Court Opinion

ID: 2920888
Source: CourtListenerOpinion
Date Created: 2015-09-11 01:48:17.670235+00
Date Added: 2024-06-11T15:21:53.719540
License: Public Domain

In re Burton, McCumber & Cortez

 

NUMBER 13-03-00360-CV

COURT OF APPEALS

THIRTEENTH DISTRICT OF TEXAS

CORPUS CHRISTI - EDINBURG

IN RE BURTON, McCUMBER & CORTEZ, L.L.P.,	Relator.

On Relator's Petition for Writ of Mandamus.

O P I N I O N

Before Justices Hinojosa, Yañez, and Garza

Opinion by Justice Hinojosa

	Relator, Burton, McCumber & Cortez, L.L.P. ("BMC"), has filed a petition for writ of
mandamus, requesting that this Court order respondent, the Honorable Elia Cornejo-Lopez, presiding judge of the Cameron County Court at Law Number Two, to:  (1) vacate
her order requiring the real party in interest, Agustin Negrete ("Negrete"), to pay the
American Arbitration Association ("AAA") only one-half of the fees and expenses of one
arbitrator and BMC to pay AAA one-half of the fees and expenses of one arbitrator and the
entire fees and expenses of the remaining two arbitrators; and (2) enforce her prior order
requiring Negrete to pay one-half of the fees and expenses of all three arbitrators.  Negrete
has filed a response, and BMC has filed a reply.  See Tex. R. App. P. 52.4, 52.5.  Without
hearing oral argument, we grant the petition in part and deny it in part.  See Tex. R. App.
P. 52.8(c).
A. Background
	On October 29, 2001, BMC, an accounting firm, sued Negrete, a former partner in
the firm, in the Cameron County Court at Law Number Two for breach of contract.  The
contract at issue is a partnership agreement which provides rules and procedures for a
partner to leave the partnership.  Section 26.5 of the agreement provides:
The law of the State of Texas shall govern all questions concerning the
interpretation of this agreement and any claims or controversies which may
arise hereunder or which may relate to this agreement.  Except to the extent
provided otherwise in this agreement, any claim or controversy arising out of
or related to this agreement or the breach or alleged breach hereof shall be
settled by arbitration under the Commercial Arbitration Rules of the American
Arbitration Association then in effect.  Such arbitrators are to be present or
former Partners of an accounting firm.

Judgment on the award rendered by the arbitrator may be entered in any
court of competent jurisdiction.  The fees and expenses of the arbitrator and
charges, if any, of the American Arbitration Association shall be shared
equally by the parties to such arbitration.

