Texas: Trial court correctly denied motion to arbitrate–Chapter 154, not 171, governs

Originally published by Gene Roberts.

In Beldon Roofing Co. v. Sunchase IV Homeowners’ Ass’n, Inc., the Thirteenth District Court of Appeals affirmed the trial court’s denial of a motion to arbitrate. The parties agreed, in their original contract, to arbitrate in accordance with the Federal Arbitration Act and the Construction Industry Arbitration Rules of the AAA. While Beldon’s request to compel arbitration was pending, the parties entered into an agreed order referring the parties to arbitration pursuant to Chapter 154 of the Texas Rules of Civil Procedure, the general ADR statute, but not Chapter 171, the Texas Arbitration Act.
The Court of Appeals held that the ADR Act and the TAA cannot govern the same proceeding. The TAA contemplates limited judicial review and is binding. The ADR Act, on the other hand, is nonbinding unless the parties stipulate beforehand that the award will be binding. The TAA applies to private agreements to arbitrate; the ADR Act applies only to court-ordered referrals to arbitration. Because this arbitra …

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