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Texas: Party waived right to arbitration by substantially invoking the judicial process

In Hogg v. Lynch, Chappell & Alsup, P.C., the El Paso Court of Appeals held that a law firm's client waived her right to seek arbitration by substantially invoking the judicial process to the law firm's detriment. Ms. Hogg and the law firm entered into a contingent fee agreement. Ms. Hogg and her attorneys attended a mediation relating to the estate of Ms. Hogg's late husband. The MSA stated that warranty deeds would be executed and an estate closing would take place. Ms. Hogg asked the law firm to take a lower contingency fee percentage, the firm declined, and Ms. Hogg terminated the law firm's services. Ultimately, the law firm and Ms. Hogg engaged in scheduling orders and discovery. The El Paso Court of Appeals outlined relevant factors when making the determination if a party has impliedly waived its rights to arbitration, including:  • whether the party who pursued arbitration was the plaintiff or the defendant; • how long the party who pursued arbitration delayed before ...

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Texas: Arbitration agreement with employee enforceable even though she did not sign

In Firstlight Federal Credit Union v. Loya, the Eighth District Court of Appeals held that the trial court abused its discretion in refusing to compel arbitration. The court held that Loya, an at-will employee, was bound by the arbitration agreement as a matter of law despite her lack of signature because she continued working after receiving notice of the arbitration agreement. According to the Court of Appeals, there was evidence that Loya received a notice of the arbitration policy and acknowledged its receipt electronically through a secure web-portal. It was undisputed that Loya did not print, sign, and return the online version of the company's Dispute Resolution Policy & Procedure. The Court of Appeals also examined the "delegation clause" of the agreement--that portion of the agreement that determines whether the court or the arbitrator has the power to rule on gateway issues, such as the validity and enforceability of the arbitration agreement. Here, the Court of Appeals held that the agree ...

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Texas: Arbitration agreement between law firm and client is enforceable

In Parallel Networks, LLC v. Jenner & Block, LLP, the Fifth District Court of Appeals examined the trial court's judgment confirming an arbitration award. The law firm, Jenner & Block, represented Parallel in patent infringement litigation pursuant to a contingent fee agreement. Jenner & Block later terminated its professional relationship with Parallel and alleged that Parallel owed it attorneys' fees--both under an hourly fee arrangement and a contingency fee arrangement. Jenner & Block filed a demand for arbitration and the arbitrator found that Parallel owed Jenner & Block $3,000,000 in attorneys' fees (hourly) and a sixteen percent contingency fee. The Court of Appeals held that the trial court correctly enforced the arbitration award. The arbitration provision was not unconscionable nor did it violate public policy. Using the FAA, the statutory grounds for vacating an arbitration award did not exist here, according to the court.   Note: Parallel has filed a Mo ...

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Texas: Agreement to arbitrate employment agreement enforceable

In Ophthalmic Consultants of Texas, P.A. v. Morales, the Thirteenth District Court of Appeals held that the agreement to arbitrate between an ophthalmology specialist and his employer was enforceable. The employee sought to have the agreement declared invalid on a number of grounds, including the defenses of it being an illusory agreement, it failed for indefiniteness, it was substantively unconscionable, and that the employer waived its right to arbitrate. The Court of Appeals held that the agreement to arbitrate was valid and enforceable.

Thanks to Ronnie Hornberger for bringing this decision to our attention.

What is a Reasoned Award?

This blog is written by Lionel M. Schooler, a partner in the Houston office of Jackson Walker L.L.P.  He currently serves as the Chair-Elect of the State Bar Alternative Dispute Resolution Section and as the Chair-Elect of the Houston Bar Association’s Alternative Dispute Resolution Section.  Mr. Schooler is a frequent writer and speaker on arbitration arbitrator and member of the State Bar of Texas' ADR Council. Lonnie is the chair-elect of the ADR Section. Thank you, Lonnie, for this contribution. Experienced Arbitrators and advocates frequently use boilerplate terms without pausing to decide what they actually mean.  The undoubtedly unanticipated consequence of such casual usage of the term “reasoned award” was on full display on October 8, when the Houston First Court of Appeals issued its opinion in Stage Stores, Inc. v. Gunnerson, addressing a question of first impression:  what is meant by the term “reasoned award” in an arbitration claus ...

