City of Baytown v. C.L. Winter, Inc.

886 S.W.2d 515, 1994 WL 573215
CourtCourt of Appeals of Texas
DecidedNovember 10, 1994
Docket01-93-00478-CV
StatusPublished
Cited by67 cases

This text of 886 S.W.2d 515 (City of Baytown v. C.L. Winter, Inc.) 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
City of Baytown v. C.L. Winter, Inc., 886 S.W.2d 515, 1994 WL 573215 (Tex. Ct. App. 1994).

Opinion

OPINION

MIRABAL, Justice.

This is an appeal from a judgment confirming an arbitration award arising out of a contract dispute between appellant, the City of Baytown (Baytown), and appellee, C.L. Winter, Inc. (Winter). We affirm.

Baytown solicited bids for the construction of a waste water collection system and lift stations on State Highway 146. Winter’s bid for the job was accepted by Baytown, and the parties entered into a contract in December, 1990. According to Winter, conditions at the site of the project were not as represented by the city, and as a result Winter was forced to incur additional costs. When Winter was unsuccessful in obtaining change orders and in collecting for the additional work, Winter demanded arbitration pursuant to the 1990 contract. Baytown refused to arbitrate on the ground that Winter’s demand was untimely under the contract. Winter filed suit and obtained an order compelling arbitration dated June 30, 1992.

The parties each chose an arbiter pursuant to the contract. Baytown’s arbiter, however, refused to meet with Winter’s arbiter to choose a third arbiter until instructed to do so by the city’s attorney. Winter returned to court to compel Baytown’s compliance with the order. A court order dated August 31, 1992 instructed Baytown’s arbiter and Winter’s arbiter to meet and agree upon a third arbiter by September 1, 1992, or appear before the court and show cause why they should not be held in contempt. A third arbiter was chosen and an arbitration proceeding was held.

After 10 days of testimony, the arbiters entered their award on March 24,1993. The award ordered Baytown to pay Winter $227,-272.50, as follows: “$18,755 for claim preparation, $22,745 for expert fees, $110,772.50 for attorney’s fees, and $75,000 for damages incurred by Winter as a result of changed conditions.” The arbiters also ordered Winter to pay Baytown $35,784.01 for damages incurred by the city for Winter’s failure to complete the contract.

Winter filed an application to confirm the award on March 29, 1993. Baytown filed an objection to the application on April 19,1993, on the basis that it was premature, and also sought to have the award vacated, modified or corrected on several grounds. The arbiters’ award was confirmed by the trial court after a hearing on April 19, 1993.

Article 237 of the Texas General Arbitration Act provides for an arbitration award to be vacated on any one of five grounds: (1) the award was procured by corruption, fraud or other undue means; (2) there was evident partiality by an arbiter appointed as a neutral, or there was corruption, misconduct or willful misbehavior by any of the arbiters prejudicing the rights of any party; (3) the arbiters exceeded their powers; (4) the arbiters refused to postpone the hearing, refused to hear evidence material to the controversy, or otherwise conducted the hearing as to prejudice substantially the rights of a party; or (5) there was no arbitration agreement, the issue was not adversely determined in proceedings under article 225, and the objecting party did not waive the lack of an arbitration agreement. Tex.Rbv.Civ.Stat. Ann. art. 237 (Vernon 1973).

*518 An appeal may be taken from the district court’s order confirming an award, vacating an award, or modifying or correcting an award. Tex.Rev.Civ.Stat.Ann. art. 238-2, §§ A(8), A(4), A(5) (Vernon 1973). Texas law favors arbitration. Brazoria County v. Knutson, 176 S.W.2d 740, 743 (Tex.1943). An arbitration award has the same effect as the judgment of a court of last resort, and a trial judge reviewing the award may not substitute his judgment for the arbiters’ merely because he would have reached a different decision. City of San Antonio v. McKenzie Constr. Co., 136 Tex. 315, 150 S.W.2d 989, 996 (1941); Bailey & Williams v. Westfall, 727 S.W.2d 86, 90 (Tex.App.—Dallas 1987, writ ref d n.r.e.). Every reasonable presumption must be indulged to uphold the arbiters’ decision, and none is indulged against it. Id.; Wetzel v. Sullivan, King & Sabom, P.C., 745 S.W.2d 78, 81 (Tex.App.—Houston [1st Dist.] 1988, no writ).

In its first three points of error, Baytown asserts the trial court erred in confirming the arbiters’ award because the arbiters exceeded their powers by (1) awarding damages on an issue not properly submitted to them; (2) disregarding the express terms of the contract; and (3) awarding expert witness fees, claim preparation fees, and attorney fees.

The contract between Baytown and Winter included the following arbitration clause: “6.05 ARBITRATION All questions of dispute under this Agreement shall be submitted to arbitration at the request of either party to the dispute.”

After an arbitration panel was selected, Winter submitted a proposed schedule to the panel which included a date by which Winter was to submit his claim to the panel and another date by which Baytown was to respond. The transcript reflects that Winter filed at least four documents styled “Specification of Claims,” and that Baytown filed a “Response to Claim and Counterclaim and Third-Party Claim.”

Under its first point of error, Baytown argues that the arbiters’ award of damages “incurred by Winter as a result of changed conditions” was error because the conditions of the construction site never changed and Winter never complained about “changed conditions” in its original or amended specification of claims. Therefore, Baytown asserts, the arbiters exceeded their powers.

As stated by the Texas Supreme Court, “the authority of arbitrators is derived from the arbitration agreement and is limited to a decision of the matters submitted therein either expressly or by necessary implication.” Gulf Oil Corp. v. Guidry, 160 Tex. 139, 327 S.W.2d 406, 408 (1959); Island on Lake Travis, Ltd. v. Hayman Co., 834 S.W.2d 529, 532 (Tex.App.—Austin 1992), judgment set aside without reference to the merits and cause remanded for entry of judgment in accordance with the settlement agreement, 848 S.W.2d 84 (Tex.1993). An award that goes beyond the matters submitted for arbitration is void to that extent. Lone Star Cotton Mills v. Thomas, 227 S.W.2d 300, 307 (Tex.Civ.App.—El Paso 1949, writ refd n.r.e.) (holding arbitration award, which included reinstatement ánd the payment of damages, void because arbitration agreement did not confer power of decision of these matters).

The arbitration provision in the present contract provided that “all questions of dispute” arising under the contract were to be arbitrated.

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Bluebook (online)
886 S.W.2d 515, 1994 WL 573215, Counsel Stack Legal Research, https://law.counselstack.com/opinion/city-of-baytown-v-cl-winter-inc-texapp-1994.