Court Opinion

ID: 8507291
Source: CourtListenerOpinion
Date Created: 2022-11-23 07:11:12.867837+00
Date Added: 2024-06-11T16:50:56.793258
License: Public Domain

Affirmed and Opinion Filed November 15, 2022

                                       In The
                            Court of Appeals
                     Fifth District of Texas at Dallas
                               No. 05-21-00746-CV

KENNETH GORDON AND HARDCORE TRUCKING SOLUTIONS LLC,
                     Appellants
                        V.
          TRUCKING RESOURCES INC., Appellee

               On Appeal from the 366th Judicial District Court
                            Collin County, Texas
                   Trial Court Cause No. 366-02385-2019

                         MEMORANDUM OPINION
                  Before Justices Myers, Pedersen, III, and Garcia
                             Opinion by Justice Myers
      Kenneth Gordon and Hardcore Trucking Solutions LLC appeal the trial

court’s judgment confirming an arbitration award in favor of Trucking Resources

Inc. Appellants bring three issues on appeal contending (1) the trial court lacked

jurisdiction to order arbitration because appellants are workers engaged in interstate

commerce and cannot be compelled to arbitrate under the Federal Arbitration Act;

(2) the trial court erred by compelling appellants to arbitrate because they did not

sign the arbitration agreements; and (3) the trial court erred by denying appellants’
objections to the arbitration award and denying their motion to vacate the arbitration

award. We affirm the trial court’s judgment.

                                        BACKGROUND
       Gordon is the owner of Hardcore Trucking Solutions LLC (HTS), a company

that recruits truck drivers for transportation companies. Appellee is a competing

recruiter of truck drivers.

       Two of appellee’s employees, Sylvia Trotter and Eric Howse, each signed

noncompetition agreements with appellee that included an arbitration provision:

       Should violation, disagreement or dispute occur between contracting
       parties arising out of, or connected with this agreement, which cannot
       be adjusted by and between the parties involved, the disputed
       disagreement shall be submitted to the American Arbitration
       Association located in Texas and all parties agree to abide by the
       decision of the referees of said Association. Judgment, upon award,
       may be entered in any court having jurisdiction thereof. The parties
       agree that the courts may only be used to issue or enforce [an]
       injunction and to enforce a judgment.1
In 2017, Trotter and Howse ceased working for appellee and went to work for HTS.

Appellee brought suit against appellants in 2017, but that suit was dismissed for want

of prosecution.

       On May 2, 2019, appellee filed this lawsuit against appellants, Trotter, and

Howse. Appellee alleged Trotter and Howse breached their contracts with appellee

   1
       The quoted arbitration provision is from the noncompetition agreement signed by Trotter. The
arbitration provision in the agreement signed by Howse is identical except for the last sentence, which
reads: “The parties agree that the courts may be used to issue or enforce an injunction and to certify a
judgment and or [sic] to enforce a judgment.”
                                                 –2–
by using appellee’s confidential information, soliciting appellee’s clients and

sending their business to HTS, and advertising for staffing in the same markets in

which appellee advertised. Appellee sued appellants for tortious interference with

contract and prospective business relationships and for conspiring with Trotter and

Howse to use appellee’s confidential information and for conspiring with Trotter and

Howse for them to breach their contractual and common law duties to appellee.

      Three weeks later, on May 24, 2019, appellee moved to stay the proceedings

in the trial court and compel the parties to arbitrate. Trotter filed objections to the

motion to stay proceedings and compel arbitration. On November 15, 2019, the trial

court granted appellee’s motion to stay proceedings in the trial court and compel

arbitration.

      On June 3, 2021, the arbitrator issued his award. The arbitrator found Trotter

took appellee’s confidential information and disclosed it to appellants, thereby

breaching her duty of loyalty to appellee, and that appellants conspired with Trotter

for her to breach her duty of loyalty to appellee and obtain appellee’s confidential

information.   The arbitrator determined that appellants should be required to

disgorge their profits. The arbitrator also found appellants refused to produce or

destroyed documents necessary to compute appellants’ profits because of the likely

prejudicial effect of the documents.      Appellee capped its claim at $300,000.

