Paul BLACK, et al., Appellants, v. Toby SHOR and Seashore Investments Management Trust, Appellees.
No. 13-11-00413-CV
Court of Appeals of Texas, Corpus Christi-Edinburg.
April 18, 2013
Rehearing Overruled May 24, 2013.
C. Execution of a Will She Would Not Otherwise Have Executed
The most important factor in determining if the will was one the testator otherwise would not have executed is the unnatural disposition. Id. Here, the 2001 Will, the 2002 Codicil, the 2004 Will, and the 2005 Codicil made numerous specific bequests and devises to each of Reno‘s four children, each of her thirteen grandchildren, as well as hospitals, a church, and pastor. However, the 2007 Will effectively leaves all of Reno‘s property to LeGrand. A person of sound mind has a perfect legal right to dispose of his or her property as he or she wishes, and the 2007 Will makes a disposition of the property where one child is preferred over the other children and grandchildren. But where a reasonable explanation for such unnatural disposition is present, an unnatural disposition is understandable. McKenzie, 900 S.W.2d at 450 (citing Rothermel, 369 S.W.2d at 924). Here, there is evidence that one daughter had severed all ties with Reno and that Reno was upset at the attempt to obtain a guardianship. While one may decide to change his or her will without undue influence, the fact is that LeGrand prepared this self-serving will. While we do not find that the disposition of Reno‘s property by this will is unnatural, in light of the animosity with some family members, it is completely different from previous wills in the sense that certain other family members and charities to whom she had previously devised property were completely omitted. This factor alone does not show an undue influence, but is only one of the many facts that combine to allow the trial court to reach such a conclusion. See Cobb v. Justice, 954 S.W.2d 162, 166 (Tex. App.-Waco 1997, pet. denied).
When viewed in light of the applicable law, the evidence supporting the trial court‘s finding of undue influence is more than a scintilla and such finding is not against the great weight of the evidence in this case. Therefore, there is legally and factually sufficient evidence to support the trial court‘s finding of undue influence.
Since we uphold the trial court‘s conclusion that the 2007 Will was produced as a result of an undue influence, we affirm the judgment of the trial court.
Jean C. Frizzell, John S. Black, Billy Berryhill, Reynolds, Frizzell, Black, Houston, Ron Barroso, Corpus Christi, Richard D. Daly, Houston, Robin C. Gibbs, Jeff Cotner, Houston, for Appellees.
Before Justices GARZA, BENAVIDES and PERKES.
OPINION
Opinion by Justice BENAVIDES.
Appellants, Paul Black, PBF Investments, Ltd., BNP Holdings, Ltd., BNP Commercial Properties, Ltd., Pagenergy Company, LLC, TSE Equities I LLC, TSE Equities Company, Ltd., BNP Management LLC, and 500 Water Street Property LLC, appeal from the judgment of the trial court affirming an arbitration award rendered against them and in favor of Seashore Investments Management Trust (“Seashore“) through its trustee, Toby Shor (collectively “appellees“). We affirm.1
I. BACKGROUND
Seashore was created in 2001 for the purpose of investing in various oil and gas and commercial property companies owned and managed by Paul Black. Kenton McDonald was the original trustee for Seashore. Seashore and Black entered into several agreements pertaining to the terms of the investment, including an Agreement Regarding Termination of Joint Ownership, a Restructure Agreement, and an Indemnity Agreement. Through the trust, Shor, the grantor for Seashore, made substantial investments in the Black group of companies. In 2007, Shor succeeded McDonald as trustee of Seashore and began investigating the financial relationships of the companies.
After concluding that appellants had committed misfeasance with regard to Seashore‘s investments, Shor brought suit against appellants for injunctive relief and pre-arbitration discovery in Nueces County Court at Law Number One. Shor alleged that the agreements between the parties provided for arbitration and that the assets and records of the jointly owned companies had to be preserved to protect the right to a meaningful arbitration. The trial court appointed a special master to assist in the pre-arbitration process. In response to the allegations against them, appellants sought sanctions against Shor, sent Seashore a “termination notice” seeking to dissolve their relationship with it, and participated in a mediation led by the court-appointed special master. Subsequently, appellants filed a separate lawsuit against Seashore in County Court at Law Number Three for an alleged breach of the Agreement Regarding Termination.
