The Texas General Arbitration Act (TAA) permits a party to appeal an order confirming or denying confirmation of an award or vacating an award without directing a rehearing. Tex. Civ. Prac. & Rem. Code 171.098(a)(3),(5). In this case, the trial court vacated an arbitration award and also refused to confirm it. Had the trial court stopped there, the order would have been final and appealable. But the court also ordered a rehearing. That order makes the trial court s judgment interlocutory and, in line with almost all decisions in Texas and beyond, ineligible for appeal. By refusing to dismiss the appeal, the Court disregards a clear statutory mandate and goes against the weight of those decisions that have addressed the issue. I respectfully dissent.
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The TAA requires Texas courts to construe the act to effect its purpose and make uniform the construction of other states law applicable to an arbitration. Tex. Civ. Prac. & Rem. Code 171.003. Section 171.098 is identical to section 19 of the Uniform Arbitration Act, so we look not only to Texas cases but also to those from courts in other states that have adopted section 19. Compare id. 171.098(a), with Unif. Arbitration Act 19, 7 U.L.A. 739 (1956). The majority of Texas courts of appeals that have considered the issue have concluded that an order denying confirmation of an award, while also vacating and directing a rehearing, is not appealable. See Thrivent Fin. for Lutherans v. Brock, 251 S.W.3d 621, 627 (Tex. App. Houston [1st Dist.] 2007, no pet.); Prudential Sec., Inc. v. Vondergoltz, 14 S.W.3d 329, 331 (Tex. App. Houston [14th Dist.] 2000, no pet.). But see 209 S.W.3d 888, 895. This is the identical conclusion reached by the state supreme courts that have considered the question. See, e.g., Me. Dep't of Transp. v. Me. State Employees Ass'n, 581 A.2d 813, 815 (Me. 1990) (stating that [t]o allow a party to appeal before the rehearing by simply filing a motion to confirm, a motion that would be denied by the court in conjunction with its order vacating the award and directing a rehearing, would be to circumvent [provisions equivalent to TAA (a)(5)] ); Karcher Firestopping v. Meadow Valley Contractors, Inc., 204 P.3d 1262, 1265-66 (Nev. 2009) (holding that such an order is not sufficiently final to be suitable for appellate review ); Double Diamond Constr. v. Farmers Coop. Elevator Ass n of Beresford, 656 N.W.2d 744, 746 (S.D. 2003) (noting that the language without directing a rehearing in the Nebraska statute is meaningful and not superfluous (internal quotations omitted)). Intermediate appellate courts in other UAA jurisdictions have come to the same conclusion. See, e.g., Connerton, Ray & Simon v. Simon, 791 A.2d 86, 88 (D.C. 2002) (holding that [w]hen it is apparent that an order confirming or denying confirmation of an arbitration award does not represent the conclusion of the proceeding on the merits, it lacks the quality of finality . . . and is not appealable ); Kowler Assocs. v. Ross, 544 N.W.2d 800, 802 (Minn. Ct. App. 1996) (ruling that when a rehearing is directed, appellate review is premature because the arbitration process has not been completed ).
The Court asserts that jurisdictions, other than Texas, that have considered whether to allow appeal in a situation like the one in this case appear about evenly divided on the issue, ___ S.W.3d at ___, but the case law in fact leans the other way. See Stephen K. Huber, State Regulation of Arbitration Proceedings: Judicial Review of Arbitration Awards by State Courts, 10 Cardozo J. Conflict Resol. 509, 576 (2009) (noting that states may require re-arbitration with an appeal of the initial order awaiting completion of the arbitration process and observing that most states have in fact adopted precisely this approach ). Of the cases enumerated by the Court, almost all are distinguishable and most were decided a decade or more ago.
This case concerns only the Texas Arbitration Act, not its federal counterpart, which perhaps explains why the Court rejects Justice Willett s proposal to conflate the two. See Huber, supra, at 577 ( Neither the Supreme Court nor any federal court of appeals have seriously suggested, let alone decided, that [the FAA appeals provision] supplants different state law in state courts. ). Where parties agree to abide by state rules of arbitration, and where the dispute is not preempted by the FAA, courts apply state law, even when it differs from the FAA. Ford v. Nylcare Health Plans of the Gulf Coast, Inc., 141 F.3d 243, 248 (5th Cir. 1998) ( Where . . . the parties have agreed to abide by state rules of arbitration, enforcing those rules according to the terms of the agreement is fully consistent with the goals of the FAA, even if the result is that arbitration is stayed where the [FAA] would otherwise permit it to go forward. (quoting Volt Info. Scis., Inc. v. Bd. of Trs. of Leland Stanford Junior Univ., 489 U.S. 468, 479 (1989))). The TAA prohibits appeal of an order vacating an award without directing a rehearing ; the FAA omits without directing a rehearing from its appellate provision. Compare 9 U.S.C. 16, with Tex. Civ. Prac. & Rem. Code 171.098(a)(5). That the Court s interpretation leads to an identical result under both statutes only highlights the fact that the words without directing a rehearing are now superfluous under Texas law. See Vondergoltz, 14 S.W.3d at 331 ( To hold [that an appeal was allowed] would render the language without directing a rehearing without effect and would elevate form over substance . . . . ); see also First Am. Title Ins. Co. v. Combs, 258 S.W.3d 627, 631 (Tex. 2008) (holding that a court must interpret the words of a statute according to their common meaning in a way that gives effect to every word, clause, and sentence (internal quotations omitted)).
The Court and the concurrence fear that a trial court can avoid confirmation by simply ordering rearbitration until the court likes the result, or one or both parties have given up. I share that concern. But a trial court s rehearing order does not confer jurisdiction where the Legislature has said none exists. Appellate jurisdiction should not hinge on whether the trial court, in conjunction with an order vacating an award and directing rehearing, denies rather than dismisses as moot a motion to confirm. See Me. Dep t of Transp., 581 A.2d at 815 (noting that a trial court should not even consider a motion to confirm once the court has granted a motion to vacate, because vacating an arbitration award renders determination of a motion to confirm the award moot ). The TAA does not authorize an appeal of an order that directs a rehearing. I would reverse the court of appeals judgment and dismiss the appeal. Because the Court does otherwise, I respectfully dissent.
Ertas, A. H., Vardar, O., Sonmez, F. O., and Solim, Z. (December 22, 2008). "Measurement and Assessment of Fatigue Life of Spot-Weld Joints." ASME. J. Eng. Mater. Technol. January 2009; 131(1): 011011. 2ff7e9595c
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