Court of Appeals of Texas, Thirteenth District, Corpus Christi-Edinburg
appeal from the 332nd District Court of Hidalgo County,
Justices Rodriguez, Benavides, and Longoria
M. BENAVIDES, Justice
appeal concerns the trial court's orders: (1) granting
appellee's, the City of Edinburg (the City), motion to
vacate an adverse arbitration award rendered in favor of
appellant, IOC Company, LLC (IOC); and (2) denying IOC's
motion to confirm the same arbitration award. By one issue,
IOC contends that the trial court erred in vacating rather
than confirming the arbitration award. We reverse and render.
The Parties and the Agreements
a Texas limited liability company that is in the business of
highway and road construction. The City is a municipality
located in Hidalgo County.
April 1, 2008, IOC and the City entered into an agreement
regarding engineering and architectural construction for
paving and drainage improvements for Canton Road located in
the City (the Canton Road Project). The Canton Road Project
agreement contained a section which required "any
controversy or claim arising out of or relating to [the
Canton Road Project], or the breach thereof" which could
not be resolved by mutual agreement to be settled by
2, 2009, IOC and the City entered into a second, separate
agreement related to engineering and architectural
construction for paving and drainage improvements for Sugar
Road located in the City (the Sugar Road Project). The Sugar
Road Project agreement contained separate mediation and
arbitration clauses. The mediation clause called first for a
"quick resolution of any and all disputes, if any"
under the contract, and the agreement provided that if the
dispute failed to resolve at mediation, the parties were
required to submit the dispute to arbitration.
The Arbitration Proceeding and Award
claims and disputes by IOC against the City arose related to
both the Canton Road Project and the Sugar Road Project. Both
matters were consolidated and arbitrated by the same
arbitrator, who conducted bifurcated evidentiary hearings for
each contract during the months of February 2014 and April
2014. The hearings were closed on June 18, 2014.
The Canton Road Project
to the record, IOC sought recovery for damages "in the
form of additional compensation due to the City's claims
breach of contract, essentially consisting of delays,
interferences, and disruptions" caused by the City
during its work on the Canton Road Project. IOC also sought
recovery of attorneys' fees, prejudgment interest, and
reimbursement of arbitrator compensation and costs.
response to IOC's claims, the City contested IOC's
entitlement to recovery of damages under section 271.153 of
the local government code. See Tex. Local Gov't
Code Ann. § 271.153 (West, Westlaw through Ch. 49, 2017
R.S.) (placing limitations on adjudication awards against
local governmental entities for breach of contract). Further,
the arbitrator's award notes that the City "strongly
denie[d] it was responsible for owner-caused delays" and
claimed that it was "not responsible for relocating
utility lines, encumbrances[, ] and obstructions that
hindered, delayed[, ] or disrupted IOC's ability to
timely, efficiently . . . perform the required scope of
work" under the Canton Road Project construction plan.
Further, the City argued that any delays that IOC suffered
were caused by third parties "over whom it had no
control or responsibility."
arbitrator found that the City materially breached the Canton
Road agreement "without excuse" and was liable to
IOC "for damages in the form of additional compensation
arising from City-caused delays, disruptions and
interference." The arbitrator found that IOC did not
materially breach the agreement. To support these findings,
the arbitrator made specific findings that:
(1) The City failed to timely and properly provide IOC with
the lands necessary for it to perform the scope of work . . .
(2) The City failed to provide IOC timely and proper access
to the areas in which it was to perform the scope of work . .
(3) The City failed to provide IOC with unhindered and
unobstructed access to the areas in which it was to perform
the scope of work . . . .
(4) The City failed to timely, reasonably[, ] and properly
manage the removal of obstacles, conflicts[, ] and
obstructions in the areas in which IOC was to perform the
scope of work . . . . The City had the duty and
responsibility to manage the removal of ...