Opinion issued December 31, 2024
In The
Court of Appeals For The
First District of Texas ———————————— NO. 01-22-00731-CV ——————————— SUZANNE SONDRUP RON, Appellant V. AVISHAI RON, INDIVIDUALLY AND AS TRUSTEE OF THE SUZANNE AND AVI RON 2012 CHILDREN'S TRUST, Appellee
On Appeal from the 55th District Court Harris County, Texas Trial Court Case No. 2022-41539
MEMORANDUM OPINION
Suzanne Ron appeals the trial court’s order confirming an arbitration award
for her former spouse Avishai (“Avi”) Ron, individually and in his capacity as
trustee of a trust formed during their marriage to benefit their children. On appeal,
Suzanne contends the arbitration award must be vacated or modified because the arbitrator exceeded his authority, and Avi contends we lack jurisdiction to decide
Suzanne’s appeal under the standing and mootness doctrines. Concluding that we
have jurisdiction and finding no error, we affirm the trial court’s order.
Background
Avi and Suzanne Ron married in 1994 and had three children. Suzanne filed
for divorce in 2014, and the parties have been mired in litigation for much of the
time since. Much of the litigation concerned two reciprocal trusts Avi and Suzanne
formed in 2012 as part of their pre-divorce estate and tax planning: (1) the Suzanne
Ron 2012 Family Trust (“Family Trust”) and (2) the Avishai and Suzanne Ron 2012
Children’s Trust (“Children’s Trust”). Relevant here, under the original terms of the
Children’s Trust, Suzanne was the settlor, Avi was the trustee, the couple’s three
children were the beneficiaries, and Gary Stein was named trust protector. As trust
protector, Stein could add and remove trustees and beneficiaries and was immune
from liability for certain actions related to the trust.
Avi and Suzanne’s divorce was finalized in 2017, when the family court
entered a decree purporting to divide their community property. Because some
valuable business interests could not be assigned in the divorce decree, the family
court ordered Avi to pay Suzanne a $19 million equalization judgment. Avi appealed
the divorce decree (“Divorce Suit Appeal”).
2 Around the same time, Suzanne, individually and on behalf of the Family
Trust, sued Avi for allegedly stealing money from entities that he managed but were
owned, in part, by Suzanne or the Family Trust (“Family Trust Suit”).
Trying to resolve all their disputes, Avi and Suzanne mediated with Alan
Levin on October 17, 2017. When the mediation ended, they executed a confidential
Mediated Settlement Agreement (“MSA”). In the MSA, Avi and Suzanne
(1) released their claims against each other as of the date of the MSA,1 and (2) agreed
to “submit any dispute related to [the MSA] to . . . Levin for binding arbitration.”
The MSA was signed by Suzanne, Avi, and their counsel. It was not signed by
anyone as trustee of either the Children’s Trust or the Family Trust. And Stein did
not participate in the mediation or sign the MSA.
In 2018, Avi and Suzanne disagreed about their obligations under the MSA.
Avi obtained an order compelling arbitration before Levin. While that arbitration
was pending,2 Suzanne filed a new lawsuit in federal district court against Avi,
1 The release provides: “All lawsuits, including the [Divorce Suit Appeal] and the [Family Trust Suit] will be mutually dismissed with prejudice and the parties to this agreement shall jointly release each other from any and all claims through the date thereof.” 2 This initial arbitration resulted in a final arbitration award on Suzanne’s interest in the Family Trust and entitlement to other compensation from Avi. The Fourteenth Court of Appeals affirmed the arbitration award. See Ron v. Ron, No. 14-20-00776- CV, 2022 WL 3365266 (Tex. App.—Houston [14th Dist.] Aug. 16, 2022, pet. denied) (mem. op.).
3 individually and as trustee of the Children’s Trust (“Federal Suit”). Suzanne alleged
that Avi had fraudulently transferred community assets to the Children’s Trust
during the divorce suit. She also named Stein as a defendant and alleged that, as trust
protector, he helped Avi complete the fraudulent transfers by naming Avi as a
beneficiary of the Children’s Trust. Suzanne pleaded two claims against Avi:
conversion and violations of the Texas Uniform Fraudulent Transfer Act
(“TUFTA”). And she pleaded three claims against Stein: civil conspiracy based on
conversion, civil conspiracy to violate TUFTA, and breach of fiduciary duty.
