No. 14-15-00610-CV

___________________________________ 

IN THE COURT OF APPEALS FOR THE

FOURTEENTH JUDICIAL DISTRICT OF TEXAS AT HOUSTON

__________________________________ 

SOUTHWINDS EXPRESS CONSTRUCTION, LLC 

Appellant

 

v.

D.H. GRIFFIN OF TEXAS, INC. 

Appellee

__________________________________ 

 On appeal from the 151st District Court, Harris County, Texas 

Cause No. 2015-22736

_________________________________ 

BRIEF OF APPELLEE. D.H. GRIFFIN OF TEXAS, INC. 

_________________________________ 

LAPIN & LANDA, LLP 

Robert E. Lapin 

State Bar No. 11945050 

500 Jefferson, Suite 2000 

Houston, TX 77002 

Office: (713) 756-3232 

Fax: (713) 654-8704 

Email: blapin@lapinlanda.com

LAW OFFICE OF DON TOMLINSON 

Don Tomlinson 

State Bar No. 24039507 

8 Loggerhead 

Hitchcock, TX 77563 

Office: (832) 444-4848 

Email: don@dontomlinsonlaw.com

ACCEPTED

14-15-00610-cv

FOURTEENTH COURT OF APPEALS

HOUSTON, TEXAS

12/8/2015 10:48:02 AM

CHRISTOPHER PRINE

CLERK

 FILED IN 14th COURT OF APPEALS HOUSTON, TEXAS 12/8/2015 10:48:02 AM CHRISTOPHER A. PRINE Clerk
ii

No. 14-15-00610-CV

___________________________________

IN THE COURT OF APPEALS FOR THE

FOURTEENTH JUDICIAL DISTRICT OF TEXAS

AT HOUSTON

__________________________________

SOUTHWINDS EXPRESS CONSTRUCTION, LLC

Appellant

v.

D.H. GRIFFIN OF TEXAS, INC.

Appellee

__________________________________

On appeal from the 151st District Court, Harris County, Texas

Cause No. 2015-22736

_________________________________

BRIEF OF APPELLEE. D.H. GRIFFIN OF TEXAS, INC.

_________________________________

IDENTITIES OF PARTIES AND COUNSEL

In accordance with Texas Rule of Appellate Procedure 38.2(a)(1)(A), 

Appellee certifies that following is a complete list of all parties to this appeal:

APPELLANT: SOUTHWINDS EXPRESS CONSTRUCTION, LLC

Counsel for Appellant

Appeal/Trial Court: Robert J. Killeen, Jr.

Email: rkilleen@killeen-law.com

Robert C. Stern

Email: rstern@killeen-law.com

Gerald M. “Tracy” Johnson, III

Email: tjohnson@killeen-law.com

Killeen & Stern, P.C.
iii

1811 Bering Drive, Suite 120

Houston, TX 77057

Office: 713.626.5100

Fax: 713.626.4545

Appellee: D.H. Griffin of Texas, Inc.

Counsel for Appellee

Appeal/Trial Court: Robert E. Lapin

Email: blapin@lapinlanda.com

Lapin & Landa, LLP

500 Jefferson, Suite 2000

Houston, TX 77002

Office: 713.756.3232

Fax: 713.654.8704

Don Tomlinson

Email: don@dontomlinsonlaw.com

Law Office of Don Tomlinson

8 Loggerhead

Hitchcock, TX 77563

Office: 832.444.4848

Trial Judge: Hon. Michael Engelhart

Presiding Judge

151st Judicial District Court

Harris County

201 Caroline, 11th Floor

Houston, TX 77002
iv

TABLE OF CONTENTS

Identities of Parties and Counsel ............................................................................. ii

Table of Contents ................................................................................................... iv

Index of Authorities ............................................................................................... vi

Statement of the Case .............................................................................................. 1

Statement on Oral Argument .................................................................................. 3

Reply to Issues Presented ........................................................................................ 3

Statement of Facts ................................................................................................... 4

Summary of Argument ......................................................................................... 13

Reply Point One (In response to Issue 1) ............................................................. 15

The trial court did not err in determining the dispute between the 

parties was subject to arbitration because the parties’ oral agreement 

to expand the Subcontractor Agreement’s scope of work to include 

C&D haul-off constituted an oral modification of the Subcontractor 

Agreement and therefore fell within the scope of that agreement’s 

claims resolution clause which required resolution of disputes by 

binding arbitration. The parties agreed to submit their dispute to 

binding arbitration under the AAA’s rules without limit as to scope of 

issues to be arbitrated. Thus, the trial court correctly deferred to the 

Arbitrator’s findings. Moreover, mediation was not a condition 

precedent to arbitration.

Arguments and Authorities ......................................................................... 16

The Oral Agreement Modified The Subcontractor Agreement ................. 16

Mediation as a Condition Precedent to Arbitration..................................... 21
v

Reply Point Two (In response to Issue 2) ............................................................. 25

The trial court did not err in applying the statutory grounds for vacatur 

set forth in §171.088 of the Texas Civil Practice & Remedies Code 

when it denied Southwinds’ motion to vacate the Arbitrator’s Award 

because Southwinds failed to meet its statutory burden of 

demonstrating that there was no valid agreement to arbitrate the 

dispute in question. 

Arguments and Authorities ........................................................26

Reply Point Three (In response to Issue 3) ........................................................... 28

The Arbitrator’s Award is not tainted by a disregard for the law or by 

a gross mistake in applying the law.

Arguments and Authorities ........................................................28

Conclusion and Prayer .......................................................................................... 31

Certificate of Service ............................................................................................ 32

Certificate of Compliance ..................................................................................... 33
vi

INDEX OF AUTHORITIES

CASES

Am. Garment Props., Inc. v. CB Richard Ellis-El Paso, L.L.C., 155 S.W.3d 

431 (Tex.App.—El Paso 2004, no pet.) ................................................................ 17

Aspri Investments, LLC v. AFEEF and ENM Food Mart, Inc., No. 04-07-

00249-CV, 2011 Tex. App. LEXIS 7082 (Tex.App.—San Antonio August 

31, 2011, pet. dism’d) (mem. op.) ................................................................... 20, 27

Burlington Res. Oil & Gas Co. LP v. San Juan Basin Royalty Trust, 249 

S.W.3d 34 (Tex. App.—Houston [1

st Dist.] ................................................... 19, 20

Centex/Vestal v. Friendship W. Baptist Church, 314 S.W.3d 677 (Tex. 

App.—Dallas 2010, pet. denied) ............................................................... 20, 27, 30

Churchill Forge, Inc. v. Brown, 61 S.W.3d 368, 371 (Tex. 2001) ....................... 23

City of Baytown v. C.L. Winter, Inc., 886 S.W.2d 515, 520 (Tex. App.--

Houston [1st Dist.] 1994, writ denied) .................................................................. 26

Crossmark, Inc. v. Hazar, 124 S.W.3d 422 (Tex. App.—Dallas 2004, pet. 

denied) ................................................................................................................... 29

CVN Group, Inc. v. Delgado, 95 S.W.3d 234, 238 (Tex. 2002) .................... 20, 27

Double Diamond, Inc. v. Hilco Electric Coop., Inc., 127 S.W.3d 260 (Tex. 

App.—Waco 2003, no pet.) .................................................................................. 17

E. Tex. Salt Water Disposal Co. v. Werline, 307 S.W.3d 267 (Tex. 2010) .......... 27

Fairfield Ins. Co. v. Stephens Martin Paving, LP, 246 S.W.3d 653 (Tex. 

2008) ................................................................................................................ 23, 24

First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995) ........................... 20

GJR Mgmt. Holdings, L.P. v. Jack Raus, Ltd., 126 S.W.3d 257 (Tex. App.—

San Antonio 2003 (pet. denied)............................................................................. 27
vii

Grand Int’l Bhd. Of Locomotive Eng’rs v. Wilson, 341 S.W.2d 206 (Tex. 

