KARLSENG v. COOKE
346 S.W.3d 85 (2011)
Robert C. KARLSENG, Karlseng Law Firm, P.C., Ashley Brigham Patten, Patten & Karlseng, P.C., Jacques Yves LeBlanc, and LeBlanc, Patten and Karlseng Law Firm, P.C., Appellants,
v.
H. Jonathan COOKE, Appellee.
No. 05-09-01002-CV.
Court of Appeals of Texas, Dallas.
June 28, 2011.
Rehearing Overruled September 9, 2011.
Susan Lea Hays, Godwin Ronquillo, P.C., Blake L. Beckham, Beckham & Thomas, L.L.P., James A. McCorquodale, Kleiman Lawrence Baskind Fitzgerald, L.L.P., Dallas, for Appellants.
Before Justices FITZGERALD, LANGMIERS, and FILLMORE.
OPINIONOpinion By Justice FITZGERALD.
This is an appeal from an order confirming an arbitrator's award of approximately $22 million in favor of appellee. Appellants raise four issues on appeal. In their first issue, they contend that their rights were prejudiced by the evident partiality of the arbitrator because the arbitrator failed to disclose his close personal and professional relationship with appellee's counsel.1 We conclude the first issue is dispositive of this appeal. For the reasons discussed below we reverse the trial court's confirmation order and final judgment, vacate the arbitration award, and remand the case for further proceedings. PROCEDURAL BACKGROUNDThis is a partnership dispute.2 The parties agreed to arbitrate their dispute under the rules of JAMS, a provider of alternative dispute resolution services. They selected Robert Faulkner, a former federal magistrate judge, as their single arbitrator. Appellee was represented in the arbitration by the firm of Fish & Richardson, P.C. and, specifically, by attorneys Elizabeth Bedell and Geoffrey Harper. Faulkner made certain disclosures using the JAMS form. Faulkner disclosed that he
had, within the preceding five years, served as a neutral arbitrator in another arbitration involving appellee's lawyer Harper. Faulkner answered "No" to all other questions posed to him on the disclosure form. Attorney Brett Johnson of Fish & Richardson first appeared in the arbitration on behalf of appellee four days after Faulkner made his disclosures; he was identified as lead counsel on appellee's claim for relief. Faulkner did not supplement his initial disclosures following Johnson's appearance. Following a five-day arbitration hearing, Faulkner ruled in favor of appellee and awarded appellee approximately $22 million, including more than $6 million in attorney's fees.
Appellee moved to confirm the award. Appellants sought a continuance, arguing they had not had adequate time to develop grounds for vacating the award. Among the grounds appellants wished to investigate was evident partiality, based on Faulkner's undisclosed relationship with Johnson. After appellants offered preliminary evidence concerning their claim of evident partiality, they sought more time to develop their theory, but the trial court denied the continuance and confirmed the arbitration award. They appealed. This Court concluded appellants should have been allowed an adequate opportunity to investigate the evident-partiality issue and, thus, the trial court abused its discretion in denying the continuance. Karlseng v. Cooke, 286 S.W.3d 51, 58 (Tex.App.-Dallas 2009, no pet.). We reversed the trial court's judgment confirming the arbitration award and remanded the cause. Id.
1. Appellants also contend that the trial court erroneously limited questioning of the arbitrator concerning that relationship; the trial court erroneously denied appellants' request for a jury trial; and the award is not appropriate on substantive grounds.
2. The facts underlying the parties' substantive dispute are set forth in detail in this Court's 2009 opinion. See Karlseng v. Cooke, 286 S.W.3d 51, 52-53 (Tex.App.-Dallas 2009, no pet.). Because we do not reach the merits of the dispute, we do not repeat those facts here.
3. She appeared under subpoena.
4. Johnson testified that in February 2003 he was invited to and attended Faulkner's retirement party. The formal ceremony was held at the courthouse in Sherman; the reception followed afterward at the Stonebriar Country Club. Johnson testified that his invitation was not unique; rather, all of Judge Brown's former law clerks were invited. Faulkner testified that a multitude of family, friends, and colleagues were invited by his secretarial staff and that he did not recall Johnson's attendance.
5. The record contains no evidence concerning the nature of the "business" that spurred an average of six calls a year. Johnson did testify that once, when Faulkner had called him about another case, Faulkner asked about the status of the Karlseng matter. But that is the single reference we find concerning a specific business call.
6. According to Harper's testimony, his conversation with Garrett concerned Faulkner's ruling on a motion for death-penalty sanctions.
7. The record is not entirely clear whether this telephone conversation was with Faulkner or with someone else at JAMS.
8. Johnson and Faulkner separately attended an annual Bar conference in Galveston from October 12-13, 2006. On one of the days of the conference, Johnson and Faulkner ran into each other and spoke briefly—less than five minutes. Kimberly and Sheila, also in attendance, independently ran into each other as well. Faulkner testified that he attends the Bar conference every year, so he could not confirm that Johnson also attended the conference in 2006.
9. This question speaks to "any other" professional relationship. The question follows questions requiring the arbitrator to disclose (1) recent service as an arbitrator or mediator for the parties or attorneys, and (2) an attorney-client relationship with the parties or attorneys.
10. In his deposition, Johnson testified the dinner was in February of 2008. At trial, he testified he thought it was "more like March or April." There was no documentation from the dinner.
11. There was some discussion during Wood's testimony concerning whether ABA and AAA arbitration standards should apply in this case. The parties agreed to arbitrate under JAMS rules, so we look solely to the issues posed by the JAMS disclosure form. Of course, we look to Texas law when analyzing those disclosure issues.
12. The TUCO opinion resolved conflicts within Texas and federal courts concerning the proper standard for identifying evident partiality. See TUCO, 960 S.W.2d at 632-37. Both section 171.088 and TUCO date from 1997. Accordingly we look to Texas authority from that date forward in analyzing the issue before us.
13. Cooke asserts in his appellate brief, "Absent a recollection of these events, Judge Faulkner cannot be condemned for not having disclosed them in connection with the underlying arbitration."
14. After the hearing, Cooke submitted a proposed arbitration award. The proposed award included awards of attorneys' fees totaling over $6.5 million.
15. The Busking arbitration commenced in January 2006, was heard in April 2006, and resulted in an award in May 2006. The award was judicially confirmed in November 2006.