Credigy Receivables, Inc v. Mahinay
(Tex.App.- Houston [14th Dist.] Jun. 30, 2009) (op. by Guzman)   
The determination of whether the trial court has subject-matter jurisdiction
over the suit to confirm arbitration award does not require the reviewing court  
to determine whether Credigy's claims are
governed by the TAA, the FAA, or
both, because the Harris County civil court at law had subject-matter
jurisdiction over the case regardless of which of these substantive laws apply.  
The court of appeals therefore reverses the trial court's judgment of dismissal
and remands for further proceedings in accordance with its opinion.
REVERSED AND REMANDED: Opinion by Justice Guzman    
Before Justices Brock Yates, Guzman and Sullivan  
14-07-01091-CV Credigy Receivables, Inc v. Alexander R. Mahinay  
Appeal from County Civil Court at Law No 1 of Harris County
Trial Court
Judge: R. Jack Cagle  
Trial Court Case #: 898231  
==============================================================================
Reversed and Remanded and Opinion filed June 30, 2009.

In The Fourteenth Court of Appeals
_______________

NO. 14-07-01091-CV
_______________

CREDIGY RECEIVABLES, INC., Appellant

V.

ALEXANDER R. MAHINAY, Appellee
                                                                                                                                         
On Appeal from the County Civil Court at Law No. 1

Harris County, Texas

Trial Court Cause No. 898231
                                                                                                                                         
O P I N I O N

In this suit on an arbitration award, appellant Credigy Receivables, Inc. (“Credigy")  appeals the
dismissal of its case by a Harris County civil court at law for want of jurisdiction.  Because we
conclude the trial court does have subject-matter jurisdiction of the claims asserted, we reverse
and remand.  

I.  Factual and Procedural Background

According to the pleadings and attachments in the record, Credigy purchased appellee Alexander
Mahinay's MBNA credit account, on which Mahinay had defaulted, and pursuant to the Federal
Arbitration Act, obtained an arbitration award of $4,550.66 on May 30, 2006.  On July 11, 2007,
Credigy filed suit on the award in Harris County Civil Court at Law No. 1.  Mahinay failed to answer
the suit, and after Credigy moved for default judgment, the trial court dismissed the suit for want of
jurisdiction.[1]  The trial court did not specify the basis for its conclusion that it lacked jurisdiction,
but Credigy appears to argue that the trial court dismissed the case in the mistaken belief that it
lacked jurisdiction to consider an arbitration award governed by the Federal Arbitration Act, or
because it concluded that the arbitration award was unenforceable under the Texas General
Arbitration Act.  Credigy asks that we reverse the order dismissing the case and remand for further
proceedings.

II.  Issues Presented

In two issues, Credigy argues that (a) the Federal Arbitration Act (“FAA") preempts the Texas
General Arbitration Act (commonly referred to as the “TAA") to the extent that the two conflict, and
(b) Harris County Courts have subject-matter jurisdiction over cases seeking confirmation of
arbitration awards of less than $100,000.  

III.  Standard of Review

Whether a trial court has subject-matter jurisdiction is a question of law that we review de novo.  
See Mayhew v. Town of Sunnyvale, 964 S.W.2d 922, 928 (Tex. 1998).  We consider only evidence
relevant to the jurisdictional inquiry and construe the pleadings in the plaintiff's favor, looking to the
pleader's intent and accepting all his allegations as true.  Patton v. Jones, 212 S.W.3d 541, 545
(Tex. App.- Austin 2006, pet. denied) (op. on reh'g) (citing County of Cameron v. Brown, 80 S.W.
3d 549, 555 (Tex. 2002) and Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 555 (Tex. 2000)).  
We presume that a trial court has jurisdiction unless the absence of jurisdiction affirmatively
appears on the face of the petition.  French v. Moore, 169 S.W.3d 1, 6 (Tex. App.- Houston [1st
Dist.] 2004, no pet.); see also Peek v. Equip. Serv. Co. of San Antonio, 779 S.W.2d 802, 805 (Tex.
1989) (explaining that in the absence of objections by the defendant to curable pleading defects,
“the plaintiff may proceed to trial, however defective its allegations").  Thus, to defeat jurisdiction,
the plaintiff's pleadings must demonstrate an incurable defect that deprives the court of subject-
matter jurisdiction.  Patton, 212 S.W.3d at 545.