Appellee showed appellants had revenues of about $1.24 million, and the arbitrator

determined that due to appellants’ abuse of the discovery process, it could be inferred

                                         –3–
that HTS’s profit from its revenues was at least $300,000. The arbitrator found

“[s]uch an inference is both reasonable and justified.” The arbitrator awarded

appellee $299,999 against appellants and Trotter, jointly and severally, and the

arbitrator denied appellants’ request for attorney’s fees.

        Eighteen days after the arbitrator’s award, the trial court signed an order

confirming the award and rendering judgment in conformity with the award.

Twenty-one days after the court’s confirmation of the arbitration award, appellants

filed a motion to vacate the confirmation of the award. Eighty-four days after the

arbitration award, and sixty-six days after the confirmation of the award, appellants

filed objections to the arbitration award and moved for the court to vacate the award.

See 9 U.S.C. § 12 (“Notice of a motion to vacate, modify, or correct an award must

be served upon the adverse party or his attorney within three months after the award

is filed or delivered.”). They filed a notice of appeal the same day.2

                        ORDER COMPELLING ARBITRATION
        In their first issue, appellants contend the arbitration provisions in Trotter’s

and Howse’s employment agreements are not enforceable because Trotter and

Howse are workers engaged in interstate commerce and are exempt from the Federal

Arbitration Act (FAA) under 9 U.S.C. § 1. In their second issue, appellants contend

    2
      Before the briefing on appeal, appellee moved to dismiss the appeal, asserting appellants’ notice of
appeal was untimely. We denied the motion to dismiss in our order of January 10, 2022. Appellee presents
the same arguments in its brief, urging we lack jurisdiction to consider this appeal. We reject those
arguments and conclude appellants’ notice of appeal was timely for the reasons set forth in our order of
January 10, 2022.
                                                  –4–
the trial court erred by granting appellee’s motion to compel arbitration against

appellants because appellants did not sign the arbitration agreement. A party may

not bring an interlocutory appeal of an order granting a motion to compel arbitration.

9 U.S.C. § 16(b)(2); Perry Homes v. Cull, 258 S.W.3d 580, 586 (Tex. 2008). But a

party may challenge the granting of the order compelling arbitration on appeal from

the final judgment. Chambers v. O’Quinn, 242 S.W.3d 30, 32 (Tex. 2007) (per

curiam).

  9 U.S.C. § 1 Exemption for “workers engaged in . . . interstate commerce”

       In their first issue, appellants contend the trial court erred by compelling

arbitration of appellee’s claims because appellee’s contracts with Trotter and Howse

containing the arbitration agreements were “contracts of employment . . . of workers

engaged in foreign or interstate commerce.” Section 1 of the FAA states, “nothing

herein contained shall apply to contracts of employment of seamen, railroad

employees, or any other class of workers engaged in foreign or interstate

commerce.” 9 U.S.C. § 1. Appellants argue that Trotter and Howse are such

employees and that the noncompetition agreements are “contracts of employment,”

so the FAA does not apply to them.

       Appellee asserts that appellants waived this argument because they did not

raise it in the trial court either before the trial court ordered the parties to arbitrate or

before the arbitrator.

                                            –5–
       Texas courts have held that an objection to arbitration under the 9 U.S.C. § 1

exemption from arbitration must be raised before the trial court rules on a motion to

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

2020 WL 4680283, at *4 (Tex. App.—Beaumont 2020, no pet.) (mem. op.) (failure

to object to arbitration procedure on the ground that 9 U.S.C. § 1 exemption applied

before the trial court ruled on motion to compel arbitration waived the objection);

J.B. Hunt Transp., Inc. v. Hartman, 307 S.W.3d 804, 809 (Tex. App.—San Antonio

2010, no pet.) (on appeal from denial of motion to compel arbitration, court of

appeals refused to consider whether 9 U.S.C. § 1 exempted the dispute from

arbitration when the appellee did not assert the application of the exemption in the

trial court).

