Human Biostar, Inc. and RNL Bio, Ltd. N/K/A K-Stemcell Co. Ltd v. Celltex Therapeutics Corporation ( 2015 )

ACCEPTED
14-15-00234-CV
FOURTEENTH COURT OF APPEALS
HOUSTON, TEXAS
8/4/2015 4:53:19 PM
CHRISTOPHER PRINE
CLERK
No. 14-15-00234-CV
FILED IN
14th COURT OF APPEALS
In the Court of Appeals HOUSTON, TEXAS
For the Fourteenth District of Texas 8/4/2015 4:53:19 PM
Houston, Texas CHRISTOPHER A. PRINE
Clerk
Human Biostar, Inc.
Appellant
vs.
Celltex Therapeutics Corporation,
Appellee
Appeal from the 434th Judicial District Court of
Fort Bend County, Texas
Trial Court Cause No. 12-DCV-202563
APPELLENT HUMAN BIOSTAR, INC.’S REPLY
Mr. Bruce C. Tough
State Bar No. 20151500
Tough Law Firm, PLLC
819 Crossbridge Drive
Spring, Texas 77373
btough@toughlawfirm.net
telephone: (281) 681-0808
telecopier: (281) 281-0809
Lead Counsel for Appellant
Human Biostar, Inc.
Table of Contents
Table of Contents ...................................................................................................... ii
Index of Authorities ................................................................................................. iii
Objection and Motion to Strike…………………………………………………….2
Reply to Section I of Appellee's Brief .......................................................................3
Reply to Section II of Appellee's Brief ..................................................................…9
Reply to Section III of Appellee's Brief...................................................................12
Certificate of Compliance…………………………………………………………16
Certificate of Service……………………………………………………………...17
Appendix………………………………………………………………………...ante
ii
Index of Authorities
Cases Page
Blanco v. Bolanos,
20 S.W.3d 809, 811
(Tex. App. – El Paso, 2000, no pet.)…………………………………………….. 15
Chamber v. O’Quinn,
242 S.W.3d 30, 31
(Tex. 2007)…………………………………………………………………………3
Circle Zebra Fabrications v. Americas Welding,
2011 Tex. App. LEXIS 1945
(Tex. App. – Corpus Christi 2011, mandamus)……………………………….……3
City of Keller,
168 S.W.3d 802, 810
(Tex. 2005)…………………………………………………………………………8
Croucher v. Croucher,
660 S.W.2d 55, 58
(Tex. 1983)…………………………………………………………………………8
Elm Creek Villas Homeowner Ass’n, Inc. v. Beldon Roofing & Remodeling Co.,
940 S.W.2d 150, 155
(Tex. App. – San Antonio 1996, no writ)……………...……………..………….4, 6
Frontera Generation v. Mission Pipeline,
400 S.W.3d 102, 112
(Tex. App. – Corpus Christi 2012, mandamus)……………………….…................3
General Electric Co., v. Falcon Ridge Apartments,
811 S.W.2d 942
(Tex. 1991)………………………………………………………………………..13
Gunnerman v. Basic Capitol Mgmt.,
106 S.W.3d 821, 824 – 25
(Tex. App. – Dallas 2003, pet. denied)……………………………………………..6
iii
In re Gulf Exploration, LLC
289 S.W.3d 836, 842 & n.33
(Tex. 2009)………………………………………………..……………………..3, 4
In re LaBatt Food Serv., L.P.,
279 S.W.3d 640, 642 – 643………………………………………………………..7
In re Morgan Stanley & Co.,
293 S.W.3d 182, 189
(Tex. 2009)…………………………………………………………………………8
In re Oakwood Mobile Homes, Inc.,
987 S.W.2d 571, 573
(Tex. 1999) (per curiam)…………………………………………………………...8
J. M. Davidson, Inc. v. Webster,
128 Sw3d 223, 227
(Tex. 2001)………………………………………………………………………....7
Karagounis v. David Lopez & Assoc.,
2003 Tex. App. LEXIS 1010, 2003 WL 203478
