Opinion issued June 25, 2013.




                                    In The

                             Court of Appeals
                                   For The

                         First District of Texas
                          ————————————
                            NO. 01-11-00563-CV
                          ———————————
                 FORGED COMPONENTS, INC., Appellant
                                      V.
                        RICKY GUZMAN, Appellee



                   On Appeal from the 55th District Court
                           Harris County, Texas
                     Trial Court Cause No. 2008-46435



                                OPINION

      This is a case about competing arbitration agreements. Appellee, Ricky

Guzman, sued his employer, Forged Components, Inc. (FCI), for negligence after

he suffered an on-the-job injury. The trial court denied FCI’s motion to compel
arbitration under an arbitration provision in FCI’s Occupational Disease and Injury

Employee Welfare Benefit Plan (Plan), which Guzman signed before becoming an

FCI employee. But it later granted Guzman’s motion to compel arbitration under a

Rule 11 agreement the parties’ attorneys signed while the lawsuit was pending.

      The arbitrator issued an award in Guzman’s favor, and the trial court entered

judgment on the award and added an award of post-judgment interest. On appeal,

FCI complains that the trial court erred by (1) denying FCI’s motion to compel

arbitration under the arbitration agreement in the Plan, (2) compelling arbitration

under the Rule 11 agreement, (3) refusing to vacate the award, and (4) awarding

post-judgment interest. In his sole cross-point, Guzman asserts that the trial court

erred in failing to award pre-judgment interest.

      We modify the trial court’s judgment to exclude the award of post-judgment

interest and affirm as modified.

                                    Background

      Guzman was pinned by a forklift at work. He underwent surgery and was

hospitalized for twenty-seven days. On August 4, 2008, Guzman sued FCI, his

employer and a non-subscriber under the Texas Workers’ Compensation Statute,

for negligence.   FCI generally denied Guzman’s allegations and asserted that

Guzman’s intoxication caused the accident. See TEX. LAB. CODE § 406.033(c)(2)

(West Supp. 2012).

                                          2
      In September 2009, after the case had been removed, remanded, and

appealed to the Fifth Circuit, FCI moved to compel arbitration under the terms of

the Plan. Section 11 of the Plan states:

      AGREEMENT TO ARBITRATE: In the event there is any dispute
      arising out of any work related Accident or Occurrence, or any claim
      for or regarding benefits under this Plan . . . the Covered Employee
      and the Company agree to submit all such disputes exclusively to final
      and binding arbitration. Arbitration shall be conducted pursuant to
      these procedures and the provisions of the Federal Arbitration Act. . . .

Guzman opposed FCI’s motion, contending that his negligence claim fell outside

the scope of the Plan’s arbitration agreement. He also argued that the Plan’s

arbitration procedures were unconscionable and rendered the agreement

unenforceable.

      The trial court held a hearing on FCI’s motion and, on November 12, 2009,

entered an order denying the motion. FCI contends it did not receive notice of the

trial court’s ruling until March 2010, because the order was mailed to the wrong

address. But on November 18, 2009, six days after the trial court denied FCI’s

motion, FCI’s counsel faxed Guzman’s counsel the following proposed Rule 11

agreement:

      This will serve as the agreement between Plaintiff and Defendant
      pursuant to TRCP 11 to abate the above-referenced matter and
      submit this dispute to binding arbitration before Judge Katie Kennedy
      of Judicial Workplace Arbitrations. If this correctly sets out our
      agreement, please sign where provided below and return your
      signature to me.

                                           3
      On the same day, Guzman’s attorney signed the Rule 11 agreement and

penned the following handwritten note next to his signature:

      By agreeing to arbitrate w[ith] Judge Kennedy, Plaintiff is not
      agreeing to be bound by the terms of the [F]orged [C]omponents
      Arbitration Plan which Plaintiff has previously contested both in his
      Response to Defendant’s Motion to Compel Arbitration and Plaintiff
      Counsel’s letter dated Oct. 28, 2009.

      Guzman’s counsel returned the signed Rule 11 agreement with his

handwritten notation to FCI’s counsel, who filed the Rule 11 agreement in the trial

court on December 7, 2009. That same day, FCI’s counsel’s assistant sent a copy

of the Rule 11 agreement to Guzman’s counsel under a cover letter stating:

“Enclosed please find the Rule 11 agreement regarding arbitration that was filed

with the Court today.”

      After an unsuccessful mediation in December 2009, Guzman’s counsel

wrote FCI’s counsel on January 5, 2010: “As you are aware we agreed to arbitrate

this matter with Katie Kennedy through Judicial Workplace Arbitrations. I would

like to set up the arbitration with JWA and see if we can agree on an Arbitration

Plan. Please call me as soon as possible so we can begin working out these

details.” On January 27, 2010, Guzman’s counsel sent a letter to JWA, copying

FCI’s counsel. The letter informed JWA of the parties’ agreement to arbitrate the

matter with former district court judge Kennedy through JWA, requested that a

scheduling conference be set as soon as possible, and enclosed the parties’ live

                                         4
pleadings, the Rule 11 agreement, and documents identifying each party’s

witnesses.