       In this case, appellants first asserted the 9 U.S.C. § 1 exemption from

arbitration in their post-arbitration motion to vacate the arbitration award. Because

they did not assert the exemption from arbitration before the arbitration took place,

they have not preserved the argument for appellate review. See Conn, 2020 WL

4680283, at *4; Hartman, 307 S.W.3d at 809.

       Even if the 9 U.S.C. § 1 exemption could be raised for the first time after

arbitration, appellants’ arguments lack merit. Whether an individual is a worker

engaged in interstate commerce depends on whether the individual performs the

work. See Sw. Airlines v. Saxon, 142 S. Ct. 1783, 1788 (2022). The individuals

subject to the exemption from the Federal Arbitration Act “must at least play a direct

                                         –6–
and ‘necessary role in the free flow of goods’ across borders. Put another way,

transportation workers must be actively ‘engaged in transportation’ of those goods

across borders via the channels of foreign or interstate commerce.” Id. at 1790

(quoting Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 121 (2001)). Whether an

arbitration agreement is part of a contract of employment of a worker engaged in

interstate commerce is a question for the trial court before it compels arbitration.

See New Prime Inc. v. Oliveira, 139 S. Ct. 532, 537 (2019) (“Given the statute’s

terms and sequencing, we agree with the First Circuit that a court should decide for

itself whether § 1’s ‘contracts of employment’ exclusion applies before ordering

arbitration.”).

       Thus, the question before us is whether interstate truck-driver recruiters like

Trotter and Howse are actively engaged in transportation of goods across state or

international borders. Appellants argue Trotter and Howse met this requirement for

the exemption from arbitration because: “They 1) worked with materials that

crossed state lines, such as trucks and truck drivers they recruited, 2) relied on

billings from out-of-state trucking companies, out-of-state . . . driver databases, and

out-of-state advertising platforms, and 3) used interstate mail and phone calls.”

None of these facts show that appellants or Trotter and Howse were actively engaged

in the transportation of goods, only that they recruited people who were. Nothing in

the record shows appellants or Trotter and Howse drive trucks or handle the goods

on the trucks.

                                         –7–
      Appellants cite Western Dairy Transport v. Vasquez, 457 S.W.3d 458 (Tex.

App.—El Paso 2014, no pet.), where the court held that a truck mechanic was a

transportation worker exempt from the Federal Arbitration Act under 9 U.S.C. § 1.

In making this determination, the court looked to eight factors from the Eighth

Circuit’s opinion in Lenz v. Yellow Transportation, Inc., 431 F.3d 348 (8th Cir.

2005):

         1. whether the employee works in the transportation industry;
         2. whether the employee is directly responsible for transporting the
            goods in interstate commerce;

         3. whether the employee handles goods that travel interstate;
         4. whether the employee supervises employees who are themselves
            transportation workers, such as truck drivers;

         5. whether, like seamen or railroad employees, the employee is
            within a class of employees for which special arbitration already
            existed when Congress enacted the FAA;
         6. whether the vehicle itself is vital to the commercial enterprise of
            the employer;

         7. whether a strike by the employee would disrupt interstate
            commerce; and
         8. the nexus that exists between the employee’s job duties and the
            vehicle the employee uses in carrying out his duties (i.e., a truck
            driver whose only job is to deliver goods cannot perform his job
            without a truck).

Id. at 352 (8th Cir. 2005). In Lenz, the 8th Circuit applied these factors and

determined that a customer-service representative for a freight transportation

company was not exempt from arbitration under 9 U.S.C. § 1. The El Paso Court of

                                        –8–
Appeals applied these factors to determine that a truck mechanic was a worker

engaged in interstate commerce under 9 U.S.C. § 1. Vasquez, 457 S.W.3d at 466.

