The ABA Section of Dispute Resolution announced the 2010 winners of its First Annual Mediation Video Contest on YOUTUBE. An Honorable Mention Winner was Mediation: Everyone’s a Winner! submitted by: Paul Torio, Neil Estaris, Reginald Estaris, Arleen Joy Reyes. Check it out: Stay tuned to Disputing for more Honorable Mention Winners! Technorati Tags: ADR, law, arbitration

The Texas Supreme Court held that the Texas General Arbitration Act (TAA) allows an appeal from a trial court’s order that denies confirmation of an arbitration award and instead, vacates the award and directs that the dispute be arbitrated anew. Justice Hecht delivered the opinion of the court, in which Justice O’Neill, Justice Wainwright, Justice Johnson, Justice Willett, and Justice Guzman joined. Justice Willett filed a concurring opinion. Chief Justice Jefferson filed a dissenting opinion, in which Justice Medina and Justice Green joined. I. Background In East Texas Salt Water Disposal Co. v. Richard Leon Werline, No. 07-0135 (Tex. Mar. 12, 2010) East Texas Salt Water Disposal Company (the “Company”), an oilfield service business, employed Richard Leon Werline (Werline), an experienced petroleum engineer, as its Operations Manager. Under Werline’s Employment Agreement, if the Company materially breached the Agreement, Werline had the right to terminate and receive two years’ salary as severance pay. A little over halfway into the Agreement’s five-year term, Werline gave notice of termination and demanded severance pay, claiming that “the Company had changed his position and stripped him of his duties.” The Company denied that it had breached the Agreement and contended that Werline had quit. Pursuant to their Agreement, the dispute was submitted to arbitration. The American Arbitration Association (AAA) arbitrator, after a three-day hearing, found for Werline and awarded him severance pay ($244,080.00), stipulated attorney fees ($28,272.50), expenses ($11,116.76), and costs ($9,535.73). II. The District Court Opinion The Company asked the district court to vacate, modify, or correct the award claiming that “the award was so contrary to the evidence that it was arbitrary and capricious and therefore the arbitrator must have been biased.” The district court agreed holding that “the material factual findings in the Award are so against the evidence . . . that they manifest gross mistakes in fact and law.” The judgment also ordered that the matter be “re-submitted to arbitration by a new arbitrator with the sole issue before that Arbitrator being whether or not there was a material breach of the Employment Agreement by ETSWD [the Company] consistent with the findings in this Judgment.” Those findings were as follow: “There is no evidence to support a finding of a material breach of any provision of the Employment Agreement”; “[A]n assignment of new and/or additional duties for Werline . . . was . . . not a material breach of the Employment Agreement”; “The change in Werline’s title . . . was not a material breach of the Employment Agreement”; “There is no evidence to support a finding that . . . a material breach was committed by the Board of Directors, officers, or representatives of ETSWD with regard to Werline and the Employment Agreement”; and “Werline voluntarily resigned his employment with ETSWD”. III. The Court of Appeals Opinion Werline appealed. The court of appeals held that it had jurisdiction to consider the appeal, that there was evidence to support the award, and that “[t]he arbitrator did not err so egregiously as to imply bad faith or a failure to exercise honest judgment.” Accordingly, the court reversed the trial court’s judgment and confirmed the award. IV. The Texas Supreme Court – Majority Opinion Now the Company petitions the Texas Supreme Court for review on the ground that the court of appeals had no jurisdiction over the appeal under section 171.098(a) of the TAA. The court begin by saying that Section 171.098(a) states: A party may appeal a judgment or decree entered under this chapter or an order: (1) denying an application to compel arbitration . . . ; (2) granting an application to stay arbitration . . . ; (3) confirming or denying confirmation of an award; (4) modifying or correcting an award; or (5) vacating an award without directing a rehearing. Because the district court denied confirmation of the award, the Texas Supreme Court noted that Werline had the right to appeal under subsection (3). However, the Company argued that subsection (5) implies (though it does not state) that a court order vacating an award and directing a rehearing is not appealable. The Texas Supreme Court was not persuaded by the Company’s argument and clarified that: “[t]he proper construction of section 171.098(a) gives full, literal effect to subsections (3) and (5) both. An order denying confirmation can be appealed, just as subsection (3) provides, including a denial of confirmation in the form of a vacatur with rehearing; and an order vacating an arbitration award without directing rehearing can be appealed, just as subsection (5) provides. “ V. The Texas Supreme Court – Dissenting Opinion Chief Justice Jefferson filed a dissenting opinion. In this opinion, Justice Jefferson argues that: (1) The trial court’s interlocutory order lacks finality under the TAA; (2) The Court’s holding conflicts with the majority of courts to examine the issue; (3) Precedent and statutory interpretation instruct us to treat an order vacating an award and directing a rehearing as the functional equivalent of an order granting a new trial; (4) The concurrence observes that the Court’s result “mirrors what the result would be under federal law” but ignores the substantive differences between the FAA and the TAA, and (5) Section 171.098(a)(5) is uniformly interpreted to prohibit appeals when a rehearing is granted. Technorati Tags: ADR, law, arbitration

