Robin Rouse and Sabrina Rouse v. Thomas Campbell, Foster Management, L.L.C., Foster Timber, Ltd., and Christy W. Kolva

• Court: Court of Appeals of Texas
• Decided: December 22, 2022
• Docket: 09-21-00023-CV
• Status: Published

Opinion

In The

Court of Appeals

Ninth District of Texas at Beaumont

__________________

NO. 09-21-00023-CV __________________

ROBIN ROUSE AND SABRINA ROUSE, Appellants

V.

THOMAS CAMPBELL, FOSTER MANAGEMENT, L.L.C., FOSTER TIMBER, LTD., AND CHRISTY W. KOLVA, Appellees

__________________________________________________________________

On Appeal from the 284th District Court Montgomery County, Texas Trial Cause No. 18-12-15871-CV __________________________________________________________________

MEMORANDUM OPINION

This is an appeal from a trial court’s order confirming an Arbitrator’s Award.

Appellants Robin Rouse and Sabrina Rouse, individually and as the personal

representative of the Estate of Terrill Scatena, filed this appeal to challenge the trial

court’s Final Judgment, and they argue that the trial court erred by modifying the

Arbitrator’s Award in a manner not authorized by statute. See Tex. Civ. Prac. &

Rem. Code Ann. § 171.091. For the reasons explained below, we sustain their issue

1 on appeal and remand the matter to the trial court. We overrule the issues raised by

Appellees Thomas Campbell, Foster Management, L.L.C., Foster Timber, Ltd., and

Christy Kolva on cross-appeal for lack of jurisdiction.

Background

The underlying dispute in this case is about the dissolution of a family timber

business. We have previously described background facts and certain aspects of the

dispute among the parties in other rulings from this Court. 1 In the interest of clarity,

we provide an overview of the parties and entities involved, but we limit our

discussion to events that are relevant to the issues in this appeal. The underlying

facts as to the structure and ownership of the business entities at issue are not

disputed.

The individuals in this lawsuit are family members and descendants of

Thomas S. Foster, as depicted in the family tree below:

1 See JPMorgan Chase Bank, N.A. v. Campbell, No. 09-20-00161-CV, 2021 Tex. App. LEXIS 5001 (Tex. App.—Beaumont June 24, 2021) (mem. op.); In re Campbell, No. 09-20-00153-CV, 2020 Tex. App. LEXIS 9637 (Tex. App.— Beaumont Dec. 10, 2020, orig. proceeding). The underlying litigation has also resulted in other appeals to this Court, but we do not include herein the details of those appeals. See In re Campbell, No. 09-21-00274-CV, 2021 Tex. App. LEXIS 9488 (Tex. App.—Beaumont Nov. 24, 2021, orig. proceeding); Rouse v. Campbell, No. 09-21-00023-CV, 2021 Tex. App. LEXIS 2828 (Tex. App.—Beaumont Apr. 15, 2021, no pet.) (mem. op.); In re Campbell, No. 09-20-00153-CV, 2020 Tex. App. LEXIS 4356 (Tex. App.—Beaumont June 10, 2020, orig. proceeding). 2 Thomas S. Foster began acquiring timberlands in the early 1900s, and when he died,

half of his interest in the timberlands passed to his daughter Letitia Foster Campbell.

JPMorgan Chase Bank, N.A. v. Campbell, No. 09-20-00161-CV, 2021 Tex. App.

LEXIS 5001, at *1 (Tex. App.—Beaumont June 24, 2021) (mem. op.). In 1946,

Letitia transferred her interest to the Letitia Foster Campbell 46 Trust (“the Trust”

a/k/a “LFC46 Trust”), and her son Neil Sr. was named as Trustee. 2 Id. at **1-2. After

Letitia’s children Neil Sr. and Jean died, the beneficial interest in the Trust was

allocated to Letitia’s grandchildren as follows: 25% for Robin S. Rouse, 25% for

Terrill Scatena Peterson, 16.66% for Neil Campbell Jr., 16.66% for Christy Kolva,

2 The parties allege that the Trust assets also include real estate, mineral interest, stocks, and marketable securities in addition to timberlands. See, e.g., Campbell, 2021 Tex. App. LEXIS 5001, at *18. 3 and 16.66% for Thomas Campbell. Id. at *2. The Trust was to terminate upon the

death of the last to die of Christy, Neil, Robin, and Terrill. 3 Id.

In 1995, Neil Sr., Thomas, Christy, Neil, Terrill, and Robin formed Foster

Management, L.L.C. (“Foster Management” or “the Company”) and Foster Timber,

Ltd. (“Foster Timber” or “the Partnership”) to avoid the need to appoint a corporate

trustee for the Trust following Neil Sr.’s death. Id. The Trustee contributed the Trust

timber property to Foster Timber. Foster Management is the general partner of

Foster Timber and owns 1% of the Partnership, and the Trust is a limited partner and

owns 99% of the Partnership. Id. at **2-3. Thomas has served as President of Foster

Management, Christy served as Treasurer from 1995 until 2018, and Sabrina

(Robin’s daughter) has served as Treasurer since Christy resigned her position in

2018. Under Foster Timber’s Partnership Agreement, Trustee JPMorgan, “shall not

take any part in the management or control of the business, or transact any business

of the Partnership or have any power to sign for or to bind the Partnership.” Foster

Management manages the assets and day-to-day operations. After Neil Sr.’s death,

the ownership of Foster Management was allocated as follows: 16.66% owned by

Neil Jr., 16.66% owned by Thomas, 16.66% owned by Christy, 25% owned by

Robin, and 25% owned by Terrill.