      Applying the Lenz factors to truck-driver recruiters, as that position is

explained in the record before us, does not show that the recruiters are workers

engaged in interstate commerce under 9 U.S.C. § 1. On the first factor, we will

assume for purposes of this opinion that the recruiters work in the transportation

industry. However, the remaining factors are negative. The recruiters are not

directly responsible for transporting the goods in interstate commerce; they do not

handle the goods; the record does not show they supervise the truck drivers who

handle the goods; the record does not show and appellants have not cited this Court

to any statute or regulation providing special arbitration for recruiters of truck

drivers; the record does not show that Trotter and Howse drove vehicles in interstate

commerce; a strike by recruiters of truck drivers might be inconvenient for the

trucking companies who would have to hire drivers directly instead of through

recruiters, but nothing in the record shows a strike by the recruiters would disrupt

interstate commerce or halt trucks from delivering goods; and there is no evidence

that Trotter and Howse required a vehicle to carry out their duties of recruiting truck

drivers. See Lenz, 431 F.3d at 352–53.

      Appellants also cite the Supreme Court’s decision in Southwest Airlines Co.

v. Saxon, 142 S. Ct. 1783 (2022). In that case, the supreme court held that

supervisors of cargo handlers for an airline who also acted as cargo handlers when

                                         –9–
necessary were workers engaged in interstate commerce under 9 U.S.C. § 1 because

they handled the cargo. The Supreme Court did not address whether the workers’

supervisory duties qualified them for the exemption from compelled arbitration. Id.

at 1790. The Supreme Court stated that for a worker to qualify for the exemption,

the worker “must at least play a direct and ‘necessary role in the free flow of goods’

across borders. Put another way, transportation workers must be actively ‘engaged

in transportation’ of those goods across borders via the channels of foreign or

interstate commerce.” Id. (quoting Circuit City, 532 U.S. at 121). The Court

concluded that cargo handlers for an airline met that standard. Recruiters of truck

drivers, however, do not. The record does not show that recruiters play a direct and

necessary role in the transportation of goods across borders. The act of recruiting

truck drivers for transportation companies does not actually move any goods. Nor

does the record show that third-party recruiters are necessary even if they may be

helpful and more efficient than the transportation companies at finding and hiring

drivers.

      We conclude appellants have not shown the contracts containing the

arbitration agreements are exempt from arbitration because of 9 U.S.C. § 1. We

overrule appellants’ first issue.

                                    Arbitrability

      In their second issue, appellants contend the trial court erred by ordering the

parties to arbitrate because appellants did not sign any arbitration agreement with

                                        –10–
appellee, the arbitration agreements did not contain language giving the employees

notice that they were waiving their right to a jury trial, and under the arbitration

agreements, the trial court did not have authority to compel the parties to arbitrate.

      The arbitration provisions were in agreements signed by Trotter and Howse,

not appellants. Appellee asserted in its motion to compel arbitration that appellants

were subject to arbitration under the doctrines of assumption and equitable estoppel

and because appellee’s claims against appellants were intertwined with its claims

against Trotter and Howse. Appellants did not file a response to the motion to

compel arbitration, nor did they appear at the hearing on appellee’s motion to compel

arbitration. Their first complaint in the record of being compelled to arbitrate is in

their post-arbitration objections to confirmation of the arbitration award. There, they

argued, as they argue here, that they are not required to arbitrate because they did

not sign an arbitration agreement, that the doctrines of assumption and equitable

estoppel do not apply to them, that the cases permitting arbitration of intertwined

claims involving nonsignatories are distinguishable, that the arbitration agreements

did not notify Trotter and Howse that they were waiving their right to a jury trial,

and that the trial court lacked authority under the language of the arbitration

provisions to order the parties to arbitrate.

      As a general rule, a party is required to present a timely complaint to the trial

court before being allowed to raise the issue on appeal. See TEX. R. APP. P.