By Holly Hayes A new study published in the March edition of the Joint Commission Journal on Quality and Patient Safety (the full article is available for purchase here) and reported on American Medical News (available here) found that physicians are less likely than risk managers to tell patients when a medical error occurs. Physicians, however, are more likely to use the word “error” in describing the event and are quicker to say, “I’m sorry” than risk managers. The study reports that these differences in disclosure attitudes could lead to conflict between risk managers and physicians and diminish the effectiveness of disclosing an error. As disclosures increasingly involve collaboration between these two groups, organizations can plan for this potential conflict and develop policies and procedures to resolve disagreements. The study authors recommend, “Programs to train physicians and risk managers in disclosure should include basic conflict resolution skills to reduce the likelihood that such disagreements will impair the disclosure process. In addition, institutional disclosure policies should clearly articulate who in the organization has final authority over whether and how disclosures will take place.” “Historically, the role of the risk manager has been perceived as really geared toward protecting the interests of the hospital, and part of that includes protecting the reputation and financial interests of the institution,” said David J. Loren, MD, lead author of the study. This could result in risk managers being less likely to use the words, “error” and to “apologize” to patients. Physicians, on the other hand, may be embarrassed that the event occurred and concerned about the potential of a malpractice suit and therefore less likely to want to disclose a medical error. The Agency for Healthcare Research and Quality (AHRQ) also reported on the study here. Almost 3,000 risk managers nationwide at health care facilities were surveyed in 2004-05 as part of the study. Physician responses came from nearly 1,300 doctors in Missouri and Washington state who were surveyed in 2003-04. Please send us any comments about this study or any experience you have had with cases about disclosing medical errors. Holly Hayes is a mediator at Karl Bayer, Dispute Resolution Expert where she focuses on mediation of health care disputes. Holly holds a B.A. from Southern Methodist University and a Masters in Health Administration from Duke University. She can be reached at: holly@karlbayer.com.

The Houston Chronicle reports on Halliburton and KBR’s appeal of the recent Fifth Circuit decision in Jones v. Halliburton, 583 F.3d 228 (5th Cir. 2009) : Halliburton, KBR drop court appeal in rape case By RAMIT PLUSHNICK-MASTI Associated Press Writer © 2010 The Associated Press March 22, 2010, 5:09PM HOUSTON — Halliburton Co. and KBR Inc. have withdrawn an appeal asking the U.S. Supreme Court to block a lawsuit by a former military contractor who says she was raped by KBR co-workers in Iraq. KBR said in a statement Monday that it withdrew the appeal to not risk violating a recently passed federal provision it called “very broad and vague,” that restricts the Defense Department from doing business with companies that prohibit employees from seeking redress for certain crimes through the courts. “As a result, KBR did not want to risk being in violation of the amendment, so the company withdrew its petition,” KBR said in a statement. Diana Gabriel, a spokeswoman for Halliburton, also confirmed the appeal was withdrawn but declined to elaborate. Read the complete article here. Related Posts: Halliburton/KBR Files Cert. in Jones v. Halliburton (Feb. 8, 2010) Employment Arbitration: Issues Implementing the ‘Franken Amendment’ (Feb. 2, 2010) U.S. Arbitration and Mediation Legislative Update (Jan. 25, 2010) Guest-Post Part II | Employment Arbitration: Short-Term Value but Long-Term Harm (Jan. 7, 2010) Guest-Post Part I | Employment Arbitration: Short-Term Value but Long-Term Harm (Jan. 6, 2010) 2009 Developments: Consumer and Employment Arbitration (Dec. 23, 2009) Defense Contractor Mandatory Arbitration Passes Senate (Oct. 13, 2009) Jones v. Halliburton: Fifth Circuit Rules on Arbitration of Tort Claims by an Employee (Sept. 18, 2009) Employment and Consumer Arbitration: NPR Article (June 10, 2009) Technorati Tags: ADR, law, arbitration