Civ. App.—Fort Worth 1960, writ ref’d n.r.e.) .................................................... 29

Group Hosp. Servcs., Inc. v. One and Two Brookriver Center, 704 S.W.2d 

886 (Tex.Civ.App.—Dallas 1986, no writ) .......................................................... 18

Haddock v. Quinn, 287 S.W.3d 158 (Tex.App.—Ft. Worth 2009) ...................... 20

Home Owners Mgmt. Enters., Inc. v. Dean, 230 S.W.3d 766 (Tex. App.—

Dallas 2007, no pet.) ............................................................................................. 29

Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79 (2002) ............................... 19

Humitech Dev. Corp. v. Perlman, 424 S.W.3d 782 (Tex.App.—Dallas 2014, 

no pet.) ................................................................................................................... 29

Hyatt Cheek Builders-Engineers v. Board of Regents of the Univ. of Texas 

System, 607 S.W.2d 258 (Tex.Civ.App.—Texarkana, 1980, writ dism’d) .......... 18

In re Mabry, 355 S.W.3d 16, 29 (Tex. App.—Houston [1st Dist.] 2010, orig. 

proceeding [mand. denied]) .................................................................................. 24

In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 128-29 (Tex. 2004) .............. 23

Int’l Bank of Commerce v. Int’l Energy Dev. Corp., 981 S.W.2d 38 (Tex. 

App.—Corpus Christi 1998, pet. denied) ............................................................. 30

J.J. Gregory Gourmet Servs., Inc. v. Anton’s Imp. Co., 927 S.W.2d 31 (Tex. 

App.—Houston [1st Dist.] 1995, no writ) ............................................................ 29

Lawrence v. CDB Servs., Inc., 44 S.W.3d at 544 (Tex. 2001) ....................... 23, 24

Lone Star Steel Co. v. Scott, 759 S.W.2d 144 (Tex.Civ.App.—Texarkana, 

1988, writ denied) ................................................................................................. 18

Mann Frankfurt Stein & Lipp Advisers, Inc. v. Fielding, 289 S.W.3d 844 

(Tex. 2009) ............................................................................................................ 22

Mar-Lan Industries, Inc. v. Nelson, 635 S.W.2d 853 (Tex. App. —El Paso 

1982, no writ) ........................................................................................................ 17
viii

Marsh USA v. Cook, 354 S.W.3d 764 (Tex. 2011) ........................................ 23, 24

Myer v. Americo Life, Inc., 232 S.W.3d 401 (Tex.App.—Dallas 2007) .............. 29

Nafta Traders, Inc. v. Quinn, 339 S.W.3d 84, 89-90 (Tex. 2011) ........................ 26

Pheng Inv., Inc. v. Rodriquez, 196 S.W.3d 322 (Tex. App.—Fort Worth 

2006, no pet.) .................................................................................................. 28, 30

Printing & Numerical Registering Co. v. Sampson, LR 19 Eq 462, 465, 874 

WL 16322 (1875) .................................................................................................. 24

Roe v. Ladymon, 318 S.W.3d 502 (Tex. App.—Dallas 2010, no pet.) ................ 20

Royston, Rayzor, Vickery & Williams, L.L.P. v. Lopez, 467 S.W.3d 494

(Tex. 2015) ...................................................................................................... 22, 23

Sacks v. Dallas Gold & Silver Exch., Inc., 720 S.W.2d 177, 180 

(Tex.App.—Dallas 1986, no writ) ........................................................................ 24

South Hampton Co. v. Stinnes Corp., 733 F.2d 1108 (5th Cir. 1984) .................. 17

Tanox, Inc. v. Akin, Gump, Strauss, Hauer & Feld, L.L.P., 105 S.W.3d 244

(Tex. App.—Houston [14th Dist.] 2003, pet. denied) .......................................... 30

Teleometrics Int’l, Inc. v. Hall, 922 S.W.2d 189 (Tex. App.—Houston [1st 

Dist.] 1995, writ denied) ....................................................................................... 30

Triton 88 v. Star Electric, L.L.C., 411 S.W.3d 42 (Tex. App. —Houston (1st

Dist.) 2013, no pet.) .............................................................................................. 17

Universal Computer Sys., Inc. v. Dealer Solutions, L.L.C., 183 S.W.3d 741

(Tex. App.—Houston [1st Dist.] 2005, pet. denied) ............................................ 30

Werline v. E. Tex. Salt Water Disposal Co., 209 S.W.3d 888 (Tex. App.—

Texarkana 2006), aff’d, 307 S.W.3d 267 (Tex. 2010) .................................... 28, 30

Wood Motor Co. v. Nebel, 150 Tex. 86, 238 S.W.2d 181, 185 (1951) .......... 23, 24
ix

Xtria L.L.C. v. Int’l Ins. Alliance Inc., 286 S.W.3d 583 (Tex. App.—

Texarkana 2009, pet. denied) .............................................................. 27, 28, 29, 30

TEXAS CONSTITUTION

Tex. Const. art. I, § 16 .......................................................................................... 23

TEXAS STATUTES

Tex. Civ. Prac. & Rem. Code Ann. § 154.002 ..................................................... 25

Tex. Civ. Prac. & Rem. Code § 171.087 .............................................................. 26

Tex. Civ. Prac. & Rem. Code Ann., Title 7 .......................................................... 24

Tex. Fam. Code Ann. §§ 6.601–6.604 .................................................................. 24

AAA RULES

American Arbitration Association Rule of Commercial Arbitration, R-7 ........... 19

RECORD REFERENCES

Clerk’s Record CR[Vol.#]:[Page#]
1

No. 14-15-00610-CV

___________________________________

IN THE COURT OF APPEALS FOR THE

FOURTEENTH JUDICIAL DISTRICT OF TEXAS AT HOUSTON

__________________________________

SOUTHWINDS EXPRESS CONSTRUCTION, LLC

Appellant

v.

D.H. GRIFFIN OF TEXAS, INC.

Appellee

_________________________________

BRIEF OF APPELLEE. D.H. GRIFFIN OF TEXAS, INC.

_________________________________

TO THE HONORABLE FOURTEENTH COURT OF APPEALS:

Appellee, D.H. Griffin of Texas, Inc., respectfully submits this brief in 

response to the brief filed by Appellant. Appellant, Southwinds Express 

Construction, appeals from the entry of a Final Order Confirming Arbitration 

Award entered by the 151st Judicial District Court, Honorable Michael Engelhart, 

Judge Presiding. Appellee respectfully requests that this Court affirm the entry of 

the Final Order Confirming Arbitration Award by the trial court.

STATEMENT OF THE CASE

Pursuant to the terms of a Subcontractor Agreement (CR1:36-47) executed 

between Appellee D.H. Griffin of Texas, Inc. (“Griffin”) and Appellant 

Southwinds Express Construction, LLC (“Southwinds”), Griffin initiated an 
2

arbitration proceeding (CR1:26-31) against Southwinds seeking damages and 

equitable relief after Southwinds walked off the job of a new construction, 

renovation, and demolition project prior to completing its scope of work. During 

the arbitration proceeding, Southwinds twice objected to the jurisdiction of the 

American Arbitration Association (“AAA”) to administer Griffin’s claims

(CR1:32-33). On both occasions, the Arbitrator rejected Southwinds’ objections 

and, following a two-day final arbitration hearing, issued an Award of Arbitration 

(“the Arbitrator’s Award”) (CR1:8-12) in favor of Griffin and against Southwinds, 

expressly overruling Southwinds’ objection to AAA’s jurisdiction and granting 

Griffin monetary and equitable relief. After Southwinds failed to abide by the 

Arbitrator’s Award, Griffin initiated an action in the 151st District Court, Harris 

County, Texas to have the Arbitrator’s Award confirmed (CR1:4-12). Southwinds 

objected to confirmation of the award and filed pleadings asserting the identical 

lack of jurisdiction arguments and asking the trial court to vacate the Arbitrator’s 

Award (CR1:15-23). The trial court requested additional briefing from Griffin

(CR1:76) and, after consideration of both parties’ briefing and arguments, entered 

a final order confirming the Arbitrator’s Award (CR1:110-111). Southwinds 

appeals from the entry of that final order.
3

STATEMENT ON ORAL ARGUMENT

Appellant requested oral argument. Appellee maintains oral argument is not 

likely to add materially to the information before the Court, but, out of an abundance 

of caution and to avoid waiver, requests the right to participate in any oral argument 

that may be scheduled by the Court.

