AFFIRM; Opinion Filed April 24, 2020
In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-18-01272-CV
INTO THE SUNSET REVOCABLE LIVING TRUST, Appellant
V.
DESIGN TECH HOMES LP, Appellee
On Appeal from the 274th District Court
Comal County, Texas
Trial Court Cause No. C2017-2027C
MEMORANDUM OPINION1
Before Justices Myers, Schenck, and Carlyle
Opinion by Justice Schenck
Into the Sunset Revocable Living Trust (“Sunset”) appeals the trial court’s
order confirming an arbitration award in favor of appellee Design Tech Homes LP
(“Design Tech”). We affirm the trial court’s judgment. Because all issues are settled
in the law, we issue this memorandum opinion. TEX. R. APP. P. 47.4.
1
The Texas Supreme Court transferred this case from the Third District Court of Appeals to this
Court. See TEX. GOV’T CODE ANN. § 73.001. In this procedural posture, we are bound to apply the
precedent of the transferor court. TEX. R. APP. P. P. 41.3.
BACKGROUND
On May 29, 2013, Sunset signed a construction agreement (“Agreement”)
with Design Tech to build a house. The Agreement contained a provision for
arbitration.2 After several disputes arose between the parties, Sunset withheld
approximately $8,0003 in payment from Design Tech. In 2015, Design Tech
instituted arbitration proceedings with the American Arbitration Association
(“AAA”) and obtained an ex-parte arbitration award against Sunset (“First Award”).
When Design Tech attempted to confirm the ex-parte arbitration award, the district
court determined Sunset had not received notice concerning the arbitration
proceedings and vacated the ex-parte arbitration award (“2017 Order”).
Design Tech again instituted arbitration proceedings with the AAA. Sunset
objected to the proceedings, arguing the AAA was not the proper entity to administer
arbitration proceedings, but instead American Construction & Education Services,
Inc. (“ACES”) was the proper entity, as specified in the Agreement. Despite that
objection, on November 21, 2017, the AAA issued a second arbitration award
(“Second Award”) in Design Tech’s favor.
2
In relevant part, the Agreement provided:
Any claim, dispute or cause of action, between [Sunset] and [Design Tech], whether
sounding in contract, ort or otherwise shall be resolved in accordance with and by following
the dispute resolution guidelines set forth in the ACES Limited Warranty, the Federal
Arbitration Act (Title 9 of the United States Code) and/or the Texas Arbitration Act.
The dispute resolution provision went on to define the scope of the provision and additional procedures.
3
The record reflects Sunset admits to withholding as much as $8,123.83 from Design Tech, while the
arbitration award ultimately obtained by Design Tech states the unpaid balance was $8,486.10.
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On November 29, 2017, Design Tech filed the instant suit to confirm the
Second Award. Sunset filed, among other requests for relief from the trial court, an
amended application to vacate the Second Award. On September 19, 2018, the trial
court signed a judgment confirming the Second Award (“September 2018 Order”).
Following the September 2018 Order, Sunset filed a motion to modify the
judgment and motion to reconsider, as well as requests for findings of fact and
conclusions of law. On September 26, 2018, Sunset filed a notice of appeal of the
September 2018 Order. On November 28, 2018, Design Tech filed a “Notice of
Dismissal,” in which it requested the trial court dismiss Sunset and its trustee with
prejudice.4 The same day, the trial court signed a “final order of dismissal”
(“November 2018 Order”).
DISCUSSION
I. Sunset’s Right to Appeal
In its first issue, Sunset urges the trial court violated its constitutional right to
access to the courts by depriving it of its ability to appeal this case. According to
Sunset, the trial court’s September 2018 Order confirming the Second Award was
an interlocutory order that was vitiated by the trial court’s November 2018 Order,
such that the arbitration award is no longer confirmed. Sunset further urges that the
4
The motion provides no grounds or further clarification of on what legal basis Design Tech sought to
dismiss Sunset from the cause with prejudice.
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trial court’s orders leave still pending Sunset’s claims to vacate the arbitration award
and for attorney’s fees and costs.
Under both the Federal and Texas Arbitration Acts (FAA and TAA), a
reviewing court must confirm an arbitration award unless grounds exist to vacate,
modify, or correct its terms. See 9 U.S.C. § 9; TEX. CIV. PRAC. & REM. CODE ANN.
§ 171.087. Further, on granting an order that confirms an award, the court shall enter
a judgment or decree conforming to the order. See 9 U.S.C. § 9, 13; CIV. PRAC. &
REM. § 171.092. In the September 2018 Order, the trial court confirmed the Second
Award as follows:
IT IS ORDERED, ADJUDGED AND DECREED that the Arbitration
Award issued on November 21, 2017 by Charles S. Turet, Jr., Arbitrator
for the American Arbitration Association should in all things be
confirmed;
The September 2018 Order further ordered “that all other relief not GRANTED in
this Order is expressly DENIED.” We construe this language to be the judgment or
decree contemplated by the FAA and the TAA. See id. Moreover, we conclude after
reviewing the record that the September 2018 Order is a final judgment as it actually
disposes of all claims and all parties. See Lehmann v. Har-Con Corp., 39 S.W.3d
191, 192–93 (Tex. 2001).
