Appellant, Petroleum Analyzer Company LP (PAC), files a motion for rehearing and a motion for en banc reconsideration of our memorandum opinion issued March 4, 2010 that upholds an arbitration award and final judgment in favor of appellee, Franek Olstowski, and a summary judgment in favor of appellee, Atom Instrument Corporation (Atom). Having received a response from Olstowski and Atom, we grant PAC's motion for rehearing and withdraw our March 4, 2010 memorandum opinion and judgment, and issue this memorandum opinion and judgment in their stead to clarify our analysis of one issue raised by PAC. Because we withdraw our March 4, 2010 opinion, PAC's motion for en banc reconsideration is rendered moot. See Brookshire Brothers, Inc. v. Smith, 176 S.W.3d 30, 33 (Tex. App.-Houston [1st] 2004, pet. denied) (op. on reh'g) (noting that motion for en banc reconsideration becomes moot when motion for rehearing is granted and new opinion and judgment issue). Through its first, third, and fourth issues in its original appellant's brief, PAC contends the trial court erred when it granted Atom's no-evidence motion for summary judgment because (1) the trial court granted Atom's motion for summary judgment before Atom had filed an answer to PAC's original petition, (2) Atom's motion for summary judgment is "predicated solely on the doctrine of res judicata" and the trial court erred by granting a summary judgment based on an affirmative defense that was never pleaded, and (3) the lawsuit between PAC and Atom had been stayed by the trial court. In its second issue in its original appellant's brief, PAC contends the trial court erred when it granted attorney's fees to Atom in conjunction with granting Atom's summary judgment. In its fifth issue in its original appellant's brief, PAC argues that the trial court erred in granting Olstowski's motion to compel arbitration. In its sixth issue in its original appellant's brief, PAC contends the trial court erred in confirming and not vacating the arbitration award.

For clarity, we have numbered the issues one through six. Roman numeral one with subissues A, B, C, and D, are numbered issues one through four, respectively. Roman numeral two with subissues A and B are numbered issues five and six, respectively.

We affirm.

Background

This appeal arises from an ownership dispute as to certain patents and other intellectual property related to excimer lamp technology, and a dispute as to Olstowski's right to control the excimer lamp technology he designed while employed as a consultant for PAC and other companies. PAC contends Olstowski breached a consultant and non-disclosure agreement by applying for patents for this technology and by sharing and attempting to sell the technology to PAC's competitors and customers.

In June 2001, Antek Instruments, L.P. (now owned by PAC) retained Olstowski as a consultant to provide "services for research, development and testing of products and/or technologies that may be incorporated into products or services provided by [Antek]." This arrangement was memorialized by a "Consultant Agreement" signed by Olstowski and Jay Szinyei, then Antek's Manager of Engineering. The Consultant Agreement expressly required that it may not be modified except by a writing signed by both parties.

Antek knew that, while Olstowski worked on projects for Antek, he was also a consultant for other companies that produced petroleum products. The Consultant Agreement, therefore, defined a non-exclusive relationship for Olstowski to provide personal services to Antek. Pursuant to the Consultant Agreement, "[a]ll [c]onfidential [i]nformation, technology, prototypes, and products developed by [Olstowski] while providing service for Antek [would] be the exclusive property of Antek."

According to Szinyei, the principal drafter of the Consultant Agreement, the agreement covered individual projects assigned to Olstowski by Antek. This limitation of the scope of the services enabled Antek to control the amount of time expended by Olstowski on projects and thereby control Antek's expenses. Thus, the Consultant Agreement required that Olstowski be assigned each consultant project. After being assigned a consultant project, any information, technology, prototypes, or products developed by Olstowski while providing such service then became the exclusive property of Antek.

In March 2002, Olstowski informed Szinyei about his idea to develop an excimer light source specifically intended to measure sulfur using ultraviolet (UV) fluorescence. Thereafter, Olstowski told Tom McMullen, Antek's president, and Szinyei about his idea. Antek did not want to assume the risk of investing its resources into the excimer technology, and decided that Olstowski could pursue the project on his own time. Antek informed Olstowski of this decision. Olstowski was also told that if he was successful in his research, Antek would be interested in talking with Olstowski about using the excimer technology in its equipment and requested "first dibs" on considering whether to license the technology.

The Consultant Agreement was never modified in writing and Olstowski was never assigned to work on excimer technology as an Antek or PAC project. Antek had specifically discussed modifying the consultant agreement through a "carve out" agreement that stated the excimer project was not being done pursuant to the Consultant Agreement; however, a "carve out" agreement never materialized.

By December 2002, Olstowski had developed the excimer technology. Although Olstowski developed the excimer technology on his own time and with his own money in his own laboratory, Olstowski performed tests and generated data on the excimer technology using PAC employees and equipment.

On December 27, 2002, in his own name and with his own lawyer, Olstowski filed a patent application titled "Excimer UV Fluorescence Detection." Olstowski then informed Antek that he had filed a patent application, and that Antek, as required by the 2001 Consultant Agreement, would need to sign a non-disclosure agreement with him before he would disclose his excimer technology to them. Antek did not object to Olstowski's filing of the patent application.

On January 28, 2003, Antek and Olstowski entered into a Mutual Non-Disclosure Agreement (MNDA) for Olstowski to conduct a feasibility study to investigate the possibility of incorporating the Olstowski Excimer Technology into the Antek Technology, or to use the Olstowski Excimer Technology to develop new products for Antek. The MNDA states:

WHEREAS, OLSTOWSKI has developed technology using excimer lamps and can detect substances using excimer fluorescence (hereafter "Olstowski Technology"); and

WHEREAS, ANTEK had developed products for detecting substances (hereafter "Antek Technology"), but has not developed and does not possess technology to detect substances using excimer fluorescence as embodied in the Olstowski Technology; and

WHEREAS, ANTEK is desirous to conduct a feasibility study in association with OLSTOWSKI to investigate the possibility of incorporating the Olstowski Technology into the Antek Technology, or to use the Olstowski Technology to develop new products (hereafter "Project").

. . . .

If either Party brings an action to enforce the terms hereof, the prevailing Party in such action shall be entitled to reasonable attorney's fees. . . . Any controversy or claim arising out of or relating to this Agreement will be submitted to final and binding arbitration with the American Arbitration Association in accordance with the Commercial Arbitration Rules. Judgment upon an award rendered by the arbitrator may be entered in and by any court having jurisdiction.

In the latter half of 2003, Antek and Olstowski negotiated a license agreement for Antek to license the excimer and related technology from Olstowski. Proposed licensing agreements were exchanged for over three years while Olstowski continued to work with PAC under the Consultant Agreement, MNDA, and later an additional Non-Disclosure/Non-Use Agreement (NDNUA). In 2004, Antek became a subsidiary of PAC.

In March 2005, PAC and Olstowski entered into the NDNUA, signed by PAC's president, McMullen. Under the NDNUA, Olstowski agreed to continue to disclose his excimer technology to PAC, and PAC, in turn, promised to keep the Olstowski Technology secret and promised not to use the Olstowski Technology. The NDNUA stated in part:

In order that we may be more free and open with you, it is necessary to have your promise that you and your employer, if any, will not use or divulge any confidential business information or proprietary designs, processes, algorithms, machines, drawings, technical information or trade secrets which may be provided you by Franek Olstowski for the particular field hereafter defined. [D]efining the field applicable to this Agreement . . . excimer lamps or the detection of substances using excimer fluorescence and the like.

. . . .

This Agreement controls over any prior written agreements.

. . . .

Any controversy or claim arising out of or relating to this Agreement will be submitted to final and binding arbitration with each party selecting an arbitrator, and the two party-appointed arbitrators selecting a neutral arbitrator. The arbitration shall be conducted under the Federal Arbitration Act because the parties agree that interstate commerce is affected, further the parties acquiesce to the jurisdiction of the U.S. District Courts and a judgment upon an award rendered by the arbitrators may be entered in and by the U.S. District court.

. . . .

RECEIVING PARTY ACCEPTED AND AGREED TO:

Signature: s/ Thomas McMullen

Print Name: Thomas E. McMullen

Employer: PAC

Date: 14 May 2005

Olstowski provided confidential information to PAC pursuant to the NDNUA.

Eventually, the relationship between PAC and Olstowski soured and discussions about a licensing agreement between the two parties broke down. In August 2006, Antek, PAC, and their attorneys informed Olstowski that Antek or PAC claimed ownership in the excimer technology. PAC and Olstowski then asserted conflicting claims as to the ownership of the excimer technology.

In August 2006, PAC filed suit against Olstowski and Atom, Olstowski's consulting company, alleging claims for declaratory relief, tortious interference with continuing business relations, conversion of intellectual property, breach of oral contract, attorney's fees, restitution/unjust enrichment, fraudulent inducement, and negligent misrepresentation. PAC also requested a temporary and permanent injunction. Olstowski counterclaimed for breach of the NDNUA, breach of the MDNA, and breach of the Consultant Agreement. Olstowski also filed suit against Robert Strozier, PAC's patent attorney, making an additional claim for return of Excimer Technology files related to the prosecution of European and Japanese patents. The Strozier case was consolidated with the suit between PAC and Olstowski and Atom; however, Olstowski later non-suited against Strozier.