Stein moved to dismiss the claims against him under Federal Rule of Civil
Procedure 12(b)(6) for failure to state a claim on which relief could be granted. And
Avi moved to compel arbitration of Suzanne’s remaining claims against him under
the MSA. The federal district court granted both motions, and the federal appeals
court affirmed.3 In affirming the district court’s decision compelling arbitration, the
federal appeals court concluded that Suzanne’s claims about the Children’s Trust
fell within the MSA’s “extremely broad” arbitration clause because she “repeatedly
referenced the MSA” in her allegations about the Children’s Trust and claimed that
she was Avi’s creditor under the MSA and that he made the transfers to defraud her.4
3 See Ron v. Ron, 836 F. App’x 192 (5th Cir. 2020). 4 Id. at 197.
4 After being compelled to arbitration, Avi asserted counterclaims alleging that
Suzanne had breached the MSA by filing the Federal Suit.5 He asked for three
categories of damages: (1) his legal fees for compelling arbitration as damages for
breach of the MSA’s arbitration provision; (2) his legal fees for defending against
Suzanne’s released claims as damages for breach of the MSA’s release provision;
and (3) damages equal to Stein’s fees in the federal district and appeals courts.
In support of his request for damages equal to Stein’s fees, Avi cited the
Children’s Trust’s obligation in the trust documents to indemnify the trust protector
for certain expenses:
Any Trust Protector is entitled to reimbursement from the trust estate for any and all expenses, including, but not limited to, reimbursement for attorneys’ fees and costs of litigation, reasonably incurred to defend any claim brought against the Trust Protector, unless the Trust Protector is shown by clear and convincing evidence to have acted in bad faith, even if the cost of the Trust Protector’s defense would exhaust the value of the trust.
Avi asserted that when Suzanne sued Stein in federal district court, she caused the
Children’s Trust to incur damages under this provision equal to the amount of Stein’s
fees. And thus, Stein’s fees were “damages to the Children’s Trust (and thus
recoverable by [him] in his capacity as trustee of the Children’s Trust).”
5 Avi also sought a declaration that Suzanne was not his creditor, which the arbitrator granted in the final arbitration award. 5 Avi moved for summary judgment on his counterclaims, and the arbitrator
granted the motion in part. The arbitrator ruled:
• the MSA released “any and all claims through October 17, 2017 [the MSA effective date] between Avi and Suzanne, in all of their respective actual capacities”;
• the MSA did not release claims that accrued after October 17, 2017;
• Suzanne breached the MSA by refusing to timely arbitrate her claims;
• Suzanne breached the MSA by bringing released claims against Avi;
• Avi was not entitled to summary judgment on his claim that Suzanne breached the MSA by bringing claims against him as trustee of the Children’s Trust because he did not show those claims were released; and
• damages would be decided at the arbitration hearing.
After the summary judgment ruling, Suzanne voluntarily dismissed her
affirmative claims. Thus, the issues for the final hearing were Avi’s claim to recover
both his own and Stein’s attorney’s fees as alleged damages and Suzanne’s claim for
attorney’s fees. The parties stipulated some facts, including that while Stein had
incurred attorney’s fees in obtaining dismissal of the claims against him in the
Federal Suit, neither Avi nor the Children’s Trust had paid any of Stein’s fees.
The parties put forward their evidence and argument at the final hearing, and
the arbitrator issued his final award. The arbitrator awarded Avi all the damages he
requested—$104,936.48—for his own fees for compelling arbitration and defending
against released claims. As for Stein’s attorney’s fees, the arbitrator found that the
6 Children’s Trust had “a contractual duty to indemnify” Stein as trust protector and
that Stein was “entitled to indemnification” for the Federal Suit. The arbitrator
ordered Avi, as trustee, to pay $334,164.29 into his counsel’s IOLTA account, to be
paid to Stein. The arbitrator ordered Suzanne to “reimburse” the Children’s Trust for
its payment of Stein’s fees no later than 20 days after receiving written notice from
Avi’s attorney of full payment from the Children’s Trust.
