Court Opinion

ID: 4071283
Source: CourtListenerOpinion
Date Created: 2016-09-30 01:54:01.649366+00
Date Added: 2024-06-11T14:33:12.254379
License: Public Domain

ACCEPTED
                                                                       14-15-00234-CV
                                                       FOURTEENTH COURT OF APPEALS
                                                                    HOUSTON, TEXAS
                                                                   8/4/2015 4:53:19 PM
                                                                 CHRISTOPHER PRINE
                                                                                CLERK

               No. 14-15-00234-CV

                                                       FILED IN
                                                14th COURT OF APPEALS
             In the Court of Appeals               HOUSTON, TEXAS
       For the Fourteenth District of Texas      8/4/2015 4:53:19 PM
                 Houston, Texas                 CHRISTOPHER A. PRINE
                                                         Clerk

               Human Biostar, Inc.
                                          Appellant
                        vs.

         Celltex Therapeutics Corporation,
                                         Appellee

  Appeal from the 434th Judicial District Court of
            Fort Bend County, Texas
     Trial Court Cause No. 12-DCV-202563

APPELLENT HUMAN BIOSTAR, INC.’S REPLY

                              Mr. Bruce C. Tough
                              State Bar No. 20151500
                              Tough Law Firm, PLLC
                              819 Crossbridge Drive
                              Spring, Texas 77373
                              btough@toughlawfirm.net
                              telephone: (281) 681-0808
                              telecopier: (281) 281-0809
                              Lead Counsel for Appellant
                              Human Biostar, Inc.
                                                Table of Contents

Table of Contents ...................................................................................................... ii

Index of Authorities ................................................................................................. iii

Objection and Motion to Strike…………………………………………………….2

Reply to Section I of Appellee's Brief .......................................................................3

Reply to Section II of Appellee's Brief ..................................................................…9

Reply to Section III of Appellee's Brief...................................................................12

Certificate of Compliance…………………………………………………………16

Certificate of Service……………………………………………………………...17

Appendix………………………………………………………………………...ante

                                                            ii
                            Index of Authorities

Cases                                                               Page

Blanco v. Bolanos,
20 S.W.3d 809, 811
(Tex. App. – El Paso, 2000, no pet.)…………………………………………….. 15

Chamber v. O’Quinn,
242 S.W.3d 30, 31
(Tex. 2007)…………………………………………………………………………3

Circle Zebra Fabrications v. Americas Welding,
2011 Tex. App. LEXIS 1945
(Tex. App. – Corpus Christi 2011, mandamus)……………………………….……3

City of Keller,
168 S.W.3d 802, 810
(Tex. 2005)…………………………………………………………………………8

Croucher v. Croucher,
660 S.W.2d 55, 58
(Tex. 1983)…………………………………………………………………………8

Elm Creek Villas Homeowner Ass’n, Inc. v. Beldon Roofing & Remodeling Co.,
940 S.W.2d 150, 155
(Tex. App. – San Antonio 1996, no writ)……………...……………..………….4, 6

Frontera Generation v. Mission Pipeline,
400 S.W.3d 102, 112
(Tex. App. – Corpus Christi 2012, mandamus)……………………….…................3

General Electric Co., v. Falcon Ridge Apartments,
811 S.W.2d 942
(Tex. 1991)………………………………………………………………………..13

Gunnerman v. Basic Capitol Mgmt.,
106 S.W.3d 821, 824 – 25
(Tex. App. – Dallas 2003, pet. denied)……………………………………………..6

                                     iii
In re Gulf Exploration, LLC
289 S.W.3d 836, 842 & n.33
(Tex. 2009)………………………………………………..……………………..3, 4

In re LaBatt Food Serv., L.P.,
279 S.W.3d 640, 642 – 643………………………………………………………..7

In re Morgan Stanley & Co.,
293 S.W.3d 182, 189
(Tex. 2009)…………………………………………………………………………8

In re Oakwood Mobile Homes, Inc.,
987 S.W.2d 571, 573
(Tex. 1999) (per curiam)…………………………………………………………...8

