Gordon Carroll Fisher v. Daniel K. Hagood, P. C. and Fitzpatrick Hagood Smith and UHL, Inc. ( 2019 )

Modify in part and affirm as modified; Opinion Filed December 10, 2019
In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-19-00106-CV
GORDON CARROLL FISHER, Appellant
V.
DANIEL K. HAGOOD, P.C. AND FITZPATRICK HAGOOD SMITH AND UHL, INC.,
Appellees
On Appeal from the County Court at Law No. 1
Dallas County, Texas
Trial Court Cause No. CC-13-05268-A
MEMORANDUM OPINION
Before Justices Myers, Schenck, and Carlyle
Opinion by Justice Myers
Gordon Carroll Fisher appeals the trial court’s judgment denying Fisher’s application to
vacate an arbitration award. Fisher brings three issues on appeal contending (1) the trial court had
jurisdiction to vacate its order confirming the arbitration award and to determine that Fisher was
entitled to a settlement credit; (2) the trial court erred by refusing to hear evidence concerning
Fisher’s application to vacate the arbitration award, and the court erred by denying Fisher’s
application to vacate the arbitration award; and (3) Fisher was entitled to a settlement credit based
on amounts paid in settlement by another defendant, Gene Phillips. The parties agree that Fisher
is entitled to credit for the amount of Phillips’s settlement. We modify the trial court’s judgment
to reduce the amount of damages and interest for which Fisher is liable, and we affirm the trial
court’s judgment as modified.
BACKGROUND
In 2006, Fisher hired the Dallas law firm of Fitzpatrick Hagood Smith & Uhl Inc. (“the
firm”) to represent him in a criminal case in Oklahoma. Fisher’s contract with the firm contained
an arbitration provision stating the parties agreed to arbitrate “a disagreement, dispute, or
controversy between the Client and the Firm concerning . . . the performance of this Agreement.”
Gene Phillips also agreed to pay the firm for its representing Fisher, but Phillips did not agree to
arbitration.
In 2013, when Fisher and Phillips failed to pay the firm’s fees for representing Fisher,
appellees, Daniel K. Hagood, PC and the firm, sued Fisher and Phillips. Fisher moved for the trial
court to compel arbitration and abate the trial court proceedings during the arbitration. The trial
court granted the motion. The arbitration took place pursuant to the Federal Arbitration Act
(FAA). On May 6, 2016, the arbitration panel found in favor of appellees against Fisher and
determined that Fisher should pay appellees $772,683.82, plus interest of $64.06 per day.
Appellees filed an application to confirm the award on August 10, 2016. On February 24, 2017,
the trial court signed an interlocutory order confirming the arbitration award with judgment interest
to that date of $18,577.40 and ordered that interest would continue to accrue at a rate of $64.06
per day.
Over a year later, on April 12, 2018, Fisher filed an application to vacate the arbitration
award and to reopen the arbitration. Fisher alleged that appellees withheld documents Fisher had
requested and failed to produce Fisher’s entire file to him. Fisher asserted that appellees’ active
concealment of documents allowed appellees to make material misrepresentations and commit
perjury in the arbitration proceeding. Fisher stated in the application that he first learned of the
withholding of documents on January 16, 2018.
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Meanwhile, Phillips settled with appellees, paying appellees $225,000. The trial court
dismissed Phillips from the lawsuit on October 11, 2018; that order constituted the final judgment
in the trial court. On October 18, 2018, Fisher amended his application to vacate the arbitration
award to include a request for a credit to the judgment in the amount of Phillips’s $225,000
payment.
On January 18, 2019, ninety-nine days after the trial court signed the final judgment, the
trial court held a hearing on Fisher’s amended application to vacate the arbitration award and
request for a settlement credit. During the hearing, the trial court stated that the application was
denied. The trial court did not enter a written ruling on the application.
JURISDICTION
In his first issue, Fisher contends the trial court had jurisdiction to vacate the arbitration
award against Fisher and to modify the judgment to reflect Phillips’s settlement. The amended
application asked the trial court to vacate the arbitration award and reopen the arbitration
proceeding and to apply a settlement credit to the judgment for Phillips’s $225,000 settlement
payment to appellees. Appellees moved the trial court to dismiss Fisher’s amended application
for want of jurisdiction, arguing that the trial court’s plenary power had expired.
The trial court had plenary power to modify the judgment for thirty days after it signed the
final judgment if no motion under Rule of Civil Procedure 329b was filed or for thirty days after
any timely motion under Rule 329b was overruled by a signed order or by operation of law. See
TEX. R. CIV. P. 329b(d), (e). A motion to modify, correct, or reform the judgment is a motion that
extends the trial court’s plenary power to thirty days after the overruling of the motion. Id. 329b.
The motion must be filed “prior to or within thirty days after the judgment or other order
complained of is signed.” Id. 329b(a). If the trial court does not rule on the motion with a written
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order within seventy-five days after signing the final judgment, then the motion is overruled by
operation of law. Id. 329b(c).