(Tex. App – Houston [14th Dist.] 2003, no pet.)…………………………………..13
Labidi v. Sydow,
287 S.W.3d 922, 926
(Tex. App. – Houston [14th Dist.] 2009, mandamus)………………………………3
Lehmann v. Har-Con Corp.,
39 S.W.3d 191, 195
(Tex. 2001)…………………………………………………………………………4
Mantas v. Fifth Court of Appeals,
925 S.W.2d 656
(Tex. 1996)………………………………………………………………………6, 7
Materials Evolution Development USA v. Jablonowski,
949 S.W.2d 31, 32
(Tex. App. – San Antonio 1997, no writ)…………………………………………..3
iv
Perry Homes v. Cull,
258 S.W.3d 580, 587
(Tex. 2008)………………………………………………….……………………...3
Quick v. City of Austin,
7 S.W.3d 109, 116
(Tex. 1998)…………………………………………………………………………7
Still v. Kilgore,
2015 Tex. App. Lexis 2795
(Tex. App. – Tyler 2015, no pet.)………………………………………..………..14
Twenty First Century Holdings, Inc. v. Precision Geothermal Drilling, Inc.,
2015 Tex. App. LEXIS 4046
(Tex. App. Austin, Apr. 23, 2015)…………………………………………………4
Will-Drill Resources, Inc. v. Samson Resources, Co.,
352 F.3d 211
(5th Cir.)…………………………………………………………………….………8
v
Statutes and Rules Page
TEX. CIV. PRAC. & REM 171.044………………………………………….11, 12
TEX. CIV. PRAC. & REM 171.088…………………………………………...... 12
TEX.R.CIV.P. 21a………………………………………………………………...15
vi
No. 14-15-00234-CV
In the Court of Appeals
For the Fourteenth District of Texas
Houston, Texas
Human Biostar, Inc.
Appellant
vs.
Celltex Therapeutics Corporation,
Appellee
Appeal from the 434th Judicial District Court of
Fort Bend County, Texas
Trial Court Cause No. 12-DCV-202563
APPELLENT HUMAN BIOSTAR, INC.’S REPLY
Mr. Bruce C. Tough
State Bar No. 20151500
Tough Law Firm, PLLC
819 Crossbridge Drive
Spring, Texas 77373
btough@toughlawfirm.net
telephone: (281) 681-0808
telecopier: (281) 281-0809
Lead Counsel for Appellant
Human Biostar, Inc.
1
TO THE HONORABLE FOURTEENTH COURT OF APPEALS:
OBJECTION AND MOTION TO STRIKE:
Appellant objects to the Appellee’s Brief because it responds to the
Appellant K-Stemcell’s Appellant’s Brief, based on an ordinary appeal, and
Appellant HBI’s Appellant’s Brief, based on a restricted appeal, in a single
Appellee’s Brief that treats the Appellants collectively, resulting in confusion in
discerning which argument(s) and fact(s) apply to Appellant HBI for the purpose
of formulating this Reply. Particularly, in Appellee’s Brief, Section II, Appellee
refers to portions of the record which are not reviewable for purposes of the
restricted appeal because the evidence was not a part of the trial record as of
February 12, 2015. These portions should be struck from the Appellee’s Brief for
the purpose of review of Appellant HBI’s Appellant’s Brief. Further, in Section II,
Appellee discusses several alleged instances of notice to K-Stemcell as constituting
notice to HBI, that should be struck when reviewing the Appellee’s Brief in the
restricted appeal of HBI. In particular, objection is made to page 6 where Appellee
refers to concessions of Appellant K-Stemcell, page 7 where Appellee discusses
Appellants’ collective failure to introduce evidence in support of defeating a
motion to confirm arbitration, page 8 where Appellee argues that K-Stemcell did
not offer any evidence at the confirmation hearing and page 9 where the April
2015 hearing is discussed.
