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Click here for the full text of this decision FACTS:FemPartners contracted with Women’s Regional Healthcare (WRH) in September 1999 for FemPartners to acquire the assets of, then operate and manage, WRH’s practice. The service agreement spelled out FemPartners’ administrative duties. It also stated that FemPartners was authorized to recommend fees in connection with WRH’s goods and services, as well as to market, negotiate and administer WRH’s managed care contracts. Under the agreement, FemPartners was expressly prohibited from exercising any control over the physician-patient relationship, including diagnoses, treatments and medical ethical affairs. The agreement also contained an arbitration clause. When a dispute arose in July 2002, WRH invoked the clause. WRH sought to terminate the contract, and FemPartners filed a breach-of-contract counterclaim. The day before the arbitration hearing two years later, WRH filed a response to FemPartners’ counterclaim, arguing that the service agreement was illegal. The arbitration panel heard evidence on the original claims, as well as on the issue of the agreement’s legality. The panel awarded FemPartners damages. FemPartners’ filed an application for a trial court to confirm the award, and WRH filed a motion to vacate the award. The trial court granted FemPartners’ application. On appeal, WRH argues that the agreement, which contained the arbitration provision, was void because it violated the doctrine of the unauthorized corporate practice of medicine. HOLDING:Affirmed. The court repeats WRH’s argument in support of vacating the award: there was no agreement to arbitrate because the service agreement containing the arbitration agreement was illegal; the issue of whether there was a valid agreement to arbitrate was not decided pursuant to a motion to stay or compel arbitration; and WRH raised the issue of the illegality of the service agreement in the arbitration. The court finds that none of these arguments meets the criteria set forth in Civil Practice & Remedies Code 171.088(a) for vacating arbitration awards. The statute does allow awards to be vacated when there was no agreement to arbitrate, but it also requires that the issue was not adversely determined in another proceeding under the code and that the party did not participate in the arbitration hearing without raising an objection. An objection to the validity of a contract containing an agreement to arbitrate as a whole does not satisfy the statute. Rather, if the parties’ dispute arises from a contract containing an arbitration clause, a challenge to the contract as a whole, as opposed to a challenge specific to the arbitration clause itself, must be resolved by the arbitrators. “From the plain language of the statute, read in light of the separability doctrine, we conclude that, to preserve its right to appeal the arbitration award under section 171.088(a)(4) of the Civil Practice and Remedies Code, WRH was required to object specifically to the arbitration itself on the ground that there was never any agreement to arbitrate between the parties. . . . This it did not do.” The court adds that WRH initiated the arbitration proceeding in the first place, and in its amended pleadings for the arbitration, it challenged the validity of the service agreement not because the arbitration clause was void, but because it allegedly violated the Medical Practices Act. OPINION:Keyes, J.; Radack, C.J., Keyes and Alcala, JJ.

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