Podcast Episode 2—Confirming my arbitration award in Texas. What do I need to know?
Podcast Episode Timestamps
00:00 — Topic introduction
00:34 — The fact pattern
00:47 — Applicable law (CPRC ch. 171)
00:55 — How this should work in Texas, Generally
01:15 — Digging Deeper into the Statute
02:30 — Recovery of Attorney’s Fees?
02:48 — Vacating, Modifying, or Correcting an Arbitration Award
04:14 — Where to File the Application to Confirm the Arbitration Award
05:08 — Two Things Every Applicant will Wish was Included in the Agreement to Arbitrate
05:46 — Some Takeaways from this Episode
06:25 — Digression about Debtor-Friendly Nature of Texas and Post-Judgment Collections
07:46 — Digression into TUFTA (Texas Uniform Fraudulent Transfer Act)
08:21 — How Arbitration Confirmation Proceedings can Go Sideways (and why a good attorney’s fees provision in the arbitration agreement can be so important)
09:13 — Hopefully, the Debtor will become Interested in Paying (but if not, post-judgment discovery will allow you to investigate deeply)
09:57 — Conclusion
10:02 — Outro (and disclaimer)
The Situation
You provided goods or services pursuant to a contract that included an arbitration provision. Your customer failed to pay so you pursued the arbitration and obtained an arbitration award. Congratulations! Unfortunately, the debtor has refused or failed to pay the award.
So, What Should You Do Next?
Because the debtor is a business or individual located in Texas, the next step is to prepare and file an application to confirm the arbitration award in court—with the end-goal of getting a Texas judgment against the debtor. Then, collection of the debt can be pursued via post-judgment procedures.
Governing Law
The Federal Arbitration Act and chapter 171 of the Texas Civil Practice and Remedies Code provide concurrent jurisdiction to state and federal courts for confirmation of the arbitration award. This blog post and podcast focusses on specific relevant provisions of the CPRC.
Confirmation is not discretionary and it is not a chance for the debtor to “take a second bite at the apple.” 171.087 mandates that the court “shall confirm the award” unless very specific grounds are proven to vacate, modify, or correct the award under .088 or .091.
Generally, the narrow grounds to vacate, modify, or correct the award must be pursued quickly—i.e., EITHER within 90 days after learning of the corruption, fraud, or other undue means of obtaining the award; OR within 90 days of delivery of a copy of the award for the defenses of (a) the rights of a party were prejudiced by evident arbitrator partiality, arbitrator corruption, or arbitrator misconduct; (b) the arbitrators exceeded their powers, refused to properly postpone a hearing, refused to hear material evidence, or conducted the hearing contrary to the rules in a manner that substantially prejudiced the rights of a party; or (c ) there was not an agreement to arbitrate.
Where to File the Application to Confirm the Arbitration Award
The rule (CPRC 171.096) instructs to file the application in the county where the debtor resides or has a place of business (or, if there is no such place, then in any county); where the agreement specifies, if any county in the state is specified; or where the arbitration was held, if it occurred in Texas. But if the applicant happens to file in the wrong county, the opponent only has 20 days from service of process to object to the location.
Disclaimer: This audio and blog post are for informational purposes only and should not be misinterpreted as legal or other professional advice. If you have a legal question, you should consult with an attorney in your jurisdiction. Thank you for listening to the Keith Law, PLLC podcast.
(Photo by RODNAE Productions from Pexels)
Once you get an award, how long can you wait before filing to confirm the award? Is there a time limit?
Thank you for your interesting question. According to the Civil Practice and Remedies Code, the timing related to the applicant is addressed in the following section:
Sec. 171.083. TIME FOR FILING. An applicant for a court order under this chapter may file the application:
(1) before arbitration proceedings begin in support of those proceedings;
(2) during the period the arbitration is pending before the arbitrators; or
(3) subject to this chapter, at or after the conclusion of the arbitration.
Added by Acts 1997, 75th Leg., ch. 165, Sec. 5.01, eff. Sept. 1, 1997.
I don’t find anything here that would put a time limit on when to file the application to confirm the award. But, I could definitely be overlooking something because I haven’t been hired by a client to dig deeply into this issue.
Statute of Limitations.
My best guess would be the 4-year statute of limitations that applies to actions arising from contract, certain debt claims, and claims in which no other statute of limitation is expressly applicable.
Tex. Civ. Prac. and Rem. Code 16.051.