2
REPLY TO SECTION I OF APPELLEE’S BRIEF:
Appellee has failed to provide authority for its proposition, “[i]t is Black
Letter law in Texas that an order granting a motion to compel arbitration is not
appealable” Appellee’s Brief, page 4.1 That proposition is incorrect. In fact,
“[o]rders compelling arbitration and staying litigation are subject to appeal after
the rendition of final judgment.” Frontera Generation v. Mission Pipeline, 400
S.W.3d 102, 112 (Tex. App. – Corpus Christi 2012, mandamus), citing Perry
Homes v. Cull, 258 S.W.3d 580, 587 (Tex. 2008); see also In re Gulf Exploration,
LLC, 289 S.W.3d 836, 842 & n.33 (Tex. 2009). “If a trial court compels arbitration
when the parties have not agreed to it, that error can unquestionably be reviewed
by final appeal. . . . Texas statutes provide for vacating an arbitration award by
1
The cases that Appellee cited as authority are not dispositive because they primarily
involve whether or not orders compelling arbitration are allowable interlocutory appeals, which
Appellant concedes they are not. In Chamber v. O’Quinn, 242 S.W.3d 30, 31 (Tex. 2007), the
Supreme Court held that the denial of a writ of mandamus, “without comment on the merits,
cannot deprive another appellate court from considering the matter in a subsequent appeal.”; in
Labidi v. Sydow, 287 S.W.3d 922, 926 (Tex. App. – Houston [14th Dist.] 2009, mandamus), this
Court held that an order compelling arbitration was not subject to interlocutory appeal under
either the federal or state schemes; in Frontera Generation v. Mission Pipeline, 400 S.W.3d at
112, the court again was referring to the limitations of the statutory interlocutory appeal scheme;
in Circle Zebra Fabrications v. Americas Welding, 2011 Tex. App. LEXIS 1945 (Tex. App. –
Corpus Christi 2011, mandamus), the court held that “[a] ‘binding, final, and non-appealable’
arbitral award . . . simply means the parties have agreed to relinquish their right to appeal the
merits of their dispute; it does not mean the parties relinquish their right to appeal an award
resulting from an arbitrator's abuse of authority, bias, or manifest disregard of the law. [citation
omitted]"); Materials Evolution Development USA v. Jablonowski, 949 S.W.2d 31, 32 (Tex.
App. – San Antonio 1997, no writ) involved statutory interlocutory appeals.
3
final appeal if the arbitrators exceeded their powers.” In re Gulf Exploration, LLC,
289 S.W.3d at 842 & n.33.
The germane issue then is whether or not the February 12, 2015 trial court
order confirming the arbitration award was a final order and appealable. If yes,
then the Appellate Court has jurisdiction now to review the trial court’s order
compelling jurisdiction. If no, then this Court, at a minimum, must dismiss the
portion of the appeal complaining of the order compelling arbitration because such
order is an interlocutory order and not statutorily appealable until after a final
judgment. Elm Creek Villas Homeowner Ass’n, Inc. v. Beldon Roofing &
Remodeling Co., 940 S.W.2d 150, 155 (Tex. App. – San Antonio 1996, no writ)
(“When a party appeals from two interlocutory orders, only one of which is made
appealable by statute, the proper course is to dismiss that portion which is non-
appealable and to rule on the portion from which an appeal may be taken.”)
The Appellee has raised this issue of the finality of the February 12, 2015
confirmation order in its Appellee’s Brief on pages 3 -4. Where, as in the appeal
before the Court, there has not been a trial on the merits, a judgment is final and
appealable if it disposes of all parties and claims or states unequivocally that it
finally disposes of all parties and claims. Lehmann v. Har-Con Corp., 39 S.W.3d
191, 195 (Tex. 2001). Twenty First Century Holdings, Inc. v. Precision
4
Geothermal Drilling, Inc., 2015 Tex. App. LEXIS 4046 (Tex. App. -- Austin, Apr.
