in Re Irving Drobny, as Representative of National Accident Insurance Group and National Accident Insurance Underwriters, 01-15-00435-CV

Background

NAIU (with Irving Drobny) and American National disputed obligations under a 2001 Underwriting Agreement after embezzlement and fraudulent-policy losses; NAIU sought arbitration in 2012 and American National counterclaimed.
Parties had procedural disputes over umpire selection; the case was stayed for arbitration after prior interlocutory rulings and an agreed umpire was chosen in 2014.
On October 24, 2014, the arbitration panel issued a Prehearing Security Order requiring NAIU to post $20 million to protect any eventual award; the panel reconfirmed aspects of that order in a January 12, 2015 Discovery Order.
NAIU filed a March 4, 2015 motion in trial court styled as seeking injunctive relief and to compel arbitration, but substantively asked the court to vacate the Prehearing Security Order, impose procedural rules, and disband the panel.
The trial court denied NAIU’s motion on May 1, 2015; NAIU appealed. American National argues the appellate court lacks jurisdiction and that the trial court correctly denied vacatur because the FAA governs and NAIU’s motion was untimely and substantively meritless.

Issues

Issue	Plaintiff's Argument (Drobny/NAIU)	Defendant's Argument (American Nat.)	Held (trial court / appellee position)
1. Does this court have jurisdiction to hear the appeal from denial of motion to vacate prehearing security?	NAIU asserts interlocutory review/mandamus is available.	No statutory or final-judgment basis for appeal; mandamus not properly presented.	No appellate jurisdiction; appeal improper.
2. Could the trial court vacate the arbitration panel’s Prehearing Security Order under the FAA?	NAIU contends the order is not an FAA "award" or otherwise reviewable in that forum.	FAA governs; if not an award court lacks jurisdiction, if an award then FAA three-month limit applies and NAIU’s motion was untimely.	Trial court lacked authority to grant vacatur (NAIU’s motion untimely or order non-reviewable).
3. Did arbitrators exceed their authority in issuing the Prehearing Security Order?	NAIU argues the panel misconstrued the contract and exceeded power by imposing large security and applying state procedural rules.	Award is subject to exceedingly narrow review; panel at least arguably interpreted the contract and applied case law, so no excess.	Even on merits, panel did not exceed authority; vacatur improper.
4. May the trial court vacate the January 12, 2015 Discovery Order or impose Texas procedural rules on arbitration?	NAIU seeks relief on discovery rulings and asks court to impose Texas procedural rules.	Discovery order was not presented to or ruled on by trial court; interlocutory discovery rulings are not "awards" reviewable under FAA; procedural rules are for arbitrators, not courts.	Discovery-order challenge not preserved; court cannot impose state procedural rules on the arbitration.

Key Cases Cited

ANR Coal Co., Inc. v. Cogentrix of N. C., Inc., 173 F.3d 493 (4th Cir. 1999) (FAA three‑month limitation and characterization of motions to vacate)
Broemer v. Houston Lawyer Referral Serv., 407 S.W.3d 477 (Tex. App.—Houston [14th Dist.] 2013) (motions to vacate are time‑barred when filed after the FAA three‑month deadline)
Bison Bldg. Materials, Ltd. v. Aldridge, 422 S.W.3d 582 (Tex. 2012) (finality rule for appellate jurisdiction under Texas law)
Yasuda Fire & Marine Ins. Co. of Europe v. Continental Cas. Co., 37 F.3d 345 (7th Cir. 1994) (interim security orders can be treated as reviewable awards under the FAA)
Pac. Reinsurance Mgmt. Corp. v. Ohio Reinsurance Corp., 935 F.2d 1019 (9th Cir. 1991) (interim escrow/security orders are final, reviewable awards to make arbitration meaningful)
Oxford Health Plans, LLC v. Sutter, 569 U.S. 564 (U.S. 2013) (judicial review of arbitration awards is highly limited; courts ask whether arbitrator even arguably interpreted the contract)