3 Thomas Campbell is not a measuring life under the Trust. Campbell, 2021 Tex. App. LEXIS 5001, at *2 n.2. 4 Terrill died in October 2020 after the Arbitrator’s Award issued, and the parties sent

a communication to the trial court stating “all of Terrill’s interests in the Foster

Entities were simply transferred to []Robin Rouse, an existing Defendant.”

Underlying Claims and Arbitration

In December 2018, Plaintiffs Thomas Campbell, Christy Kolva, Foster

Management, and Foster Timber filed an Original Petition and Application for

Temporary Injunction against Defendants Neil Campbell Jr., 4 Robin Rouse, Terrill

Scatena, and Sabrina Rouse. The petition also named JPMorgan Chase Bank, N.A.,

Trustee of the Letitia Foster Campbell Trust U/A/D May 14, 1946 (“JPMorgan”) as

a “[n]ominal [d]efendant [and] necessary party to this litigation and the ADR

4 Although Neil was originally one of the Appellants, he filed a motion to dismiss his appeal, which this Court granted. See Rouse v. Campbell, No. 09-21- 00023-CV, 2021 Tex. App. LEXIS 5662 (Tex. App.—Beaumont July 15, 2021, no pet.) (mem. op.). We discuss him herein only as necessary. 5 [p]rocess.”5 The petition alleged that the parties had experienced “more than a

decade of dysfunction, dissension, and deadlock in the strategic management and

day-to-day operations of Foster Timber and Foster Management.” The petition

stated that Plaintiffs did not seek relief on the merits but only sought limited

declaratory and injunctive relief to preserve the status quo and prevent irreparable

harm while the ADR process moved forward.

In January of 2019, Defendants Robin, Terrill, and Sabrina filed a Special

Appearance challenging the trial court’s personal jurisdiction over them. Robin,

Terrill, and Sabrina also filed a Motion to Compel Arbitration, Motion to Stay

Pending Arbitration, and Plea to the Jurisdiction. The motion alleged that section

13.1 of the governing Regulations of Foster Management require that any disputes

relating to the Regulations must be submitted to mediation before initiating any

additional proceedings. On February 11, 2019, Thomas and Christy as Claimants

filed a Demand for Arbitration before the American Arbitration Association, and the

trial court then ordered the parties to arbitration and stayed proceedings in an order

signed April 12, 2019.

5 JPMorgan was originally one of the Appellants, but it filed a motion to dismiss its appeal, which this Court granted. See Rouse, 2021 Tex. App. LEXIS 2828. We discuss JPMorgan herein only as necessary. 6 The Arbitrator’s Award

After arbitration, the arbitrator issued a Final Award (“Arbitrator’s Award”)

on March 23, 2020. In the arbitrator’s Findings of Fact, the arbitrator found that the

family members had experienced disagreement and dissension for years, and this

state of affairs had interfered with the ability of Foster Management to operate

effectively, and the Foster Management Regulations require that certain major

business decisions can only be taken with the approval of members owning 75% of

the Company. 6 The arbitrator noted that the family members had discussed ways to

divide their business interests voluntarily, but they were unable to agree upon a plan.

The arbitrator stated that he considered whether an involuntary winding up

and termination of Foster Management was warranted under section 11.314 of the

Texas Business and Organizations Code, which provides that a district court may

order the winding up and termination of a limited liability company if:

(1) the economic purpose of the entity is likely to be unreasonably frustrated; (2) another owner has engaged in conduct relating to the entity’s business that makes it not reasonably practicable to carry on the business with that owner; or (3) it is not reasonably practicable to carry on the entity’s business in conformity with its governing documents.

Tex. Bus. Orgs. Code Ann. § 11.314. The arbitrator found the Claimants (Thomas

and Christy) had met their burden of proof on all three statutory requirements and

6 Citing Article 6.1(b) of the Regulations of Foster Management, L.L.C. 7 determined that Foster Management and Foster Timber “shall be dissolved in

accordance with Section 11.314 of the Texas Business Organizations Code[.]” The

arbitrator further ordered that the two entities “shall be liquidated[]”:

Under both the Foster Management Regulations and the Foster Timber Limited Partnership Agreement, liquidation follows automatically and promptly after an Order of dissolution under Section 11.314 of the Texas Business Organizations Code. Article 12.2 of the Foster Management Regulations states the following: “On dissolution of the Company, a Majority in Interest shall appoint one or more Members as Liquidator.” The remainder of Article 12 describes the duty of the Liquidator (or Liquidators) and the steps to follow in completing liquidation of the Company. Similarly, Article 12.1 of the Foster Management Limited Partnership Agreement states the following: “If the Partnership is dissolved under Section . . . 11.l(c) [through an Order of dissolution under Section 11.314 of the Texas Business Organizations Code], . . . the General Partner or, if necessary, a person or committee selected by a Majority in Interest of the Limited Partners (“Liquidator”) shall commence to wind up the affairs of the Partnership and to liquidate and sell its properties.” In this case, because Foster Management as the General Partner of Foster Timber will have been dissolved, JPMorgan as the Trustee of the LFC46 Trust will presumably select the liquidator to distribute the assets of the Partnership and to wind up its affairs. The remainder of Article 12.1 and Article 12.2 describe the duties and powers of the Liquidator. Importantly for purposes of this arbitration, Article 12.3 gives the Liquidator the discretion to liquidate the assets of the Partnership through either “Cash Distributions” [Article 12.3(a)] or “Distribution in Kind” [Article 12.3(b)]. Finally, the remaining sections of Article 12 describe the procedures for winding up and terminating the Partnership.

The arbitrator declined to determine the form a liquidation of Foster Timber should

take and concluded that “a qualified and experienced liquidator, as well as the

appropriate judges, would be best equipped to resolve the remaining issues”

8 concerning liquidation of Foster Timber and Foster Management and the future of

the Trust. The arbitrator also stated:

If, within thirty days following the issuance of this Final Award, a Majority in Interest of the members of Foster Management cannot decide on the appointment of one or more of its members as Liquidator under Article 12.2 of the Foster Management Regulations, the Arbitrator will retain jurisdiction in this arbitration to appoint one or more members as the Liquidator of Foster Management.

Despite declining to determine how liquidation should occur, the arbitrator stated

that a plan for dividing the timberland into five equally valued segments that had

been developed by the Claimants’ expert “deserves careful consideration[.]” After

awarding certain costs and fees (which are not the subject of this appeal), the

Arbitrator’s Award concluded “[a]ll claims or counterclaims not expressly granted

herein are denied.”

Application to Confirm Arbitrator’s Award

The same day that the Arbitrator’s Award was signed, Plaintiffs filed an

Application to Confirm Arbitrat[or’s] Award and Counterclaim for Trust

Modification. The Plaintiffs characterized the Arbitrator’s Award as “sound, well-

reasoned, and effectuates the common-sense solution apparent to everyone who

encounters the dysfunctional family business that is the subject of these

proceedings.” The Plaintiffs stated that there were “no conceivable grounds for

vacating, modifying, or correcting” the Arbitrator’s Award, and they requested the

trial court issue an order confirming the Arbitrator’s Award “in all respects.” 9 Plaintiffs alleged that since Foster Timber and Foster Management have been

dissolved under the Arbitrator’s Award, “JPMorgan is preparing to implement a

liquidation process that will have disastrous consequences.” According to Plaintiffs,

“JPMorgan has made clear that it intends to sell the Trust assets and invest the

proceeds in marketable securities over which JPMorgan will have complete control.”

Plaintiffs argued that without an order modifying the Trust, the family faces tax

losses “in the tens of millions as a result of JPMorgan’s sale of the timberland

properties[.]” Plaintiffs further argued that a trust modification was the only way to

avoid this outcome because a division of the Trust would allow the family members

to manage their own shares of the timberlands instead of a wholesale sell-off by the

Trustee. Plaintiffs requested “that the Court modify the Trust Agreement to allow

for the division of the existing single Trust into five separate trusts, such that each

beneficiary’s Share will be segregated into a separate and distinct trust set aside in

proportion to such beneficiary’s existing Share of the Trust estate.” Plaintiffs asked

the trial court to issue an order “modifying the [] Trust to achieve family branch

autonomy and fair distribution of Trust assets and/or directing JPMorgan, as Trustee,

to take actions to effectuate this same result.”

Defendants Neil, Terrill, Robin, and Sabrina filed certain objections to

confirmation of the award, but their objections did not relate to the issues in this

10 appeal. 7 None of the parties asked the trial court to modify the Arbitrator’s Award

to provide that JPMorgan shall select the liquidator for Foster Timber.

On May 18, 2020, JPMorgan filed a plea to the jurisdiction as to the

Counterclaim for Trust Modification. JPMorgan argued that the Trust owns no land

but only a partnership interest in Foster Timber; that during arbitration, no one was

asking the arbitrator to modify the Trust; that JPMorgan did not expect that the

members of Foster Management would agree to appoint a liquidator and JPMorgan

believed it should do so upon confirmation of the Arbitrator’s Award; that the Trust

was formed in California and has been administered in Illinois; that JPMorgan had

filed a petition in an Illinois court seeking instructions that would allow JPMorgan

to divide the trust into five subtrusts; and that the trial court could not grant the Trust

modification counterclaim because it lacks jurisdiction over all of its beneficiaries

and the Trustee.