23, 2015).
In the current restricted appeal, the trial court on February 12, 2015 granted
the motion to confirm the award, but also retained the case to resolve future
controversies arising from the arbitration award. 1RR 21. The trial court explained
that “in the normal circumstances of things, the confirmation [of the arbitration
award] then would result in a dismissal which would have a thirty day appellate
period and then we would have a finite end to the controversy, . . .I don’t think I
can dismiss it yet until – if there are unresolved conflicts concerning it.” Id. The
“conflicts” were the new claims of breach interposed by Appellee. Id at 17 – 21.
(Appellants’ counsel argued that the new claims should be the basis of a new
lawsuit. Id.at 17 – 18.)
The Appellee had asserted those new claims for breach of the arbitrated
settlement agreement before the arbitration award had even been confirmed. 1 RR
18. The trial court agreed with Appellants that any obligations and deadlines to
perform under the arbitrated settlement agreement did not commence to run until
after the award had been confirmed on February 12, 2015 and, correspondingly,
that the alleged omissions or acts of Appellants that were the basis of Appellee’s
newly-filed complaints could not have taken place prior to February 12, 2015 when
the trial court confirmed the arbitration award. Id. at 24 – 25. Thus, as of February
5
12, 2015 when the court confirmed the arbitration award, the parties and issues had
been disposed of and the new claims had not come into existence.
If the order was not final and appealable, then, at this juncture, this Court
lacks jurisdiction in this appeal to entertain any error of the trial court in
compelling arbitration because it is an interlocutory appeal. And, it must dismiss
those portions of the appeal complaining of that particular error until a final
judgment has been rendered. Elm Creek Villas Homeowner Ass’n, Inc. v. Beldon
Roofing & Remodeling Co., 940 S.W.2d at 150. If, however, the February 15,
2012 order is construed as a final judgment based on the disposition of all parties
and issues on that date, then the order compelling arbitration is merged into the
final order confirming arbitration. Gunnerman v. Basic Capitol Mgmt., 106 S.W.3d
821, 824 – 25 (Tex. App. – Dallas 2003, pet. denied) (citing Rule 25.1 and holding
that appeal from final judgment encompassed earlier interlocutory orders.)
Another option appears to be abatement of the appeal to allow the trial court
to render a final judgment. Mantas v. Fifth Court of Appeals, 925 S.W.2d 656,
(Tex. 1996). In Mantas, supra, in holding that the court of appeals abused its
discretion by refusing to abate the appeal pending resolution of the enforcement of
a settlement reached during the appellate process, the Texas Supreme Court stated
that “it makes no sense for the court of appeals to expend its resources, and require
the parties to expend theirs, on an appeal which may be moot. Certainly, a ruling
6
on the merits of the appeal before a judgment is rendered in the enforcement suit
would inject needless uncertainty and confusion into the issues surrounding the
settlement” Id. Unlike Mantas, in this Appeal, the needless uncertainty and waste
of time and resources would persist even with abatement because Appellee’s new
claims of breach that would presumably be disposed of in any final judgment may
potentially be moot in the event a final appeal resulted in a finding of error on the
part of the trial court in compelling arbitration.
In the event this Court entertains jurisdiction to review the order
compelling arbitration, any decision of the trial court regarding these gateway
issues would be subject to de novo review. In re LaBatt Food Serv., L.P., 279 S.W.
3d 640, 642 – 643. When reviewing error under a de novo standard, the appellate
court conducts an independent analysis of the record to arrive at its own
conclusions without deferring to the trial court’s conclusions. Quick v. City of
Austin, 7 S.W.3d 109, 116 (Tex. 1998). Appellant raised the material issue of the
existence of the Rule 11 Settlement Agreement in its response to Appellee’s
motion to compel arbitration. CR 22 -24.