	On November 16, 2001, BMC asked the court to order arbitration, citing the above
provision of the partnership agreement.  Respondent signed an order granting arbitration
on May 7, 2002.  In a motion to compel filed on December 9, 2002, BMC asserted that
Negrete had refused to comply with the court's order to arbitrate by failing to pay his share
of the arbitration fees and expenses as required by Section 26.5 of the partnership
agreement, and that the AAA had suspended the arbitration, pending payment.  
	On March 5, 2003, respondent signed an order requiring Negrete to pay the AAA
all fees, costs, and expenses required by the partnership agreement.  When Negrete failed
to comply with the March 5, 2003 order, BMC filed a motion to show cause why Negrete
should not be held in contempt and sanctioned by the court.
	A hearing on BMC's motion for contempt and for sanctions was held on May 14,
2003, and respondent found that Negrete had not complied with the March 5, 2003 order. 
However, respondent found that the amount Negrete had been ordered to pay was
excessive.  Respondent then ordered Negrete to pay one-half of the fees and expenses
of one arbitrator and ordered BMC to pay the remaining half of that arbitrator's fees and
expenses.  Respondent also ordered BMC to pay all of the fees and expenses of the other
two arbitrators.
B.  Standard of Review
	Mandamus will issue only to correct a clear abuse of discretion or the violation of
a duty imposed by law when there is no adequate remedy by appeal.  In re Daisy Mfg. Co.,
17 S.W.3d 654, 658 (Tex. 2000) (orig. proceeding).  A trial court clearly abuses its
discretion if "it reaches a decision so arbitrary and unreasonable as to amount to a clear
and prejudicial error of law."  Walker v. Packer, 827 S.W.2d 833, 839 (Tex. 1992) (orig.
proceeding).  A trial court has no discretion in determining what the law is or applying the
law to the facts.  Id. at 840.  Consequently, a clear failure by the trial court to analyze or
apply the law correctly constitutes an abuse of discretion.  Id. 
C.  Law and Analysis
	Arbitration is a creature of contract.  City of Alamo v. Garcia, 878 S.W.2d 664, 665
(Tex. App.-Corpus Christi 1994, no writ).  By consent, the parties to an arbitration
agreement submit their controversy to arbitrators or judges they have voluntarily chosen
"in substitution for the tribunals provided by the ordinary processes of the law."  Jack B.
Anglin Co. v. Tipps, 842 S.W.2d 266, 272 (Tex. 1992).  Thus, where a party contractually
agrees to arbitrate a dispute, it waives its right to recourse in the courts.  D. Wilson Constr.
Co. v. McAllen Ind. Sch. Dist., 848 S.W.2d 226, 231 (Tex. App.-Corpus Christi 1992, writ
dism'd w.o.j.).
	Texas law strongly encourages and favors arbitration.  EZ Pawn Corp. v Mancias,
934 S.W.2d 87, 90 (Tex. 1996) (orig. proceeding).  Because arbitration is favored in the
law, a presumption of arbitrability attaches once the existence of an arbitration agreement
is established.  Cantella & Co. v. Goodwin, 924 S.W.2d 943, 944 (Tex. 1996) (orig.
proceeding); Prudential Sec. Inc. v. Marshall, 909 S.W.2d 896, 898-99 (Tex. 1995) (orig.
proceeding).  Further, a broad arbitration clause gives rise to a presumption in favor of
arbitration.  In re Sun Communications, Inc., 86 S.W.3d 313, 318 (Tex. App.-Austin 2002,
orig. proceeding).  Any doubt as to whether a dispute falls within the scope of an arbitration
clause is resolved in favor of arbitration.  Id. 
	Because arbitration is an alternative forum, the Texas Arbitration Act has
established boundaries limiting judicial involvement in the process.  See  Tex. Civ. Prac.
& Rem. Code Ann. §§ 171.001-171.098 (Vernon 1997 & Supp. 2003).  When a trial court
modifies the agreement of the parties concerning payment of fees and expenses of the
arbitrators, it goes beyond those boundaries.  See Tex. Civ. Prac. & Rem. Code Ann. §
171.055 (Vernon Supp. 2003).
	Arbitration agreements are interpreted by applying contract principles.  Belmont
Constructors, Inc. v. Lyondell, Petrochemical Co., 896 S.W.2d 352, 357 (Tex.
App.-Houston [1st Dist.] 1995, no writ); City of Alamo, 878 S.W.2d at 665.  A court cannot
change an arbitration agreement merely because it or one of the parties disagrees with the
agreement's provisions.  See Mewbourne Oil Co. v. Blackburn, 793 S.W.2d 735, 737 (Tex.
App.-Amarillo 1990, orig. proceeding) (parties having agreed upon qualifications of
arbitrators, it is not function of court to change them or prescribe other qualifications). 
	The firm's partnership agreement clearly states that "fees and expenses of the
arbitrator . . . shall be shared equally by the parties to such arbitration."  Therefore, when
respondent ordered Negrete to pay one-half of the fees and expenses of one arbitrator and
ordered BMC to pay the remaining half of those fees and expenses, and further ordered
BMC to pay all of the fees and expenses of the other two arbitrators, she failed to correctly
analyze and apply the law, and she abused her discretion.
	Accordingly, we hold that respondent abused her discretion in signing the May 14,
2003 order.  We conditionally grant a writ of mandamus and direct respondent to vacate
her order of May 14, 2003.  The writ will issue only if respondent fails to vacate her order.
	We further conclude that respondent abused her discretion by signing the March 5,
2003 order.  The partnership agreement clearly provides that "any claim or controversy
arising out of or related to this agreement or the breach or alleged breach hereof shall be
settled by arbitration."  Because Negrete's failure to pay his share of the arbitrators' fees
and expenses falls within this category, we hold it is subject to review by the AAA, not by
respondent. 
	We deny relator's request that we order respondent to enforce her March 5, 2003
order.  Having concluded that Negrete's failure to pay his share of the arbitrators' fees and
expenses is not subject to review by respondent, we are confident that respondent will also
vacate her March 5, 2003 order. 

							FEDERICO G. HINOJOSA
							Justice

Opinion delivered and filed this the
25th day of August, 2003.