On May 19, 2020, Neil and Benjamin (Ben) Campbell filed a Plea to the

Jurisdiction Regarding Trust Modification. Relevant to the issues in this appeal, Neil

and Ben argued that the Trust is not governed by an arbitration clause; that the

7 Neil objected to confirming the Arbitrator’s Award based on its award of fees and ruling on indemnity. Terrill, Robin, and Sabrina objected to the Arbitrator’s Award based in part on an alleged improper relationship between the arbitrator and Plaintiffs’ counsel, which we have already ruled on. See generally In re Campbell, 2020 Tex. App. LEXIS 9637. Terrill, Robin, and Sabrina also objected to the Arbitrator’s Award to the extent that it made rulings as to Foster Timber because Foster Timber was not a party to the arbitration. 11 proposed Trust modification would pose financial risks and would fundamentally

change who controls the Trust assets in a manner that lacks support in the settlor’s

intent or the 1995 proceedings to amend the Trust; and Illinois has jurisdiction over

the Trust that predates the Plaintiffs’ Counterclaim. Neil and Ben asked the trial

court to decline jurisdiction to modify the Trust.

On May 20, 2020, Defendants Terrill, Robin, and Sabrina filed a Response to

Plaintiffs’ Application for Order in Support of Arbitration Against JPMorgan Under

Tex. Civ. Prac. & Rem. Code § 171.086. Therein, they argued that the Trust was a

California trust, it had never been administered in Texas, and it was currently

administered in Illinois; that the Trust does not require modification or division to

ensure implementation of the Arbitrator’s Award; that Article 12 of the Partnership

Agreement controls the liquidation process, which permits distribution either in case

or in kind; that the trial court’s jurisdiction to render judgment on the Arbitrator’s

Award is a distinctly different matter than its jurisdiction (if any) over the Trust; and

that the trial court lacks jurisdiction over the counterclaim to modify the Trust

because the Trust does not own land in Texas. Defendants Terrill, Robin, and

Sabrina asked the trial court to deny Plaintiffs’ Application and Plaintiffs’ claim for

Trust modification.

12 The Trial Court’s Orders

On June 4, 2020, the trial court signed three orders. In the Order on

Defendants’ Special Appearance, the trial court sustained Robin, Terrill, and

Sabrina’s special appearance and ordered:

. . . all claims raised against Robin S. Rouse, Terrill A. Scatena, and Sabrina Rouse, including those related to modification of the LFC46 Trust BUT NOT INCLUDING ANY OF THE CLAIMS RELATED TO THE ARBITRATION OF MATTERS IN THIS CASE, are dismissed with prejudice for refiling in Texas.

In another order—Order Granting J.P. Morgan Chase’s, Neil Campbell’s and Ben

Campbell’s Pleas to the Jurisdiction—the trial court stated:

. . . The Court finds that it lacks subject matter jurisdiction over the Trust Modification for the reasons presented in the Pleas to the Jurisdiction as well as the fact that the issue of Trust modification was an arbitrable issue, left for the Arbitrator and outside the scope of this Court’s authority under Chapter 171 of the Civil Practice and Remedies Code. IT IS THEREFORE ORDERED that JPMorgan’s Plea to the Jurisdiction regarding the “Counterclaim for Trust Modification” is in all things GRANTED. IT IS FURTHER ORDERED that NEIL AND BEN CAMPBELL’S PLEA TO THE JURISDICTION REGARDING TRUST MODIFICATION is in al[l] things GRANTED. IT IS FURTHER ORDERED that the claim for Trust Modification by Thomas Campbell, Christy Kolva, Isabelle Campbell, and Ashley Gates is hereby DISMISSED WITH PREJUDICE.

In its third order, the trial court found that “as a matter of law J.P. Morgan Chase

generally appeared in this Court on January 9, 2019 via a filed general denial, as

well as by filing its own Petition for Declaratory Judgment on August 1, 2019.”

Therefore, the trial court denied JPMorgan’s special appearance. In a separate 13 appeal, this Court determined that JPMorgan did not waive personal jurisdiction by

filing a declaratory judgment action, that the trial court erred by denying JPMorgan’s

special appearance, and that the Plaintiffs “failed to meet their burden to establish

that the Texas court had personal jurisdiction over JPMorgan with regard to the trust

modification counterclaim.” See Campbell, 2021 Tex. App. LEXIS 5001, at **5-6,

**26-27.

On January 7, 2021, the trial court signed an Order Confirming Arbitrat[or’s]

Award and Setting Attorney’s Fees Submission Date. Therein, the trial court stated

that “Confirmation of the Arbitrat[or’s] Award is nothing but a ministerial act[,]”

citing sections 171.087 and 171.092(a) of the Texas Civil Practice and Remedies

Code and Temple v. Riverland Co., 228 S.W. 605, 607 (Tex. App.—Amarillo 1921,

no writ) (“The court, in entering the award, performs no judicial function in

pronouncing judgment or in determining the rights of the parties. The entry is purely

a ministerial act which the law commands as a duty.”). The order stated “[t]his Order

incorporates all provisions of the Arbitrat[or’s] Award for all purposes.”