IV.  Analysis

Because it is dispositive of this appeal, we begin with Credigy's second issue, which concerns the
scope of the trial court's subject-matter jurisdiction.  “A county civil court at law in Harris County has
jurisdiction over all civil matters and causes, original and appellate, prescribed by law for county
courts, but does not have the jurisdiction of a probate court."  Tex. Gov't Code Ann. § 25.1032(a)
(Vernon 2004).  County courts have concurrent jurisdiction with district courts in “civil cases in
which the matter in controversy exceeds $500 but does not exceed $100,000, excluding interest,
statutory or punitive damages and penalties, and attorney's fees and costs, as alleged on the face
of the petition."  Id. § 25.0003(c)(1).  “Together, these provisions grant Harris County civil courts at
law concurrent jurisdiction with district courts in civil cases in which the amount in controversy falls
within a certain jurisdictional dollar limit for statutory county courts."  Cont'l Coffee Prods. Co. v.
Cazarez, 937 S.W.2d 444, 448 (Tex. 1996).

Credigy's claim falls within these parameters, and we are unable to discern in the pleadings any
bar to the trial court's exercise of jurisdiction.  Although Credigy spends much of its brief arguing
that the arbitration award is valid because provisions of the TAA that might invalidate the FAA are
preempted, this argument goes to the merits of Credigy's claim, not to the trial court's jurisdiction.  
If the parties “have asserted nothing in the TAA or other state law that would subvert enforcement
of the agreements at issue," then the FAA does not preempt the TAA, and the court may have
jurisdiction under both laws.  See  In re D. Wilson Constr. Co., 196 S.W.3d 774, 780 (Tex. 2006).

Assuming that federal preemption does apply in this case, the application of the FAA, without more,
does not divest a state court of jurisdiction.  Mills v. Warner Lambert Co., 157 S.W.3d 424, 427
(Tex. 2005) (per curiam).  Federal and state courts instead have concurrent jurisdiction to enforce
the FAA.  See Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 25 (1983); In re
Kellogg Brown & Root, Inc., 166 S.W.3d 732, 739 (Tex. 2005) (orig. proceeding).  Moreover, the
FAA does not preempt state common-law actions to confirm arbitration awards.  FIA Card Servs., N.
A. v. Gachiengu, 571 F. Supp. 2d 799, 805 (S.D. Tex. 2008).[2]  

In sum, the determination of whether the trial court has subject-matter jurisdiction does not require
us to determine if Credigy's claims are governed by the TAA, the FAA, or both, because the Harris
County civil court at law had subject-matter jurisdiction over the case regardless of which of these
substantive laws apply.  We therefore reverse the trial court's judgment and remand for further
proceedings in accordance with this opinion.

/s/        Eva M. Guzman

Justice

Panel consists of Justices Yates, Guzman, and Sullivan.

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[1]  The trial court originally dismissed the suit on December 4, 2007.  Credigy moved for
reinstatement and filed a “Brief in Support of Enforcement of Arbitration Award."  The trial court
reinstated the case on December 13, 2007 to consider the brief, then dismissed the suit again.

[2]  Under the FAA, a party to the arbitration may move to confirm an award within one year of the
award's date.  See 9 U.S.C.A. § 9 (West 2009).  As noted in FIA Card Services and the cases cited
therein, there is a split of authority among federal courts as to whether this provision is permissive
or constitutes a mandatory statute of limitations.  FIA Card Servs., 571 F. Supp. 2d at 803-05.  
Although it is undisputed that Credigy filed this suit more than one year after the arbitration award,  
it is unclear whether it seeks to confirm an award or simply pursue judgment based on Mahinay's
failure to pay.  We need not consider this issue, however, because even if the action is time-
barred, this would be an affirmative defense rather than a jurisdictional barrier.  See Tex. R. Civ. P.
94; Mauldin v. MBNA Am. Bank, N.A., No. 2-07-208-CV, 2008 WL 4779614, at *3-4 (Tex. App.- Fort
Worth, no pet.) (mem. op.).