Preview
Cause Number 22-05-05551
Suchmor Thomas, M.D. and In the District Court
Thomas Developers, L.L.C.,
Plaintiffs,
versus of Montgomery County,
Texas
Charles Davis,
Defendant 457" Judicial District
Plaintiffs’ Reply to Defendant’s Response to Motion to Stay and Compel
Arbitration
To the Honorable Vincenzo J. Santini, District Judge:
Plaintiffs Suchmor Thomas, M.D., and Thomas Developers, L.L.C., file this
Reply to Defendant’s Response to Motion to Stay and to Compel Arbitration:
No Waiver
1 Plaintiffs have not waived arbitration. The arbitration agreement
specifically provides the Commercial Rules of the American Arbitration
Association control their agreement. See paragraph 20.3 of the Company
Agreement (as Plaintiffs define and use such term in their Motion to Stay
and Compel Arbitration). Rule 54(a) of the Commercial Arbitration
Rules (annexed hereto as Exhibit “A”) provides:
“No judicial proceeding by a party relating to the subject matter of the
arbitration shall be deemed a waiver of the party’s right to arbitrate.”
Asa result, the parties’ agreement bars a finding of waiver with respect
to this judicial proceeding.
There is a strong presumption against waiver of arbitration in Texas and
where it exists, waiver must be intentional.” Jn re Bank One, N.A., 216
S.W.3d 825, 827 (Tex.2007) (quoting EZ Pawn Corp. v. Mancias, 934
S.W.2d 87, 89 (Tex.1996)); In re Citgo Petroleum Corp., 248 S.W.3d
769, 777-78 (Tex. App. — Beaumont 2008, orig. proceeding). Generally,
delay alone does not establish waiver. Jn re Vesta Ins. Group, Inc., 192
S.W.3d 759, 763 (Tex.2006). Public policy favors the enforcement of
contracts, including those related to arbitration, therefore the law imposes
a strong presumption against waiver. /n re Bruce Terminix Co., 988
S.W.2d 702, 704 (Tex. 1998) (orig. proceeding) (per curiam). The parties
asserting waiver bears the burden of proof. Jd. at 705.
The Supreme Court of Texas has noted that no one factor is, by itself,
dispositive, among the factors courts should consider whether waiver has
occurred. RSL Funding, L.L.C., v. Pippins, 499 8.W.3d 423, 430 (Tex.
2016).
Thus, even if waiver under the common law, outside of the parties’
agreement, were possible, the Court should consider the ten factors set
forth in Perry Homes v. Cull, 258 S.W.3d 580, 598 (Tex. 2008), before
finding waiver. Those ten factors are (1) whether the party asserting the
right to arbitrate is the plaintiff or defendant in the lawsuit; (2) how long
the party waited before seeking arbitration; (3) the reasons for any delay
in seeking to arbitrate; (4) whether and when the movant knew of the
arbitration agreement during the period of delay; (5) how much discovery
and other pretrial activity the party seeking to arbitrate conducted before
seeking arbitration; (6) whether the party seeking to arbitrate requested
the court to dispose of claims on the merits; (7) whether the party seeking
to arbitrate asserted affirmative claims for relief in court; (8) the amount
of time and expense the parties have expended in litigation; (9) whether
the discovery conducted would be unavailable or useful in arbitration;
and (10) when the case was to be tried. Id. at 590-92.
Plaintiffs are, of course, the Plaintiffs in this lawsuit. Their delay in
seeking arbitration, however, occurred entirely because of the misconduct
of Defendant Charles Davis. The Court entered an Agreed Temporary
Injunction on August 25, 2022, to establish an orderly procedure to sell
certain real properties and manage certain rentals in dispute. Since that
time, Defendant Charles Davis has continuously violated the Court’s
Agreed Temporary Injunction Order by refusing to execute releases of
the notices of lis pendens he filed in the Real Property Records. To date,
Defendant has continued to refuse to execute the release of the notice of
lis pendens pertaining to 1308 North Frazier, Conroe, Texas 77301, even
though the Court ordered him to do so. Clearly, Plaintiffs need equitable
relief from a judicial court, which has the ability to enforce by contempt
or otherwise.