The parties complained about a specific portion of the January 7th Order

confirming the arbitration, wherein the trial court states:

Based on the Arbitrat[or’s] Award, it is further ORDERED, ADJUDGED, and DECREED that J.P. Morgan Chase as Trustee of the LFC46 Trust shall select a Liquidator pursuant to Article 12 of the Foster Management Regulations who shall liquidate Foster Management, LLC pursuant to the provisions of Article 12 of the Foster Management Regulations. 14 Defendants Robin and Sabrina filed a Motion to Set Aside and Alternatively

Motion to Correct Order Confirming Arbitrat[or’s] Award and Informal Bill raising

numerous challenges to the trial court’s Order. In their motion, Robin and Sabrina

argued that the portion of the Order excerpted above “is not contained in the

Arbitrat[or’s] Award and warrants correction[.]” They further argued that the

Arbitrator’s Award makes clear that the liquidator shall be a member of Foster

Management and JPMorgan is not a member. According to Robin and Sabrina, the

Arbitrator’s Award correctly stated that (1) the General Partner of Foster Timber

(that is, Foster Management) has the right to name the liquidator of Foster Timber

and (2) the limited partners (that is, JPMorgan as Trustee) will have the authority to

appoint the liquidator only if the General Partner does not do so.

JPMorgan also filed a Motion Nunc Pro Tunc/To Clarify, stating that the

portion of the Order requiring it to select a liquidator “was entered in error[]”

because the Arbitrator’s Award does not require JPMorgan to select a liquidator for

either Foster Management or Foster Timber and the arbitrator only “presumed” that

JPMorgan—as the limited partner of Foster Timber—would appoint a liquidator for

Foster Timber. JPMorgan explained that the Arbitrator’s Award referred to Article

12.2 of the Foster Management Regulations, which states in relevant part, “On

dissolution of the Company, a Majority in Interest shall appoint one or more

Members as Liquidator.”

15 On February 17, 2021, Plaintiffs filed Notice to the Court Regarding Further

Developments Related to Liquidation & Plaintiffs’ Further Opposition to Matters

Set for Submission on February 19th. Attached as an exhibit thereto is a document

dated January 26, 2021 and titled “Written Consent of the Members of Foster

Management, LLC[.]” This document states, in relevant part, that the Article 12.2 of

the Regulations of Foster Management provides that “On dissolution of the

Company, a Majority in Interest shall appoint one or more Members as Liquidator.”

The document further states:

Pursuant to Section 7.6(a) of the Regulations of Foster Management, LLC[8] Robin Rouse, Sabrina Rouse, Benjamin Campbell and Neil F. Campbell, Jr. as a Majority in Interest of Foster Management, LLC take the following Action by Written Consent: Should the Arbitrat[or’s] Award and Confirmation Order become an enforceable final judgment, Sabrina Rouse, a Member, is

8 Section 7.6(a) of the Regulations of Foster Management provides: Any action required or permitted to be taken at any annual or special meeting of Members requiring the vote of a Required Interest, a Majority in Interest, or some lesser percentage of the Sharing Ratios may be taken without a meeting, without prior notice, and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by a Required Interest, a Majority in Interest, or such lesser percentage of the Sharing Ratios as may be required to act under the Act, the Articles, or these Regulations. Every written consent shall bear the date of signature of each Member who signs the consent. A telegram, telex, cablegram or similar transmission by a Member, or a photographic, photostatic, facsimile or similar reproduction of a writing signed by a Member, shall be regarded as signed by the Member for purposes of this Section. Prompt notice of the taking of any action by Members without a meeting by less than unanimous written consent shall be given to those Members who did not consent in writing to the action. 16 appointed as the sole Liquidator of Foster Management, LLC as called for by Article 12.2 of the Regulations of Foster Management. As Liquidator, Sabrina Rouse shall continue to operate the Company properties with all the power and authorities of the Members.

On February 20, 2021, the trial court signed an Order on Motion Nunc Pro

Tunc. The court noted the following:

• The Arbitrat[or’s] Award actually quotes from Art. 12.1 of the Forest [sic] Timber Limited Partnership Agreement, but mistakenly attributes the quote to the “Foster Management Limited Partnership Agreement”:

“If the Partnership is dissolved under Section…[11.1](c) [through an Order of dissolution under Section 11.31-i of the Texas Business Organizations Code] . . . the General Partner or, if necessary, a person or committee selected by a Majority in Interest of the Limited Partners (‘Liquidator’) shall commence to wind up the affairs of the Partnership and to liquidate and sell its properties. In this case, because Foster Management as the General Partner of Foster Timber will have been dissolved, JPMorgan as the Trustee of the LFC46 Trust will presumably select the liquidator to distribute the assets of the Partnership and to wind up its affairs.”

• The error by the Arbitrator in the attribution of his quote led this Court to its January 7, 2021 Order saying JPMorgan is required to select a liquidator for Foster Management instead of saying it is required to select a liquidator for Foster Timber.

• It is entirely appropriate for JPMorgan to select the liquidator under the quoted provision because it held a 99% limited partnership interest in Foster Timber as the trustee of the LFC46 Trust. Foster Management had held the other 1% interest.

• Although the Arbitrator did not order JPMorgan to select a liquidator (see paragraph 12 of the Conclusions of Law in the Arbitrat[or’s] Award), given that the Arbitrator both dissolved and liquidated Foster Timber and Foster Management, but did not order the members to take any action toward liquidating Foster 17 Management (instead retaining jurisdiction to do so if the members failed to take appropriate action (see paragraphs 12 and 14 of the Conclusions of Law), the Arbitrator’s intent in this regard is clear, as is the mistaken reference to Foster Management when intending Foster Timber.

The trial court then ordered that its Order of January 7, 2021 be modified by the

Final Judgment to say that “JPMorgan is ordered to determine a liquidator for Foster

Timber instead of Foster Management.”

