Aston Solar, LLC and Aston Holdings, Inc. v. Sunnova Energy Corporation
14-21-00074-CV
| Tex. App. | Apr 28, 2022Background
- Sunnova (solar financier) and Aston Solar entered a Channel Partner Agreement (CPA) with a broad arbitration clause; Aston Holdings later signed an amendment substituting it as “Contractor.”
- Customers experienced defective solar systems installed by Aston; Sunnova repaired some systems and treated others as total losses, losing lease payments on affected accounts.
- Aston (and Aston Holdings) demanded arbitration seeking payment for repairs; Sunnova counterclaimed for breach, indemnity, and offsets, seeking roughly $574,282 plus fees.
- The arbitrator held a two-day hearing and awarded Sunnova $574,282, attorney’s fees, arbitration costs, and interest; the award referenced only Aston Solar as claimant in the written award.
- Sunnova moved to confirm the award in district court naming both Aston Solar and Aston Holdings as defendants; the trial court confirmed the award and denied appellants’ motion to vacate.
- On appeal, appellants argued (1) the arbitrator exceeded authority by awarding damages barred by the CPA’s consequential-damages exclusion, and (2) Aston Holdings was not bound or properly included in the confirmed award.
Issues
| Issue | Plaintiff's Argument (Aston) | Defendant's Argument (Sunnova) | Held |
|---|---|---|---|
| Whether the arbitrator exceeded authority by awarding damages allegedly barred by CPA (consequential damages exclusion) | Award exceeded arbitrator’s powers because CPA limits remedies to repair/offset and bars consequential damages | Arbitration clause broadly submits disputes (including damages interpretation) to arbitrator; classification of damages is for arbitrator | Court held arbitrator acted within authority; at most she erred in classifying damages, which is not a basis to vacate |
| Whether Aston Holdings was a proper party to the confirmed award | Aston Holdings not a CPA party or in the award; trial court erred confirming award against it | Aston Holdings signed an amendment incorporating CPA, participated in arbitration (joined demand, discovery, witnesses), and intended to be part of claims | Court held Aston Holdings was a signatory/participant and the award properly construed to include it; confirmation against it stands |
Key Cases Cited
- CVN Grp., Inc. v. Delgado, 95 S.W.3d 234 (Tex. 2002) (arbitration awards receive extremely deferential judicial review)
- Prudential Secs., Inc. v. Marshall, 909 S.W.2d 896 (Tex. 1995) (policy favoring arbitration)
- Nafta Traders, Inc. v. Quinn, 339 S.W.3d 84 (Tex. 2011) (arbitrator’s powers derive from parties’ agreement)
- D.R. Horton-Tex., Ltd. v. Bernhard, 423 S.W.3d 532 (Tex. App.—Houston [14th Dist.] 2014) (distinguishing mistakes of law from excess of authority)
- Forest Oil Corp. v. El Rucio Land & Cattle Co., 518 S.W.3d 422 (Tex. 2017) (arbitrator decides scope of recoverable damages if arbitration clause is broad)
- Baker Hughes Oilfield Operations, Inc. v. Hennig Prod. Co., 164 S.W.3d 438 (Tex. App.—Houston [14th Dist.] 2005) (broad arbitration clause subsumes related controversies)
- Cambridge Legacy Grp., Inc. v. Jain, 407 S.W.3d 443 (Tex. App.—Dallas 2013) (judicial review of arbitrator’s legal/factual errors is limited)
- Barton v. Fashion Glass & Mirror, Ltd., 321 S.W.3d 641 (Tex. App.—Houston [14th Dist.] 2010) (award construed to include parties who agreed to arbitration and participated)
- Oxford Health Plans LLC v. Sutter, 569 U.S. 564 (U.S. 2013) (courts may not second-guess arbitrator’s factual or legal errors to vacate an award)