J. M. Davidson, Inc. v. Webster,
128 Sw3d 223, 227
(Tex. 2001)………………………………………………………………………....7

Karagounis v. David Lopez & Assoc.,
2003 Tex. App. LEXIS 1010, 2003 WL 203478
(Tex. App – Houston [14th Dist.] 2003, no pet.)…………………………………..13

Labidi v. Sydow,
287 S.W.3d 922, 926
(Tex. App. – Houston [14th Dist.] 2009, mandamus)………………………………3

Lehmann v. Har-Con Corp.,
39 S.W.3d 191, 195
(Tex. 2001)…………………………………………………………………………4

Mantas v. Fifth Court of Appeals,
925 S.W.2d 656
(Tex. 1996)………………………………………………………………………6, 7

Materials Evolution Development USA v. Jablonowski,
949 S.W.2d 31, 32
(Tex. App. – San Antonio 1997, no writ)…………………………………………..3

                               iv
Perry Homes v. Cull,
258 S.W.3d 580, 587
(Tex. 2008)………………………………………………….……………………...3

Quick v. City of Austin,
7 S.W.3d 109, 116
(Tex. 1998)…………………………………………………………………………7

Still v. Kilgore,
2015 Tex. App. Lexis 2795
(Tex. App. – Tyler 2015, no pet.)………………………………………..………..14

Twenty First Century Holdings, Inc. v. Precision Geothermal Drilling, Inc.,
2015 Tex. App. LEXIS 4046
(Tex. App. Austin, Apr. 23, 2015)…………………………………………………4

Will-Drill Resources, Inc. v. Samson Resources, Co.,
352 F.3d 211
(5th Cir.)…………………………………………………………………….………8

                                     v
Statutes and Rules                               Page

TEX. CIV. PRAC. & REM 171.044………………………………………….11, 12
TEX. CIV. PRAC. & REM 171.088…………………………………………...... 12
TEX.R.CIV.P. 21a………………………………………………………………...15

                          vi
               No. 14-15-00234-CV

             In the Court of Appeals
       For the Fourteenth District of Texas
                 Houston, Texas

               Human Biostar, Inc.
                                          Appellant
                        vs.

         Celltex Therapeutics Corporation,
                                         Appellee

  Appeal from the 434th Judicial District Court of
            Fort Bend County, Texas
     Trial Court Cause No. 12-DCV-202563

APPELLENT HUMAN BIOSTAR, INC.’S REPLY

                              Mr. Bruce C. Tough
                              State Bar No. 20151500
                              Tough Law Firm, PLLC
                              819 Crossbridge Drive
                              Spring, Texas 77373
                              btough@toughlawfirm.net
                              telephone: (281) 681-0808
                              telecopier: (281) 281-0809
                              Lead Counsel for Appellant
                              Human Biostar, Inc.

                         1
TO THE HONORABLE FOURTEENTH COURT OF APPEALS:

OBJECTION AND MOTION TO STRIKE:

      Appellant objects to the Appellee’s Brief because it responds to the

Appellant K-Stemcell’s Appellant’s Brief, based on an ordinary appeal, and

Appellant HBI’s Appellant’s Brief, based on a restricted appeal, in a single

Appellee’s Brief that treats the Appellants collectively, resulting in confusion in

discerning which argument(s) and fact(s) apply to Appellant HBI for the purpose

of formulating this Reply. Particularly, in Appellee’s Brief, Section II, Appellee

refers to portions of the record which are not reviewable for purposes of the

restricted appeal because the evidence was not a part of the trial record as of

February 12, 2015. These portions should be struck from the Appellee’s Brief for

the purpose of review of Appellant HBI’s Appellant’s Brief. Further, in Section II,

Appellee discusses several alleged instances of notice to K-Stemcell as constituting

notice to HBI, that should be struck when reviewing the Appellee’s Brief in the

restricted appeal of HBI. In particular, objection is made to page 6 where Appellee

refers to concessions of Appellant K-Stemcell, page 7 where Appellee discusses

Appellants’ collective failure to introduce evidence in support of defeating a

motion to confirm arbitration, page 8 where Appellee argues that K-Stemcell did

not offer any evidence at the confirmation hearing and page 9 where the April

2015 hearing is discussed.

