Court Opinion

ID: 4066014
Source: CourtListenerOpinion
Date Created: 2016-09-29 22:21:47.015943+00
Date Added: 2024-06-11T09:26:24.213025
License: Public Domain

ACCEPTED
                                                                                               04-15-00114-CV
                                                                                   FOURTH COURT OF APPEALS
                                                                                        SAN ANTONIO, TEXAS
                                                                                           9/8/2015 4:41:13 PM
                                                                                                KEITH HOTTLE
                                                                                                        CLERK
                                      No. 04-15-00114-CV

                                                                               FILED IN
                                  In the Fourth Court of Appeals        4th COURT OF APPEALS
                                        San Antonio, Texas               SAN ANTONIO, TEXAS
                                                                        9/8/2015 4:41:13 PM
                                                                          KEITH E. HOTTLE
                                                                                Clerk
HARI PRASAD KALAKONDA AND LATHA KALAKONDA, Appellants

                                                v.

                              ASPRI INVESTMENTS, LLC, Appellee

                            From the 45th Judicial District Court
                      Bexar County, Texas, Cause No: 2014-CI-16394,
                       the Honorable Judge Karen H. Pozza, presiding

                                 ASPRI INVESTMENTS, LLC’S
                                    APPELLEE’S BRIEF

                                              HIRSCH & WESTHEIMER, P.C.
                                                     Michael D. Conner
                                                     State Bar No. 04688650
                                                     mconner@hirschwest.com
                                                     Eric Lipper
                                                     State Bar No. 12399000
                                                     elipper@hirschwest.com
                                                     1415 Louisiana, 36th Floor
                                                     Houston, Texas 77002
                                                     Tel: (713) 220-9162
                                                     Fax: (713) 223-9319
                                               Attorneys for Appellee
                                               Aspri Investments, LLC

  Appellee does not believe oral argument will significantly aid the Court.
       If the Appellants’ request is granted, Aspri asks to be heard.

20140366.20140366/2213589.1
                                      TABLE OF CONTENTS

Table of Authorities..............................................................................................ii

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

The Record on Appeal.......................................................................................... 2

Regarding Oral Argument .................................................................................... 3

Statement of Facts ................................................................................................ 3

Summary of the Argument ................................................................................... 4

Argument and Authorities .................................................................................... 6

                   Review of Judgment Confirming Arbitration
                   Award is “Extraordinarily Narrow” ............................................... 6

                   Issue 1: The arbitrator did not refuse to hear
                   pertinent evidence; no basis for partiality was shown.
                   9 U.S.C. §10(a)(2), (3). ................................................................... 8

                   Issue 2: The arbitrator’s disclosures were adequate;
                   no basis for partiality was shown. 9 U.S.C. §10(a)(2), (3)........... 10

                   Issue 3: The arbitrator did not exceed his powers;
                   the Kalakondas guaranteed the lease. 9 U.S.C. §10(a)(4). ........... 16

                  Issue 4: The trial court correctly and sustainably
                  confirmed the award. .................................................................... 17

Conclusion and Prayer ....................................................................................... 19

Certificate of Compliance .................................................................................. 21

Certificate of Service .......................................................................................... 21

20140366.20140366/2213589.1
                                                          i
                                 TABLE OF AUTHORITIES

Cases

Ancor Holdings, LLC v. Peterson, Goldman & Villani, Inc.,
 294 S.W.3d 818 (Tex. App.–Dallas 2009, no pet.) .................................. 10, 16

Anzilotti v. Gene D. Liggin, Inc.,
 899 S.W.2d 264 (Tex. App.–Houston [14th Dist.] 1995, no writ) ........... 10, 16

Bernstein Seawell & Kove v. Bosarge,
  813 F.2d 726 (5th Cir. 1987) .......................................................................... 13

Burlington N. R. Co. v. TUCO Inc.,
 960 S.W.2d 629 (Tex. 1997)........................................................................... 11

Cambridge Legacy Group, Inc. v. Jain,
 407 S.W.3d 443 (Tex. App.–Dallas 2013, pet. denied)................................ 6-7

Citigroup Global Markets, Inc. v. Bacon,
  562 F.3d 349 (5th Cir. 2009) ............................................................................ 8

City of Keller v. Wilson,
  168 S.W.3d 802 (Tex. 2005)........................................................................... 11

Crossmark, Inc. v. Hazar,
 124 S.W.3d 422 (Tex. App.–Dallas 2004, pet. denied)............................ 10, 16

Dealer Computer Servs., Inc. v. Michael Motor Co., Inc.,
 485 F. App’x 724 (5th Cir. 2012) ................................................... 9, 13-14, 15

Dow Chem. Co. v. Francis,
 46 S.W.3d 237 (Tex. 2001)............................................................................. 15

El Paso Field Servs., L.P. v. MasTec N. Am., Inc.,
  389 S.W.3d 802 (Tex. 2012)........................................................................... 13

