W. Dow Hamm, III, Corporation and W. Dow Hamm, III v. Millennium Income Fund, L.L.C.

Opinion issued July 28, 2005

In The

Court of Appeals

For The

First District of Texas

NO. 01-03-01209-CV

W. DOW HAMM III AND DOW HAMM III CORPORATION, Appellants

V.

MILLENNIUM INCOME FUND, L.L.C., Appellee

On Appeal from the 61st District Court

Harris County, Texas

Trial Court Cause No. 2003-13955

O P I N I O N

Appellants, W. Dow Hamm III and Dow Hamm III Corporation (together,

“the Hamm parties”), appeal the trial court’s final judgment in favor of appellee,

Millennium Income Fund, L.L.C. (“Millennium”), entered upon confirmation of an

arbitration award. The Hamm parties simultaneously challenge the confirmation of

the arbitration award and the denial of their post-judgment motion to vacate or to

modify the arbitration award. We determine whether the Hamm parties’ motion to

vacate the arbitration award was untimely, so that the trial court erred neither in

overruling the motion nor in confirming the arbitration award. We affirm.

Background

In the late 1990s, Millennium and the Hamm parties formed seven limited

partnerships for the purpose of developing seven hotels. Dow Hamm III Corporation

was the general partner, and W. Dow Hamm III and Millennium were limited

partners. The partnership agreements contained identical arbitration provisions.

The parties’ relationship eventually deteriorated, Millennium alleged (and

the Hamm parties denied) because the Hamm parties had made unauthorized

payments to Dow Hamm III Corporation. In March 2003, Millennium sued the

Hamm parties, seeking a temporary restraining order and temporary and permanent

injunctive relief to prevent the Hamm parties from “making further unauthorized

payments to themselves and others” while the parties pursued the arbitration required

by their partnership agreements.

Arbitration proceeded, with the arbitration hearing taking place from July

14, 2003 until July 17, 2003. The arbitrator rendered his award, and the award was

transmitted to the parties, on August 25, 2003. Among other things, the arbitrator

ordered an accounting of the partnerships, expelled Dow Hamm III Corporation as

the general partner, permanently enjoined the Hamm parties from taking certain

actions, ordered the Hamm parties to pay actual damages of $700,000 and exemplary

damages of $150,000, ordered the limited partners to agree on a new general partner

within 90 days or face dissolution of the partnerships, and ordered that each party

bear its own attorney’s fees and arbitration expenses.

On August 29, 2003, Millennium moved to confirm the arbitration award.

The confirmation hearing was set for September 5, 2003. On September 2, 2003, the

Hamm parties moved for a continuance of the confirmation hearing,

stating, in

pertinent part, as follows:

[The Hamm parties] respectfully request a continuance on

Millennium’s application for confirmation of the arbitration

award because they intend to prepare and present motions to

vacate and/or modify the arbitration award pursuant to Texas

Civil Practice and Remedies Code, Sections 171.088 and

171.091. These statutes allow applicants to contest arbitration

awards within ninety (90) days of the date the applicant receives

a copy of the award.

Although Respondents do not anticipate needing ninety (90)

days to properly contest the arbitration award, they do request a

reasonable amount of time to do so. Arbitration in this matter was

lengthy, lasting four (4) days. Numerous witnesses testified.

Four (4) volumes of transcribed testimony were generated and

over one thousand (1,000) pages of exhibits were introduced.

Respondents contend there are substantial factual and legal errors

in the award and would respectfully request thirty (30) days to

properly prepare their motions to contest the arbitration award

prior to it[s] being confirmed by this Court under Section

171.087.

The trial court denied the Hamm parties’ motion for continuance without

specifying grounds on September 5, 2003, the date on which the court also heard

Millennium’s confirmation motion. We have no reporter’s record from the September

5 confirmation hearing, and nothing in our record indicates what the parties and court

might have discussed concerning the continuance motion at that hearing. The clerk’s

record contains no written objection to confirmation of the award, or any motion to

vacate or to modify the award, filed by the Hamm parties at that time; of course, as

their continuance motion indicated, neither did the Hamm parties file any of the

arbitration record at that time. At the September 5 hearing, the trial court entered a

final judgment confirming the arbitration award and rendered judgment against the

Hamm parties.

On October 3, 2003, the Hamm parties filed a “motion to vacate or modify

judgment and arbitration award.” They also filed the record and exhibits from the

arbitration proceeding on the same date. Millennium responded to the Hamm parties’

motion to vacate or to modify the judgment and award, asserting, in part, that that

motion was untimely for having been filed after final judgment confirming the award.

