Opinion issued February 2, 2016




                                     In The

                             Court of Appeals
                                    For The

                         First District of Texas
                            ————————————
                             NO. 01-14-00919-CV
                           ———————————
                         JUAN A. RUEDA, Appellant
                                       V.
                     RANDALL W. HOLLAND, Appellee


                   On Appeal from the 11th District Court
                           Harris County, Texas
                     Trial Court Case No. 2012-41959


                         MEMORANDUM OPINION

      Appellant, Juan A. Rueda appeals the trial court’s confirmation of an

arbitration award rendered in favor of appellee, Randall W. Holland. In one issue

on appeal, Rueda argues that the trial court erred in confirming the arbitration
award because it was the second decision of the arbitrator and therefore should

have been vacated.

      We affirm.

                                   Background

      This dispute arises out of Enviro-Grow Nursery, a business in which Rueda

owned a 49% interest and Holland owned a 51% interest. After Rueda sued

Holland for minority shareholder oppression, Holland relied on the parties’ 1995

shareholder’s agreement that contained an arbitration agreement to compel

arbitration pursuant to the Commercial Arbitration Rules of the American

Arbitration Association (“AAA”). The trial court ordered the parties to arbitration,

appointed Judge Mark Davidson to arbitrate, and stayed the proceedings pending

the outcome of the arbitration.

      Judge Davidson conducted an arbitration trial on May 7 and June 5, 2014.

The arbitration concluded on June 16, and Judge Davidson said he would rule by

June 26. After discovering that the Supreme Court of Texas issued an opinion in

Ritchie v. Rupe on June 24, 2014 that eliminated the common law cause of action

for shareholder oppression,1 Holland filed an emergency memorandum with Judge




1
      See Ritchie v. Rupe, 443 S.W.3d 856 (Tex. 2014).


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Davidson informing him of the Ritchie opinion. On June 25, Judge Davidson

reopened the arbitration and asked for additional briefing in light of Ritchie.2

      On July 9, 2014, Elizabeth Kidd, the Director of ADR Services, e-mailed the

parties informing them that the Award was attached to her e-mail, and that Judge

Davidson “has also asked me to forward his original ruling which was drafted prior

to the Ri[t]chie v. Rupe decision and which was supplanted by the final award.”

Attached to her e-mail was Judge Davidson’s signed, final award in favor of

Holland, and Judge Davidson’s unsigned decision that ruled in favor of Rueda.

      On July 10, 2014, Rueda apparently filed a “Motion Asking the Arbitrator to

Disregard and Withdraw his Subsequent Ruling Because the Arbitrator Was Not

‘Empowered’ to Enter a Subsequent Ruling Pursuant to AAA Commercial Rule R-




2
      Rule 40 of the AAA allows the trial court to reopen the hearing:

             The hearing may be reopened on the arbitrator’s initiative, or
             by the direction of the arbitrator upon application of a party,
             at any time before the award is made. If reopening the
             hearing would prevent the making of the award within the
             specific time agreed to by the parties in the arbitration
             agreement, the matter may not be reopened unless the parties
             agree to an extension of time. When no specific date is fixed
             by agreement of the parties, the arbitrator shall have 30
             calendar days from the closing of the reopened hearing within
             which to make an award (14 calendar days if the case is
             governed by the Expedited Procedures).

      American Commercial Arbitration Rules R-40 (2013).


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46.”3 In an e-mail to the parties, Judge Davidson denied Rueda’s motion, stating,

“The motion to Disregard and withdraw the Arbitrator’s Award is denied. The

transmittal of a draft of a preliminary opinion that was never adopted, signed or

sent to all counsel is not a binding ruling. Claimant’s motion is without merit, and

is respectfully denied.”

      Holland then moved to confirm the arbitration award in the trial court on

October 7, 2014. On the same day, Rueda filed in the trial court a Motion to

Vacate the Second Arbitration Decision and Award and to Enter Judgment on the

First Arbitration Decision. In his motion, Rueda argued that Rule 50 of the AAA

states that the arbitrator is not empowered to re-determine the merits of any claim

already decided and that because Judge Davison had initially ruled in his favor,

Judge Davidson had no power to issue his subsequent decision.

      The trial court held a hearing on Rueda’s motion to enter the award. At the

hearing, Rueda again relied on Rule 50 of the AAA and section 171.088 of the

Texas Civil Practice and Remedies Code4 to argue that the arbitrator could only

issue one decision. The trial court, after reviewing Rule 46 of the AAA, stated that




3
      This motion is not in the appellate record.
4
      Section 171.088 of the Texas Arbitration Act provides that a court shall vacate an
      award if the arbitrators exceed their powers. See TEX. CIV. PRAC. & REM. CODE
      ANN. § 171.088(a)(3)(A) (West 2011).