Although there is a strong presumption in favor of arbitration, it only arises
after the party seeking to compel arbitration proves that a valid arbitration
agreement exists. J. M. Davidson, Inc. v. Webster, 128 Sw3d 223, 227 (Tex. 2001).
Nothing in the record indicates that the required board approval of the Rule 11
7
Agreement was obtained and, consequently, the Rule 11 Agreement did not come
into existence nor the arbitration agreement contained within. In re Morgan
Stanley & Co., 293 S.W.3d 182, 189 (Tex. 2009), citing Will-Drill Resources, Inc.
v. Samson Resources, Co., 352 F.3d 211 (5th Cir.) It was Appellee’s burden to
demonstrate that a valid agreement to arbitrate existed. In re Oakwood Mobile
Homes, Inc., 987 S.W.2d 571, 573 (Tex. 1999) (per curiam).
Where, as here, Appellant does not have the burden of proof, the “no
evidence” standard is used in a legal sufficiency challenge. Croucher v. Croucher,
660 S.W.2d 55, 58 (Tex. 1983). The appellate court will only sustain a no-evidence
challenge if the record shows one of the following: (1) there is no evidence on the
challenged element, (2) the evidence offered to prove the challenged element is no
more than a scintilla, (3) the evidence establishes the opposite of the challenged
element, or (4) the court is barred by law or rules of evidence from considering the
only evidence offered to prove the challenged element. City of Keller, 168 S.W.3d
802, 810 (Tex. 2005). The Rule 11 Agreement attached to the motion to compel
arbitration filed by Appellee (CR 60 – 72), indicates in paragraph 6 that board
approval is required, but not that is has been obtained. Because nothing in the
record indicates that board approval was obtained, the Rule 11 Agreement does not
overcome the no-evidence challenge as an essential element of the Rule 11
Agreement, to wit – “acceptance” - has not been obtained.
8
Should this Court decide that the February 12, 2015 order granting
confirmation of the arbitration award was a final order subject to final appeal, then
this Court should reverse the trial court’s order compelling the parties to arbitration
for the reasons stated in the Appellant’s Brief. If the order is found to be an
interlocutory order, then Appellant concedes that the order compelling arbitration
is not appealable at this time.
REPLY TO SECTION II OF APPELLEE’S BRIEF:
Appellant does not dispute the authority cited to by Appellee for the legal
premise that every reasonable presumption must be indulged to uphold the
arbitrator’s decision, and none against it. As discussed below and in Appellant’s
Brief and Reply to Section III of Appellee’s Brief, Appellant has pointed the Court
to affirmative evidence that overcomes the presumption. 2
Appellee has seriously misstated the record. On page 8, the Appellee
incorrectly states that “at that [confirmation hearing on February 12, 2015], Celltex
presented “conclusive” evidence that Biostar in fact did have notice of the
arbitration hearing.” The evidence is anything but conclusive:
1. Appellee first mentions the “Award” as evidence of notice, but
the Award (and other Arbitration Documents that comprise the Award,
referred to in Appellant’s Brief as “Arbitration Documents”, collectively),
affirmatively refutes the arbitrator’s statements that the parties had notice;
2
Appellee also complains that “Biostar filed no response to the motion to confirm the
Award” (Appellee’s Brief, page 6), but the record is silent as to notice to Appellant of the motion
to confirm. Appellant also did not participate in the hearing.
9
thus, overcoming any presumption of due notice. Those affirmative
statements of the arbitrator and attached emails to support the statements
constitute evidence in the record that may be considered by this Court in
reviewing this restricted appeal. (This evidence has been discussed in
Appellant’s Brief, pages 29 – 35 and below. CR 65 – 69; 1 SUPP. CR 4 -
11)3.
2. Appellee then points to the Arbitrator’s “Procedural Order No.
3” as evidence of notice to Appellant HBI, but again the affirmative
statements of the arbitrator that are “factual” in nature wholly controvert the
recitations of due notice that are “conclusive” in nature. 1st SUPP. CR 6 –
11. (See also footnote 3 herein).
