White v. Siemens
369 S.W.3d 911
Tex. App.2012Background
- Siemens, a Canadian investor, pursued claims under the Texas Securities Act and for common-law fraud against MWE, MWF, Mullins, and White under mandatory arbitration provisions; the arbitration was held by AAA and transferred to ICDR due to Siemens’s citizenship.
- Final Arbitrators’ Award (July 14, 2010) awarded Siemens $1,571,331 in rescission damages against MWE, MWF, Mullins, and White jointly and severally, plus $65,522 in arbitration fees/expenses, with 5% interest and rescission of limited partnership interests upon payment.
- Siemens moved to confirm the award; MWF, MWE, and Mullins sought modification/vacatur; a settlement (Sept. 22, 2010) between MWE, MWF, Mullins and Siemens (White not a party) provided for payment of the award with White’s share pending, and required an agreed judgment.
- White filed a motion to modify; the trial court entered a judgment confirming the award but dismissed all claims against MWF, effectively excluding a jointly and severally liable party from the judgment; White’s motion to modify was denied.
- On appeal, White argued (1) the court modified the award by dismissing MWF, (2) the court failed to include an order regarding return of limited partnership interests, and (3) the court should credit the $500,000 already paid; the court sustained the first issue, declined to reach the second, and denied the third.
- The court concluded the FAA and TAA grounds for modification were not met and reversed to render a judgment confirming the Final Award.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Modification of award to dismiss a jointly liable party | White | Siemens | White wins; modification improper. |
| Omission of limited partnership interests transfer order | White | Siemens | Not reached due to issue 1. |
| Credit for $500,000 payment | White | Siemens | Denied; improper modification; credit via partial release suggested. |
Key Cases Cited
- Roehrs v. FSI Holdings, Inc., 246 S.W.3d 796 (Tex.App.-Dallas 2008) (FAA preemption and modification standards in Texas-arbitration context)
- In re D. Wilson Const. Co., 196 S.W.3d 774 (Tex.2006) (FAA vs. state-law interplay in arbitration)
- In re Chestnut Energy Partners, Inc., 300 S.W.3d 386 (Tex.App.-Dallas 2009) (procedural/ substantive limits in arbitration under Texas law)
- Hall St. Assocs., L.L.C. v. Mattel, Inc., 552 U.S. 576 (2008) (exclusive grounds for vacating/modifying/arbitRATION awards; contract can't expand grounds)
- Callahan & Assocs. v. Orangefield Indep. Sch. Dist., 92 S.W.3d 841 (Tex.2002) (statutory grounds limited to expressly identified ones)
- Ernst & Young LLP v. Martin, 278 S.W.3d 497 (Tex.App.-Houston [14th Dist.] 2009) (FAA applicability and binding arbitration provisions)