20140366.20140366/2213589.1
                                                     ii
First Options of Chicago, Inc. v. Kaplan,
  514 U.S. 938, 115 S. Ct. 1920, 131 L. Ed. 2d 985 (1995)................................... 7

Forest Oil Corp. v. El Rucio Land & Cattle Co., Inc.,
 446 S.W.3d 58 (Tex. App.–Houston [1st Dist.]
 2014 pet. abated July 24, 2015) .......................................................... 11, 12, 14

Hall St. Associates, L.L.C. v. Mattel, Inc.,
 552 U.S. 576, 128 S. Ct. 1396, 170 L. Ed. 2d 254 (2008) ............................... 8

Hamstein Cumberland Music Grp. v. Williams,
 532 Fed. Appx. 538 (5th Cir. 2013).................................................................. 9

InfoBilling, Inc. v. Transaction Clearing, LLC,
  2013 WL 1501570 (W.D. Tex. Apr. 10, 2013) .............................................. 13

In re Chestnut Energy Partners, Inc.,
  300 S.W.3d 386 (Tex. App.–Dallas 2009, pet. denied).............................. 6, 14

In re Labatt Food Serv., L.P.,
  279 S.W.3d 640 (Tex. 2009)............................................................................. 6

Ingham v. O’Block,
  351 S.W.3d 96 (Tex. App.–San Antonio 2011, pet. denied) .......................... 15

Kiernan v. Piper Jaffray Cos., Inc.,
  137 F.3d 588 (8th Cir. 1998) .......................................................................... 14

Kosty v. S. Shore Harbour Cmty. Ass'n, Inc.,
 226 S.W.3d 459 (Tex. App.–Houston [1st Dist.] 2006, pet. denied) ............. 10

Mariner Fin. Grp. v. Bossley,
 79 S.W.3d 30 (Tex. 2002)............................................................................... 14

Mapco, Inc. v. Forrest,
 795 S.W.2d 700 (Tex. 1990)........................................................................... 18

Myer v. Americo Life, Inc.,
 232 S.W.3d 401 (Tex. App.–Dallas 2007, no pet.) ................................ 6, 8, 16

20140366.20140366/2213589.1
                                                    iii
Nat’l Prop. Holdings, L.P. v. Westergren,
 453 S.W.3d 419 (Tex. 2015)........................................................................... 12
Oxford Health Plans, LLC v. Sutter,
 –––U.S. ––––, 133 S. Ct. 2064, 186 L. Ed. 2d 113 (2013) ................................. 7

Positive Software,
 476 F.3d 278 (5th Cir. 2007) .......................................................................... 11

Schlobohm v. Pepperidge Farm, Inc.,
  806 F.2d 578 (5th Cir. 1986) .......................................................................... 19

SSP Holdings Ltd. P'ship v. Lopez,
  432 S.W.3d 487 (Tex. App.–San Antonio 2014, pet. denied) ................. passim

Sun v. Al's Formal Wear of Houston, Inc.,
  1998 WL 726479 (Tex. App.–Houston [14th Dist.]
  Oct. 15, 1998, no pet.) .................................................................................... 18

Tenaska Energy, Inc. v. Ponderosa Pine Energy, LLC,
  437 S.W.3d 518 (Tex. 2014)........................................................................... 11

Vera v. N. Star Dodge Sales, Inc.,
  989 S.W.2d 13 (Tex. App.–San Antonio 1998, no pet.) ................................ 12

Why Nada Cruz, L.L.C. v. Ace Am. Ins. Co.,
 569 Fed. Appx. 339 (5th Cir. 2014).................................................................. 9

Statutes

9 U.S.C. § 1, et seq. .............................................................................................. 6

9 U.S.C. § 9 .......................................................................................................... 7

9 U.S.C. § 10 .....................................................................................i, 7, 8, 10, 16

9 U.S.C. § 11 ........................................................................................................ 7

20140366.20140366/2213589.1
                                                           iv
Rules

Tex. R. App. P. 9.4(e) ........................................................................................ 21

Tex. R. App. P. 9.4(i) ......................................................................................... 21

Tex. R. Civ. P. 48 ............................................................................................... 18

20140366.20140366/2213589.1
                                                         v
                              Statement of the Case

 Nature of the Case:            Appellee petitioned for confirmation of an
                                arbitration award; Appellants sought vacatur and
                                remand and raised the issue of lease termination

 Trial Court:                   45th Judicial District Court
                                Bexar County, Texas, the Honorable Judge Karen
                                H. Pozza, presiding

 Trial Court Disposition:       The trial court signed its Final Judgment
                                December 1, 2014 confirming the arbitrator’s
                                award. CR175. Both the award and the Final
                                Judgment include “Mother Hubbard” clauses.

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                                        1
                               The Record on Appeal

         The Clerk’s Record should comprise a single volume filed April 2, 2015.

