Opinion
No. 05-07-01101-CV
Opinion issued August 6, 2008.
On Appeal from the 296th Judicial District Court Collin County, Texas, Trial Court Cause No. 296-912-07.
Before Justices MORRIS, WHITTINGTON, and O'NEILL.
MEMORANDUM OPINION
This is an appeal from the trial court's order confirming an arbitration award in a dispute arising out of the construction of a new home. Penhollow Custom Homes, L.L.C. and Steven J. Penhollow contend the trial court's order should be reversed because the trial court lacked jurisdiction to render the confirmation order, the arbitrator exceeded his authority, and the arbitrator was biased. For the reasons that follow, we affirm the trial court's order.
I.
Latroy and Anita Hawkins contracted with Penhollow Custom Homes for the construction of a new home. Problems with the construction led the Hawkinses to terminate the contract before the home was completed. In accordance with a provision in the contract, the parties attempted to arbitrate their dispute. When they could not agree on an arbitrator, the home builder filed suit in the 380th Judicial District Court. The Hawkinses moved to compel arbitration. The trial court granted the motion to compel and ordered the cause administratively closed.
Penhollow Custom Homes sued the Hawkinses and Jose Gomez, the builder's former employee who supervised construction of the home.
The matter proceeded to arbitration. The Hawkinses filed a counterclaim against Steven Penhollow individually and requested he be made a party to the arbitration proceeding. The arbitrator ruled Penhollow was a proper party to the arbitration. All parties participated in the arbitration hearing. The arbitrator denied the builder's claims and awarded the Hawkinses $566,905.00 against Penhollow Custom Homes and Steven Penhollow jointly and severally. Thereafter, the Hawkinses moved in the 380th Judicial District Court to reopen the case, add Steven Penhollow as a party to that lawsuit, and confirm the arbitration award. The motion to reopen the case was denied. The Hawkinses then filed a new lawsuit against both Penhollow Custom Homes and Steven Penhollow in the 296th Judicial District Court seeking confirmation of the arbitration award. The trial court granted the Hawkinses' application and confirmed the award. This appeal followed.
II.
Appellants first assert the trial court lacked jurisdiction to render the confirmation order because of the existence of the lawsuit previously filed in the 380th Judicial District Court. Appellees argue that appellants waived this issue by failing to file a plea in abatement in the trial court.
Generally, the court in which a suit is first filed acquires dominant jurisdiction to the exclusion of all other coordinate courts. See Wyatt v. Shaw Plumbing Co., 760 S.W.2d 245, 247-48 (Tex. 1988). A complaint based on dominant jurisdiction, however, must be raised by a timely plea in abatement in the second court or it is waived. Id. Appellants did not file a plea in abatement in the second court. In the absence of a plea in abatement, the second court, having subject matter jurisdiction and jurisdiction over the parties, can determine the issues before it and its judgment, if rendered first, may have preclusive effect on the pending proceeding in the other court. Mower v. Boyer, 811 S.W.2d 560, 563 n. 2 (Tex. 1991).
At the hearing on appellees' motion to confirm the award, appellants apparently made the trial court aware of the prior proceedings in the 380th District Court. They never asserted, however, that the trial court lacked jurisdiction to proceed with the case because of the previously filed lawsuit. Instead, appellants argued in the trial court, and again here, that the 380th District Court had previously denied appellees' motion to confirm the award and appellees should not be permitted to forum shop for a more favorable ruling. But our record has no order in it from the 380th District Court denying appellees' motion to confirm. The order on which appellants apparently rely is located in the appendix to their brief. Documents in an appendix, however, are not part of the appellate record and may not be considered on appeal. See Cantu v. Horany, 195 S.W.3d 867, 870 (Tex.App.-Dallas 2006, no pet.). Furthermore, the order in appellants' appendix only denies appellees' motion to reopen the case and does not address appellees' motion to confirm the award. Thus, appellants have failed to establish any reversible error based on their complaint of forum shopping. Moreover, because appellants never presented their dominant jurisdiction complaint to the trial court, it has not been properly preserved for our review. We resolve appellants' first and second issues against them.
In their third issue, appellants argue that the trial court erred in confirming the award because the arbitrator exceeded his authority by including Penhollow individually as a party to the arbitration when he was not a party to the contract and by awarding damages that did not comport with the contract's remedy provisions. Under the Texas General Arbitration Act, the trial court must confirm an arbitrator's award on application unless an opposing party establishes a statutory ground under the Act for vacating, modifying, or correcting the award. Tex. Civ. Prac. Rem. Code Ann. § 171.087 (Vernon 2005). The Act permits an award to be vacated if the arbitrator exceeded his powers. § 171.088(a)(3)(A). An arbitrator exceeds his authority when he decides matters not properly before him. See Pheng Invs., Inc. v. Rodriguez, 196 S.W.3d 322, 329 (Tex.App.-Fort Worth 2006, no pet.) (op. on reh'g). The arbitration agreement before us permits the consolidation and joinder of parties "substantially involved in a common question of fact or law or whose presence is required if complete relief is to be accorded in arbitration." To vacate the award on the grounds that there was no agreement to arbitrate between Penhollow individually and the Hawkinses, however, the Act requires that specific objection to be raised with the arbitrator. § 171.088(a)(4).
In the record before us, we have no indication of what specific objection was raised with the arbitrator. Although the parties do not appear to dispute that objections were made to the inclusion of Penhollow as an additional party to the arbitration, we are unable to discern what specific objection was made or what evidence the arbitrator had before him when he made his ruling. Based on the record before us, we are unable to examine the merits of appellants' complaints with respect to the inclusion of Penhollow as a party to the arbitration.
Appellants also complain the arbitrator exceeded his authority by awarding damages contrary to the contract provisions. Specifically, appellants argue that the arbitrator awarded damages prematurely, used the wrong measure of damages, and failed to consider appellees' obligation to mitigate damages. We initially question whether these complaints were properly preserved for appeal as the only ground for vacation asserted in appellants' responsive pleading to appellees' application to confirm was that Penhollow was not a proper party to the arbitration. Moreover, the lack of an arbitration record prevents any meaningful review of these complaints. Even if we assume these complaints were properly preserved, we would not be persuaded to reverse the trial court's confirmation order on this basis.
Section 4.6.1 of the contract provides, "Any claim arising out of or related to the Contract, . . ., shall be subject to arbitration." This language vests the arbitrator with broad power to resolve claims involving the contract and does not limit the arbitrator's authority to contractual remedies. In fact, section 13.4.1 of the contract entitled "Rights and Remedies" specifically provides that the rights and remedies available under the contract shall be in addition to and not a limitation of rights and remedies otherwise imposed or available by law. We thus reject appellants' argument that the arbitrator exceeded his authority in awarding damages.
Finally, appellants assert the trial court's order confirming the award should be reversed because the arbitrator was biased against them. Appellants did not raise this ground in their response to appellees' motion to confirm, nor did they argue or present evidence to support this ground at the hearing on appellees' motion to confirm. Accordingly, appellants have not preserved this issue for appellate review. See Tex. R. App. P. 33.1.
We affirm the trial court's order.