Upon Olstowski's motion, the trial court compelled the dispute between Olstowski and PAC to arbitration in January 2007. Pursuant to the NDNUA, the trial court ordered PAC and Olstowski to arbitrate their respective claims against each other, and stayed the suit between Olstowski and Strozier until the conclusion of the Arbitration. The court did not compel Atom and PAC to arbitrate and the suit between PAC and Atom remained active.

After the trial court denied a motion to reconsider the order compelling the dispute to arbitration, PAC filed a petition for a writ of mandamus against the trial court with this Court, claiming the trial court erred by entering an order that included Atom in the arbitration proceedings. We denied PAC's petition. PAC then filed a petition for a writ of mandamus with the Texas Supreme Court. The Supreme Court also denied PAC's petition.

An arbitration hearing was held in August 2007, and the arbitration panel rendered a unanimous award in favor of Olstowski in October 2007. The panel found, among other things, that Olstowski was the exclusive and sole owner of all the technology in dispute, and enjoined PAC from claiming ownership in or using the technology, and from interfering with Olstowski's use and enjoyment of the technology. The panel declared, by its actions and by signing the MNDA, which was "all but an admission by [PAC] that it did not develop the excimer technology, and does not own such technology," that PAC "waived any claim of ownership of the excimer technology, if it was ever entitled to the same." The panel awarded Olstowski declaratory relief, and fees and costs of $449,150.00, but also awarded restitution and contract damages of $323,993.05 to PAC. The trial court confirmed the arbitration award on November 6, 2007, concluding the case between PAC and Olstowski.

Olstowski subsequently alleged that PAC sent letters to the U.S. Patent and Trademark Office, and used and disclosed Olstowski's trade secrets and technology, in violation of the trial court's November 2007 order. Olstowski filed a Motion for Contempt with the trial court in February 2008; however, before the court ruled on the motion, PAC filed a notice of removal to the United States District Court, Southern District of Texas, Houston Division. Olstowski moved to remand the case and requested rule 11 sanctions. In May 2008, the United States District Court remanded the case back to the trial court, did not grant Olstowski's request for rule 11 sanctions, but did grant Olstowski's request for costs and attorney's fees because "[PAC] lacked an objectively reasonable basis for seeking removal."

In January 2008, Atom filed a no-evidence motion for summary judgment to resolve all claims by PAC against Atom. In August 2008, the trial court ruled on the summary judgment without hearing or further notice to the parties, granted the summary judgment in favor of Atom, and disposed of all causes of actions between the parties. It also ordered PAC to pay Atom's attorney's fees and ordered conditional awards in the event of an appeal by PAC. This appeal followed.

Motion to Compel Arbitration

In its fifth issue, PAC argues that the trial court erred by granting Olstowski's motion to compel arbitration. We address (A) the controlling law; (B) the standard of review for arbitration conducted under the Federal Arbitration Act (FAA); and (C) PAC's arguments.

A. Controlling Law

We must determine whether the contract is controlled by the FAA or the Texas Arbitration Act (TAA), or both. See Royce Homes, L.P. v. Bates, No. 01-08-00191-CV, 2010 WL 184216, at *5 (Tex. App.-Houston [1st] Jan. 21, 2010, no pet. h.). PAC contends the FAA does not apply.

The FAA preempts all otherwise applicable inconsistent state laws, including any inconsistent provisions of the TAA, under the Supremacy Clause of the United States Constitution. U.S. CONST. art. VI, cl. 2; see Allied-Bruce Terminix Co. v. Dobson, 513 U.S. 265, 272, 115 S. Ct. 834, 838 (1995); Royce Homes, L.P., 2010 WL 184216 at *6. When there is an express agreement to arbitrate under the FAA, courts have upheld such choice-of-law provisions even though the transaction at issue does not involve interstate commerce. In re Kellogg Brown Root, 80 S.W.3d 611, 617 (Tex. App.-Houston [1st] 2002, orig. proceeding). As the Kellogg court explained, when "the parties agree to arbitrate under the FAA, they are not required to establish that the transaction at issue involves or affects interstate commerce." Id.

In the absence of an express agreement to arbitrate under the FAA, a party may establish the applicability of the FAA by showing that the transaction affects or involves interstate commerce. Id. Interstate commerce may be evidenced by location of headquarters in another state, manufacture of components in a different state, transportation of goods across state lines, and billings prepared in another state, among other factors. Stewart Title Guar. Co. v. Mack, 945 S.W.2d 330, 333 (Tex. App.-Houston [1st] 1997, writ dism'd w.o.j.); see also Robinson v. TCI/US West Commc'ns Inc., 117 F.3d 900, 904 (5th Cir. 1997) (defining interstate commerce as "trade, commerce, transportation, or communication among the several States, or between any foreign country and any place or ship outside thereof").

The Texas Supreme Court has held that a Texas choice-of-law provision will not be construed to select the TAA to the exclusion of the FAA unless the clause specifically excludes the application of the federal law. In re L L Kempwood Assocs., 9 S.W.3d 125, 127-28 (Tex. 1999); Royce Homes, L.P., 2010 WL 184216 at *6. Texas courts have also held that a general choice-of-law clause such as the one in the NDNUA is insufficient to invoke the TAA to the exclusion of the FAA. Royce Homes, L.P., 2010 WL 184216 at *6.

Here, the contract between PAC and Olstowski provides, "[t]he arbitration shall be conducted under the Federal Arbitration Act because the parties agree that interstate commerce is affected." Because PAC and Olstowski signed a contract to arbitrate under the FAA and expressly agreed that interstate commerce is affected by the contract, they are bound to their agreement. See In re Kellogg, 80 S.W.3d at 617 (concluding that parties were "not required to establish that the transaction at issue involves or affects interstate commerce" because parties had agreed to arbitrate under FAA); see also W. Dow Hamm III Corp. v. Millennium Income Fund, L.L.C., 237 S.W.3d 745, 751 (Tex. App.-Houston [1st] 2007, no pet.) (holding, in addition to other reasons, that FAA applied to arbitration agreement because parties expressly agreed in arbitration agreement that transaction involved interstate commerce) (citing Jack B. Anglin Co. v. Tipps, 842 S.W.2d 266, 269-70, 272 (Tex. 1992)). Moreover, even if the parties had not expressly agreed that interstate commerce is affected, PAC is a Delaware limited partnership; therefore, this agreement affects interstate commerce. See Stewart Title Guar. Co., 945 S.W.2d at 333; Royce Homes, L.P., 2010 WL 184216 at *6. Accordingly, we apply the FAA, while recognizing that the TAA also applies to the extent it is consistent with the FAA. See Royce Homes, L.P., 2010 WL 184216 at *6 (citing In re D. Wilson Constr. Co., 196 S.W.3d 774, 779-80 (Tex. 2006)).

B. Standard of Review

Arbitration is a contractual proceeding by which the parties, in order to obtain a speedy and inexpensive final disposition of disputed matters, consent to submit the controversy to arbitrators for determination. See Porter Clements, L.L.P. v. Stone, 935 S.W.2d 217, 221 (Tex. App.-Houston [1st] 1996, no writ). "Whether an arbitration agreement is enforceable is subject to de novo review." In re Labatt Food Serv., L.P., 279 S.W.3d 640, 643 (Tex. 2009).

A party seeking to compel arbitration under the FAA must establish that there is a valid arbitration agreement and that the claims raised fall within that agreement's scope. In re Kellogg Brown Root, Inc., 166 S.W.3d 732, 737 (Tex. 2005); J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 227 (Tex. 2003). Under the FAA, ordinary principles of state contract law determine whether there is a valid agreement to arbitrate. In re Kellogg Brown Root, 166 S.W.3d at 738 (citing First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944, 115 S. Ct. 1920, 1924 (1995)) ("In determining the validity of an agreement to arbitrate under the FAA, courts must first apply state law governing contract formation."). Although there is a strong presumption favoring arbitration, that presumption arises only after the party seeking to compel arbitration proves that a valid arbitration agreement exists. J.M. Davidson, 128 S.W.3d at 227. Because arbitration is contractual in nature, the FAA generally does not require parties to arbitrate when they have not agreed to do so. In re Kellogg Brown Root, Inc., 166 S.W.3d at 738 (quoting Volt Info. Scis., Inc. v. Bd. of Trs. of Leland Stanford Junior Univ., 489 U.S. 468, 478-79, 109 S. Ct. 1248, 1255 (1989)).

C. Arguments Presented by PAC

PAC contends the trial court erred by granting Olstowski's motion to compel arbitration because (1) the NDNUA contract did not exist, (2) the claims raised and addressed by the arbitration panel were not within the arbitration agreement's scope, (3) the court erred by compelling arbitration without first holding an evidentiary hearing, and (4) Olstowski waived his right to arbitrate.

1. NDNUA Contract

The court compelled arbitration based upon the arbitration provision found within the NDNUA contract. PAC does not challenge the arbitration provision contained within the NDNUA, but instead attacks both the validity of the contract and the very existence of the contract. It asserts it was an invalid contract because there was no consideration. It attacks the existence of the contract because it asserts neither it, nor Olstowski, were parties to the agreement.

a. Attack on Validity of NDNUA Contract

Contending that the NDNUA was not a valid contract, PAC asserts that the trial court erred in compelling arbitration. PAC contends the NDNUA is invalid because it asserts there was no consideration for the contract.

