Kenneth Gordon and Hardcore Trucking Solutions LLC v. Trucking Resources Inc. ( 2022 )

Affirmed and Opinion Filed November 15, 2022
In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-21-00746-CV
KENNETH GORDON AND HARDCORE TRUCKING SOLUTIONS LLC,
Appellants
V.
TRUCKING RESOURCES INC., Appellee
On Appeal from the 366th Judicial District Court
Collin County, Texas
Trial Court Cause No. 366-02385-2019
MEMORANDUM OPINION
Before Justices Myers, Pedersen, III, and Garcia
Opinion by Justice Myers
Kenneth Gordon and Hardcore Trucking Solutions LLC appeal the trial
court’s judgment confirming an arbitration award in favor of Trucking Resources
Inc. Appellants bring three issues on appeal contending (1) the trial court lacked
jurisdiction to order arbitration because appellants are workers engaged in interstate
commerce and cannot be compelled to arbitrate under the Federal Arbitration Act;
(2) the trial court erred by compelling appellants to arbitrate because they did not
sign the arbitration agreements; and (3) the trial court erred by denying appellants’
objections to the arbitration award and denying their motion to vacate the arbitration
award. We affirm the trial court’s judgment.
BACKGROUND
Gordon is the owner of Hardcore Trucking Solutions LLC (HTS), a company
that recruits truck drivers for transportation companies. Appellee is a competing
recruiter of truck drivers.
Two of appellee’s employees, Sylvia Trotter and Eric Howse, each signed
noncompetition agreements with appellee that included an arbitration provision:
Should violation, disagreement or dispute occur between contracting
parties arising out of, or connected with this agreement, which cannot
be adjusted by and between the parties involved, the disputed
disagreement shall be submitted to the American Arbitration
Association located in Texas and all parties agree to abide by the
decision of the referees of said Association. Judgment, upon award,
may be entered in any court having jurisdiction thereof. The parties
agree that the courts may only be used to issue or enforce [an]
injunction and to enforce a judgment.1
In 2017, Trotter and Howse ceased working for appellee and went to work for HTS.
Appellee brought suit against appellants in 2017, but that suit was dismissed for want
of prosecution.
On May 2, 2019, appellee filed this lawsuit against appellants, Trotter, and
Howse. Appellee alleged Trotter and Howse breached their contracts with appellee
1
The quoted arbitration provision is from the noncompetition agreement signed by Trotter. The
arbitration provision in the agreement signed by Howse is identical except for the last sentence, which
reads: “The parties agree that the courts may be used to issue or enforce an injunction and to certify a
judgment and or [sic] to enforce a judgment.”
–2–
by using appellee’s confidential information, soliciting appellee’s clients and
sending their business to HTS, and advertising for staffing in the same markets in
which appellee advertised. Appellee sued appellants for tortious interference with
contract and prospective business relationships and for conspiring with Trotter and
Howse to use appellee’s confidential information and for conspiring with Trotter and
Howse for them to breach their contractual and common law duties to appellee.
Three weeks later, on May 24, 2019, appellee moved to stay the proceedings
in the trial court and compel the parties to arbitrate. Trotter filed objections to the
motion to stay proceedings and compel arbitration. On November 15, 2019, the trial
court granted appellee’s motion to stay proceedings in the trial court and compel
arbitration.
On June 3, 2021, the arbitrator issued his award. The arbitrator found Trotter
took appellee’s confidential information and disclosed it to appellants, thereby
breaching her duty of loyalty to appellee, and that appellants conspired with Trotter
for her to breach her duty of loyalty to appellee and obtain appellee’s confidential
information. The arbitrator determined that appellants should be required to
disgorge their profits. The arbitrator also found appellants refused to produce or
destroyed documents necessary to compute appellants’ profits because of the likely
prejudicial effect of the documents. Appellee capped its claim at $300,000.