3. Appellee then points to the October 23, 2014 order granting
Brian Antweil’s notice of withdrawal as notice that the arbitration was to
take place on November 17, 2014, but the order in fact states that the
arbitration must commence on or before November 17, 2014, the inference
being that the arbitration may be scheduled to start prior to November 17,
2014. It was not until the Procedural Order No. 1 was issued by the
arbitrator on November 9, 2014, after the withdrawal of Mr. Antweil, that
the actual time and place of the arbitration was set. 1st SUPP. CR 4 -5.
(Please also see footnote 3, herein.)
4. Finally, the email exchange between Brian Antweil and the
purported co-counsel for K-Stemcell, Gee Hong, merely reflects that Gee
Hong “will forward the court’s order [granting withdrawal of Brian Antweil]
to K-Stemcell HBI”, not that he “has” forwarded it. 1 SUPP. CR 10 -11. The
arbitrator also mischaracterizes Gee Hong’s email. 1 SUPP. CR 7. Even had
3
Procedural Order Nos. 1 and 3 rebut that Appellant HBI was given notice or was served any
documents. The arbitrator on November 9, 2015, over a week after the withdrawal of Brian
Antweil as counsel for Appellant HBI, first sends notice of the actual time and place of the
arbitration hearing to the parties with the exception of Appellant HBI. The order no. 1 states that
“[t]he arbitrator has communicated by email regarding the hearing with a party indicating itself
to be K-Stemcell. . . .In accordance with court order, the Arbitrator will convene a hearing on
November 17, 2014, to begin at 9:00 a.m. The situs will be . . . Counsel for Celltex has filed with
the Arbitrator its Arbitration Claim and Trial Brief [attached] [and] K-Stemcell and
Huyconggeun Park are invited to file pre-hearing responsive pleadings on or before the close of
business on November 14, 2014.” 1 SUPP. CR 4. Appellant HBI is not mentioned by the
arbitrator in this order. Id. 1SUPP. CR 4 – 11.
10
Gee Hong stated that he “had forwarded” the information, the notice would
still be inadequate for purposes of compliance with Texas Civil Practices &
Remedies Code Section 171.044 that requires the arbitrator to give notice of
the time and place of the arbitration by personal notice or certified mail,
return receipt requested. The insufficiency of this email as evidence of
notice is reinforced by Mr. Antweil’s statement that he believed Mr. Bristow
would be sending procedural and scheduling information pertinent to the
arbitration to Mr. Gee. Id. This referenced scheduling order, Procedural
Order No. 1, was dated November 9, 2014. 1 SUPP. CR 3 -5. It was not
until the arbitrator issued that Procedural Order No. 1 that the scheduling
information was determined to be November 17, 2014 at 9:00 a.m. at the
address listed. Id. Thus, Mr. Antweil could not have had this information on
October 24, 2014 as alluded to by the Appellee in the Appellee’s Brief (page
9), nor did the trial order allowing him to withdraw provide that information
other than that the hearing must start on or before November 17, 2014.
Finally, the email further indicates that the subject of the email is
“transitional issues for K-Stemcell”, not HBI. In summary, the very evidence
offered by the arbitrator to show notice to Appellant backfires as it proves
quite the opposite.
Appellee further incorrectly states on page 11 of its Brief that “Biostar . . .
admits the trial court’s October 23, 2014 order granting Appellants’ counsel’s
motion to withdraw, specifically provided that the granting of the motion would
not delay the arbitration ‘scheduled to begin on November 17, 2014.’” Appellant
has never admitted quite this statement. Although seemingly minor, Appellee
omits to include “on or before” before “November 17, 2014” when discussing the
trial court’s order that amended the court’s original order that the arbitration must
commence on or before October 23, 2014. CR 34 -36. This is a critical
misstatement on the part of Appellee because Appellee has argued that Appellant
HBI knew the place of the arbitration and the arbitration date of November 17,
11
2014 because of that order issued before the withdrawal of Brian Antweil on
October 23, 2014; however, the order clearly contemplates the possibility of a date
prior to November 17, 2014. Even had the order established November 17, 2014 as
the date, the required notice of the time and place of the arbitration had not been
issued by the arbitrator until November 9, 2014, over a week after Mr. Antweil’s
withdrawal as counsel for K-Stemcell Appellant HBI.
