based on factual error or it misinterprets the parties’ agreement.”
Tanox, Inc. 105 S.W.3d at 250.
All reasonable presumptions are indulged in favor of the award, and none
against it. CVN Group, Inc. v. Delgado, 95 S.W.3d 234, 238 (Tex. 2002). An
arbitration award has the same effect as a judgment of a court of last resort,
and a court reviewing the award may not substitute its judgment for that of the
arbitrators merely because it would have reached a different decision. Id.;
Bailey & Williams v. Westfall, 727 S.W.2d 86, 90 (Tex. App.—Dallas 1987,
writ ref’d n.r.e). Arbitration awards are entitled to great deference by the
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courts “lest disappointed litigants seek to overturn every unfavorable arbitration
award in court.” Crossmark, Inc. v. Hazar, 124 S.W.3d 422, 429 (Tex.
App.—Dallas 2004, pet. denied) (quoting Daniewicz v. Thermo Instrument Sys.,
Inc., 992 S.W.2d 713, 716 (Tex. App.—Austin 1999, pet. denied)). Judicial
review of arbitration awards “adds expense and delay, thereby diminishing the
benefits of arbitration as an efficient, economical system for resolving
disputes.” Id. Therefore, review of an arbitration award is “extraordinarily
narrow.” GJR Mgmt. Holdings, L.P. v. Jack Raus, Ltd., 126 S.W.3d 257, 263
(Tex. App.—San Antonio 2003, pet. denied). Review is so limited that an
arbitration award may not be vacated even if there is a mistake of fact or law.
Crossmark, 124 S.W.3d at 429 (citing Anzilotti v. Gene D. Liggin, Inc., 899
S.W.2d 264, 266 (Tex. App.—Houston [14th Dist.] 1995, no writ)).
The FAA clearly defines the circumstances under which an arbitration
award may be vacated. See 9 U.S.C.A. § 10(a). A trial court may vacate an
arbitration award under the FAA only if the challenger asserts one of four
statutory grounds. Hall St. Assocs., L.L.C. v. Mattel, Inc., 128 S. Ct. 1396,
1402–03 (2008).4 The statutory grounds set forth in the FAA are (1) the
award was fraudulently procured, (2) there was evidence of partiality or
4
… Courts have recognized certain narrow common law exceptions, see
Myer, 232 S.W .3d at 408, but the Supreme Court’s decision in Hall Street
casts doubt on the continued viability of those common law exceptions.
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corruption of the arbitrator, (3) the arbitrator was guilty of misconduct that
prejudiced the rights of a party, or (4) the arbitrator exceeded the arbitrator’s
powers or so imperfectly executed them that a definite award was not made.
9 U.S.C.A. § 10(a).
Discussion
In his first and second issues, Mauldin argues that the trial court erred by
confirming the arbitration award without proof of the existence of a contractual
agreement and an arbitration agreement between the parties bearing his
signature.
Section 13 of the FAA provides that the party moving for an order
confirming, modifying, or correcting an arbitration award shall, at the time such
order is filed with the clerk for the entry of judgment thereon, also file the
following papers with the clerk
(a) The agreement; the selection or appointment, if any, of an
additional arbitrator or umpire; and each written extension of the
time, if any, within which to make the award;
(b) The award; and
(c) each notice, affidavit, or other paper used upon an application
to confirm, modify, or correct the award, and a copy of each order
of the court upon such an application.
9 U.S.C.A. § 13.
MBNA attached to its petition to confirm the award a copy of the “Credit
Card Agreement, Additional Terms and Conditions” containing the arbitration
agreement, a copy of the arbitration award, and the affidavit of its “arbitration
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analyst” authenticating the documents as business records. These documents
fulfilled MBNA’s filing requirements under section 13(a) and (b); section (c)
does not appear to be applicable, and Mauldin does not argue otherwise. See
id. Neither section 13 of the FAA nor Texas law, with exceptions not relevant
here, requires a signature to an arbitration agreement, as Mauldin appears to
argue, so long as it is written and agreed to by the parties. In re AdvancePCS
Health L.P., 172 S.W.3d 603, 606 (Tex. 2005).
Though Mauldin does not use the word “vacate,” he in essence argues
that the trial court should have vacated the arbitration award—the only
alternative to confirmation applicable to this case.5 We observe that notice of
a motion to vacate, modify, or correct an award must be served upon the
adverse party or his attorney within three months after the award is filed or
delivered. Id. § 13. A party who fails to timely serve notice of such a motion
forfeits his right to seek judicial review of the award. Garner v. MBNA Am.
Bank, N.A., No. 3:05-cv-1029-R, 2006 WL 2354939, at *2 (N.D. Tex. Aug.
14, 2006) (citing Allied Van Lines, Inc. v. Aaron Transfer & Storage, Inc., No.