      On March 10, 2010, FCI filed a “Notice of Revocation of Consent to

Proposed Rule 11 Agreement.” In it, FCI asserted that “Plaintiff’s return of the

[Rule 11] with altered terms [i.e., Guzman’s counsel’s handwritten notation] was a

mere counter-offer. Therefore, no enforceable Rule 11 agreement existed.” FCI

separately advised Guzman that FCI did not intend to arbitrate and served Guzman

with a deposition notice and written discovery.

      On March 24, 2010, Guzman moved to enforce the Rule 11 agreement, abate

the case, and compel arbitration.     In response, FCI argued that no Rule 11

agreement was formed, and that, even if one had been formed, FCI had withdrawn

its consent to arbitrate, and Guzman had waived his right to arbitrate by opposing

arbitration under the Plan. The trial court granted Guzman’s motion to compel

arbitration under the Rule 11 agreement.

      The parties arbitrated the dispute before Katie Kennedy, who awarded

Guzman damages in the amount of $1,312,518.23. Guzman moved to confirm the

award and for entry of judgment, and FCI moved to vacate the award. On June 13,

2011, the trial court entered judgment awarding Guzman $1,312,518.23 in

damages, plus post-judgment interest and taxable costs. FCI appeals.

                               Which law governs?

                                           5
       Before turning to the merits, we address the parties’ threshold choice-of-law

dispute. The parties agree that the Federal Arbitration Act (FAA) governs the

arbitration agreement in the Plan, 1 but they disagree about which law governs the

Rule 11 arbitration agreement. FCI contends that because the Rule 11 agreement

does not expressly invoke the FAA and does not involve interstate commerce, the

FAA is inapplicable, and the Texas Arbitration Act (TAA) alone governs. It

further argues that the Rule 11 agreement is unenforceable because it does not

meet the TAA’s requirement that it be signed by the parties and their counsel. See

TEX. CIV. PRAC. & REM. CODE ANN. § 171.002(a)(3), (c)(2) (West 2011). Guzman

argues that the FAA applies to the Rule 11 arbitration agreement and renders

irrelevant the TAA’s requirement that an arbitration agreement be signed by the

parties.

       The FAA applies to an arbitration agreement arising out of a contract

evidencing a transaction involving commerce. See 9 U.S.C.S § 2 (Lexis Nexis

2008).     Therefore, if the employment relationship between FCI and Guzman




1
       Courts apply the FAA when the parties’ arbitration agreement expressly invokes
       it. See, e.g., In re Kellogg Brown & Root, 80 S.W.3d 611, 617 (Tex. App.—
       Houston [1st Dist.] 2002, orig. proceeding) (upholding choice-of-law provision
       when there is express agreement to arbitrate under FAA); see also In re Pham, 314
       S.W.3d 520, 526 (Tex. App.—Houston [14th Dist.] 2010, pet. struck) (same).
       Here, the Plan states that “[a]rbitration shall be conducted pursuant to these
       procedures and the provisions of the Federal Arbitration Act . . . .”
                                           6
involves “commerce,” as defined in section 2, then the FAA governs the arbitration

agreement. See id.

      The United States Supreme Court has interpreted the term “involving

commerce” in the FAA “as the functional equivalent of the more familiar term

‘affecting commerce’—words of art that ordinarily signal the broadest permissible

exercise of Congress’ Commerce Clause power.” Citizens Bank v. Alafabco, Inc.,

539 U.S. 52, 56, 123 S. Ct. 2037, 2040 (2003) (per curiam); see also In re L & L

Kempwood Assocs., L.P., 9 S.W.3d 125, 127 (Tex. 1999) (per curiam) (the

provision of the FAA that makes enforceable a written arbitration provision in “‘a

contract evidencing a transaction involving commerce’ extends to any contract

affecting commerce, as far as the Commerce Clause of the United States

Constitution will reach”).

      In the employment context, the “relationship between an employer who is

regularly engaged in activities related to interstate commerce and its employees is

affected by interstate commerce as a matter of law and implicates commerce clause

issues.” In re Big 8 Food Stores, Ltd., 166 S.W.3d 869, 880 (Tex. App.—El Paso

2005, orig. proceeding).     Whether the FAA governs the Rule 11 arbitration

agreement thus turns on whether FCI is regularly engaged in activities related to

interstate commerce.     The record demonstrates that FCI manufactures steel,

primarily for the oil and gas industry. In general, FCI takes raw bar steel, then

                                        7
forges and machines it into finished product. FCI’s head office is in Humble,

Texas, and it has a sales office in Canada, meaning that FCI, at a minimum,

engages in trade, commerce, or communication between Texas and Canada. See

Robinson v. TCI/US West Commc’ns Inc., 117 F.3d 900, 904 (5th Cir. 1997)

