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Novoa v. Viramontes

Court of Appeals of Texas, Eighth District, El Paso

April 27, 2018

FERNANDO NOVOA, Appellant/Cross-Appellee,
J.C. VIRAMONTES, Individually, and J.C. VIRAMONTES INC., d/b/a INTERNATIONAL GARMENT PROCESSORS, Appellees/Cross-Appellants.

          Appeal from the County Court at Law No. 6 of El Paso County, Texas (TC# 2001-2295)

          Before McClure, C.J., Rodriguez, and Hughes, JJ.


          YVONNE T. RODRIGUEZ, Justice

         This is a cross-appeal from an order denying a motion to vacate an arbitrator's award. The original proceeding stems from a bank fraud scheme dating back almost twenty-five years. Fernando Novoa was convicted on two counts of bank fraud in July of 1994. J.C. Viramontes employed Novoa before and after the convictions, however, the two later had a falling out and Novoa's employment was subsequently terminated. Novoa then filed suit, which is the subject of this appeal.


         On June 18, 2001, Fernando Novoa filed a lawsuit (the "2001-2295 Claim") against J.C. Viramontes and J.C. Viramontes, Inc. (collectively, "Viramontes") asserting various causes of action including fraud and breach of contract.[1] In response, Viramontes asserted various affirmative defenses, counterclaims, and demanded arbitration pursuant to an arbitration clause in Novoa's employment agreement. On March 6, 2002, the trial court[2] severed the individual fraud claim against J.C. Viramontes (the "2002-1040 Claim") and ordered that the two remaining causes of breach of contract/piercing-of-corporate-veil against Viramontes be tried in arbitration, pursuant to the arbitration agreement (the "03-0199Arb Claim"). On November 26, 2003, the parties met and chose Hector Zavaleta as the arbitrator (the "Arbitrator Zavaleta").

         In June 2004, Novoa filed two (pro se) motions to dismiss; one in cause number 2002-1040 and the other directly with the Arbitrator Zavaleta, requesting all the proceedings against Viramontes be dismissed, explaining he had been diagnosed with a depressive and anxiety disorder. In a handwritten letter dated June 9, 2004, Novoa also requested, based on his motion to dismiss, that the trial court cancel a previously scheduled pretrial status hearing. On June 10, 2004, the trial court dismissed the 2002-1040 Claim against J.C. Viramontes.

         On April 11, 2008, the trial court scheduled a status conference hearing for April 16, 2008 on the 2001-2295 Claim.[3] In an order dated April 16, 2008, the trial court stayed its proceedings and ordered the parties to contact the arbitrator no later than June 1, 2008, for the 2001-2295 Claim. On August 20, 2008, the trial court entered an order dismissing the 2001-2295 Claim explaining that "it appear[ed] that no arbitration was held within the 45 days specified" in its April 16, 2008 order. On August 21, 2008, the district clerk sent a final notice of the "judgment/order" to the parties titled, "Rule 306a, OFFICIAL NOTICE."

         On September 2, 2008, Novoa filed a motion to reconsider and reinstate the 2001-2295 Claim. This motion was signed by Novoa's attorney, however, it was not verified by either Novoa or his attorney. The motion argued that Novoa repeatedly attempted to contact Texas Arbitration Mediation Services, Inc. ("TAMS"), complying with the trial court's April 16, 2008 order. The motion also included two exhibits: a copy of the trial court's April 16, 2008 order; and a copy of the cover letter, the "judgment order, " and fax transmission confirmations sent to Defendant's trial counsel and Joann Chapman, a representative of TAMS.

         In an order dated December 3, 2008, the trial court granted Novoa's motion to reinstate the 2001-2295 Claim, ordering that the "Defendant's claims, counterclaims and defenses are hereby STRUCK" for failure to obey the April 16, 2008 order and also ordered that "THIS MATTER BE AND IS HEREBY REFERRED TO [Arbitrator Zavaleta] FOR A FINAL RULING CONSISTENT WITH THIS ORDER; ARBITRATION TO BE COMPLETED BY JANUARY 15, 2009."[4]

         On January 12, 2009, Viramontes filed a Motion to Reconsider, Alternatively, Motion for Clarification; Motion to Stay Arbitration; and Motion for Sanctions in both the 2001-2295 Claim and the 03-0199Arb Claim. In a written order, the trial court granted Viramontes' motion for reconsideration on February 10, 2009 and reinstated the claims and defenses in the 2001-2295 Claim as they existed on August 20, 2008.

         On March 6, 2013, Novoa wrote to TAMS requesting Arbitrator Zavaleta and TAMS recuse themselves from the 03-0199Arb Claim. Novoa alleged that Rene D. Peña was a principal and shareholder of the accounting firm Peña, Briones, McDaniel & Co. (the "Accounting Firm"). He further alleged that the Accounting Firm then had a professional relationship with TAMS. Specifically, Novoa claimed that the Accounting Firm provided accounting services to TAMS. Novoa's motion also claimed that Peña was an "essential witness" for Viramontes. The motion requested that TAMS and Arbitrator Zavaleta be removed since this relationship had not been disclosed and that a new arbitrator be assigned. On March 11, 2013, Arbitrator Zavaleta denied Novoa's request, explaining that he had no bias or financial or personal interest in the arbitration.

         On April 10, 2013, Novoa filed a motion to recuse Arbitrator Zavaleta, maintaining the same failure to disclose argument, and requested for the appointment of a new arbitrator. On June 5, 2013, the trial court held a hearing on the motion. On July 1, 2013, the trial court denied Novoa's motion based on the pleadings and arguments at the hearing.

         A final arbitration hearing was held in July 2013. Arbitrator Zavaleta drafted and later delivered the arbitrator's award to both parties on March 10, 2014. In his award, Arbitrator Zavaleta concluded that the parties entered into an enforceable oral agreement and it was breached, requiring payment to Novoa of $118, 121. All other claims between the parties were dismissed by Arbitrator Zavaleta. On June 6, 2014, Novoa filed a motion to vacate the arbitrator's award, maintaining the same failure to disclose argument presented in his recusal motion and request. On October 7, 2014, the trial court denied the motion to vacate and ordered Arbitrator Zavaleta's award confirmed.

         Novoa filed a notice of appeal on November 4, 2014, for the 2001-2295 Claim. On November 18, 2014, Viramontes filed a motion to dismiss the appeal for want of jurisdiction, averring error in the appeal date. On December 8, 2014, Novoa filed a response to Defendant's motion to dismiss the appeal. On December 12, 2014, Viramontes filed a motion to abate the appeal until the disposition of the trial court's ruling on the motion for new trial. Viramontes subsequently filed their notice of appeal on January 8, 2015, for the 2001-2295 Claim, the 2002-1040 Claim, and the 03-0199Arb Claim.

         On January 13, 2015, we ordered the parties brief their appeals with the ...

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