                                         2
REPLY TO SECTION I OF APPELLEE’S BRIEF:

       Appellee has failed to provide authority for its proposition, “[i]t is Black

Letter law in Texas that an order granting a motion to compel arbitration is not

appealable” Appellee’s Brief, page 4.1 That proposition is incorrect. In fact,

“[o]rders compelling arbitration and staying litigation are subject to appeal after

the rendition of final judgment.” Frontera Generation v. Mission Pipeline, 400
S.W.3d 102, 112 (Tex. App. – Corpus Christi 2012, mandamus), citing Perry

Homes v. Cull, 258 S.W.3d 580, 587 (Tex. 2008); see also In re Gulf Exploration,

LLC, 289 S.W.3d 836, 842 & n.33 (Tex. 2009). “If a trial court compels arbitration

when the parties have not agreed to it, that error can unquestionably be reviewed

by final appeal. . . . Texas statutes provide for vacating an arbitration award by

       1
          The cases that Appellee cited as authority are not dispositive because they primarily
involve whether or not orders compelling arbitration are allowable interlocutory appeals, which
Appellant concedes they are not. In Chamber v. O’Quinn, 242 S.W.3d 30, 31 (Tex. 2007), the
Supreme Court held that the denial of a writ of mandamus, “without comment on the merits,
cannot deprive another appellate court from considering the matter in a subsequent appeal.”; in
Labidi v. Sydow, 287 S.W.3d 922, 926 (Tex. App. – Houston [14th Dist.] 2009, mandamus), this
Court held that an order compelling arbitration was not subject to interlocutory appeal under
either the federal or state schemes; in Frontera Generation v. Mission Pipeline, 400 S.W.3d at
112, the court again was referring to the limitations of the statutory interlocutory appeal scheme;
in Circle Zebra Fabrications v. Americas Welding, 2011 Tex. App. LEXIS 1945 (Tex. App. –
Corpus Christi 2011, mandamus), the court held that “[a] ‘binding, final, and non-appealable’
arbitral award . . . simply means the parties have agreed to relinquish their right to appeal the
merits of their dispute; it does not mean the parties relinquish their right to appeal an award
resulting from an arbitrator's abuse of authority, bias, or manifest disregard of the law. [citation
omitted]"); Materials Evolution Development USA v. Jablonowski, 949 S.W.2d 31, 32 (Tex.
App. – San Antonio 1997, no writ) involved statutory interlocutory appeals.

                                                 3
final appeal if the arbitrators exceeded their powers.” In re Gulf Exploration, LLC,
289 S.W.3d at 842 & n.33.

      The germane issue then is whether or not the February 12, 2015 trial court

order confirming the arbitration award was a final order and appealable. If yes,

then the Appellate Court has jurisdiction now to review the trial court’s order

compelling jurisdiction. If no, then this Court, at a minimum, must dismiss the

portion of the appeal complaining of the order compelling arbitration because such

order is an interlocutory order and not statutorily appealable until after a final

judgment. Elm Creek Villas Homeowner Ass’n, Inc. v. Beldon Roofing &

Remodeling Co., 940 S.W.2d 150, 155 (Tex. App. – San Antonio 1996, no writ)

(“When a party appeals from two interlocutory orders, only one of which is made

appealable by statute, the proper course is to dismiss that portion which is non-

appealable and to rule on the portion from which an appeal may be taken.”)

      The Appellee has raised this issue of the finality of the February 12, 2015

confirmation order in its Appellee’s Brief on pages 3 -4. Where, as in the appeal

before the Court, there has not been a trial on the merits, a judgment is final and

appealable if it disposes of all parties and claims or states unequivocally that it

finally disposes of all parties and claims. Lehmann v. Har-Con Corp., 39 S.W.3d
191, 195 (Tex. 2001). Twenty First Century Holdings, Inc. v. Precision

                                         4
Geothermal Drilling, Inc., 2015 Tex. App. LEXIS 4046 (Tex. App. -- Austin, Apr.

23, 2015).