Appellee, Aspri, moved to strike pages 236 through 496 of that volume. Denying

Aspri’s motion, the Court appropriately observed it “will consider only those matters

that were before the trial court at the time of the rulings being reviewed.” As set forth

in Aspri’s motion, Appellants, the Kalakondas, made what may be described as a

“bulk” filing in the trial court under their cover letter dated March 24, 2015. The

Kalakondas have made no effort to demonstrate that any of the materials in their

March 24 filing (pages 236-496 of the record) were before the trial court when it

signed the judgment or at any time within its period of plenary power over the

judgment.

         Appellants, the Kalakondas, also refer to a second volume (227 pages) filed

June 9, 2015 and labelled “Supplemental Clerk’s Record.” This “supplemental”

record is actually the record from a different trial court case, Cause No.

2015CI01910. Thus, it is not properly part of the clerk’s record in this proceeding

unless or until it is shown that any referenced material was, likewise, “before the

trial court at the time of the rulings being reviewed.”

         The Kalakondas reference four volumes of Reporter’s Record. The first, third

and fourth volumes are transcripts of proceedings in the trial court case from which

this appeal follows; the second volume is from a different case, Cause No.

20140366.20140366/2213589.1
                                           2
2015CI01910. Volume one, “1RR**,” is the transcript of the dispositive hearing

held December 1, 2014. Volume three has to do with the Kalakonda’s motion for

reconsideration; and, volume four (“4RR**”) is the transcript of a hearing on April

1, 2015—a full four months after judgment—at which Judge Pozza was asked to

“clarify” her December 1 judgment. No new judgment issued.

                              Regarding Oral Argument

         Aspri believes oral argument would impair rather than facilitate disposition.

Review of a judgment confirming an arbitration award is narrow; there are no novel

issues presented.

                                   Statement of Facts

         Aspri, as landlord, prosecuted breach of contract claims in arbitration against

Shubha, LLC, the tenant pursuant to a Lease Assumption Agreement (see CR7), and

against its principals (see, e.g., CR151), Mr. Kalakonda and Mrs. Kalakonda, as

guarantors of the lease. See CR115; CR160-61. Shubha, LLC and the Kalakondas

were represented by counsel in the arbitration. See CR6. The arbitration award was

signed October 10, 2014 in favor of Aspri and against Shubha, LLC, Mr. Kalakonda

and Mrs. Kalakonda ordering them to pay Aspri $66,235.51. CR6-10. Promptly

thereafter, Aspri petitioned the trial court for confirmation of the award. CR1, et seq.

         Despite service of the petition on Shubha through its registered agent Mr.

Kalakonda (see CR13), Shubha did not answer or otherwise appear in the trial court.

20140366.20140366/2213589.1
                                            3
Like in this Court, the Kalakondas appeared pro se in the district court. See, e.g.,

CR15, 73-75.

          The Kalakondas moved the trial court to vacate and remand the award. CR15,

et seq.

          The trial court heard the matter on December 1, 2014 and signed its Final

Judgment confirming the arbitration award the same day. CR175.

                               Summary of the Argument

          Shubha, LLC did not answer or appear below; it is not before this Court. There

is no basis to disturb the Final Judgment confirming the award against Shubha, LLC.

          The Kalakondas did not show the arbitrator refused to hear pertinent evidence.

Among other things, the 2002 lease agreement includes the tenant’s waiver of all

Texas Deceptive Trade Practices Act claims. CR129-48; CR145, ¶15.11. And, it was

within the arbitrator’s discretion to refuse the Kalakondas’ newly substituted

attorney’s eleventh hour attempt to add such claims which appear to substantially

overlap with claims the arbitrator considered.

          The arbitrator fully disclosed his previous relationships (through his “active

ADR practice”) with Aspri’s counsel, e.g., as mediator in matters where Aspri’s

counsel represented strangers to this case. There was no apparent partiality.

          That Mr. Hoover was identified in the arbitration clause in the lease

assumption agreement and in the guaranty is facially apparent. There is no indication

20140366.20140366/2213589.1
                                             4
in the record that the Kalakondas’ attorney objected to Mr. Hoover’s service as

arbitrator. There is no indication that the Kalakondas’ attorney attempted to invoke

the alternative of arbitration pursuant to American Arbitration Association rules as

provided in the arbitration agreement.

         “Manifest disregard of the law” is not an available basis for setting aside the

award. In any event, the Kalakondas have not shown any such disregard by the

arbitrator.

         Omitting any mention that they both signed a guaranty of the lease and

ignoring the pervasive evidence that they both participated as respondents and

counter-claimants in the arbitration, the Kalakondas’ argument that the arbitrator

exceeded his powers borders on disingenuous.

         The Kalakondas’ argument that the trial court interpreted rather than

confirmed the award is patently meritless. The judgment recites no facts and neither

expands nor limits the relief afforded in the arbitrator’s award.