The Texas Supreme Court has held that the validity of the contract as a whole must be submitted to arbitration as long as the arbitration provision is valid. See In re FirstMerit Bank, N.A., 52 S.W.3d 749, 753 (Tex. 2001) (orig. proceeding); Women's Reg'l Healthcare, P.A. v. FemPartners of N. Tex., Inc., 175 S.W.3d 365, 368 (Tex. App.-Houston [1st] 2005, no pet.) ("Only if the arbitration clause is attacked on an independent basis can the court decide the [validity of the contract] dispute; otherwise, general attacks on the agreement are for the arbitrator.") (quoting Will-Drill Res., Inc. v. Samson Res. Co., 352 F.3d 211, 218-19 (5th Cir. 2003)); In re H.E. Butt Grocery Co., 17 S.W.3d 360, 367 (Tex. App.-Houston [14th] 2000, orig. proceeding) ("As a general rule, 'questions related to the enforcement of a contract as a whole are properly referable to an arbitrator; it is only when attack is made on the arbitration clause itself that a court, rather than an arbitrator, should decide questions of validity.'") (quoting Prima Paint Corp. v. Flood Conklin Mfg. Co., 388 U.S. 395, 402-04, 87 S. Ct. 1801, 1805-06 (1967)). Because the issue regarding the validity of the NDNUA as a whole is an issue for the arbitrators, and PAC attacks the validity of the contract only by asserting there was no consideration, we hold the court did not err in compelling arbitration under the NDNUA. See Dewey v. Wegner, 138 S.W.3d 591, 601 (Tex. App.-Houston [14th] 2004, no pet.) (holding validity of entire agreement at issue between parties must be submitted to arbitration because Wegner did not attack arbitration agreement specifically).

b. Attack on Existence of NDNUA Contract

On appeal, PAC also attacks the very existence of the NDNUA contract through its contention that it and Olstowski were not parties to the NDNUA. Generally, issues attacking the validity of the contract containing the arbitration provision must be submitted to arbitration as long as the arbitration provision is valid. See In re FirstMerit Bank, N.A., 52 S.W.3d at 753. However, where a party attacks the very existence of an agreement, as opposed to its continued validity or enforcement, the issue is a matter for the court and not the arbitrators. See In re Morgan Stanley Co., 293 S.W.3d 182, 189 (Tex. 2009).

PAC contends the NDNUA does not exist because, "neither PAC nor Olstowski were listed as a signatory to the NDNUA." Before the trial court, PAC raised several assertions regarding why the NDNUA contract was invalid, but it did not attack the contract by the same argument it makes on appeal, specifically that neither it nor Olstowski were parties to the NDNUA contract. As a general rule, a party is required to present a complaint to the trial judge before being allowed to raise the issue on appeal. Graham-Rutledge Co. v. Nadia Corp., 281 S.W.3d 683, 688-89 (Tex. App.-Dallas 2009, no pet.) (citing In re L.M.I., 119 S.W.3d 707, 711 (Tex. 2003) (to preserve issue for appellate review, including constitutional error, party must present to trial court timely request, motion, or objection, state specific grounds therefore, and obtain ruling)). Because PAC did not raise this issue before the trial court, and the trial court did not rule or refuse to rule on the issue, we hold PAC waived any error regarding this issue. See, e.g., Graham-Rutledge Co., 281 S.W.3d at 688-89 (holding that appellant waived error because record failed to show where it objected to denial of motion to compel discovery in arbitration proceeding).

2. Scope of Arbitration Agreement

PAC also contends that the claims decided by the arbitrators that were at issue between Olstowski and PAC were not within the scope of the arbitration agreement. Federal and state law strongly favors arbitration. Cantella Co. v. Goodwin, 924 S.W.2d 943, 944 (Tex. 1996) (orig. proceeding). Under the FAA, any doubt as to whether a plaintiff's claims fall within the scope of the arbitration agreement must be resolved in favor of arbitration. Id. Once an agreement is established, "a court should not deny arbitration 'unless it can be said with positive assurance that an arbitration clause is not susceptible of an interpretation which would cover the dispute at issue.'" Prudential Sec. Inc. v. Marshall, 909 S.W.2d 896, 899 (Tex. 1995) (per curiam) (orig. proceeding) (emphasis in original).

The NDNUA contains a broad arbitration clause that does not include any exclusions from arbitration. The NDNUA requires arbitration of "[a]ny controversy or claim arising out of or relating to this Agreement. . . ." The NDNUA is an agreement allowing Olstowski to disclose his technology to PAC in exchange for PAC's promise not to use the technology. In this dispute, each of PAC's claims against Olstowski, and Olstowski's counterclaims against PAC, derive from the conflicting claims between PAC and Olstowski over who owned the intellectual property rights to the excimer technology. Because the claims between PAC and Olstowski each concern the disputed ownership rights to the excimer technology, we hold that their claims against each other are subject to the arbitration provision of the NDNUA, and that the trial court properly compelled arbitration. See In re D. Wilson Constr. Co., 196 S.W.3d at 783 (holding that where claims were related to contract containing arbitration clause, claims "fall squarely within the scope of the arbitration agreements").

3. Evidentiary Hearing

PAC further contends that the trial court erred by failing to conduct an evidentiary hearing before compelling PAC and Olstowski to arbitration. PAC asserts a hearing was required because of allegedly contradictory affidavits and testimony presented by PAC.

When Texas courts are called on to decide if disputed claims fall within the scope of an arbitration clause under the FAA, Texas procedure controls that determination. Jack B. Anglin Co., 842 S.W.2d at 268 (citing Southland Corp. v. Keating, 465 U.S. 1, 16, n. 10, 104 S. Ct. 852, 861, n. 10 (1984)). Texas Civil Practice and Remedies Code section 171.021 allows trial courts to "summarily determine" the issue of whether to compel a party to arbitrate its claims. CIV. PRAC. REM. CODE ANN. § 171.021 (Vernon 2005); Jack B. Anglin Co., 842 S.W.2d at 269 ("[W]e hold that the trial court may summarily decide whether to compel arbitration on the basis of affidavits, pleadings, discovery, and stipulations."). However, if the material facts necessary to determine the proper disposition of a motion to compel arbitration are controverted by an opposing affidavit or otherwise admissible evidence, the trial court must conduct an evidentiary hearing to determine the disputed material facts. Jack B. Anglin Co., 842 S.W.2d at 269.

Here, any inconsistencies in the affidavits are not material facts to the issue of arbitrability. We hold the trial court did not err in failing to hold an evidentiary hearing under these circumstances where the material facts are found in documents exchanged between the parties. See Stewart Stevenson, LLC v. Galveston Party Boats, Inc., No. 01-09-00030-CV, 2009 WL 3673823, at *12 (Tex. App.-Houston [1st] Nov. 05, 2009, no pet.) (mem. op., not designated for publication) (holding that trial court did not err in failing to hold evidentiary hearing regarding allegedly opposing affidavits, where appellate court could rely solely on material facts found in documents exchanged between parties to determine validity of arbitration agreement).

4. Waiver

PAC asserts that Olstowski waived his right to enforce the arbitration provision by engaging in discovery and by filing a motion to dismiss. There is a strong presumption against finding that a party has waived its right to arbitration; the burden to prove waiver is thus a heavy one. In re Bank One, N.A., 216 S.W.3d 825, 827 (Tex. 2007); In re D. Wilson Const. Co., 196 S.W.3d at 783 ("There is a strong presumption against waiver under the FAA."). Any doubts regarding waiver are resolved in favor of arbitration. In re Bruce Terminix Co., 988 S.W.2d 702, 705 (Tex. 1998).

Waiver may be express or implied, but it must be intentional. EZ Pawn Corp. v. Mancias, 934 S.W.2d 87, 89 (Tex. 1996). "A party waives an arbitration clause by substantially invoking the judicial process to the other party's detriment." In re Citigroup Global Mkts., Inc., 258 S.W.3d 623, 625 (Tex. 2008) (orig. proceeding) (quoting Perry Homes v. Cull, 258 S.W.3d 580, 589-90 (Tex. 2008), cert. denied, 129 S. Ct. 952 (2009)). Waiver is a question of law based on the totality of the circumstances. The test for waiver is whether the party moving for arbitration "has substantially invoked the judicial process to an opponent's detriment, the latter term meaning inherent unfairness caused by 'a party's attempt to have it both ways by switching between litigation and arbitration.'" In re Citigroup Global Mkts., Inc., 258 S.W.3d at 625 (quoting Perry Homes, 258 S.W.3d at 597).

In determining whether a party waived an arbitration clause, the courts can consider, among other factors: (1) whether the movant for arbitration was the plaintiff (who chose to file in court) or the defendant (who merely responded), (2) when the movant learned of the arbitration clause and how long the movant delayed before seeking arbitration, (3) the amount of pretrial activity related to the merits rather than arbitrability or jurisdiction, (4) the amount of discovery conducted, and (5) whether the movant sought judgment on the merits. See Perry Homes, 258 S.W.3d at 591-92; In re Hawthorne Townhomes, L.P., 282 S.W.3d 131, 141 (Tex. App.-Dallas 2009, no pet.).

