559 S.W.3d 169
Tex. App.2016Background
- In 2013 Newsome assigned portions of his lifetime structured-settlement annuity to RSL in exchange for $53,000; the Transfer Agreement and a promissory note contained broad arbitration clauses, including a clause delegating arbitrability to an arbitrator.
- The trial court entered an October 2013 order approving the transfer under the Texas Structured Settlement Protection Act (SSPA) but contained a handwritten term requiring RSL to pay $53,000 within 10 days or $106,000.
- Parties later filed a joint agreed motion and the court signed a nunc pro tunc corrected order in September 2014 removing the handwritten language; Newsome later filed a bill of review arguing the nunc pro tunc order was void as correcting a judicial (not clerical) error after plenary power expired.
- RSL sought to compel arbitration of multiple contract disputes (amount and timing of payment, duress, detrimental reliance, and whether Newsome satisfied bill-of-review elements); the trial court denied multiple motions to compel arbitration and refused to stay proceedings.
- The trial court granted a temporary restraining order (TRO) directing RSL to remit assigned payments to Newsome; RSL appealed interlocutorily the denials to compel arbitration and the TRO. The appellate court stayed trial proceedings and heard the interlocutory appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the trial court abused its discretion by denying RSL’s motions to compel arbitration | Newsome: the bill-of-review claim and challenge to the nunc pro tunc order are judicial matters not for arbitration; SSPA approval is a judicial function | RSL: arbitration clause (including delegation of arbitrability) covers the disputes; arbitrator should decide arbitrability and related contract defenses | Court: Affirmed — trial court did not err; the disputes RSL raised did not bear on whether the nunc pro tunc corrected a clerical vs. judicial error and SSPA matters (approval/vacatur of transfer) are for the court, not an arbitrator. |
| Whether the trial court abused its discretion by granting the TRO | Newsome: TRO necessary to preserve assigned payments and prevent dissipation pending resolution | RSL: TRO operated as a temporary injunction altering the status quo and was appealable; it was improper | Court: Affirmed (moot) — appellate court found the TRO expired and no payments were made, rendering the issue moot. |
Key Cases Cited
- Johnson v. Structured Asset Servs., LLC, 148 S.W.3d 711 (Tex. App.—Dallas 2004) (describing purpose and protections of the Texas SSPA)
- Transamerica Occidental Life Ins. Co. v. Rapid Settlements, Ltd., 284 S.W.3d 385 (Tex. App.—Houston [1st Dist.] 2008) (SSPA requires disclosures and court approval for transfers)
- Washington Square Fin., LLC v. RSL Funding, LLC, 418 S.W.3d 761 (Tex. App.—Houston [14th Dist.] 2013) (discussing SSPA transfer-approval requirements)
- Bonded Builders Home Warranty Ass’n of Tex., Inc. v. Smith, 488 S.W.3d 468 (Tex. App.—Dallas 2016) (standard of review for denial of motion to compel arbitration)
- Rachal v. Reitz, 403 S.W.3d 840 (Tex. 2013) (strong presumption favoring arbitration and resolving scope doubts in favor of arbitration)
- Tex. Dep’t of Transp. v. A.P.I. Pipe & Supply, LLC, 397 S.W.3d 162 (Tex. 2013) (nunc pro tunc may correct clerical but not judicial errors)
- Middleton v. Murff, 689 S.W.2d 212 (Tex. 1985) (bill of review elements and collateral-attack principles)