Under the terms of the arbitration agreements between the parties, these matters were ultimately submitted to arbitration before a panel of three arbitrators in accordance with the Commercial Arbitration Rules of the American Arbitration Association. After months of pre-arbitration discovery and motions practice, the arbitration hearing was held from June 2, 2010 to June 15, 2010. In its detailed, ten-page award, the arbitration panel awarded Seashore “substantial relief” and denied the Black parties’ claims “in their entirety.” Specifically, the panel concluded that Black “intentionally and over a lengthy
In 2001, Seashore invested in a group of companies run by Paul Black and PBF Investments, Limited (“PBF“) consisting mainly of limited partnerships in the real estate and oil and gas businesses, with Paul Black directly or indirectly holding majority interests in and controlling the general partners, and Seashore holding minority and limited partnership interests.... Paul Black, BNP Management, LC, Pagenergy Company, LLC and other Paul Black-owned or controlled entities stood in a fiduciary relationship to Seashore.
The evidence presented at the Arbitration Hearing clearly and convincingly established that Paul Black treated the entities jointly-owned with Seashore as his own without regard for Seashore‘s rights and interests. In particular, the evidence established that Paul Black, intentionally and over a lengthy period of years, extracted millions of dollars from the jointly-owned entities for his own personal use and benefit. Paul Black transferred substantial sums of money to companies wholly owned by himself. He used company credit cards of the jointly-owned entities to pay personal expenses, and instructed company employees to transfer funds from the business as necessary to prevent his personal checking account to be overdrawn. He made other improper transfers. He continued to make transfers for his own benefit even after some of his improper transfers and expenditures were discovered and he had signed a written agreement expressly prohibiting such transfers in the future. Mr. Black continued
to make such transfers even when the entities lacked funds to pay their own creditors and obligations. As a fiduciary, Mr. Black had the burden to establish the fairness of all such transactions; based on the evidence presented at the Arbitration hearing, he failed to do so. Mr. Black‘s claims of implicit permission from Seashore and/or its trustee to engage in such self-dealings were contradicted by the evidence presented and belied by the written agreements between the Parties. The preponderance of the credible evidence established that Mr. Black, individually, and through PBF and the entities he controlled, violated fiduciary and other duties owed to Seashore and breached the agreements with Seashore. [Appellants], on the other hand, failed to establish entitlement to any of the relief they sought. For these reasons, as discussed in greater detail below, we award [appellees] substantial relief on their claims asserted herein and deny [appellants‘] claims in their entirety.
The award further details, inter alia, that appellants failed to make payments to appellees under promissory notes and guarantees; breached fiduciary duties to appellees “by wrongly taking and permitting or effecting excessive distributions from the jointly-owned entities [and] making improper transfers and misusing company funds;” “engaged in fraud and fraudulently induced Seashore to make an initial and subsequent investments in the jointly-owned entities” through promissory notes and other agreements; and “hid or attempted to hide transfers to benefit Mr. Black.” The arbitration panel also concluded that the “type of misconduct proven in this case is precisely the sort of misbehavior Texas law seeks to deter by permitting awards of exemplary damages in appropriate cases” and awarded $5 million in punitive damages based on “a persisted pattern of willful, intentional, malicious conduct and grossly negligent conduct on the part of Mr. Black toward Seashore over an extended period of time,” for which the panel concluded that Mr. Black was “personally liable.”
In County Court at Law Number One, Seashore moved to confirm the arbitration award, whereas appellants moved to vacate the award in County Court at Law Number Three. These cases were ultimately consolidated. The arbitration award was affirmed by judgment rendered by County Court at Law Number Three on April 6, 2011. This appeal ensued.