REPLY TO ISSUES PRESENTED

REPLY POINT ONE

In response to Issue 1.

The trial court did not err in determining the dispute between the parties was 

subject to arbitration because the parties’ oral agreement to expand the 

Subcontractor Agreement’s scope of work to include C&D haul-off constituted an 

oral modification of the Subcontractor Agreement and therefore fell within the 

scope of that agreement’s claims resolution clause which required resolution of 

disputes by binding arbitration. The parties agreed to submit their dispute to binding 

arbitration under the AAA’s rules without limit as to scope of issues to be arbitrated. 

Thus, the trial court correctly deferred to the Arbitrator’s findings. Moreover, 

mediation was not a condition precedent to arbitration.

REPLY POINT TWO

In response to Issue 2.

The trial court did not err in applying the statutory grounds for vacatur set 

forth in §171.088 of the Texas Civil Practice & Remedies Code when it denied 

Southwinds’ motion to vacate the Arbitrator’s Award because Southwinds failed to 

meet its statutory burden of demonstrating that there was no valid agreement to 

arbitrate the dispute in question. 
4

REPLY POINT THREE

In response to Issue 3.

The Arbitrator’s Award is not tainted by a disregard for the law or by a gross 

mistake in applying the law.

STATEMENT OF FACTS

Appellee D.H. Griffin of Texas, Inc. (“Griffin”) is a demolition contractor 

headquartered in Houston, Texas, since the 1990s. On occasion, Griffin is a 

subcontractor for a general contractor (usually when the overall project includes 

new construction and renovation as well as demolition). 

In 2013, the Lemoine Company (“Lemoine”), a construction 

company/general contractor headquartered in Lafayette, Louisiana, hired Griffin to 

serve as the demolition subcontractor for a new construction, renovation, and 

demolition project (“the Project”) on the grounds of Our Lady of Lourdes Hospital

(“the Owner”) in Lafayette (CR1:27).

At Griffin’s request, Appellant Southwinds Express Construction, LLC

(“Southwinds”) submitted a bid for removing debris and other material from the 

demolition site of the Project (CR1:86). Southwinds’ bid was for concrete 

excavation and haul-off, brick haul-off, and construction and demolition (“C&D”) 

haul-off. Griffin accepted Southwinds’ terms for the concrete haul-off and the 

brick haul-off but was unwilling to accept Southwinds’ proposed price terms 

($12/cubic yard) for the C&D haul-off. So, on September 26, 2013, Griffin and 
5

Southwinds entered into a Subcontractor Agreement whose scope of work 

encompassed only the concrete haul-off and brick haul-off (CR1:36-47). 

However, the scope of work agreed to between the parties (memorialized in Ex. A 

to the Subcontractor Agreement) expressly referenced Southwinds’ original 

proposal for the C&D haul-off.

Over the course of the ensuing two weeks, the Griffin and Southwinds

reached agreement on the price Griffin would agree to pay Southwinds for C&D 

haul-off ($9/cubic yard) and, on October 9, 2013, reached an oral agreement to 

expand Southwinds’ scope of work for the Project to include C&D haul-off for that 

price (CR1:8-10). As clear evidence of the material terms of this agreement, the 

very next day, Southwinds hauled and dumped 50 yards of C&D and invoiced 

Griffin for the same at $9/cubic yard (CR1:10). 

Five days later, Griffin attempted to reduce this agreement to writing by 

sending Southwinds two unexecuted originals of a proposed new Subcontractor

Agreement whose only change from the existing Subcontractor Agreement was the 

expansion of the scope of work to include C&D haul-off for $9/cubic yard (CR1:9, 

48-59). Southwinds sought to unilaterally change the payment terms of the 

proposed new Subcontractor Agreement by interlineating “Payment terms will be 

Net 14” into the agreement and then privately executed the proposed second 

Subcontractor Agreement and chose not to return it to Griffin (CR1:9). 
6

Southwinds’ unilateral, private interlineation represented a material change to the 

payment terms because the Subcontractor Agreement contained “pay when paid” 

payment terms providing that Griffin’s obligation to pay Southwinds for its work 

did not arise until after Griffin had first been paid by Lemoine for Southwinds’ 

work (CR1:43). 

In the absence of a replacement written agreement, the agreement between 

the parties whereby Southwinds’ scope of work expanded to include C&D haul-off 

for $9/cubic yard became an oral modification of the existing Subcontractor 

Agreement best evidenced by the parties’ subsequent course of dealing whereby, 

throughout October, November and December of 2013, Southwinds hauled and 

dumped C&D, invoiced Griffin at the price of $9/cubic yard, and was paid by 

Griffin at that rate pursuant to the “pay when paid” terms of the Subcontractor 

Agreement. – all of which transpired without an iota of complaint from 

Southwinds (CR1:8-10).

The all-inclusive price which Griffin paid Southwinds for C&D haul-off 

included the cost of disposal of that debris at a local landfill. However, 

unbeknownst and without any notice to Griffin, in December of 2013, Southwinds 

stopped paying the landfill for disposal of loads of construction debris dating back 

to mid-November and had sent the landfill a check which had bounced (CR1:10). 

In response, the landfill owner understandably refused to allow Southwinds to 
7

bring any more construction debris for disposal there. Without a landfill available 

for disposal of the debris, Southwinds ceased work on the Project (CR1:10).

In mid-January, 2014, Griffin learned that Southwinds had ceased work and 

had abandoned the job before completing the scope of its work for the Project

(CR1:10). At the same time, Griffin was notified by the landfill that Southwinds 

owed the landfill, in arrears, approximately $67,000.00 for debris from the Project

which Southwinds had hauled to and deposited in the landfill (CR1:10). The 

landfill demanded payment from Griffin and threatened to place a lien on the 

Owner’s property if Southwinds’ payment obligation to the landfill remained 

unpaid (CR1:10). 

When Griffin contacted Southwinds to investigate why Southwinds had 

refused to fulfill its payment obligations to the landfill owner, Southwinds 

deflected the conversation from its nonpayment of its obligations to the landfill and 

instead suggested that Griffin was behind in its payment of Southwinds’ invoices 

to Griffin. Such a suggestion was without merit because Southwinds knew that 

Griffin was not obligated to pay Southwinds until Griffin had been paid by 

Lemoine and Griffin had, to that date, timely paid Southwinds for all invoices for 

which Griffin had been paid by Lemoine. 

On February 6, 2014, Southwinds confirmed to Griffin that it would not 

return to the jobsite and complete its work on the Project. The next day, Griffin’s 
8

lawyer sent Southwinds a letter advising Southwinds that, pursuant to its rights 

under the Subcontractor Agreement: (1) Griffin would pay the unpaid landfill bill 

from funds which would otherwise have been due Southwinds, (2) Griffin would 

withhold future sums paid by Lemoine for work completed by Southwinds to cover 

whatever expenses Griffin would incur to complete the work which Southwinds 

was refusing to perform, and (3) Griffin reserved the right to pursue Southwinds 

for any and all other expenses to be incurred by Griffin as a result of Southwinds 

having walked off of the job. 