The Texas Supreme Court has found waiver of arbitration in only one case, Perry Homes v. Cull. 258 S.W.3d at 591-92; see Hawthorne Townhomes, L.P., 282 S.W.3d at 142. In that case, the plaintiffs initially "vigorously opposed" the defendants' motion for arbitration, the parties conducted nearly complete discovery, and the case was set for trial. See Perry Homes, 258 S.W.3d at 585. Then, after fourteen months of litigation, the plaintiffs changed their minds and moved for arbitration. The trial court granted the motion four days before the date the case was set for trial. Id. The Texas Supreme Court held the arbitration was waived, set aside the arbitration award, and remanded the case for trial. Id. at 601.

This case is unlike Perry Homes. The record shows that PAC filed its original petition August 25, 2006, and that on November 21, 2006 Olstowski filed his first expedited motion to refer the case to arbitration. In the interim, Olstowski filed his original answer and counterclaim, a request for a permanent injunction against PAC, and a motion for a protective order.

PAC has not shown that Olstowski waived his right to arbitration under the factors listed in Perry Homes. First, it was the defendant, Olstowski, who moved for arbitration. See id. at 591-92. Second, the record shows that Olstowski did not delay before seeking arbitration as his first motion to compel arbitration came less than three months after PAC's initial petition. See id. Under the third and fourth factors, PAC fails to demonstrate, and the record does not show, that any significant amount of pretrial activity or discovery related to the merits of the case occurred prior to Olstowski's first expedited motion to compel arbitration. See id. Instead, the record shows that during the 58 days between Olstowski's answer and his filing the motion to compel arbitration, Olstowski's actions were only to respond to PAC and to protect his claim to intellectual property rights. Had Olstowski not responded to PAC's petition, he would have faced a default judgment. Fifth, the record does not show that Olstowski sought judgment on the merits. See id.

PAC contends that Olstowski, nevertheless, waived the arbitration clause by moving to dismiss the claims for lack of standing, yet the Texas Supreme Court has held that a motion to dismiss for lack of standing does not sufficiently invoke the judicial process to overcome the strong presumption against waiver. See In re Vesta Ins. Group, Inc. 192 S.W.3d 759, 764 (Tex. 2006); In re Hawthorne Townhomes, L.P., 282 S.W.3d at 142. We hold that PAC has failed to show that Olstowski "substantially invok[ed] the judicial process to [PAC]'s detriment." See Perry Homes, 258 S.W.3d at 589-90; In re Hawthorne Townhomes, L.P., 282 S.W.3d at 142 (holding that totality of circumstances did not show that defendants had substantially invoked judicial process to plaintiff's detriment).

We overrule PAC's fifth issue.

Confirmation and Vacation of Arbitration Award

In its sixth issue, PAC contends the trial court erred in confirming and not vacating the arbitration award. It asserts the trial court erred because the claims at issue were exclusive to federal jurisdiction; the award violated due process; the arbitration panel did not make the necessary findings to support injunctive relief; the award was ambiguous and contradictory; the arbitration panel miscalculated damages due to PAC; the arbitration panel refused to follow Texas law; the order granted more relief to Olstowski than what was awarded by the panel; the arbitration panel granted relief outside the NDNUA; the arbitration panel exceeded its authority for not finding Olstowski liable for conversion; and, the trial court did not have jurisdiction to confirm the arbitration award.

A. Vacatur

We review de novo a trial court's confirmation of an arbitration award under the FAA based on the entire record. Royce Homes, L.P., 2010 WL 184216 at *6; Myer v. Americo Life, Inc., 232 S.W.3d 401, 407 (Tex. App.-Dallas 2007, no pet.); Tanox, Inc. v. Akin, Gump, Strauss, Hauer Feld, L.L.P., 105 S.W.3d 244, 250 (Tex. App.-Houston [14th] 2003, pet. denied). All reasonable presumptions are indulged to uphold the arbitrator's decision, and none are indulged against it. Royce Homes, L.P., 2010 WL 184216 at *6; Bailey Williams v. Westfall, 727 S.W.2d 86, 90 (Tex. App.-Dallas 1987, writ ref'd n.r.e.).

An arbitration award is presumed valid and entitled to great deference. Myer, 232 S.W.3d at 407-08. When reviewing an arbitration award, we may not substitute our judgment merely because we would have reached a different decision. Bailey, 727 S.W.2d at 90. Because judicial review of an arbitration award adds expense and delay that diminishes the benefits of arbitration as an efficient, economical system for resolving disputes, our review of the arbitration award is "extraordinarily narrow." See Myer, 232 S.W.3d at 408. Accordingly, we may not vacate an award even if it is based upon a mistake in law or fact. Royce Homes, L.P., 2010 WL 184216 at *7.

The United States Supreme Court recently foreclosed any common law ground for vacatur of an arbitration award and held that the statutory grounds provided in sections 10 and 11 of the FAA for vacating, modifying, or correcting an arbitration award are the exclusive grounds for vacating an arbitration award. Hall St. Assocs., L.L.C. v. Mattel, Inc., 552 U.S. 576, 582, 128 S. Ct. 1396, 1402 (2008); Royce Homes, L.P., 2010 WL 184216 at *7, 11; see also Citigroup Global Mkts., Inc. v. Bacon, 562 F.3d 349, 350 (5th Cir. 2009) (holding that Hall Street restricts grounds for vacatur to those set forth in section 10 of FAA); Anzilotti v. Gene D. Liggin, Inc., 899 S.W.2d 264, 266 (Tex. App.-Houston [14th] 1995, no writ) (holding that courts may not vacate arbitration award even if it is based upon mistake in law or fact). section 10(a) permits a court to vacate an arbitration award:

(1) where the award was procured by corruption, fraud, or undue means;

(2) where there was evident partiality or corruption in the arbitrators, or either of them;

(3) where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or, of any other misbehavior by which the rights of any party have been prejudiced; or

(4) where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter was not made.

9 U.S.C.S. § 10(a) (LexisNexis 2008); Royce Homes, L.P., 2010 WL 184216 at *7.

Section 11 of the Federal Arbitration Act refers to modification or correction of an arbitration award. See 9 U.S.C.S. § 11 (LexisNexis 2008).

On appeal, PAC lodges multiple assertions why the trial court erred in refusing to vacate the arbitration award. It, however, does not assert any of the four statutory grounds listed in sections 10 and 11 as grounds for why the trial court erred in refusing to vacate the arbitration award. Furthermore, PAC's statements that the arbitration panel "exceeded its powers" in granting an award against public policy or that the arbitrators did not make necessary findings resulting in an award that is "not final and definite," are statements couched in common law arguments that do not provide valid ground for vacatur of the arbitrators' award. We hold, therefore, that the trial court did not err in confirming and refusing to vacate the arbitration award. See Royce Homes, L.P., 2010 WL 184216 at *11 (holding common law arguments made by appellant, such as manifest disregard of law and gross mistake, were not valid grounds for vacatur of arbitration award as Hall Street forecloses any common law grounds for vacatur, and statutory grounds in sections 10 and 11 of FAA are only grounds available for vacating, modifying, or correcting arbitration award) (citing Hall Street, 1552 U.S. at 583, 128 S. Ct. at 1403; Citigroup Global Mkts., Inc., 562 F.3d at 350).

B. Trial Court's Jurisdiction

PAC contends the trial court had no jurisdiction to confirm the arbitration award because the NDNUA states, "the parties acquiesce to the jurisdiction of the U.S. District Courts and a judgment upon an award rendered by the arbitrators may be entered in and by the U.S. District Court."

The plain meaning of the parties' agreement in the NDNUA to "acquiesce to the jurisdiction of the U.S. District Court," means that a U.S. District Court may confirm an award. The agreement fails to specify that the U.S. District Court is exclusive to other courts. State courts may confirm arbitration awards pursuant to the FAA. See, e.g., Royce Homes, L.P., 2010 WL 184216 at *11 (upholding state trial court's confirmation of arbitration award arbitrated pursuant to FAA). We hold the district court had jurisdiction to confirm the arbitration award.

C. Trial Court's Relief

PAC contends the trial court awarded greater relief than the arbitration award. It asserts the court erred when it stated PAC is "enjoined from interfering with Olstowski's use and enjoyment of his excimer technology and closed-loop technology." It states this was an error because the "Arbitration Panel never awarded Olstowski with ownership of closed loop technology."

In its award, the arbitration panel states, "The Panel DECLARES that Olstowski is the exclusive and sole owner of:

a. the technology and methods embodied in the patent applications styled "Improved Ozone Generator with Duel Dielectric Barrier Discharge;" [sic] Improved Closed-Loop Light Intensity Control and Related Fluorescence Application Method;[fn. 4] and "Excimer UV Fluorescence Detection";

b. all the accompanying drawings, blueprints, schematics and formulas created or drawn by either Olstowski or Virgil Stamps of the application identified in or in support of ((a) and (b) hereinafter referred to as the "Excimer Technology"); and

c. Issued Patents and/or Patent Applications pending entitled: Ozone Generator with Dual Dielectric Barrier Discharge and Methods for Using Same, Improved Closed-Loop Light Intensity Control and Related Fluorescence Application Method, and Excimer UV Fluorescence Detection (as amended).

. . . .

fn.4 However, the general closed-loop technology is not new or unique as noted in finding no. 20.