In their post-judgment motion attacking the judgment and arbitration award, the

Hamm parties did not complain about the trial court’s denial of their motion for

continuance of the confirmation hearing, but instead challenged the merits of the

arbitration award on contractual and statutory grounds. See 9 U.S.C.S. §§ 10-11

(West 1997 & Supp. 2005) (allowing for vacating, modifying, or correcting

arbitration award under certain circumstances); Tex. Civ. Prac. & Rem. Code Ann.

§§ 171.088, 171.091 (Vernon 2005) (same).

The Hamm parties’ motion did not refer

to the arbitration record and exhibits, and neither the Hamm parties nor the trial court

specifically referred to the arbitration record and exhibits at the brief hearing on the

Hamm parties’ post-judgment motion. At the end of the hearing, the trial court

denied the motion to vacate or to modify the judgment and award without stating its

reasons.

Post-Judgment Motion to Vacate or to Modify

In three issues, the Hamm parties attack the merits of the arbitration award

on various statutory and contractual grounds.

A. Statutes Governing Confirmation of Arbitration Awards

Concerning confirmation of arbitration awards, the FAA and the TAA

provide in pertinent part as follows:

§ 9.Award of arbitrators; confirmation; jurisdiction;

procedure

[A]t any time within one year after the award is made any

party to the arbitration may apply to the court . . . for an order

confirming the award, and thereupon the court must grant

such an order unless the award is vacated, modified, or

corrected as prescribed in sections 10 and 11 of this title. . . .

9 U.S.C.S. § 9 (West 1997) (emphasis added).

§ 171.087. Confirmation of Award

Unless grounds are offered for vacating, modifying, or

correcting an award under Section 171.088 or 171.091, the

court, on application of a party, shall confirm the award.

Tex. Civ. Prac. & Rem. Code Ann. § 171.087 (Vernon 2005) (emphasis

added).

B. Statutes Governing Vacating, Modifying, or Correcting Arbitration

Awards

Concerning vacating, modifying, or correcting arbitration awards, the FAA

and the TAA provide in pertinent part as follows:

§ 10.Same; vacation; grounds; rehearing

(a)In any of the following cases the United States court in

and for the district wherein the award was made may make an

order vacating the award upon the application of any party to

the arbitration—

(1)where the award was procured by corruption,

fraud, or undue means;

(2)where there was evident partiality or corruption

in the arbitrators, or either of them;

(3)where the arbitrators were guilty of misconduct

in refusing to postpone the hearing, upon sufficient cause

shown, or in refusing to hear evidence pertinent and material

to the controversy; or of any other misbehavior by which the

rights of any party have been prejudiced; or

(4)where the arbitrators exceeded their powers, or so

imperfectly exercised them that a mutual, final, and definite

award upon the subject matter submitted was not made.

9 U.S.C.S. § 10 (West 1997) (emphasis added).

§ 11.Same; modification or correction; grounds; order

In either of the following cases the United States court in and

for the district wherein the award was made may make an

order modifying or correcting the award upon the application

of any party to the arbitration—

(a)Where there was an evident material

miscalculation of figures or an evident material mistake in the

description of any person, thing, or property referred to in the

award.

(b)Where the arbitrators have awarded upon a matter

not submitted to them, unless it is a matter not affecting the

merits of the decision upon the matter submitted.

(c)Where the award is imperfect in matter of form

not affecting the merits of the controversy.

The order may modify and correct the award, so as to effect

the intent thereof and promote justice between the parties.

Id. § 11 (West 1997) (emphasis added).

§ 12.Notice of motions to vacate or modify; service; stay of

proceedings

Notice of a motion to vacate, modify, or correct an award must

be served upon the adverse party or his attorney within three

months after the award is filed or delivered. . . .

Id. § 12 (West 1997) (emphasis added).

§ 13.Papers filed with order on motions; judgment;

docketing; force and effect; enforcement

. . .

The judgment so entered shall have the same force and effect ,

in all respects, as , and be subject to all the provisions of law

relating to, a judgment in an action; and it may be enforced as

if it had been rendered in an action in the court in which it is

entered.

Id. § 13 (West 1997) (emphasis added).