In response, Southwinds had its lawyer file a lien on the job project, notify 

the Owner of its lien and, for the first time, sent Griffin’s lawyer the unsigned copy 

of the proposed revised Subcontractor Agreement which Griffin had sent unsigned 

to Southwinds back in October and onto which Southwinds’ subsequently and 

unilaterally imposed handwritten interlineations seeking to add a “net 14 days” 

payment term to the agreement. Griffin had never signed and, upon receipt,

expressly rejected that agreement as constituting any sort of enforceable second 

agreement. That is why Southwinds’ assertion in its Statement of Facts in 

Appellant Brief (p. 5) that there was a second “...Subcontractor Agreement dated 

October 14, 2013....” is patently untrue and was soundly rejected by both the

Arbitrator and the trial court. 
9

Thereafter, Griffin paid off the landfill bill which Southwinds had refused to 

pay, hired and paid third-parties to complete the work which Southwinds had 

refused to perform, and initiated an arbitration against Southwinds with the 

American Arbitration Association (“the AAA”) to recover all damages to which 

Griffin was entitled under the Subcontractor Agreement (CR1:25-31). The 

Subcontractor Agreement contained a claims resolution provision (CR1:37) which 

provided for mediation unless, in Griffin’s sole discretion, Griffin believed 

mediation would be a useless exercise, in which case Griffin had the right to 

directly proceed to initiate binding arbitration. Griffin concluded that Southwinds 

had no interest being held accountable for its conduct and even less interest in 

agreeing to compensate Griffin for the substantial damages it caused. Griffin had 

the unequivocal right to skip mediation and properly exercised that right. 

Here, Griffin wishes to point out to that Southwinds’ Statement of Facts, 

which erroneously claims that the “facts” listed in its brief “are not disputed”, 

posits as a “fact” in its Appellant’s Brief (pages 4 and 5) that “Griffin 

acknowledged that at the time it instituted the arbitration proceeding, it owed 

Southwinds $94,531.00”. Such a statement is entirely untrue. In point of fact, what 

Griffin acknowledged was that this amount would have been due Southwinds but 

for Southwinds having breached the Subcontractor Agreement by, among other 

thing, walking off the job prior to its completion and requiring Griffin to incur 
10

substantial damages resulting therefrom in an amount well in excess of what 

Southwinds might have been due had it performed its obligations under the 

Subcontractor Agreement.

After Griffin initiated binding arbitration, Southwinds sought to evade 

accountability in arbitration by objecting to the jurisdiction of the AAA to 

administer Griffin’s claims (CR1:32-35), even though the Subcontractor 

Agreement clearly made any such dispute subject to the AAA’s Construction 

Industry Arbitration Rules (CR1:37). 

Southwinds has never disputed that it willingly executed the Subcontractor 

Agreement and that the agreement contained a valid and enforceable claim 

resolution provision which provided for binding arbitration of unresolved claims 

between the parties. Nor has Southwinds ever disputed that, on October 9, 2013, it 

orally agreed to perform C&D haul-off in return for a payment of $9/cubic yard, 

that it thereafter performed C&D haul-off for the next three months and invoiced 

Griffin at the rate of $9/cubic yard or that it subsequently abandoned the Project 

prior to completion of its scope of work.

Southwinds instead sought to avoid it liability for the damages it caused 

Griffin by abandoning the Project by arguing that Subcontractor Agreement’s 

claims resolution clause does not reach Griffin’s claim for damages arising out of 

Southwinds’ conduct because Griffin’s claims for damages arising from the C&D 
11

haul-off portion of Southwinds’ scope of work somehow fell outside of the reach 

of the Subcontractor Agreement’s claims resolution clause. Thus, Southwinds 

claimed, the AAA did not have jurisdiction to hear these claims. 

Griffin responded that Southwinds and Griffin’s oral agreement to expand 

the Subcontractor Agreement’s scope of work to include C&D haul-off constituted 

an oral modification of the Subcontractor Agreement (CR1:8-10). Therefore, C&D 

haul-off was governed by the Subcontractor Agreement and, consequently, 

resolution of Griffin’s claims arising therefrom fell within the scope of the 

Subcontractor Agreement’s claims resolution clause. 

After both parties briefed this issue, the Arbitrator conducted a November 

17, 2014 telephonic hearing on the subject and overruled Southwinds’ objection to 

the AAA’s jurisdiction over this matter but agreed to reconsider the issue at the 

final arbitration hearing if any new facts presented themselves to call her ruling 

into question.

At the two-day final arbitration hearing on January 29-30, 2015, both parties 

exercised the opportunity to fully brief and present evidence on this issue. 

Southwinds also argued that mediation was a condition precedent to arbitration 

pursuant to the Subcontractor Agreement, to which Griffin responded that the 

Subcontractor Agreement gave Griffin the clear right to escalate the dispute 

directly to arbitration.
12

After hearing the evidence and considering the parties’ legal arguments, the 

Arbitrator issued a March 12, 2015 Award of Arbitration (“the Arbitrator’s 

Award”) (CR1:8-12) in favor of Griffin and against Southwinds on each of these 

issues, expressly overruling Southwinds’ objection to AAA’s jurisdiction and 

granting Griffin monetary and equitable relief. 

Because Southwinds would not respond post-arbitration to multiple queries 

as to when Griffin would be paid, Griffin initiated an action in the 151st District 

Court, Harris County, Texas to have the Arbitrator’s Award confirmed (CR1:4-12). 

Southwinds objected to confirmation of the award and filed pleadings asserting the 

identical lack of jurisdiction and mediation arguments and asking the trial court to 

vacate the Arbitrator’s Award (CR1:15-23). After careful consideration of the 

parties’ extensive briefing and arguments, on June 16, 2015, the trial court entered 

its final order confirming the Arbitrator’s Award (CR1:110-111), ruling on the 

merits of the identical arguments which Southwinds has re-asserted in this appeal 

and expressly finding:

The Court is persuaded that the agreement between the parties 

contemplated additional potential work such as the C&D work. Thus, 

this work arose out of the agreement and, consequently, the arbitration 

agreement contemplated additional work. Further, the issue of 

whether there was, in fact, an enforceable oral agreement to do the 

C&D work was for the arbitrator to decide, not this Court. The Court 

will note, though, that the agreement between the parties does NOT 

(emphasis in original) state that no subsequent agreements could be 

formed; only that no oral representations prior to the written 

agreement existed or were relied on. Finally, this Court is not 
13

persuaded that the mediation clause was a condition precedent to 

arbitration.”

Southwinds appeals from the entry of that final order.

SUMMARY OF ARGUMENT

When distilled to its essence, Southwinds makes but one argument with two 

facets. The argument is arbitrability. The facets are that the subject matter 

arbitrated did not fall under the arbitration provision of the Subcontractor 

Agreement and that mediation was a condition precedent to arbitration. 

Southwinds makes these same arguments in all three issues. For the reasons stated 

herein, each of Southwinds’ arguments fail.

On two occasions, the Arbitrator ruled against Southwinds’ jurisdiction 

argument – pre-hearing and then in the final arbitration itself. The basis for the 

Arbitrator’s decision was that the parties’ agreement on the terms of the C&D 

haul-off constituted an oral modification of the Subcontractor Agreement, thereby 

bringing the dispute over C&D haul-off within the scope of the Subcontractor 

Agreement’s dispute resolution clause which provided for arbitration. After the 

subsequent filing of briefs on this issue by the parties in the trial court, the court 

ruled, correctly:

...that the agreement between the parties contemplated additional 

potential work such as the C&D work. Thus, this work arose out of 

the agreement and, consequently, the arbitration agreement 

contemplated additional work. Further, the issue of whether there was, 

in fact, an enforceable oral agreement to do the C&D work was for the 
14

arbitrator to decide, not this Court. The Court will note, though, that 

the agreement between the parties does NOT (emphasis in original) 

state that no subsequent agreements could be formed; only that no oral 

representations prior to the written agreement existed or were relied 

on.