33.1(a)(1) (“As a prerequisite to presenting a complaint for appellate review, the

                                          –11–
record must show that: (1) the complaint was made to the trial court by a timely

request, objection, or motion . . . .”). A timely objection is one that is made “at a

point in the proceedings which gives the trial court the opportunity to cure any

alleged error.” Crews v. Dkasi Corp., 469 S.W.3d 194, 201 (Tex. App.–Dallas 2015,

pet. denied). The opportunity for the trial court to cure any error from requiring

nonsignatories to arbitrate is before the court rules on the opposing party’s motion

to compel arbitration, not after the arbitration proceeding. See My Three Sons, Ltd.

v. Midway/Parker Med. Ctr., L.P., No. 05-15-01068-CV, 2017 WL 2351082, at *3

(Tex. App.—Dallas May 31, 2017, no pet.) (mem. op.) (nonsignatory party waived

any error from being compelled to arbitrate when party did not raise that ground

before court ordered the parties to arbitrate); see also Nicholas v. Inhance Techs.

LLC, No. 01-18-00750-CV, 2019 WL 6703939, at *2–3 (Tex. App.—Houston [1st

Dist.] Dec. 10, 2019, no pet.) (mem. op.) (party’s failure to file response to motion

to compel arbitration waived party’s arguments on appeal that arbitration agreement

was procured by fraud and lacked consideration). Likewise, the time for appellants

to raise their other arguments opposing arbitration was before the trial court ruled on

appellee’s motion to compel arbitration.

      Because appellants did not file a response to the motion to compel arbitration,

they did not timely present their arguments for why the court should not have granted

appellee’s motion to compel arbitration. We conclude appellants did not timely raise

                                        –12–
these arguments, and we cannot address them. TEX. R. APP. P. 33.1(a). We overrule

appellant’s second issue.

               CONFIRMATION OF ARBITRATION AWARD
      In their third issue, appellants contend the trial court erred by confirming the

arbitration award.   Appellants assert the trial court erred by not vacating or

modifying the award under the FAA because the arbitrator exceeded his powers,

showed partiality, misbehaved and prejudiced a party, made a material

miscalculation, and issued an “imperfect” award.

                               Standard of Review

      We review a trial court’s decision to vacate or confirm an arbitration award

de novo based on review of the entire record. Humitech Dev. Corp. v. Perlman, 424

S.W.3d 782, 790 (Tex. App.—Dallas 2014, no pet.). “[A]n award of arbitrators upon

matters submitted to them is given the same effect as the judgment of a court of last

resort. All reasonable presumptions are indulged in favor of the award, and none

against it.” CVN Group, Inc. v. Delgado, 95 S.W.3d 234, 238 (Tex. 2002) (quoting

City of San Antonio v. McKenzie Constr. Co., 150 S.W.2d 989, 996 (Tex. 1941)).

The award is presumed valid, and it is entitled to great deference. Humitech, 424

S.W.3d at 790. The award is conclusive on the parties as to all matters of fact and

law; in other words, we may not vacate an award even if it is based upon a mistake

of fact or law. Id. We may not substitute our judgment for that of the arbitrators

merely because we would have reached a different decision. Id.

                                        –13–
       A non-prevailing party seeking to vacate an arbitration award bears the burden

in the trial court of bringing forth a complete record that establishes its basis for

vacating the award. In re Chestnut Energy Partners, Inc., 300 S.W.3d 386, 401

(Tex. App.—Dallas 2009, pet. denied).           “When there is no transcript of the

arbitration hearing, the appellate court will presume the evidence was adequate to

support the award.” Id. (quoting Statewide Remodeling, Inc. v. Williams, 244

S.W.3d 546, 568 (Tex. App.—Dallas 2008, no pet.)).

       In this case, there is no record of the arbitration proceedings except for the

arbitration award. Appellants’ motion to vacate the award purports to provide the

background and procedural history describing the proceedings before the arbitrator,

but that description does not constitute a record of the documents and the

proceedings before the arbitrator, nor is it evidence that could be considered by the

trial court or this Court.