On February 20, 2021, the trial court signed a Final Judgment, entirely

replacing its January 7, 2021 Order. The trial court stated that, because the Trust

modification claim was dismissed for lack of subject matter jurisdiction, the only

pending matter was confirmation of the Arbitrator’s Award, and “Confirmation of

the Arbitrat[or’s] Award is nothing but a ministerial act.” The trial court ordered that

the Arbitrator’s Award is confirmed, ordered dissolution of both Foster Timber and

Foster Management, and stated, in relevant part:

Based on the Arbitrat[or’s] Award, it is further ORDERED, ADJUDGED and DECREED that J.P. Morgan Chase as Trustee of the LFC46 Trust shall select a Liquidator pursuant to Article 12 of the Foster Timber Regulations who shall liquidate Foster Timber, LLC pursuant to the provisions of Article 12 of the Foster Management Regulations.

On April 14, 2021, JPMorgan appointed the Stapleton Group as liquidator of

Foster Timber. 9

9 Our record does not indicate that any party filed a supersedeas bond. 18 Issues

Appellants argue that the trial court erred by modifying the Arbitrator’s

Award to order that JPMorgan select a liquidator for Foster Management. According

to Appellants, the trial court erred in modifying the Arbitrator’s Award in a way that

no party had requested, that was contrary to the terms of the partnership Agreement,

that ignored the appointment of the liquidator who would need to be selected by a

Majority in Interest of the Members of Foster Management, and the trial court’s

order was without reason and not authorized by statute. Appellants also argue that

the trial court should not have taken the dissolution process out of the family’s hands.

Appellants ask this Court to reverse the portion of the trial court’s final judgment

that orders JPMorgan to select a liquidator for Foster Timber and to modify the final

judgment to conform to the arbitrator’s award. Appellants also ask this Court to

. . . acknowledge that, pursuant to Section 12.2 of the Regulations, and Section 12.1(a) of the Partnership Agreement, Sabrina Rouse, as the duly appointed liquidator of Foster Management, acts with the power and authority of the General Partner in connection with the dissolution of Foster Timber, and that she is therefore charged with the duty and authority to wind up the affairs of Foster Timber and to liquidate its assets.

Appellants do not appeal the Arbitrator’s Award or the arbitrator’s holding that the

company and partnership be dissolved and liquidated.

Appellees argue this Court should decline the invitation to appoint Sabrina as

Foster Timber’s liquidator. That said, in two issues in their cross-appeal, Appellees

19 also contend that the trial court erred in denying JPMorgan and Neil Jr.’s pleas to

the jurisdiction and in ruling that it lacked jurisdiction to modify a Texas trust and

divide Texas real property. Appellees also argue that the trial court erred in granting

Robin’s, Terrill’s, and Sabrina’s special appearance and finding that it lacked

personal jurisdiction over them.

Standard of Review

We review de novo a trial court’s order confirming, modifying, or vacating an

arbitration award. See Conn Appliances, Inc. v. Puente, No. 09-18-00326-CV, 2020

Tex. App. LEXIS 6410, at *7 (Tex. App.—Beaumont Aug. 13, 2020, no pet.) (mem.

op.); Constr. Fin. Servs. v. Douzart, No. 09-16-00035-CV, 2018 Tex. App. LEXIS

1551, at *6 (Tex. App.—Beaumont Feb. 28, 2018, pet. denied) (mem. op.) (citing

D.R. Horton-Tex., Ltd. v. Bernhard, 423 S.W.3d 532, 534 (Tex. App.—Houston

[14th Dist.] 2014, pet. denied)). Texas law favors arbitration, and under Texas law,

the review of arbitration awards is “extraordinarily narrow.” Hoskins v. Hoskins, 497

S.W.3d 490, 494 (Tex. 2016) (citation omitted); Conn Appliances, Inc., 2020 Tex.

App. LEXIS 6410, at *7. An arbitration award has the same effect as a judgment of

a court of last resort, and we indulge all reasonable presumptions in favor of the

award and none against it. See Conn Appliances, Inc., 2020 Tex. App. LEXIS 6410,

at *7; see also CVN Grp., Inc. v. Delgado, 95 S.W.3d 234, 238 (Tex. 2002); Midani

v. Smith, No. 09-18-00009-CV, 2018 Tex. App. LEXIS 8954, at *10 (Tex. App.—

20 Beaumont Nov. 1, 2018, pet. denied) (mem. op.). An appellate court gives great

deference to an arbitrator’s award, and such awards are presumed to be valid. See

Delgado, 95 S.W.3d at 238. Generally, even where the arbitrator has made a mistake

of law or fact, courts may not vacate or modify the award. See Midani, 2018 Tex.

App. LEXIS 8954, at *10. We consider the entire record in our review. See Conn

Appliances, Inc., 2020 Tex. App. LEXIS 6410, at *7.

“Unless grounds are offered for vacating, modifying, or correcting an award

under Section 171.088 or 171.091 [of the Texas Arbitration Act], the court, on

application of a party, shall confirm the award.” Tex. Civ. Prac. & Rem. Code Ann.