Appellee showed appellants had revenues of about $1.24 million, and the arbitrator
determined that due to appellants’ abuse of the discovery process, it could be inferred
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that HTS’s profit from its revenues was at least $300,000. The arbitrator found
“[s]uch an inference is both reasonable and justified.” The arbitrator awarded
appellee $299,999 against appellants and Trotter, jointly and severally, and the
arbitrator denied appellants’ request for attorney’s fees.
Eighteen days after the arbitrator’s award, the trial court signed an order
confirming the award and rendering judgment in conformity with the award.
Twenty-one days after the court’s confirmation of the arbitration award, appellants
filed a motion to vacate the confirmation of the award. Eighty-four days after the
arbitration award, and sixty-six days after the confirmation of the award, appellants
filed objections to the arbitration award and moved for the court to vacate the award.
See 9 U.S.C. § 12 (“Notice 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.”). They filed a notice of appeal the same day.2
ORDER COMPELLING ARBITRATION
In their first issue, appellants contend the arbitration provisions in Trotter’s
and Howse’s employment agreements are not enforceable because Trotter and
Howse are workers engaged in interstate commerce and are exempt from the Federal
Arbitration Act (FAA) under 9 U.S.C. § 1. In their second issue, appellants contend
2
Before the briefing on appeal, appellee moved to dismiss the appeal, asserting appellants’ notice of
appeal was untimely. We denied the motion to dismiss in our order of January 10, 2022. Appellee presents
the same arguments in its brief, urging we lack jurisdiction to consider this appeal. We reject those
arguments and conclude appellants’ notice of appeal was timely for the reasons set forth in our order of
January 10, 2022.
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the trial court erred by granting appellee’s motion to compel arbitration against
appellants because appellants did not sign the arbitration agreement. A party may
not bring an interlocutory appeal of an order granting a motion to compel arbitration.
9 U.S.C. § 16(b)(2); Perry Homes v. Cull, 258 S.W.3d 580, 586 (Tex. 2008). But a
party may challenge the granting of the order compelling arbitration on appeal from
the final judgment. Chambers v. O’Quinn, 242 S.W.3d 30, 32 (Tex. 2007) (per
curiam).
9 U.S.C. § 1 Exemption for “workers engaged in . . . interstate commerce”
In their first issue, appellants contend the trial court erred by compelling
arbitration of appellee’s claims because appellee’s contracts with Trotter and Howse
containing the arbitration agreements were “contracts of employment . . . of workers
engaged in foreign or interstate commerce.” Section 1 of the FAA states, “nothing
herein contained shall apply to contracts of employment of seamen, railroad
employees, or any other class of workers engaged in foreign or interstate
commerce.” 9 U.S.C. § 1. Appellants argue that Trotter and Howse are such
employees and that the noncompetition agreements are “contracts of employment,”
so the FAA does not apply to them.
Appellee asserts that appellants waived this argument because they did not
raise it in the trial court either before the trial court ordered the parties to arbitrate or
before the arbitrator.
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Texas courts have held that an objection to arbitration under the 9 U.S.C. § 1exemption from arbitration must be raised before the trial court rules on a motion to
compel arbitration. See Conn Appliances, Inc. v. Puente, No. 09-18-00326-CV,
2020 WL 4680283, at *4 (Tex. App.—Beaumont 2020, no pet.) (mem. op.) (failure
to object to arbitration procedure on the ground that 9 U.S.C. § 1 exemption applied
before the trial court ruled on motion to compel arbitration waived the objection);
J.B. Hunt Transp., Inc. v. Hartman, 307 S.W.3d 804, 809 (Tex. App.—San Antonio
2010, no pet.) (on appeal from denial of motion to compel arbitration, court of
appeals refused to consider whether 9 U.S.C. § 1 exempted the dispute from
arbitration when the appellee did not assert the application of the exemption in the
trial court).