             Grounds for Vacating or Modifying Arbitration Award

       Section 9 of the FAA requires the trial court to confirm an arbitration award

upon application by a party “unless the award is vacated, modified, or corrected as

prescribed in sections 10 and 11 of this title.” 9 U.S.C. § 9. Section 10 provides that

the court may vacate an arbitration award in the following situations:

       (1) where the award was procured by corruption, fraud, or undue
       means;
       (2) where there was evident partiality or corruption in the arbitrators, or
       either of them;

                                         –14–
      (3) where the arbitrators were guilty of misconduct in refusing to
      postpone the hearing, upon sufficient cause shown, or in refusing to
      hear evidence pertinent and material to the controversy; or of any other
      misbehavior by which the rights of any party have been prejudiced; or

      (4) where the arbitrators exceeded their powers, or so imperfectly
      executed them that a mutual, final, and definite award upon the subject
      matter submitted was not made.
Id. § 10(a). Section 11 provides that the court may modify or correct an arbitration

award in the following situations:

      (a) Where there was an evident material miscalculation of figures or an
      evident material mistake in the description of any person, thing, or
      property referred to in the award.
      (b) Where the arbitrators have awarded upon a matter not submitted to
      them, unless it is a matter not affecting the merits of the decision upon
      the matter submitted.

      (c) Where the award is imperfect in matter of form not affecting the
      merits of the controversy.
Id. § 11. These are the exclusive bases for vacating or modifying an award under

the FAA. See Hall Street Assocs., L.L.C. v. Mattel, Inc., 552 U.S. 576, 584 (2008)

(“We now hold that §§ 10 and 11 respectively provide the FAA’s exclusive grounds

for expedited vacatur and modification.”); Tex. Brine Co., L.L.C. v. Am. Arbitration

Ass’n, Inc., 955 F.3d 482, 487 (5th Cir. 2020) (“The Supreme Court has held that

the statutory bases for vacating an arbitrator’s award are the only grounds on which

a court may vacate an award.”); Ancor Holdings, LLC v. Peterson, Goldman &

Villani, Inc., 294 S.W.3d 818, 828 (Tex. App.—Dallas 2009, no pet.) (“the Supreme

Court made clear that sections 10 and 11 are the exclusive grounds for vacating and

modifying an arbitration award under the FAA”).
                                      –15–
        An arbitrator exhibits evident partiality under 9 U.S.C. § 10(a)(2) if he does

not disclose facts which might, to an objective observer, create a reasonable

impression of the arbitrator’s partiality. Jones v. Carlos & Parnell, M.D., P.A., No.

05-17-00329-CV, 2017 WL 4930896, at *5 (Tex. App.—Dallas Oct. 31, 2017, pet.

denied) (mem. op.); Karlseng v. Cooke, 286 S.W.3d 51, 56 (Tex. App.—Dallas

2009, no pet.). The arbitrator’s findings and rulings, standing alone, are not “evident

partiality,” nor are asserted errors of fact or law. See Jones, 2017 WL 4930896, at

*6–7.

        “Misbehavior” under 9 U.S.C. § 10(a)(3) is a catch-all for other procedural

irregularities such as an arbitrator’s running afoul of his or her own rules in

conducting the arbitration or receiving evidence ex parte. Roehrs v. FSI Holdings,

Inc., 246 S.W.3d 796, 811 (Tex. App.—Dallas 2008, pet. denied). “Misbehavior”

does not include erroneous factual or legal determinations.            See Valdes v.

Whataburger Rests., LLC, No. 14-16-00222-CV, 2017 WL 2602728, at *3 (Tex.

App.—Houston [14th Dist.] June 15, 2017, no pet.) (mem. op.). Courts cannot

determine alleged misbehavior by an arbitrator without a record of the arbitration

proceeding. Id.

