81R8751 CAE-F
By: Gattis H.B. No. 2696
A BILL TO BE ENTITLED
AN ACT
relating to arbitration proceedings.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 51.014(a), Civil Practice and Remedies
Code, is amended to read as follows:
(a) A person may appeal from an interlocutory order of a
district court, county court at law, or county court that:
(1) appoints a receiver or trustee;
(2) overrules a motion to vacate an order that
appoints a receiver or trustee;
(3) certifies or refuses to certify a class in a suit
brought under Rule 42 of the Texas Rules of Civil Procedure;
(4) grants or refuses a temporary injunction or grants
or overrules a motion to dissolve a temporary injunction as
provided by Chapter 65;
(5) denies a motion for summary judgment that is based
on an assertion of immunity by an individual who is an officer or
employee of the state or a political subdivision of the state;
(6) denies a motion for summary judgment that is based
in whole or in part upon a claim against or defense by a member of
the electronic or print media, acting in such capacity, or a person
whose communication appears in or is published by the electronic or
print media, arising under the free speech or free press clause of
the First Amendment to the United States Constitution, or Article
I, Section 8, of the Texas Constitution, or Chapter 73;
(7) grants or denies the special appearance of a
defendant under Rule 120a, Texas Rules of Civil Procedure, except
in a suit brought under the Family Code;
(8) grants or denies a plea to the jurisdiction by a
governmental unit as that term is defined in Section 101.001;
(9) denies all or part of the relief sought by a motion
under Section 74.351(b), except that an appeal may not be taken from
an order granting an extension under Section 74.351;
(10) grants relief sought by a motion under Section
74.351(l); [or]
(11) denies a motion to dismiss filed under Section
90.007; or
(12) denies an application to compel or grants an
application to stay arbitration.
SECTION 2. Section 171.001, Civil Practice and Remedies
Code, is amended by adding Subsections (c) and (d) to read as
follows:
(c) A written arbitration agreement described by Subsection
(a)(1) must include a statement, initialed by each party to the
agreement, stating that the party has chosen to arbitrate a
controversy that exists at the time of the agreement. A written
arbitration agreement described by Subsection (a)(2) must include a
statement, initialed by each party to the agreement, stating that
the party has chosen to arbitrate any controversy that arises
between the parties after the date of the agreement. An agreement
to arbitrate must be prominently displayed in the document and in
12-point bold type.
(d) A party to a contract may not require any other party to
the contract to agree to arbitration as a condition of the contract.
SECTION 3. Section 171.021, Civil Practice and Remedies
Code, is amended by adding Subsection (d) to read as follows:
(d) An order compelling arbitration may not violate a right
protected by the United States Constitution or the Texas
Constitution. The provisions of Section 171.098(a) apply to an
appeal on constitutional grounds from an order compelling
arbitration.
SECTION 4. Section 171.022, Civil Practice and Remedies
Code, is amended to read as follows:
Sec. 171.022. UNCONSCIONABLE AGREEMENTS UNENFORCEABLE. A
court may not enforce an agreement to arbitrate if the court finds
the agreement was unconscionable at the time the agreement was
made. An agreement is unconscionable if enforcement of the
agreement will violate a right protected by the United States
Constitution or the Texas Constitution.
SECTION 5. Section 171.041, Civil Practice and Remedies
Code, is amended by adding Subsection (d) to read as follows:
(d) An arbitrator appointed under Subsection (b) must
satisfy objective qualification standards, including an
appropriate level of education, training, and experience. A court
may not appoint an unqualified arbitrator. The qualifications of
an arbitrator are subject to judicial review. If a court determines
that an arbitrator does not satisfy objective qualification
standards, an arbitration award of the arbitrator is void and
unenforceable.
SECTION 6. Section 171.042, Civil Practice and Remedies
Code, is amended to read as follows:
Sec. 171.042. MAJORITY ACTION BY ARBITRATORS. The powers
of the arbitrators are exercised by a majority [unless otherwise
provided by the agreement to arbitrate or this chapter].
SECTION 7. Section 171.043(a), Civil Practice and Remedies
Code, is amended to read as follows:
(a) Unless otherwise provided by the agreement to
arbitrate, all the arbitrators shall conduct the hearing. A
majority of the arbitrators is required to [may] determine a
question and render a final award.
SECTION 8. Section 171.044, Civil Practice and Remedies
Code, is amended by amending Subsection (b) and adding Subsection
(d) to read as follows:
(b) The notice must be served not later than the fifth day
before the hearing either personally or by registered or certified
mail with return receipt requested. Notice may not be waived, and
the hearing may not proceed without proper [Appearance at the
hearing waives the] notice.
(d) Notwithstanding Subsection (c), a hearing may not
proceed without notice or waiver of notice in accordance with this
section.
SECTION 9. Section 171.047, Civil Practice and Remedies
Code, is amended to read as follows:
Sec. 171.047. RIGHTS OF PARTY AT HEARING. Unless otherwise
provided by the agreement to arbitrate, a party at the hearing is
entitled to:
(1) be heard;
(2) present evidence material to the controversy;
[and]
(3) cross-examine any witness; and
(4) a transcript of the hearing.
SECTION 10. Subchapter C, Chapter 171, Civil Practice and
Remedies Code, is amended by adding Section 171.0481 to read as
follows:
Sec. 171.0481. TRANSCRIPT. (a) A transcript of the hearing
must be requested by a party before commencement of the hearing or
the right to a transcript is waived.
(b) A party requesting the transcript is responsible for the
cost. A party requesting a copy of the transcript is responsible
for the cost of the copy.
(c) An arbitrator may consider the cost of the transcript to
be an expense incurred in conducting the arbitration as provided by
Section 171.055.
(d) A transcript of a hearing must be prepared by a person
authorized by law to record testimony.
SECTION 11. Sections 171.049 and 171.055, Civil Practice
and Remedies Code, are amended to read as follows:
Sec. 171.049. OATH. The arbitrators, or an arbitrator at
the direction of the arbitrators, shall [may] administer to each
witness testifying before them the oath required of a witness in a
civil action pending in a district court.
Sec. 171.055. ARBITRATOR'S FEES AND EXPENSES. Unless
otherwise provided in the agreement to arbitrate, the arbitrators'
reasonable expenses and fees, with other reasonable expenses
incurred in conducting the arbitration, shall be paid as provided
in the award.
SECTION 12. Section 171.088(a), Civil Practice and Remedies
Code, is amended to read as follows:
(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; or
(5) the award clearly violates fundamental public
policy.
SECTION 13. Section 171.098(a), Civil Practice and Remedies
Code, is amended to read as follows:
(a) A party may appeal a judgment or decree entered under
this chapter or an order:
(1) granting or denying an application to compel
arbitration made under Section 171.021;
(2) granting an application to stay arbitration made
under Section 171.023;
(3) confirming or denying confirmation of an award;
(4) modifying or correcting an award; or
(5) vacating an award without directing a rehearing.
SECTION 14. The change in law made by this Act applies only
to arbitration commenced on or after the effective date of this Act.
An arbitration commenced before the effective date of this Act is
governed by the law applicable to arbitrations immediately before
the effective date of this Act, and that law is continued in effect
for that purpose.
SECTION 15. This Act takes effect immediately if it
receives a vote of two-thirds of all the members elected to each
house, as provided by Section 39, Article III, Texas Constitution.
If this Act does not receive the vote necessary for immediate
effect, this Act takes effect September 1, 2009.