The final judgment in this case was the trial court’s order dismissing appellees’ claims
against Phillips, signed October 11, 2018. Fisher filed his “Amended Application to Vacate
Arbitration Award and to Reopen the Arbitration or Alternatively for Application of Settlement
Credit” on October 18, 2018, seven days after the final judgment. At a minimum, the portion of
the motion seeking a settlement credit was a motion to modify the judgment. See Chesser v.
LifeCare Mgmt. Servs., L.L.C., 356 S.W.3d 613, 645 (Tex. App.—Fort Worth 2011 pet. denied)
(modifying trial court judgment to apply settlement credit); Brown & Root Inc. v. Shelton, 446
S.W.3d 386, 400 (Tex. App.—Tyler 2003 no pet.) (same). This motion was timely filed. The
motion was overruled by operation of law on December 27, 2018, and the court’s plenary power
to modify the judgment continued for another thirty days, through January 28, 2019.1 The hearing
on the motion was held on January 18, 2019, ninety-nine days after the final judgment. As of that
date, the amended application motion had been overruled by operation of law, but the trial court
still had plenary power to modify, correct, or reform the judgment. See TEX. R. CIV. P. 329b(e).
Section 12 of the FAA requires that an application to vacate an arbitration award must be
served on the opposing party within three months of the delivery or filing of the application award.
9 U.S.C. § 12. Section 12 has been treated as a limitations provision, not a jurisdictional
prerequisite. See Holcim (Tex.) Ltd. P’Ship v. Humboldt Wedag, Inc., 211 S.W.3d 801–02 (Tex.
App.—Waco 2006, no pet.). Therefore, whether Fisher timely asserted under section 12 his
original application to vacate the arbitration and reopen the arbitration proceedings did not affect
1
The seventy-fifth day after October 11, 2018 was December 25, 2018. December 25 and 26 are legal holidays. See TEX. GOV’T CODE ANN.
§§ 662.003(a)(9), (b)(8), 662.021. Rule of Civil Procedure 4 provides that if the last day of a period of time falls on a Saturday, Sunday, or legal
holiday, “the period runs until the end of the next day which is not a Saturday, Sunday, or legal holiday.” TEX. R. CIV. P. 4. Therefore, the period
of time before the motion was denied by operation of law was extended until the end of December 27, 2018. Thirty days after December 27, 2018
was January 26, 2019, which was a Saturday, so the court’s plenary power extended through the following Monday, January 28, 2019.
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the trial court’s jurisdiction to consider the original application or the amended application with
the request to modify the judgment to credit Phillips’s settlement.
LIMITATIONS PERIOD TO SEEK VACATION OF THE ARBITRATION AWARD
In his second issue, Fisher contends the trial court erred by denying his application to vacate
the arbitration award and reopen the arbitration proceeding. When an arbitration is conducted
pursuant to the FAA, “the FAA applies to the substantive rules of decision, but Texas law, and
specifically the Texas General Arbitration Act (TAA), governs the procedural matters.” Craig v.
Sw. Secs., Inc., 05-16-01378-CV, 2017 WL 6503213, at *2 (Tex. App.—Dallas Dec. 18, 2017, no
pet.) (mem. op.) (footnote omitted).
Appellees asserted Fisher did not comply with the requirement under section 12 of the FAA
that “[n]otice of a motion to vacate, modify, or correct an award must be served upon the adverse
party or his attorney within three months after the award is filed or delivered.” 9 U.S.C. § 12. The
arbitration panel delivered its award on May 6, 2016, and appellees filed the award in the trial
court on August 16, 2016. Fisher filed his original application to vacate the arbitration award and
reopen the arbitration proceeding on April 12, 2018, almost fifteen months after appellees filed the
award and well outside the three-month time limit under section 12. Section 12’s three-month
period for bringing and serving an application to vacate an arbitration award is considered to be a
limitations period. In re Chevron U.S.A., Inc., 419 S.W.3d 318, 326 (Tex. App.—El Paso 2010,
orig. proceeding [mand. denied]); Holcim (Tex.) Ltd. P’ship, 211 S.W.3d at 802.
Fisher asserts that the deadline for bringing an application to vacate an arbitration award is
a procedural matter and that the TAA’s provisions should apply. The TAA states that an
application to vacate on the ground that the award was obtained by corruption, fraud, or other
undue means must be filed “not later than the 90th day after the date the grounds for the application
are known or should have been known.” TEX. CIV. PRAC. & REM. CODE ANN. § 17.088(a)(1), (b).
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Fisher asserts that he filed the application to vacate the arbitration award eighty-four days after
learning of the fraud, and he argues his application to vacate the arbitration award was timely.
Generally, statutes of limitations are procedural, not substantive. Baker Hughes, Inc. v.