In this case, appellants first asserted the 9 U.S.C. § 1 exemption from
arbitration in their post-arbitration motion to vacate the arbitration award. Because
they did not assert the exemption from arbitration before the arbitration took place,
they have not preserved the argument for appellate review. See Conn, 2020 WL
4680283, at *4; Hartman, 307 S.W.3d at 809.
Even if the 9 U.S.C. § 1 exemption could be raised for the first time after
arbitration, appellants’ arguments lack merit. Whether an individual is a worker
engaged in interstate commerce depends on whether the individual performs the
work. See Sw. Airlines v. Saxon, 142 S. Ct. 1783, 1788 (2022). The individuals
subject to the exemption from the Federal Arbitration Act “must at least play a direct
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and ‘necessary role in the free flow of goods’ across borders. Put another way,
transportation workers must be actively ‘engaged in transportation’ of those goods
across borders via the channels of foreign or interstate commerce.” Id. at 1790(quoting Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 121 (2001)). Whether an
arbitration agreement is part of a contract of employment of a worker engaged in
interstate commerce is a question for the trial court before it compels arbitration.
See New Prime Inc. v. Oliveira, 139 S. Ct. 532, 537 (2019) (“Given the statute’s
terms and sequencing, we agree with the First Circuit that a court should decide for
itself whether § 1’s ‘contracts of employment’ exclusion applies before ordering
arbitration.”).
Thus, the question before us is whether interstate truck-driver recruiters like
Trotter and Howse are actively engaged in transportation of goods across state or
international borders. Appellants argue Trotter and Howse met this requirement for
the exemption from arbitration because: “They 1) worked with materials that
crossed state lines, such as trucks and truck drivers they recruited, 2) relied on
billings from out-of-state trucking companies, out-of-state . . . driver databases, and
out-of-state advertising platforms, and 3) used interstate mail and phone calls.”
None of these facts show that appellants or Trotter and Howse were actively engaged
in the transportation of goods, only that they recruited people who were. Nothing in
the record shows appellants or Trotter and Howse drive trucks or handle the goods
on the trucks.
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Appellants cite Western Dairy Transport v. Vasquez, 457 S.W.3d 458 (Tex.
App.—El Paso 2014, no pet.), where the court held that a truck mechanic was a
transportation worker exempt from the Federal Arbitration Act under 9 U.S.C. § 1.
In making this determination, the court looked to eight factors from the Eighth
Circuit’s opinion in Lenz v. Yellow Transportation, Inc., 431 F.3d 348 (8th Cir.
2005):
1. whether the employee works in the transportation industry;
2. whether the employee is directly responsible for transporting the
goods in interstate commerce;
3. whether the employee handles goods that travel interstate;
4. whether the employee supervises employees who are themselves
transportation workers, such as truck drivers;
5. whether, like seamen or railroad employees, the employee is
within a class of employees for which special arbitration already
existed when Congress enacted the FAA;
6. whether the vehicle itself is vital to the commercial enterprise of
the employer;
7. whether a strike by the employee would disrupt interstate
commerce; and
8. the nexus that exists between the employee’s job duties and the
vehicle the employee uses in carrying out his duties (i.e., a truck
driver whose only job is to deliver goods cannot perform his job
without a truck).
Id. at 352 (8th Cir. 2005). In Lenz, the 8th Circuit applied these factors and
determined that a customer-service representative for a freight transportation
company was not exempt from arbitration under 9 U.S.C. § 1. The El Paso Court of
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Appeals applied these factors to determine that a truck mechanic was a worker
engaged in interstate commerce under 9 U.S.C. § 1. Vasquez, 457 S.W.3d at 466.