§ 171.088. Vacating Award

(a)On application of a party, the court shall vacate an

award if:

(1)the award was obtained by corruption, fraud, or

other undue means;

(2)the rights of a party were prejudiced by:

(A)evident partiality by an arbitrator appointed

as a neutral arbitrator;

(B)corruption in an arbitrator; or

(C)misconduct or wilful misbehavior of an

arbitrator;

(3)the arbitrators:

(A)exceeded their powers;

(B)refused to postpone the hearing after a

showing of sufficient cause for the postponement;

(C)refused to hear evidence material to the

controversy; or

(D)conducted the hearing, contrary to Section

171.043, 171.044, 171.045, 171.046, or 171.047, in a manner

that substantially prejudiced the rights of a party; or

(4)there was no agreement to arbitrate, the issue was

not adversely determined in a proceeding under Subchapter B,

and the party did not participate in the arbitration hearing

without raising the objection.

(b)A party must make an application under this section not

later than the 90th day after the date of delivery of a copy of

the award to the applicant. . . .

(c)If the application to vacate is denied and a motion to

modify or correct the award is not pending, the court shall

confirm the award.

Tex. Civ. Prac. & Rem. Code Ann. § 171.088 (Vernon 2005)

(emphasis added).

§ 171.091.Modifying or Correcting Award

(a)On application, the court shall modify or correct an

award if:

(1)the award contains:

(A)an evident miscalculation of numbers; or

(B)an evident mistake in the description of a

person, thing, or property referred to in the award;

(2)the arbitrators have made an award with respect

to a matter not submitted to them and the award may be

corrected without affecting the merits of the decision made

with respect to the issues that were submitted; or

(3)the form of the award is imperfect in a manner not

affecting the merits of the controversy.

(b)A party must make an application under this section not

later than the 90th day after the date of delivery of a copy of

the award to the applicant.

(c)If the application is granted, the court shall modify or

correct the award to effect its intent and shall confirm the

award as modified or corrected. If the application is not

granted, the court shall confirm the award.

Id. § 171.091 (Vernon 2005) (emphasis added).

§ 171.092.Judgment on Award

(a)On granting an order that confirms, modifies, or corrects

an award, the court shall enter a judgment or decree

conforming to the order. The judgment or decree may be

enforced in the same manner as any other judgment or decree.

Id. § 171.092(a) (Vernon 2005) (emphasis added).

C. Discussion

1. The Statutory Language

We begin by examining the statutory language. See Helena Chem. Co. v.

Wilkins , 47 S.W.3d 486, 493 (Tex. 2001). Both the FAA and TAA require the trial

court to confirm an arbitration award unless “grounds are offered for vacating,

modifying, or correcting an award” (TAA) or the award “is vacated, modified, or

corrected” (FAA). See 9 U.S.C.S. § 9 ; Tex. Civ. Prac. & Rem. Code Ann. §

171.087 (Vernon 2005). Under these provisions, confirmation is the default result

unless a challenge to the award has been or is being considered. See id. These

provisions thus imply a due order of consideration: they contemplate that any motions

to vacate, to modify, or to correct the award must be pending before the court for its

consideration, or must already have been ruled on, at the time that the court considers

the motion to confirm. See Robinson & Wells, P.C. v. Warren , 669 P.2d 844, 847-48

(Utah 1983).

Additionally, the TAA provides that (1) if the court denies a motion to

vacate, to modify, or to correct an arbitration award, it must confirm the award and

(2) if the court grants a motion to modify or to correct an award, it must confirm the

award as modified or corrected. See Tex. Civ. Prac. & Rem. Code Ann. §§

171.088(c), 171.091(c). Taken together with the section requiring confirmation

unless statutory grounds not to do so are shown, sections 171.088(c) and 171.091(c)

also indicate that motions to modify, to vacate, and to correct an arbitration award

should be heard either before or simultaneously with motions to confirm the award.

Finally, both the FAA and the TAA provide that a judgment confirming (or

modifying or correcting) an arbitration award is a final judgment like any other. See

9 U.S.C.S. § 13 (“The judgment so entered shall have the same force and effect . . .

as, and be subject to all the provisions of law relating to, a judgment in an action; and

it may be enforced as if it had been rendered in an action in the court in which it is

entered.”); Tex. Civ. Prac. & Rem. Code Ann. § 171.092(a) (providing that, when

court “grant[s] an order” confirming, modifying, or correcting arbitration award, court

“shall enter a judgment or decree conforming to the order,” and judgment or decree

“may be enforced in the same manner as any other judgment or decree.”).

