Texas Supreme Court Agrees to Consider Whether Estate Arbitration Award Should Have Been Vacated

On Friday, the Supreme Court of Texas agreed to consider whether the Fourth Court of Appeals in San Antonio committed error when it refused to vacate an arbitral award on common-law grounds in a mineral and property rights transfer dispute among family members. In Leonard K. Hoskins v. Colonel Clifford Hoskins and Hoskins, Inc., No. 15-0046, a bankruptcy court ordered two brothers to arbitration over mineral rights that were purportedly improperly transferred from their father’s estate by their mother. Following arbitration proceedings, one brother sought to vacate the arbitrator’s decision. Instead, the trial court confirmed the award and the Fourth Court of Appeals affirmed its decision.

According to the brother’s petition for review to Texas high court, the issues presented in the case are:

1. The court of appeals wrongly holds that the well-settled common-law grounds to vacate an arbitration award are no longer valid under Texas law. The court wrongly applied Hall Street Assocs., L.L.C. v. Mattel, Inc., 552 U.S. 576, 590, 128 S. Ct. 1396, 1406, 170 L. Ed. 2d 254 (2008) and ignored Nafta Traders v. Quinn, 339 S.W.3d 84 (Tex. 2011) as well as substantial conflicting authority from other courts.
2. The TAA requires that an arbitration award be vacated when a party’s rights have been substantially prejudiced because the arbitrator failed to conduct a hearing in compliance with TEX. CIV. PRAC. & REM. CODE § 171.047. The arbitrator dismissed Len’s claims against Respondents sua sponte, without a hearing or even a motion seeking any such relief. This adverse action significantly crippled Len’s remaining claims.
3. In addition to the TAA violation, the failure to conduct a hearing also violates Len’s constitutional rights. The due process clauses of the Texas and United States Constitutions require that parties to an arbitration proceeding are entitled to a hearing.

The Supreme Court of Texas has scheduled oral argument for January 13, 2016. Stay tuned to Disputing for future developments in this case!

Photo credit: Steven Polunsky / Foter.com / CC BY