Applying the Lenz factors to truck-driver recruiters, as that position is
explained in the record before us, does not show that the recruiters are workers
engaged in interstate commerce under 9 U.S.C. § 1. On the first factor, we will
assume for purposes of this opinion that the recruiters work in the transportation
industry. However, the remaining factors are negative. The recruiters are not
directly responsible for transporting the goods in interstate commerce; they do not
handle the goods; the record does not show they supervise the truck drivers who
handle the goods; the record does not show and appellants have not cited this Court
to any statute or regulation providing special arbitration for recruiters of truck
drivers; the record does not show that Trotter and Howse drove vehicles in interstate
commerce; a strike by recruiters of truck drivers might be inconvenient for the
trucking companies who would have to hire drivers directly instead of through
recruiters, but nothing in the record shows a strike by the recruiters would disrupt
interstate commerce or halt trucks from delivering goods; and there is no evidence
that Trotter and Howse required a vehicle to carry out their duties of recruiting truck
drivers. See Lenz, 431 F.3d at 352–53.
Appellants also cite the Supreme Court’s decision in Southwest Airlines Co.
v. Saxon, 142 S. Ct. 1783 (2022). In that case, the supreme court held that
supervisors of cargo handlers for an airline who also acted as cargo handlers when
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necessary were workers engaged in interstate commerce under 9 U.S.C. § 1 because
they handled the cargo. The Supreme Court did not address whether the workers’
supervisory duties qualified them for the exemption from compelled arbitration. Id.
at 1790. The Supreme Court stated that for a worker to qualify for the exemption,
the worker “must at least play a direct and ‘necessary role in the free flow of goods’
across borders. Put another way, transportation workers must be actively ‘engaged
in transportation’ of those goods across borders via the channels of foreign or
interstate commerce.” Id. (quoting Circuit City, 532 U.S. at 121). The Court
concluded that cargo handlers for an airline met that standard. Recruiters of truck
drivers, however, do not. The record does not show that recruiters play a direct and
necessary role in the transportation of goods across borders. The act of recruiting
truck drivers for transportation companies does not actually move any goods. Nor
does the record show that third-party recruiters are necessary even if they may be
helpful and more efficient than the transportation companies at finding and hiring
drivers.
We conclude appellants have not shown the contracts containing the
arbitration agreements are exempt from arbitration because of 9 U.S.C. § 1. We
overrule appellants’ first issue.
Arbitrability
In their second issue, appellants contend the trial court erred by ordering the
parties to arbitrate because appellants did not sign any arbitration agreement with
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appellee, the arbitration agreements did not contain language giving the employees
notice that they were waiving their right to a jury trial, and under the arbitration
agreements, the trial court did not have authority to compel the parties to arbitrate.
The arbitration provisions were in agreements signed by Trotter and Howse,
not appellants. Appellee asserted in its motion to compel arbitration that appellants
were subject to arbitration under the doctrines of assumption and equitable estoppel
and because appellee’s claims against appellants were intertwined with its claims
against Trotter and Howse. Appellants did not file a response to the motion to
compel arbitration, nor did they appear at the hearing on appellee’s motion to compel
arbitration. Their first complaint in the record of being compelled to arbitrate is in
their post-arbitration objections to confirmation of the arbitration award. There, they
argued, as they argue here, that they are not required to arbitrate because they did
not sign an arbitration agreement, that the doctrines of assumption and equitable
estoppel do not apply to them, that the cases permitting arbitration of intertwined
claims involving nonsignatories are distinguishable, that the arbitration agreements
did not notify Trotter and Howse that they were waiving their right to a jury trial,
and that the trial court lacked authority under the language of the arbitration
provisions to order the parties to arbitrate.
As a general rule, a party is required to present a timely complaint to the trial
court before being allowed to raise the issue on appeal. See TEX. R. APP. P.