Appellants raise six issues on appeal: (1) the judgment and arbitration award should be vacated and set aside because the award is made to Seashore, which is not a legal entity, and the time for correcting the award has passed; (2) the judgment should be reversed because after modifying the award and the judgment, the trial court failed to issue findings of fact and conclusions of law to find a clerical error and that judge is no longer on the bench, precluding supplemental findings now; (3) the award on the “so-called” tort claims, which are related to the partnership interests, should be reversed and rendered because Seashore had transferred its partnership interest to the Toby Shor 2004 Grantor Retained Annuity Trust (“Toby Shor 2004 GRAT“), which was not a party to the arbitration; (4) the judgment and award should be set aside and remanded to a different arbitration panel because the panel failed to give effect to the termination of the partnership, and the allocation of liabilities and offsets in a termination requires a new arbitration proceeding; (5) the judgment and award should be reformed to eliminate duplicative tort and contract recovery, including amounts that were awarded for appellants’ breach of the promissory notes underlying
II. STANDARD OF REVIEW
Arbitration is strongly favored by Texas law, and judicial review of an arbitration award is extraordinarily narrow. See E. Tex. Salt Water Disposal Co., Inc. v. Werline, 307 S.W.3d 267, 271 (Tex. 2010) (citing Prudential Sec. Inc. v. Marshall, 909 S.W.2d 896, 898 (Tex. 1995); CVN Group, Inc. v. Delgado, 95 S.W.3d 234, 238 (Tex. 2002)); see also In re Guardianship of Cantu de Villarreal, 330 S.W.3d 11, 17 (Tex. App.-Corpus Christi 2010, no pet.). “Subjecting arbitration awards to judicial review adds expense and delay, thereby diminishing the benefits of arbitration as an efficient, economical system for resolving disputes.” CVN Group, Inc., 95 S.W.3d at 238. An arbitration award is given the same effect as a judgment of last resort and all reasonable presumptions are indulged in favor of the award and none against it. Id. Accordingly, we review a trial court‘s decision to vacate or confirm an arbitration award de novo, and we review the entire record. Xtria L.L.C. v. Int‘l Ins. Alliance Inc., 286 S.W.3d 583, 591 (Tex. App.-Texarkana 2009, pet. denied); In re Guardianship of Cantu de Villarreal, 330 S.W.3d at 17; see Centex/Vestal v. Friendship W. Baptist Church, 314 S.W.3d 677, 683 (Tex. App.-Dallas 2010, pet. denied); GJR Mgmt. Holdings, L.P. v. Jack Raus, Ltd., 126 S.W.3d 257, 262 (Tex. App.-San Antonio 2003, pet: denied). Although we review de novo a trial court‘s judgment confirming an arbitration award, we give “strong deference to the arbitrator with respect to issues properly left to the arbitrator‘s resolution.” Xtria L.L.C., 286 S.W.3d at 591; see Centex/Vestal, 314 S.W.3d at 683. Our review focuses on the integrity of the process, not the propriety of the result. Ancor Holdings, LLC v. Peterson, Goldman & Villani, Inc., 294 S.W.3d 818, 826 (Tex. App.-Dallas 2009, no pet.); Women‘s Reg‘l Healthcare, P.A. v. FemPartners of N. Tex., Inc., 175 S.W.3d 365, 367-68 (Tex. App.-Houston [1st Dist.] 2005, no pet.).
While judicial review to determine whether an arbitrator correctly applied the law to the facts is generally limited under the Texas Arbitration Act, the parties, by their contract, may agree to allow for judicial review of an arbitration award for reversible error. See Nafta Traders, Inc. v. Quinn, 339 S.W.3d 84, 97 (Tex. 2011). In this case, the parties’ agreements do not contain any provisions allowing for an expanded judicial review of the arbitrator‘s decision, so our review is limited to determining whether the matters the arbitrator decided were within the scope of the parties’ agreements to arbitrate. See id.