(noting interstate commerce includes “trade, commerce, transportation, or

communication . . . between any foreign country and any . . . place or ship outside

thereof”). Based on these facts, and the fact that FCI does not dispute that it

regularly engaged in activities related to interstate commerce, we conclude that the

relationship between Guzman and FCI involves interstate commerce such that the

FAA applies to the arbitration provision in the Rule 11 agreement. See In re

Border Steel, Inc., 229 S.W.3d 825, 830–31 (Tex. App.—El Paso 2007, orig.

proceeding [mand. denied]) (holding that relationship between employer and

employee “unquestionably affected interstate commerce” when employer recruited

and advertised outside Texas, purchased goods and services from other states, and

served customers in various states); see also In re Big 8 Food Stores, 166 S.W.3d

at 879–80 (holding that FAA applied to arbitration agreement between employer

and employee when employer purchased goods, served customers, and advertised

outside of Texas).

      Because the FAA preempts inconsistent state law—including the TAA

provision that requires parties to sign an arbitration agreement—we hold that the

                                         8
TAA provision relied on by FCI does not bar enforcement of the arbitration

agreement in the Rule 11 agreement, as FCI contends. See Royce Homes, L.P. v.

Bates, 315 S.W.3d 77, 85 (Tex. App.—Houston [1st Dist.] 2010, no pet.) (FAA

preempts all otherwise applicable inconsistent state laws, including any

inconsistent provisions of the TAA, under the Supremacy Clause of the United

States Constitution); see also In re Nexion Health at Humble, Inc., 173 S.W.3d 67,

68 (Tex. 2005) (because provision of TAA requiring additional signature on

arbitration agreement was preempted by FAA, signature was not a prerequisite to

enforcement of arbitration agreement). Having decided that the FAA governs both

arbitration agreements, we consider the merits of FCI’s appeal.

Did the trial court commit reversible error by refusing to compel arbitration
 under the Plan and compelling arbitration under the Rule 11 agreement?

      A party seeking to compel arbitration under the FAA must establish (1) the

existence of a valid, enforceable arbitration agreement and (2) that the claims at

issue fall within that agreement’s scope. In re Kellogg Brown & Root, Inc., 166

S.W.3d 732, 737 (Tex. 2005) (orig. proceeding); In re Provine, 312 S.W.3d 824,

828 (Tex. App.—Houston [1st Dist.] 2009, orig. proceeding). Generally speaking,

we review the trial court’s denial of a motion to compel arbitration for abuse of

discretion. Okorafor v. Uncle Sam & Assocs., Inc., 295 S.W.3d 27, 38 (Tex.

App.—Houston [1st Dist.] 2009, pet. denied). However, “[w]hen an appeal from a

denial of a motion to compel arbitration turns on a legal determination . . . we
                                         9
apply a de novo standard.” Forest Oil Corp. v. McAllen, 268 S.W.3d 51, 55 n.9

(Tex. 2008). Here, FCI challenges the trial court’s rulings on both motions to

compel arbitration. We address each in turn.

A.    Order denying FCI’s motion to compel arbitration under the Plan

      In its third issue, FCI complains that the trial court erred in denying its

motion to compel arbitration under the Plan. It contends that Guzman’s claim is

within the scope of the Plan’s arbitration agreement, and that, if the trial court

found any provision of the agreement unconscionable, the express terms of the

agreement required that the unenforceable provision be severed and the remaining

provisions enforced. Guzman contends FCI waived this complaint by entering into

the Rule 11 agreement, and that any error in denying FCI’s motion to compel was

harmless because the parties ultimately arbitrated Guzman’s claim anyway.

      We agree with Guzman that, under these circumstances, the trial court’s

error in denying FCI’s motion to compel, if any, was harmless. FCI was not

deprived of its bargained-for right to have Guzman’s claim submitted to

arbitration—his claim ultimately was arbitrated. FCI argues that it should have

been afforded the right to arbitrate according to the arbitration procedures set forth

in the Plan. But it points to only one aspect in which it purportedly was harmed by

the failure of the arbitrator to adopt the Plan’s procedures.




                                          10
      FCI contends that, under the Plan’s procedures, Guzman would have been

limited to three four-hour depositions. However, as Guzman points out, the Plan

expressly permitted the arbitrator to grant the parties leave to take additional

depositions and exceed the four-hour time limit. Put differently, Guzman could

have exceeded the limits on depositions even if the Plan’s arbitration provision had

been enforced. And FCI does not contend that the fact that Guzman was not

limited to three four-hour depositions caused the rendition of an improper

judgment. See Texas La Fiesta Auto Sales, LLC v. Belk, 349 S.W.3d 872, 884–85

(Tex. App.—Houston [14th Dist.] 2011, no pet.) (affirming order compelling

arbitration when appellants could not show that compelling arbitration under one

of two agreements prejudiced them or caused the rendition of an improper

judgment). Accordingly, we hold that, under these circumstances, FCI failed to

demonstrate that the trial court’s error in denying its motion to compel, if any,

probably caused the rendition of an improper judgment. See TEX. R. APP. P.