As for Sunset’s arguments regarding the effects of the November 2018 Order,
we conclude that order cannot have “vitiated” the September 2018 Order because a
non-suit cannot vitiate a final decision on the merits. Sunset relies on authority in
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which a plaintiff’s non-suit of its claims on appeal have the effect of vitiating an
interlocutory order on appeal. See UTMB v. Estate of Blackmon, 195 S.W.3d 98,
101 (Tex. 2006). Rule 162 of the rules of civil procedure permits plaintiffs to dismiss
a case, or take a non-suit, “[a]t any time before the plaintiff has introduced all of his
evidence.” See TEX. R. CIV. P. 162. However, we have already concluded that the
September 2018 Order is a final judgment and thus Design Tech could not have non-
suited its claims. See Hyundai Motor Co. v. Alvarado, 892 S.W.2d 853, 854–55
(Tex. 1995) (per curiam) (holding nonsuit may have effect of vitiating earlier
interlocutory orders but a decision on the merits is not vitiated).
Sunset alternatively argues the November 2018 Order modified the September
2018 Order pursuant to Design Tech’s motion to modify with the effect of vacating
the September 2018 Order. The record reflects Design Tech filed a motion to modify
the judgment in which it sought to set aside the September 2018 Order and order the
parties to arbitration. However, the November 2018 Order makes no mention of
setting aside the September 2018 Order or ordering the parties to arbitration. It
instead provided:
On 28 Nov, the Court considered the Plaintiff’s Notice of Dismissal.
After due consideration of the Notice, this matter is DISMISSED, with
prejudice. Court denies requests for costs and attorney’s fees.
As we concluded above, Design Tech could not have dismissed its claims after the
September 2018 Order.
We overrule Sunset’s first issue.
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II. Trial Court’s Failure to Vacate the Second Award
In its fifth issue, Sunset urges the trial court erred by failing to vacate the
Second Award. The FAA and the TAA provide limited grounds for vacating an
arbitration award. See 9 U.S.C. § 10; CIV. PRAC. & REM. § 171.088(a). Section
171.088(a) of the TAA expressly provides limited grounds for vacatur. Sunset’s
arguments rely on certain of these grounds, which we address below.
A. Whether Arbitrator Exceeded Power or Agreement to Arbitrate
Existed
Sunset argues that the arbitrator exceeded his power such that the trial court
was required to vacate the Second Award. See 9 U.S.C. § 10(a)(4); CIV. PRAC. &
REM. § 171.088(a)(3)(A). Sunset also argues there was no agreement to arbitrate as
required by the TAA. See 171.088(a)(4) (providing trial court shall vacate award if
“there was no agreement to arbitrate, the issue was not adversely determined in a
proceeding [to compel or stay arbitration] and the party did not participate in the
arbitration hearing without raising the objection”).
Sunset’s arguments rely on provisions 9 and 11 of the Agreement to assert
that any dispute should have been governed by ACES procedures, not those of the
AAA, that the parties did not agree to arbitrate this dispute, and that there was no
agreement that the AAA instead of ACES would administer the arbitration.
Provision 9, titled Warranties, provides:
. . . The Owner also acknowledges that the Limited Home Warranty
provides for an alternative dispute resolution procedure for any
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disagreements or misunderstandings that may arise between the Owner
and the Contractor which relate to or otherwise involve the Limited
Home Warranty or otherwise relate to the residence or construction
thereof (referred to as “Disputes.”). . . . any Disputes or claims shall be
submitted to the American Construction & Education Services, Inc.
(“ACES”) for administration and resolution in accordance with the
procedures prescribed by ACES. This is in no way intended to limit,
restrict or otherwise affect any other dispute resolution
mechanisms or procedures provided in this Construction
Agreement or as may be provided under applicable law.
