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Craig v. Southwest Securities, Inc.

Court of Appeals of Texas, Fifth District, Dallas

December 18, 2017

CAROL LEE CRAIG, Appellant
v.
SOUTHWEST SECURITIES, INC. & JOHN C. COYLE, Appellee

         On Appeal from the 44th Judicial District Court, Dallas County, Texas, Trial Court Cause No. DC-16-07300.

          Before Justices Lang-Miers, Brown, and Boatright.

          MEMORANDUM OPINION

          ADA BROWN JUSTICE.

         Appellant Carol Lee Craig appeals from a final judgment confirming an arbitration award. In two issues, she contends the trial court erred in dismissing her motion to vacate the arbitration award because she timely served notice of the motion and, even if the service was untimely, the trial court should have equitably tolled the deadline for service. For the following reasons, we affirm the trial court's final judgment confirming the arbitration award.

         Background

         Beginning in 2007, Craig held an investment account and a traditional IRA account with appellee Southwest Securities, Inc. (SWS). Appellee John C. Coyle, a SWS investment representative, served as Craig's broker. From 2007 to 2009, Craig's accounts lost value.

         In July 2014, Craig filed an arbitration proceeding before the Financial Industry Regulatory Authority (FINRA) asserting a number of different causes of action allegedly resulting from appellees' mismanagement of her accounts and failure to follow her investment objectives. Both Craig and appellees agreed the arbitration dispute would be governed by the Federal Arbitration Act (FAA).[1] Following a hearing, an arbitration panel entered an award denying all of Craig's claims on March 18, 2016.

         On June 16, 2016, Craig electronically filed "Movant's Motion to Vacate Arbitration Decision" in the 44th Judicial District Court of Dallas County and paid a filing fee. Craig did not request issuance of citations or service. Instead, her counsel emailed a copy of the motion to Clint Corrie, appellees' counsel in the underlying arbitration proceeding. Craig's motion complained of the arbitrators' partiality and false statements by appellees' counsel, which "tainted the award with fraud and/or undue means."

         On September 1, 2016, Craig filed a supplemental motion, which was identical to her original motion with the exception of incorporating previously-unavailable citations to the record from the arbitration panel hearing. Craig delivered a copy of the supplemental motion to appellees' counsel by certified mail, return receipt requested. Further, Craig sought issuances of citation from the Dallas County Clerk's Office and, thereafter, SWS, through its registered agent for process, and Coyle were served with process and citation.

         Appellees subsequently filed a motion requesting the trial court dismiss Craig's motion to vacate and confirm the arbitration decision. They contended Craig failed to properly serve her initial motion to dismiss on appellees within three months after the arbitration award was issued as required under the FAA. After a hearing, the trial court signed an Order granting appellees' motion. That same day, the trial court also signed a final judgment confirming the arbitration award and stating that the judgment "fully and finally disposes of all claims and parties and is therefore, final and appealable."

         Applicable Law

         Texas law strongly favors arbitration; thus, review of an arbitration decision is "extraordinarily narrow." Univ. Computer Sys., Inc. v. Dealer Solutions, 183 S.W.3d 741, 752 (Tex. App.-Houston [1st Dist.] 2005, pet. denied). We review a district court's order confirming an arbitration award under a de novo standard. Peacock v. Wave Tec Pools, Inc., 107 S.W.3d 631 (Tex. App.-Waco 2003, no pet.).

         Both parties agree the FAA governs this arbitration dispute. In such a case, the FAA applies to the substantive rules of decision, but Texas law, and specifically the Texas General Arbitration Act (TAA), [2] governs the procedural matters. In re Chestnut Energy Partners, 300 S.W.3d 386, 395-96 (Tex. App.-Dallas 2009, pet. denied) (citing Jack B. Anglin Co. v. Tipps, 842 S.W.2d 266, 272 (Tex. 1992)); Roehrs v. FSI Holdings Inc., 246 S.W.3d 796, 804 (Tex. App.-Dallas 2008, pet. denied); Holcim (Tx.) Ltd. P'ship v. Humboldt Wedge, Inc., 211 S.W.3d 796, 800-01 (Tex. App.-Waco 2006, no pet.); Hamm v. Millennium Income Fund, LLC, 178 S.W.3d ...


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