TX STATETexas Court of Appeals, 5th District (Dallas)
2010

Centex/Vestal v. Friendship West Baptist Church

314 S.W.3d 677Texas Court of Appeals, 5th District (Dallas) • Decided 2010Enforced

HOLDING

Centex, a general contractor, submitted pass-through claims on behalf of its subcontractors to arbitration with a church client. The church tried to overturn the arbitrator's award, claiming the arbitrator exceeded his authority by deciding these claims. The Texas Court of Appeals ruled that once parties agree to arbitration and submit an issue to an arbitrator, they cannot later claim the arbitrator overstepped. The arbitrator's award was confirmed and enforced.

KEY FINDINGS

Dispute Resolution

If your GC includes you in an arbitration clause and submits your claim to arbitration, the other party cannot later challenge the arbitrator's decision by claiming it was outside the arbitrator's authority.

Change Order

Broad arbitration clauses that cover disputes 'arising out of or related to the contract' will be interpreted to include pass-through claims and change order disputes.

Flow-Down

Make sure your subcontract flows down the same arbitration language as the prime contract to protect your claims if disputes arise.

FULL COURT OPINION