The Texas Supreme Court handed down five opinions this morning. None is about arbitration, so we’ll give them short shrift here. City of San Antonio v. TPLP Office Park Properties is a discussion of the City of San Antonio’s potential police power to close access to certain roadways in order to address residents’ complaints about commercial traffic in their neighborhood. Cause No. 04-1130. In Norris v. Thomas, a five-justice majority holds that a boat cannot be a homestead (and thus protected from creditors) under the Texas Constitution, even if it’s a really big boat that is the primary residence of the debtor. “In order to qualify as a homestead, a residence must rest on the land and have a requisite degree of physical permanency, immobility, and attachment to fixed realty. A dock-based umbilical cord providing water, electricity, and phone service may help make a boat habitable, but the attachment to land is too slight to warrant homestead protection.” The opinion provides a nice history of Texas’ homestead protection. Cause No. 05-0476. Justive O’Neill wrote the dissent in Norris, arguing that the majority set forth a “cramped interpretation of homestead.” Since the Norris family actually lived on the boat, and since the majority acknowledged that it was in fact their home, the dissent argues that it ought to be given homestead protection. State Farm v. Martinez addresses the effect an insurance carrier’s interpleader of claim funds has on the Texas prompt payment of claims statute. Cause No. 05-0812. Wachovia v. Gilliam reverses a default judgment where substituted service was not made on the defendant at the defendant’s proper address. Cause No. 05-0903 In Jack in the Box v. Skiles, the Court reverses a Fifth Court of Appeals opinion and renders summary judgment in favor of Jack in the Box in a case where one of its truck drivers was injured on the job delivering some meat (Jack in the Box is a non-subscriber to workers’ compensation insurance). According to the Court, its earlier opinion in Kroger v. Elwood means that an employer has no duty to warn an employee about an obviously dangerous condition (we blogged on the Kroger case back in May). In this case, Kroger means that the truck driver could not recover against Jack in the Box for injuring his knees trying to jump over a broken lift gate on his truck, even though a Jack in the Box manager pressured him into doing so during a busy lunch hour when meat was scarce. According to the Court, since doing what the manager wanted was obviously dangerous, Jack in the Box did not have a duty to warn its employee of the danger. Cause No. 05-0911. Technorati Tags: litigation, Texas Supreme Court, law

Well, the Florida arbitration blog has another interesting post today. It concerns a Missouri case where a court refused to compel arbitration of a wrongful death case against a nursing home. According to that case, since the Missouri wrongful death statute creates a new cause of action in favor of the decedent’s statutory beneficiaries, and it is not a cause of action that the decedent could have had prior to his/her death, the statutory beneficiaries could not be forced to arbitrate their wrongful death claim against a nursing home, notwithstanding the fact that the decedent signed the nursing home admission form, which in turn contained an arbitration clause. (link to a .pdf of the opinion here) In Texas, of course, we also have a wrongful death statute which sets forth statutory beneficiaries who have the claim; Texas wrongful death claims, in other words, do not belong to the estate of the decedent. Therefore, the Missouri court’s logic ought to apply here in Texas as well. Simply put, since a living person cannot have a wrongful death claim, that person cannot agree to arbitrate one. The decedent’s survival claims would be a different issue, of course, since those belong to the estate. I suppose we could have a situation where the wrongful death claims are tried but the survival claims must be arbitrated (assuming it’s an FAA case and the TAA’s strict personal injury arbitration requirements are preempted). Or we could have a situation where nursing homes require that potential residents round up all their potential wrongful death beneficiaries (in Texas, parents, spouse and children of the deceased) and make them sign the arbitration clause before admission. It’s an interesting issue, and I do not know of a Texas case specifically addressing it, although I suppose if I had a quiet moment today I could actually look. Technorati Tags: arbitration, ADR, law

Embarrassingly, the always excellent Florida Arbitration Law blog has scooped us on a Texas state appellate court decision on arbitrability. Instead of recapping their summary of the Beaumont opinion on whether or not participation in litigation discovery waives a potential right to compel arbitration, we’ll just give you a link and direct you to their commentary. The Beaumont Court, by the way, in part bases its decision on the Texas Supreme Court’s decision in Vesta, about which we blogged back when it was handed down. In that opinion, the Supreme Court refused to find waiver despite much more involved litigation participation than that found in the Beaumont case. Interestingly, a dissenting Justice in the Beaumont case distinguishes between sheer volume of work done and the type of work done when conducting the waiver analysis. He notes that having filed a motion to dismiss on the merits and lost, the defendant should not then be able to move to compel arbitration to get another bite at the apple in a different forum, which seems to be an important point not precluded by Vesta. Technorati Tags: arbitration, ADR, law

Today the Fifth Circuit released its en banc opinion (link is to .pdf file) in the Positive Software case (background on case here and here). The long-awaited opinion, written by Judge Jones, sets out the rule, in the Fifth Circuit, for when a court (employing the FAA) must vacate an arbitral award based on an arbitrator’s failure to disclose a possible conflict. As we wrote in a CLE paper back in May 2005, the Fifth Circuit had not, until recently, clarified its position on a rift among the circuits as to what to make of a 1968 Supreme Court case describing when an arbitral award can be overturned based on the “evident partiality” of an arbitrator who failed to disclose a prior relationship with a party. In May 2006, the Fifth Circuit ruled that a failure to disclose any relationship between an arbitrator and a party or attorney before him or her could be grounds for vacatur, since the failure to disclose in and of itself “might have conveyed an impression of possible partiality to a reasonable person.” In other words, possible partiality, rather than evidence of actual bias, was the test, as that opinion interpreted the 1968 Commonwealth Coatings case. Since 1968, courts have resisted the holding in Commonwealth Coatings, choosing to treat the opinion as a plurality. As the Texas Supreme Court explained: Although Justices White and Marshall joined fully in Justice Black?s opinion for the Court, some lower federal courts have purported to see a conflict between the two writings. By treating Justice Black?s opinion as a mere plurality, they have felt free to reject the suggestion that ‘evident partiality’ is met by an ‘appearance of bias,’ and to apply a much narrower standard. Burlington Northern Railroad Co. v. TUCO, 960 S.W.2d 629, 633-34 (Tex. 1997). Today, the en banc Fifth Circuit joined those courts and reversed the first Positive Software opinion in favor of a more forgiving standard, finding that “the better interpretation of Commonwealth Coatings is that which reads Justice White’s opinion holistically.” In other words: “in nondisclosure cases, an award may not be vacated because of a trivial or insubstantial relationship between the arbitrator and the parties to the proceeding,” even if that relationship is not disclosed by the arbitrator. Judge Reavley, in his dissent (he had written the initial opinion), writes that Commonwealth Coatings actually means what it says, and that it ought to be followed as Supreme Court precedent. Judge Wiener’s dissent reminds us of the critical point that a requirement that an arbitrator disclose every relationship does not necessarily mean that a disclosed relationship can warrant disqualification. Instead, the requirement is simply that the arbitrator fully disclose; “trivial” relationships, even if they must be disclosed, may well not justify disqualification of the arbitrator. However, since arbitration is a creature of contract between the parties, it is the parties, and not the arbitrator, who ought to be able to decide whether or not a relationship is trivial. That is no longer the rule in the Fifth Circuit, however. Positive Software Solutions, Inc. v. New Century Mortgage Corp., ___ F.3d ___ (5th Cir. 2007). Technorati Tags: arbitration, ADR, Fifth Circuit, law