      In the current restricted appeal, the trial court on February 12, 2015 granted

the motion to confirm the award, but also retained the case to resolve future

controversies arising from the arbitration award. 1RR 21. The trial court explained

that “in the normal circumstances of things, the confirmation [of the arbitration

award] then would result in a dismissal which would have a thirty day appellate

period and then we would have a finite end to the controversy, . . .I don’t think I

can dismiss it yet until – if there are unresolved conflicts concerning it.” Id. The

“conflicts” were the new claims of breach interposed by Appellee. Id at 17 – 21.

(Appellants’ counsel argued that the new claims should be the basis of a new

lawsuit. Id.at 17 – 18.)

      The Appellee had asserted those new claims for breach of the arbitrated

settlement agreement before the arbitration award had even been confirmed. 1 RR

18. The trial court agreed with Appellants that any obligations and deadlines to

perform under the arbitrated settlement agreement did not commence to run until

after the award had been confirmed on February 12, 2015 and, correspondingly,

that the alleged omissions or acts of Appellants that were the basis of Appellee’s

newly-filed complaints could not have taken place prior to February 12, 2015 when

the trial court confirmed the arbitration award. Id. at 24 – 25. Thus, as of February

                                         5
12, 2015 when the court confirmed the arbitration award, the parties and issues had

been disposed of and the new claims had not come into existence.

      If the order was not final and appealable, then, at this juncture, this Court

lacks jurisdiction in this appeal to entertain any error of the trial court in

compelling arbitration because it is an interlocutory appeal. And, it must dismiss

those portions of the appeal complaining of that particular error until a final

judgment has been rendered. Elm Creek Villas Homeowner Ass’n, Inc. v. Beldon

Roofing & Remodeling Co., 940 S.W.2d at 150. If, however, the February 15,

2012 order is construed as a final judgment based on the disposition of all parties

and issues on that date, then the order compelling arbitration is merged into the

final order confirming arbitration. Gunnerman v. Basic Capitol Mgmt., 106 S.W.3d
821, 824 – 25 (Tex. App. – Dallas 2003, pet. denied) (citing Rule 25.1 and holding

that appeal from final judgment encompassed earlier interlocutory orders.)

      Another option appears to be abatement of the appeal to allow the trial court

to render a final judgment. Mantas v. Fifth Court of Appeals, 925 S.W.2d 656,

(Tex. 1996). In Mantas, supra, in holding that the court of appeals abused its

discretion by refusing to abate the appeal pending resolution of the enforcement of

a settlement reached during the appellate process, the Texas Supreme Court stated

that “it makes no sense for the court of appeals to expend its resources, and require

the parties to expend theirs, on an appeal which may be moot. Certainly, a ruling

                                          6
on the merits of the appeal before a judgment is rendered in the enforcement suit

would inject needless uncertainty and confusion into the issues surrounding the

settlement” Id. Unlike Mantas, in this Appeal, the needless uncertainty and waste

of time and resources would persist even with abatement because Appellee’s new

claims of breach that would presumably be disposed of in any final judgment may

potentially be moot in the event a final appeal resulted in a finding of error on the

part of the trial court in compelling arbitration.

             In the event this Court entertains jurisdiction to review the order

compelling arbitration, any decision of the trial court regarding these gateway

issues would be subject to de novo review. In re LaBatt Food Serv., L.P., 279 S.W.
3d 640, 642 – 643. When reviewing error under a de novo standard, the appellate

court conducts an independent analysis of the record to arrive at its own

conclusions without deferring to the trial court’s conclusions. Quick v. City of

Austin, 7 S.W.3d 109, 116 (Tex. 1998). Appellant raised the material issue of the

existence of the Rule 11 Settlement Agreement in its response to Appellee’s

motion to compel arbitration. CR 22 -24.