III. TEXAS ARBITRATION ACT OR FEDERAL ARBITRATION ACT
In the arbitration clauses that engendered these proceedings, the parties did not specify whether the Federal Arbitration Act (“FAA“) or the Texas Arbitration Act (“TAA“) applies. See
On appeal, because the parties have not taken a position on this issue, but have instead variously referred to different sections of the TAA, we will apply the TAA to this case. Under the Texas arbitration scheme, section 171.088(a) of the Texas Civil Practice and Remedies Code provides the following statutory grounds for which a trial court “shall” vacate an arbitration award:
- the award was obtained by corruption, fraud, or other undue means;
- the rights of the party were prejudiced by:
- evident partiality by an arbitrator appointed as a neutral arbitrator;
- corruption in an arbitrator; or
- misconduct or willful misbehavior of an arbitrator;
- the arbitrator:
- exceeded his powers;
- refused to postpone the hearing after a showing of sufficient cause for the postponement;
refused to hear evidence material to the controversy; - conducted the hearing, contrary to sections 171.044-.047 of the civil practice and remedies code, in a manner that substantially prejudiced the rights of a party; or
- there was no agreement to arbitrate, the issue was not adversely determined in a proceeding under [statutes to compel arbitrations], and the party did not participate in the arbitration hearing without raising the objection.
See
IV. PRESERVATION OF ERROR
We first address appellees’ contention that “none of the issues on appeal were adequately preserved.” According to appellees, appellants failed to timely file a motion to vacate the arbitration award on any of the grounds raised in this appeal. Appellees contend section 171.088(b) of the Texas Civil Practice and Remedies Code required appellants to file a motion to vacate within 90 days of receiving the award. See
The TAA provides, “[o]n application of a party, the court shall vacate an award” where certain specified conditions are met.
It is abundantly clear that a party seeking to vacate an arbitration award must present any grounds for doing so to the trial court, otherwise, those complaints are waived on appeal. See
V. PARTIES
By their first and third issues, appellants attack the arbitration award on grounds that it was rendered in favor of entities or parties who were not properly before the arbitration panel. Appellants’ first issue contends that the judgment and arbitration award should be vacated and set aside because the award is made to Seashore, which is not a legal entity, and the time for correcting the award has passed. The third issue asserts that the award on the “so-called” tort claims, which are related to the partnership interests, should be reversed and rendered because Seashore had transferred its partnership interest to the Toby Shor 2004 GRAT, which was not a party to the arbitration. Appellants’ arguments under these issues focus on jurisdiction and standing.
Although appellants do not expressly complain that the arbitrators “exceeded their powers” in determining that Seashore or the Toby Shor 2004 GRAT had justiciable interests, the underlying basis for their argument that the trial court had no jurisdiction over these entities is the contention that the arbitration panel exceeded its powers. Accordingly, we interpret appellants’ real complaint to be that the arbitration panel exceeded its powers in determining that it had jurisdiction over these parties or that they had standing to pursue claims against appellants.
The Texas Supreme Court has stated that “the authority of arbitrators is derived from the arbitration agreement and is limited to a decision of the matters submitted therein either expressly or by necessary implication.” Gulf Oil Corp. v. Guidry, 160 Tex. 139, 327 S.W.2d 406, 408 (1959). Therefore, we turn our attention to the arbitration agreements at issue.
The “Agreement Regarding Termination of Joint Ownership” (“Agreement“) refers to the parties thereto as including, inter alia, “Seashore Investment Management Trust, Kenton E. McDonald, trustee (‘Seashore‘),” and states that “the undersigned” agree to set forth agreements for the provisions for the termination of their joint ownership of the businesses. The Agreement defines “the undersigned” as, inter alia, “Seashore, Toby Shor[,] and entities controlled by Seashore or Toby Shor [which] are sometimes collectively referred to as the ‘Seashore Group.‘” The Agreement includes a dispute resolution provision as follows:
Dispute Resolution. If a dispute (“Dispute“) arises between the parties hereto regarding the meaning of this Agreement, or an alleged breach thereof, the parties agree to resolve the Dispute through the mediation and arbitration procedures described below in lieu of litigation.
....
Arbitration. If the parties are not successful in resolving the dispute through [alternative dispute resolution], then the parties agree that the Dispute shall be settled by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association, and
judgment upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction. The costs of the arbitration shall be allocated as determined by the arbitrator.