The Arbitrator also ruled that mediation was not a condition precedent to 

arbitrating the matter because of the plain language of the Subcontractor 

Agreement, to wit:

In the event that a claim is not resolved through the negotiations of the 

parties, claim resolution will be resolved through mediation unless, in 

the sole discretion of [Griffin], [Griffin] believes mediation would be 

a useless exercise in which case [Griffin], unilaterally, may escalate 

the claims process to binding arbitration at any time” (Subcontractor 

Agreement, p. 2, paragraph 3).

The Arbitrator properly found that, pursuant to this contractual language, 

mediation was not a condition precedent to the valid filing of an arbitration claim 

by Griffin without first having resorted to mediation. After the filing of briefs by 

the parties on this subject in the trial court, the court ruled, appropriately: “...this 

Court is not persuaded that the mediation clause was a condition precedent to 

arbitration.”

Additionally, the trial court appropriately applied the statutory grounds for 

vacatur set forth in §171.088 of the Texas Civil Practice & Remedies Code when it 

denied Southwinds’ motion to vacate the Arbitrator’s Award. As is discussed 

herein, Southwinds failed to meet its statutory burden of demonstrating that there 

was no valid agreement to arbitrate the dispute in question. The trial court 
15

therefore correctly applied §171.088 when it denied Southwinds’ request for 

vacatur.

Lastly, Southwinds has not established that the Arbitrator’s Award is in any 

way tainted by a disregard for the law or by a gross mistake in applying the law. 

Here, Southwinds simply restates its flawed argument on the arbitrability of this 

dispute and asserts that, because the Arbitrator rejected the argument and ruled 

against Southwinds, that ruling must necessarily constitute manifest disregard and 

gross error. Such an assertion is not only contrary to the law, it ignores the very 

telling fact that Southwinds voluntarily and willingly agreed in the Subcontractor 

Agreement to subject itself to arbitration under the AAA’s rules and to allow an

arbitrator to rule on those very subjects. The trial court properly agreed and 

correctly rejected Southwinds’ suggestion that the Arbitrator’s Award was in any 

way tainted by a disregard for the law or by a gross mistake in applying the law.

REPLY POINT ONE

In response to Issue 1.

The trial court did not err in determining the dispute between the parties was 

subject to arbitration because the parties’ oral agreement to expand the 

Subcontractor Agreement’s scope of work to include C&D haul-off constituted an 

oral modification of the Subcontractor Agreement and therefore fell within the 

scope of that agreement’s claims resolution clause which required resolution of 

disputes by binding arbitration. The parties agreed to submit their dispute to binding 

arbitration under the AAA’s rules without limit as to scope of issues to be arbitrated. 

Thus, the trial court correctly deferred to the Arbitrator’s findings. Moreover, 

mediation was not a condition precedent to arbitration.
16

ARGUMENTS AND AUTHORITIES

In its brief, Southwinds argues that the parties’ oral agreement to include 

C&D haul-off within the scope of Southwinds’ work for the Project fell outside the 

reach of the Subcontractor Agreement’s dispute resolution clause and that, as a 

consequence, the Arbitrator had no jurisdiction to hear Griffin’s claims arising 

from Southwinds’ breach of that agreement and the trial court erred in confirming 

an award the Arbitrator had no jurisdiction to make. Southwinds also argues that 

both the Arbitrator and the trial court lacked jurisdiction to hear the dispute 

because mediation was a condition precedent to arbitration.

For the reasons detailed herein, both of Southwinds’ jurisdictional 

arguments should be soundly rejected.

The Oral Agreement Modified The Subcontractor Agreement

On October 9, 2013, Southwinds and Griffin orally agreed to expand the 

Subcontractor Agreement’s Scope of Work to include C&D haul-off for $9 per 

cubic yard. That there was a clear meeting of the minds as to these material terms 

supported by new consideration is evidenced by: (i) the agreement reached 

between the parties, (ii) Southwinds’ immediate commencement (on October 10, 

2013) of C&D haul-off and invoicing Griffin $9 per cubic yard for each load, and 

(iii) the parties course of dealings throughout October, November and December of
17

2013 during which Southwinds hauled C&D, invoiced Griffin $9 per cubic yard, 

and was paid by Griffin at that rate.

The parties’ October 9, 2013 oral agreement to expand Southwinds scope of 

work under the Subcontractor Agreement to include C&D haul-off for $9 per cubic 

yard therefore constituted a binding and enforceable oral modification of the 

September 26, 2013 Subcontractor Agreement.

In Double Diamond, Inc. v. Hilco Electric Coop., Inc., 127 S.W.3d 260, 267 

(Tex. App.—Waco 2003, no pet.), the Waco Court of Appeals confirmed 

longstanding Texas law when it held:

A written agreement not required by law to be in writing may be 

modified by a later oral agreement, even though it provides that it can 

be modified only in writing.

See also Mar-Lan Industries, Inc. v. Nelson, 635 S.W.2d 853, 855 (Tex. App.—El 

Paso 1982, no writ). Accord, Triton 88 v. Star Electric, L.L.C., 411 S.W.3d 42, 57 

(Tex. App.—Houston (1st Dist.) 2013, no pet.); Am. Garment Props., Inc. v. CB 

Richard Ellis-El Paso, L.L.C., 155 S.W.3d 431, 435 (Tex.App.—El Paso 2004, no 

pet.); see also South Hampton Co. v. Stinnes Corp., 733 F.2d 1108, 1118 (5th Cir. 

1984). 

Texas courts have long recognized and enforced oral modifications even 

where the parties’ agreement contains a no-oral-modification clause, reasoning that 

the written agreement is of no higher legal degree than an oral one, and either may 
18

vary or discharge the other. Id.; see also Lone Star Steel Co. v. Scott, 759 S.W.2d 

144, 153 (Tex.Civ.App.—Texarkana, 1988, writ denied); Group Hosp. Servcs., 

Inc. v. One and Two Brookriver Center, 704 S.W.2d 886, 890 (Tex.Civ.App.—

Dallas 1986, no writ); Hyatt Cheek Builders-Engineers v. Board of Regents of the 

Univ. of Texas System, 607 S.W.2d 258, 265 (Tex.Civ.App.—Texarkana, 1980, 

writ dism’d).

Here, no Texas law (e.g., the statute of frauds) required the oral modification 

to be in writing. Hence, Griffin and Southwinds were perfectly free to modify their 

binding September 26, 2013 Subcontractor Agreement orally to expand the 

agreement’s Scope of Work to include the C&D haul-off and that is precisely what 

they did when they agreed on or about October 9, 2013 that Southwinds would

haul C&D for $9 per cubic yard. 

Because the binding and enforceable oral modification modified the 

Subcontractor Agreement and because the Subcontractor Agreement contained a 

dispute resolution clause permitting either party to invoke binding arbitration, the 

oral modification, then being a part of the Subcontractor Agreement as though 

written in the agreement ab initio, was subject to the arbitration provision. Thus, 

when Southwinds walked off the job and failed to complete the C&D haul-off, and 

when Griffin asserted its claim against Southwinds for breach of the Subcontractor 

Agreement, that claim (along with Griffin’s additional claims) was subject to the 
19

binding arbitration provision of the Subcontractor Agreement. That is precisely 

what the Arbitrator found in her Award of Arbitration (see pp. 2-3). The trial court 

affirmed that result and indicated that the decision on this subject was the province 

of the Arbitrator and not the trial court; this Court should reach precisely the same 

result.