In the trial court's order confirming the arbitration award, the trial court noted:

(1) Olstowski is the exclusive and sole owner of all technology in dispute,

. . . .

(3) Further, PAC is enjoined from interfering with Olstowski's use and enjoyment of his excimer and closed-loop technology,

. . . .

Because the trial court used the word "his" to modify "closed-loop technology," the trial court's order, read in conjunction with the arbitration award, plainly refers to the "Improved Closed-Loop technology" referenced by the arbitration panel, and not to "the general closed-loop technology" expressly excluded by the arbitration panel in its footnote four. We conclude the trial court's relief was consistent with the arbitrator's award.

We overrule PAC's sixth issue.

Atom's Motion for Summary Judgment

Through three issues, PAC contends the trial court erred when it granted Atom's no-evidence motion for summary judgment against PAC.

A. Standard of Review

We review summary judgments de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). A no-evidence motion for summary judgment must be granted if, after adequate time for discovery, the moving party asserts there is no evidence of one or more specified elements of a claim or defense on which the adverse party would have the burden of proof at trial, and the respondent produces no summary judgment evidence raising a genuine issue of material fact on those elements. TEX. R. CIV. P. 166a(i); LMB, Ltd. v. Moreno, 201 S.W.3d 686, 688 (Tex. 2006). When the movant files its motion in proper form, the burden shifts to the nonmovant to defeat the motion by presenting evidence that raises an issue of material fact regarding the elements challenged by the motion. LMB, Ltd., 201 S.W.3d at 688; Landers v. State Farm Lloyds, 257 S.W.3d 740, 744 (Tex. App.-Houston [1st] 2008, no pet.).

In a Rule 166a(i) no-evidence summary judgment, the movant represents that no evidence exists as to one or more essential elements of the non-movant's claims, upon which the non-movant has the burden of proof at trial. TEX. R. CIV. P. 166a(i). The non-movant then must present evidence raising a genuine issue of material fact on the challenged elements. Id. A party who files a no-evidence summary judgment motion pursuant to rule 166a(i) has essentially requested a pretrial directed verdict. Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 581 (Tex. 2006). A fact issue exists if the evidence "rises to a level that would enable reasonable and fair-minded people to differ in their conclusions." King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751 (Tex. 2003) (quoting Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997)). If the evidence does no more than create a mere surmise or suspicion of fact, less than a scintilla of evidence exists, and summary judgment is proper. Transp. Ins. Co. v. Faircloth, 898 S.W.2d 269, 282 (Tex. 1995); Macias v. Fiesta Mart, Inc., 988 S.W.2d 316, 317 (Tex. App.-Houston [1st] 1999, no pet.). A respondent is not required to marshal its proof to defeat a no-evidence motion for summary judgment; it need only point out evidence that raises a fact issue on the challenged elements. TEX. R. CIV. P. 166a(i), cmt. (1997). Because the trial court's summary judgment does not specify the ground on which the court relied for its ruling, we should affirm it if any theory advanced by Atom has merit. See Weiner v. Wasson, 900 S.W.2d 316, 317 n. 2 (Tex. 1995).

B. No Answer

In its first issue, PAC contends the trial court erred because it granted Atom's summary judgment motion before Atom filed an answer to PAC's original petition. PAC asserts, "[a]lthough Atom did make an appearance in the case, Atom never filed a general denial, affirmative defense or counter-claim before summary judgment was filed and granted." PAC notes that Atom was not included as a defendant in Olstowski's original answer filed October 3, 2006, but was included in an amended answer that included both Olstowski and Atom filed on October 30, 2008, two months after the trial court granted Atom's summary judgment motion. PAC also notes Atom made an appearance in the case.

PAC waived this error, if any. As a prerequisite to presenting a complaint for appellate review, the record must show that a complaint was made to the trial court by a timely request, objection, or motion and that the trial court (1) ruled on the request, objection, or motion, either expressly or impliedly, or (2) refused to rule on the request, objection, or motion, and the complaining party objected to the refusal. See TEX. R. APP. P. 33.1. Under rule 166a(c) of the Rules of Civil Procedure, in the context of summary judgment, issues that are not expressly presented to the trial court by written motion, answer, or response will not serve as grounds for reversal of a summary judgment on appeal. TEX. R. CIV. P. 166a(c); Roark v. Stallworth Oil Gas, Inc., 813 S.W.2d 492, 495 (Tex. 1991); City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex. 1979) (summary judgment non-movant could not raise for first time on appeal additional fact issue that was not raised in its response). The party who allows an issue to be tried by consent and who fails to raise the lack of a pleading before submission of the case cannot later raise the pleading deficiency for the first time on appeal. Roark, 813 S.W.2d at 495 (citing TEX. R. CIV. P. 67, 90). As the Supreme Court has noted, "[t]here is no valid reason why these rules should not apply to issues raised in the motion for summary judgment." Id. "[I]t would advance no compelling interest of the parties or of our legal system to reverse a summary judgment simply because of a pleading defect." Id.

An opposing party should use special exceptions to identify defects in a pleading so that they may be cured, if possible, by amendment. Horizon/CMS Healthcare Corp. v. Auld, 34 S.W.3d 887, 897 (Tex. 2000). When a party fails to specially except, courts should construe the pleadings liberally in favor of the pleader. Id.

In this case, the trial court set the submission date for the motion for summary judgment on August 18, 2008. Prior to that date, the record shows that PAC failed to raise the issue regarding any deficiencies in Atom's pleadings. PAC did not file any special exceptions, and did not raise the issue in any motions. The first time the record shows that PAC raised this issue is in PAC's motion for reconsideration, filed after the trial court granted the summary judgment. Because the record does not show that PAC brought this issue to the attention of the trial court or that the trial court ruled on it before it granted summary judgment, we hold that PAC failed to preserve error, if any, on this issue. See TEX. R. APP. P. 33.1; TEX. R. CIV. P. 67, 166a(c); Roark, 813 S.W.2d at 495 (holding that because Roark failed to direct trial court's attention to absence of pleading in his written response or before court rendered judgment, complaint may not be raised on appeal); Hainsworth v. Berry, 485 S.W.2d 934, 934-35 (Tex. Civ. App.-Houston [1st] 1972, no writ) (holding failure to object to absence of answer at trial level prevents contention on appeal that pleadings were insufficient).

We overrule PAC's first issue.

C. Res Judicata

In its second issue, PAC states the trial court erred when it granted Atom's motion for summary judgment based on "an affirmative defense and counter-claim that was never pled." PAC contends the summary judgment for Atom was premised on the affirmative defense of res judicata, which was never pleaded by Atom, and, therefore, an improper ground for summary judgment.

The record shows Atom's no-evidence motion for partial summary judgment requests judgment against PAC for "all causes of action against Atom" and it cites to rule 166a(i) of the Texas Rules of Civil Procedure, the rule pertaining to no-evidence motions for summary judgment. See TEX. R. CIV. P. 166a(i). In its motion, Atom states:

Atom is entitled to summary judgment because PAC cannot, by depositions, answer to interrogatories, admissions on file, or other admissible evidence, demonstrate there is any evidence to support its causes of action for declaratory relief, tortious interference with continuing business relations, conversion of intellectual property, breach of oral contract, attorney fees, restitution/unjust enrichment (alternative to breach of contract), fraudulent inducement, negligent misrepresentation (alternative to fraudulent inducement), and application for temporary and permanent injunction.

In addition to challenging the absence of any evidence to establish PAC's claims, Atom also asserts that the motion for summary judgment should be granted because each of the causes of action were the same as those that had been fully and completely adjudicated in the arbitration. Atom's no-evidence motion for summary judgment, therefore, makes two alternative challenges, (1) that there is no evidence on each of PAC's claims, and (2) that the arbitration between Olstowski and PAC fully and completely adjudicated PAC's claims against Atom. Without stating the basis for its decision, the trial court granted summary judgment against PAC, which disposed of all claims between PAC and Atom.

When there are multiple grounds for summary judgment and the order does not specify the ground on which the summary judgment was rendered, the appealing party must negate all grounds on appeal. Ellis v. Precision Engine Rebuilders, Inc., 68 S.W.3d 894, 898 (Tex. App.-Houston [1st] 2002, no pet.) (citing State Farm Fire Cas. Co. v. S.S., 858 S.W.2d 374, 381 (Tex. 1993)). If summary judgment may have been rendered, properly or improperly, on a ground not challenged, the judgment must be affirmed. Id. (citing Holloway v. Starnes, 840 S.W.2d 14, 23 (Tex. App.-Dallas 1992, writ denied)).

In this appeal, PAC does not challenge each of the grounds under which the no evidence motion for summary judgment could have been granted. Excluding its arguments concerning attorney's fees that we address separately in this opinion, PAC's entire argument challenging the summary judgment is, as follows:

To obtain summary judgment, a movant must either negate at least one element of the plaintiff's theory of recovery, or plead and conclusively establish each element of an affirmative defense. Pursuant to Texas Rule of Civil Procedure 94, res judicata is an affirmative defense that must be pled. Atom's Motion was predicated on and granted solely on the doctrine of res judicata. Because the affirmative defense upon which Atom based its Motion was never pled, the trial court erred in granting summary judgment on this basis and it must be reversed.

(citations omitted) (emphasis in original).