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Texas: Arbitration clause between attorney and client upheld

This post is authored by Lonnie Schooler with Jackson Walker. Lonnie is on the State Bar of Texas' ADR Section Council. Thanks to Lonnie for brining this decision to us and for providing this outstanding analysis of Royston, Rayzor, Vickery & Williams LLP v. Lopez. Introduction.  The Texas Supreme Court on June 26, 2015, through Justice Johnson issued its unanimous decision in Royston, Rayzor, Vickery & Williams L.L.P. v. Lopez (which included a concurring opinion by Justice Guzman, joined by Justices Lehrman and Devine), upholding an arbitration clause contained within an engagement letter that the Royston, Rayzor law firm had entered into with the client. Background Facts.  The arbitration clause in question required submitting to arbitration any dispute arising out of the agreement except for claims made by the law firm for recovery of fees or expenses.  The law firm took on the representation of the client in a divorce proceeding, subject to the terms of this agreement ...

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Texas: Trial court correctly denied motion to arbitrate--Chapter 154, not 171, governs

In Beldon Roofing Co. v. Sunchase IV Homeowners' Ass'n, Inc., the Thirteenth District Court of Appeals affirmed the trial court's denial of a motion to arbitrate. The parties agreed, in their original contract, to arbitrate in accordance with the Federal Arbitration Act and the Construction Industry Arbitration Rules of the AAA. While Beldon's request to compel arbitration was pending, the parties entered into an agreed order referring the parties to arbitration pursuant to Chapter 154 of the Texas Rules of Civil Procedure, the general ADR statute, but not Chapter 171, the Texas Arbitration Act. The Court of Appeals held that the ADR Act and the TAA cannot govern the same proceeding. The TAA contemplates limited judicial review and is binding. The ADR Act, on the other hand, is nonbinding unless the parties stipulate beforehand that the award will be binding. The TAA applies to private agreements to arbitrate; the ADR Act applies only to court-ordered referrals to arbitration. Because this arbitra ...

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Pet mediation (and business tips)

Here's a fun article from Emma Johnson at Forbes

Debra Hamilton is a pet mediator based in New York. The article may provide ADR practitioners with some ideas for their business, including marketing and going "super-niche." 

Blog: There are no do-overs in mediation

Barbara Reeves recently published "There Are No Do-Overs in Mediation" at In her article, Reeves encourages counsel to prepare for a mediation because the market no longer allows the luxury of a lengthy mediation. Because of the prevalence of half-day (or shorter) mediations, counsel needs to spend time with their clients before the mediation, inoculating them against anticipated offers, thinking about how to respond to offers, using decision trees, and considering remedies and benefits that a court cannot order.

Fifth Circuit: Error in refusing to recognize Philippine arbitration award

In Asignacion v. Rickmers Genoa Schiffahrtsgesellschaft MBH & CIE, KG, the United States Court of Appeals for the Fifth Circuit examined whether the district court correctly refused to enforce a Philippine arbitral award pursuant to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards and the prospective-waiver doctrine. Asignacion filed suit in Louisiana state court to recover for personal injuries with Rickmers seeking an exception to enforce the arbitration clause in the contract it had with Asignacion. The state court granted the exception, stayed litigation, and ordered arbitration in the Philippines. At arbitration, the arbitrators found that Asignacion had the lowest grade of compensable disability and awarded $1,870. Asignacion then filed a motion in Louisiana state court asking Rickmers to show cause why the Philippine arbitral award should not be set aside for violating United States public policy. That suit was removed to federal court by Rickmers. The t ...

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