Summary
In Dealer Computer Services, Inc. v. Red Hill Ford, Inc., No. 05–10–00983–CV, 2010 WL 3566124, at *1 (Tex.App.-Dallas Sept. 15, 2010, no pet.) (mem. op.), the trial court had issued a restraining order staying arbitration proceedings after Red Hill Ford alleged that the arbitration panel had engaged in misconduct.
Summary of this case from Schlumberger v. HughesOpinion
No. 05-10-00983-CV
Opinion issued September 15, 2010.
On Appeal from the 193rd Judicial District Court Dallas County, Texas, Trial Court Cause No. 10-04531.
Before Justices BRIDGES, FRANCIS, and LANG.
MEMORANDUM OPINION
This is an interlocutory appeal from a trial court order denying Dealer Computer Services's (DCS) motion to compel arbitration. DCS filed the motion not to commence arbitration but to resume arbitration proceedings the trial court stayed in April 2010. Concluding we lack jurisdiction over the appeal, we dismiss the appeal.
Background
DCS and Red Hill Ford have been in arbitration proceedings over a commercial contract dispute since December 2006. On April 16, 2010, Red Hill Ford filed an application for temporary restraining order in conjunction with an original petition for declaratory judgment and requests for temporary and permanent injunctions. In its pleading, Red Hill Ford alleged the American Arbitration Association (AAA), which is administering the arbitration proceedings, had engaged in misconduct and the arbitration panel was "tainted and biased and prejudiced." Based on its allegations, Red Hill Ford sought to stay the final arbitration hearing scheduled for April 19, 2010. The trial court granted the ex parte temporary restraining order for a period of fourteen days-until April 30th-and then extended the period an additional fourteen days after that-until May 14th. By its terms, the temporary restraining order expired May 14th, but due to pending motions on other issues, the final hearing was not rescheduled. Instead, the court allowed the parties to conduct discovery on the allegations asserted by Red Hill against the AAA and arbitration panel.
On July 14th, DCS moved to stay the trial court proceedings and compel a return to the pending arbitration. The trial court held a hearing July 26th and denied the motion, concluding it was moot because "the case is in the arbitration process." The court also set hearing dates of August 30, 2010 to resolve any discovery issues that might arise and September 24, 2010 to hear the application for a temporary injunction. This interlocutory appeal followed, along with a motion for temporary relief and stay of all trial court proceedings and discovery pending this Court's resolution of the appeal.
We questioned our jurisdiction over this appeal and, at our direction, the parties filed letter briefs addressing this threshold issue.
Discussion
Arbitration proceedings involving commerce are governed by the Federal Arbitration Act (FAA). See 9 U.S.C. § 2 (2006); In re L L Kempwood Assocs., 9 S.W.3d 125, 127 (Tex. 1999); see also Citizens Bank v. Alafabco, Inc., 539 U.S. 52, 56-57 (2003). Our Court has jurisdiction over interlocutory trial court orders concerning a matter subject to the FAA under the same circumstances that an appeal from a federal district court's order or decision would be permitted to a federal circuit court. See Tex. Civ. Prac. Rem. Code Ann. § 51.016 (West Supp. 2010); see also 9 U.S.C. § 16. The FAA permits an appeal from an order denying a petition for order to compel arbitration. See 9 U.S.C. §§ 4, 16 (a)(1)(B). However, the petition must be based on a party's alleged failure, neglect, or refusal to arbitrate under a written agreement. See 9 U.S.C. § 4. No such allegation exists here. To the contrary, as the trial court noted, the parties are "in the arbitration process." We have found no authority, and DCS points us to none, that allows an appeal from an order denying a motion to compel arbitration where the parties are in arbitration proceedings but the proceedings have been stayed. We dismiss the appeal for lack of jurisdiction. And having concluded we have no jurisdiction over the appeal, we necessarily lack jurisdiction over the motion for temporary relief and stay of all trial court proceedings and discovery.