In this appeal, PAC challenges the res judicata portion of the no-evidence summary judgment, but it fails to address Olstowski's alternative challenge that there exists no evidence on each of PAC's claims. Because summary judgment may have been rendered on a ground not challenged on appeal, we uphold the summary judgment, whether it may have been rendered properly or improperly. See Ellis, 68 S.W.3d at 898.

We overrule PAC's second issue.

D. Stay

In its fourth issue, PAC asserts the trial court erred in granting Atom's motion for summary judgment because the lawsuit between PAC and Atom had been stayed by the trial court. In its response to Atom's summary judgment motion at trial, PAC does not directly raise or identify evidence to counter Atom's no evidence motion for summary judgment. PAC's sole response to the motion is its assertion that the trial court should not grant the motion because the trial court stayed the case between PAC and Atom.

The record shows that there was only one order that stayed proceedings. The order granted Olstowski's motion to stay the cause of action between Olstowski and Strozier. The order states:

After considering the Defendant/Counter-plaintiff Franek Olstowski's motion to stay proceeding arbitration, the court GRANTS the motion and ORDERS this matter is stayed as to cross-defendant Strozier until the arbitration proceeding is complete. . . .

Although no written order shows a stay of the Atom proceedings, PAC claims the court verbally ordered a stay. At the hearing to which PAC cites, the court states, "This [arbitration agreement] only refers to Mr. Olstowski. Just set [the arbitration] for Mr. Olstowski. Everybody else will be stayed. I think [the arbitration proceeding] will resolve it anyway." At the same hearing, however, the court also states, "The Court grants the motion. So you go back to the subject matter of the motion, which was only as to Mr. Olstowski — I mean — Strozier."

A judgment or order that is rendered in writing and signed by the trial judge becomes the official judgment of the court. Capital Fin. Commerce AG v. Sinopec Overseas Oil Gas, Ltd., 260 S.W.3d 67, 85 (Tex. App.-Houston [1st] 2008, no pet.). Anytime there is a conflict between oral pronouncements made by a trial judge and his written judgment or order, the matters set forth in the written order control. In re JDN Real Estate-McKinney L.P., 211 S.W.3d 907, 914 (Tex. App.-Dallas 2006, pet. denied); see also Capital Fin., 260 S.W.3d at 85 ("Recitals in a judgment or signed order of the court thus control over conflicting recitals in the record.").

In this case, the trial court's written order clearly stays only those matters between Olstowski and Strozier. This order controls over conflicting oral pronouncements, if any exist. See In re JDN Real Estate-McKinney L.P., 211 S.W.3d at 914. We hold the proceedings between Atom and PAC were never stayed, and that the trial court, therefore, did not err in granting Atom's motion.

We overrule PAC's fourth issue.

Attorney's Fees

In its second issue, PAC contends the trial court erred when it granted attorney's fees to Atom in conjunction with granting Atom's summary judgment. The trial court awarded Atom $240,379.66 in attorney's fees and conditional awards in the event of a successful appeal. See Hunsucker v. Fustok, 238 S.W.3d 421, 431 (Tex. App.-Houston [1st] 2007, no pet.) ("The general rule is that a trial court's award of attorney's fees may include appellate attorney's fees.").

A. Standard of Review

Generally, we review a trial court's decision to grant or deny attorney's fees for an abuse of discretion. See Bocquet v. Herring, 972 S.W.2d 19, 21 (Tex. 1998); EMC Mortgage Corp. v. Davis, 167 S.W.3d 406, 418 (Tex. App.-Austin 2005, pet. denied). A trial court abuses its discretion if its decision is arbitrary, unreasonable, and without reference to guiding principles. Goode v. Shoukfeh, 943 S.W.2d 441, 446 (Tex. 1997). When reviewing a trial court's decision under this standard, we must view the evidence in the light most favorable to the trial court's ruling and indulge every presumption in its favor. Aquaduct, L.L.C. v. McElhenie, 116 S.W.3d 438, 444 (Tex. App.-Houston [14th] 2003, no pet.); Phillips Akers, P.C. v. Cornwell, 927 S.W.2d 276, 279 (Tex. App.-Houston [1st] 1996, no writ).

The statute authorizing attorney's fees in this case is the Declaratory Judgment Act, which states, "In any proceeding under this chapter, the court may award costs and reasonable and necessary attorneys' fees as are equitable and just." TEX. CIV. PRAC. REM. CODE ANN. § 37.009 (Vernon 2008). The grant or denial of attorney's fees in a declaratory judgment lies within the discretion of the trial court, and its judgment will not be reversed on appeal absent a clear showing that it abused its discretion. Oake v. Collin County, 692 S.W.2d 454, 455 (Tex. 1985). Any fees must be reasonable and necessary, which are questions of fact, as well as equitable and just, which are questions of law. Bocquet, 972 S.W.2d at 21. Although what constitutes reasonable attorney's fees is a question of fact, clear, direct, and uncontroverted evidence, even evidence from an interested witness, will establish that attorney's fees sought are reasonable and necessary, where the opposing party had means and opportunity to disprove the testimony but failed to do so. See Smith v. Patrick W.Y. Tam Trust, 296 S.W.3d 545, 547-48 (Tex. 2009) (citing Ragsdale v. Progressive Voters League, 801 S.W.2d 880, 882 (Tex. 1990)); Rosenblatt v. Freedom Life Ins. Co. of Am., 240 S.W.3d 315, 321 (Tex. App.-Houston [1st] 2007, no pet.).

B. Arguments Presented by PAC

PAC asserts the court erred in awarding fees because (1) Atom failed to plead for attorney's fees, (2) the action between PAC and Atom was stayed by the trial court, (3) Atom's attorney's affidavit was inadmissible, (4) there was no statutory basis for the award, (5) Atom failed to segregate between those fees generated for Olstowski and those generated for Atom, and (6) there was insufficient evidence to support the trial court's award of attorney's fees.

1. Failure to Plead for Attorney's Fees

PAC asserts the trial court erred in awarding attorney's fees to Atom because "Atom failed to plead for the recovery of attorney's fees." PAC notes that Olstowski's amended answer including Atom as a defendant was not filed until after the trial court granted Atom's motion for summary judgment.

Absent a mandatory statute, a trial court's jurisdiction to render a judgment for attorney's fees must be invoked by pleadings, and a judgment not supported by pleadings requesting an award of attorney's fees is a nullity. Alan Reuber Chevrolet, Inc. v. Grady Chevrolet, Ltd., 287 S.W.3d 877, 884 (Tex. App.-Dallas 2009, no pet.). However, the issue must not be waived or tried by consent. Id. (citing In re Pecht, 874 S.W2d 797, 803 (Tex. App.-Texarkana 1994, no writ)).

As discussed above, we hold this issue was waived when PAC failed to bring the issue before the trial court until after the summary judgment was granted. See TEX. R. APP. P. 33.1; TEX. R. CIV. P. 67, 166a(c); Roark, 813 S.W.2d at 495 (holding that because Roark failed to direct trial court's attention to absence of pleading in his written response or before court rendered judgment, complaint may not be raised on appeal).

2. Stay

PAC also asserts that the court erred in awarding attorney's fees because the action between PAC and Atom was stayed, and additionally, Atom could not have incurred attorney's fees during the time period of the arbitration proceeding because the claims between PAC and Atom were stayed from January 19, 2007 though at least the conclusion of the arbitration in November 2007. As discussed above, the claims between Atom and PAC were not stayed, and therefore the court did not err in granting summary judgment. Additionally, because the case between PAC and Atom was not stayed, Atom could have incurred fees generated during the time period of the arbitration proceeding to time the summary judgment was rendered.

3. The Affidavit

PAC next contends that Atom's attorney's affidavit regarding the amount of attorney's fees generated was inadmissible because (a) it was not sworn before a notary public and the date on the jurat of the notarization makes the affidavit inadmissible, and (b) Atom's attorney's affidavit was conclusory and the motion was based upon hearsay.

a. Defects in the Affidavit

PAC asserts the trial court erred in awarding fees because the affidavit supplying evidence of the fees was never sworn to before a notary public. As we construe PAC's argument, it next asserts that even if sworn, the affidavit was sworn to on February 9, 2008, over a month after Atom filed its summary judgment. It contends that because of the incorrect date on the jurat of the notarization, the affidavit is inadmissible.

Texas Government Code section 312.01 sets out the requirements for an affidavit: "'Affidavit' means a statement in writing of a fact or facts signed by the party making it, sworn to before an officer authorized to administer oaths, and officially certified to by the officer under his seal of office." See TEX. GOV'T CODE ANN. § 312.011(1) (Vernon 2005). Without notarization or a jurat, an unsworn statement is not an affidavit, and it is not proper summary judgment evidence. Coastal Cement Sand Inc. v. First Interstate Credit Alliance, Inc., 956 S.W.2d 562, 567 (Tex. App.-Houston [14th] 1997, writ denied). When an affidavit admitted in support of summary judgment is not properly authenticated by notarization, the party may raise this "substantive" complaint for the first time on appeal. Blanche v. First Nationwide Mortg. Corp., 74 S.W.3d 444, 451 (Tex. App.-Dallas 2002, no pet.).