20140366.20140366/2213589.1
                                            5
                                Argument and Authorities

Review of Judgment Confirming Arbitration Award is “Extraordinarily
Narrow1”

         The award recites that the “case was governed by Federal law.” 2 CR7. Review

of the judgment confirming an arbitration award under the Federal Arbitration Act

(9 U.S.C. § 1, et seq.) (“FAA”) is de novo. SSP Holdings Ltd. P’ship v. Lopez, 432
S.W.3d 487, 492 (Tex. App.–San Antonio 2014, pet. denied); In re Chestnut Energy

Partners, Inc., 300 S.W.3d 386, 397 (Tex. App.–Dallas 2009, pet. denied); see also

In re Labatt Food Serv., L.P., 279 S.W.3d 640, 643 (Tex. 2009) (orig. proceeding).

The Court reviews the entire record.3 SSP Holdings Ltd. P’ship, supra (citing In re

Chestnut, 300 S.W.3d at 397). All reasonable presumptions are indulged in favor of

the arbitration award, and none against it. Id. An arbitration award is presumed valid

and entitled to great deference and a court’s review of the arbitration award is

“extraordinarily narrow.” SSP Holdings Ltd. P’ship, supra (quoting Myer, 232
S.W.3d at 407–08). The party seeking to vacate the award bears the ultimate burden

of proving grounds for vacatur. Id. (citing Cambridge Legacy Group, Inc. v. Jain,

         1
          SSP Holdings Ltd. P'ship v. Lopez, 432 S.W.3d 487, 492 (Tex. App.–San Antonio 2014,
pet. denied) (citing Myer v. Americo Life, Inc., 232 S.W.3d 401, 407-08 (Tex. App.–Dallas 2007,
no pet.)).
         2
         The arbitration clause in the lease does not specify federal law. CR143. The arbitration
clauses in the lease assumption and the Kalakondas’ guaranty do, referencing the FAA. CR150;
CR161.
         3
             See p. 2, supra.

20140366.20140366/2213589.1
                                               6
407 S.W.3d 443, 449 (Tex. App.–Dallas 2013, pet. denied)). The Kalakondas did

not carry that burden.

         “Under the FAA, courts may vacate an arbitrator’s decision ‘only in very

unusual circumstances.’” Oxford Health Plans, LLC v. Sutter, –––U.S. ––––, 133
S. Ct. 2064, 2068, 186 L. Ed. 2d 113 (2013) (quoting First Options of Chicago, Inc.

v. Kaplan, 514 U.S. 938, 942, 115 S. Ct. 1920, 131 L. Ed. 2d 985 (1995)). No such

circumstances exist here and, the award must be confirmed unless vacated, modified,

or corrected under one of the limited grounds set forth in sections 10 and 11 of the

FAA. See 9 U.S.C. §§ 9–11. The Kalakondas moved only to “vacate and remand,”

they did not ask the trial court to modify or correct the award. CR15, et seq.

Accordingly, they had the ultimate burden to demonstrate a section 10 basis for

vacatur. See SSP Holdings Ltd. P’ship, supra; 9 U.S.C. § 10.

         Under section 10, the Kalakondas must have demonstrated to Judge Pozza

that:

         (1) the award was procured by corruption, fraud, or undue means;

         (2) there was evident partiality or corruption in the arbitrator;

         (3) the arbitrator was 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) the arbitrator exceeded his powers, or so imperfectly executed them
             that a mutual, final, and definite award upon the subject matter
             submitted was not made.

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                                             7
See 9 U.S.C. § 10(a). The Kalakondas’ motion to vacate argued “evident partiality”

(10(a)(2)), “refus[al] to hear and consider … pertinent and material” evidence

(10(a)(3)), and that arbitrator Hoover “exceeded [his] power, or so imperfectly

executed them, that a mutual, final, and definite award … was never made”

(10(a)(4)). See CR19. 4 The trial court correctly determined that the Kalakondas’

arguments were insufficient on any basis presented to overcome the strong

presumption that the award is valid. See SSP Holdings Ltd. P’ship, 432 S.W.3d at

492; Myer, 232 S.W.3d at 407–08.

Issue 1: The arbitrator did not refuse to hear pertinent evidence; no basis for
         partiality was shown. 9 U.S.C. §10(a)(2), (3).

         The Kalakondas say that “well before the arbitration,” they pled DTPA

claims. Br. at 8. But, the arbitration hearing “convened as scheduled on July 24,

2014” (CR6) and the pleading referred to (see CR59-62) was served less than two

weeks before. CR62. Regardless of the Kalakondas’ then recently engaged

attorney’s timeliness, the Fifth Circuit has held that “arbitrators enjoy inherent

authority to police the arbitration process and fashion appropriate remedies to

         4
         The Kalakondas also asserted Mr. Hoover “acted in “manifest disregard of the law.’”
CR19. That is not a basis for vacatur under federal law. Hall St. Associates, L.L.C. v. Mattel, Inc.,
552 U.S. 576, 584, 128 S. Ct. 1396, 1403, 170 L. Ed. 2d 254 (2008) (“We now hold that §§ 10 and
11 respectively provide the FAA’s exclusive grounds for expedited vacatur and modification.”);
Citigroup Global Markets, Inc. v. Bacon, 562 F.3d 349 (5th Cir. 2009).