§ 171.087 (emphasis added). A trial court may modify or correct an arbitration

award only if:

(1) the award contains: (A) an evident miscalculation of numbers; or (B) an evident mistake in the description of a person, thing, or property referred to in the award; (2) the arbitrators have made an award with respect to a matter not submitted to them and the award may be corrected without affecting the merits of the decision made with respect to the issues that were submitted; or (3) the form of the award is imperfect in a manner not affecting the merits of the controversy.

Id. § 171.091.

In the absence of a clear agreement to limit the arbitrator’s authority and

expand the scope of judicial review, on appeal this Court may not exercise expanded

judicial review. See Midani, 2018 Tex. App. LEXIS 8954, at *12 (citing Forest Oil 21 Corp. v. El Rucio Land & Cattle Co., 518 S.W.3d 422, 432 (Tex. 2017)). The trial

court that is asked to confirm an arbitration award may not substitute its judgment

for the arbitrator’s nor speculate about the arbitrator’s intent. See Garza v. Phelps

Dodge Ref. Corp., 262 S.W.3d 514, 519 (Tex. App.—El Paso 2008, no pet.); Baker

Hughes Oilfield Operations, Inc. v. Hennig Prod. Co., 164 S.W.3d 438, 447 (Tex.

App.—Houston [14th Dist.] 2005, no pet.) (citing Riha v. Smulcer, 843 S.W.2d 289,

293 (Tex. App.—Houston [14th Dist.] 1992, writ denied)).

The Arbitrator’s Award ordered that Foster Management and Foster Timber

“shall be dissolved” and “shall be liquidated.” Referencing Article 12.2 of the Foster

Management Regulations, the arbitrator wrote that upon dissolution of the company,

“‘a Majority in Interest shall appoint one or more Members as Liquidator.’” The

arbitrator then stated, “because Foster Management as the General Partner of Foster

Timber will have been dissolved, JPMorgan as the Trustee of the [] Trust will

presumably select the liquidator to distribute the assets of the Partnership and to

wind up its affairs.” The arbitrator acknowledged that Article 12.3 gives the

Liquidator discretion whether to liquidate the assets of the Partnership in cash or in

kind, and the arbitrator expressly declined to determine the form that liquidation

should take. Rather, the arbitrator concluded that “a qualified and experienced

liquidator, as well as the appropriate judges, would be best equipped to resolve the

22 remaining issues concerning the liquidation of the Foster Timber Partnership and the

future of the [] Trust.”

While the arbitrator expressly ordered the dissolution and liquidation of Foster

Management and Foster Timber, the arbitrator did not order that JPMorgan should

select a liquidator. Instead, the arbitrator wrote that JPMorgan “will presumably

select the liquidator[.]” (emphasis added) Merriam-Webster defines “presumably”

to mean “by reasonable assumption[.]” See Presumably, Merriam-Webster,

https://www.merriam-webster.com/dictionary/presumably (last visited Nov. 15,

2022). Black’s Law Dictionary defines “presume” to mean “[t]o assume beforehand;

to suppose to be true in the absence of proof.” See Presume, Black’s Law Dictionary

(9th ed. 2009). By contrast, Black’s defines “order” as “[a] command, direction, or

instruction.” See Order, Black’s Law Dictionary (9th ed. 2009). Nothing in the text

of the Arbitrator’s Award orders, commands, directs, or instructs JPMorgan to select

the liquidator.

The trial court knew this, as acknowledged in the Order on Motion Nunc Pro

Tunc (emphasis added):

Although the Arbitrator did not order JPMorgan to select a liquidator (see paragraph 12 of the Conclusions of Law in the Arbitrat[or’s] Award), given that the Arbitrator both dissolved and liquidated Foster Timber and Foster Management, but did not order the members to take any action toward liquidating Foster Management (instead retaining jurisdiction to do so if the members failed to take appropriate action (see paragraphs 12 and 14 of the Conclusions of Law), the Arbitrator’s

23 intent in this regard is clear, as is the mistaken reference to Foster Management when intending Foster Timber.

The trial court erroneously modified the Arbitrator’s Award to add an order

that JPMorgan select the liquidator and in doing so improperly engaged in

speculation about what the arbitrator “intended” when the arbitrator wrote that

JPMorgan “will presumably select the liquidator[.]” This exceeded the scope of the

statutory criteria enumerated in section 171.091. See Tex. Civ. Prac. & Rem. Code

Ann. § 171.091. 10 No party filed an application to modify or correct the Arbitrator’s

Award. See generally id. (explaining that a party must file an application to modify

or correct an award.). A trial court reviewing the award errs by substituting its

judgment for the arbitrator’s or when it speculates about the arbitrator’s intent. See

Garza, 262 S.W.3d at 519; Baker Hughes Oilfield Operations, Inc., 164 S.W.3d at

447 (citing Riha, 843 S.W.2d at 293). This Court has already determined that the

trial court lacked personal jurisdiction over JPMorgan. See Campbell, 2021 Tex.

App. LEXIS 5001, at **26-27. Therefore, we conclude that the trial court erred by

including in its Final Judgment language ordering that JPMorgan “shall select a

Liquidator[,]” and this paragraph should be stricken from the Final Judgment. See

Tex. Civ. Prac. & Rem. Code Ann. § 171.087.