402CV497Y, 2003 WL 22056220, at *2 (N.D. Tex. Sept. 3, 2003)). In this
case, Mauldin filed his motion to vacate the arbitration award—in which he
raised the same argument he now raises on appeal—well beyond section 13’s
5
… See 9 U.S.C.A §§ 9, 10, 11 (providing that a reviewing court may
confirm, vacate, or modify an arbitration award).
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three-month deadline. Therefore, he waived his right to seek judicial review of
the arbitrator’s findings that he entered into a credit agreement with MBNA and
that the credit agreement contained an arbitration clause. See id. We overrule
Mauldin’s first two issues.
In his third issue, Mauldin argues that the trial court lacked jurisdiction
over the confirmation proceeding because MBNA did not file its petition to
confirm the award within one year of the date of the award.
Section 9 of the FAA provides as follows:
If the parties in their agreement have agreed that a judgment of the
court shall be entered upon the award made pursuant to the
arbitration, and shall specify the court, then at any time within one
year after the award is made any party to the arbitration may apply
to the court so specified for an order confirming the award, and
thereupon the court must grant such an order unless the award is
vacated, modified, or corrected as prescribed in sections 10 and 11
of this title. If no court is specified in the agreement of the parties,
then such application may be made to the United States court in
and for the district within which such award was made.
9 U.S.C.A. § 9 (emphasis added).
Mauldin argues that the words “within one year” act as a statute of
limitations and bar MBNA’s petition to confirm the award, which MBNA filed
more than one year after the award was made. Federal courts of appeals are
split as to whether section nine acts as a statute of limitations. The fourth and
eighth circuits have held that the word “may” in the relevant sentence of
section nine makes the provision permissive, not mandatory, and that a party’s
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failure to file a confirmation proceeding within one year of the award does not
bar confirmation. Sverdrup Corp. v. WHC Constructors, Inc., 989 F.2d 148,
151 (4th Cir. 1993); Val-U Constr. Co. of S.D. v. Rosebud Sioux Tribe, 146
F.3d 573, 581 (8th Cir. 1998); see also Nations Personnel of Tex., Inc. v. Am.
Med. Sec., No. CIV A 3:95-CV-3072-R, 2000 WL 626868, at *2 (N.D. Tex.
May 15, 2000) (“[T]he court finds the reasoning of [Sverdrup] persuasive.”).
On the other hand, the Second Circuit has held that section 9 imposes a
mandatory one-year statute of limitations despite Congress’s use of the word
“may.” Photopaint Techs., LLC v. Smartlens Corp., 335 F.3d 152, 158 (2d Cir.
2003); see also FIA Card Servs., N.A. v. Gachiengu, No. H-07-2382, 2008 WL
3826110, at *4–5 (S.D. Tex. Aug. 14, 2008) (noting that Fifth Circuit
apparently adopted the same approach in Bernstein Seawell & Kove v. Bosarge,
813 F.2d 726, 731 (1987)).
We need not resolve this split in federal authority. Even if section 9
imposes a one-year statute of limitations on confirmation proceedings, as the
Photopaint court held, the fact that MBNA filed its petition more than a year
after the arbitrator made the award would not deprive the trial court of
jurisdiction, as Mauldin argues; nor would it entitle him to the relief he seeks,
dismissal for lack of jurisdiction. Limitations is an affirmative defense, see Tex.
R. Civ. P. 94, which would entitle Mauldin to a take-nothing judgment on
MBNA’s petition for confirmation. See Rhodes v. McCarron, 763 S.W.2d 518,
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521 (Tex. App.—Amarillo 1988, writ denied). We cannot grant the relief
Mauldin has requested (dismissal for lack of jurisdiction); nor can we grant relief
that he has not requested (reversal and rendition of a take-nothing judgment).
See Stevens v. Nat'l Educ. Ctrs., Inc., 11 S.W.3d 185, 186 (Tex. 2000)
(denying petition for review when party did not request appropriate relief).
Therefore, we overrule his third issue.
In his fourth issue, Mauldin argues that the trial court lacked jurisdiction
over MBNA’s petition to confirm the award because the arbitration agreement
did not confer jurisdiction on the trial court. He argues that the phrase
“judgment may be entered upon any award made hereunder in any court having
jurisdiction” [emphasis added] in the arbitration agreement does not “specify [a]
court” with the power to enter a judgment on an award under FAA section 9,
thus limiting jurisdiction to the court specified by section 9’s default provision,
“the United States court in and for the district within which such award was
made.” See 9 U.S.C.A §9.
Federal and state courts have concurrent jurisdiction to enforce the FAA.