In summary, the evidence in the Arbitration Documents offered to
affirmatively demonstrate notice to Appellant instead rebuts any presumption of
notice to Appellant. Even, arguendo, were this Court to find that Appellant
received notice, that notice did not rise to the requirement of Texas Civil Practices
& Remedies Code 171.044.
REPLY TO SECTION III OF APPELLEE’S BRIEF:
The gist of Appellee’s argument is that Appellant failed to establish error on
the face of the record, a necessary component of a restricted appeal. Appellant
respectfully disagrees. As stated in section II above, Appellant has shown in the
record affirmative proof that it was not noticed of the arbitration hearing in any
manner, much less by the method required by the Texas Civil Practices &
Remedies Code Section 171.088. Appellant refers this Court to its Appellant’s
Brief and Section II, above, to avoid repetition as to the affirmative evidence in the
12
record that overcomes any presumption of notice, much less proper notice to
Appellant.
Appellee cites to several cases as authority.4 Appellee cites to Karagounis v.
David Lopez & Assoc., 2003 Tex. App. LEXIS 1010, 2003 WL 203478 (Tex. App
– Houston [14th Dist.] 2003, no pet.) as dispositive of the proposition that an
appellant claiming an absence of notice has a heavy burden to show error on the
face of the record. Id. This case is factually distinguishable from the instant appeal
as, in Karagounis, there was no discussion of the particular facts of the case other
than that the appellant claimed he had not received notice of the trial setting
resulting in a default judgment and that nothing in the record indicated that he had
not received notice. Id. In this case, unlike in Karagounis, the record consists of
substantial affirmative statements of the arbitrator in the Arbitration Documents
including that irrefutably rebut the presumption of notice. CR 63 – 72; 1 SUPP CR
4 -11. This affirmative evidence overcome the otherwise heavy burden of
Appellant to show the absence of notice. Id.
4
Appellee’s citation to General Electric Co., v. Falcon Ridge Apartments, 811 S.W.2d 942 (Tex.
1991), involving the predecessor writ of error procedure, states the general proposition that the
absence from the trial record of affirmative proof that notice of intent to dismiss or of the order
of dismissal is provided does not establish error. This case is factually distinguishable because,
unlike the current appeal, it dealt with extrinsic evidence not in the record to prove notice.
Appellee’s citation to In re Cartwright, a case that involved the inherent authority of the trial
court to control timetables, is not dispositive on the issues raised by Appellant. Appellant has
never asserted as error the trial judge’s instructions to start the arbitration hearing no later than
November 17, 2014. Rather, the Appellant complained that the arbitrator should have postponed
the November 17 hearing and issuance of the award based on the arbitrator’s actual or
constructive knowledge of his lack of proper notice to Appellant and Appellant’s absence at the
hearing.
13
Appellee’s citation to Still v. Kilgore, 2015 Tex. App. Lexis 2795 (Tex. App.
– Tyler 2015, no pet.) is also distinguishable factually from the instant appeal
because that appellant, unlike Appellant in this appeal, failed to affirmatively
overcome the presumption of notice. The appellant in Still filed a notice of
restricted appeal on the basis that he had not received notice of the trial setting and
did not participate at the trial that resulted in a final judgment. Attempts to serve
the appellant with citation at a Henderson Blvd address had been unsuccessful
necessitating substituted service at 10746 CR 243. The appellant answered the
lawsuit pro se, placing a P.O. Box address under his signature as his mailing
address, but did not otherwise make allegations that the other two addresses were
incorrect, hence nothing was in the record before the trial court about the other
addresses. The appellee announced at trial that he had given notice of the trial
setting to appellant: the judgment included a recitation that due notice had been
given to appellant of the trial setting. The appellant’s restricted appeal failed
because he did not affirmatively show in the record that he had not received notice.
