Anchor Paving Company, Inc. and Anchor, Inc. v. Wood Electrical Services, Inc.

Reversed and Remanded and Memorandum Opinion filed September 30, 2004 Reversed and Remanded and Memorandum Opinion filed September 30, 2004. In The Fourteenth Court of Appeals ____________ NO. 14-03-00224-CV ____________ ANCHOR PAVING COMPANY, INC. d/b/a ANCHOR, INC., Appellant V. WOOD ELECTRICAL SERVICES, INC., Appellee On Appeal from the County Civil Court at Law No. 3 Harris County, Texas Trial Court Cause No. 759,478 M E M O R A N D U M   O P I N I O N Wood Electrical Services, Inc. (“Wood”) filed suit seeking confirmation of an arbitration award. Anchor Paving Company, Inc. (“Anchor”) filed counterclaims seeking to have the arbitration vacated, corrected, or modified. Pursuant to Wood’s no-evidence motion for summary judgment, the trial court entered a final judgment awarding the amount of the summary judgment to Wood and disposing of Anchor’s counterclaims. In three issues, Anchor contends that (1) the trial court erred in granting Wood’s motion under the no-evidence summary judgment standard, (2) the trial court erred in granting Wood’s motion under the traditional summary judgment standard, and (3) the trial court erred in granting more relief than requested. We reverse. FACTUAL AND PROCEDURAL BACKGROUND On March 30, 1999, Wood subcontracted to perform electrical work for Anchor. A dispute arose in which Anchor contended that Wood was liable for non-performance and defective performance, and Wood contended that Anchor was liable for breach of contract and unjust enrichment. On June 27, 2000, the parties agreed to arbitrate their dispute. The arbitrator scheduled the hearing for February 8, 2001. On January 25, 2001, Anchor requested that the hearing be postponed. The arbitrator granted the request, rescheduling the hearing for March 23, 2001. On March 20, 2001, Anchor requested that the hearing be postponed, and the arbitrator rescheduled the hearing for August 16, 2001. On August 7, 2001, Anchor requested that the hearing be postponed, and the arbitrator rescheduled the hearing for September 12, 2001. On September 12, 2001, the arbitration hearing was held. Each party was given one and one-half hours for their case-in-chief and fifteen minutes for closing arguments. During the course of the hearing, Anchor argued that it needed to subpoena three additional witnesses and requested either that the hearing be adjourned or that an additional half-day be scheduled. The arbitrator denied the request. On October 22, 2001, the arbitrator issued an award in favor of Wood. Wood filed suit in the county court, seeking confirmation of the award. Anchor filed counterclaims seeking to have the award vacated, corrected, or modified. Wood filed a no-evidence motion for summary judgment, asserting that Anchor had “no evidence of any of the elements of its counterclaim[,] . . . no evidence that the award should be set aside, modified, or vacated, no evidence that the arbitrator engaged in wilful misconduct, and no evidence that [it] was denied unlawfully an additional hearing session.” The trial court entered a final judgment awarding Wood the amount of damages in the award[1] and denying Anchor’s counterclaims. ANALYSIS I. Standard of Review Anchor first raises a concern about whether Wood’s motion for summary judgment should be reviewed under the no-evidence summary judgment standard or the traditional summary judgment standard. The Texas Supreme Court has recently held that if evidence is attached to a motion brought under Rule 166a(i), the motion will be treated as a no-evidence summary judgment motion and the evidence will not be considered unless it creates a fact question. Binur v. Jacobo, 135 S.W.3d 646, 651 (Tex. 2004). Thus, although Wood attached evidence to its motion, we will apply the no-evidence summary judgment standard. A no‑evidence summary judgment should be sustained in the following situations: (1) there is a complete absence of proof of a vital fact, (2) the court is barred by rules of law or evidence from giving weight to the only evidence offered to prove a vital fact, (3) the evidence offered to prove a vital fact is no more than a mere scintilla, or (4) the evidence conclusively establishes the opposite of a vital fact. King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751 (Tex. 2003). A no‑evidence summary judgment is improperly granted if the non‑movant counters with more than a scintilla of probative proof to raise a genuine issue of material fact. Id. More than a scintilla of proof exists when the proof “‘rises to a level that would enable reasonable and fair‑minded people to differ in their conclusions.’” Id. (quoting Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997)). Less than a scintilla of proof exists when that which is proffered is “‘so weak as to do no more than create a mere surmise or suspicion’”—the effect being that there is no evidence offered. See id. (quoting Kindred v. Con/Chem, Inc., 650 S.W.2d 61, 63 (Tex. 1983)). We examine the evidence in the light most favorable to the nonmovant and disregard all evidence and inferences to the contrary. Id. A no-evidence motion for summary judgment must specifically set forth the elements of the adverse party’s claim for which there is no evidence. Tex. R. Civ. P. 166a(i); Specialty Retailers, Inc. v. Fuqua, 29 S.W.3d 140, 147 (Tex. App.—Houston [14th Dist.] 2000, pet. denied). The motion cannot be conclusory or generally allege that there is no evidence to support the claims. Tex. R. Civ. P. 166a cmt.; Specialty Retailers, 29 S.W.3d at 147. A challenge to the specificity of a no-evidence motion for summary judgment may be brought for the first time on appeal. Gourrier v. Joe Myers Motors, Inc., 115 S.W.3d 570, 574 (Tex. App.—Houston [14 Dist.] 2002, no pet.). “A no‑evidence summary judgment may not be granted on grounds not expressly presented to the trial court.” Hinkle v. Adams, 74 S.W.3d 189, 193 (Tex. App.—Texarkana 2002, no pet.); see also McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 337, 339–42 (Tex. 1993). Although Wood correctly states that arbitration is a favored means of dispute resolution and that every reasonable presumption must be made in upholding an arbitration award, “in a summary judgment proceeding such rules must yield to the degree they conflict with the presumptions in favor of a non‑movant.” TUCO Inc. v. Burlington N. R.R. Co., 912 S.W.2d 311, 315 (Tex. App.—Amarillo 1995), aff’d as modified, 960 S.W.2d 629 (Tex. 1997); see also Orangefield Indep. Sch. Dist. v. Callahan & Assocs., 93 S.W.3d 124, 127 (Tex. App.—Beaumont 2001), aff’d in part and rev’d in part on other grounds, 92 S.W.3d 841 (Tex. 2002).[2] II. Evidence In its first issue, Anchor contends the trial court erred in granting a no-evidence summary judgment because (1) Wood’s motion lacked the specificity required by Rule 166a(i), and (2) Anchor produced more than a scintilla of evidence to support its claims. The first two no-evidence statements in Wood’s motion—that Anchor had “no evidence of any of the elements of its counterclaim” and “no evidence that the award should be set aside, modified, or vacated”—were general challenges to Anchor’s claims. They are thus not specific enough to support the summary judgment. See Tex. R. Civ. P. 166a(i); see also id. cmt. (“[P]aragraph (i) does not authorize conclusory motions or general no‑evidence challenges to an opponent’s case.”); cf. Gourrier, 115 S.W.3d at 574 (holding a motion was sufficiently specific because “[a]lthough the [movant] challenged 41 elements or combinations of elements in [the non-movant’s] causes of action, it referenced the specific page and paragraph numbers of his petition where each of these identified elements were alleged”). Anchor presented sufficient evidence to counter Wood’s third no-evidence statement—that Anchor had “no evidence that the arbitrator engaged in wilful misconduct.” To constitute “misconduct” justifying vacation of an arbitration award, an act must so affect the rights of a party as to deprive it of a fair hearing. See IPCO-G.&C. Joint Venture v. A.B. Chance Co., 65 S.W.3d 252, 258 (Tex. App.—Houston [1st Dist.] 2001, pet. denied); see also Mullinax, Wells, Baab & Cloutman, P.C. v. Sage, 692 S.W.2d 533, 536 (Tex. App.—Dallas 1985, writ ref’d n.r.e.) (applying Texas common law). An arbitrator can commit misconduct by preventing a party from presenting evidence. See Gulf Coast Indus. Workers Union v. Exxon Co., USA, 70 F.3d 847, 850 (5th Cir. 1995) (applying the Federal Arbitration Act).[3] In the affidavit presented by Anchor, its representative stated he had personal knowledge that the arbitrator prevented Anchor from presenting impeaching evidence, refused to schedule an additional hearing after Anchor explained its need to present additional evidence, and refused to allow an additional hearing after Anchor explained that the National Arbitration Forum had interfered with Anchor’s attempts to subpoena witnesses because of a fee dispute between Anchor and the Forum.