After the arbitration hearing, Avi’s counsel wrote to Suzanne’s counsel that
Avi had “previously advanced” $140,000 to Stein. And later, after Avi transferred
the rest of the amount specified in the arbitration award to the IOLTA account, Avi’s
counsel sent a letter to Suzanne’s counsel and the arbitrator:
Please be advised that today my firm received a wire transfer from Avi[] Ron, as Trustee of the Suzanne and Avi Ron 2012 Children’s Trust, in the amount of $194,164.29. Per the Arbitrator’s Final Award, this amount represents the legal fees and costs awarded to Gary Stein of $334,164.29 less the $140,000.00 that was previously advanced to Mr. Stein by Mr. Ron on behalf of the Trust. The funds have been deposited into [the law firm’s] IOLTA account for distribution to Mr. Stein.
Avi moved to confirm the arbitration award in the trial court. Suzanne filed a
competing motion to vacate, modify, or correct the arbitration award under the Texas
Arbitration Act (“TAA”). Suzanne argued that the arbitrator exceeded his power,
and ruled on a matter not before him, by awarding Stein damages (which, ultimately,
Suzanne would pay) because (1) Stein was not a party to the MSA; (2) Suzanne
never agreed to arbitrate any claim Stein might have against her, Avi, or the
7 Children’s Trust; (3) Stein was not a party to and never made a claim in the
arbitration; and (4) the arbitration award manufactured damages that did not exist at
the final hearing because the Children’s Trust had not yet reimbursed Stein’s fees.
After a hearing on the motions, the trial court confirmed the entire award.
Suzanne appealed, complaining of the portion of the arbitration award that requires
her to reimburse the Children’s Trust for its payment of Stein’s fees.
Justiciability
Avi argues that Suzanne’s appeal must be dismissed for lack of jurisdiction
because no justiciable issues exist. He asserts: (1) Suzanne lacks standing to
complain about his obligation under the arbitration award to pay Stein, and (2) any
dispute over his obligation is moot because he voluntarily paid Stein and thus
satisfied the arbitration award.
We must examine our jurisdiction any time it is in doubt. Pike v. Tex. EMC
Mgmt., LLC, 610 S.W.3d 763, 774 (Tex. 2020). Issues of justiciability, such as
standing and mootness, implicate a court’s subject matter jurisdiction. See Patterson
v. Planned Parenthood of Hous. & Se. Tex., Inc., 971 S.W.2d 439, 442–43 (Tex.
1998). These justiciability doctrines stem from the prohibition against advisory
opinions. Id. When no live controversy exists between the parties, an opinion is
advisory because it does not remedy any actual or imminent harm and addresses only
a hypothetical injury. Tex. Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440,
8 440 (Tex. 1993). A controversy must exist between the parties “from the first filing
through the final judgment,” including any appeal. Heckman v. Williamson Cnty.,
369 S.W.3d 137, 147–48 (Tex. 2012). If a controversy ceases while a case is on
appeal, the case is moot, and the appellate court lacks subject matter jurisdiction to
act. Williams v. Lara, 52 S.W.3d 171, 184 (Tex. 2000).
The standing and mootness doctrines relate to whether an appropriate party
has sued at an appropriate time so that there is an actual, live controversy between
the parties. Standing concerns who may bring an action. Patterson, 971 S.W.2d at
442. “Just as plaintiffs must have standing to bring suit, appellants must have
standing to appeal trial court judgments.” Nephrology Leaders & Assocs. v. Am.
Renal Assocs. LLC, 573 S.W.3d 912, 914 (Tex. App.—Houston [1st Dist.] 2019, no
pet.); see also State v. Naylor, 466 S.W.3d 783, 787 (Tex. 2015) (courts lack subject
matter jurisdiction to determine appeal brought by an “improper party” who lacks
“appellate standing”). To have standing, an appellant must be personally aggrieved,
meaning her alleged injury “must be concrete and particularized, actual or imminent,
not hypothetical.” Fin. Comm’n of Tex. v. Norwood, 418 S.W.3d 566, 580 (Tex.