        Arbitrators exceed their powers under 9 U.S.C. § 10(a)(4) when they decide

matters not properly before them. Ancor Holdings, 294 S.W.3d at 829. Arbitrators

may also exceed their powers when the arbitration award is not rationally inferable

from the parties’ agreement. Id. Any doubts concerning the scope of what is

                                         –16–
arbitrable are resolved in favor of arbitration. Centex/Vestal v. Friendship W. Baptist

Church, 314 S.W.3d 677, 684 (Tex. App.—Dallas 2010, pet. denied). Unless the

arbitration agreement expressly provides for expanded review of the arbitration

proceedings, errors of fact or law do not constitute the exceeding of powers when

those errors do not concern whether an issue to be decided was properly before the

arbitrators or whether the arbitration award was rationally inferable from the parties’

agreement. Nafta Traders, Inc. v. Quinn, 339 S.W.3d 84, 97–102 (Tex. 2011). In

this case, the arbitration agreements do not permit expanded review of the arbitration

proceedings.

        “Evident material miscalculation” in 9 U.S.C. § 11(a) refers to a

mathematical error on the face of the award. 9 U.S.C. § 11(a); see Mid Atlantic

Capital Corp. v. Bien, 956 F.3d 1182, 1192–93 (10th Cir. 2020); Apex Plumbing

Supply, Inc. v. U.S. Supply Co., 142 F.3d 188, 194 (4th Cir. 1998).

       An argument that an award is “imperfect” must concern a matter of form that

does not affect the merits of the controversy. Id. § 11(c).

                                      Analysis

       Appellants argue the arbitrator exceeded his powers, showed partiality,

misbehaved and prejudiced a party, made a material miscalculation of figures or

“anything” in the award, or issued an imperfect award. See 9 U.S.C. § 10(a)(2), (3),

(4); id. § 11(a), (c).

                                        –17–
      Appellants assert the arbitrator exceeded his powers, showed evident

partiality, misbehaved and prejudiced a party, made a material miscalculation of

figures or “anything” in the award, or issued an imperfect award by:

          finding there was a breach of fiduciary duty;

          ordering appellants to provide discovery;

          imposing discovery sanctions against appellants, which appellants
           assert constituted “death penalty” sanctions;

          determining Gordon provided virtually no discovery when he provided
           discovery;

          determining Howse, Trotter, and Gordon conspired with HTS because,
           appellants argue, agents and principals cannot conspire;

          finding Trotter or appellants breached a duty of loyalty to appellee by
           contacting each other;

          making damages findings not supported by any evidence of the value
           of appellee’s trade secrets;

          stating in the award that appellee’s secret recording of Howse was the
           best piece of evidence showing a conspiracy; and

          determining disgorgement based on evidence of HTS’s bank deposits
           and not based on evidence of its profits.

The record does not show that appellants objected to any of these before the

arbitrator; therefore, they were not preserved for review by the trial court. See TEX.

R. APP. P. 33.1(a); Nafta Traders, 339 S.W.3d at 101 (in considering arguments of

error by the arbitrator, “complaints must have been preserved, all as if the award

were a court judgment on appeal”). Further, none of the arbitrator’s actions were

subject to the challenges brought by appellants.
                                        –18–
        The arbitrator’s actions do not constitute evident partiality by the arbitrator

because the asserted actions do not show the arbitrator failed to disclose facts that

might create a reasonable impression of the arbitrator’s partiality. See Jones, 2017

WL 4930896, at 6–7.

        The arbitrator’s actions do not constitute misbehavior prejudicing a party

because appellants have not shown they constitute a violation by the arbitrator of the

arbitrator’s rules. See Roehrs, 246 S.W.3d at 811. Moreover, without a record of

the arbitration proceeding, such a determination would be impossible. Valdes, 2017

WL 2602728, at *3.3

        Concerning whether the arbitrator exceeded his powers under 9 U.S.C. §

10(a)(4), the arbitration agreements provided the arbitrator authority to decide any

“violation, disagreement or dispute . . . arising out of, or connected with this

agreement.” Appellants do not explain in this Court, and they did not explain in the