[4] This affidavit was not conclusory on these points and therefore constitutes more than a scintilla of evidence that the arbitrator’s acts deprived Anchor of a fair hearing. We cannot consider the evidence Wood cites to the contrary, such as the arbitrator’s order stating that the arbitrator had granted three of Anchor’s requests for postponement and that Anchor had made no effort to pay the subpoena fees for the witnesses it wanted subpoenaed.[5] See Blan v. Ali, 7 S.W.3d 741, 747 (Tex. App.—Houston [14th Dist.] 1999, no pet.); Lampasas v. Spring Center, Inc., 988 S.W.2d 428, 432 (Tex. App.—Houston [14th Dist.] 1999, no pet.). Because Anchor presented more than a scintilla of evidence of arbitrator misconduct, this claim does not support the summary judgment. See Blan, 7 S.W.3d at 747; Lampasas, 988 S.W.2d at 432. Although Wood raises additional grounds to support the summary judgment—that Anchor’s counterclaims were untimely filed and that there was no evidence of miscalculation—these grounds were not raised in the motion for summary judgment and we cannot consider them here. See McConnell, 858 S.W.2d at 339–42; Hinkle, 74 S.W.3d at 193. Anchor’s first point of error is sustained. Since this issue disposes of the appeal, we need not address the remaining issues. We reverse the judgment of the trial court and remand the case. /s/ Wanda McKee Fowler Justice Judgment rendered and Memorandum Opinion filed September 30, 2004. Panel consists of Justices Fowler, Edelman, and Seymore. [1] We note that a party may never move for a no-evidence summary judgment on a cause of action for which it has the burden of proof. See Nowak v. DAS Inv. Corp., 110 S.W.3d 677, 680 (Tex. App.—Houston [14th Dist.] 2003, no pet.). The trial court would thus have been precluded from awarding the amount of damages in the arbitration award and thereby effectively confirming it. Anchor does not make this argument, however, nor does it affect our decision. [2] Typically we do not see an appeal of a summary judgment order; instead, we review the confirmation of an arbitration award. In that circumstance, we would review the award very deferentially and indulge every reasonable presumption in favor of the award and none against it. CVN Group, Inc. v. Delgado, 95 S.W.3d 234, 238 (Tex. 2002). The award would have the same effect as a judgment of a court of last resort and we could not substitute our judgment for the arbitrator’s merely because we would have reached a different conclusion. Porter & Clements, L.L.P. v. Stone, 935 S.W.2d 217, 221 (Tex. App.—Houston [1st Dist.] 1996, no writ). [3] The language of the Federal Arbitration Act (“FAA”) differs from the Texas Arbitration Act (“TAA”) in that it lists acts which can constitute misconduct. The FAA provides for vacature “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 of any other misbehavior by which the rights of any party have been prejudiced.” 9 U.S.C. § 10. Although the TAA also provides for vacature if the arbitrator “refused to postpone the hearing after a showing of sufficient cause for the postponement” or “refused to hear evidence material to the controversy,” those grounds are not listed as examples of misconduct, see Tex. Civ. Prac. & Rem. Code § 171.088(a)(3)(B)–(C); arbitrator misconduct is included under a different subsection, see id. § 171.088(a)(2). It does not appear the legislature intended the separate grounds for vacature provided in section 171.088 to be mutually exclusive, however. Compare id. § 171.088(a)(1) (providing for vacature of an “award obtained by corruption”), with id. § 171.088(a)(2)(B) (providing for vacature in the case of “corruption in an arbitrator”). Refusal to postpone a hearing after a showing of sufficient cause for postponement or failure to hear material evidence can constitute misconduct if the act so affects the right of a party so as to deprive it of a fair hearing. See IPCO‑G.&C., 65 S.W.3d at 258. [4] Wood did address this issue that Anchor was denied an additional hearing session, listing it as a claim for which Anchor had no evidence. However, the denial of an additional hearing session was merely one instance of arbitrator misconduct alleged by Anchor; it was not an essential element of any of Anchor's counterclaims. Additionally, we have already held that Anchor raised a fact issue on whether the arbitrator wrongfully denied an additional session. Thus this claim also will not support the judgment. [5] If Wood had filed a motion to confirm the arbitration award we could consider all the evidence and could have indulged all reasonable presumptions in favor of the award, just as the trial court would have. See CVN Group, 95 S.W.3d at 238.