Hari Prasad Kalakonda and Latha Kalakonda v. Aspri Investments, LLC
04-15-00114-CV
Tex. App.Sep 8, 2015Background
- Appellee Aspri obtained an arbitration award (Oct. 10, 2014) against tenant Shubha, LLC and guarantors Hari and Latha Kalakonda for $66,235.51; Aspri moved to confirm the award in Bexar County district court.
- Shubha, LLC did not appear in the confirmation proceeding; the Kalakondas appeared pro se and moved to vacate and remand the award under 9 U.S.C. § 10.
- The Kalakondas raised multiple §10 grounds: evident partiality (insufficient arbitrator disclosures), refusal to hear pertinent evidence, and that the arbitrator exceeded his powers. They also argued post‑award lease termination/other relief.
- The arbitrator (Hoover) disclosed an active ADR practice and past mediations with counsel for Aspri; the arbitration award recited that all testimony and exhibits were admitted and that parties had a full and fair opportunity to present their cases.
- The trial court (Judge Pozza) confirmed the arbitration award (Final Judgment Dec. 1, 2014). Aspri’s brief on appeal argues review is narrowly circumscribed under the Federal Arbitration Act and that the Kalakondas failed to carry the heavy burden to vacate.
Issues
| Issue | Plaintiff's Argument (Kalakonda) | Defendant's Argument (Aspri) | Held (trial court / appellate standard) |
|---|---|---|---|
| Whether arbitrator refused to hear pertinent evidence (9 U.S.C. §10(a)(3)) | DTPA claims and other theories were improperly excluded and were pleaded before arbitration | Arbitration record shows parties had full and fair opportunity; no evidence of excluded material; DTPA waiver in lease | Arbitrator did not refuse evidence; review extremely deferential; §10(a)(3) not shown |
| Whether arbitrator exhibited evident partiality via nondisclosure (9 U.S.C. §10(a)(2)) | Hoover failed to disclose relationships and served repeatedly for Aspri; objective appearance of bias | Hoover disclosed his ADR practice and prior contacts; no proof he knew of or failed to disclose relevant facts; no timely objection during arbitration | Disclosure was adequate; no evident partiality; §10(a)(2) not shown |
| Whether arbitrator exceeded his powers by imposing personal liability on guarantors (9 U.S.C. §10(a)(4)) | Personal liability for guarantors was not properly before arbitrator | Guaranty and arbitration of guaranty were in record; guarantors were named respondents and presented at hearing; award included judgment against them | Arbitrator acted within powers; §10(a)(4) not shown |
| Whether trial court improperly altered or should have denied confirmation / awarded additional relief | Argued lease termination and other post‑award relief should affect confirmation | Trial court confirmed exact award (monetary judgment plus interest); denied other relief; court cannot expand award | Confirmation proper; court did not expand award; post‑award requests denied and not a basis to vacate |
Key Cases Cited
- SSP Holdings Ltd. P’ship v. Lopez, 432 S.W.3d 487 (Tex. App.–San Antonio 2014) (confirms de novo and highly deferential review of arbitration confirmation)
- Myer v. Americo Life, Inc., 232 S.W.3d 401 (Tex. App.–Dallas 2007) (describing narrow scope of review of arbitration awards)
- Oxford Health Plans, LLC v. Sutter, 568 U.S. 564 (U.S. 2013) (courts may vacate awards only in very unusual circumstances)
- Hall St. Associates, L.L.C. v. Mattel, Inc., 552 U.S. 576 (U.S. 2008) (statutory grounds in §§10–11 are exclusive bases for vacatur)
- First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (U.S. 1995) (deference principles in arbitration contexts)
- Ancor Holdings, LLC v. Peterson, Goldman & Villani, Inc., 294 S.W.3d 818 (Tex. App.–Dallas 2009) (arbitration awards cannot be vacated for errors of law or fact)
- Forest Oil Corp. v. El Rucio Land & Cattle Co., Inc., 446 S.W.3d 58 (Tex. App.–Houston [1st Dist.] 2014) (arbitrator’s duty to disclose facts that might create objective impression of partiality)