Consequently, requiring a trial court to consider a motion, filed for the first time after

judgment, that seeks to vacate, to modify, or to correct that judgment—in effect the

Hamm parties’ position because they argue that a trial court would abuse its

discretion by not considering such a motion filed at that time—could, in certain

circumstances, interfere with the same judgment’s enforcement and with the

presumption of finality that third parties, such as title companies and creditors, are

entitled to place upon it. See Martin v. Hydraulic Fishing Supply, Inc. , 66 Wash.

App. 370, 378 , 832 P.2d 118, 123 (Wash. App. 1992) (Forrest, J., concurring, joined

by Webster, A.C.J.) (noting same problems if motion to vacate is considered after

judgment confirming arbitration award). Put simply, we doubt that the respective

legislative branches intended to require a trial court to consider such a motion when

it is filed for the first time during a period that they also expressly designated for the

judgment’s enforcement. Additionally, requiring a court to consider a motion to

vacate filed after judgment, but before the statutory 90-day or three-month period

expires, could also create “unique exception[s] to the normal rules governing the

modification and amendment of judgments” by, in effect, extending a trial court’s

plenary power to consider post-judgment motions beyond 30 days, in conflict with

the procedural rules applicable to all other judgments. Id. , 66 Wash. App. at 379 , 832

P.2d at 123 (Forrest, J., concurring); see Tex. R. Civ. P. 329b(a), (g). This would be

an odd result indeed for a judgment that, by express statutory declaration, is to be

treated like any other final judgment. See 9 U.S.C.S. § 13; Tex. Civ. Prac. & Rem.

Code Ann. § 171.092(a).

2. The Case Law

The scant case law on the issue conflicts. However, we conclude that the

better reasoned authority supports our reading of the statutes. Moreover, the only

Texas authority on this issue necessitates today’s holding.

Although both the FAA and TAA allow a party who wishes to challenge an

arbitration award a certain period to move to vacate, to modify, or to correct an

arbitration award,

courts have held that that period of time represents a maximum,

not an absolute period upon which the challenging party may always rely. See The

Hartbridge , 57 F.2d 672, 673 (2nd Cir. 1932) (holding, under FAA, that party

seeking to confirm arbitration award may do so even before expiration of three-month

period in which party challenging award is allowed to move to vacate, to modify, or

to confirm award, thus, if party moves for confirmation before three-month period

ends, other party must raise any challenges then, too); City of Baytown v. C.L. Winter,

Inc. , 886 S.W.2d 515, 520-21 (Tex. App.—Houston [1st Dist.] 1994, writ denied)

(adopting holding and analysis in The Hartbridge in case in which TAA applied); see

also Clearwater v. Skyline Constr. Co. , 67 Wash. App. 305, 315 , 835 P.2d 257, 263

(Wash. App. 1992, rev. denied) (regarding statutory three-month period in which to

move to vacate arbitration award, stating, “This could be read to mean that 3 months

is the maximum period in which a motion to vacate may be filed, not that the 3-month

period is available in every situation. Generally, when a motion to confirm an

arbitration award is filed within the 3-month period, the motion to vacate should also

be brought at that time so that the two motions can be heard together.”) (citations

omitted; emphasis in original). That is, one party’s motion to confirm the award “puts

the other party to his objections” to the award then and there, even if time remains on

the statutory period in which the challenger would otherwise be entitled to move to

vacate, to modify, or to correct the award. The Hartbridge , 57 F.2d at 673 ; see

Florasynth, Inc. v. Pickholz , 750 F.2d 171, 174 (2nd Cir. 1984) (describing the

holding in The Hartbridge as follows: “On appeal, we . . . held that one party’s

motion to confirm an arbitration award imposes on the other party an obligation to

move to vacate if he intends to do so.”); C.L. Winter , 886 S.W.2d at 521 (quoting the

above-referenced holding of The Hartbridge with approval); see Warren , 669 P.2d

at 846-48 (concluding that relevant statutory provisions contemplated that motions

to vacate, to modify, or to correct arbitration award be before court when it rules on

motion to confirm).

Going a step further, at least one federal court has held that, if a party moves

to confirm the arbitration award, then the party opposing the award may not “idly

stand by, allow the award to be confirmed and judgment thereon entered, and then

move to vacate the award just as though no judgment existed.” The Hartbridge , 57

F.2d at 673 .