44.1(a); Texas La Fiesta Auto Sales, 349 S.W.3d at 884–85.

      We overrule FCI’s third issue.

B.    Order granting Guzman’s motion to compel arbitration under the Rule
      11 agreement

      In its fourth issue, FCI contends that the trial court erred in enforcing the

Rule 11 agreement to arbitrate Guzman’s claims because (1) there was no valid

offer and acceptance or meeting of the minds, (2) even if there was, FCI revoked
                                        11
its consent, and (3) Guzman waived his right to arbitrate.        We address each

contention in turn.

      1.     Was there an enforceable Rule 11 agreement to arbitrate Guzman’s
             claims?

      A party seeking to compel arbitration under the FAA must establish (1) the

existence of a valid, enforceable arbitration agreement and (2) that the claims at

issue fall within that agreement’s scope. In re Kellogg Brown & Root, Inc., 166

S.W.3d at 737; In re Provine, 312 S.W.3d at 828. There is a strong presumption

favoring arbitration but this presumption only arises after the party seeking to

compel arbitration proves that a valid arbitration agreement exists. In re Kellogg

Brown & Root, Inc., 166 S.W.3d at 737. “[A]n arbitration agreement does not

have to assume any particular form, but the language of the agreement must clearly

indicate the intent to arbitrate.” Wachovia Secs., LLC v. Emery, 186 S.W.3d 107,

113 (Tex. App.—Houston [1st Dist.] 2005, no pet.).

      In determining the validity of arbitration agreements under the FAA, we

generally apply state-law principles governing the formation of contracts. See In

re Palm Harbor Homes, Inc., 195 S.W.3d 672, 676 (Tex. 2006) (citing First

Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944, 115 S. Ct. 1920, 1924

(1995)). Under Texas contract law, a legally enforceable contract consists of

“(1) an offer, (2) an acceptance, (3) a meeting of minds, (4) each party’s consent to

the terms, and (5) execution and delivery of the contract with the intent that it be
                                         12
mutual and binding.” Prime Prods., Inc. v. S.S.I. Plastics, Inc., 97 S.W.3d 631,

636 (Tex. App.—Houston [1st Dist.] 2002, pet. denied); Parker Drilling Co. v.

Romfor Supply Co., 316 S.W.3d 68, 72 (Tex. App.—Houston [14th Dist.] 2010,

pet. denied) (same, but describing second element as “acceptance in strict

compliance with the terms of the offer” (emphasis added)); see also TEX. R. CIV. P.

11 (to be enforceable, agreements between attorneys touching any suit pending

must be in writing, signed, and filed with the papers as part of the record, unless it

is made in open court and entered of record). “Whether the parties reached an

agreement is a question of fact.” Parker Drilling Co., 316 S.W.3d at 72.

      Here, the parties dispute whether Guzman’s counsel’s return of the signed

Rule 11 agreement with his handwritten note constituted an acceptance of FCI’s

offer or, as FCI contends, a rejection and counteroffer. “A purported acceptance

that changes or qualifies an offer’s material terms constitutes a rejection and

counter offer rather than an acceptance.” Id. at 74. Contracts must be examined

on a case-by-case basis to determine which terms are material or essential. Id.

(citing T.O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 221 (Tex.

1992)). Our determination of whether there was a valid offer and acceptance is

based on the objective standard of what the parties said and did and not on their

subjective state of mind. Baroid Equip., Inc. v. Odeco Drilling, Inc., 184 S.W.3d

1, 17 (Tex. App.—Houston [1st Dist.] 2005, pet. denied).

                                         13
      “Unless otherwise indicated, an offer may be accepted in any manner

reasonable under the circumstances.” Horton v. DaimlerChrysler Fin. Servs. Ams.,

L.L.C., 262 S.W.3d 1, 6 (Tex. App.—Texarkana 2008, no pet.) (citing

RESTATEMENT (SECOND)      OF   CONTRACTS § 30 (1981)). The mode of expressing

assent is inconsequential as long as it effectively makes known to the offeror that

his offer has been accepted. Id. (citing Fujimoto v. Rio Grande Pickle Co., 414

F.2d 648, 652 (5th Cir. 1969). A party may show acceptance through conduct. Id.

      In response to FCI’s contention that Guzman’s counsel’s addition of the

handwritten note qualified a material term of FCI’s offer and, thus, constituted a

rejection and counteroffer, Guzman argues that the handwritten note merely

clarified, but did not materially alter, the terms of FCI’s offer. Therefore, Guzman

claims, his counsel’s return of the signed Rule 11 offer constituted a valid

acceptance. Alternatively, Guzman argues that, if his counsel’s inclusion of the

handwritten note constituted a counteroffer and not an acceptance, FCI’s

subsequent conduct demonstrates that it accepted the counteroffer.