20140366.20140366/2213589.1
                                                 8
effectuate this authority.” Why Nada Cruz, L.L.C. v. Ace Am. Ins. Co., 569 Fed.

Appx. 339, 343 (5th Cir. 2014) (citing Hamstein Cumberland Music Grp. v.

Williams, 532 Fed. Appx. 538, 543 (5th Cir. 2013)).

         The award states, moreover, that the Kalakondas appeared with counsel and

“announced ready for final hearing.” CR6. After two and one-half days, “each party

confirmed that they had a full and fair opportunity to present their respective case in

chief ….” CR7. There is no indication that the Kalakondas objected to going forward

or otherwise attempted to preserve any issue regarding the scope of their pleadings

or permitted evidence. See, e.g., Dealer Computer Servs., Inc. v. Michael Motor Co.,

Inc., 485 F. App’x 724, 727-28 (5th Cir. 2012).

         Further, the award clearly shows the arbitrator considered an array of legal

theories advanced by the Kalakondas including breach of contract, tortious

interference, breach of fiduciary duty, and fraud. CR9. The Kalakondas do not

complain that evidence relevant to any of those theories was excluded. They have

not identified any evidence that was excluded just because it might also have

20140366.20140366/2213589.1
                                           9
supported a DTPA theory. 5 In fact, no evidence was excluded on any basis. CR7.

Per terms of the award, the arbitrator considered all testimony and all exhibits that

were offered, considered the parties’ objections, and, admitted everything into

evidence. Id.

         As the Kalakondas correctly point out, an arbitrator is “not bound to hear all

the evidence tendered by the parties as long as each party is given an adequate

opportunity to present evidence and arguments.” Kosty v. S. Shore Harbour Cmty.

Ass’n, Inc., 226 S.W.3d 459, 463 (Tex. App.–Houston [1st Dist.] 2006, pet. denied).

There is nothing in the record to suggest that the arbitrator’s recital that the

Kalakondas “had a full and fair opportunity to present their … case” (CR7) is

inaccurate. The Kalakondas have not and cannot overcome the strong presumption

that the award is valid. See SSP Holdings Ltd. P’ship, 432 S.W.3d at 492.

Issue 2: The arbitrator’s disclosures were adequate; no basis for partiality was
         shown. 9 U.S.C. §10(a)(2), (3).

         Citing mainly to materials not before the trial court, the Kalakondas argue that

Mr. Hoover’s disclosures were somehow inadequate. The Fifth Circuit has held that

         5
          Paragraph 15.11 of the lease is the tenant’s waiver of all DTPA claims, remedies, and
causes of action. CR50. The Kalakondas have not argued such a waiver is unenforceable. Even if
they had, the reviewing court “may not vacate an award even if it is based upon a mistake in law
or fact.” Ancor Holdings, LLC v. Peterson, Goldman & Villani, Inc., 294 S.W.3d 818, 826 (Tex.
App.–Dallas 2009, no pet.); Crossmark, Inc. v. Hazar, 124 S.W.3d 422, 429 (Tex. App.–Dallas
2004, pet. denied); Anzilotti v. Gene D. Liggin, Inc., 899 S.W.2d 264, 266 (Tex. App.–Houston
[14th Dist.] 1995, no writ).

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                                              10
a neutral arbitrator exhibits evident partiality if the arbitrator does not disclose facts

which might create a “reasonable impression of bias.” See Positive Software, 476
F.3d 278, 283 (5th Cir. 2007). The Texas Supreme Court applies a slightly different

standard: a neutral arbitrator exhibits evident partiality “if the arbitrator does not

disclose facts which might, to an objective observer, create a reasonable impression

of the arbitrator’s partiality.” Burlington N. R. Co. v. TUCO Inc., 960 S.W.2d 629,

630 (Tex. 1997); see also Tenaska Energy, Inc. v. Ponderosa Pine Energy, LLC, 437
S.W.3d 518, 524–25 (Tex. 2014).

         In a recent case applying the TUCO standard, the First Court of Appeals

observed, “An arbitrator has a duty to disclose facts known to him that might, to an

objective observer, create a reasonable impression of the arbitrator’s partiality.”

