Centex/Vestal v. Friendship West Baptist Church

314 S.W.3d 677, 2010 Tex. App. LEXIS 4346, 2010 WL 2307095
CourtCourt of Appeals of Texas
DecidedJune 10, 2010
Docket05-09-00053-CV
StatusPublished
Cited by79 cases

This text of 314 S.W.3d 677 (Centex/Vestal v. Friendship West Baptist Church) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Centex/Vestal v. Friendship West Baptist Church, 314 S.W.3d 677, 2010 Tex. App. LEXIS 4346, 2010 WL 2307095 (Tex. Ct. App. 2010).

Opinion

OPINION

Opinion By

Justice RICHTER.

This is an appeal from an order vacating an arbitration award in favor of Cen-tex/Vestal (“Centex”) on behalf of its subcontractors under the Texas General Arbitration Act (“TAA”). In two issues, Centex argues the trial court (1) erred in granting Friendship West Baptist Church’s (the “Church”) motion to vacate because the Church did not meet its burden to show the arbitrator exceeded his authority, and (2) erred in denying the motion to confirm. Because the record does not establish that the arbitrator exceeded his authority under the TAA, we reverse the trial court’s order and render judgment confirming the arbitrator’s award.

*680 I. FACTS

A. The Contract for the Project.

In June 2004, Centex and the Church agreed that Centex would provide labor, equipment, materials, and supervision for the construction of a sanctuary, classroom, and administration building (the “Project”). The agreement was memorialized in a contract (the “Contract”) that provides for the resolution of disputes through arbitration administered by the American Arbitration Association. (“AAA”). 1 The basis for payment under the Contract is the cost of the work plus a fee, with a negotiated guaranteed maximum price not to exceed $22,599,110 subject to written and approved change orders. Specifically, the Contract provides that if additional time or cost is involved because of clarifications or instructions issued by the architect for the Project, Centex is entitled to make a claim. The claim is subject to review by the architect, who in turn makes a recommendation to the Church concerning its approval.

B. The Subcontracts.

On June 24, 2004, Centex entered into a subcontract with Ennis Steel Industries, Inc. (“Ennis”) (the “Ennis Subcontract”) pursuant to which Ennis was to perform the fabrication and erection of the structural and miscellaneous steel on the Project, including catwalks. The Ennis Subcontract provides that Ennis is not entitled to receive payment until Centex receives payment from the Church, and this includes payments for changes or additional work. Once Ennis receives payment, it is obligated to pay its subcontractors and suppliers who perform extra work or provide materials that are integrated into the change or extra work. The Ennis Subcontract further provides that Centex may allow Ennis to pursue a pass-through claim against the Church. 2

Ennis subsequently entered into a subcontract with Choctow Erectors, Inc. (“Choctow”) (the “Choctow Subcontract”). The Choctow Subcontract provides that Choctow will perform the erection portion of the steel work on the Project. The Choctow Subcontract also provides that Choctow is bound to Ennis by the same terms Ennis is bound to Centex, and allows Choctow to make a claim for changes. Payment is to be made when the claim for changes is accompanied by a signed work order or “unless otherwise directed by” Ennis.

C.Claims for Changes.

Several engineering changes were made during the course of the Project, including the elimination of some catwalks, the scaling back of catwalks, the elimination of hangers on the catwalks, and ducting changes to the HVAC system. These changes impacted the scope of Ennis’s work as well as the construction schedule. Consequently, on April 22, 2005, Centex provided the Church’s representative with formal notice of a request for equitable adjustment under the Contract, and advised that Ennis would be submitting a claim for payment relating to the catwalk portion of the work. On April 22, 2005, Choctow forwarded to Ennis a claim for payment of costs incurred in connection with the steel erection portion of the work. *681 On April 25, 2005, Ennis submitted a written claim to Centex for extra compensation and lost productivity related to the catwalk installation. This claim included Choc-tow’s claim. On October 21, 2005, Centex formally submitted Ennis’ claim to the Church, and the architect subsequently recommended that the Church deny the claim. The Project was substantially completed in December 2005.

D. The Joint Defense Agreement.

In December 2006, Centex and Ennis entered into a Joint Prosecution and Defense Agreement (the “Defense Agreement”). The Defense Agreement was later amended to detail the status of Ennis’ claim as a pass-through claim and provides in pertinent part:

It is expressly understood by the parties ... that [Centex] is obligated ... to remit any monies relating to [the claims against the Church] which are received from [the Church] to [Ennis]. [The claims against the Church] are both pass through/liquidated claims and [Ennis] is only entitled to payment of such claims if the claims are paid by [the Church], To the extent that any portion of [the claims] are satisfied by [the Church], [Centex] is obligated to turn those funds over to [Ennis] in compliance with the Agreement.

E. The Lawsuits.

On January 19, 2006, Choctow filed suit against Ennis, Centex, and the surety on its payment bond in the 298th District Court of Dallas County seeking the recovery of damages, interest and attorney’s fees for uncompensated work that Choc-tow performed on the Project (the “Choc-tow Case”).

On August 28, 2006, Centex initiated an action against the Church in the 95th District Court of Dallas County requesting foreclosure of a statutory mechanics lien filed against the property of the Church for failure to pay Centex for its services, labor, and materials on the Project (the “Centex Case”). Centex also requested a stay of the litigation pending the completion of arbitration as required by the Contract. The Church did not dispute the validity of the agreement to arbitrate, or challenge whether the claims are within the scope of the agreement. After the Church filed a counterclaim for breach of contract, the trial court signed an order abating and administratively closing the case until arbitration was concluded. The Choctow Case was also administratively closed, and after being reopened, was continued several times pending the conclusion of arbitration.

F.The Arbitration.

Centex filed a demand for arbitration with the AAA seeking payment of the unpaid balance under the Contract and for the extra work that had been performed on the Project. Centex also filed a specification of claims, which included allegations concerning the pass-through claim brought on behalf of Ennis. The Ennis claim included those amounts claimed by Choctow.

Prior to the arbitration hearing, but within the context of the arbitration, the Church filed a motion for partial summary judgment claiming Centex did not have standing to assert claims on behalf of En-nis and waived its right to assert these claims. The Church also argued that the district court in the Choctow case had dominant jurisdiction over Choctow’s claim. The arbitrator denied the motion. The Church then filed an emergency motion to sever the Ennis claim to allow additional time to address discovery issues, and the motion was granted.

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Cite This Page — Counsel Stack

Bluebook (online)
314 S.W.3d 677, 2010 Tex. App. LEXIS 4346, 2010 WL 2307095, Counsel Stack Legal Research, https://law.counselstack.com/opinion/centexvestal-v-friendship-west-baptist-church-texapp-2010.