2013); see also McAllen Med. Ctr., Inc. v. Cortez, 66 S.W.3d 227, 234 (Tex. 2001)
(“[S]tanding requires that the controversy adversely affect the party seeking
review.”). And her injury must be “likely to be redressed by the requested relief.”
Heckman, 369 S.W.3d at 154. “[A]n appealing party may not complain of errors that
9 do not injuriously affect it or that merely affect the rights of others.” Torrington Co.
v. Stutzman, 46 S.W.3d 829, 843 (Tex. 2000).
Mootness occurs when what was once a live controversy between the parties
ends. See Travelers Ins. Co. v. Joachim, 315 S.W.3d 860, 865 (Tex. 2010); Williams,
52 S.W.3d at 184. “Usually, when a judgment debtor voluntarily pays and satisfies
a judgment rendered against him, the cause becomes moot.” Riner v. Briargrove
Park Prop. Owners, Inc., 858 S.W.2d 370, 370 (Tex. 1993) (per curiam). This rule
prevents “a party who voluntarily pays a judgment from later changing his mind and
seeking the court’s aid in recovering payment.” Id. But if a party does not voluntarily
pay a judgment, his appeal is not moot. Id.
A. Standing
Avi argues that Suzanne lacks standing to complain about the part of the
arbitration award authorizing reimbursement of Stein’s attorney’s fees because the
award—and the trial court’s order confirming it—“did not obligate Suzanne to pay
anything to Stein.” Instead, Avi says, the arbitration award “obligated [him] to pay
Stein as a condition precedent to recovering certain damages.” Thus, “[i]f anyone
was aggrieved by the need to pay a non-party, it was Avi alone.”
In support, Avi cites State Farm Mutual Insurance Co. v. Peck, 900 S.W.2d
910 (Tex. App.—Amarillo 1995, no writ), a dog bite case. The dog’s owner was
driving the dog to the groomer in her car when the dog bit a passenger sitting in the
10 backseat with the dog. Id. at 912. The passenger sued, and the driver made a claim
on her automobile and homeowner’s insurance policies. Id. The automobile
insurance carrier (State Farm) sought a declaration that it had no duty to defend and
joined the homeowner’s insurance carrier (American States) as a party. Id. The trial
court concluded that State Farm had a duty to defend, but American States did not.
Id. Only State Farm appealed, challenging the declaration that American States had
no duty to defend. Id.
The appellate court concluded that the judgment declaring American States
had no duty to defend did not affect the rights or obligations of State Farm. Id.
Instead, any error related to American States’ duty to defend “was a matter for [the
dog owner] to challenge on appeal [because] that portion of the judgment was
adverse to her and involved only her rights and those of American States[.]” Id.
Consequently, State Farm lacked standing to challenge the declaration that
American States had no duty to defend. Id.
Peck is distinguishable because, unlike State Farm, Suzanne is complaining
about her own obligation under the arbitration award and the trial court’s order
confirming it. The arbitration award sets out a multi-step process for damages. First,
in paragraph G, the arbitration award orders Avi, as trustee, to pay $334,164.29 into
his attorney’s IOLTA account, to be paid to Stein:
G. The [Children’s] Trust had, and continues to have, a contractual duty to indemnify its Trust Protector [Stein] . . . during the entire period in 11 which he served in that capacity. More specifically, Stein, as Trust Protector of the Trust, is entitled to indemnification as to Suzanne’s [Federal Suit] against him. The Trust, through its current Trustee, is therefore ORDERED, by not later than twenty (20) days from the date of execution below, to reimburse Stein a total of $334,164.29. . . . This amount represents the actual legal fees and costs incurred by Stein in defense of Suzanne’s [Federal Suit] targeting his conduct as Trust Protector. The said funds hereby awarded, less any amounts previously advanced to Stein by Avi on behalf of the Trust, shall be deposited into the MNB IOLTA account for appropriate and prompt distribution to Stein. [Avi’s counsel] shall be responsible to immediately notify Suzanne’s counsel, in writing, upon receipt of the foregoing payment in full from the Trust.
