Monday v. Cox

881 S.W.2d 381, 1994 Tex. App. LEXIS 1986, 1994 WL 238842
CourtCourt of Appeals of Texas
DecidedMay 31, 1994
Docket04-93-00694-CV
StatusPublished
Cited by24 cases

This text of 881 S.W.2d 381 (Monday v. Cox) 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
Monday v. Cox, 881 S.W.2d 381, 1994 Tex. App. LEXIS 1986, 1994 WL 238842 (Tex. Ct. App. 1994).

Opinion

OPINION

PEEPLES, Justice.

Our opinion dated March 30, 1994, is withdrawn and the following is substituted.

Jay Monday appeals an order refusing to enforce an arbitrator’s award of attorney’s fees. Appellee Rebecca Cox cross-appeals the court’s order enforcing the rest of the arbitrator’s award, which rendered a take-nothing judgment on her suit for damages. Monday also seeks attorney’s fees for having to enforce the arbitration agreement in court.

Monday built a house for Cox, who alleged that the sprinkler system did not work properly. She notified Monday of the problem. The parties’ contract included an arbitration clause committing them to final and binding arbitration of disputes. An arbitrator was chosen and the parties presented to him the issues contained in their written statements of claims. The arbitrator ruled that Cox take nothing on her damage claim for the sprinkler system, that Monday take nothing on his claim for extras, and that Monday recover attorney’s fees of $6773.59 plus certain administrative fees. Cox refused to pay and brought suit to set aside the award. We conclude the trial court erred in refusing to enforce the attorney’s fee award.

We will first consider Cox’s argument that the court erred in (1) failing to set aside the entire award because the arbitrator was biased. We will then consider Monday’s arguments that the trial court erred in (2) setting aside the arbitrator’s attorney’s fees award and in (3) failing to award Monday attorney’s fees for successfully defending Cox’s suit to set aside the award.

*384 I. ARBITRATOR BIAS

Cox argues that the trial court should have set aside the entire award because of arbitrator bias. She argues that the arbitrator, Harold Kunz, was biased in favor of Monday’s attorney in the following way. Attorney Holmes Bennett represented Monday before the arbitrator. Bennett is in the same law firm — Gardner & Ferguson — with attorney William Sommers. The arbitrator was president of Kunz Construction Company. Sommers (Bennett’s partner) had sued Kunz’s company; as part of an agreement with Sommers, Kunz’s company had agreed to try to get recompense from one of the entities involved and then to pay Sommers’ clients. Kunz did not disclose any of this to the parties.

The trial court found that this attenuated relationship did not disqualify Kunz, and that he did not err or commit misconduct by failing to disclose it to the litigants. This finding is supported by the evidence and we cannot upset it. There is no indication that Kunz knew the connection between Sommers and Bennett. The trial court expressly found that Kunz did not realize that Som-mers was with the same law firm as Bennett until after he had issued the award, and that he had no personal or financial relationship with Monday, his company, or Bennett. Kunz testified that he did not realize they were in the same firm, and that he did not pay attention to such things. The trial court expressly found that there was no basis for setting aside the arbitration due to arbitrator misconduct, corruption, partiality, or bias. These findings are well within the evidence. Cox’s cross-point is overruled.

II. ATTORNEY’S FEES FOR ARBITRATION

The next issue is whether the court erred in setting aside the arbitrator’s award of attorney’s fees to Monday.

The Texas courts favor arbitration of disputes. L.H. Lacy Co. v. City of Lubbock, 559 S.W.2d 348 (Tex.1977); Brazoria County v. Knutson, 142 Tex. 172, 176 S.W.2d 740, 743 (1943). The legislature has sanctioned the practice. See Texas General Arbitration Act, Tex.Rbv.Civ.Stat.Ann. art. 224 et seq. (Vernon 1973). The statute expressly authorizes and approves of agreements to arbitrate existing and future disputes. Id. arts. 224, 238-20 (Vernon Supp.1994). It permits courts to set aside arbitration awards only in limited circumstances. The issue here is whether under article 238(2), the matter of attorney’s fees was submitted to the arbitrator. We hold that it was and that the trial court was therefore without authority to modify that aspect of the decision.

The arbitration act provides that an arbitrator shall award attorney’s fees when the parties’ agreement so specifies or the state’s law would allow attorney’s fees from a court:

Attorneys fees shall be awarded by the arbitrators as additional sums required to be paid under the Award only if provided for in the agreement to arbitrate or provided by law as to any recovery in a civil action in the district court on such a cause of action on which the award in whole or part is based.

Id. art. 233.

The parties’ agreement does not mention attorney’s fees, but § 17.50(c) of the DTPA says that a defendant may recover attorney’s fees if the plaintiffs claim “was groundless and brought in bad faith, or brought for the purpose of harassment.” Tex.Bus. & Comm.Code Ann. § 17.50(c) (Vernon 1987). If Monday’s right to DTPA attorney’s fees was submitted to the arbitrator, the trial court was not authorized to set it aside. Certainly, with no record from the arbitration hearing a court could not disagree with the arbitrator’s implied findings that the requirements of § 17.50(c) were met;

Cox claimed the sprinkler system was defective and sought relief under the DTPA, including attorney’s fees. Monday denied that the sprinkler system was defective, sought recovery for extras, and pleaded for attorney’s fees. The arbitrator heard evidence and inspected the system at Cox’s house. He then rendered a decision denying Cox’s claim involving the sprinkler system, denying Monday’s claim for extras, and awarding Monday attorney’s fees.

*385 The courts are not permitted to second-guess the correctness of an arbitrator’s decision on the merits. Under the arbitration act, courts may modify an arbitrator’s award only if the issue to be modified was not submitted to him (or for other reasons not at issue in this case). See Tex.Rev.Civ. StatAnn. art. 238 (Vernon 1973). 1 The record shows that both parties sought attorney’s fees. Monday’s arbitration statement of claims did not mention § 17.50 of the DTPA but it clearly sought attorney’s fees. In the “Answering Statement” part of his pleading before the arbitrator, Monday pleaded:

Monday requests that Cox be awarded no relief on her claims, and Monday recover all of his costs, expenses, and attorneys fees expended in connection with the claim of Cox.

In the “Counterclaim” part of his pleading, in which he sought payment for extras, Monday pleaded:

Monday premises his claims upon the terms of the contract for construction; the legal theory of quantum meruit; and the provisions of § 38.001, Tex.Ctv.PRAG. & Rem.Code.

A fair reading of the first pleading for attorney’s fees is that Monday sought them in his defense of Cox’s suit.

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Bluebook (online)
881 S.W.2d 381, 1994 Tex. App. LEXIS 1986, 1994 WL 238842, Counsel Stack Legal Research, https://law.counselstack.com/opinion/monday-v-cox-texapp-1994.