law-confirmation of arbitration award | agreement to arbitrate | arbitration case law | FAA

A. Standard of Review

The court of appeals reviews de novo a trial court's decision to confirm or vacate an arbitration award under
the FAA. Myer v. Americo Life, Inc., 232 S.W.3d 401, 407 (Tex. App.--Dallas 2007, no pet.). A district court may
vacate an award under the FAA only if (1) the award was procured by fraud, corruption, or undue means; (2)
there was evidence of partiality or corruption among the arbitrators; (3) the arbitrators were guilty of misconduct
that prejudiced the rights of a party; or (4) the arbitrators exceeded their powers. 9 U.S.C.S. § 10(a).

We conclude the determination by the arbitrator that Stature committed common-law fraud does not establish
that the arbitration clause was obtained by fraud because the arbitration clause is severed from the entire
agreement. See id. Moreover, the procedure for challenging whether an arbitration agreement was obtained by
fraud is to be held before the trial court, when the trial court is determining whether to compel arbitration. See
First Options, 514 U.S. at 943, 115 S. Ct. at 1924. After the trial court orders the case to be sent to arbitration,
the arbitrator is not determining the effectiveness of the arbitration agreement but rather the remaining part of
the contract that is severed from the arbitration agreement. See W. Dow Hamm III Corp. v. Millennium Income
Fund, L.L.C., 237 S.W.3d 745, 753 (Tex. App.--Houston [1st Dist.] 2007, orig. proceeding & no pet.) ("[U]nless
an arbitration agreement provides otherwise, a court may determine only matters of substantive arbitrability . . .
." (citing Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 84, 123 S. Ct. 588, 592 (2002))). The arbitrator
does not revisit the trial court's determination about the effectiveness of the arbitration clause. See First
Options, 514 U.S. at 943, 115 S. Ct. at 1924 ("[A]rbitration is simply a matter of contract between the parties; it
is a way to resolve those disputes--but only those disputes--that the parties have agreed to submit to
arbitration."). We hold the trial court did not err by refusing to vacate the arbitrator's award based on the
arbitrator's finding that Stature committed common-law fraud under the contract.
Fogal v. Stature Construction (Tex.App.- Houston [1st Dist.] Jan. 29, 2009)(Alcala)
confirmation of arbitration award, no waiver, modification of arbitration award, challenges to arb award
overruled, award confirmed,
open courts provision not violated)
Justice Alcala
Before Justices Taft, Keyes and Alcala
01-07-00456-CV Mary Fogal and Robert Fogal v. Stature Construction, Inc., Jorge Casimiro, Tom Thibodeau
and Bernie Kane
Appeal from 80th District Court of Harris County
Trial Court
Judge: Hon. Lynn Bradshaw-Hull