      We agree with Guzman. The two material terms of FCI’s offer were: (1)

abatement of the lawsuit, and (2) submission of the dispute to binding arbitration

with Katie Kennedy. 2 The agreement FCI proposed did not state whether FCI



2
      The agreement proposed by FCI stated:

                                        14
intended for the Plan’s procedures to apply in the proposed arbitration. Guzman’s

counsel, perhaps appreciating this ambiguity, clarified with his handwritten note

that it was his intent that the Plan’s procedures would not apply. We conclude that

even if his clarification constituted a rejection and counteroffer—a question we do

not decide—FCI’s subsequent, objective acts manifested FCI’s intent to accept and

be bound by Guzman’s terms.           FCI’s counsel received the signed Rule 11

agreement with the handwritten clarification, filed it with the trial court, and then

confirmed the filing in a letter to Guzman’s counsel that same day, enclosing a file-

stamped copy of the agreement. FCI later filed a notice purporting to “revok[e]”

its consent to the Rule 11 agreement, further underscoring that it agreed to its terms

at an earlier point in time. Based on FCI’s objective acts, we conclude the record

supports the trial court’s implied finding that the parties formed an enforceable


             This will serve as the agreement between Plaintiff and Defendant
             pursuant to TRCP 11 to abate the above-referenced matter and
             submit this dispute to binding arbitration before Judge Katie
             Kennedy of Judicial Workplace Arbitrations. If this correctly sets
             out our agreement, please sign where provided below and return
             your signature to me.

      Guzman’s attorney signed in the space provided and handwrote the following
      note next to his signature:

             by agreeing to arbitrate w [sic] Judge Kennedy, Plaintiff is not
             agreeing to be bound by the terms of the [F]orged [C]omponents
             Arbitration Plan which Plaintiff has previously contested both in his
             Response to Defendant’s Motion to Compel Arbitration and Plaintiff
             Counsel’s letter dated Oct. 28, 2009.

                                          15
Rule 11 agreement to arbitrate Guzman’s claim. See Baroid Equip., Inc., 184

S.W.3d at 17 (whether there was a valid offer and acceptance is based on the

objective standard of what the parties said and did and not on their subjective state

of mind).

      2.     Did FCI revoke its consent to arbitrate under the Rule 11
             agreement?

      FCI next argues that the trial court erred in enforcing the Rule 11 agreement

because FCI revoked its consent. The Texas Supreme Court repeatedly has held

that an agreed judgment rendered after one of the parties revokes his consent is

void. See S & A Rest. Corp. v. Leal, 892 S.W.2d 855 (Tex. 1995) (per curiam);

Quintero v. Jim Walter Reed Homes, Inc., 654 S.W.2d 442 (Tex. 1983). But it also

made clear in Padilla that this does not preclude enforcement of Rule 11 settlement

agreements. Padilla v. LaFrance, 907 S.W.2d 454, 461 (Tex. 1995). And this

Court has held that the rule applies only to agreed judgments, not to agreements to

arbitrate. See In re Mabray, 355 S.W.3d 16, 32 (Tex. App.—Houston [1st Dist.]

2010, orig. proceeding [mand. denied]) (holding trial court did not abuse its

discretion in denying motion to revoke consent to arbitration agreement).

      In Mabray, a divorcing husband and wife agreed to submit their divorce

dispute to binding arbitration if the case had not been settled by negotiation before

a certain date. 355 S.W.3d at 20. The wife later sought to revoke her consent to

the arbitration agreement. Id. at 21. This court affirmed the trial court’s denial of
                                         16
the wife’s motion to revoke consent. Id. at 32. We explained: “The arbitration

process, more than likely, will lead to a judgment that at least one of the parties

does not agree to, just as the judgment following a trial would. This does not mean

that a party can revoke her ‘consent’ to it.” Id. Following Mabray, we conclude

that the trial court did not err in rejecting FCI’s assertion that the Rule 11

agreement was unenforceable because FCI had revoked its consent.

      3.     Did Guzman waive his right to arbitrate?

      FCI argues that, even if the Rule 11 agreement was enforceable at one time,

Guzman waived his right to arbitrate by invoking the litigation process to FCI’s

detriment and by taking inconsistent positions on arbitration, i.e., opposing

arbitration under the Plan and then requesting arbitration under the Rule 11

agreement.

      The Texas Supreme Court has articulated the test for determining whether a

party has waived his right to arbitration: the question 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 623, 625 (Tex. 2008) (quoting Perry

Homes v. Cull, 258 S.W.3d 580, 597 (Tex. 2008)). Waiver may be express or

implied. See EZ Pawn Corp. v. Mancias, 934 S.W.2d 87, 89 (Tex. 1996) (per

                                        17
curiam). But there is a strong presumption against finding that a party has waived

its right to arbitration. In re D. Wilson Constr. Co., 196 S.W.3d 774, 783 (Tex.