Forest Oil Corp. v. El Rucio Land & Cattle Co., Inc., 446 S.W.3d 58, 80 (Tex. App.–

Houston [1st Dist.] 2014 pet. abated July 24, 2015) (emphasis in original). In Forest

Oil, Ramos, an arbitrator, was apparently considered by parties to serve as mediator

in related litigation. See id. at 78. There was conflicting evidence whether Ramos

was aware that he was being considered as a mediator. See id. at 80. The court

observed that “as the fact finder in the vacatur proceeding, [the trial court resolves]

conflicts in the evidence ….” Id. (citing City of Keller v. Wilson, 168 S.W.3d 802,

819–20 (Tex. 2005)). And, based on the record, determined that “the evidence

supported an implied finding by the trial court that Ramos was unaware of what had

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                                           11
occurred in the [related] litigation” and, therefore, the “parties’ consideration of

Ramos as mediator in [related] litigation could not have influenced Ramos’s

partiality during the arbitration.” Id. at 81. Here, the Kalakondas did not attempt to

show in the trial court whether arbitrator Hoover knew he was identified in some

other unrelated arbitration agreement. Without evidence that Hoover knew his name

appeared in other Aspri contracts, the Kalakondas did not and cannot establish that

Hoover failed to “disclose facts known to him.” Forest Oil Corp., supra. They did

not show evident partiality and the judgment should be affirmed.

         The Kalakondas’ argument that Mr. Hoover was appointed “unilaterally

without consultation and acceptance in a take it or leave it assignment of lease” (Br.

at 14) is patently without merit. While accurate that Mr. Hoover is identified in the

lease assumption arbitration clause (CR150) and in the similar clause found in the

Kalakondas’ guaranty (CR161), there is no evidence—and the Kalakondas do not

argue—that they somehow were coerced into signing either document. The law

presumes parties have read and understood the contracts they sign. See, e.g., Nat’l

Prop. Holdings, L.P. v. Westergren, 453 S.W.3d 419, 425-26 (Tex. 2015); Vera v.

N. Star Dodge Sales, Inc., 989 S.W.2d 13, 17 (Tex. App.–San Antonio 1998, no

pet.). It was not the trial court’s role, nor is it this Court’s, “to protect parties from

20140366.20140366/2213589.1
                                           12
their own agreements.” El Paso Field Servs., L.P. v. MasTec N. Am., Inc., 389
S.W.3d 802, 810–11 (Tex. 2012).6

         In any event, the very fact about which the Kalakondas now complain was

“disclosed,” not hidden, in the two contracts they signed. CR150-51; CR160-61.

And, there is nothing in the record that might possibly suggest the Kalakondas or

their counsel took exception to Mr. Hoover’s selection when arbitration began or

that they attempted to invoke the alternative AAA process provided in the

contract(s). CR 150, 160-61. Generally, one seeking to vacate an arbitration award

based on evident partiality must object during the arbitration proceedings and

“failure to do so results in waiver of its right to object.” InfoBilling, Inc. v.

Transaction Clearing, LLC, SA-12-CV-01116-DAE, 2013 WL 1501570, at *3

(W.D. Tex. Apr. 10, 2013) (quoting Dealer Computer Servs., Inc. v. Michael Motor

Co., Inc., 485 F. App’x 724, 727 (5th Cir. 2012); see also Bernstein Seawell & Kove

v. Bosarge, 813 F.2d 726, 732 (5th Cir. 1987). Like in InfoBilling, the Kalakondas

“cannot ‘now seek to avoid [the] tactical decision to await the decision of the

[arbitrator] rather than seek [his] removal.’” InfoBilling, Inc., supra (citing Dealer

         6
          Relatedly, the Kalakondas argue the arbitration was “hijacked to Houston.” Br., p. 17.
The arbitration provision in the lease is the only one with a venue term. CR143. That provision
does not, however, specify federal law. Id. The arbitration “was governed by Federal law.” CR7.
The arbitration provisions in both the assumption of lease and the Kalakondas’ guaranty specify
federal law; neither specifies venue. CR150; CR160. Presumptively in favor of confirmation of
the award, the agreement upon which arbitration proceeded did not require a specific venue. See
SSP Holdings Ltd. P’ship, 432 S.W.3d at 492.

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                                              13
Computer Servs., 485 F. App’x at 728 n. 4 (quoting Kiernan v. Piper Jaffray Cos.,

Inc., 137 F.3d 588, 593 (8th Cir. 1998)). The Kalakondas did not establish evident

partiality; they have not and cannot overcome the strong presumption that the award

is valid. See SSP Holdings Ltd. P’ship, 432 S.W.3d at 492. Similarly, the Kalakondas

argue that Mr. Hoover’s timely disclosure of his “active ADR practice” suggests

partiality. In disclosing his active ADR practice, Mr. Hoover revealed his history

mediating with attorneys Fuhr, Lipper, and the firm of Hirsch & Westheimer; Mr.