A separate agreement between the parties, the “Restructure Agreement,” defines the parties as including “Kenton E. McDonald, Trustee of Seashore Investment Management Trust (‘Seashore‘).” This Restructure Agreement also provides a dispute resolution procedure including an arbitration provision that is substantially identical to the one in the Agreement.
At arbitration, both sides to this dispute stipulated that all parties were properly before the arbitration panel and all claims would be definitively resolved by the arbitrators. The stipulation entered by the parties provides as follows:
The parties to this arbitration hereby stipulate to the arbitrability of, and submit to arbitration, all claims raised in the pleadings to date of all parties listed in the caption above. All parties in such caption agree and stipulate that they and all other such parties are properly before the Arbitration Panel, and that the Panel has power, authority, and jurisdiction to issue an award binding as to all parties. They agree further that a reasoned award is sufficient, and that such award need not include formal findings of fact and conclusions of law.
The caption, or style, includes “Toby Shor and Seashore Investment Management Trust” who are identified as respondents, counter-claimants, and third-party claimants.
The arbitration award defines the parties in relevant part as follows:
The term “Respondents” is used herein to refer to Toby Shor, individually, and Seashore Investments Management Trust (“Seashore“). Seashore is a grantor trust created in September 2000. Initially, Ms. Shor was the grantor and beneficiary. Her then husband, Kenton McDonald, served as trustee. Following Ms. Shor‘s divorce from Mr. McDonald in 2007, Ms. Shor became the trustee also.
In the instant case, appellants’ arguments under their first issue focus on the fact that the arbitration award issued by the arbitration panel expressly awarded damages to “Seashore Investments Management Trust“; however, the final judgment, which expressly incorporated the arbitration award verbatim and by attachment, awarded damages to “Seashore, through Toby Shor as Trustee.” In their third issue, appellants contend that the arbitration panel lacked jurisdiction to award damages to Seashore on various partnership-related claims because Seashore had previously transferred its partnership interests to the Toby Shor 2004 GRAT.
The arbitration clauses in the Agreement and Restructure Agreement are broad and encompass disputes regarding the meaning of the agreements or any alleged breaches thereof. The party definitions in these agreements are also quite broad. Under a broad arbitration clause, “a dispute between the parties to the contract concerning the ownership of a claim arising from the contract is just as arbitrable as a dispute concerning the merits of the claim itself.” Island on Lake Travis, Ltd. v. Hayman Co. Gen. Contractors, 834 S.W.2d 529, 532 (Tex. App.-Austin 1992, writ granted, judgm‘t vacated w.r.m.); see Hisaw & Assocs. Gen. Contrs., Inc. v. Cornerstone Concrete Sys., 115 S.W.3d 16, 19-20 (Tex. App.-Fort Worth 2003, pet. denied) (“We hold that the arbitration clause gave the arbitration panel the power to make the determination as to whether Cornerstone, as opposed to Chatham, was the properly named party, and that the trial
We overrule appellants’ first and third issues.
VI. FINDINGS OF FACT AND CONCLUSIONS OF LAW
In their second issue, appellants contend that the judgment should be reversed because, after modifying the award in the judgment, the trial court failed to issue findings of fact and conclusions of law to correct a clerical error, and that judge is no longer on the bench, precluding supplemental findings now. In this regard, appellants contend that the arbitration panel awarded damages to Seashore, whereas the trial court‘s judgment, which recited and incorporated the arbitration award, rendered judgment “for Seashore Investments Management Trust through its trustee Toby Shor (‘Seashore‘).”
Pursuant to Rules 296 and 297 of the Texas Rules of Civil Procedure, a trial judge must, when properly requested, prepare findings of fact in cases tried in the district court or county court without a jury. See
When a judgment is rendered as a matter of law, findings and conclusions have no purpose and should not be requested or considered on appeal. IKB Indus. (Nigeria) Ltd., 938 S.W.2d at 443. Therefore, even when the trial court receives evidence, findings and conclusions are only appropriate if the trial court is called upon to determine questions of fact upon conflicting evidence. Ford v. City of Lubbock, 76 S.W.3d 795, 796-98 (Tex. App.-Amarillo 2002, no pet.); Port Arthur Indep. Sch. Dist. v. Port Arthur Teachers Ass‘n, 990 S.W.2d 955, 958 (Tex. App.-Beaumont 1999, pet. denied); see also K2M3, LLC v. Cocoon Data Holding Pty. Ltd., No. 13-11-00194-CV, 2012 WL 2469705, at *2-3 (Tex. App.-Corpus Christi June 28, 2012, pet. denied) (mem. op.).