Id. In other words, the appellant had failed to overcome the presumption of proper
notice.
In this appeal, however, substantial affirmative evidence in the record
overcomes any presumption of due notice. The arbitrator’s very attempts to
affirmatively establish notice prove the opposite. The arbitrator’s occasional
14
recitations of due notice cannot be reconciled with the overwhelming affirmative
evidence rebutting that “due notice”.
In Blanco v. Bolanos, 20 S.W.3d 809, 811 (Tex. App. – El Paso, 2000, no
pet.), the record showed that the request for a trial setting was filed with less than
the required 45 day notice and, therefore, any purported evidence of telephone and
facsimile notice of the October 1st trial setting on September 22 could not have
been served 45 days before the trial setting, effectively rebutting the presumption
of proper notice. The court explained its decision, as follows:
“[I]t is presumed that the trial court will hear a case only when notice
has been given to the parties. [] To overcome this presumption, an appellant
must affirmatively show a lack of notice. [] This burden is not discharged by
mere allegations, unsupported by affidavits or other competent evidence,
that proper notice was not received. Here, even if we were to assume that a
facsimile notice to her Hawaii attorney is sufficient to comply with
TEX.R.CIV.P. 21a, the record affirmatively demonstrates that Blanco
received less than the forty-five days mandated by Rule 45. [] Torres
testified at the final hearing on October 1 that she provided notice to Smith
by telephone and by facsimile on September 22. Additionally, the record
reveals that Bolanos did not even file his setting request until September 16,
a mere fifteen days prior to the final hearing. Because Blanco did not receive
notice of the trial setting as required by Rule 245, we sustain this issue. We
reverse the judgment and remand the case to the trial court for a new trial.”
Id. [Internal cites omitted.]
Based upon a review of the Arbitration Documents in this appeal, as
discussed in the Appellant’s Brief and hereinabove, Appellant has overcome the
heavy burden of rebutting the presumption of notice and thus has shown error on
the face of the record.
15
Respectfully submitted,
TOUGH LAW FIRM, PLLC
/s/ Bruce C. Tough
Bruce C. Tough
btough@toughlawfirm.net email
State Bar No. 20151500
819 Crossbridge Drive
Spring, Texas 77373
(281) 681-0808 telephone
(281) 681-0809 telecopy
Lead Counsel for Appellant
Human Biostar, Inc.
Certificate of Compliance
Based upon the word counting function of Windows, this Reply of
Appellant, Human Biostar, Inc., contains 4,057 words excluding the portions of the
brief excluded in Texas Rule of Appellate Procedure 9.4(i)(1).
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Certificate of Service
I hereby certify that a true and correct copy of the foregoing document has
been forwarded by e-filing and e-service to all lead counsel of record, on this 4th
day of August, 2015, as follows:
Grant Cook
GREENBERG TRAURIG, LLP
1000 Louisiana, Ste. 1700
Houston, Texas 77002
(713) 374-3505 telecopier
cook@gtlaw.com email
Co-Counsel for Appellee
Celltex Therapeutics Corporation
Richard Tate
TATE MOERER & KING, LLP
206 South Second Street
Richmond, Texas 77469
(281) 341-1003 telecopier
rltate@tate-law.com email
Co-Counsel for Appellee
Celltex Therapeutics Corporation
Paula E. Hughes
18115 FM 756
Whitehouse, Texas 75791
(281) 281-0809 telecopier
pehughes11@yahoo.com email
Counsel for Appellant RNL
Bio, Ltd. n/k/a K-Stemcell
Co. Ltd.
/s/ Bruce C. Tough
Bruce C. Tough
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