Thomas v. Cook
2011 Tex. App. LEXIS 6788
| Tex. App. | 2011Background
- Cook and Thomas signed a 2007 Distribution Contract with Ardyss; they would receive commissions for joint sales of Ardyss products.
- The contract incorporated Ardyss Policies and Procedures Manual, which contains a broad arbitration clause (AAA, Nevada venue, one arbitrator, discovery rights, final and binding award).
- Thomas sued Cook in Aug. 2008 alleging Cook formed a new entity and diverted commission checks; Thomas later added Ardyss as a defendant and asserted various claims.
- Ardyss and Cook moved to compel arbitration under the FAA; after mediation, Thomas demanded arbitration; the July 23, 2009 arbitration issued awards in favor of Ardyss and Cook (Thomas received nothing).
- Ardyss and Cook filed motions to confirm the arbitration award in Sept. 2009; Thomas moved to vacate in Oct. 2009; the trial court confirmed the award via final judgment.
- In March 2010, the district court dismissed Thomas’s federal suit against Ardyss (res judicata/collateral estoppel); Fifth Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the trial court had subject matter jurisdiction to confirm the FAA award after nonsuit | Thomas argues Rule 162 nonsuit defeated jurisdiction | FAA confers jurisdiction; independent basis exists; state court may confirm FAA awards | Subject matter jurisdiction existed; nonsuit did not defeat it |
| Whether an arbitration agreement encompassed Thomas's disputes with Cook | No agreement between Thomas and Cook; clause limited to Ardyss | Distribution Contract signed by both; broad arbitration clause covers disputes with Cook | Agreement encompassed Thomas–Cook disputes under the contract |
| Whether indemnity provisions justify vacatur of the Cook award | Indemnity obligation created by arbitrator’s interpretation | Indemnity merits-based; not vacatur grounds under FAA | Indemnity interpretation does not justify vacatur under §10(a) of FAA |
| Whether the arbitrator exceeded authority | Arbitrator addressed improper indemnity and all claims against Cook | Arbitrator acted within scope by resolving contract and tort claims through arbitration | Arbitrator did not exceed authority |
| Whether Stolt-Nielsen applies to preclude class-arbitration considerations | Expansive merits review under Stolt-Nielsen | Not applicable; no class-arbitration issue here | Stolt-Nielsen has no application in this context |
Key Cases Cited
- In re Choice Homes, Inc., 174 S.W.3d 408 (Tex.App.-Houston [14th Dist.] 2005) (FAA-based arbitration confirmation may proceed in state court)
- Tanox v. Akin, Gump, Strauss, Hauer & Feld, L.L.P., 105 S.W.3d 244 (Tex.App.-Houston [14th Dist.] 2003) (arbitration related considerations in Texas)
- Credigy Receivables, Inc. v. Mahinay, 288 S.W.3d 565 (Tex.App.-Houston [14th Dist.] 2009) (state court has jurisdiction to confirm FAA awards)
- Chatman, 288 S.W.3d 552 (Tex.App.-Houston [14th Dist.] 2009) (FAA arbitration award enforcement in state court; independent jurisdiction)
- Hall Street Assocs., L.L.C. v. Mattel, Inc., 552 U.S. 576 (U.S. 2008) (statutory grounds for vacatur are exclusive under FAA)
- Stolt-Nielsen, S.A. v. AnimalFeeds International Corp., 559 U.S. 662 (U.S. 2010) (no implicit authorization for class arbitration absent agreement)