Because Rules 296 and 297 do not impose any duty on the trial court to file findings and conclusions when there has been no trial—that is to say, when there has been no determination of questions of fact based on conflicting evidence—there is no error in the trial court‘s failure to file
Based upon the foregoing, we conclude that the trial court did not err in failing to make findings and conclusions. In the instant case, the trial court proceedings regarding the arbitration award were heard in the same manner and on the same notice as a motion in a civil case. See
VII. PUBLIC POLICY
By their fourth issue, appellants contend that the judgment and award should be set aside and remanded to a different arbitration panel because the panel failed to give effect to the termination of the partnership and the allocation of liabilities and offsets that would result from a partnership termination. In connection with this issue, appellants argue that as “matter of public policy in this state,” appellants were absolutely entitled to terminate their partnership relationships, and that the judgment and award failed to give effect to the legal termination of the partnership and the allocation of liability and indemnity that would be triggered by such a termination. Appellants contend that “[s]imply put, people cannot be forced to remain partners. The arbitration decision fails to recognize this important public policy decision for Texas.”
Public policy is not listed as a ground for vacatur under the TAA. For purposes of this opinion, we assume, without deciding, that a public policy concern is a valid ground to set aside an arbitration award. The Texas Supreme Court has previously held that an arbitration award cannot be set aside on public policy grounds except in an “extraordinary case” in which the award “clearly violates carefully articulated, fundamental policy.” CVN Group, Inc., 95 S.W.3d at 239. To support vacatur of an arbitration award, a public policy concern must be “well defined and dominant” and not derived “from general considerations of supposed public interests.” Id. at 239-40 (quoting United Paperworkers Int‘l Union v. Misco, Inc., 484 U.S. 29, 44 (1987)); see Lee v. Daniels & Daniels, 264 S.W.3d 273, 278 (Tex. App.-San Antonio 2008, pet. denied).
Appellants’ arguments regarding their alleged right to terminate the partnerships were submitted to, and heard by, the arbitration panel. The panel concluded, inter alia:
Although [appellants] allege a breach of the Termination Agreement[,] they
failed to prove by a preponderance of the credible evidence that any breach actually occurred. Rather, the evidence established that although there was an agreement by [appellees] with respect to termination, [appellees] raised legitimate questions about what should be terminated, when it should happen[,] and how it should be done. Even Mr. Black admitted there was no deadline to accomplish termination. Moreover, [appellants‘] conduct before and after the notice of termination, and their refusal to provide necessary information, excused performance of that agreement by [appellees] and thwarted any ability to terminate. In addition to the failure to prove breach, [appellants] failed to prove that the alleged breaches caused any actual, recoverable damages or actually precluded [appellants] from hedging.3 The causal connection between the alleged breach and the damages claimed was so tenuous that it established no causal connection at all. In addition, the damages claimed were impermissibly speculative, requiring, among other things, an assumption that [appellants] would have successfully engaged in physical hedging in the gas market. Such assumptions were not proven by the evidence presented. Accordingly [appellants‘] claims for breach of the Termination Agreement claims are denied and [appellants] shall take nothing on those claims.
[Appellants‘] request for an order directing termination and division of property also is denied. The Bankruptcy Court proceeding and other events and activities have progressed to such a stage that a termination order would not be fair, fully-effective[,] or meaningful at this time. Moreover, most of the relief requested is not warranted under the Termination Agreement or otherwise. Accordingly, the request for an order directing termination and division of property is denied.