33.1(a)(1) (“As a prerequisite to presenting a complaint for appellate review, the
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record must show that: (1) the complaint was made to the trial court by a timely
request, objection, or motion . . . .”). A timely objection is one that is made “at a
point in the proceedings which gives the trial court the opportunity to cure any
alleged error.” Crews v. Dkasi Corp., 469 S.W.3d 194, 201 (Tex. App.–Dallas 2015,
pet. denied). The opportunity for the trial court to cure any error from requiring
nonsignatories to arbitrate is before the court rules on the opposing party’s motion
to compel arbitration, not after the arbitration proceeding. See My Three Sons, Ltd.
v. Midway/Parker Med. Ctr., L.P., No. 05-15-01068-CV, 2017 WL 2351082, at *3
(Tex. App.—Dallas May 31, 2017, no pet.) (mem. op.) (nonsignatory party waived
any error from being compelled to arbitrate when party did not raise that ground
before court ordered the parties to arbitrate); see also Nicholas v. Inhance Techs.
LLC, No. 01-18-00750-CV, 2019 WL 6703939, at *2–3 (Tex. App.—Houston [1st
Dist.] Dec. 10, 2019, no pet.) (mem. op.) (party’s failure to file response to motion
to compel arbitration waived party’s arguments on appeal that arbitration agreement
was procured by fraud and lacked consideration). Likewise, the time for appellants
to raise their other arguments opposing arbitration was before the trial court ruled on
appellee’s motion to compel arbitration.
Because appellants did not file a response to the motion to compel arbitration,
they did not timely present their arguments for why the court should not have granted
appellee’s motion to compel arbitration. We conclude appellants did not timely raise
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these arguments, and we cannot address them. TEX. R. APP. P. 33.1(a). We overrule
appellant’s second issue.
CONFIRMATION OF ARBITRATION AWARD
In their third issue, appellants contend the trial court erred by confirming the
arbitration award. Appellants assert the trial court erred by not vacating or
modifying the award under the FAA because the arbitrator exceeded his powers,
showed partiality, misbehaved and prejudiced a party, made a material
miscalculation, and issued an “imperfect” award.
Standard of Review
We review a trial court’s decision to vacate or confirm an arbitration award
de novo based on review of the entire record. Humitech Dev. Corp. v. Perlman, 424
S.W.3d 782, 790 (Tex. App.—Dallas 2014, no pet.). “[A]n award of arbitrators upon
matters submitted to them is given the same effect as the judgment of a court of last
resort. All reasonable presumptions are indulged in favor of the award, and none
against it.” CVN Group, Inc. v. Delgado, 95 S.W.3d 234, 238 (Tex. 2002) (quoting
City of San Antonio v. McKenzie Constr. Co., 150 S.W.2d 989, 996 (Tex. 1941)).
The award is presumed valid, and it is entitled to great deference. Humitech, 424
S.W.3d at 790. The award is conclusive on the parties as to all matters of fact and
law; in other words, we may not vacate an award even if it is based upon a mistake
of fact or law. Id. We may not substitute our judgment for that of the arbitrators
merely because we would have reached a different decision. Id.
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A non-prevailing party seeking to vacate an arbitration award bears the burden
in the trial court of bringing forth a complete record that establishes its basis for
vacating the award. In re Chestnut Energy Partners, Inc., 300 S.W.3d 386, 401
(Tex. App.—Dallas 2009, pet. denied). “When there is no transcript of the
arbitration hearing, the appellate court will presume the evidence was adequate to
support the award.” Id. (quoting Statewide Remodeling, Inc. v. Williams, 244
S.W.3d 546, 568 (Tex. App.—Dallas 2008, no pet.)).
In this case, there is no record of the arbitration proceedings except for the
arbitration award. Appellants’ motion to vacate the award purports to provide the
background and procedural history describing the proceedings before the arbitrator,
but that description does not constitute a record of the documents and the
proceedings before the arbitrator, nor is it evidence that could be considered by the
trial court or this Court.