      Although there is a strong presumption in favor of arbitration, it only arises

after the party seeking to compel arbitration proves that a valid arbitration

agreement exists. J. M. Davidson, Inc. v. Webster, 128 Sw3d 223, 227 (Tex. 2001).

Nothing in the record indicates that the required board approval of the Rule 11

                                            7
Agreement was obtained and, consequently, the Rule 11 Agreement did not come

into existence nor the arbitration agreement contained within. In re Morgan

Stanley & Co., 293 S.W.3d 182, 189 (Tex. 2009), citing Will-Drill Resources, Inc.

v. Samson Resources, Co., 352 F.3d 211 (5th Cir.) It was Appellee’s burden to

demonstrate that a valid agreement to arbitrate existed. In re Oakwood Mobile

Homes, Inc., 987 S.W.2d 571, 573 (Tex. 1999) (per curiam).

      Where, as here, Appellant does not have the burden of proof, the “no

evidence” standard is used in a legal sufficiency challenge. Croucher v. Croucher,

660 S.W.2d 55, 58 (Tex. 1983). The appellate court will only sustain a no-evidence

challenge if the record shows one of the following: (1) there is no evidence on the

challenged element, (2) the evidence offered to prove the challenged element is no

more than a scintilla, (3) the evidence establishes the opposite of the challenged

element, or (4) the court is barred by law or rules of evidence from considering the

only evidence offered to prove the challenged element. City of Keller, 168 S.W.3d
802, 810 (Tex. 2005). The Rule 11 Agreement attached to the motion to compel

arbitration filed by Appellee (CR 60 – 72), indicates in paragraph 6 that board

approval is required, but not that is has been obtained. Because nothing in the

record indicates that board approval was obtained, the Rule 11 Agreement does not

overcome the no-evidence challenge as an essential element of the Rule 11

Agreement, to wit – “acceptance” - has not been obtained.

                                         8
       Should this Court decide that the February 12, 2015 order granting

confirmation of the arbitration award was a final order subject to final appeal, then

this Court should reverse the trial court’s order compelling the parties to arbitration

for the reasons stated in the Appellant’s Brief. If the order is found to be an

interlocutory order, then Appellant concedes that the order compelling arbitration

is not appealable at this time.

REPLY TO SECTION II OF APPELLEE’S BRIEF:

       Appellant does not dispute the authority cited to by Appellee for the legal

premise that every reasonable presumption must be indulged to uphold the

arbitrator’s decision, and none against it. As discussed below and in Appellant’s

Brief and Reply to Section III of Appellee’s Brief, Appellant has pointed the Court

to affirmative evidence that overcomes the presumption. 2

       Appellee has seriously misstated the record. On page 8, the Appellee

incorrectly states that “at that [confirmation hearing on February 12, 2015], Celltex

presented “conclusive” evidence that Biostar in fact did have notice of the

arbitration hearing.” The evidence is anything but conclusive:

              1.    Appellee first mentions the “Award” as evidence of notice, but
       the Award (and other Arbitration Documents that comprise the Award,
       referred to in Appellant’s Brief as “Arbitration Documents”, collectively),
       affirmatively refutes the arbitrator’s statements that the parties had notice;

2
        Appellee also complains that “Biostar filed no response to the motion to confirm the
Award” (Appellee’s Brief, page 6), but the record is silent as to notice to Appellant of the motion
to confirm. Appellant also did not participate in the hearing.
                                                9
       thus, overcoming any presumption of due notice. Those affirmative
       statements of the arbitrator and attached emails to support the statements
       constitute evidence in the record that may be considered by this Court in
       reviewing this restricted appeal. (This evidence has been discussed in
       Appellant’s Brief, pages 29 – 35 and below. CR 65 – 69; 1 SUPP. CR 4 -
       11)3.

              2.    Appellee then points to the Arbitrator’s “Procedural Order No.
       3” as evidence of notice to Appellant HBI, but again the affirmative
       statements of the arbitrator that are “factual” in nature wholly controvert the
       recitations of due notice that are “conclusive” in nature. 1st SUPP. CR 6 –
       11. (See also footnote 3 herein).