(emphasis added). Provision 11, titled Dispute Resolution, provides:
Any claim, dispute or cause of action, between Owner and Contract,
whether sounding in contract, tort, or otherwise, shall be resolved in
accordance with and by following the dispute resolution guidelines set
forth in the ACES Limited Warranty, the Federal Arbitration Act (Title
9 of the United States Code) and/or the Texas Arbitration Act. Such
claims, disputes or causes of action, include, but are not limited to,
those arising out of or relating to: (i) this Agreement, including the . . .
breach or termination hereof; . . . (v) any transaction, event or
relationship between Owner and Contractor; . . . and/or (vii) any other
rights, obligations or agreements between Owner and Contractor (“the
Dispute”). . . . Owner and Contractor require that the arbitrator provide
a reasoned award, same being an award that explains the factual and
legal bases for making the award. After commencement of an
arbitration proceeding, either party may require that the Dispute be
submitted to mediation prior to the final arbitration hearing. If the
Dispute is not resolved by mediation, then the arbitration proceeding
shall continue to conclusion. Judgment upon the arbitration award or
decision may be confirmed, entered and enforced in any court having
jurisdiction, subject to appeal only in the event of the arbitrator’s
misapplication of the law, no evidence to support the award, or such
other grounds for appeal of arbitration awards that exist by applicable
law.
(emphasis added).
Reading these two provisions together, it is clear the dispute resolution
procedures in provision 9 provides for resolution of disputes related to the warranty,
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which none of the parties assert is the case here. Instead, the parties dispute centers
on the amount of payment Sunset owed Design Tech under the Agreement. Further,
provision 11 broadly mandates resolution in accordance with the guidelines set forth
in the ACES Limited Warranty, the FAA, “and/or” the TAA. Thus, Sunset’s
arguments for strict compliance with the guidelines set forth in the ACES Limited
Warranty are unavailing.
Sunset makes an additional argument that the arbitrator exceeded his powers,
arguing the arbitrator did not have the authority to determine the arbitrability of the
dispute. The arbitrator issued a Reasoned Order of Arbitrability, in which he
determined the instant dispute to be arbitrable. Sunset argues the question of
arbitrability is one for the court, not the arbitrator, to decide. Indeed, absent “clear
and unmistakable evidence” that the parties agreed to the contrary, the primary
power to decide such issues lies with the courts—not an arbitrator. See First Options
of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (1995). However, in light of Sunset’s
arguments regarding the applicability of the Warranty and its insistence that only the
ACES could administer the arbitration, in substance what Sunset argues is not
whether the claim is arbitrable but whether the AAA arbitrator, as opposed to the
ACES, had the authority to arbitrate. As we have already concluded Sunset’s
arguments for strict compliance with the guidelines set forth in the ACES Limited
Warranty are unavailing, we find this argument similarly unavailing.
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We conclude the trial court did not err in denying Sunset’s application to
vacate on the ground that the arbitrator exceeded his powers or the ground that there
was no agreement to arbitrate pursuant to section 171.088(a)(4).
B. Whether Arbitrators Conducted Hearing in Manner Substantially
Prejudicing Sunset’s Rights
Sunset argues the trial court erred by not vacating the Second Award, arguing
the arbitrator conducted the hearing in a manner that substantially prejudiced its
rights. Under Section 171.088(a)(3)(D), a trial court shall vacate an arbitration
award if the arbitrator conducted the hearing, contrary to certain enumerated sections
of the statute, in a manner that substantially prejudiced the rights of a party. See
CIV. PRAC. & REM. § 171.088(a)(3)(D).
Sunset complains the arbitrators violated section 171.044 of the TAA, which
requires arbitrators to notify each party of the time and place for the hearing and
provides such notice “must be served not later than the fifth day before the hearing
either personally or by registered or certified mail with return receipt requested.”
See id. § 171.044(a), (b). Sunset argues the record contains no evidence the
arbitrators set a time and place for the hearing or that they notified Sunset of the
hearing in compliance with section 171.044(b). Sunset further argues that the
arbitrators violated section 171.043, which requires in part, “Unless otherwise
provided by the agreement to arbitrate, all the arbitrators shall conduct the hearing.”
See id. § 171.043(a). As part of this argument, Sunset notes that the arbitrator issued
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an award to Design Tech after reviewing Design Tech’s papers without conducting
any hearing. Sunset further argues that the lack of notice and hearing prejudiced his
due process rights.
As noted by Sunset, the record contains no evidence a hearing took place.
However, the record contains letters sent to Sunset’s trustee from the AAA, which
indicate they were delivered via email to Sunset’s trustee on March 17, June 1,
October 2,5 November 20, and November 21 of 2017. The record also contains
letters sent to the AAA from Sunset’s trustee on April 10 and June 27, in which
Sunset’s trustee states he received certified letters from the AAA regarding
arbitration of the instant dispute and in which he objected to AAA’s exercise of
jurisdiction over this dispute. Accordingly, we cannot conclude the trial court erred
by failing to vacate the arbitration award on the ground that Sunset’s rights were
substantially prejudiced.
We overrule Sunset’s fifth issue.
III. Effect of 2017 Order
In its sixth issue, Sunset complains the trial court’s 2017 Order has preclusive
effect on the instant litigation.