Grounds for Vacating or Modifying Arbitration Award
Section 9 of the FAA requires the trial court to confirm an arbitration award
upon application by a party “unless the award is vacated, modified, or corrected as
prescribed in sections 10 and 11 of this title.” 9 U.S.C. § 9. Section 10 provides that
the court may vacate an arbitration award in the following situations:
(1) where the award was procured by corruption, fraud, or undue
means;
(2) where there was evident partiality or corruption in the arbitrators, or
either of them;
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(3) where the arbitrators were guilty of misconduct in refusing to
postpone the hearing, upon sufficient cause shown, or in refusing to
hear evidence pertinent and material to the controversy; or of any other
misbehavior by which the rights of any party have been prejudiced; or
(4) where the arbitrators exceeded their powers, or so imperfectly
executed them that a mutual, final, and definite award upon the subject
matter submitted was not made.
Id. § 10(a). Section 11 provides that the court may modify or correct an arbitration
award in the following situations:
(a) Where there was an evident material miscalculation of figures or an
evident material mistake in the description of any person, thing, or
property referred to in the award.
(b) Where the arbitrators have awarded upon a matter not submitted to
them, unless it is a matter not affecting the merits of the decision upon
the matter submitted.
(c) Where the award is imperfect in matter of form not affecting the
merits of the controversy.
Id. § 11. These are the exclusive bases for vacating or modifying an award under
the FAA. See Hall Street Assocs., L.L.C. v. Mattel, Inc., 552 U.S. 576, 584 (2008)
(“We now hold that §§ 10 and 11 respectively provide the FAA’s exclusive grounds
for expedited vacatur and modification.”); Tex. Brine Co., L.L.C. v. Am. Arbitration
Ass’n, Inc., 955 F.3d 482, 487 (5th Cir. 2020) (“The Supreme Court has held that
the statutory bases for vacating an arbitrator’s award are the only grounds on which
a court may vacate an award.”); Ancor Holdings, LLC v. Peterson, Goldman &
Villani, Inc., 294 S.W.3d 818, 828 (Tex. App.—Dallas 2009, no pet.) (“the Supreme
Court made clear that sections 10 and 11 are the exclusive grounds for vacating and
modifying an arbitration award under the FAA”).
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An arbitrator exhibits evident partiality under 9 U.S.C. § 10(a)(2) if he does
not disclose facts which might, to an objective observer, create a reasonable
impression of the arbitrator’s partiality. Jones v. Carlos & Parnell, M.D., P.A., No.
05-17-00329-CV, 2017 WL 4930896, at *5 (Tex. App.—Dallas Oct. 31, 2017, pet.
denied) (mem. op.); Karlseng v. Cooke, 286 S.W.3d 51, 56 (Tex. App.—Dallas
2009, no pet.). The arbitrator’s findings and rulings, standing alone, are not “evident
partiality,” nor are asserted errors of fact or law. See Jones, 2017 WL 4930896, at
*6–7.
“Misbehavior” under 9 U.S.C. § 10(a)(3) is a catch-all for other procedural
irregularities such as an arbitrator’s running afoul of his or her own rules in
conducting the arbitration or receiving evidence ex parte. Roehrs v. FSI Holdings,
Inc., 246 S.W.3d 796, 811 (Tex. App.—Dallas 2008, pet. denied). “Misbehavior”
does not include erroneous factual or legal determinations. See Valdes v.
Whataburger Rests., LLC, No. 14-16-00222-CV, 2017 WL 2602728, at *3 (Tex.
App.—Houston [14th Dist.] June 15, 2017, no pet.) (mem. op.). Courts cannot
determine alleged misbehavior by an arbitrator without a record of the arbitration
proceeding. Id.Arbitrators exceed their powers under 9 U.S.C. § 10(a)(4) when they decide
matters not properly before them. Ancor Holdings, 294 S.W.3d at 829. Arbitrators
may also exceed their powers when the arbitration award is not rationally inferable
from the parties’ agreement. Id. Any doubts concerning the scope of what is
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arbitrable are resolved in favor of arbitration. Centex/Vestal v. Friendship W. Baptist
Church, 314 S.W.3d 677, 684 (Tex. App.—Dallas 2010, pet. denied). Unless the
arbitration agreement expressly provides for expanded review of the arbitration
proceedings, errors of fact or law do not constitute the exceeding of powers when
those errors do not concern whether an issue to be decided was properly before the
arbitrators or whether the arbitration award was rationally inferable from the parties’
agreement. Nafta Traders, Inc. v. Quinn, 339 S.W.3d 84, 97–102 (Tex. 2011). In
this case, the arbitration agreements do not permit expanded review of the arbitration
proceedings.