              3.    Appellee then points to the October 23, 2014 order granting
       Brian Antweil’s notice of withdrawal as notice that the arbitration was to
       take place on November 17, 2014, but the order in fact states that the
       arbitration must commence on or before November 17, 2014, the inference
       being that the arbitration may be scheduled to start prior to November 17,
       2014. It was not until the Procedural Order No. 1 was issued by the
       arbitrator on November 9, 2014, after the withdrawal of Mr. Antweil, that
       the actual time and place of the arbitration was set. 1st SUPP. CR 4 -5.
       (Please also see footnote 3, herein.)

              4.      Finally, the email exchange between Brian Antweil and the
       purported co-counsel for K-Stemcell, Gee Hong, merely reflects that Gee
       Hong “will forward the court’s order [granting withdrawal of Brian Antweil]
       to K-Stemcell HBI”, not that he “has” forwarded it. 1 SUPP. CR 10 -11. The
       arbitrator also mischaracterizes Gee Hong’s email. 1 SUPP. CR 7. Even had

3
  Procedural Order Nos. 1 and 3 rebut that Appellant HBI was given notice or was served any
documents. The arbitrator on November 9, 2015, over a week after the withdrawal of Brian
Antweil as counsel for Appellant HBI, first sends notice of the actual time and place of the
arbitration hearing to the parties with the exception of Appellant HBI. The order no. 1 states that
“[t]he arbitrator has communicated by email regarding the hearing with a party indicating itself
to be K-Stemcell. . . .In accordance with court order, the Arbitrator will convene a hearing on
November 17, 2014, to begin at 9:00 a.m. The situs will be . . . Counsel for Celltex has filed with
the Arbitrator its Arbitration Claim and Trial Brief [attached] [and] K-Stemcell and
Huyconggeun Park are invited to file pre-hearing responsive pleadings on or before the close of
business on November 14, 2014.” 1 SUPP. CR 4. Appellant HBI is not mentioned by the
arbitrator in this order. Id. 1SUPP. CR 4 – 11.

                                                10
      Gee Hong stated that he “had forwarded” the information, the notice would
      still be inadequate for purposes of compliance with Texas Civil Practices &
      Remedies Code Section 171.044 that requires the arbitrator to give notice of
      the time and place of the arbitration by personal notice or certified mail,
      return receipt requested. The insufficiency of this email as evidence of
      notice is reinforced by Mr. Antweil’s statement that he believed Mr. Bristow
      would be sending procedural and scheduling information pertinent to the
      arbitration to Mr. Gee. Id. This referenced scheduling order, Procedural
      Order No. 1, was dated November 9, 2014. 1 SUPP. CR 3 -5. It was not
      until the arbitrator issued that Procedural Order No. 1 that the scheduling
      information was determined to be November 17, 2014 at 9:00 a.m. at the
      address listed. Id. Thus, Mr. Antweil could not have had this information on
      October 24, 2014 as alluded to by the Appellee in the Appellee’s Brief (page
      9), nor did the trial order allowing him to withdraw provide that information
      other than that the hearing must start on or before November 17, 2014.
      Finally, the email further indicates that the subject of the email is
      “transitional issues for K-Stemcell”, not HBI. In summary, the very evidence
      offered by the arbitrator to show notice to Appellant backfires as it proves
      quite the opposite.

      Appellee further incorrectly states on page 11 of its Brief that “Biostar . . .

admits the trial court’s October 23, 2014 order granting Appellants’ counsel’s

motion to withdraw, specifically provided that the granting of the motion would

not delay the arbitration ‘scheduled to begin on November 17, 2014.’” Appellant

has never admitted quite this statement. Although seemingly minor, Appellee

omits to include “on or before” before “November 17, 2014” when discussing the

trial court’s order that amended the court’s original order that the arbitration must

commence on or before October 23, 2014.            CR 34 -36. This is a critical

misstatement on the part of Appellee because Appellee has argued that Appellant

HBI knew the place of the arbitration and the arbitration date of November 17,

                                         11
2014 because of that order issued before the withdrawal of Brian Antweil on

October 23, 2014; however, the order clearly contemplates the possibility of a date

prior to November 17, 2014. Even had the order established November 17, 2014 as

the date, the required notice of the time and place of the arbitration had not been

issued by the arbitrator until November 9, 2014, over a week after Mr. Antweil’s

withdrawal as counsel for K-Stemcell Appellant HBI.