Some of the limited state authority on the matter concurs that a motion

to vacate, to modify, or to correct an arbitration award must be filed before a

judgment confirming the award is entered. See Warren , 669 P.2d at 847-48 ; see also

Clearwater , 67 Wash. App. at 315 , 835 P.2d at 263 . But see Federated Servs. Ins.

Co. v. Estate of Norberg , 101 Wash. App. 119, 123 , 4 P.3d 844, 847 (Wash. App.

2000); Martin , 66 Wash. App. at 373-74 , 832 P.2d at 120 . Once the arbitration award

has been confirmed without challenge and final judgment has been rendered thereon,

“the award can be vacated only if the judgment can be [vacated], and to vacate the

judgment an adequate excuse must be shown for not having presented objections to

the award when the motion to confirm was heard.” The Hartbridge , 57 F.2d at 673 ;

Clearwater , 67 Wash. App. at 315 , 835 P.2d at 263 (“Although we recognize that

there may be situations where [filing a motion to vacate] is not possible [at the time

that a motion to confirm is filed], we have no way of knowing whether such a

situation was present here.”).

Under Texas law, we believe that the result reached in The Hartbridge is

necessitated by C.L. Winter , in which this Court held that one must assert a motion

to vacate, to modify, or to correct an arbitration award when a motion to confirm is

filed, regardless of whether the TAA’s 90-day period to challenge the award has

expired. See id. , 886 S.W.2d at 521 . Otherwise, our holding in C.L. Winter has no

teeth: the requirement that one bring challenges to the arbitration award when a

motion to confirm is filed means nothing if one may ignore that requirement with

impunity and file a motion to vacate post-judgment, with no reasonable explanation

for the delay.

By post-submission letter briefing, the Hamm parties rely on two opinions

from the first division of the Washington court of appeals, in which that court held

contrary to our holding today. See Martin , 66 Wash. App. at 373-74 , 832 P.2d at 120 ;

see also Estate of Norberg , 101 Wash. App. at 123 , 4 P.3d at 847 .

We respectfully

decline to follow these opinions. In Martin , for example, the court held, based on

what it interpreted to be conflicting statutory provisions that did not expressly speak

to this issue, that one could move to vacate, to modify, or to amend an arbitration

award for the first time after judgment confirming the award, provided that one did

so within the statutory period. Id. , 66 Wash. App. at 373-74 , 832 P.2d at 120 .

However, the Martin court’s basis for this holding was that, “[i]n the absence of any

provision explicitly providing that a party’s rights . . . are limited by the entry of an

order confirming the judgment . . . , we must conclude that the motion to vacate the

judgment here was permissible . . . ,” frankly acknowledging that “we have no basis

for understanding what the Legislature’s intentions were in establishing this particular

statutory scheme [concerning the time for filing a motion to vacate]” and concluding

that it was thus “constrained to interpret the statute as we have.” Id. , 66 Wash. App.

at 374 , 374 n.4, 832 P.2d at 120 , 120 n.4. Martin was also not a unanimous decision:

two justices concurred, expressly disagreeing with the cited holding, and the majority

even acknowledged that “the concurrence makes an excellent point concerning the

inconsistencies among the various provisions of the statute.” Id. , 66 Wash. App. at

374 n.4, 832 P.2d at 120 n.4; see id. , 66 Wash. App. at 377-80 , 832 P.2d at 122-23

(Forrest, J., concurring, joined by Webster, A.C.J.). The Estate of Norberg court

merely relied on Martin . See 101 Wash. App. at 123 , 4 P.3d at 847 .

We respectfully disagree with Martin and Estate of Norberg . First, for the

reasons detailed above, we conclude that the FAA, and especially the TAA, imply a

due order of consideration. Second, and also as discussed above, we agree instead

with the concerns that Justice Forrest raised in his concurring opinion in Martin :

An arbitration award that is confirmed pursuant to [ Wash.

Stat. Ann. art. 7.04.150] is entered as a judgment of the court

and “has the same force and effect, in all respects as, and is

subject to all the provisions of law relating to” any other civil

judgment. The majority rule creates a judgment unlike any other

in that it creates the anomaly of permitting, in effect, an appeal

from a judgment more than 30 days after it has become final.

After confirmation of the award, not only is the judgment creditor

entitled to institute garnishment or execution proceedings but

third parties, such as title companies and credit bureaus, are

entitled to rely on the unappealed judgment. I find that the

majority’s result is inconsistent with the policy of the finality and

integrity of judgments.