2006). The burden to prove waiver is thus a heavy one. See id. Any doubts

regarding waiver are resolved in favor of arbitration. In re Bruce Terminix Co.,

988 S.W.2d 702, 705 (Tex. 1998) (per curiam).

      The Texas Supreme Court found waiver of the right to arbitrate in Perry

Homes. Perry Homes, 258 S.W.3d at 584. In that case, the plaintiffs initially

“vigorously opposed” the defendants’ motion for arbitration but then, after

fourteen months of litigation, when discovery was nearly complete and the case

was set for trial, they moved to compel arbitration under the same agreement they

had previously resisted. Id. at 585. The trial court granted the motion four days

before the trial date. Id. The Texas Supreme Court found waiver, set aside the

arbitration award, and remanded the case for trial. Id. at 601.

      Here, FCI argues that Guzman waived the right to arbitrate by opposing

arbitration under the Plan and availing himself of the litigation process for nineteen

months before moving to compel arbitration under the Rule 11 agreement.

Guzman certainly opposed arbitration under the Plan, but, unlike the plaintiff in

Perry Homes, he never reversed course and sought to enforce the very arbitration

agreement he previously opposed.




                                         18
      Indeed, here, the agreement to arbitrate that Guzman sought to enforce only

came into existence on November 18, 2009, some fifteen months after Guzman

filed suit. Guzman could not have waived the right to arbitrate under the Rule 11

agreement before it came into existence. See Jernigan v. Langley, 111 S.W.3d

153, 156 (Tex. 2003) (per curiam) (“Waiver is defined as ‘an intentional

relinquishment of a known right . . . .’”) (emphasis added); Furmanite Worldwide,

Inc. v. Nextcorp, Ltd., 339 S.W.3d 326, 334 (Tex. App.—Dallas 2011, no pet.)

(noting elements of waiver are: “(1) an existing right, benefit, or advantage;

(2) knowledge, actual or constructive, of its existence; and (3) an actual intent to

relinquish the right (which can be inferred from conduct)”) (emphasis added).

      Guzman’s conduct after the Rule 11 agreement came into existence does not

demonstrate waiver. Guzman moved to compel arbitration under the Rule 11

agreement four months after it was signed. 3 Additionally, the record does not

reflect that Guzman substantially invoked the litigation process during that time.

Rather, the parties mediated in December 2009, and Guzman’s counsel began the

process of initiating the arbitration (by informing JWA of the dispute) in January

2010. Guzman’s counsel requested the depositions of several FCI witnesses in

early 2010, but this was not necessarily inconsistent with arbitration and, in any


3
      We observe that a far longer delay was occasioned by FCI’s removal and appeal
      from the remand order, which ultimately was dismissed in June 2009 for FCI’s
      failure to file an appellate brief.
                                        19
event, this conduct is insufficient to establish waiver. Cf. Perry Homes, 258

S.W.3d at 601. We conclude that Guzman did not substantially invoke the judicial

process to FCI’s detriment before seeking to enforce the Rule 11 arbitration

agreement, and, accordingly, we hold Guzman did not waive his right to arbitrate

under that agreement.

       Having concluded that the trial court did not err in enforcing the parties’

Rule 11 agreement to arbitrate Guzman’s claims, we overrule FCI’s fourth issue.

            Did the trial court err in denying FCI’s motion to vacate?

       We review de novo a trial court’s confirmation of an arbitration award,

recognizing that the statutory grounds for vacatur under the FAA are limited. See

Hall St. Assocs., L.L.C. v. Mattel, Inc., 552 U.S. 576, 584, 128 S. Ct. 1396, 1403

(2008); Statewide Remodeling, Inc. v. Williams, 244 S.W.3d 564, 567–68 (Tex.

App.—Dallas 2008, no pet.). “All reasonable presumptions are indulged to uphold

the arbitrator’s decision, and none are indulged against it.” Royce Homes, L.P. v.

Bates, 315 S.W.3d 77, 85 (Tex. App.—Houston [1st Dist.] 2010, no pet.) (citing

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.

Royce Homes, 315 S.W.3d at 85. Because judicial review of an arbitration award

adds expense and delay that diminishes the benefits of arbitration as an efficient,

                                        20
economical system for resolving disputes, our review of the arbitration award is

extraordinarily narrow.    Id. at 85–86 (citing Myer v. Americo Life, Inc., 232

S.W.3d 401, 407–08 (Tex. App.—Dallas 2007, no pet.)). We may not vacate an

award even if it is based upon a mistake in law or fact. Id. at 86. Rather, under the

FAA, an arbitration award may be vacated only if: (1) the award was procured by

corruption, fraud, or undue means; (2) there was evident partiality or corruption in

the arbitrators; (3) 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 (4) the arbitrators exceeded their powers, or so

imperfectly executed them that a mutual, final, and definite award upon the subject

matter submitted was not made. 9 U.S.C.S § 10(a). The Supreme Court has held

that these statutory grounds are the exclusive grounds for vacating an arbitration

award. Hall St. Assocs., 552 U.S. at 584, 128 S. Ct. at 1403.