Then, in paragraph H, the arbitration award orders Suzanne to “reimburse”
the Trust the same amount as Stein’s fees.
H. The Arbitrator additionally ORDERS that Suzanne shall, by not later than twenty (20) days after such written notification from [Avi’s counsel], reimburse the Trust the full $334,164.29 being the same amount as the Trust and/or Avi actually paid, in one or more tranches, to reimburse Stein. These funds shall be deposited into the MNB IOLTA account for [Avi’s counsel’s] appropriate and prompt distribution to the Trust.
The trial court’s order confirming the arbitration award enters judgment
against Suzanne for the same amount, expressly referencing paragraph H.
Consequently, Suzanne’s appeal challenging the personal liability imposed on her
by the arbitrator, as confirmed by the trial court, is an appeal from a
“judgment . . . adverse to her.” Peck, 900 S.W.2d at 912. We hold Suzanne has been
“injuriously affect[ed]” by the judgment and therefore has standing on appeal.
Torrington, 46 S.W.3d at 844.
12 B. Mootness
Avi contends Suzanne’s appeal is moot because he satisfied his obligation, as
trustee, to pay the amount of Stein’s fees into the IOLTA account. According to Avi,
his “voluntary payment moots any challenge to [his] obligation to pay non-party
Stein[.]” While Avi may be correct that any challenge to his obligation as trustee to
reimburse Stein’s attorney’s fees was mooted by his voluntary payment, see Riner,
858 S.W.2d at 370, he ignores the second part of the arbitration award obligating
Suzanne to pay. The trial court’s order confirming the arbitration award makes
Suzanne a judgment debtor for that amount, which she has not paid and now
challenges. We hold that because there has been no voluntary payment of Suzanne’s
obligation under the judgment, her appeal is not moot. See id.
Confirmation of Arbitration Award
In her sole issue, Suzanne argues that the arbitration award must be vacated,
modified, or corrected because “the arbitrator (1) exceeded his power and the scope
of his authority and (2) ruled on a matter not submitted to him when he awarded
attorney’s fees to be paid to an individual [Stein] who was not a party to the
arbitration agreement and who did not appear, make a claim, or participate in the
arbitration proceedings.”
13 A. Standard of review and applicable law
We review de novo a trial court’s decision to confirm or vacate an arbitration
award. Port Arthur Steam Energy LP v. Oxbow Calcining LLC, 416 S.W.3d 708,
713 (Tex. App.—Houston [1st Dist.] 2013, pet. denied). Review of an arbitration
award is “extraordinarily narrow.” E. Tex. Salt Water Disposal Co. v. Werline, 307
S.W.3d 267, 271 (Tex. 2010). We give an arbitration award great deference and
indulge every reasonable presumption in favor of the award and none against it. See
CVN Grp., Inc. v. Delgado, 95 S.W.3d 234, 238 (Tex. 2002).
Suzanne moved to vacate, modify, or correct the arbitration award under the
Texas Arbitration Act (“TAA”). See TEX. CIV. PRAC. & REM. CODE § 171.001–.098.
The TAA requires a court, on a party’s application, to confirm an arbitration award
“[u]nless grounds are offered for vacating, modifying, or correcting [the] award
under Section 171.088 or 171.091.” TEX. CIV. PRAC. & REM. CODE § 171.087; see
Hamm v. Millenium Income Fund, L.L.C., 178 S.W.3d 256, 262 (Tex. App.—
Houston [1st Dist.] 2005, pet. denied) (“[C]onfirmation [of an arbitration award] is
the default result unless a challenge to the award has been or is being considered.”).
Under Section 171.088, courts must vacate an arbitration award if the arbitrator
exceeded his powers. See TEX. CIV. PRAC. & REM. CODE § 171.088(a)(3)(A). And
under Section 171.091, an arbitration award must be modified or corrected if the
arbitrator “made an award with respect to a matter not submitted to [him] and the
14 award may be corrected without affecting the merits of the decision made with
respect to the issues that were submitted.” Id. § 171.091(a)(2).