I see no reason to believe that the Legislature intended this

unique exception to the normal rules governing the modification

and amendment of judgments. Indeed, it is arguable, although not

argued, that the majority’s interpretation of [ Wash. Stat. Ann.

art. 7.04.160] results in an encroachment on the rule making

authority of the Supreme Court. As interpreted it is, if not in

conflict with, at least inconsistent with the civil rules as to

judgments including: . . . new trial, reconsideration and

amendment of judgments, . . . relief from judgment or order, and

. . . time allowed to file notice. Such a result is not required by

the language of the statute and should be avoided.

Id. , 66 Wash. App. at 378-79 , 832 P.2d at 123 (Forrest, J., concurring) (citations and

footnotes omitted). We further agree with the reasoning given by the Utah Supreme

Court in reaching the conclusion that we do today:

This construction is further confirmed by the provision directing

entry of a conforming judgment or decree upon granting of an

order “confirming, modifying, correcting or vacating an award,”

. . . , since that direction apparently contemplates that the court

would consider such motions together rather than in succession.

Otherwise, the procedures, hearings, and action of the court in

the motion to confirm could be held for naught and the whole

process repeated. We do not readily infer a legislative intent to

squander scarce judicial time in this manner . . . . This

construction facilitates the limited scope of review and the

considerations of finality sought to be served by our policies on

judicial review of arbitration awards.

Warren , 669 P.2d at 848 (emphasis added). This reasoning applies in Texas because

here, as elsewhere, (1) the bases for reviewing an arbitration award are limited;

(2)

the statute provides for expedited consideration of motions to confirm, to vacate, to

modify, and to correct an arbitration award;

and (3) parties generally agree to

arbitrate for the benefit of a speedy, final resolution of their dispute.

The Texas

policy of expediting arbitration matters is not promoted by allowing a party to seek

a “do-over,” at a later date, of an award that has already been confirmed, that has been

made final and enforceable by statute, and that could have been challenged on the

same grounds before confirmation.

3. An Analogy

Because a statute makes a judgment confirming an arbitration award final

and enforceable like any other judgment, our conclusion is further supported by

analogous authority concerning affirmative defenses. An affirmative defense “seeks

to establish an independent reason that the plaintiff should not recover” and is “thus

[a defense] of avoidance, rather than a defense in denial”; that is, it is a defense of

confession and avoidance. In re C.M. , 996 S.W.2d 269, 270 (Tex. App.—Houston

[1st Dist.] 1999, no pet.); Great Am. Prods. v. Permabond Int’l , 94 S.W.3d 675, 683

(Tex. App.—Austin 2002, pet. denied). The statutory grounds for vacating,

modifying, or correcting an arbitration award under either statute are in the nature of

affirmative defenses because the party asserting these grounds implicitly confesses

the existence of an arbitration award, but nonetheless seeks to avoid its effect by

asserting an independent reason that the award should not be enforced. Like Rule of

Civil Procedure 94,

which expressly requires pre-judgment pleading of affirmative

defenses and “matter[s] constituting an avoidance” in other contexts, the FAA and

TAA also contemplate (as discussed above) a due order of pleading with respect to

motions to confirm, to vacate, to modify, or to correct, requiring a party challenging

an award to raise its challenge before final judgment. This requirement makes sense

given that the statutory grounds for vacatur, modification, and correction are

matters—like those governed, by analogy, by rule 94—of confession and avoidance.

An affirmative defense that is not pleaded or proved and on which findings

are not obtained is waived and cannot be preserved by raising the affirmative defense

for the first time in a motion for new trial. In re C.M. , 996 S.W.2d at 270 ; Tien Tao

Ass’n, Inc. v. Kingsbridge Park Cmty. Ass’n , 953 S.W.2d 525, 532 (Tex.

App.—Houston [1st Dist.] 1997, no pet.); see Glover v. State , 346 S.W.2d 121, 122

(Tex. Crim. App. 1961) (“A litigant is not permitted during a trial on the merits to

remain silent as to affirmative defenses known to him, and then when an adverse

result is reached, on motion for new trial complain because of his own neglect.”);

Tex. R. Civ. P. 94. Likewise, a trial court cannot abuse its discretion in overruling

a motion for new trial raising an untimely affirmative defense. Cf. id . By analogy,

then, a party that moves to vacate, to modify, or to correct an arbitration award, and

adduces evidence in support, only after the award has been confirmed and final

judgment rendered has waived that challenge—or, at least, a trial court does not abuse

its discretion if it overrules such a post-judgment motion. Cf. In re C.M. , 996 S.W.2d

at 270 .