10 By contrast, modifying the Arbitrator’s Award to change the reference to Foster Management to Foster Timber is allowable as an “evident mistake in the description of a person, thing, or property referred to in the award[.]” See Tex. Civ. Prac. & Rem. Code Ann. § 171.091(a)(1)(B). 24 Appellants have also asked that this Court to acknowledge that Sabrina is the

“duly appointed liquidator of Foster Management[.]” We decline to do so because

we are limited to reviewing a trial court’s rulings or judgments, and our record does

not indicate that the trial court made any ruling on this issue. See Tex. R. App. P.

33.1 (an issue on appeal must be preserved in the trial court by a timely objection

and obtaining a ruling thereon).

Cross-Appeal

“A court must have both subject matter jurisdiction over a case and personal

jurisdiction over the parties to issue a binding judgment.” Luciano v.

SprayFoamPolymers.com, LLC, 625 S.W.3d 1, 7-8 (Tex. 2021) (citing Spir Star AG

v. Kimich, 310 S.W.3d 868, 871 (Tex. 2010)). In all proceedings concerning trusts,

the trustee is a necessary party to the action. See Antolik v. Antolik, 625 S.W.3d 530,

538 (Tex. App.—Texarkana 2021, pet. denied) (citing Tomlinson v. Khoury, 624

S.W.3d 601, 608 (Tex. App.—Houston [1st Dist.] Oct. 27, 2020, pet. denied)); Ray

Malooly Trust v. Juhl, 186 S.W.3d 568, 570 (Tex. 2006). That said, this Court has

already ruled that the trial court lacked personal jurisdiction over JPMorgan as to the

counterclaim seeking a modification of the Trust. See Campbell, 2021 Tex. App.

LEXIS 5001, at **26-27. Therefore, Appellees’ Counterclaim for Trust

Modification fails for lack of jurisdiction, and we overrule Appellees’ issues on

cross-appeal.

25 Appellees previously presented an argument that the trial court had in rem

jurisdiction over the Trust in JPMorgan Chase Bank, N.A. v. Campbell, 2021 Tex.

App. LEXIS 5001.11 Appellees made the same argument in this appeal, wherein they

argued “[b]ecause the trial court had in rem jurisdiction over the Trust assets, it did

not need to have in personam jurisdiction over any Trust party[]” and “[t]he trial

court’s personal-jurisdiction rulings are simply immaterial given its in rem

jurisdiction.” In JPMorgan Chase Bank, N.A. v. Campbell, this Court found the trial

court lacked personal jurisdiction over JPMorgan and that personal jurisdiction over

the trustee was material to the claim for trust modification, thereby implicitly

overruling Appellees’ argument about in rem jurisdiction over the Trust assets. Id.

at **26-27.12 We follow our own precedent and reject the Appellees’ in rem

argument.

Appellees also argue that the trial court was wrong when it ruled that it lacked

personal jurisdiction over Robin, Terrill, and Sabrina. Robin, Terrill, and Sabrina

participated in the arbitration. Neither Robin, Terrill, or Sabrina challenges the

11 In JPMorgan Chase Bank, N.A. v. Campbell, the appellant was JPMorgan, and the appellees were Thomas Campbell, Christy Kolva, Foster Management, Foster Timber, Neil Campbell, Robin Rouse, Terrill Scatena, and Sabrina Rouse. See generally 2021 Tex. App. LEXIS 5001. 12 Appellees in JPMorgan Chase Bank, N.A. v. Campbell did not address in rem jurisdiction in their motion for rehearing filed in that appeal, and they did not file a petition for review with the Supreme Court of Texas in that matter. The mandate has issued in that case. 26 Arbitrator’s Award, and all parties agree that the Arbitrator’s Award is binding on

them. Therefore, we need not address the issue of whether the trial court erred in its

ruling that it lacked personal jurisdiction over Robin, Terrill, and Sabrina because

that issue is moot. See Allstate Ins. Co. v. Hallman, 159 S.W.3d 640, 642 (Tex. 2005)

(“A case becomes moot if a controversy ceases to exist or the parties lack a legally

cognizable interest in the outcome.”). We overrule Appellees’ issues on cross-

appeal.

Conclusion

Having sustained Appellants’ issue and having overruled Appellees’ issues on

cross-appeal, we affirm the Final Judgment in part, and we reverse that portion of

the Final Judgment that reads:

Based on the Arbitrat[or’s] Award, it is further ORDERED, ADJUDGED and DECREED that J.P. Morgan Chase as Trustee of the LFC46 Trust shall select a Liquidator pursuant to Article 12 of the Foster Timber Regulations who shall liquidate Foster Timber, LLC pursuant to the provisions of Article 12 of the Foster Management Regulations.

We remand to the trial court with instructions to modify the Final Judgment to delete

the paragraph excerpted above in accordance with this opinion. See Tex. R. App. P.

43.2(a), (d).

27 AFFIRMED IN PART; REVERSED AND REMANDED IN PART.

_________________________ LEANNE JOHNSON Justice

Submitted on March 24, 2022 Opinion Delivered December 22, 2022

Before Golemon, C.J., Horton and Johnson, JJ.