      In its first issue, FCI argues that the trial court erred in entering judgment on

the arbitration award. It contends its motion to vacate should have been granted

because (1) the arbitrator exceeded her powers by conducting the arbitration using

procedures other than those set forth in the Plan and (2) the award is tainted by the

arbitrator’s refusal to hear and consider material evidence.       We address each

complaint in turn.




                                         21
A.    Did the arbitrator exceed her powers by using procedures other than
      those set forth in the Plan?

      An arbitrator’s authority to decide a dispute is derived from the arbitration

agreement. Kosty v. S. Shore Harbour Cmty. Ass’n, Inc., 226 S.W.3d 459, 465

(Tex. App.—Houston [1st Dist.] 2006, pet. denied). The scope of an arbitrator’s

authority depends on the arbitration agreement. J.J. Gregory Gourmet Servs., Inc.

v. Antone’s Imp. Co., 927 S.W.2d 31, 35 (Tex. App.—Houston [1st Dist.] 1995, no

pet.) (citing Gulf Oil Corp. v. Guidry, 327 S.W.2d 406, 408 (1959)); see also

Apache Bohai Corp. LDC v. Texaco China BV, 480 F.3d 397, 401 (5th Cir. 2007);

Brook v. Peak Int’l, 294 F.3d 668, 672 (5th Cir. 2002).

      Arbitrators exceed their powers when they decide matters not properly

before them. Ancor Holdings, LLC v. Peterson, Goldman & Villani, Inc., 294

S.W.3d 818, 829 (Tex. App.—Dallas 2009, no pet.). But “[i]t is only when the

arbitrator departs from the agreement, and, in effect, dispenses his own idea of

justice that the award may be unenforceable.” Centex/Vestal v. Friendship W.

Baptist Church, 314 S.W.3d 677, 684 (Tex. App.—Dallas 2010, pet. denied)

(citing Major League Baseball Players Ass’n v. Garvey, 532 U.S. 504, 509, 121 S.

Ct. 1724, 1728 (2001)). “To determine whether an arbitrator exceeded his powers,

we must examine the language in the arbitration agreement.” Allstyle Coil Co.,

L.P. v. Carreon, 295 S.W.3d 42, 44 (Tex. App.—Houston [1st Dist.] 2009, no pet.)

(quoting Glover v. IBP, Inc., 334 F.3d 471, 474 (5th Cir. 2003)); see Rapid
                                        22
Settlements, Ltd. v. Green, 294 S.W.3d 701, 707 (Tex. App.—Houston [1st Dist.]

2009, no pet.) (arbitrator exceeded his powers in issuing award against party not

subject to arbitration).

      The Rule 11 agreement provided that the parties would submit their dispute

to binding arbitration before Katie Kennedy.      With respect to procedures to be

used in the arbitration, however, it said only that the parties did not agree to use

those set forth in the Plan. FCI does not contend that that the arbitrator exceeded

her authority by departing from the terms of the Rule 11 agreement and dispensing

her own idea of justice, nor does it contend that the arbitrator adjudicated a claim

outside the scope of the agreement or purported to bind a party not subject to

arbitration. See Centex/Vestal, 314 S.W.3d at 684 (award may be unenforceable if

arbitrator departs from agreement); Rapid Settlements, 294 S.W.3d at 707

(arbitrator exceeded his powers in issuing award against party not subject to

arbitration). Instead, FCI merely repackaged its complaint about the trial court’s

ruling compelling arbitration under the Rule 11 agreement, as opposed to the Plan,

as an “arbitrator exceeded her powers” argument. We conclude that FCI failed to

demonstrate that the arbitrator exceeded her authority by failing to apply the Plan’s

procedures. See John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543, 557, 84 S.

Ct. 909, 918 (1964) (“Once it is determined . . . that the parties are obligated to

submit the subject matter of a dispute to arbitration, ‘procedural’ questions which

                                         23
grow out of the dispute and bear on its final disposition should be left to the

arbitrator.”); PaineWebber Inc. v. Elahi, 87 F.3d 589, 599 (1st Cir. 1996) (“Thus, if

the parties have (1) entered into a valid arbitration agreement . . . , and (2) the

arbitration agreement covers the subject matter of the underlying dispute between

them . . . , then we will presume that the parties have made a commitment to have

an arbitrator decide all the remaining issues necessary to reach a decision on the

merits of the dispute. Put differently, the signing of a valid arbitration agreement

to arbitrate the merits of a subject matter in dispute presumptively pushes the

parties across the ‘arbitrability’ threshold; we will then presume that other issues

relating to the substance of the dispute or the procedures of arbitration are for the

arbitrator.”).