      In summary, the evidence in the Arbitration Documents offered to

affirmatively demonstrate notice to Appellant instead rebuts any presumption of

notice to Appellant.    Even, arguendo, were this Court to find that Appellant

received notice, that notice did not rise to the requirement of Texas Civil Practices

& Remedies Code 171.044.

REPLY TO SECTION III OF APPELLEE’S BRIEF:

      The gist of Appellee’s argument is that Appellant failed to establish error on

the face of the record, a necessary component of a restricted appeal. Appellant

respectfully disagrees. As stated in section II above, Appellant has shown in the

record affirmative proof that it was not noticed of the arbitration hearing in any

manner, much less by the method required by the Texas Civil Practices &

Remedies Code Section 171.088. Appellant refers this Court to its Appellant’s

Brief and Section II, above, to avoid repetition as to the affirmative evidence in the

                                         12
record that overcomes any presumption of notice, much less proper notice to

Appellant.

       Appellee cites to several cases as authority.4 Appellee cites to Karagounis v.

David Lopez & Assoc., 2003 Tex. App. LEXIS 1010, 2003 WL 203478 (Tex. App

– Houston [14th Dist.] 2003, no pet.) as dispositive of the proposition that an

appellant claiming an absence of notice has a heavy burden to show error on the

face of the record. Id. This case is factually distinguishable from the instant appeal

as, in Karagounis, there was no discussion of the particular facts of the case other

than that the appellant claimed he had not received notice of the trial setting

resulting in a default judgment and that nothing in the record indicated that he had

not received notice. Id. In this case, unlike in Karagounis, the record consists of

substantial affirmative statements of the arbitrator in the Arbitration Documents

including that irrefutably rebut the presumption of notice. CR 63 – 72; 1 SUPP CR

4 -11. This affirmative evidence overcome the otherwise heavy burden of

Appellant to show the absence of notice. Id.
4
 Appellee’s citation to General Electric Co., v. Falcon Ridge Apartments, 811 S.W.2d 942 (Tex.
1991), involving the predecessor writ of error procedure, states the general proposition that the
absence from the trial record of affirmative proof that notice of intent to dismiss or of the order
of dismissal is provided does not establish error. This case is factually distinguishable because,
unlike the current appeal, it dealt with extrinsic evidence not in the record to prove notice.
Appellee’s citation to In re Cartwright, a case that involved the inherent authority of the trial
court to control timetables, is not dispositive on the issues raised by Appellant. Appellant has
never asserted as error the trial judge’s instructions to start the arbitration hearing no later than
November 17, 2014. Rather, the Appellant complained that the arbitrator should have postponed
the November 17 hearing and issuance of the award based on the arbitrator’s actual or
constructive knowledge of his lack of proper notice to Appellant and Appellant’s absence at the
hearing.
                                                 13
      Appellee’s citation to Still v. Kilgore, 2015 Tex. App. Lexis 2795 (Tex. App.

– Tyler 2015, no pet.) is also distinguishable factually from the instant appeal

because that appellant, unlike Appellant in this appeal, failed to affirmatively

overcome the presumption of notice. The appellant in Still filed a notice of

restricted appeal on the basis that he had not received notice of the trial setting and

did not participate at the trial that resulted in a final judgment. Attempts to serve

the appellant with citation at a Henderson Blvd address had been unsuccessful

necessitating substituted service at 10746 CR 243. The appellant answered the

lawsuit pro se, placing a P.O. Box address under his signature as his mailing

address, but did not otherwise make allegations that the other two addresses were

incorrect, hence nothing was in the record before the trial court about the other

addresses. The appellee announced at trial that he had given notice of the trial

setting to appellant: the judgment included a recitation that due notice had been

given to appellant of the trial setting. The appellant’s restricted appeal failed

because he did not affirmatively show in the record that he had not received notice.