In arbitration compelled by contract, “[a]n arbitrator derives his power from
the parties’ agreement to submit to arbitration.” Nafta Traders, Inc. v. Quinn, 339
S.W.3d 84, 89–91 (Tex. 2011). As with any other contract, the parties’ intentions
control, and courts must give effect to the parties’ contractual rights and
expectations. Id. An arbitrator thus exceeds his authority when he disregards the
contract and dispenses his own idea of justice. See Forged Components, Inc. v.
Guzman, 409 S.W.3d 91, 104 (Tex. App.—Houston [1st Dist.] 2013, no pet.). But
not when he simply misinterprets the contract or misapplies the law. See D.R
Horton-Tex., Ltd. v. Bernhard, 423 S.W.3d 532, 534 (Tex. App.—Houston [14th
Dist.] 2014, pet. denied); Ancor Holdings, LLC v. Peterson, Goldman & Villani, Inc.,
294 S.W.3d 818, 830 (Tex. App.—Dallas 2009, no pet.) (“[I]mprovident, even silly
interpretations by arbitrators usually survive judicial challenges.” (quotation
omitted)). That is, “an arbitrator does not exceed [his] authority by committing a
mistake of law, but instead by deciding a matter not properly before [him].”
LeFoumba v. Legend Classic Homes, Ltd., No. 14-08-00243-CV, 2009 WL
3109875, at *3 (Tex. App.—Houston [14th Dist.] Sept. 17, 2009, no pet.) (mem.
op.). “[T]he proper inquiry is not whether the arbitrator decided an issue correctly,
15 but rather, whether he had the authority to decide the issue at all.” Forest Oil Corp.
v. El Rucio Land & Cattle Co., 518 S.W.3d 422, 431 (Tex. 2017).
B. The arbitrator acted within his authority on matters submitted to him
Suzanne frames the arbitrator’s award as deciding an unasserted claim (for
indemnity) by someone who was neither a party to nor third-party beneficiary of the
MSA (Stein) or its arbitration provision. Based on this framing, she makes the same
argument for vacatur and modification or correction of the arbitration award. That
is, she seeks both remedies based on the same claimed error. She asserts that when
the arbitrator “decide[d] an issue not submitted to him,” and “award[ed] damages to
a party not before him, with whom the arbitration parties did not agree to arbitrate,”
the arbitrator both exceeded his authority and made an award on a matter not
submitted to him, making both remedies appropriate. Avi responds that Stein’s
nonparticipation and nonparty status is not a basis for vacating, modifying, or
correcting the arbitration award because the damages Suzanne complains about were
properly awarded to Avi in his capacity as trustee of the Children’s Trust, and not to
Stein. We agree with Avi.
We acknowledge that several facts underlying Suzanne’s argument are
undisputed. For instance, it is undisputed that Stein was not a party to the MSA or
its arbitration provision, that he did not appear in the arbitration proceeding, and that
16 he did not make a claim for reimbursement of his attorney’s fees from the Federal
Suit. But those facts are not controlling.
The underlying arbitration was ordered by the Fifth Circuit in the Federal Suit
filed by Suzanne against Stein and Avi, in both his individual capacity and
representative capacity as trustee of the Children’s Trust. In the Federal Suit,
Suzanne named Stein and Avi as defendants, with Avi being named in both his
individual capacity and representative capacity as trustee of the Children’s Trust.
Ron, 836 F. App’x at 197. She alleged that “Avi caused assets in which [she] and
[he] held community interests to be transferred to the [Children’s] Trust,” totaling
about $1.3 million. Id. And although she argued that her claims related to the
Children’s Trust fell outside the scope of the MSA’s arbitration provision, the Fifth
Circuit disagreed and affirmed the district court’s order compelling arbitration of all
claims against Avi, individually and as trustee. Id. In support of its holding, the Fifth
Circuit observed that the MSA contains “an extremely broad arbitration clause” and
that Suzanne’s allegations against Avi relating to the Children’s Trust “repeatedly
referenced the MSA” and thus “squarely implicate[d] the terms of the MSA.”6 Id.