Hoover disclosed that he and a different Hirsch & Westheimer lawyer had previously

served together as arbitrators; he also stated affirmatively that he did not recognize

the names of any party to the arbitration and did not know any of the individuals

personally; and, he invited all involved to alert him if he had missed something.7 See

CR170-73. No such alert was forthcoming. This record supports an implied finding

by the trial court that Mr. Hoover did not fail to disclose “facts known to him that

might, to an objective observer, create a reasonable impression of the arbitrator’s

partiality.” Forest Oil Corp., 446 S.W.3d at 80; Mariner Fin. Grp. v. Bossley, 79
S.W.3d 30, 33 (Tex. 2002) (“the state of [Hoover’s] knowledge … is a fact issue

         7
          The Kalakondas’ argue that Mr. Hoover “is the arbitrator for several of Plaintiff’s
properties.” Br., p. 16. There is no evidence that Mr. Hoover has arbitrated any other matter
involving Aspri. Record facts support Hoover’s disclosure; no record facts support the
Kalakondas’ argument. All reasonable presumptions are indulged in favor of the arbitration award,
and none against it. SSP Holdings Ltd. P’ship, supra (citing In re Chestnut, 300 S.W.3d at 397).

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material to determining his partiality.”); see also Ingham v. O’Block, 351 S.W.3d
96, 100 (Tex. App.–San Antonio 2011, pet. denied) (discussing legal and factual

sufficiency standards) (citing Dow Chem. Co. v. Francis, 46 S.W.3d 237, 241 (Tex.

2001)). And, as with the arbitration clauses identifying Mr. Hoover, these facts about

lawyers who had mediated other cases for other clients were known to the

Kalakondas and their counsel at the time. Yet, no objection to Mr. Hoover’s service

as arbitrator was raised. See Dealer Computer Servs., Inc., 485 F. App’x at 727-28,

n. 4. No partiality was shown. The judgment confirming the award should be

affirmed.

         At pages 18 through 22 of their brief under the heading “Post Arbitration” and

with the apparent objective of showing partiality, the Kalakondas argue matters that

necessarily were or could have been argued in the arbitration. They argue, for

example, “The arbitrator completely misread or intentionally ignored the above

[referenced lease terms] which clearly shows evident partiality and the result of it.”

Br., p. 19. They argue that the “arbitrator stopped reading the lease on page three or

four ….” Id. With reference to various lease terms and supposed undisclosed

preexisting agreements, the argue fraud. See Brief, p. 20. But the arbitrator

considered and rejected the Kalakondas’ fraud claim. CR9 (“I find no credible

evidence for a fraud finding against Clamant.”).

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                                           15
         None of these arguments is about anything “post arbitration.” All have to do

with the very issues presented to the arbitrator. See CR6-10. That the Kalakondas

disagree with the arbitrator’s disposition of the matters presented does not

demonstrate partiality. Mr. Hoover’s interpretation of lease terms and the parties’

respective compliance and/or failures to comply was not reviewable in the trial court

and is not reviewable here. Review is “extraordinarily narrow.” SSP Holdings Ltd.

P’ship, 432 S.W.3d at 492 (quoting Myer, 232 S.W.3d at 407–08). A court reviewing

an arbitration award “may not vacate an award even if it is based upon a mistake in

law or fact.” Ancor Holdings, LLC v. Peterson, Goldman & Villani, Inc., 294 S.W.3d
818, 826 (Tex. App.–Dallas 2009, no pet.); Crossmark, Inc. v. Hazar, 124 S.W.3d
422, 429 (Tex. App.–Dallas 2004, pet. denied); Anzilotti v. Gene D. Liggin, Inc., 899
S.W.2d 264, 266 (Tex. App.–Houston [14th Dist.] 1995, no writ). The judgment of

the trial court should be affirmed.

Issue 3: The arbitrator did not exceed his powers; the Kalakondas guaranteed
         the lease. 9 U.S.C. §10(a)(4).

         The Kalakondas’ argument that their personal liability was not in issue in the

arbitration is contrary to the record and should be rejected. The award says they

appeared at arbitration in person and through counsel, announced ready, and

“confirmed that they had a full and fair opportunity to present their respective case.”

CR6-10. The Kalakondas were named in Aspri’s Claimant’s Petition in Arbitration

“as guarantors on the subject lease agreement.” CR115, 117-18. The “Personal

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                                           16
Guaranty of Lease, Subject to Binding Arbitration” was before the arbitrator

(“Exhibit ‘E’” to Aspri’s petition; CR118) and is in this record. CR160-61. Finally,

by terms of the award, the Kalakondas, two of three “Respondents,” were ordered to

pay Aspri $66,235.51. CR9. The argument that their “personal liability was not

presented to the arbitrator” belies the record; the judgment should be affirmed.

Issue 4: The trial court correctly and sustainably confirmed the award.

