Austin Commercial Contractors, Lp v. Carter & Burgess, Inc.
Docket: 05-10-01542-CV
Court: Court of Appeals of Texas; September 29, 2011; Texas; State Appellate Court
Austin Commercial Contractors, L.P. (ACCLP) appealed a trial court's October 29, 2010 order that compelled arbitration in a dispute with Carter. Burgess, Inc. regarding a Consultant Agreement related to a construction project for the Regents of the University of California. ACCLP alleged breach of contract against Carter. Burgess, which responded with a motion to dismiss and a counterclaim for breach of contract. Subsequently, ACCLP sought to compel arbitration under the Consultant Agreement, citing a clause that directed disputes to be resolved through arbitration per the Prime Contract. However, the Prime Contract specified mediation followed by binding arbitration under the Civilian Board of Contract Appeals (CBCA). Carter. Burgess opposed ACCLP's motion, arguing that the CBCA lacked jurisdiction and that ACCLP had waived its right to arbitration by initiating litigation. The trial court partially granted ACCLP's motion, ordering arbitration but designating the American Arbitration Association (AAA) instead of the CBCA. ACCLP appealed this specific ruling and sought mandamus relief, which led to the consolidation of both proceedings for resolution. The Court of Appeals dismissed the appeal for lack of jurisdiction but conditionally granted the mandamus petition.
In 2009, the Texas Legislature amended the civil practice and remedies code to allow interlocutory appeals under the Federal Arbitration Act (FAA). Specifically, individuals can appeal from certain district court or county court orders in cases governed by the FAA, mirroring the conditions outlined in 9 U.S.C. Section 16. Appeals are permitted for orders that: (1) refuse to stay an action, (2) deny arbitration petitions, (3) deny applications to compel arbitration, (4) confirm or deny arbitration awards, or (5) modify, correct, or vacate awards. Additionally, interlocutory orders granting or modifying injunctions against arbitration may also be appealed.
However, certain orders are not appealable, including those compelling arbitration or directing arbitration procedures, which are deemed favorable to arbitration. In this case, the trial court's order compelling arbitration was not subject to appeal under federal law, leading to the dismissal of ACCLP's interlocutory appeal due to lack of jurisdiction.
For mandamus relief, a relator must demonstrate both a clear abuse of discretion by the trial court and the absence of an adequate remedy by appeal. Mandamus is typically unavailable for orders compelling arbitration, as any errors can be addressed through final appeals. While improper arbitration may cause delays and expenses, these factors alone do not render the appeal inadequate, particularly in contract claim arbitrations where prevailing parties can recover fees and expenses.
The case involves contract claims without conflicting legislative mandates, affirming that the parties have a remedy by appeal regarding the trial court's order compelling arbitration. ACCLP argues that it lacks an adequate remedy for the order requiring arbitration under AAA rules instead of CBCA rules, a position the court supports. Parties can specify arbitration rules by contract, and failure to enforce these rights under the FAA constitutes a lack of adequate remedy by appeal. The court references CMH Homes v. Perez, where the supreme court ruled that a trial court's appointment of an arbitrator could be reviewed by mandamus if a party was denied its contractual arbitration rights. The court concludes that if ACCLP was denied its rights by being compelled to arbitrate under AAA rules, it lacks an adequate remedy by appeal. The trial court abused its discretion by compelling arbitration under AAA rules, as the Consultant Agreement clearly stipulates that disputes should follow the Prime Contract’s procedures, which specify binding arbitration under CBCA rules. Any procedural objections raised by Carter. Burgess regarding the jurisdiction of the CBCA or conditions precedent to arbitration are to be determined by the arbitrator, not the court.
The arbitrator is responsible for determining whether the prerequisites for arbitration have been met. The argument from Carter. Burgess that ACCLP waived its right to contest arbitration by initiating proceedings before the AAA is unconvincing. The interlocutory appeal by ACCLP is dismissed due to a lack of jurisdiction. However, the petition for mandamus is conditionally granted concerning the October 29, 2010 order mandating arbitration before the AAA. The trial court is directed to vacate this order and amend it to require arbitration according to the Prime Contract rules under the CBCA. The district court is expected to comply promptly; the writ will be issued only if it does not.
The contract pertains to the CMRR Radiological Laboratory/Utility/Office Building, with Los Alamos National Security, LLC replacing the University in the Prime Contract. The former DOE Board of Contract Appeals is designated as the proper arbitration forum, but the CBCA now holds jurisdiction over claims previously under the Board's authority. The court rejects claims that this case involves anything other than the October 29, 2010 order, clarifying that earlier hearings did not yield final rulings on arbitration. Additionally, Carter. Burgess's Motion to Dismiss Appeal, based on estoppel due to ACCLP's actions before the AAA, is rendered moot by the jurisdictional dismissal of the appeal.