Although appellants cite case law for the proposition that there are no restrictions on a partner‘s ability to terminate a partnership, see Bohatch v. Butler & Binion, 977 S.W.2d 543, 545-46 (Tex. 1998), appellants provide no authority for the proposition that such ability is a well-defined, fundamental public policy. See CVN Group, Inc., 95 S.W.3d at 239. Appellants’ arguments that they were entitled to termination of the partnership were disputed by appellees and the issue was submitted to the arbitrators. Appellants contend that the arbitrators were wrong; but a mere error, if any, does not necessarily implicate a violation of public policy. See id. We overrule appellants’ fourth issue.
VIII. DAMAGES
By their fifth issue, appellants contend that the judgment and award should be reformed to eliminate duplicative tort and contract recovery. Appellants assert that the arbitrators’ finding of fraud in connection with appellants’ breach of the promissory notes constitutes a manifest disregard of the law. Appellants further contend that the arbitration award violates the one-satisfaction rule by awarding damages for both tort and contract breaches, thereby awarding a double recovery for the same injury, and that the tort and fraud recoveries are subsumed within the recovery on the notes.
Manifest disregard is a very narrow standard of review. Xtria L.L.C., 286 S.W.3d at 594;
Gross mistake is conceptually analogous to manifest disregard. See Int‘l Bank of Commerce v. Int‘l Energy Dev. Corp., 981 S.W.2d 38, 48 (Tex. App.-Corpus Christi 1998, pet. denied). A gross mistake is a mistake that implies bad faith or a failure to exercise honest judgment and results in a decision that is arbitrary and capricious. Xtria L.L.C., 286 S.W.3d at 598; Werline v. E. Tex. Salt Water Disposal Co., 209 S.W.3d 888, 898 (Tex. App.-Texarkana 2006), aff‘d, 307 S.W.3d 267, 268 (Tex. 2010); Teleometrics Int‘l, Inc. v. Hall, 922 S.W.2d 189, 193 (Tex. App.-Houston [1st Dist.] 1995, writ denied). A judgment rendered after honest consideration given to conflicting claims, no matter how erroneous, is not arbitrary and capricious. Xtria L.L.C., 286 S.W.3d at 598.
We note that the doctrines of manifest disregard and gross mistake do not extend to mere mistakes of fact or law. Judicial review of an arbitration award “is so limited that even a mistake of fact or law by the arbitrator in the application of substantive law is not a proper ground for vacating an award.” Centex/Vestal, 314 S.W.3d at 683; Xtria L.L.C., 286 S.W.3d at 591; Universal Computer Sys., Inc. v. Dealer Solutions, L.L.C., 183 S.W.3d 741, 752 (Tex. App.-Houston [1st Dist.] 2005, pet. denied).
It is clear from the record from the arbitration hearing and the panel‘s lengthy written decision that the arbitration panel gave serious consideration to the parties’ contentions, evidence, and arguments. Nothing in the record suggests the panel made its decision in bad faith or that it failed to exercise honest judgment. The trial court should not overturn an arbitration award rendered after honest consideration given to claims and defenses presented to it, no matter how erroneous. See Xtria L.L.C., 286 S.W.3d at 598; Werline, 209 S.W.3d at 898. Accordingly, we hold the trial court did not err in denying the motion to vacate on this ground. We overrule appellants’ fifth issue.
IX. ATTORNEY‘S FEES
In their sixth issue, appellants contend that the award of attorney‘s fees to Shor should be reversed and rendered because she was not a prevailing party and there is no other basis for awarding her fees. According to appellants, Shor did not recover individually on any cause of action.
The parties agreed to arbitrate in accordance with the Commercial Arbitration Rules of the American Arbitration Association, and those rules allow the recovery of attorneys’ fees “if all parties have requested such an award.” AAA Comm. R. 43(d). The record from the arbitration hearing
In this case, the arbitrator‘s award of fees is authorized by law. See Centex/Vestal, 314 S.W.3d at 687. Moreover, to the extent that appellants’ arguments under this issue focus on the allegation that Shor was not a proper party to the arbitration or to receive an award, we have already addressed these issues and need not address them further in connection with this issue. See
X. CONCLUSION
Having overruled each of appellants’ issues, we affirm the judgment of the trial court.
GINA M. BENAVIDES
JUSTICE