On the subject of arbitrability, Texas law is clear. “The scope of the 

arbitration is a matter of substantive arbitrability for a court to decide unless the 

parties clearly agreed otherwise.” See Howsam v. Dean Witter Reynolds, Inc., 537 

U.S. 79, 84 (2002); Burlington Res. Oil & Gas Co. LP v. San Juan Basin Royalty 

Trust, 249 S.W.3d 34, 39 (Tex. App.—Houston [1st Dist.] 2007, pet. denied). In 

this case, parties agreed in paragraph 3 of the Subcontractor Agreement to subject 

any dispute to binding arbitration under the rules of the AAA’s Construction 

Industry Dispute Resolution Procedures. Those very rules provide that the 

Arbitrator “shall have the power to rule on his or her own jurisdiction, including 

any objections with respect to the existence, scope or validity of the arbitration 

agreement.” American Arbitration Association Rule of Commercial Arbitration, R7. This explains why, rather than ask a court to decide the arbitrability issue, 

Southwinds raised its jurisdictional objection to the Arbitrator in the course of the 

arbitration proceeding in its pleadings, pre-hearing conference, and during the final 

arbitration hearing itself. The Arbitrator decided the issue, ruling at each 
20

opportunity that C&D haul-off was arbitrable under the Subcontractor Agreement

and that mediation was not a condition precedent to arbitration. The trial court, in 

turn, ruled that these findings, indeed, fell within the province of the Arbitrator and

that mediation was not a precedent to arbitration.

In Aspri Investments, LLC v. AFEEF and ENM Food Mart, Inc., No. 04-07-

00249-CV, 2011 Tex. App. LEXIS 7082 (Tex.App.—San Antonio August 31, 

2011, pet. dism’d) (mem. op.) the Court stated:

Most courts have concluded that where the parties’ agreement did not 

limit the issues to be arbitrated or the applicability of the AAA rules, 

incorporation of the AAA rules constitutes clear and unmistakable 

evidence of the parties’ intent to delegate issues of arbitrability to the 

arbitrator. See Haddock, 287 S.W.3d at 172-73 (discussing cases); 

Burlington, 249 S.W.3d at 40-42 (same). We conclude the parties 

agreed to submit arbitrability issues to the arbitrators. Because the 

arbitration panel had the primary power to decide the scope of

arbitration, the court’s standard for reviewing the panel’s decision on 

that matter is the same as the standard used in reviewing the panel’s 

decision on substantive matters. First Options of Chicago, Inc. v. 

Kaplan, 514 U.S. 938, 943 (1995). That is, the trial court reviews the 

panel’s determination with great deference, indulging all reasonable 

presumptions in favor of the panel’s decision. See CVN Group, 95 

S.W.3d at 238; Roe v. Ladymon, 318 S.W.3d 502, 511 (Tex. App.—

Dallas 2010, no pet.). Any doubts concerning the scope of what is 

arbitrable should be resolved in favor of arbitration. Centex/Vestal, 

314 S.W.3d at 684. ... We conclude that Aspri has not shown grounds 

for the trial court to do anything other than defer to the arbitration 

panel’s determinations about the scope of the arbitration, and we hold 

the trial court did not err in failing to vacate on the ground the 

arbitrators exceeded their powers.

The same result should follow here.
21

Mediation as a Condition Precedent to Arbitration

In its brief, Southwinds argues that, notwithstanding its plain language, the 

dispute resolution clause in the Subcontractor Agreement required mediation to be 

a condition precedent to arbitration. As the Arbitrator ruled and as the trial court 

agreed, this is argument is devoid of legal basis or merit.

Southwinds suggests that the contractual dispute-resolution process required

negotiation, followed by mediation, followed by arbitration (assuming no 

settlement). Not so. The dispute resolution process agreed to between the parties in 

paragraph 3 of the Subcontractor Agreement called for negotiation (which Griffin 

attempted on various occasions but which Southwinds absolutely and steadfastly 

rebuffed), followed by mediation unless Griffin, at its sole discretion, decided to 

bypass mediation by escalating the dispute straight to arbitration.

Paragraph 3 of the Subcontractor Agreement clearly and unambiguously 

provides:

In the event that a claim is not resolved through the negotiations of the 

parties, claim resolution will be resolved through mediation, unless in 

the sole discretion of [Griffin], [Griffin] believes mediation would be 

a useless exercise in which case [Griffin], unilaterally, may escalate 

the claims process to binding arbitration at any time.

While this contract language in no way requires Griffin to justify why it 

decided to forego mediation and escalate the dispute directly to binding arbitration 

by filing an arbitration claim against Southwinds, Griffin notes here that, given the 
22

chronology of events detailed at the arbitration, Griffin understandably concluded 

that Southwinds had no interest being held accountable for its conduct and even 

less interest in agreeing to compensate Griffin for the substantial damages it 

caused. Griffin had the unequivocal right to skip mediation and properly exercised 

that right.

The cases relied upon by Southwinds in support of its suggestion that this 

Court should brand the dispute resolution clause in the Subcontractor Agreement 

as illusory are inapplicable here. 

In Mann Frankfurt Stein & Lipp Advisers, Inc. v. Fielding, 289 S.W.3d 844 

(Tex. 2009), for example, the question was whether a promisor could unilaterally 

discontinue or change performance. The case concerned the enforceability of a 

covenant-not-to-compete and is far afield from this dispute. The dispute resolution 

clause in this case does not grant Griffin the right to change its performance of the 

Subcontractor Agreement, only to escalate from mediation to arbitration. Griffin 

was not discontinuing or changing anything. The Subcontractor Agreement gave 

Griffin the right to do exactly what it did.

Citing Royston, Rayzor, Vickery & Williams, L.L.P. v. Lopez, 467 S.W.3d 

494 (Tex. 2015), Southwinds argues that the Supreme Court of Texas recently 

stated that an arbitration provision that permits one party to amend or change the 

agreed-upon procedure so as to avoid its obligations is illusory, but that is simply 
23

not what happened in this case. Griffin had no right to change or to amend the 

agreed-upon procedure because the agreed-upon procedure plainly was spelled out 

in the dispute resolution clause itself; i.e., it was agreed upon. By executing the 

Subcontractor Agreement, Southwinds agreed to the precise procedure which was 

followed: failed negotiation moving to mediation unless Griffin chose to move 

straight from negotiation to arbitration. There is nothing illusory or unenforceable 

about that. In Royston, the Court found that the arbitration provision in question 

was not illusory.

Freedom of contract is fundamental to the conduct of business in Texas. As 

the Supreme Court of Texas stated in Marsh USA v. Cook, 354 S.W.3d 764 (Tex. 

2011): “The Texas Constitution protects the freedom to contract.” See Tex. Const. 

art. I, §16; Fairfield Ins. Co. v. Stephens Martin Paving, LP, 246 S.W.3d 653, 663–

64 (Tex. 2008); see also In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 128–29 

(Tex. 2004).

In Fairfield, the Court stated: “This Court has long recognized Texas’ strong 

public policy in favor of preserving the freedom of contract.” Tex. Const. art. I, § 

16 (“No bill of attainder, ex post facto law, retroactive law, or any law impairing 

the obligation of contracts, shall be made.”); see also Churchill Forge, Inc. v. 

Brown, 61 S.W.3d 368, 371 (Tex. 2001); Lawrence, 44 S.W.3d at 553 (citations 

omitted); Wood Motor Co. v. Nebel, 150 Tex. 86, 238 S.W.2d 181, 185 (1951).
24

Sophisticated businesspersons, as here, have every right to enter into the 

contracts and contractual language of their choosing. On that subject, the Fairfield

Court quoted law well-settled since at least 1875:

[I]f there is one thing which more than another public policy 

requires, it is that men of full age and competent understanding shall 

have the utmost liberty of contracting, and that their contracts when 

entered into freely and voluntarily shall be held sacred and shall be 

enforced by Courts of justice. Therefore, you have this paramount 

public policy to consider — that you are not lightly to interfere with 

this freedom of contract. Nebel, 238 S.W.2d at 185 (quoting Printing 

& Numerical Registering Co. v. Sampson, LR 19 Eq 462, 465, 1874 

WL 16322 (1875)).