“Evident material miscalculation” in 9 U.S.C. § 11(a) refers to a
mathematical error on the face of the award. 9 U.S.C. § 11(a); see Mid Atlantic
Capital Corp. v. Bien, 956 F.3d 1182, 1192–93 (10th Cir. 2020); Apex Plumbing
Supply, Inc. v. U.S. Supply Co., 142 F.3d 188, 194 (4th Cir. 1998).
An argument that an award is “imperfect” must concern a matter of form that
does not affect the merits of the controversy. Id. § 11(c).
Analysis
Appellants argue the arbitrator exceeded his powers, showed partiality,
misbehaved and prejudiced a party, made a material miscalculation of figures or
“anything” in the award, or issued an imperfect award. See 9 U.S.C. § 10(a)(2), (3),
(4); id. § 11(a), (c).
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Appellants assert the arbitrator exceeded his powers, showed evident
partiality, misbehaved and prejudiced a party, made a material miscalculation of
figures or “anything” in the award, or issued an imperfect award by:
 finding there was a breach of fiduciary duty;
 ordering appellants to provide discovery;
 imposing discovery sanctions against appellants, which appellants
assert constituted “death penalty” sanctions;
 determining Gordon provided virtually no discovery when he provided
discovery;
 determining Howse, Trotter, and Gordon conspired with HTS because,
appellants argue, agents and principals cannot conspire;
 finding Trotter or appellants breached a duty of loyalty to appellee by
contacting each other;
 making damages findings not supported by any evidence of the value
of appellee’s trade secrets;
 stating in the award that appellee’s secret recording of Howse was the
best piece of evidence showing a conspiracy; and
 determining disgorgement based on evidence of HTS’s bank deposits
and not based on evidence of its profits.
The record does not show that appellants objected to any of these before the
arbitrator; therefore, they were not preserved for review by the trial court. See TEX.
R. APP. P. 33.1(a); Nafta Traders, 339 S.W.3d at 101 (in considering arguments of
error by the arbitrator, “complaints must have been preserved, all as if the award
were a court judgment on appeal”). Further, none of the arbitrator’s actions were
subject to the challenges brought by appellants.
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The arbitrator’s actions do not constitute evident partiality by the arbitrator
because the asserted actions do not show the arbitrator failed to disclose facts that
might create a reasonable impression of the arbitrator’s partiality. See Jones, 2017
WL 4930896, at 6–7.
The arbitrator’s actions do not constitute misbehavior prejudicing a party
because appellants have not shown they constitute a violation by the arbitrator of the
arbitrator’s rules. See Roehrs, 246 S.W.3d at 811. Moreover, without a record of
the arbitration proceeding, such a determination would be impossible. Valdes, 2017
WL 2602728, at *3.3
Concerning whether the arbitrator exceeded his powers under 9 U.S.C. §
10(a)(4), the arbitration agreements provided the arbitrator authority to decide any
“violation, disagreement or dispute . . . arising out of, or connected with this
agreement.” Appellants do not explain in this Court, and they did not explain in the
3
Appellants do assert on appeal one act where the arbitrator failed to follow the American Arbitration
Association rules. Appellants argue that the award was imperfect because the arbitrator failed to follow
AAA R-58. Appellants state:
Despite [appellee’s] numerous motions for sanctions and to compel discovery, there never
was an order for sanctions against Gordon & HTS—until the Award. Offering no
opportunity to cure such deficiencies or make an argument, the arbitrator violated R-58
and Gordon & HTS’s due process rights, which led to an imperfect Award.