6 The court gave two examples: (1) “in her amended complaint under the Children’s Trust, Suzanne specifically alleged that the MSA was the result of Avi’s fraud and breach of fiduciary duties,” and (2) she also claimed that she was Avi’s creditor under the MSA because of the payment schedule for satisfying the equalization judgment and that his alleged fraudulent transfer of assets to the Children’s Trust was a scheme to defraud her as a creditor under the MSA. Ron, 836 F. App’x at 197. 17 The court also noted that the MSA’s release provision supported its holding because
Suzanne and Avi had jointly released each other from “any and all claims” through
the date of its execution, and some of Avi’s alleged misconduct related to the
Children’s Trust predated the MSA. See id.
Thus, the underlying arbitration began with claims against Avi, both
individually and as trustee of the Children’s Trust. Avi, as trustee, counterclaimed
for breach of contract and sought damages in the amount due to Stein. That is, Avi
did not make a claim in arbitration to enforce an indemnity obligation. Instead, he
made a claim for damages based on Suzanne’s breach of the MSA’s arbitration and
release provisions, which recited the parties’ agreement to “mutually dismiss[] with
prejudice” “[a]ll lawsuits,” to “jointly release each other from any and all claims
through the MSA’s date” of October 17, 2017, and to “submit any dispute related to
the [MSA] to Alan Levin for binding arbitration.”
Suzanne acknowledged as much in the arbitration proceeding, when she
recognized in her motion practice that Avi was purporting to act not just on behalf
of himself but also as trustee and that, as damages, he sought not just “‘(1) the fees
[he] personally expended compelling arbitration,’ but also ‘(2) the fees the
[Children’s] Trust expended compelling arbitration, and (3) the fees the [Children’s]
Trust must reimburse to Gary Stein as trust protector for [the Federal Suit].’” When
Suzanne sued Stein in the Federal Suit, the Children’s Trust incurred obligations to
18 Stein equal to Stein’s attorney’s fees, leading to the arbitrator’s finding that the
Children’s Trust “had, and continues to have, a contractual duty to indemnify Stein”
for his fees incurred in the lawsuit.” And the arbitrator awarded the damages Avi
requested.
Suzanne cites several cases as limiting the arbitrator’s discretion to award
such damages. But in each case, the arbitration agreement expressly limited the
arbitrator’s authority as to certain remedies. See, e.g., Hebbronville Lone Star
Rentals LLC v. Sunbelt Rentals Indus. Servs., LLC, 898 F.3d 629, 632–33 (5th Cir.
2018) (vacating part of arbitration award reforming asset purchase agreement
because agreement specified arbitrator could only calculate disputed revenue);
Townes Telecomms., Inc. v. Travis, Wolff & Co., 291 S.W.3d 490, 492–93 (Tex.
App.—Dallas 2009, pet. denied) (vacating part of arbitration award splitting costs
between parties because arbitration agreement required arbitrators to designate a
non-prevailing party to bear all costs); Lee v. Daniels & Daniels, 264 S.W.3d 273,
283 (Tex. App.—San Antonio 2008, pet. denied) (vacating part of arbitration award
that assessed 100% of the arbitrator’s fees against one side because arbitration
agreement specified that 50% of the arbitrator’s fees would be paid by each side);
Robinson v. West, No. 11-03-00028-CV, 2004 WL 178586, at *3 (Tex. App.—
Eastland Jan. 30, 2004) (mem. op.) (vacating arbitration award when arbitrator
exceeded authority by refusing to order dissolution of corporation even though
19 agreement called for arbitrator to handle dissolution), rev’d on other grounds, 180
S.W.3d 575 (Tex. 2005); Peacock v. Wave Tec Pools, Inc., 107 S.W.3d 631, 639
(Tex. App.—Waco 2003, no pet.) (vacating part of arbitration award ordering costs
for rock removal in a dispute over construction of a pool because such costs were
not submitted under agreement seeking arbitrator’s decision only as to whether
customer should be compensated for new pool, reimbursement of amounts paid for
pool construction, or pool repairs).7 The MSA’s arbitration provision contains no
similar restrictive language. It states broadly that “the parties agree to submit any
dispute related to [the MSA] to Alan Levin for binding arbitration,” without
specifying any particular remedy.
