top of page
  • Writer's pictureBeth M. Johnson

Arbitration Agreements

Divorces and SAPCRs can be resolved through arbitration proceedings. See Tex. Fam. Code §§ 6.601, 153.0071(a). Generally, an agreement by the parties to submit a divorce with children to binding arbitration is governed by both the Family Code and the Texas Arbitration Act (“TAA”). See In re Cartwright, 104 S.W.3d 706, 711 (Tex. App.—Houston [1st Dist.] 2003, orig. proceeding). Unless the Texas Family Code and TAA provisions conflict, the TAA supplements the Family Code’s arbitration provisions and should be used only if a subject is not covered by the Family Code. See e.g., In re M.W.M., 523 S.W.3d 203, 207–08 (Tex. App.—Dallas 2017, orig. proceeding).

Often in family law, a mediated settlement agreement, prenuptial agreement, or partition agreement may include arbitration provisions. Additionally, given the pandemic-related backlog of the courts’ dockets, parties may be inclined to agree to arbitration to reach a conclusion of their case more swiftly.

If the parties agree to arbitration, the written agreement to refer the suit to arbitration must state whether the arbitration will be binding. Tex. Fam. Code §§ 6.601(a), 153.0071(a). If the arbitration is binding, the court must sign an order reflecting the arbitrator’s award. Tex. Fam. Code § 153.0071(b). However, the court can vacate an arbitration award if:

  1. under Family Code § 153.0071(b), the court determines at a nonjury hearing that the award is not in the child’s best interest; or

  2. there are grounds for vacating the award under Texas Civil Practice & Remedies Code § 171.088.

Stieren v. McBroom, 103 S.W.3d 602, 605 (Tex. App.—San Antonio 2003, pet. denied); see Tex. Fam. Code § 153.0071(b). The party challenging an arbitration based on a best-interest ground has the burden to request a hearing to prove that ground. E.g., In re T.B.H.-H., 188 S.W.3d 312, 315 (Tex. App.—Waco 2006, no pet.). Without a hearing, the appellate court will find that the party seeking to set aside the award on a best-interest ground has waived that issue for appellate review. The grounds listed in Texas Civil Practice and Remedies Code Section 171.088 include corruption, fraud, or other undue means; misconduct by the arbitrator; and failure to follow the arbitration agreement. See Tex. Civ. Prac. & Rem. Code § 171.088. The appellate courts conduct a de novo review of a trial court’s decision to confirm or vacate based on the Texas Civil Practice and Remedies Code. Denbury Onshore, LLC v. Texcal Energy South Texas, L.P., 513 S.W.3d 511, 515 (Tex. App.—Houston [14th Dist.] 2016, no pet.).

Texas caselaw has long enshrined a preference in favor of enforcing valid contractual arbitration agreements. See e.g., RSL Funding, LLC v. Newsome, 569 S.W.3d 116, 121 (Tex. 2018). Thus, a party seeking to compel arbitration need only establish:

  1. the existence of a valid, enforceable arbitration agreement; and

  2. the claims at issue fall within the scope of that agreement.

Bonsmara Nat. Beef Co. v. Hart of Tex. Cattle Feeders, LLC, 603 S.W.3d 385, 397 (Tex. 2020). Once those two elements are proven, the burden shifts to the party seeking to avoid arbitration to prove an affirmative defense to the provision’s enforcement, such as fraud, duress, or waiver. Henry v. Cash Biz LP, 551 S.W.3d 111, 115 (Tex. 2018); In re Oakwood Mobile Homes, Inc., 987 S.W.2d 571, 573 (Tex. 1999) (orig. proceeding) (per curiam). If the party seeking to avoid arbitration fails to establish an affirmative defense, the court must grant the motion to compel arbitration, and the parties will be bound by the terms of the arbitration agreement. See e.g., In re Marriage of Bowers, 635 S.W.3d 756, 763 (Tex. App.—Amarillo 2021, no pet.).

A presumption exists in favor of arbitration, and courts are required to resolve doubts regarding arbitrability in favor of referring the dispute to arbitration. In re FirstMerit Bank, N.A., 52 S.W.3d 749, 753 (Tex. 2001) (orig. proceeding). A court has no discretion but to compel arbitration and stay its own proceedings when a claim falls within the scope of a valid arbitration agreement and there are no defenses to its enforcement. Richmont Holdings, Inc. v. Superior Recharge Sys., L.L.C., 392 S.W.3d 633, 635 (Tex. 2013) (per curiam).

A party may waive his right to arbitration if he participates extensively in litigation before seeking to compel arbitration. Menger v. Menger, No. 01-19-00921-CV, 2021 WL 2654137 (Tex. App.—Houston [1st Dist.] 2021, pet. dismissed) (mem. op.) (husband’s late-filed motion to compel arbitration would have caused wife undue prejudice); cf. Roman v. Herrera, No. 13-20-00111-CV, 2021 WL 1306407 (Tex. App.—Corpus Christi 2020, no pet.) (mem. op.) (although case had been pending for two years, husband sought arbitration shortly after being served and, thus, did not waive right to same).

Parties should take caution when signing an arbitration agreement. It is extremely difficult to set aside an arbitration award resulting from a binding arbitration agreement. See e.g., Kamke v. Kamke, No. 12-20-00186-CV, 2021 WL 5365576 (Tex. App.—Tyler 2021, no pet.) (mem. op.) (contrary to wife’s assertion, arbitrator did not exceed scope of arbitration because arbitrator was authorized to resolve “any dispute…of this agreement, as well as all issues involving its enforcement…”).

An arbitrator exceeds her authority when she disregards the terms of the arbitration agreement and dispenses her own idea of justice. Id. at *2 (citing D.R. Horton-Texas, Ltd. v. Bernhard, 423 S.W.3d 532, 534 (Tex. App.—Houston [14th Dist.] 2014, pet. denied)). However, an arbitrator does not exceed her authority merely because she may have misinterpreted the contract or misapplied the law. Id. “[A]n arbitrator does not exceed her authority by committing a mistake of law, but instead by deciding a matter not properly before her.” Id. The proper inquiry is not whether the arbitrator correctly decided an issue, but whether the arbitrator had authority to decide the issue at all. Id.; Forest Oil Corp. v. El Rucio Land & Cattle Co., 518 S.W.3d 422, 431 (Tex. 2017). An arbitrator does not exceed her authority when the matter she addresses is one that the parties agreed to arbitrate. Id. (citing Centex/Vestal v. Friendship W. Baptist Church, 314 S.W.3d 677, 686 (Tex. App.—Dallas 2010, pet. denied)). “[A] complaint that the arbitrator decided the issue incorrectly or made a mistake of law is not a complaint that the arbitrator exceeded [her] powers.” Id. Thus, “a mistake of fact or law by the arbitrator in the application of substantive law is not a proper ground for vacating an award.” Id. (emphasis added).

The courts apply arbitration agreements precisely as written. Thus, attorneys for a party signing an agreement to arbitrate should ensure that the client does actually agree to every term of the agreement, including any appellate relief (or lack thereof).

6 views0 comments


bottom of page