In this case, Atom's attorney, Alton W. Payne, made statements in writing and signed the affidavit. The statements are sworn to because the affidavit begins, "Before me, the undersigned authority, personally appeared Alton W. Payne. . . ." See Norcross v. Conoco, Inc., 720 S.W.2d 627, 630 (Tex. App.-San Antonio 1986, no writ) (holding affidavit that expressly stated affiant was duly sworn was valid affidavit). The record shows Payne's statement is sworn to before a notary, who is an officer authorized to administer oaths. See TEX. GOV'T CODE ANN. § 602.002(4) (Vernon 2003). Finally, the statement is officially certified by the notary under her seal of office. The record shows that in its response to Atom's summary judgment, PAC's only objection regarding the issue of the affidavit's validity was that the affidavit "was never sworn to and subscribed to before a notary public." Because the record shows that the affidavit was notarized by a notary public, we hold PAC's objection at trial and assertion on appeal lack merit.

PAC next contends that the error in the date of the jurat of the notarization renders the notarization invalid. Error in the date of the notarization is a defect of form, not substance. Nortex Drug Distribs., Inc. v. Sunset Trails, Inc., No. 05-98-00676-CV, 2000 WL 1230766, at *4 (Tex. App.-Dallas Aug. 31, 2000, no pet.) (mem. op., not designated for publication). By failing to object to the trial court, PAC waived this error if any. See id. Rule 166a(f) states that reversal cannot be predicated on defects in the form of an affidavit or attachment unless the opposing party objects and the proponent of the proof has the "opportunity" to amend, but refuses. See TEX. R. CIV. P. 166a(f); Vice v. Kasprzak, No. 01-08-00168-CV, 2009 WL 3152122, at *6 (Tex. App.-Houston [1st] Oct. 1, 2009, no pet. h.) (citing Grand Prairie Indep. Sch. Dist. v. Vaughan, 792 S.W.2d 944, 945 (Tex. 1990)). The notarization on Payne's affidavit is dated February 8, 2008. PAC had until August 18, 2008, the submission date, to raise the issue regarding the date of the notarization before the trial court. Because it failed to object to the date, we hold PAC waived any error regarding the date of the notarization. Eberstein v. Hunter, 260 S.W.3d 626, 629 (Tex. App.-Dallas 2008, no pet.) (holding appellant waived right to complain about evidence on appeal due to failure to object to summary judgment evidence).

b. Objections to Payne's Affidavit

Without pointing to any specific statements within Payne's affidavit, PAC generally objected at trial on the basis that the affidavit "misstates the contents of the various attachments," "is conclusory," is "without foundation," and that the attachments are "hearsay." PAC's arguments on appeal are the same.

An objection based on a summary judgment affidavit's conclusory statements is an objection to substance, which may be raised for the first time on appeal; whereas, an objection based on lack of foundation or hearsay is an objection to form, which requires a written ruling for appellate review. See Green v. Indus. Specialty Contractors, 1 S.W.3d 126, 130 (Tex. App.-Houston [1st] 1999, no pet.).

At the outset, we note that the trial court did not rule on PAC's objections to the affidavit. As a result, PAC's objections as to the form of the affidavit are waived. See Hogan v. J. Higgins Trucking, Inc., 197 S.W.3d 879, 883 (Tex. App.-Dallas 2006, no pet.) ("[T]here must be some indication that the trial court ruled on the objections in the record or in the summary judgment itself, other than the mere granting of the summary judgment."). Moreover, PAC's general objections of "hearsay" or "without foundation," as well as objections not specifically identifying statements, would be too general to present an issue for review, even if it had been preserved for appeal through an adverse ruling. See TEX. R. APP. P. 33.1(a)(1)(a) (requiring that complaint be sufficiently specific to make trial court aware of complaint).

PAC's objection on appeal that the affidavit is conclusory is an objection to the substance of the affidavit, which may be raised for the first time on appeal. See Green, 1 S.W.3d at 130 (citing City of Wilmer v. Laidlaw Waste Sys., Inc., 890 S.W.2d 459, 467 (Tex. App.-Dallas 1994), aff'd, 904 S.W.2d 656, 660-661 (Tex. 1995). Thus, PAC did not need to obtain a ruling to raise this objection on appeal. See id. Nevertheless, PAC's argument on appeal is vague and overbroad. PAC fails to cite to the record, presents no argument to explain how the affidavit is conclusory, and cites no authority to support its allegation that the affidavit is conclusory. Accordingly, we hold this contention is waived. TEX. R. APP. P. 38.1(h) (stating that brief must contain clear and concise argument for contentions made with appropriate citations to authorities and record); Fredonia State Bank v. Gen. Am. Life Ins. Co., 881 S.W.2d 279, 284-85 (Tex. 1994) (holding appellate court has discretion to deem points of error waived due to inadequate briefing); see Kyle v. Countrywide Home Loans, Inc., 232 S.W.3d 355, 359, 361 (Tex. App.-Dallas 2007, pet. denied) (holding objection inadequate when it fails to identify specific language that is objectionable, fails to explain basis for the objection, and fails to show how alleged deficiencies defeat motion for summary judgment); Stewart v. Sanmina Tex., L.P., 156 S.W.3d 198, 207 (Tex. App.-Dallas 2005, no pet.) (objections insufficient if they do not state specific basis for objection to particular statement).

4. Statutory Basis for Award

PAC asserts the trial court's award of attorney's fees was based upon section 38.001 of the Texas Civil Practice and Remedies Code. PAC contends the trial court erred by awarding attorney's fees under section 38.001 of the Civil Practice and Remedies Code because the Code does not permit recovery of attorney's fees for defending a breach of contract claim.

A party may not recover attorney's fees unless such recovery is authorized by statute or provided for by contract between the parties. State v. Mid-South Pavers, Inc., 246 S.W.3d 711, 730 (Tex. App.-Austin 2007, pet. denied) (citing Travelers Indem. Co. of Conn. v. Mayfield, 923 S.W.2d 590, 593 (Tex. 1996)). Under section 38.001(8) of the Texas Civil Practice and Remedies Code, a party "may recover" reasonable attorney's fees if the claim is for an oral or written contract. See TEX. CIV. PRAC. REM. CODE ANN. § 38.001(8) (Vernon 2008). Chapter 38 does not provide for the recovery of attorney's fees by a defendant who only defends against a plaintiff's contract claim and presents no contract claim of its own. Energen Res. MAQ, Inc. v. Dalbosco, 23 S.W.3d 551, 558 (Tex. App.-Houston [1st] 2000, pet. denied) (citing Am. Airlines, Inc. v. Swest, Inc., 707 S.W.2d 545, 547 (Tex. 1986) (holding defendant could not recover attorney's fees under predecessor to section 38.001 when defendant presented no contract claim of its own)).

In its motion for summary judgment, Atom requested attorney's fees under both section 38.001 and under the Texas Declaratory Judgments Act (TDJA), as found in section 37.003(a) of the Civil Practices and Remedies Code. The Declaratory Judgments Act provides that in any proceeding under the Act "the court may award costs and reasonable and necessary attorney's fees as are equitable and just." TEX. CIV. PRAC. REM. CODE ANN. § 37.009.

Although Atom requested fees under section 38.001, it is clear from the summary judgment that the trial court awarded Atom fees under section 37.003. Atom sought summary judgment to dispose of "all causes of action against Atom." PAC sought declaratory relief against Atom in its original petition. In its summary judgment motion, Atom was defending against PAC's claims, and it sought fees under section 37.003 because PAC's suit "is a suit seeking declaratory relief." When the trial court granted the summary judgment, it stated in the order that "Atom is entitled to attorney's fees incurred in the defense of this suit that were reasonable and necessary, and Atom is entitled to attorney fees incurred in the defense of this suit in the amount of $240,379.66." (emphasis in original). Atom was defending against a suit for declaratory judgment, and the trial court awarded Atom attorney's fees based only upon his defense, and not upon any alternative claims of Atom against PAC. We conclude that the trial court did not grant attorney's fees under section 38.001(8). We hold the trial court properly awarded fees under section 37.009 by exercising its discretion to award fees to a party defending a claim for declaratory relief. Cf. Flagship Hotel, Ltd. v. City of Galveston, 117 S.W.3d 552, 566 (Tex. App.-Texarkana 2003, pet. denied) (holding that, where party claimed it was entitled to attorney's fees under both sections 38.001 and 37.009 of the Texas Civil Practice and Remedies Code, and order granting attorney's fees did not state basis for the award, it was not abuse of discretion to award attorney's fees under section 37.009 to party that did not prevail on contract claim if that is equitable and just under circumstances).

5. Segregation

PAC contends that Atom failed to segregate its attorney's fees between those generated for Olstowski and those generated for Atom.

a. Applicable Law

A party seeking attorney's fees has a duty to segregate nonrecoverable fees from recoverable fees, and to segregate the fees owed by different parties. French v. Moore, 169 S.W.3d 1, 17 (Tex. App.-Houston [1st] 2004, no pet.). If any attorney's fees relate solely to a claim for which such fees are unrecoverable, a claimant must segregate recoverable from unrecoverable fees. Tony Gullo Motors I., L.P. v. Chapa, 212 S.W.3d 299, 313 (Tex. 2006). It is only when legal services advance both recoverable and unrecoverable claims that the services are so intertwined that the associated fees need not be segregated. Id. at 313-14; see also A.G. Edwards Sons, Inc. v. Beyer, 235 S.W.3d 704, 710 (Tex. 2007).