Id. In other words, the appellant had failed to overcome the presumption of proper

notice.

      In this appeal, however, substantial affirmative evidence in the record

overcomes any presumption of due notice. The arbitrator’s very attempts to

affirmatively establish notice prove the opposite. The arbitrator’s occasional

                                          14
recitations of due notice cannot be reconciled with the overwhelming affirmative

evidence rebutting that “due notice”.

      In Blanco v. Bolanos, 20 S.W.3d 809, 811 (Tex. App. – El Paso, 2000, no

pet.), the record showed that the request for a trial setting was filed with less than

the required 45 day notice and, therefore, any purported evidence of telephone and

facsimile notice of the October 1st trial setting on September 22 could not have

been served 45 days before the trial setting, effectively rebutting the presumption

of proper notice. The court explained its decision, as follows:

              “[I]t is presumed that the trial court will hear a case only when notice
      has been given to the parties. [] To overcome this presumption, an appellant
      must affirmatively show a lack of notice. [] This burden is not discharged by
      mere allegations, unsupported by affidavits or other competent evidence,
      that proper notice was not received. Here, even if we were to assume that a
      facsimile notice to her Hawaii attorney is sufficient to comply with
      TEX.R.CIV.P. 21a, the record affirmatively demonstrates that Blanco
      received less than the forty-five days mandated by Rule 45. [] Torres
      testified at the final hearing on October 1 that she provided notice to Smith
      by telephone and by facsimile on September 22. Additionally, the record
      reveals that Bolanos did not even file his setting request until September 16,
      a mere fifteen days prior to the final hearing. Because Blanco did not receive
      notice of the trial setting as required by Rule 245, we sustain this issue. We
      reverse the judgment and remand the case to the trial court for a new trial.”
      Id. [Internal cites omitted.]

      Based upon a review of the Arbitration Documents in this appeal, as

discussed in the Appellant’s Brief and hereinabove, Appellant has overcome the

heavy burden of rebutting the presumption of notice and thus has shown error on

the face of the record.
                                         15
                                     Respectfully submitted,

                                     TOUGH LAW FIRM, PLLC

                                        /s/ Bruce C. Tough
                                     Bruce C. Tough
                                     btough@toughlawfirm.net email
                                     State Bar No. 20151500
                                     819 Crossbridge Drive
                                     Spring, Texas 77373
                                     (281) 681-0808 telephone
                                     (281) 681-0809 telecopy
                                     Lead Counsel for Appellant
                                     Human Biostar, Inc.

                           Certificate of Compliance
       Based upon the word counting function of Windows, this Reply of
Appellant, Human Biostar, Inc., contains 4,057 words excluding the portions of the
brief excluded in Texas Rule of Appellate Procedure 9.4(i)(1).

                                       16
                               Certificate of Service

      I hereby certify that a true and correct copy of the foregoing document has
been forwarded by e-filing and e-service to all lead counsel of record, on this 4th
day of August, 2015, as follows:

Grant Cook
GREENBERG TRAURIG, LLP
1000 Louisiana, Ste. 1700
Houston, Texas 77002
(713) 374-3505 telecopier
cook@gtlaw.com email
Co-Counsel for Appellee
Celltex Therapeutics Corporation

Richard Tate
TATE MOERER & KING, LLP
206 South Second Street
Richmond, Texas 77469
(281) 341-1003 telecopier
rltate@tate-law.com email
Co-Counsel for Appellee
Celltex Therapeutics Corporation

Paula E. Hughes
18115 FM 756
Whitehouse, Texas 75791
(281) 281-0809 telecopier
pehughes11@yahoo.com email
Counsel for Appellant RNL
Bio, Ltd. n/k/a K-Stemcell
Co. Ltd.

                                               /s/ Bruce C. Tough
                                              Bruce C. Tough

                                         17