Forged Components, Inc. v. Guzman, No. 01-11-00563-CV (Tex.App.-Houston [1st Dist.] 6-25-2013)
An Employee of a nonsubscriber was pinned by a forklift while at work. The Employee sued the Employer for negligence. The Employer denied the Employee’s allegations and asserted the Employee’s intoxication caused his injury. The Trial Court denied the Employer’s motion to compel arbitration pursuant to an arbitration provision in the Employer’s ERISA plan. Before the Employer received the Court’s order denying the Motion, it agreed with the Employee to arbitrate the matter with Katie Kennedy of Judicial Workforce Arbitrations. The Employer sent the Employee an agreement, the Employee wrote in a change stating he would not agree to the terms of the arbitration agreement in the Employer’s ERISA Plan, and sent the agreement back to the Employer. The Employer then filed the agreement with the Court as a Rule 11 agreement. The Employer later sought to revoke its agreement. The Trial Court granted the Employee’s Motion to Compel arbitration pursuant to the Rule 11 Agreement.
The parties arbitrated the dispute and the Arbitrator awarded the employee damages in the amount of $1,312,518.23. The Employee moved to confirm the award and for entry of judgment, and Employer moved to vacate the award. The Trial Court entered judgment affirming the arbitrator’s award and awarding post-judgment interest.
The Court of Appeals first held the FAA applied to both arbitration agreements as the Employer established it was engaged in interstate commerce. The Court then held that to the extent the Trial Court erred in denying Employer’s Motion to Compel arbitration under the arbitration provision in the Employer’s ERISA plan, the Employer failed to show such error probably caused rendition of an improper judgment. As such, any such error was harmless error.
The Court then held the Trial Court did not error in compelling arbitration under the Rule 11 agreement rejecting the Employer’s argument that the alterations by the Employee of the proposed agreement constituted a counteroffer and that no agreement was ever entered into by the parties. The Court held that even if the Employee’s alterations constituted a counteroffer, the Employer, by its conduct in filing the Rule 11 agreement, accepted the counteroffer.
The Court held the Arbitrator did not exceed her authority in not following the procedures set out in the arbitration agreement in the Employer’s Plan as the Rule 11 agreement stated the Plan provisions would not apply. The Court also rejected the Employer’s argument that the Arbitrator committed “gross mistake” by ignoring material evidence of the Employee’s intoxication at the time of the accident. The Court pointed out the Employee did present evidence at the arbitration refuting the Employer’s evidence and the Arbitrator made a finding concerning same.
The Court held the Trial Court erred in awarding post-judgment interest in that the Arbitrator did not make such an award and neither the FAA nor the Texas Finance Code authorized an award of pre- or post-judgment interest when the arbitrator makes no such award. The Court otherwise affirmed the Trial Court’s order enforcing the Arbitration award.
Note: The Court of Appeals seems to go out of its way to make it known the Arbitrator was Katie Kennedy of Judicial Workforce Arbitration, as well as the amount of the Arbitrator’s Award.