         The Kalakondas’ issue four presents nothing for the Court’s review. 8 The

award orders the Kalakondas to pay Aspri a total amount of $66,235.51 comprising

amounts for actual damages for breach of the contract plus attorneys’ fees as set

forth by the arbitrator. CR8-9. The award provides for post award interest (6%) in

the event the amounts were not paid within 30 days. CR10. The trial court’s

judgment, in two decretal sentences, grants judgment in favor of Aspri for the same

$66,235.51 plus interest at 6% to accrue from November 10, 2014 (the 30th day after

the award date). CR175. Neither the award nor the judgment includes injunctive or

         8
         The majority of “record” citations in the Kalakondas’ arguments relating to issue four are
to materials not properly before the Court. See p. 2, supra. The references to findings of fact and
conclusions of law is particularly misleading. The Clerk’s Record in this case does not include
any; nor does it include any request for findings and conclusions. See CR unnumbered pages 2nd
through 4th.

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similar relief. CR6-10; CR175. Each includes the forum’s statement that relief not

expressly granted is denied. Id.

         Pertinent to the Final Judgment, the Kalakondas put the issue of lease

termination before the trial court. See, e.g., CR72, ¶¶ X, XII. They argued the issue.

1RR25-30. However, the trial court declined to afford relief for what the Kalakondas

called “preemptive and premature action of foreclosure and termination of the

lease.” See CR72; CR175 (“All relief not expressly granted herein is denied.”).

Having themselves raised the issue (see Tex. R. Civ. P. 48), the Kalakondas did not

move to sever and did not file a nonsuit in an effort to preserve the claim. See Sun v.

Al's Formal Wear of Houston, Inc., No. 14–96–01516–CV; 1998 WL 726479, at *2

(Tex. App.-Houston [14th Dist.] Oct. 15, 1998, no pet.) (not designated for

publication); Mapco, Inc. v. Forrest, 795 S.W.2d 700, 703 (Tex. 1990) (stating a

judgment is void only when the court rendering judgment had no jurisdiction of the

parties, no jurisdiction of the subject matter, no jurisdiction to enter the judgment,

or no capacity to act as a court.). The trial court clearly was within its jurisdiction in

denying the additional relief sought

         Regardless what additional relief the Kalakondas may have sought in the trial

court, Judge Pozza’s judgment does not enlarge or alter the arbitration award in any

respect. And, with the exception of full satisfaction prior to confirmation—thus,

obviating the need for it—post award events are not relevant to the sustainability of

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                                           18
the trial court’s judgment. As stated by the Fifth Circuit, “where the parties made an

agreement intended to avoid court litigation by resolving the entire dispute through

arbitration, intervention by the court to award additional relief would be inconsistent

with the language and policy of the Federal Arbitration Act.” Schlobohm v.

Pepperidge Farm, Inc., 806 F.2d 578, 581 (5th Cir. 1986). The Final Judgment

effectuates the parties’ intent to resolve their entire dispute through arbitration. The

judgment should be affirmed and this litigation terminated.

                               Conclusion and Prayer

         As the Court is keenly aware, review of an arbitration award is

“extraordinarily narrow.” SSP Holdings Ltd. P’ship v. Lopez, 432 S.W.3d at 492.

With all reasonable presumptions indulged in favor of the award, and none against

it, the Kalakondas as the parties seeking vacatur had a high burden; the arbitration

award is presumed valid and entitled to great deference. Id. The trial court correctly

determined all issues brought before it and reached the only legally sustainable

result. It properly confirmed the award. Accordingly, for at least the foregoing

reasons, Aspri Investments, LLC asks the Court to affirm the judgment of the trial

court in all respects.

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                              Respectfully submitted,

                              HIRSCH & WESTHEIMER, P.C.

                              By: /s/ Michael D. Conner
                                Michael D. Conner
                                State Bar No. 04688650
                                mconner@hirschwest.com
                                Eric Lipper
                                State Bar No. 12399000
                                elipper@hirschwest.com
                                1415 Louisiana, 36th Floor
                                Houston, Texas 77002
                                Telephone: (713) 220-9162
                                Facsimile: (713) 223-9319

                              ATTORNEYS FOR APPELLEE
                              ASPRI INVESTMENTS, LLC

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                               20
                              CERTIFICATE OF COMPLIANCE

       I do hereby certify that the relevant contents of this document consist of 4300
words, in compliance with Tex. R. App. P. 9.4(i) and this document complies with
the typeface requirements of Tex. R. App. P. 9.4(e) because it has been prepared in
a proportionally spaced typeface using Microsoft Word 2007 in 14 point Times New
Roman font.

                                                 /s/ Michael D. Conner
                                            Michael D. Conner

                                CERTIFICATE OF SERVICE

      I hereby certify that on this 8th day of September, 2015, a true and correct copy
of Appellee’s Brief was served as follows:

                                      Hari Prasad Kalakonda
                                        Latha Kalakonda
                                           Shubha, LLC
                                      5002 Newcastle Lane
                                     San Antonio, TX 78249
                              Via E-Serve: smfoodmart@yahoo.com,

                                                 /s/ Michael D. Conner
                                            Michael D. Conner

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