Of course, as the Marsh Court also stated: “[T]he Legislature may impose 

reasonable restrictions on the freedom to contract consistent with public policy.” 

See Fairfield at 664-65.

In In re Mabry, 355 S.W.3d 16, 29 (Tex. App.—Houston [1st Dist.] 2010,

orig. proceeding [mand. denied]), this Court stated: “[In various areas of the law], 

Texas public policy permits and encourages parties to enter into agreements to 

submit disputes to various forms of alternative dispute resolution.” See, e.g., Tex. 

Fam. Code Ann. §§ 6.601–6.604; Tex. Civ. Prac. & Rem.Code Ann., Title 7. 

Texas public policy, this Court also stated, strongly favors “preserving the freedom 

to contract.” Lawrence, 44 S.W.3d at 553. But “[t]he courts will not enforce a 

contract whose provisions are against public policy.” Sacks v. Dallas Gold & 

Silver Exch., Inc., 720 S.W.2d 177, 180 (Tex.App.-Dallas 1986, no writ).
25

This Court continued:

We can see no reason why we should hold that cooperative law 

agreements violate public policy in Texas. Neither the collaborative 

law statute nor common law prohibit the practice of cooperative law 

in Texas, and [Mabry] has offered no persuasive evidence as to why 

cooperative law agreements cannot be negotiated by parties within 

Texas’s generous ADR ambit. See Tex. Civ. Prac. & Rem.Code Ann. 

§ 154.002.

Nothing in the Subcontractor Agreement, specifically including its disputeresolution clause, is against or violates public policy and the Legislature has not 

seen fit so to say. Southwinds had every opportunity to negotiate changes to the 

dispute-resolution provision of the Subcontractor Agreement but engaged in 

absolutely no effort to do so; it must be so, therefore, that Southwinds was just as 

much in agreement with the exact language of the dispute-resolution provision as it 

was with any other provision in the Subcontractor Agreement.

As is set forth above, the parties agreed to abide by arbitration rules which 

let the Arbitrator decide the arbitrability issues. Beyond any doubt, the Arbitrator 

had the authority to decide arbitrability, the Arbitrator did so, the trial court upheld 

the Arbitrator’s decisions with respect to arbitrability. Arbitrability was properly 

decided by the Arbitrator, affirmed by the trial court and should not be disturbed.

REPLY POINT TWO

In response to Issue 2.

The trial court did not err in applying the statutory grounds for vacatur set 

forth in §171.088 of the Texas Civil Practice & Remedies Code when it denied 
26

Southwinds’ motion to vacate the Arbitrator’s Award because Southwinds failed to 

meet its statutory burden of demonstrating that there was no valid agreement to 

arbitrate the dispute in question. 

ARGUMENTS AND AUTHORITIES

The Arbitrator’s Award must be confirmed unless there are grounds for 

modifying, correcting or vacating the award. Texas Civil Practice & Remedies 

Code §171.087; Nafta Traders, Inc. v. Quinn, 339 S.W.3d 84, 89-90 (Tex. 2011); 

City of Baytown v. C.L. Winter, Inc., 886 S.W.2d 515, 520 (Tex. App. - Houston 

[1st Dist.] 1994, writ denied). 

Southwinds’ brief argues that the trial court should have vacated the 

Arbitrator’s Award in this case because there was no valid agreement to arbitrate

the C&D haul-off claims. 

Griffin incorporates herein the evidence, arguments and authorities detailed 

above in response to Issue No. 1 wherein Griffin demonstrated that there was 

indeed a valid and enforceable agreement between the parties to arbitrate the C&D 

haul-off claims. Therefore, the trial court did not err by failing to apply the 

§171.088 statutory grounds for vacating an arbitration award because Southwinds 

failed to meet its legal burden of demonstrating no valid agreement to arbitrate.

Southwinds also suggests that vacatur of the Arbitrator’s Award was

justified under §171.088(a)(3)(A) because the Arbitrator exceeded her powers by 

deciding matters outside the scope of her authority. Here, as the only basis for this 
27

argument, Southwinds rehashes its suggestion that that the arbitrator exceeded her 

authority because she did not have jurisdiction to hear the claims she decided. 

In response, Griffin again incorporates herein the evidence, arguments and 

authorities detailed above in response to Issue No. 1 wherein Griffin demonstrated 

that arbitrability, including issues of jurisdiction, may be decided by the Arbitrator 

where the parties have requested, as here, that the Arbitrator so decide. In Aspri, p. 

6, the Court stated clear and well-settled Texas law:

We review de novo the trial court’s judgment confirming an 

arbitration award “while giving strong deference to the arbitrator with 

respect to issues properly left to the arbitrator’s resolution.” Xtria 

L.L.C. v. Int'l Ins. Alliance Inc., 286 S.W.3d 583, 591 (Tex. App.—

Texarkana 2009, pet. denied); see Centex/Vestal v. Friendship W. 

Baptist Church, 314 S.W.3d 677, 683 (Tex. App.—Dallas 2010, pet. 

denied); GJR Mgmt. Holdings, L.P. v. Jack Raus, Ltd., 126 S.W.3d 

257, 262 (Tex. App.—San Antonio 2003, pet. denied). Judicial review 

of arbitration awards is “extraordinarily narrow.” E. Tex. Salt Water 

Disposal Co. v. Werline, 307 S.W.3d 267, 271 (Tex. 2010). Courts are 

to indulge all reasonable presumptions in favor of the award.... CVN 

Group, Inc. v. Delgado, 95 S.W.3d 234, 238 (Tex. 2002); 

Centex/Vestal, 314 S.W.3d at 683.

In essence, Southwinds admits in its brief that this argument arises from the 

suggestion that the Arbitrator “dispensed her own justice” by carefully considering 

the facts and ruling in Griffin’s favor. In other words, because Southwinds lost, 

the Arbitrator somehow exceeded her own powers. Such a suggestion is without 

any legal basis and should be rejected.
28

Since Southwinds failed to meet its burden of proving all three elements 

with respect to the §171.088 statutory grounds for seeking vacatur of the 

Arbitrator’s Award, the trial court committed no error in failing to vacate the 

award.

REPLY POINT THREE

In response to Issue 3.

The Arbitrator’s Award is not tainted by a disregard for the law or by a gross 

mistake in applying the law. 

ARGUMENTS AND AUTHORITIES

Southwinds’ third and final argument relies yet again on the notion that the 

Arbitrator decided matters not covered by a valid arbitration agreement, arguing 

that this constitutes manifest disregard of the law and gross error.

Other than the naked assertion and conclusion that not ruling in its favor on 

the arbitrability issue constitutes manifest disregard for the law and gross error, 

Southwinds has offered no proof whatsoever of any semblance of manifest 

disregard or gross error.

In Aspri, supra, the Court stated, at 20-21:

[A] party challenging an arbitration award on the ground of gross 

mistake has the burden of demonstrating the arbitrators acted in bad 

faith or failed to exercise honest judgment. Xtria, 286 S.W.3d at 598; 

Werline, 209 S.W.3d at 898; Pheng Inv., Inc. v. Rodriquez, 196 

S.W.3d 322, 330-31 (Tex. App.—Fort Worth 2006, no pet.). “Gross 

mistake results in a decision that is arbitrary and capricious;” whereas 

“a judgment rendered after honest consideration given to conflicting 
29

claims, no matter how erroneous, is not arbitrary or capricious.” Xtria 

at 598. An arbitrator’s decision is arbitrary and capricious if it is the 

product of “willful and unreasoning action, action without 

consideration and in disregard of the facts and circumstances of the 

case.” Grand Int’l Bhd. Of Locomotive Eng’rs v. Wilson, 341 S.W.2d 

206, 211 (Tex. Civ. App.—Fort Worth 1960, writ ref’d n.r.e.).

