Alia Realty LLC, EED, Inc. v. Alhalwani

Dallas Court of Appeals, No. 05-21-00265-CV (September 23, 2021)
Justices Schenck, Smith (opinion available here), and Garcia

        The Dallas Court of Appeals reversed a trial court’s judgment vacating the arbitration award in this case and rendered judgment confirming that award, finding that filing a motion for continuance alone was not enough to preserve error.

        Parties involved in a series of real estate investments and construction projects agreed to resolve any potential disputes in an “expedited JAMS arbitration.” The agreement required the arbitration proceeding to occur within three months of a demand for arbitration, or “as close thereto as the parties and arbitrator’s schedule allowed.” Alia Realty filed a claim for arbitration against Alhalwani on July 6, 2020, seeking over $2 million in damages. Alhalwani answered and filed counterclaims.
        The deadline for designating expert witnesses was September 1, 2020, and the deadline for supplemental or rebuttal expert reports was September 18. Arbitration was set for October 13-15, 2020. On September 23, Alhalwani filed a motion for continuance, arguing he had attempted in good faith to meet the scheduling order deadlines but needed more time to examine the “thousands upon thousands” of accounting transactions at issue in the suit and present an expert report. The arbitrator denied the continuance, but gave Alhalwani until October 2, 2020 to file a supplemental expert report. Alhalwani met the new deadline, and the parties proceeded to arbitration as scheduled.
        After the arbitrator found against Alhalwani and awarded over $500,000 to Alia Realty, Alhalwani filed a motion to vacate the award in district court, arguing the arbitrator violated Civil Practice & Remedies Code § 171.088(a)(3)(B) by refusing to postpone the arbitration. The trial court agreed and vacated the award.
        The Dallas Court of Appeals reversed and rendered, confirming the arbitration award. It found that Alhalwani failed to preserve his complaint about the arbitrator’s denial of a continuance. The Court first noted that the preservation requirements of TRAP 33.1 apply to arbitrations. Alhalwani’s filing of a motion for continuance was not sufficient to preserve error as to the timing of the arbitration because, in response to that motion, the arbitrator granted Alhalwani additional time to file a supplemental expert report, which seemed to be Alhalwani’s primary reason for requesting the continuance. The Court held that, once Alhalwani was permitted to and did file a supplemental expert report and then proceeded to arbitration without further complaint, he left the arbitrator with the impression he was ready to proceed with the evidence he had obtained. The Court also noted that it was Alhalwani’s burden to prove error and, without a transcript from the continuance hearing, it was impossible to know who suggested moving the expert deadline or whether the parties agreed with the decision at the time. Because Alhalwani also failed to provide a transcript of the arbitration hearing itself, he had no evidence that he objected to going forward with the arbitration after being given additional time to submit an expert report. “Counsel’s statements in post-arbitration briefing and briefing in this Court concerning what occurred is not a substitute for a record of those proceedings.” Therefore, Alhalwani failed to preserve the alleged error.