    3
     Appellants do assert on appeal one act where the arbitrator failed to follow the American Arbitration
Association rules. Appellants argue that the award was imperfect because the arbitrator failed to follow
AAA R-58. Appellants state:
        Despite [appellee’s] numerous motions for sanctions and to compel discovery, there never
        was an order for sanctions against Gordon & HTS—until the Award. Offering no
        opportunity to cure such deficiencies or make an argument, the arbitrator violated R-58
        and Gordon & HTS’s due process rights, which led to an imperfect Award.
According to appellants’ brief, AAA R-58 requires the arbitrator provide the party to be sanctioned with
the opportunity to respond before making any determination regarding sanctions. Without the record of the
arbitration proceedings, the record does not show what motions for sanctions appellee made, their content,
whether the arbitrator had made a previous sanctions order against appellants, or whether appellants
objected to the arbitrator’s imposition of sanctions without their having an opportunity to respond to the
motions for sanctions. Appellants did not assert a violation of R-58 in the trial court, and with no record of
the arbitration proceedings, they cannot show they objected to any failure by the arbitrator to follow R-58.
Accordingly, they have not preserved any error.

                                                   –19–
trial court, why the dispute was not properly before the arbitrator or why the

arbitration award was not inferable from the arbitration agreement. See Ancor

Holdings, 294 S.W.3d at 829–30 (complaint that is actually that the arbitrator made

an error of fact or law is not a complaint that the arbitrator exceeded his powers).

We conclude appellants have not shown the trial court erred by not concluding the

arbitrator exceeded his powers.

      Appellants also assert the arbitrator’s findings and determinations show he

“miscalculated these facts and made ‘significant negative inferences’ on his

misunderstanding” and “such clear error of law probably cause an improper Award.”

The asserted errors are not mathematical miscalculations of figures evident on the

face of the award. See Mid Atlantic Capital Corp., 956 F.3d at 1192–93. Therefore,

they are not subject to modification by the trial court.

      Appellants also argue that the arbitration award was “imperfect.” A trial court

may modify an award that is imperfect “in matter of form not affecting the merits of

the controversy.” 9 U.S.C. § 11(c). All of appellants’ asserted errors by the

arbitrator concern the merits of the controversy, which do not constitute

imperfections in the award under section 11(c).

      Appellants assert in their brief on appeal that the arbitrator’s negative

inferences against appellants were “clear errors” of law. In their motion to vacate

the arbitration award, they assert the arbitrator confused facts leading to “clear error”

in his findings and conclusions. “Clear error” is not a ground for vacating or

                                         –20–
modifying an arbitration award. See 9 U.S.C. §§ 10, 11; see Denver City Energy

Assocs. L.P. v. Golden Spread Elec. Co-op, Inc., 340 S.W.3d 538, 549 (Tex. App.—

Amarillo 2011, no pet.) (“neither error nor clear error nor even gross error is a ground

for vacating an award”).

      We conclude appellants did not present to the trial court a proper ground for

vacating or modifying the arbitrator’s award. Therefore, the trial court did not err

by confirming the arbitration award and not vacating or modifying the award. See 9

U.S.C. § 9 (court must grant application to confirm award “unless the award is

vacated, modified, or corrected as prescribed in sections 10 and 11”). We overrule

appellants’ third issue.

                                   CONCLUSION
      We affirm the trial court’s judgment.

                                            /Lana Myers//
210746f.p05                                 LANA MYERS
                                            JUSTICE

                                         –21–
                            Court of Appeals
                     Fifth District of Texas at Dallas
                                   JUDGMENT

KENNETH GORDON AND                             On Appeal from the 366th Judicial
HARDCORE TRUCKING                              District Court, Collin County, Texas
SOLUTIONS LLC, Appellants                      Trial Court Cause No. 366-02385-
                                               2019.
No. 05-21-00746-CV           V.                Opinion delivered by Justice Myers.
                                               Justices Pedersen, III and Garcia
TRUCKING RESOURCES INC.,                       participating.
Appellee

       In accordance with this Court’s opinion of this date, the judgment of the trial
court is AFFIRMED.

       It is ORDERED that appellee TRUCKING RESOURCES INC. recover its
costs of this appeal from appellants KENNETH GORDON AND HARDCORE
TRUCKING SOLUTIONS LLC.

Judgment entered this 15th day of November, 2022.

                                        –22–