Keco R. & D., Inc., 12 S.W.3d 1, 4 (Tex. 1999). In Craig v. Southwest Securities, Inc., Craig filed
an application to vacate an arbitration award. We determined that the method for serving the
application award, whether by service of process as the TAA requires or in the manner for service
of a motion as the FAA requires, was a procedural matter governed by the TAA. Craig, 2017 WL
6503213, at *2–3; see 9 U.S.C. § 12; CIV. PRAC. § 171.094. However, we also stated that the
three-month limitations period of the FAA was a substantive matter. Craig, 2017 WL 6503213,
at *2. We applied the TAA’s method of service, service of process, and the FAA’s three-month
length of time. See id. at *3 (“Because she did not serve notice of her motion to vacate within
Section 12's three-month limitations period, the service was untimely and the trial court was
required to dismiss her motion as untimely.”).
In this case, Fisher did not serve his application within three months of the delivery or
filing of the arbitration award. Under section 12 of the FAA, there is no discovery-rule exception.
Id.
Fisher argues that even if the limitations period is not procedural, we should determine that
equitable tolling applies. We disagree. In Craig, we concluded that equitable tolling does not
apply under section 12 of the FAA. Id. (“Texas courts have determined that, ‘once the three-month
statutory period contained in section 12 has expired, a party may not attempt to vacate an
arbitration award for any reason.’” (quoting Turner v. Tex//Tow Marine Towing & Salvage, LLC,
502 S.W.3d 368, 372 (Tex. App.—Houston [14th Dist.] 2016, no pet.))).
Fisher also argues that appellees are equitably estopped from asserting section 12’s
limitations provision. Fisher did not assert estoppel in the trial court. Therefore, it is not preserved
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for appellate review. TEX. R. APP. P. 33.1; cf. Stover v. Gormley, 883 S.W.2d 278, 282–83 (Tex.
App.—Amarillo 1994) (appellant who was nonmovant in summary judgment proceeding could
not argue for the first time on appeal that fraudulent concealment equitably estopped the summary
judgment movant from asserting limitations), rev’d on other grounds, 907 S.W.2d 448 (Tex. 1995)
(per curiam). Fisher cites Cox v. Upjohn Co., 913 S.W.2d 225 (Tex. App.—Dallas 1995, no pet.),
but in that case, the appellants raised equitable estoppel in the trial court in their response to the
appellees’ motion for summary judgment. Id. at 227. Fisher cites no authority allowing him to
assert for the first time on appeal that appellees are equitably estopped from asserting limitations.
We conclude the trial court did not err by denying Fisher’s application to vacate the
arbitration award and reopen the arbitration proceedings because Fisher did not serve the
application within ninety days of the delivery or filing of the arbitration award. Accordingly, we
need not determine whether the trial court erred by excluding Fisher’s evidence in support of the
application. We overrule Fisher’s second issue.
INCORPORATION OF PHILLIPS’S SETTLEMENT INTO THE JUDGMENT
In his third issue, Fisher contends the trial court erred by not modifying the judgment to
reduce the amount Fisher owes appellees because of Phillips’s $225,000 settlement payment to
appellees. As discussed above, the trial court had plenary power to consider the motion at the
January 18, 2019 hearing.
Appellees stated in a letter filed in this Court that they agree Fisher should receive a
settlement credit for the amount of Fisher’s settlement. In the letter, appellees stated the amount
of the judgment against Fisher after the settlement credit should be $602,583.24 as of September
10, 2018, plus interest of $49.52 per day until paid. After submission, Fisher informed the Court
that he does not oppose appellees’ calculation of the settlement credit. Accordingly, we modify
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the trial court’s judgment to provide that Fisher owes appellees $602,583.24 as of September 10,
2018, plus interest of $49.52 per day until paid.
CONCLUSION
We modify the trial court’s judgment to provide that Fisher shall pay appellees the sum of
$602,583.24 plus interest of $49.52 per day from September 10, 2018 until paid. We affirm the
trial court’s judgment as modified.
/Lana Myers/
LANA MYERS
JUSTICE
190106F.P05
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Court of Appeals
Fifth District of Texas at Dallas
JUDGMENT
GORDON CARROLL FISHER, Appellant On Appeal from the County Court at Law
No. 1, Dallas County, Texas
No. 05-19-00106-CV V. Trial Court Cause No. CC-13-05268-A.
Opinion delivered by Justice Myers.
DANIEL K. HAGOOD, P. C. AND Justices Schenck and Carlyle participating.
FITZPATRICK HAGOOD SMITH AND
UHL, INC., Appellee
In accordance with this Court’s opinion of this date, we MODIFY the judgment of the
trial court to provide that Gordon Carroll Fisher shall pay to Daniel K. Hagood, P.C. and
Fitzpatrick Hagood Smith and Uhl, Inc. the sum of $602,583.24 plus interest of $49.52 per day
from September 10, 2018 until paid. As modified, the judgment of the trial court is
AFFIRMED.
It is ORDERED that appellees Daniel K. Hagood, P.C. and Fitzpatrick Hagood Smith
and Uhl, Inc. recover their costs of this appeal from appellant Gordon Carroll Fisher.
Judgment entered this 10th day of December, 2019.
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