This analogy to the law of affirmative defenses is particularly appropriate

given that both the FAA and the TAA contemplate that a judgment confirming (or

modifying or correcting) an arbitration award is final and enforceable like any other.

See 9 U.S.C.S. § 13; Tex. Civ. Prac. & Rem. Code Ann. § 171.092(a). If a judgment

confirming an arbitration award is final like any other, then, as it is required to do

with any other judgment, a party must raise (and prove, if evidence is necessary) its

confession-and-avoidance defenses before judgment.

4. Application of the Above Law to the Facts

Here, the record does not show that the Hamm parties challenged the

arbitration award on the merits until after the award was confirmed and final

judgment rendered. In its written response to the Hamm parties’ motion to vacate or

to modify, Millennium argued, citing The Hartbridge and C.L. Winter , that the Hamm

parties had filed their motion too late and that the motion should be overruled for that

reason. We agree with this proposition. A motion to vacate, to modify, or to correct

an arbitration award must be raised or considered before or simultaneously with a

motion to confirm the award. See The Hartbridge , 57 F.2d at 673 ; Warren , 669 P.2d

at 847-48 ; cf. C.L. Winter , 886 S.W.2d at 521 . The Hamm parties did not do this.

By post-submission letter briefing, the Hamm parties argue that their post-judgment motion to vacate was, in effect, rendered timely by the filing of their pre-judgment, unverified motion for continuance, which “inform[ed] the trial court of

[their] intent to file a motion to vacate.” Likewise, by post-submission amended

brief,

the Hamm parties have assigned error to the trial court’s denial of their

continuance motion.

Case law indicates that, once an arbitration award has been confirmed

without challenge and final judgment has been rendered, “the award can be vacated

only if the judgment can be [vacated], and to vacate the judgment an adequate excuse

must be shown for not having presented objections to the award when the motion to

confirm was heard.” The Hartbridge , 57 F.2d at 673 ; see Clearwater , 67 Wash. App.

at 315 , 835 P.2d at 263 . We review a ruling on a motion for continuance for abuse

of discretion.

See BMC Software Belgium, N.V. v. Marchand , 83 S.W.3d 789, 800

(Tex. 2002); Thomas James Assocs., Inc. v. Owens , 1 S.W.3d 315, 322 (Tex.

App.—Dallas 1999, no pet.) (so holding with respect to continuance motion made in

conjunction with motions to confirm and to vacate arbitration award). A trial court

abuses its discretion when its decision is so arbitrary and unreasonable that it amounts

to a clear and prejudicial error of law. Marchand , 83 S.W.2d at 800.

Here, the Hamm parties’ continuance motion was not verified or

accompanied by affidavit, contrary to rule. See Tex. R. Civ. P. 251 (“. . . nor shall

any continuance be granted except for sufficient cause supported by affidavit, or by

consent of the parties, or by operation of law.”).

For this reason alone, the trial

court did not abuse its discretion in overruling the continuance motion. See Villegas

v. Carter , 711 S.W.2d 624, 626 (Tex. 1986) (“Generally, when movants fail to

comply with Tex. R. Civ. P. 251’s requirement that the motion for continuance be

‘supported by affidavit,’ we presume that the trial court did not abuse its discretion

in denying the motion.”); cf. N. State Constr. Co. v. Banchero , 63 Wash.2d 245, 248 ,

386 P.2d 625, 627 (1963) (holding that trial court did not abuse discretion in denying

motion to continue hearing to confirm and to vacate arbitration award, when

continuance was sought for preparation of statement of facts from arbitration

proceeding, when continuance motion did not comply with statute requiring such

motion to be supported by affidavit showing materiality of sought-after evidence and

due diligence).