That Aspri may disagree with the panel’s credibility determinations 

or the weight to be given to particular evidence does not render the 

panel’s decision arbitrary and capricious, evidence bad faith, or show 

a failure to exercise honest judgment. Aspri’s arguments amount to 

nothing more than challenges to the legal and factual sufficiency of 

the evidence and alleged errors in the application of the substantive 

law, which we have no power to review. See id.; Crossmark, Inc. v. 

Hazar, 124 S.W.3d 422, 435 (Tex. App.—Dallas 2004, pet. denied); 

J.J. Gregory Gourmet Servs, Inc. v. Anton’s Imp. Co., 927 S.W.2d 

31, 35 (Tex. App.—Houston [1st Dist.] 1995, no writ). Aspri has not 

pointed to anything other than the result as evidence of bad faith or 

bad motive. It did not establish gross mistake and the trial court 

therefore did not err in denying the motion to vacate on that ground.

In Humitech Dev. Corp. v. Perlman, 424 S.W.3d 782, 795-96 (Tex.App.—Dallas 

2014, no pet.), the Court stated:

Manifest disregard is a “very narrow” or “extremely limited” 

standard of review. Xtria L.L.C. v. Int'l Ins. Alliance Inc., 286 S.W.3d 

583, 594 (Tex. App.—Texarkana 2009, pet. denied) (“very narrow” 

standard); Home Owners Mgmt. Enters., Inc. v. Dean, 230 S.W.3d 

766, 768-69 (Tex. App.—Dallas 2007, no pet.) (“extremely limited” 

standard). It is more than error or misunderstanding of the law. Xtria 

L.L.C., 286 S.W.3d at 594; Home Owners, 230 S.W.3d at 768. The 

disregarding of the law is “manifest” if it was “obvious and capable 

of being readily and instantly perceived by the average person 

qualified to serve as an arbitrator.” Xtria L.L.C., 286 S.W.3d at 594;

Myer v. Americo Life, Inc., 232 S.W.3d 401, 411. The term 

“disregard” implies that the arbitrator “appreciate[d] the existence of 

a clearly governing principle but decided to ignore or pay no 

attention to it.” Myer, 232 S.W.3d at 411. “In other words, the issue 

is not whether the arbitrator correctly interpreted the law, but whether 
30

the arbitrator, knowing the law and recognizing that the law required 

a particular result, simply disregarded the law.” Xtria L.L.C., 286 

S.W.3d at 594; see Pheng Invs., Inc. v. Rodriquez, 196 S.W.3d 322, 

332 (Tex. App.—Fort Worth 2006, no pet.)) (“Under this standard, 

the arbitrator clearly recognizes the law but chooses to ignore it or 

refuses to apply it correctly.”). It is appellants’ burden to demonstrate 

that the arbitrator manifestly disregarded the law. Xtria L.L.C., 286 

S.W.3d at 594; Tanox, Inc. v. Akin, Gump, Strauss, Hauer & Feld, 

L.L.P., 105 S.W.3d 244, 253 (Tex. App.—Houston [14th Dist.] 2003, 

pet. denied).

Gross mistake is conceptually analogous to manifest disregard. See 

Int’l Bank of Commerce v. Int’l Energy Dev. Corp., 981 S.W.2d 38, 

48 (Tex. App.—Corpus Christi 1998, pet. denied). A gross mistake is 

a mistake that implies bad faith or a failure to exercise honest 

judgment and results in a decision that is arbitrary and capricious. 

Xtria L.L.C., 286 S.W.3d at 598; Werline v. E. Tex. Salt Water 

Disposal Co., 209 S.W.3d 888, 898 (Tex. App.—Texarkana 2006), 

aff'd, 307 S.W.3d 267, 268 (Tex. 2010); Teleometrics Int'l, Inc. v. 

Hall, 922 S.W.2d 189, 193 (Tex. App.—Houston [1st Dist.] 1995, 

writ denied). “A judgment rendered after honest consideration given 

to conflicting claims, no matter how erroneous, is not arbitrary or 

capricious.” Xtria L.L.C., 286 S.W.3d at 598. The doctrines of 

manifest disregard and gross mistake do not extend to mere mistakes 

of fact or law. Judicial review of an arbitration award “is so limited 

that even a mistake of fact or law by the arbitrator in the application of 

substantive law is not a proper ground for vacating an award." 

Centex/Vestal, 314 S.W.3d at 683; Xtria L.L.C., 286 S.W.3d at 591;

Universal Computer Sys., Inc. v. Dealer Solutions, L.L.C., 183 S.W.3d 

741, 752 (Tex. App.—Houston [1st Dist.] 2005, pet. denied).

Here, Southwinds has utterly failed to provide a semblance of evidence that 

the Arbitrator in any way manifestly disregarded the law or committed any gross 

error. Here, Southwinds simply restates its flawed argument on the arbitrability of 

this dispute and asserts that, because the Arbitrator rejected the argument and ruled 

against Southwinds, that ruling must necessarily constitute manifest disregard and 
31

gross error. Such an assertion is not only contrary to the law, it ignores the very 

telling fact that Southwinds voluntarily and willingly agreed in the Subcontractor 

Agreement to subject itself to arbitration under the AAA’s rules and to allow an

arbitrator to rule on those very subjects. The trial court properly agreed and 

correctly rejected Southwinds’ suggestion that the Arbitrator’s Award was in any 

way tainted by a disregard for the law or by a gross mistake in applying the law.

Finally, and importantly, Southwinds did not ask the trial court to vacate the 

arbitrator’s award on the basis of manifest disregard of the law or gross error, and, 

therefore, Southwinds has waived its right to raise this issue on appeal.

CONCLUSION AND PRAYER

The trial court committed no error. The Arbitrator’s Award is not tainted by 

a disregard for the law or by a gross mistake in applying the law. The trial court’s 

Final Order Confirming Arbitrator’s Award should be affirmed.

WHEREFORE, PREMISES CONSIDERED, Appellee D.H. Griffin of 

Texas, Inc. respectfully prays that this Court affirm the judgment of the trial court, 

and for such other and further relief to which it may show itself justly entitled.
32

Respectfully submitted,

LAPIN & LANDA, L.L.P.

By: /s/ Robert E. Lapin 

 Robert E. Lapin

 Bar Card No. 11945050

 500 Jefferson, Suite 2000

Houston, Texas 77002

Phone: (713) 756-3232

Fax: (713) 654-8704

blapin@lapinlanda.com

LAW OFFICE OF DON TOMLINSON

Don Tomlinson

State Bar No. 24039507

8 Loggerhead

Hitchcock, TX 77563

Phone (832) 444-4848

don@dontomlinsonlaw.com

ATTORNEYS FOR APPELLEE,

 D.H. GRIFFIN OF TEXAS, INC.

CERTIFICATE OF SERVICE

I hereby certify that on the 8th day of December, 2015, a true and correct 

copy of the above and foregoing Brief of Appellee was delivered to Appellant’s 

counsel of record, Robert J. Killeen, Jr., Robert C. Stern, and Gerald M. Johnson, 

III, 1811 Bering Drive, Suite 120, Houston, TX 77057, pursuant to the Texas Rules 

of Appellate Procedure via e-service and via e-mail.

 /s/ Robert E. Lapin 

Robert E. Lapin
33

CERTIFICATE OF COMPLIANCE

I hereby certify that this brief contains 6,851 words.

 /s/ Robert E. Lapin 

Robert E. Lapin