B.     Did the arbitrator commit a gross mistake?

       FCI next argues that the award should be vacated because the arbitrator

committed a gross mistake insofar as she ignored material evidence of Guzman’s

intoxication at the time of the accident. Specifically, FCI contends that, because

Guzman testified positive for controlled substances after his injury, there is a

rebuttable presumption under the Texas Labor Code that Guzman was intoxicated

and did not have the normal use of mental or physical faculties at the time of his

injury.   See TEX. LAB. CODE. ANN. § 401.013 (West 2006) (“On the voluntary

introduction into the body of [a controlled substance], based on a blood test or urinalysis,


                                            24
it is a rebuttable presumption that a person is intoxicated and does not have the normal

use of mental or physical faculties.”). According to FCI, the arbitrator improperly

ignored the urinalysis results and excused Guzman from having to adduce evidence

to rebut this presumption.

      There is no suggestion in the record that the arbitrator refused to hear any

evidence or otherwise engaged in misconduct warranting vacatur under 9 U.S.C.S

§ 10(a)(3). Indeed, as Guzman argues, the record demonstrates that the arbitrator

heard both parties’ evidence on the intoxication issue, including Guzman’s expert’s

testimony that the urinalysis results demonstrated that Guzman was not intoxicated

at the time, and made the factual determination that Guzman rebutted the

presumption that he was intoxicated. Indeed, the arbitrator’s award expressly

states she concluded that Guzman’s evidence rebutted the presumption. See Tex.

Mut. Ins. Co. v. Havard, No. 01-07-00268-CV, 2008 WL 598347, at *4 (Tex.

App.—Houston [1st Dist.] Mar. 6, 2008, no pet.) (mem. op.) (finding that truck

driver rebutted presumption of intoxication created by positive urine test, in part,

by presenting expert testimony that test did not prove driver was suffering from

effects of cocaine at time of accident). FCI’s complaint, at bottom, is that this

issue, on which there was conflicting evidence, was resolved adversely to him.




                                          25
But the claim that the arbitrator “ignore[d] . . . the rebuttable presumption of

intoxication” finds no support in the record. 4

      We conclude that the trial court did not err in refusing to vacate the

arbitration award, and we overrule FCI’s first issue.

            Is Guzman entitled to pre- and post-judgment interest?

      In its second issue, FCI argues the trial court erred in awarding post-

judgment interest when the arbitrator made no such award. In his sole issue in his

cross-appeal, Guzman contends the trial court erred in also failing to award pre-

judgment interest. We agree with FCI that Guzman is not entitled to either.

      A trial court has limited powers to modify an arbitrator’s award. See 9

U.S.C. § 11. This Court has held that neither the FAA nor the Texas Finance Code

authorizes an award of pre- or post-judgment interest whern the arbitrator made no

such award. See Fogal v. Stature Const., Inc., 294 S.W.3d 708, 722 (Tex. App.—

Houston [1st Dist.] 2009, pet. denied) (prevailing party in arbitration is not entitled


4
      Moreover, vacatur would be inappropriate even if the arbitrator erroneously
      applied the law, as FCI contends. See Hall St. Assocs., L.L.C., 552 U.S. at 585,
      128 S. Ct. at 1404 (rejecting notion that arbitrator’s “manifest disregard of the
      law” expanded the grounds for vacatur beyond those enumerated in FAA); see
      also Allstyle Coil Co., 295 S.W.3d at 44. Because statutory grounds are the
      exclusive means for vacatur under the FAA, FCI’s argument that the arbitrator
      misapplied the presumption set forth in the Texas Labor Code, even if true, would
      not warrant vacatur. See Royce Homes, 315 S.W.3d at 90 (manifest disregard for
      the law is not a basis for vacatur of arbitration award); Allstyle Coil Co., 295
      S.W.3d at 44 (“manifest disregard of the law as an independent, non-statutory
      ground for setting aside an award must be abandoned and rejected”).

                                          26
to pre- or post-judgment interest under FAA or pre-judgment interest under Texas

Finance Code; trial court did not err by failing to modify arbitrator’s award to add

pre-judgment interest); Thomas Petroleum, Inc. v. Morris, 355 S.W.3d 94, 98–99

(Tex. App.—Houston [1st Dist.] 2011, pet. denied) (trial court lacked authority to

modify award by adding pre- or post-judgment interest).

       Guzman acknowledges these authorities but urges us to reconsider them.

We decline to do so, and we conclude that the trial court lacked authority to award

post-judgment interest and correctly declined to award pre-judgment interest. See

Fogal, 294 S.W.3d at 722; Thomas Petroleum, Inc., 355 S.W.3d at 98–99.

Accordingly, we sustain FCI’s second issue, overrule Guzman’s sole cross-issue,

and modify the trial court’s judgment to exclude the award of post-judgment

interest.

                                   Conclusion

       We modify the trial court’s judgment to exclude the award of post-judgment

interest and affirm as modified.



                                             Rebeca Huddle
                                             Justice

Panel consists of Justices Jennings, Massengale, and Huddle.




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