Air Force Village Foundation, Inc. d/b/a Air Force Village II v. Robert G. Asbury--Appeal from 37th Judicial District Court of Bexar County

MEMORANDUM OPINION
No. 04-03-00373-CV
AIR FORCE VILLAGE FOUNDATION, INC. d/b/a Air Force Village II,
Appellant
v.
Robert G. ASBURY,
Appellee
From the 37th Judicial District Court, Bexar County, Texas
Trial Court No. 2003-CI-01242
Honorable Pat Boone, Judge Presiding

Opinion by: Karen Angelini, Justice

Sitting: Alma L. L pez, Chief Justice

Paul W. Green , Justice

Karen Angelini, Justice

Delivered and Filed: June 30, 2004

REVERSED AND REMANDED

Air Force Village II ("AFV") appeals from the trial court's modification of the arbitrator's award, arguing that the trial court had no authority to modify the arbitrator's award. We agree and reverse the trial court's judgment.

Background

Robert G. Asbury was employed as a night security guard by AFV, a retirement community. While lifting a resident, Asbury injured his back. After completing two months of physical therapy, Asbury returned to his usual duties at work. A few days later, Asbury injured his back a second time while lifting the same resident. Asbury filed two workers' compensation claims. Soon thereafter, Asbury was fired due to "insubordination." Asbury, believing that AFV fired him because he filed the workers' compensation claims, brought suit against AFV for violating chapter 451 of the Labor Code. Because the terms of Asbury's employment contract provided for binding arbitration of disputes, an arbitrator heard Asbury's claim. After a hearing, the arbitrator found that AFV had violated chapter 451 and awarded Asbury damages and costs. Because the arbitrator failed to order reinstatement, Asbury wrote a letter to the arbitrator requesting that he be reinstated. The arbitrator denied his request.

Asbury then filed an "Application to Vacate, Modify or Correct an Award and Confirmation of an Arbitration Award," arguing that the trial court should vacate and/or modify the Arbitrator's decision and order Asbury reinstated. According to Asbury, under Texas law, the arbitrator had no discretion to refuse to order reinstatement. The district court agreed with Asbury and entered a "Judgment to Confirm and Modify or Correct an Arbitration Award." The district court confirmed that part of the arbitrator's decision awarding Asbury damages for his chapter 451 claim. However, the trial court then ordered Asbury be reinstated:

Pursuant to Texas Labor Code 451.002, Defendant [AFV] is hereby ORDERED to reinstate Plaintiff, Robert G. Asbury, in accordance with the laws of the State of Texas. To the extent that the Arbitrator denied this request for reinstatement, his decision is REVERSED AND OVERRULED because he abused his discretion in not ordering reinstatement. This Court finds that the Arbitrator was without discretion to refuse to order that Plaintiff, Robert G. Asbury, be reinstated to his former employment upon finding that a violation of 451.001 of the Texas Labor Code had occurred.

AFV appeals.

Standard of Review

An arbitrator's award has the same effect as the judgment of a court of last resort. CVN Group, Inc. v. Delgado, 95 S.W.3d 234, 238 (Tex. 2002); Barsness v. Scott, 126 S.W.3d 232, 241 (Tex. App.--San Antonio 2003, pet. denied). Review of an arbitration award is extraordinarily narrow; we must indulge every reasonable presumption in favor of upholding the arbitration award. Barsness, 126 S.W.3d at 241; Stieren v. McBroom, 103 S.W.3d 602, 605 (Tex. App.--San Antonio 2003, pet. denied). Review is so limited that an arbitration award may not be vacated even if there is a mistake of fact or law. Stieren, 103 S.W.3d at 605; Vernon E. Faulconer, Inc. v. HFI Ltd., 970 S.W.2d 36, 39 (Tex. App.--Tyler 1998, no pet.). In reviewing an arbitrator's award, a reviewing court may not substitute its judgment for the arbitrator's merely because it would have reached a different decision. Stieren, 103 S.W.3d at 605. Discussion

In its first point of error, AFV alleges that because Asbury failed to show any statutory or common law grounds for modification of the arbitration award, the district court erred in modifying it. AFV argues that at most, the arbitrator's refusal to award reinstatement was a mistake of law which is not a sufficient ground to modify or vacate an arbitration award. Particularly, AFV points out that the arbitrator examined Asbury's request for reinstatement, but denied it because he believed that Asbury failed to prove that he was physically capable of returning to his former position pursuant to Schrader v. Artco Bell Corp., 579 S.W.2d 534 (Tex. Civ. App.--Tyler 1979, writ ref'd n.r.e), a belief that may be a mistake of law but not a sufficient ground for modification.

