What is the applicable standard of review on appeal in evaluating whether trial court's order
compelling arbitration was proper?
Justice Don Willett writes separately in Perry Homes v. Cull (Tex. 2008) to
address the issue; would have affirmed trial court's order compelling builder to
arbitrate.
Perry Homes v. Cull, No. 05-0882 (Tex. May 2, 2008)
go to ---> Court's Opinion In Perry Homes v. Cull (by Scott A. Brister)
Related terms: arbitration clause, arbitration award Recent Texas arbitration case law decisions from the Texas Supreme Court
(Tex. 2007) | Arbitration appellate decisions from the Houston Courts of Appeals
consumer law, homeowner law | residential construction law and litigation |
2008 Supreme Court Cases | Texas Opinions Homepage |
Also see --> Other Opinions by Tex. Sup. Ct. Justice Don R. Willett
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Willett's Separate Opinion in Perry Homes homeowner arbitration case
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Argued March 20, 2007
Justice Willett, concurring in part and dissenting in part. [Bold terms and links are not part of the opinion as
released by the court)
Arbitration has become a hot-button topic for the Court of late—in this Term alone we have decided at least
three arbitration-related cases[1] and heard argument in four more.[2] As the range of opinions in this case
demonstrates, the invocation and operation of arbitration provisions can present tricky legal questions that
spark honest differences of opinion. I agree with Parts I-V of the Court’s decision, and also with much of Part VI
regarding waiver. However, I respectfully dissent from the Court’s ultimate result, not on an arbitration law issue,
but on a much more old-fashioned ground—the applicable standard of review.
The Court properly acknowledges that a trial court’s order compelling arbitration is reviewed for abuse of
discretion. Under this standard, we will reverse the trial court only when “it acts in an arbitrary or unreasonable
manner, without reference to any guiding rules or principles.”[3] I agree with the Court, and the trial judge for
that matter, that the record clearly shows that the Culls substantially invoked the judicial process. I also agree
with the Court that the cost-reimbursement provision in the arbitration agreement does not prevent Perry
Homes from showing prejudice resulting from the Culls’ arbitration flip-flop. Justice Johnson is comforted by the
possibility that an arbitrator might (mis)construe this provision to award Perry Homes all its litigation-related
costs and fees, but I am not. The provision limits reimbursement to “costs and expenses including attorney’s
fees incurred in seeking dismissal of such litigation,” and we cannot plausibly say Perry Homes fails on
prejudice because an arbitrator may misread the agreement.
Having said all that, I cannot conclude, as does the Court, that the trial court abused its discretion by
compelling arbitration. I believe in waiver-by-conduct, but Perry Homes bore the threshold responsibility of
building a record upon which the trial court could find prejudice. The record on appeal is far more extensive
than what the trial court considered (and the arguments far more refined), but I agree with Justice Johnson that
the trial court—sitting where it sat, seeing what it saw, hearing what it heard, reviewing what it reviewed—did not
abuse its discretion in concluding “no prejudice.”
Trial courts do not have carte blanche “to send any case to arbitration no matter what has occurred in court,”[4]
but I cannot conclude that this trial court acted “without reference to any guiding rules or principles”[5] in ruling
that Perry Homes fell short of building a trial-court record that showed prejudice.
This is admittedly a close call, and the Court makes the best possible case for going the other way. Given the
relevant record, however, I have a difficult time saying the trial court acted arbitrarily or disregarded all guiding
standards in not reaching the opposite result.
Accordingly, I dissent from the Court’s decision vacating the arbitration award and remanding for trial.
______________________________
Don R. Willett
Justice
Opinion delivered: May 2, 2008
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[1] See Chambers v. O’Quinn, 242 S.W.3d 30 (Tex. 2007); In re U.S. Home Corp., 236 S.W.3d 761 (Tex. 2007).
This case is the third.
[2] In re Gulf Exploration, LLC, 211 S.W.3d 828 (Tex. App.—Eastland 2006), pet. granted, 51 Tex. Sup. Ct. J.
77 (Nov. 2, 2007); E. Tex. Salt Water Disposal Co. v. Werline, 209 S.W.3d 888 (Tex. App.—Texarkana 2006),
pet. granted, 51 Tex. Sup. Ct. J. 77 (Nov. 2, 2007); Bison Bldg. Materials v. Aldridge, 2006 WL 641280 (Tex.
App.—Houston [1st Dist.] 2006), pet. granted, 51 Tex. Sup. Ct. J. 77 (Nov. 2, 2007); Forest Oil Corp. v.
McAllen, 2005 WL 3435061 (Tex. App.—Corpus Christi 2005), pet. granted, 51 Tex. Sup. Ct. J. 667 (Apr. 27,
2007).
[3] In re Nitla, 92 S.W.3d 419, 422 (Tex. 2002) (citing Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238,
241-42 (Tex. 1985)).
[4] ___ S.W.3d ___.
[5] Nitla, 92 S.W.3d at 422.
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Perry Homes v. The Culls, No. 05-0882 (Tex. 2008)(Opinion by Brister)
PERRY HOMES, A JOINT VENTURE, HOME OWNERS MULTIPLE EQUITY, INC., AND WARRANTY
UNDERWRITERS INSURANCE COMPANY v. ROBERT E. CULL, AND S. JANE CULL; from Tarrant County; 2nd
district (02-04-00052-CV, 173 S.W.3d 565, 08-31-05)
The Court reverses the court of appeals' judgment, vacates the arbitration award, and remands the case to the
trial court.
Justice Brister delivered the opinion of the Court, in which Justice Hecht, Justice O'Neill, Justice Wainwright, and
Justice Medina joined, and in which Chief Justice Jefferson, Justice Green, Justice Johnson, and Justice Willett
joined as to parts I-V.
Justice O'Neill delivered a concurring opinion.
Justice Johnson wrote an opinion concurring and dissenting in part, which was joined by Chief Justice Jefferson and Justice
Green
Justice Willett delivered an opinion concurring in part and dissenting in part.