To preserve a complaint for review on appeal, a party must present to the trial court a timely request, motion, or objection that states the specific grounds for the ruling requested and conforms to the requirements of the Rules of Procedure and Evidence. TEX. R. APP. P. 33.1(a)(1)(A)-(B); see Wal-Mart Stores, Inc. v. McKenzie, 997 S.W.2d 278, 280 (Tex. 1999). The complaining party must also show that the trial court ruled on the request, objection, or motion "either expressly or impliedly." TEX. R. APP. P. 33.1(a)(2)(A).

b. Analysis

In PAC's original brief on appeal, PAC makes the following argument regarding segregation,

In addition, the claims and defenses Atom asserted are different from the claims and defenses asserted by Olstowski; therefore, pursuant to the holding of Stewart Title Guaranty Company v. Aiello, the fees must be segregated. Atom failed to demonstrate, as a matter of law, that the causes of action involved in the suit are dependent upon the same set of facts or circumstances and thus are "intertwined to the point of being inseparable." Because it failed to segregate the fees or provide proper evidence, the court erred in awarding any attorney's fees.

(citations omitted) (emphasis omitted).

This argument was never made by PAC in its response to Atom's motion for summary judgment. The response states:

Additionally, there is no competent summary judgment evidence to support a claim of attorneys' fees and PAC objects to Exhibit C to Atom's Motion and its attachments. First, Exhibit C, the affidavit of Alton Payne, is not an affidavit. As can be seen, it was never sworn and subscribed to before a Notary Public. Therefore, it cannot be considered at all. Second, Mr. Payne's affidavit misstates the contents of the various attachments and is conclusory without foundation. Third, since Exhibit C is not proper summary judgment proof, the various attachments cannot be considered as they are hearsay and without foundation. Fourth, all of the attorneys' fees Atom seeks to recover are fees that were generated for Olstowski as part of the arbitration. In that proceeding, Olstowski was awarded $375[,]000 in attorneys' fees. Any additional award of attorneys' fees to Atom would amount to a double recovery. Therefore, Atom's request for attorneys' fees must be declined.

(citation omitted).

The argument on appeal is different from the argument in PAC's response to Atom's motion for summary judgment. At trial, PAC's position was that the attorney's fees to Atom would be a "double recovery" because the arbitration awarded Olstowski those same fees. On appeal, however, PAC's argument is that the fees must be segregated because the claims and defenses asserted by Atom and Olstowski are not intertwined. We hold PAC has waived any complaint regarding segregation by failing to raise this issue before the trial court. See TEX. R. APP. PROC. 33.1 (prerequisite to presenting complaint on appeal is timely complaint to the trial court); Green Int'l, Inc. v. Solis, 951 S.W.2d 384, 389 (Tex. 1997) ("[I]f no one objects to the fact that the attorney's fees are not segregated as to specific claims, then the objection is waived.") (citing Hruska v. First State Bank of Deanville, 747 S.W.2d 783, 785 (Tex. 1988)).

6. Sufficiency of the Evidence

On appeal, PAC challenges the evidence offered by Atom to support the award of attorney's fees, and contends the evidence is insufficient to support the award. It asserts that because Atom failed to provide proper evidence, the court erred in awarding any attorney's fees to Atom. For support, it maintains its argument that the action between Atom and PAC was stayed, and that any fees were, therefore, generated for Olstowski and not Atom.

The amount of an award for attorney's fees rests in the sound discretion of the trial court, and its judgment will not be reversed on appeal absent a clear showing of abuse. Owen Elec. Supply, Inc. v. Brite Day Constr., Inc., 821 S.W.2d 283, 288 (Tex. App.-Houston [1st] 1991, writ denied). When a movant includes a prayer for attorney's fees in its summary judgment motion, an attached affidavit is "expert opinion testimony" that may be considered as proof of the attorney's fees incurred. Id. To create a fact issue, the non-movant must file a counter affidavit contesting the reasonableness of the movant's attorney's fee claim. Id. (citing Tesoro Petrol. Corp. v. Coastal Ref. Mktg., Inc., 754 S.W.2d 764, 767 (Tex. App.-Houston [1st] 1988, writ denied)); see also TEX. CIV. PRAC. REM. CODE ANN. § 18.001 (Vernon 2008). Unless a controverting affidavit is filed, an affidavit as to the amount of attorney's fees is presumed reasonable. TEX. CIV. PRAC. REM. CODE ANN. § 18.001(b) (Vernon 2008); Hunsucker, 238 S.W.3d at 432. Even if the testimony comes from an interested witness, the movant establishes the amount of attorney's fees as a matter of law when the testimony is clear, direct, positive, not contradicted by any other witness or attendant circumstances, and could have been easily controverted by the non-movant. See Smith, 296 S.W.3d at 547-48 (citing Ragsdale, 801 S.W.2d at 882). The trial court abuses its discretion in denying attorney's fees when the movant files an affidavit for fees and no fact issue is created by the non-movant. See Hunsucker, 238 S.W.3d at 432 (citing Ragsdale, 801 S.W.2d at 882).

Here, Atom attached to its motion for summary judgment the affidavit of its attorney. Attached to the affidavit is a 51-page invoice of fees. In this affidavit, Atom's attorney, Payne, detailed the specific work he and his law firm performed in the defense of Atom and Olstowski, including hundreds of specific tasks, total number of hours worked, and estimates of charges for any appellate work. Payne stated that the total fees his law firm had incurred in the defense of Atom and Olstowski against PAC's claims were $689,529.66. He then noted that the arbitration award to Olstowski was $449,150 in attorney's fees, and that there was a remaining $240,379.66 balance still due from Atom. In the 51-page invoice attached to the affidavit, the total fees listed by the invoice was $690,729.60. Almost every invoice page specifies that the invoice was generated "[i]n reference to . . . Franek Olstowski and Atom Instrument Corp."

PAC fails to cite, and the record does not show, that it filed an affidavit controverting Payne's testimony. PAC, therefore, failed to raise a material fact issue as to the reasonableness of the fees set forth in the affidavit because it filed no affidavit controverting Payne's testimony, even though it could have readily done so if it believed his claimed fee was unreasonable. Such uncontroverted testimony will be taken as a matter of law, when, as here, the opposing party has means and opportunity to disprove it. Ragsdale, 801 S.W.2d at 882. The amount requested by Atom was clear, direct, and positive in this case. Although the trial court had discretion to award less than the requested amount if the amount requested was unreasonable, not credible, or questionable, the court here would abuse its discretion if it had not awarded any attorney's fees at all in the face of uncontroverted evidence of fees incurred and anticipated. See Hunsucker, 238 S.W.3d at 432; Ragsdale, 801 S.W.2d at 882.

Although Payne included an itemized invoice of the services and charges he billed to Atom and Olstowski, PAC asserts that the affidavit was still insufficient because did not identify how many hours were spent on Atom's defense specifically. However, an attorney's fee affidavit need not do this. See, e.g., Hugh Wood Ford, Inc. v. Galloway, 830 S.W.2d 296, 298 (Tex. App.-Houston [14th] 1992, writ denied) (holding that attorney's detail concerning work he had done, together with his total estimate of hours worked, was sufficient to support award of attorney's fees). Here, Atom's attorney provided an affidavit which sufficiently detailed the nature and extent of the services rendered, with Atom listed in the subject area on nearly every page of the invoice.

PAC also complains the trial court awarded Atom fees that had already been awarded to Olstowski by the arbitration panel so that it is paying twice for the same fees. In its motion, Atom requested attorney's fees for the amount of fees generated in excess of those awarded to Olstowski by the arbitration award. Double award does not occur because PAC is ordered to pay fees that are not part of the amount awarded by the arbitrators to Olstowski.

Taking into consideration (1) the evidence presented to the trial court regarding attorney's fees and (2) the fact that no controverting affidavit or other evidence was submitted regarding the reasonableness of legal fees, we hold that the court did not abuse its discretion by awarding attorney's fees to Atom in the amount of $240,379.66, and conditional attorney's fees in the event of a successful appeal.

We overrule PAC's second issue.

Conclusion

We affirm the judgment of the trial court.

Petro. An. v. Olstowski

Summary

Opinion

MEMORANDUM OPINION

Background

Motion to Compel Arbitration

A. Controlling Law

B. Standard of Review

C. Arguments Presented by PAC

1. NDNUA Contract

a. Attack on Validity of NDNUA Contract

b. Attack on Existence of NDNUA Contract

2. Scope of Arbitration Agreement

3. Evidentiary Hearing

4. Waiver

Confirmation and Vacation of Arbitration Award

A. Vacatur

B. Trial Court's Jurisdiction

C. Trial Court's Relief

Atom's Motion for Summary Judgment

A. Standard of Review

B. No Answer

C. Res Judicata

D. Stay

Attorney's Fees

A. Standard of Review

B. Arguments Presented by PAC

1. Failure to Plead for Attorney's Fees

2. Stay

3. The Affidavit

a. Defects in the Affidavit

b. Objections to Payne's Affidavit

4. Statutory Basis for Award

5. Segregation

a. Applicable Law

b. Analysis

6. Sufficiency of the Evidence

Conclusion

Petro. An. v. Olstowski

Petro. An. v. Olstowski

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