Note: This limitation does not apply to lawsuits seeking to recover land.
Check out my blog post and podcast episode going over, in general, statute of limitations: https://www.keith.law/business-disputes/explaining-statutes-of-limitation/
I might also think about the possibility of dealing with an affirmative defense of laches. Laches is briefly addressed in the above-linked blog post and podcast episode, and more thoroughly explored in the trademark infringement context in the following blog post and podcast episode:
https://www.keith.law/trademark/explaining-laches-an-equitable-defense-to-trademark-infringement/
Please let me know if any of this is helpful.
Best regards,
Jason
Hi Keith,
I stumbled across your page as well as your podcast and have a question about losing an arbitration. What can a defendant(home owner) do in a situation where, the claimant( contractor) covered up defective construction work and lied to the arbitrator throughout the arbitration. Photos and details provided by the home owner show the contractor is lying but for some odd reason the arbitrator fully sided with the contractor. Arbitrator gave no explanation on why they sided with the contractor and only mentioned the award being in full favor of the contractor. Now the home owner is left with a damaged second floor patio that has to be replaced still and also has to pay the contractor. We were surprised by the arbitrators decision since we even had a licensed inspector who confirmed during the arbitration that the work done by the contractor was very bad. Is there nothing the home owner can do even though the contractor lied to the arbitrator? The home owners lawyer said it would be difficult to request a correction/modification and that the home owner also can’t ask the arbitrator to clarify. Is this correct?
Thank you for your comment! First, please confirm that you’ve done two things: (a) listen to the full podcast episode, and (b) review the linked statute. Then, if you still have a question, please click the link on my home page that says “schedule a call” so that I can ask questions to more fully understand your situation.
Thank you sir. This is exactly what I needed. We live in TX. But my issue is the other direction. We contracted with a Landscaper, part of the contract (under written by a certain popular company that has “Lists” of Contractors) was that we would use Arbitration and that I can collect Attorney fees. I’m willing to this myself but TX doesn’t make it easy as most states have a particular form for Petitioning for Confirmation. I cannot find out any information yours’s is the first link I found offering some free guidance. This guy coasted right through Arbitration. Arbitrator said she had never seen a better prepared case and more blatant abuse of poor quality and breach. He thumbed his nose up at State Law and challenged us to try and collect. He said he’s been doing this for 30 years and knows that in TX you can’t garnish anything. Where can I find the forms? Which court do I go to, County or State?
Thank you for your comment! In Texas, “garnishment” to satisfy a judgment means different things in different contexts. Bank accounts can be garnished to satisfy judgments, but wages cannot be garnished except in very specific circumstances.
I recommend checking out my podcast and blog post at the following link to learn a little more about post-judgment collections in Texas (in addition to the post judgment collection information discussed in the arbitration award confirmation podcast episode which covers quite a bit too): https://www.keith.law/business-disputes/texas-justice-courts-do-it-yourself/
Regarding confirming an arbitration award, I’m sure you’ve already reviewed the statutes cited in this arbitration confirmation blog post. Whether justice courts have jurisdiction to confirm an arbitration award is an interesting question that I haven’t researched.
A quick Google search turned up this 2021 JP Court training material that suggests that JP Courts can confirm arbitration awards (I would suspect within the $20,000 jurisdictional limits of such courts): https://www.co.midland.tx.us/DocumentCenter/View/115/Civil-Case-Handbook-PDF
The question of proper jurisdiction is one thing, proper venue is another. These and many other questions are why attorneys undergo years of formal schooling and law practice to help you navigate the civil justice system. Although justice courts (a/k/a JP Courts a/k/a small claims courts) are designed to be more user-friendly by non-lawyers than state county courts, state district courts, and federal district courts, there are times that having an attorney on your side can be useful in JP courts too.
Sir,
Not sure what happened to my previous comment. I have won Arbitration, but I cannot find which court to file and what that document looks like. I”ve called my JP, District and county clerk. No on has heard of the TAA nor what an Application to Confirm the Arbitration Award even is
Thank you for your comment! Because Keith Law’s website gets a ton of spam (not you!), all comments must be approved before they appear on the site. I do my best to respond to all non-spam comments, such as yours. But, sometimes it takes me a while to get to them.
Thanks Jason that training document I think put my JP on the right path. I’m hoping it doesn’t come to me hiring representation because it doesn’t look like I can collect it based on the referring document above.