In re Palacios, 221 S.W.3d 564, 565 (Tex. 2005) (orig. proceeding); In re
Kellogg Brown & Root, Inc., 166 S.W.3d 732, 739 (Tex. 2005) (orig.
proceeding) (citing Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460
U.S. 1, 26 n.32, 103 S. Ct. 927, 942 n.32 (1983)). But the FAA does not
create federal-court jurisdiction where it does not otherwise exist:
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The Arbitration Act is something of an anomaly in the field of
federal-court jurisdiction. It creates a body of federal substantive
law establishing and regulating the duty to honor an agreement to
arbitrate, yet it does not create any independent federal-question
jurisdiction under 28 U.S.C. § 1331 (1976 ed., Supp. IV) or
otherwise.
Moses H. Cone, 460 U.S. at 26 n.32, 103 S. Ct. at 942 n.32. Thus, a federal
court may not issue an order affecting an arbitration dispute absent “diversity
of citizenship or some other independent basis for federal jurisdiction.” Id.; see
also Specialty Healthcare Mgmt., Inc. v. St. Mary Parish Hosp., 220 F.3d 650,
653 n.5 (5th Cir. 2000) (“Since the FAA does not create federal jurisdiction,
confirmation under § 9 requires an independent basis for federal jurisdiction,
such as diversity jurisdiction in the present case.”). Enforcement of the FAA
is left in large part to the states. Moses H. Cone, 460 U.S. at 26 n.32, 103 S.
Ct. at 942 n.32. The Federal District Court for the Northern District of Texas
cited Moses H. Cone when it remanded this case for lack of jurisdiction after
Mauldin removed it to federal court. Mauldin does not assert an independent
basis for federal jurisdiction over MBNA’s confirmation petition, and none
appears of record. We therefore overrule his fourth issue.
In his fifth issue, Mauldin argues that the trial court erred by ignoring his
request for a jury trial. Mauldin admits that he did not pay the jury fee and
claims that he did not know that the fee was due.
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It is within the discretion of the trial court to deny a jury trial in the
absence of a timely request or payment of a jury fee. Huddle v. Huddle, 696
S.W.2d 895, 895 (Tex. 1985). But even when a party does not timely pay the
jury fee, a trial court should accord the right to a jury trial if it can be done
without injuring the court’s docket, delaying the trial, or injuring the opposing
party. Gen. Motors Corp. v. Gayle, 951 S.W.2d 469, 476 (Tex. 1997).
Mauldin does not explain how the trial court abused its discretion by
proceeding to judgment without a jury trial nor attempt to show that a jury trial
would not have injured the trial court’s docket, delayed the trial, or injured the
opposing party. Thus, Mauldin has not shown an abuse of discretion, and we
defer to the trial court’s decision to proceed without a jury.
On a more fundamental level, we question whether a jury trial would have
been appropriate even if Mauldin had timely paid the fee. A proceeding to
confirm an arbitration award under 9 U.S.C.A. section 9 is a summary
proceeding, and confirmation can be denied only if the award has been
corrected, vacated, or modified in accordance with the FAA. Taylor v. Nelson,
788 F.2d 220, 225 (4th Cir.1986); Garner, 2006 WL 2354939, at *2. As we
have already noted, Mauldin did not file a timely motion to vacate the award
under FAA section 12. Thus, the only possible outcome was confirmation;
there were no fact issues that could be submitted to the jury. For this
additional reason, we hold that the trial court did not abuse its discretion by
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confirming the arbitration award without a jury trial, and we overrule Mauldin’s
fifth issue.
In his sixth and final issue, Mauldin argues that the trial court erred by
allowing MBNA to file a late amended response to his motion to vacate the
arbitration award. Mauldin contends that proceedings in the trial court were
governed by the summary judgment rule and its deadlines, under which a party
must file a summary judgment response and controverting evidence seven days
before the summary judgment hearing. See Tex. R. Civ. P. 166a(c).
Mauldin cites no authority for the proposition that a motion to confirm or
vacate an arbitration award under the FAA are governed by the rules of
summary judgment practice. Generally, a summary judgment motion is not
required for the trial court to confirm, modify, or vacate an arbitration award,
but if a party chooses to pursue confirmation of the award through summary
judgment proceedings rather than the motion procedure under the Texas
Arbitration Act, that party assumes the traditional burdens and requirements of
summary judgment practice. Baker Hughes Oilfield Operations, Inc. v. Hennig
Production Co.,164 S.W.3d 438, 442–43 (Tex. App.—Houston [14th Dist.]
2005, no pet.) (citing Crossmark, 124 S.W.3d at 430). We can discern no
reason why the same principle should not apply to motions filed under the
equivalent provisions of the FAA. Neither MBNA nor Mauldin filed motions for
summary judgment; thus, neither invoked the procedures and deadlines
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applicable to summary judgment practice. Therefore, we overrule Mauldin’s
sixth issue.
Conclusion
Having overruled all of Mauldin’s issues, we affirm the trial court’s
judgment.
ANNE GARDNER
JUSTICE
PANEL: GARDNER, WALKER, and MCCOY, JJ.
WALKER, J. concurs without opinion.
DELIVERED: October 30, 2008
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