The Motion to Stay and Compel Arbitration is only eight months after the
filing of this lawsuit. Other than repeated attempts by Plaintiffs to enforce
this Court’s Agreed Temporary Injunction Order, little has occurred.
There has been no discovery whatsoever in this lawsuit, in the form of
depositions, written discovery, or otherwise, While the case is set for
trial on a first setting in April, the parties most clearly are not ready for
trial, since the entirety of this case to date has involved the Court’s
injunctive relief and attempts by Plaintiffs to enforce the Court’s Order.
Mere delay alone does not suffice to show prejudice. Jn re Serv. Corp.
Int'l, 85 S.W.3d 171, 174 (Tex.2002); In re Bath Junkie Franchise, Inc.,
246 S.W.3d 356, 368 (Tex. App. — Beaumont 2008, orig. proceeding) (14
month delay not waiver of right to arbitrate).
A court should not ordinarily infer waiver based on prejudice if a party
seeking arbitration has conducted only a minimal amount of discovery,
and the party opposing arbitration has not met its burden of showing
sufficient prejudice. Citgo Petroleum Corp., 248 S.W.3d at 778. In this
instance, Defendant has done little more than flash the claim of unfair
prejudice without showing any prejudice whatsoever. Defendant could
not show such prejudice in this instance, because Defendant caused the
delays by continuously refusing to abide by the Court’s Agreed
Temporary Injunction Order.
Parties to Arbitration
The agreement encompasses “[a]ny controversy or claim between or
among the Parties...” See paragraph 20.3 of the Company Agreement. It
is broad enough to encompass this dispute between Suchmor Thomas,
M.D., and Charles Davis, both of whom were the signatories to that
Company Agreement.
10. Defendant’s struggle to understand who the “parties” (with or without
capitalization of the letter p) to the Company Agreement is disingenuous
at best. Clearly, the parties to a contract are the people who sign it. See,
e.g., DeClaire v. G&B McIntosh Family Ltd. P'ship, 260 S.W.3d 34, 44
(Tex. App. — Houston [1* Dist.] 2008, no pet.) (a person who signs a
contract is a party). Plaintiff Suchmor Thomas, M.D., and Defendant
Charles Davis were the parties to the Company Agreement, because they
signed it.
11 As for Thomas Developers, L.L.C., if Defendant really would prefer to
have two proceedings — one in this Court and an arbitration before the
American Arbitration Association to which Defendant agreed — then
Thomas Developers, L.L.C., will go along with that. It does make for
more judicial economy, however, to combine all of this dispute into the
arbitration, which such combination to which Thomas Developers,
L.L.C., would agree.
Plaintiffs Suchmor Thomas, M.D., and Thomas Developers, L.L.C., pray
that the Court stay this proceeding until the parties have completed an arbitration
and the arbitrator has rendered an award, order Plaintiffs Suchmor Thomas, M.D.
and Thomas Developers, L.L.C., to commence an arbitration regarding this dispute
consistent with the aforementioned Company Agreement, and grant such other and
further relief to which Plaintiffs Suchmor Thomas, M.D., and Thomas Developers,
L.L.C., may show themselves justly entitled.
Respectfully submitted,
/s/ Eric Yollick
State Bar Number 22160100
104 West Davis Street
Conroe, Texas 77301
Telephone 281.363.3591
Email eyollick@yollicklawfirm.com
Attorney-in-Charge for
Plaintiffs Suchmor Thomas, M.D., and
Thomas Developers, L.L.C.
Certificate of Service
I served this instrument in accordance with Rules 21 and 21a by electronic
service, on this 24" day of January, 2023, to:
J. Randal Bays
randy @baysfirm.com
/s/ericyollick/s/
Eric Yollick
Commercial
Arbitration Rules and Mediation Procedures
Including Procedures for Large, Complex Commercial Disputes
GG) 2:00 ssatr0w assoerano
Available online at adr.org/commercial
Rules Amended and Effective September 1, 2022
f&
Regional Vice Presidents
States: Delaware, District of Columbia, States: Connecticut, Maine, Massachusetts,
Maryland, New Jersey, Pennsylvania, Virginia New Hampshire, Rhode Island, Vermont
P. Jean Baker, Esq. Karen Jalkut
Vice President Vice President
Phone; 202.223.7093 Phone:.617.695,6062
Email: BakerJ@adr.org Email: JalkutK@adrorg
States: Oklahoma, Texas States: Indiana, Kentucky, North Carolina,
Andrew Barton Ohio, South Carolina, Tennessee, West Virginia
Vice President Michelle M. Skipper
Phone: 210.998.5750 Vice President
Email: BartonA@adrorg Phone: 704.643.8605
Email: SkipperM@adrorg
States: Alabama, Georgia
John M. Bishop States: Florida
Vice President Rebecca Storrow, Ph.D.
