Beldon Roofing Company v. Sunchase IV Homeowners' Association, Inc.
2015 Tex. App. LEXIS 5635
| Tex. App. | 2015Background
- In 2008 Beldon Roofing contracted to repair condominium roofs for Sunchase; the contract contained an FAA arbitration clause calling for AAA Construction Industry Rules.
- Beldon sued in 2009 on an account and sought to administer arbitration under the original contract; Sunchase denied and counterclaimed for defective work and other causes of action.
- The parties entered multiple court-signed agreed orders (Rule 11) referring the dispute to arbitration under Texas’s ADR Act (chapter 154) and later appointed Judge Garza as arbitrator (the Garza Arbitration).
- Beldon later sought to compel arbitration under the original FAA/AAA terms (including a three-expert panel per AAA rules), and alternatively sought a jury trial; the trial court (and arbitrator) denied Beldon’s motion.
- Beldon appealed the denial as an interlocutory order; this Court held it had jurisdiction and stayed trial-court proceedings pending appeal.
- The Court of Appeals affirmed: the ADR Act governed the court-referred arbitration, Beldon could not withdraw from that court-ordered arbitration, and the FAA did not preempt the parties’ Rule 11 referral under these facts.
Issues
| Issue | Plaintiff's Argument (Beldon) | Defendant's Argument (Sunchase) | Held |
|---|---|---|---|
| Timeliness / Jurisdiction of appeal | Appeal from denial of June 6, 2014 motion to compel is timely | Earlier filings do not start appellate clock; only the denial order controls | Court has jurisdiction; notice was timely from the June 6 denial |
| Which statute governs arbitration (ADR Act vs TAA vs FAA) | FAA/AAA clause in contract governs; original contract should control | Court-ordered referral under Rule 11 invokes ADR Act; TAA inapplicable to court referrals | ADR Act governs the Garza Arbitration; TAA does not apply to court-referred arbitration |
| Right to withdraw from court-referred arbitration | Common-law rule allows withdrawal before award; ADR Act is silent so common law fills gap | Court-ordered referral compels participation once objection period passes; ADR Act precludes unilateral withdrawal | No right to withdraw from the ADR Act court-referred arbitration; trial court did not abuse discretion |
| FAA preemption of ADR Act referral | FAA preempts state procedures and entitles Beldon to immediate FAA-based arbitration under original contract | Parties modified procedure by Rule 11 court referral; FAA does not preempt the parties’ agreement to proceed under ADR Act here | FAA does not preempt the ADR Act referral on these facts; parties’ Rule 11 referral is enforceable |
Key Cases Cited
- J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223 (Tex. 2003) (arbitration-agreement existence is decided by state contract law)
- L. H. Lacy Co. v. City of Lubbock, 559 S.W.2d 348 (Tex. 1977) (common-law withdrawal from arbitration before award)
- In re D. Wilson Const. Co., 196 S.W.3d 774 (Tex. 2006) (party seeking arbitration must show agreement exists and dispute falls within scope)
- Volt Info. Sciences, Inc. v. Board of Trustees, 489 U.S. 468 (U.S. 1989) (FAA respects parties' choice to follow state arbitration rules specified in contract)
- Preston v. Ferrer, 552 U.S. 346 (U.S. 2008) (FAA preempts state statutes that vest primary jurisdiction elsewhere when parties agreed to arbitrate under the FAA)
- Nafta Traders, Inc. v. Quinn, 339 S.W.3d 84 (Tex. 2011) (FAA preemption scope and analysis under Texas law)
- CMH Homes v. Perez, 340 S.W.3d 444 (Tex. 2011) (strict construction of interlocutory-appeal statutes)
- U.S. Lawns, Inc. v. Castillo, 347 S.W.3d 844 (Tex. App. — Corpus Christi 2011) (standard of review for denial of motion to compel arbitration)