Columbia Valley Healthcare System, L.P. v. Rodolfo J. Walss, M.D., P.A.

Court of Appeals of Texas·Decided December 29, 2015·No. 13-14-00345-CV·Published

Opinion

NUMBER 13-14-00345-CV

COURT OF APPEALS

THIRTEENTH DISTRICT OF TEXAS CORPUS CHRISTI - EDINBURG

COLUMBIA VALLEY HEALTHCARE SYSTEM, L.P., Appellant,

v.

RODOLFO J. WALSS, M.D., P.A., Appellee.

On appeal from the 138th District Court of Cameron County, Texas.

MEMORANDUM OPINION

Before Justices Benavides, Perkes, and Longoria Memorandum Opinion by Justice Benavides By five issues, which we will address as one main issue with sub-issues, appellant,

Columbia Valley Healthcare System, L.P. (“Columbia Valley”) appeals the trial court’s judgment vacating its arbitration award. We reverse and remand.

I. BACKGROUND

In early 2011, Valley Regional Medical Center (“Valley Regional”), a subsidiary of Columbia Valley, entered into a Recruiting Agreement (“the contract”) with Dr. Alberto Aguayo-Orozco (“Aguayo”). Aguayo was to join the practice of Dr. Rodolfo Walss (“Walss”) as part of the contract. Both Aguayo and Walss executed agreements with Valley Regional agreeing to all parts of the contract. As a part of the contract, any controversy or claim between the parties would be settled by mandatory binding arbitration. Within the first twelve months of the contract, Columbia Valley found that there had been a material breach of the contract by Walss and Aguayo and filed suit against them.

In August 2012, Valley Regional, acting on behalf of Columbia Valley, initiated arbitration between the parties. Arbitrator Penny Hobbs was appointed to handle the arbitration. In January of 2013, Hobbs issued a scheduling order to the parties, which included all deadlines, and set the arbitration for October 9, 2013. On July 5, 2013, shortly before the deadline to file dispositive motions, Columbia Valley filed a motion to modify the scheduling order. In their motion, Columbia Valley asked for a three-and-a- half week continuance in order to take the deposition of Walss’s billing manager. The motion alleged that the deposition was set for a date shortly after the original motions deadline; previous attempts to depose the manager unsuccessful due to motions to quash the deposition filed by Walss. Hobbs granted the motion and sent out an amended scheduling order to the parties. On August 2, 2013, Columbia Valley filed their motion for summary judgment.

Later that month, Walss asked Columbia Valley via e-mail to agree to move the arbitration until January of 2014. Columbia Valley agreed to a one-month extension of the arbitration hearing to November 2013 if Columbia Valley’s motion for summary judgment was denied, but nothing further. Walss did not agree with Columbia Valley’s counter-offer and filed a motion to extend the deadlines and continue the arbitration. In that motion, Walss did not address the motion for summary judgment filed by Columbia Valley. Hobbs denied the motion for continuance filed by Walss, stating that she felt the motion “contains factual inaccuracies and fails to fulfill the requirements of Texas Rule of Civil Procedure 252 or to otherwise justify the need for an extension of deadlines or for a continuance.” The arbitration moved forward as scheduled, and neither party asked for a hearing to present oral arguments. Walss never filed a response to Columbia Valley’s motion for summary judgment. Hobbs reviewed the documents submitted to her, found in favor of Columbia Valley, granted Columbia Valley’s motion for summary judgment, and entered her second amended arbitration award1 on October 30, 2013. Hobbs found both Walss and Aguayo were responsible for the breach of the contract and jointly and severally liable for damages in the amount of one hundred thirty-eight thousand nine hundred thirty-five dollars and nineteen cents ($138, 935.19) in favor of Columbia Valley.

Columbia Valley filed its original petition in the trial court shortly after the arbitration award was determined, and asked the trial court to grant their motion for summary judgment and confirm the arbitration award. Walss filed a motion to vacate the arbitration award alleging that the arbitrator was biased as evidenced by her denial of his

1 Hobbs’s First Arbitration Award was not a part of the record submitted to this Court. The Second Arbitration Award would appear to supersede any prior awards.

motion for continuance. After one day of oral hearing and another day meeting in chambers with the trial court,2 the trial court granted the motion to vacate the arbitration award stating that “it appears that good cause exists.”3 This appeal followed.

II. ARBITRATION AWARD VACATED By five issues, Columbia Valley argues that: (1) the trial court erred in not confirming the award; (2) the arbitrator did not abuse her discretion by denying Walss’s motion for continuance; (3) there was no “evident partiality” by the arbitrator; (4) the arbitrator was not “guilty of misconduct in refusing to postpone the hearing upon sufficient cause”; and (5) there was no substantive unconscionability. However, issues two through five appear to be sub-issues of issue one and we will address them as such. A. Standard of Review “Review of a trial court’s decision as to vacatur or confirmation of an arbitration award is de novo and the appellate court reviews the entire record.” In re Guardianship of Cantu de Villarreal, 330 S.W.3d 11, 17 (Tex. App.—Corpus Christi 2010, no pet.); see In re Chestnut Energy Partners, Inc., 300 S.W.3d 386, 397 (Tex. App.—Dallas 2009, pet. denied). “However, all reasonable presumptions are indulged in favor of the award, and none against it.” Id. “Because Texas law favors arbitration, judicial review of an arbitration award is extraordinarily narrow.” In re Cantu, 330 S.W.3d at 17; see E. Tex.

2 Information provided from the trial court’s court reporter is that these motions were addressed

on two different days before the trial court. However, the second day consisted of an oral hearing and an in-chambers meeting between the parties and trial judge. The oral hearing on the second day was not recorded or transcribed by the court reporter and unavailable for this Court to review.

3 The trial court also took Columbia Valley’s motion for summary judgment to confirm the arbitration award under advisement. However, there was never a ruling by the trial court handed down on the motion for summary judgment.

Saltwater Disposal Co. v. Werline, 307 S.W.3d 267, 271 (Tex. 2010). “We give strong deference to the arbitrator with respect to issues properly left to the arbitrator’s resolution.” Age Industries, Ltd. v. Edwards, 318 S.W.3d 461, 462 (Tex. App.—El Paso 2010, pet. dism’d). “Subjecting arbitration awards to judicial review adds expense and delay, thereby diminishing the benefits of arbitration as an efficient, economical system for resolving disputes.” In re Cantu, 330 S.W.3d at 17 (quoting CVN Group, Inc. v. Delgado, 95 S.W.3d 234, 238 (Tex. 2002)). B. Applicable Law and Discussion The Texas Supreme Court has “long held that ‘an award of arbitrators upon matters submitted to them is given the same effect as the judgment of a court of last resort. All reasonable presumptions are indulged in favor of the award, and none against it.’” In re Cantu, 330 S.W.3d at 18 (quoting CVN Group, 95 S.W.3d at 238). Arbitration awards can only be vacated under very limited circumstances. Id. “When a non- prevailing party seeks to vacate an arbitration award, it bears the burden in the trial court of bringing forth a complete record that establishes its basis for vacating the award.” In re Cantu, 330 S.W.3d at 24; see In re Chestnut, 300 S.W.3d at 401. “When there is no transcript of the arbitration hearing, as here, the appellate court will presume the evidence was adequate to support the award.”4 Id.

The “Texas statutes governing arbitration of disputes, commonly referred to as the [Texas Arbitration Act or] TAA, are found in chapter 171 of the Texas Civil Practice and

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Columbia Valley Healthcare System, L.P. v. Rodolfo J. Walss, M.D., P.A., (Tex. Ct. App. 2015).

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