In response, Asbury argues that the district court did have a statutory ground for vacating (not modifying) the arbitrator's award: section 171.088(a)(3)(A). (1) Section 171.088(a)(3)(A) provides that on application of a party, a district court shall vacate an arbitrator's award if the arbitrator exceeded his power. Tex. Civ. Prac. & Rem. Code Ann. 171.088(a)(3)(A) (Vernon Supp. 2004). According to Asbury, our decision in Martin v. Texas Dental Plans, Inc., 948 S.W.2d 799 (Tex. App.--San Antonio 1997, writ denied), controls. In Martin, we noted that section 451.002 of the Texas Labor Code provides that an employee discharged in violation of the Labor Code is entitled to recover reasonable damages and to be reinstated into his former position. Id. at 803. We held that the word "entitled" in the statute indicates that there is no discretion on the part of the trial court where reinstatement is sought and a violation of the Labor Code has been found. Id. Indeed, the plain language of the statute "clearly demonstrates that it is unnecessary for the issue of reinstatement to be submitted to a jury. Instead, the statute requires reinstatement where it has been requested and liability under section 451.001 has been found." Id. at 804. As such, we held that because "the jury in this case determined that appellant was terminated in violation of section 451.001 and appellant affirmatively requested reinstatement, the trial court erred in failing to order that appellant be reinstated to his former position." Id.

Relying on Martin, Asbury argues that the arbitrator only had authority to determine whether AFV had violated chapter 451. According to Asbury, once the arbitrator made that determination, he was required to order reinstatement:

The plain language of [section 451.002] is clear; reinstatement is compulsory. . . . By examining whether reinstatement was proper in Asbury's case, the arbitrator answered a question Texas law does not permit him to even ask. . . . The fact that the arbitrator exercised decision-making authority where Texas law grants him none evinces an abuse of the arbitrator's powers under section 171.088(a)(3)(A).

We disagree.

The Texas Supreme Court has held that the "authority of arbitrators is derived from the arbitration agreement and is limited to a decision of the matters submitted therein either expressly or by necessary implication." Gulf Oil Corp. v. Guidry, 160 Tex. 139, 327 S.W.2d 406, 408 (1959); see also Barsness, 126 S.W.3d at 241 (quoting Gulf Oil). Arbitrators therefore exceed their authority when they decide matters not properly before them. Barsness, 126 S.W.3d at 241.

Here, however, the arbitrator was given the authority to decide whether Asbury was entitled to reinstatement. The arbitration agreement states:

any controversy or claim ("Dispute") arising out of or in any way relating to an employee's employment with [AFV] or termination of employment with [AFV] shall be submitted to and settled by final and binding arbitration in accordance with AFV's arbitration procedures. Judgment on any award rendered by an arbitrator may be entered and enforced in any court having jurisdiction thereof.

(emphasis added). This language encompasses whether Asbury was entitled to reinstatement. Thus, in determining that Asbury was not entitled to reinstatement, the arbitrator did not exceed his authority. The arbitrator may have incorrectly applied the law, but he did not exceed his authority. And, mistake of fact or law or errors in the application of substantive law are not sufficient grounds to vacate the arbitration award. Stieren, 103 S.W.3d at 605.

Further, the arbitration agreement gave the arbitrator power as judge and jury. The agreement states that the arbitrator shall enter a final judgment that shall be enforced in any court. Thus, Asbury's argument that the arbitrator was a mere fact-finder is contrary to the plain language of the the agreement.

Besides section 171.088, Asbury points to no other statutory or common-law grounds in support of the trial court's action and we find none. We, therefore, sustain AFV's first issue. (2)

Conclusion

Having sustained AFV's first issue, we reverse the judgment of the trial court and remand the cause for entry of judgment consistent with this memorandum opinion.

Karen Angelini, Justice

1. Asbury argues that the trial court partially vacated the award (instead of modifying it) because there are different statutory grounds for vacating versus modifying. However, because we find no merit in Asbury's argument that the trial court had authority to vacate the award under section 171.088(a)(3)(A), we need not decide whether the trial court partially vacated the arbitrator's award or whether it modified the award. Even if the trial court, as argued by Asbury, vacated the award, it still had no authority for doing so.

2. Having sustained this issue, we need not reach the other issues presented.