According to appellants’ brief, AAA R-58 requires the arbitrator provide the party to be sanctioned with
the opportunity to respond before making any determination regarding sanctions. Without the record of the
arbitration proceedings, the record does not show what motions for sanctions appellee made, their content,
whether the arbitrator had made a previous sanctions order against appellants, or whether appellants
objected to the arbitrator’s imposition of sanctions without their having an opportunity to respond to the
motions for sanctions. Appellants did not assert a violation of R-58 in the trial court, and with no record of
the arbitration proceedings, they cannot show they objected to any failure by the arbitrator to follow R-58.
Accordingly, they have not preserved any error.
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trial court, why the dispute was not properly before the arbitrator or why the
arbitration award was not inferable from the arbitration agreement. See Ancor
Holdings, 294 S.W.3d at 829–30 (complaint that is actually that the arbitrator made
an error of fact or law is not a complaint that the arbitrator exceeded his powers).
We conclude appellants have not shown the trial court erred by not concluding the
arbitrator exceeded his powers.
Appellants also assert the arbitrator’s findings and determinations show he
“miscalculated these facts and made ‘significant negative inferences’ on his
misunderstanding” and “such clear error of law probably cause an improper Award.”
The asserted errors are not mathematical miscalculations of figures evident on the
face of the award. See Mid Atlantic Capital Corp., 956 F.3d at 1192–93. Therefore,
they are not subject to modification by the trial court.
Appellants also argue that the arbitration award was “imperfect.” A trial court
may modify an award that is imperfect “in matter of form not affecting the merits of
the controversy.” 9 U.S.C. § 11(c). All of appellants’ asserted errors by the
arbitrator concern the merits of the controversy, which do not constitute
imperfections in the award under section 11(c).
Appellants assert in their brief on appeal that the arbitrator’s negative
inferences against appellants were “clear errors” of law. In their motion to vacate
the arbitration award, they assert the arbitrator confused facts leading to “clear error”
in his findings and conclusions. “Clear error” is not a ground for vacating or
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modifying an arbitration award. See 9 U.S.C. §§ 10, 11; see Denver City Energy
Assocs. L.P. v. Golden Spread Elec. Co-op, Inc., 340 S.W.3d 538, 549 (Tex. App.—
Amarillo 2011, no pet.) (“neither error nor clear error nor even gross error is a ground
for vacating an award”).
We conclude appellants did not present to the trial court a proper ground for
vacating or modifying the arbitrator’s award. Therefore, the trial court did not err
by confirming the arbitration award and not vacating or modifying the award. See 9
U.S.C. § 9 (court must grant application to confirm award “unless the award is
vacated, modified, or corrected as prescribed in sections 10 and 11”). We overrule
appellants’ third issue.
CONCLUSION
We affirm the trial court’s judgment.
/Lana Myers//
210746f.p05 LANA MYERS
JUSTICE
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Court of Appeals
Fifth District of Texas at Dallas
JUDGMENT
KENNETH GORDON AND On Appeal from the 366th Judicial
HARDCORE TRUCKING District Court, Collin County, Texas
SOLUTIONS LLC, Appellants Trial Court Cause No. 366-02385-
2019.
No. 05-21-00746-CV V. Opinion delivered by Justice Myers.
Justices Pedersen, III and Garcia
TRUCKING RESOURCES INC., participating.
Appellee
In accordance with this Court’s opinion of this date, the judgment of the trial
court is AFFIRMED.
It is ORDERED that appellee TRUCKING RESOURCES INC. recover its
costs of this appeal from appellants KENNETH GORDON AND HARDCORE
TRUCKING SOLUTIONS LLC.
Judgment entered this 15th day of November, 2022.
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