Before the trial court’s September 2018 Order confirming the Second Award,
Sunset filed a “motion to dismiss due to res judicata,” arguing that the issue of
5
This letter from the AAA to the parties states, “This case will be administered by facilitating the
exchange of appropriate documents through the AAA.”
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whether Design Tech had satisfied all requirements to confirm the First Award in
the 2017 Order, which vacated for failure of notice of the initial proceeding, had the
effect of deciding the merits against Design Tech and that the 2017 Order barred
Design Tech from either initiating or attempting to later confirm the resulting Second
Award.
As discussed above, under the FAA and TAA, a reviewing court must confirm
an arbitration award unless grounds exist to vacate, modify, or correct its terms. See
9 U.S.C. § 9; CIV. PRAC. & REM. § 171.087. Sunset’s arguments regarding res
judicata are not supported by either the FAA or the TAA, nor has Sunset cited any
case law applying the doctrine of res judicata in the context of satisfying statutory
requirements to confirm an arbitration award. Accordingly, we overrule Sunset’s
sixth issue.
IV. Sunset’s Requests to Vacate and for Attorney’s Fees
In its third issue, Sunset complains the trial court improperly dismissed
Sunset’s request to vacate the November 21, 2017 arbitration award and its claims
for attorney’s fees pursuant to a provision in the Agreement for award of court costs
and attorney’s fees to “the prevailing party.” In its fourth issue, Sunset argues the
trial court erred by failing to award Sunset its court costs because Sunset is the
“successful party.” As determined above, the trial court denied all relief not granted
in its September 2018 Order, including Sunset’s request to vacate the November 21,
2017 arbitration award and its claims for attorney’s fees. As Sunset does not argue,
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and the record does not reflect, any other basis for Sunset to be the prevailing or
successful party, we overrule its third and fourth issues.
V. Trial Court’s Failure to Enter Any Findings of Fact or Conclusions of
Law
In its second issue, Sunset argues the trial court erred by failing to respond to
Sunset’s requests for findings of fact and conclusions of law. Sunset filed requests
and notices of past due requests for findings of fact and conclusions of law for the
September Order and the November 2018 Order. Sunset complains the lack of
findings of fact and conclusions of law leave it to guess what relief the trial court
granted and denied and the basis upon which the trial court granted or denied
requested relief.
Pursuant to Rules 296 and 297 of the Texas Rules of Civil Procedure, a trial
judge must, when properly requested, prepare findings of fact in cases tried in the
district court or county court without a jury. See Black v. Shor, 443 S.W.3d 154,
166 (Tex. App.—Corpus Christi 2013, pet. denied) (citing TEX. R. CIV. P. 296
(providing that “in any case tried in the district or county court without a jury, any
party may request the court to state in writing its findings of fact and conclusions of
law”); id. R. 297 (specifying the timetable for filing findings of fact and conclusions
of law and the procedure for filing a notice of past due findings of fact and
conclusions of law)). However, when a judgment is rendered as a matter of law,
findings and conclusions have no purpose and should not be requested or considered
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on appeal. See id. Therefore, even when the trial court receives evidence, findings
and conclusions are only appropriate if the trial court is called upon to determine
questions of fact upon conflicting evidence. See id.
In the instant case, the trial court did not make any determinations of fact
based on conflicting evidence. Sunset argues that the proceedings here required the
trial judge to decide whether facts existed to vacate the Second Award, referring to
its arguments regarding whether it received notice pursuant to the requirements of
Section 171.044 and whether an arbitration existed pursuant to Section
171.088(a)(4). However, the trial court proceedings regarding the arbitration award
were heard in the same manner as a motion in a civil case. See CIV. PRAC. & REM.
§ 171.093. Specifically, no evidence was adduced by the parties at the hearing on
the motion to confirm the arbitration award. Further, the record does not otherwise
contain any conflicting evidence on which the trial court would have determined a
question of fact. See Black v. Shor, 443 S.W.3d at 166. Accordingly, we overrule
Sunset’s second issue.
CONCLUSION
We affirm the trial court’s judgment.
/David J. Schenck/
DAVID J. SCHENCK
JUSTICE
181272F.P05
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Court of Appeals
Fifth District of Texas at Dallas
JUDGMENT
INTO THE SUNSET REVOCABLE On Appeal from the 274th District
LIVING TRUST, Appellant Court, Comal County, Texas
Trial Court Cause No. C2017-2027C.
No. 05-18-01272-CV V. Opinion delivered by Justice
Schenck. Justices Myers and Carlyle
DESIGN TECH HOMES LP, participating.
Appellee
In accordance with this Court’s opinion of this date, the judgment of the trial
court is AFFIRMED.
It is ORDERED that appellee DESIGN TECH HOMES LP recover its costs
of this appeal from appellant INTO THE SUNSET REVOCABLE LIVING
TRUST.
Judgment entered this 24th day of April, 2020.
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