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Click here for the full text of this decision FACTS:The Williamses contracted Statewide Remodeling Inc. to construct a conservatory sunroom attached to their residence. The contract contained an arbitration clause. Dissatisfied with the work performed by Statewide, the Williamses filed suit against Statewide for damages. In their original petition, the Williamses requested the trial court enter an agreed order appointing an arbitrator and abating the suit. After Statewide filed a general denial answer, arbitration proceeded according to agreements made by the parties and was conducted primarily by written submission. The parties submitted position statements to the arbitrator, which included affidavits of witnesses and other exhibits in support of their arguments. The arbitrator then conducted a hearing, at which the parties offered witness testimony. No transcript of the arbitration hearing was made. The arbitrator decided in favor of the Williamses and awarded them $33,500. The award consisted of $18,000 to “repair the room interior and take necessary steps to alter or replace the roof” and $15,500 in attorney’s fees and arbitration costs. The Williamses returned to the trial court and filed a motion to confirm the arbitration award. Statewide filed a motion to vacate the arbitration award. Specifically, Statewide argued that the evidence did not support the arbitrator’s award, which was for the cost to repair damages to the room’s interior and to alter or replace the roof. Moreover, Statewide argued the Williamses had not asked for the cost of repair as a measure of damages. Rather, Statewide contended that the Williamses requested only rescission and refund of the contract price of $52,656. Accordingly, Statewide asserted the arbitrator committed a gross mistake, because the award was issued in bad faith and without the exercise of honest judgment. Statewide attached to its motion to vacate: 1. both parties’ position statements with attached affidavits and supporting exhibits which were submitted to the arbitrator; 2. a sworn affidavit of Statewide’s attorney stating he had been present during the arbitration hearing and the Williamses did not present any evidence of the cost of repair; and 3. numerous additional documents, including letters and the text of a voice mail message between counsel. The trial court heard argument from the parties on the motion. The only exhibit admitted into evidence at the hearing was the arbitrator’s award. At the Williamses’ request, the trial court took judicial notice of Statewide’s written “money back” guarantee and the contract between Statewide and the Williamses, both of which contained arbitration clauses. Statewide represented to the trial court that no transcript had been made of the arbitration hearing because “the amount in controversy simply didn’t warrant it.” Over the Williamses’ objections, the trial court allowed Statewide to call the Williamses’ attorney to the witness stand. The Williamses’ attorney testified that, at the arbitration hearing, he did not offer any exhibit showing the cost of repairs to the Williamses’ home. The trial court denied Statewide’s motion to vacate and granted the Williamses’ motion to confirm the arbitration award. Statewide appealed. HOLDING:Affirmed. Texas common law, the court stated, provides that a binding arbitration award may be set aside if it is tainted with “fraud, misconduct, or such gross mistake as would imply bad faith, or a failure to exercise honest judgment.” A gross mistake sufficient to justify setting aside an arbitration award, the court stated, is a mistake that implies bad faith or a failure to exercise honest judgment and results in a decision that is arbitrary and capricious. An honest judgment made after due consideration given to conflicting claims, however erroneous, is not arbitrary and capricious. Only those errors that result in a fraud or some great and manifest wrong and injustice warrant the setting aside of an arbitration award, the court stated. When a nonprevailing party seeks to vacate an arbitration award, it bears the burden in the trial court of bringing forth a complete record that establishes its basis for vacating the award. When there is no transcript of the arbitration hearing, the court stated that an appellate court will presume the evidence was adequate to support the award. In its first issue, Statewide argued that the trial court erred in requiring it to provide a transcript of the arbitration hearing. As the nonprevailing party seeking to vacate the arbitration award, Statewide had the burden of bringing forth a complete record to the trial court. The court found that it could not conclude the trial court erred in holding Statewide to the burden of bringing forth a complete record of the arbitration proceedings, including a transcript of the arbitration hearing. In its second issue, Statewide contended that the trial court erred when it failed to find the arbitrator had committed a gross mistake sufficient to justify setting aside the arbitration award. Statewide argued that the Williamses sought only the return of the full contract price of $52,656 upon rescission of the contract and that the Williamses offered no evidence of the cost to make any repairs. Therefore, Statewide contended that the arbitrator made a gross mistake by making an award that was “inconsistent with anything demanded or proven” and that the arbitrator “picked a number out of the sky.” In the absence of a transcript of the arbitration hearing provided for the trial court’s review, however, the court could not determine the basis of the arbitrator’s award. Therefore, the court could not conclude that the trial court erred in declining to vacate the arbitration award based on Statewide’s contention of gross mistake. Finally, upon review of the record and briefs on file, the court found that Statewide’s appeal was not frivolous and thus declined to impose sanctions. OPINION:Lang, J.; O’Neill, Richter and Lang, JJ.

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