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it “is pretty clear: Shall be in writing and signed by the majority of the arbitrators.”

After admitting various exhibits, the trial court stated,

             Until I sign it and it gets entered, it is not effective unless there
             is some announcement on the record or something else that
             makes it a final judgment. It is not—the rule is pretty specific,
             it has to be signed, and that was not signed. I think, therefore—
             it is unbelievably bad luck. I think—it is a technical issue. I
             think without that signature it wasn’t a final award.

      On the same day, the trial court signed an order entering judgment in

accordance with the Final Award of the Arbitrator signed by Judge Davidson on

July 9, 2014. Rueda then timely filed his notice of appeal.

                           Review of Arbitration Award

      In his sole issue on appeal, Rueda argues that the trial court should have

vacated Judge Davidson’s award because he exceeded his powers by changing his

unsigned decision in Rueda’s favor to a subsequently signed award that ruled

against Rueda.

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

Royce Homes, L.P. v. Bates, 315 S.W.3d 77, 85 (Tex. App.—Houston [1st Dist.]

2010, no pet.). However, review of an arbitration award is extraordinarily narrow.

Id. at 85–86. Arbitration is favored as a means of dispute resolution; therefore,

courts indulge every reasonable presumption to uphold an award, and none against

it. Id. at 85; Kosty v. S. Shore Harbour Cmty. Ass’n, Inc., 226 S.W.3d 459, 462

(Tex. App.—Houston [1st Dist.] 2006, pet. denied).            An arbitration award is

                                           5
presumed valid and entitled to great deference. Royce Homes, 315 S.W.3d at 85.

A reviewing court “may not substitute [its] judgment merely because [it] would

have reached a different decision.” Id. at 85; see Kosty, 226 S.W.3d at 463.

      Rueda’s argument is based on his belief that the Commercial Rules of the

AAA do not mandate that the arbitrator’s decision must be signed by the arbitrator

to be the decision of the arbitrator. We disagree. Both the Texas Arbitration Act

(“TAA”) and the Commercial Rules of the AAA explicitly require the arbitrator to

sign a final award.

      The TAA provides the signature and delivery requirement in section

171.053:

             (a)      The arbitrators’ award must be in writing and signed by
                      each arbitrator joining in the award.

             (b)      The arbitrators shall deliver a copy of the award to each
                      party personally, by registered or certified mail, or as
                      provided in the agreement.

TEX. CIV. PRAC. & REM. CODE ANN. 171.053(a)(b) (West 2011).

      Likewise, Rule 46 of the AAA, entitled “Form of Award,” states,

             (a)      Any award shall be in writing and signed by a
                      majority of the arbitrators. It shall be executed in
                      the form and manner required by law.

American Commercial Arbitration Rules R-46 (2013).

      Rule 49 of the AAA provides notice and delivery requirements:




                                            6
            Parties shall accept as notice and delivery of the award
            the placing of the award or a true copy thereof in the mail
            addressed to the parties or their representatives at their
            last known addresses, personal or electronic service of
            the award, or filing of the award in any other manner that
            is permitted by law.

American Commercial Arbitration Rules R-49 (2013).

      Despite section 171.053 and Rules 46 and 49, which require the arbitrator’s

signature and delivery of the award, Rueda relies on the last sentence of Rule 50 of

the AAA, entitled, “Modification of Award,” which provides, in relevant part,

            Within 20 calendar days after the transmittal of an award,
            any party, upon notice to the other parties, may request
            the arbitrator, through the AAA, to correct any clerical,
            typographical, or computational errors in the award. The
            arbitrator is not empowered to redetermine the merits of
            any claim already decided.

American Commercial Arbitration Rules R-50 (2013).

      Rueda argues that because the unsigned opinion of Judge Davidson was his

first decision, he could not re-determine the merits in a subsequently signed

decision. We disagree. The record reflects that after Judge Davidson was made

aware of the Ritchie decision, and before signing and delivering any award, he

opted to reopen the arbitration and requested briefing on the ramifications of the

Ritchie opinion. Neither party objected to the reopening of the arbitration.5 Under


5
      Rule 41 of the AAA provides that “Any party who proceeds with the arbitration
      after knowledge that any provision or requirement of these rules has not been
      complied with and who fails to state an objection in writing shall be deemed to

                                         7
these facts, the unsigned award is not the arbitrator’s final award. The only final

award is the arbitrator’s signed award, which was delivered to the parties, and

which the trial court subsequently confirmed. See TEX. CIV. PRAC. & REM. CODE

ANN. § 171.053.

      We overrule Rueda’s sole issue on appeal.

                                   Conclusion

      We affirm the trial court’s judgment.




                                      Sherry Radack
                                      Chief Justice


Panel consists of Chief Justice Radack and Justices Massengale and Brown.




      have waived the right to object.” American Commercial Arbitration Rules R-41
      (2013).

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