Absent restrictive language, an arbitrator has broad discretion to fashion an
appropriate remedy. Forest Oil Corp. v. El Rucio Land & Cattle Co., 446 S.W.3d
58, 82 (Tex. App.—Houston [1st Dist.] 2014), aff’d, 518 S.W.3d 422 (Tex. 2017);
J.J. Gregory Gourmet Servs., Inc. v. Antone’s Import Co., 927 S.W.2d 31, 35 (Tex.
7 In another case cited by Suzanne, this Court considered whether the arbitrator exceeded their authority as to claims that were not arbitrable. Burlington Res. Oil & Gas Co. v. San Juan Basin Royalty Tr., 249 S.W.3d 34, 44–45 (Tex. App.—Houston [1st Dist.] 2007, pet. denied) (vacating part of arbitration award that ruled on claim that was not included on exhibit listing “the only items” that were subject to arbitration agreement). Suzanne did not argue in the trial court or in her opening brief on appeal that there was no agreement to arbitrate Avi’s claims in his capacity as trustee. Cf. Black v. Shor, 443 S.W.3d 170, 174 n.3 (Tex. App.—Corpus Christi 2013, no pet.) (new or additional issues raised in post-submission briefing are untimely and will not be considered by the court). Her complaints were of no agreement to arbitrate claims for damages to Stein. 20 App.—Houston [1st Dist.] 1995, no writ). A particular remedy lies beyond the
arbitrator’s authority “only if there is no rational way to explain the remedy . . . as a
logical means of furthering the aims of the contract.” Forest Oil, 446 S.W.3d at 82.
Courts look only at the result. Id. “The single question is whether the award, however
arrived at, is rationally inferable from the contract.” Id. (quotation omitted).
The question of a rational relationship between the arbitration award and
agreement must be answered affirmatively here. As Avi points out, when the parties
executed the MSA, they contemplated that one or the other of them might breach its
provisions, including the arbitration and release provisions; the arbitrator found
Suzanne breached those provisions; and the arbitrator found that the Children’s Trust
suffered damages as a result. The arbitrator awarded the amount of Stein’s fees as
part of the Children’s Trust’s damages, and he created a mechanism whereby Avi
could recover those damages as trustee once they were realized. Simply put, Stein’s
fees were not enforcement of an unasserted indemnity claim by Stein, but the
measure of damages awarded by the arbitrator for Avi as trustee.
We do not decide whether the arbitrator correctly decided Avi’s entitlement
to damages as trustee or their ripeness or measure. See id. at 84. Even if the arbitrator
made a mistake in applying the law of remedies or awarded a remedy a court of law
could not, that does not support vacatur of the arbitration award on the ground that
the arbitrator exceeded his authority, or modification or correction of the arbitration
21 award on the ground that the arbitrator ruled on a matter not submitted to him. See
id.; see also TEX. CIV. PRAC. & REM. CODE §§ 171.088(a)(3)(A), .091(a)(2); cf.
Peacock, 107 S.W.3d at 638–39 (arbitrator could award specific performance of
contract obligations even though specific performance could not have been awarded
by court of law). Accordingly, we hold the trial court did not err in confirming the
arbitration award.
We further hold that the arbitration award does not require modification, as
Suzanne suggests, to order Stein and the Children’s Trust to release Suzanne from
liability. As explained, Stein did not assert a claim against Suzanne, and she has not
explained what claim he could assert given that the reimbursement obligation flows
to Stein from the Children’s Trust, not Suzanne. And the Children’s Trust may only
have one recovery—through the judgment confirming the arbitration award—for the
claimed damages. Cf. Waite Hill Servs., Inc. v. World Class Metal Works, Inc., 959
S.W.2d 182, 184 (Tex. 1998) (a party may not have more than one recovery for the
same injury).
We overrule Suzanne’s sole issue.
22 Conclusion
We affirm the trial court’s order.
Sarah Beth Landau Justice
Panel consists of Justices Goodman, Landau, and Hightower.