Additionally, their continuance motion neither explained on which statutory

grounds for vacating or modifying they might rely,

nor explained how the

arbitration materials for which they needed the continuance were relevant and

material to those grounds—even though the counsel who filed the continuance

motion also represented the Hamm parties at arbitration. Cf. Banchero , 63 Wash.2d

at 248 , 386 P.2d at 627 (“Appellants were in a good position to comply with all of

these requirements [of supporting their continuance motion with affidavit showing

materiality of sought–after evidence, among other matters] as they were, or should

have been, familiar with the evidence presented to the board of arbitrators.”). This

is important because (1) the trial court already had the arbitration agreement,

Millennium’s arbitration demand filed with the American Arbitration Association,

and the arbitration award before it, by virtue of previously filed pleadings and

motions, and (2) some statutory grounds for vacating or modifying arbitration awards

based on “legal errors” (as the Hamm parties alleged in part) do not necessarily

require the filing of more than these documents. See Tex. Civ. Prac. & Rem. Code

Ann. § 171.088(3)(A) (providing for vacating award if arbitrators exceeded their

authority); id. , § 171.091(a)(1)-(3) (providing for modifying or correcting award if

it contains evident miscalculation of numbers or evident mistake in description of

person, thing, or property to which award refers; arbitrators made award with respect

to matter not submitted to them and award may be corrected without affecting

decision’s merits; or award’s form is imperfect in manner not affecting merits); see

Crossmark, Inc. v. Hazar , 124 S.W.3d 422, 430 (Tex. App.—Dallas 2004, no pet.)

(“[A]pplications to confirm or vacate an arbitration award should be decided as other

motions in civil cases; on notice and an evidentiary hearing if necessary .”) (emphasis

added) .

Moreover, we have no idea what, if anything, was discussed concerning the

continuance motion at the September 5 hearing because we have no record of that

hearing. Neither did the Hamm parties ask the court to revisit its continuance ruling

at the time that they filed their post-judgment motion to vacate the judgment and

award or explain then why the record for which they sought a continuance was

essential to the bases for their motion to vacate.

Given this record, we cannot say that the trial court abused its discretion in

denying the Hamm parties’ continuance motion.

5. The Record

Finally, even if we were to reach the merits of the Hamm parties’ post-trial

motion, it is not at all clear that we could consider the arbitration record and exhibits

filed in support. First, the arbitration record and exhibits were not introduced into

evidence at the post-judgment hearing; the Hamm parties did not expressly or

specifically refer to them in their post-judgment motion to vacate or to modify;

nothing shows that the trial court considered the arbitration record and exhibits at the

hearing on the Hamm parties’ post-judgment motion; and the arbitration materials,

like the post-judgment motion in support of which they were produced, were not filed

before final judgment. Given these circumstances, nothing shows that the trial court

considered the arbitration record and exhibits when it ruled on the Hamm parties’

post-judgment motion. See State v. One (1) 1986 Nissan Auto. V.I.N.

JN1HZ14S1GX162301 , 792 S.W.2d 577, 579 (Tex. App.—El Paso 1990, no writ)

(holding that letter that was included in clerk’s record, but that was not admitted into

evidence and that did not appear to have been considered by trial court, could not be

considered on appeal), overruled on other grounds sub. nom State v. $435,000 , 842

S.W.2d 642 (Tex. 1992).

Indeed, the trial court would not have abused its

discretion in overruling the Hamm parties’ post-judgment motion even without first

considering the arbitration record and exhibits because the Hamm parties had

untimely filed both that motion and their supporting documentation.

Simply put,

nothing requires a court to consider materials relevant to vacating an arbitration

award when those materials are filed along with an untimely motion to vacate and

insufficient explanation is offered for the delay. Second, the arbitration materials

were not before the trial court at the time that it confirmed the award and rendered

final judgment—in effect, the only ruling that we may review on the merits because

the motion to vacate or to modify was untimely—and we may generally not evaluate

a trial court’s rulings based on materials that were not before it at the time that it

ruled. See, e.g. , Methodist Hosps. of Dallas v. Tall , 972 S.W.2d 894, 898 (Tex.

App.—Corpus Christi 1998, no pet.) (“It is axiomatic that an appellate court reviews

actions of a trial court based on the materials before the trial court at the time it

acted.”).

Conclusion

The trial court had no discretion but to confirm the arbitration award if the

Hamm parties did not file a motion to vacate or to modify (or otherwise challenge in

any way) the award before the ruling on Millennium’s motion to confirm. See Tex.

Civ. Prac. & Rem. Code Ann. § 171.087. The Hamm parties did not do so. The

trial court was entitled summarily to deny the Hamm parties’ untimely post-judgment

motion to vacate or to modify and did not have to consider the untimely materials

filed in support of that motion. For these reasons and the reasons stated above, we

overrule each of the Hamm parties’ issues and affirm the judgment of the trial court.

Tim Taft

Justice

Panel consists of Justices Taft, Alcala, and Higley.