AllStyle Coil Co, LP v. Correon (Tex.App.- Houston [1st Dist.] May 7, 2009)(Sharp)
(arbitration confirmation suit FAA, vacature denied, grounds to vacate)(worker wins in arbitration, award
AFFIRM TC JUDGMENT: Opinion by Justice Jim Sharp
Before Justices Taft, Bland and Sharp
AllStyle Coil Company, L.P. v. Roberto Carreon
Appeal from 133rd District Court of Harris County
Trial Court Judge: Hon. Lamar McCorkle
Opinion issued May 7, 2009
Court of Appeals
First District of Texas
ALLSTYLE COIL COMPANY, L.P. Appellant,
ROBERTO CARREON, Appellee
On Appeal from the 133rd District Court
Harris County, Texas
Trial Court Cause No. 2004-65621
O P I N I O N
Allstyle Coil Company, L.P. appeals the trial court’s judgment confirming an arbitration award under the
Federal Arbitration Act in favor of appellee, Roberto Carreon. In one issue, appellant contends that the trial
court erred by confirming the arbitrator’s award because the arbitrator exceeded his authority, manifestly
disregarded the law, and failed to base his award on any recognized legal standard.
While working for Allstyle Coil, appellee Roberto Carreon, who neither spoke nor read English, splashed
wet concrete on his legs. When he told his supervisor that he was in pain, his supervisor told him “everyone
gets that.” Appellee later sought medical attention for injuries to his legs, for which he was hospitalized for
Allstyle Coil is a nonsubscriber to the Texas Worker’s Compensation system. Appellee sued Allstyle Coil
for negligence. Allstyle Coil moved to compel arbitration, and appellee agreed. The parties agreed on an
arbitrator, who found that that Allstyle Coil had failed to warn, train, and supervise appellee adequately and
awarded approximately $217,000 to appellee. Appellee moved to confirm the arbitrator’s award and Allstyle
Coil moved to vacate it. On March 19, 2007, the trial court rendered final judgment in accordance with the
arbitrator’s award. The court reporter filed a statement that no record was taken in this case. The appellate
record does not include a copy of the arbitration agreement.
In one issue, appellant contends that the trial court erred by confirming the arbitrator’s award because the
arbitrator exceeded his authority, manifestly disregarded the law, and failed to base his award on any
recognized legal standard. The parties agree that the arbitration agreement was governed by the Federal
Arbitration Act. See 9 U.S.C. §§ 1–16 (2006). Under the Federal Arbitration Act, we review a trial court’s
decision to confirm an arbitration award de novo. Tanox, Inc. v. Akin, Gump, Strauss, Hauer & Feld, L.L.P.,
105 S.W.3d 244, 250 (Tex. App.—Houston [14th Dist.] 2003, pet. denied). The statutory grounds for vacatur
under the FAA are:
(1) Where the award was procured by corruption, fraud, or undue means.
(2) Where there was evident partiality or corruption in the arbitrators, or either of them.
(3) Where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause
shown, or in refusing to hear evidence pertinent and material to the controversy; or any other misbehavior by
which the rights of any party have been prejudiced.
(4) Where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and
definite award upon the subject matter submitted was not made.
9 U.S.C. § 10(a). The United States Supreme Court held that these are the exclusive grounds for vacating an
arbitration award when a party has moved for confirmation of the award in the trial court. Footnote Hall St.
Assocs., L.L.C. v. Mattel, Inc., 128 S. Ct. 1396, 1401, 1403, 1406 (2008). Relying on Hall Street Assocs., the
Fifth Circuit overruled its prior holdings recognizing “manifest disregard of the law” as an independent
common-law ground for vacating an arbitration award. Citigroup Global Mkts, Inc. v. Bacon, No. 07-20670,
2009 WL 542780, *9 (5th Cir. March 5, 2009).
The question before us now is whether, under the FAA, manifest disregard of the law remains valid, as an
independent ground for vacatur, after Hall Street. The answer seems clear. Hall Street, unequivocally held
that the statutory grounds are the exclusive means for vacatur under the FAA. Our case law defines manifest
disregard of the law as a non-statutory ground for vacatur. Thus, to the extent that manifest disregard of the
law constitutes a nonstatutory ground for vacatur, it is no longer a basis for vacating awards under the FAA.
. . . .
In light of the Supreme Court’s clear language that, under the FAA, the statutory provisions are the exclusive
grounds for vacatur, manifest disregard of the law as an independent, nonstatutory ground for setting aside
an award must be abandoned and rejected. Indeed, the term itself, as a term of legal art, is no longer useful in
actions to vacate arbitration awards. Hall Street made it plain that the statutory language means what it says:
“courts must [confirm the award] unless the award is vacated, modified, or corrected as prescribed in sections
10 and 11 of this title,” 9 U.S.C. § 9 (emphasis added), and there’s nothing malleable about “must.” Thus from
this point forward, arbitration awards under the FAA may be vacated only for reasons provided in § 10.
To the extent that our previous precedent holds that nonstatutory grounds may support the vacatur of an
arbitration award, it is hereby overruled.
Id. at *6, *9.
Here, appellee sought to enforce the arbitration award through the expedited procedures available under
the FAA, specifically by filing a motion to confirm the award in the trial court. Appellant argues the
nonstatutory grounds of manifest disregard of the law and violation of public policy as grounds for vacatur.
These are no longer legally recognized grounds for vacating an arbitration award. To the extent that appellant’
s sole issue is based on these non-statutory grounds for vacatur, it is overruled.
In addition, appellant argues that the arbitrator exceeded the scope of his authority by issuing his
arbitration award several months after the court-ordered deadline for completing arbitration and by awarding
future medical damages. The scope of an arbitrator’s authority depends on arbitration agreement. J.J.
Gregory Gourmet Servs. Inc. v. Antone’s Import Co., 927 S.W.2d 31, 35 (Tex. App.—Houston [1st Dist.] 1995,
no pet.) (citing Gulf Oil Corp. v. Guidry, 327 S.W.2d 406, 408 (Tex. 1959)).; see also Apache Bohai Corp.
LDC v. Texaco China BV, 480 F.3d 397, 401 (5th Cir. 2007); Brook v. Peak Int’l, 294 F.3d 668, 672 (5th Cir.
2002). “To determine whether an arbitrator exceeded his powers, we must examine the language in the
arbitration agreement.” Glover v. IBP, Inc., 334 F.3d 471, 474 (5th Cir. 2003). The appellate record does not
include a copy of the arbitration agreement, nor does it include a record of the arbitration. Based on this
record, appellant has not shown that the arbitrator exceeded his authority. To the extent that appellant’s sole
issue argues that the arbitrator exceeded his authority, we overrule appellant’s issue.
We hold that the trial court did not err by confirming the arbitration award in favor of appellee.
We affirm the judgment of the trial court.
Panel consists of Justices Taft, Bland, and Sharp.