Phone: 404.320.5150 Vice President
Email: BishopJ@adr.org Phone: 954.372.4341
Email: StorrowR@adrorg
States: Arkansas, Illinois, lowa, Michigan,
Minnesota, Missouri, North Dakota, States: Arizona, Colorado, Kansas, Hawaii,
South Dakota, Wisconsin Idaho, Montana, Nebraska, Nevada,
Svetlana Gitman, Esq New Mexico, Utah, Wyoming
Vice President Lance K. Tanaka
Phone: 773.820.7801 Vice President
Email: GitmanS@adrorg Phone: 303.831.0824
Email: Tanakal@adr org
States: Alaska, California, Oregon.
States: New York
wae Gothelf, Esq. Jeffrey T. Zaino, Esq
Vice President Vice President
Phone: 415.671.4053 Phone: 212.484.3224
Email: GothelfA@adr.org Email: ZainoJ@adrorg
States: City of Houston, Louisiana, Mississippi
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Vice President
Phone: 832.308.7893
Email: Grayl@adrorg
Case Management
John M. Bishop Rod Toben
Vice President Vice President
Phone: 404.320.5150 Phone: 972.774.6923
Email: BishopJ@adr.org Email: TobenR@adr.org
Administers cases in: AL, DC, FL. GA, IN, KY, Administers Cases in: AR, IL, 1A, KS, LA, MN,
MD, NC, OH, SC, TN, VA MS, MO, NE, ND, OK, SD, TX,
Sandra Marshall Yvonne Baglini
Vice President Assistant Vice President
Phone: 559.490.1906 Phone: 866.293.4053
Email: MarshallS@adrorg Email: BagliniV@adr.org
Administers cases in: AK, AZ, CA, CO, Hi, ID, Administers cases in: CT, DE, MA, ME, MI, NH,
MT, NV, NM, OR, UT, WA, WY NJ, NY, PA, RI, VT, WV
2 RULES AND MEDIATION PROCEDURES Jmencan Arbvitation Associaton
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Table of Contents
Important Notice
Introduction
Standard Arbitration Clause
Administrative Fees
Mediation
arge, Complex Cases
Commercial Arbitration Rules. 10
R-1. Agreement of Parties* 10
R-2. AAA, Delegation of Duties, Conduct of Parties, Administrative Review Council Nn
R-3. National Roster of Arbitrators nN
R-4, Filing Requirements and Procedures fa REDS awe genSy N
R-5. Answers and Counterclaims 13
R-6. Changes of Claim 14
R-7, Jurisdiction kwititermes camer ang 14
R-8. Consolidation and Joinder 15
R-9. Interpretation and Application of Rules. 7
R-10. Mediation V7
R-11. Administrative Conference 7
R12. Fixing of Locale. .......2:0000++ 7
R-13. Appointment from National Roster. par aie 18
R-14. Direct Appointment by Party 19
R-15. Appointment of snelpeiee by Pay PAepointed) Arbitrators, Parties, or
the AAA 79
R-16. Nationality of Arbitrator 20
R-17. Number of Arbitrators. 20
R-18. Disclosure 20
R-19. Disqualification of Arbitrator 21
R-20. Communication with Arbitrator 21
R-21. Vacancies. 22
R-22. Preliminary Hearing 22
R-23. Pre-Hearing Exchange and Production of Information 22
R-24. Enforcernent Powers of Arbitrator. 23
R-25. Date, Time, Place, and Method of Hearing 23
Rules Amended and Effective September 1, 2022, COMMERCIAL RUL
R-26. Attendance at Hearing... 24
R-27. Representation 24
R-28. Oaths . . 24
R-29. Official Record of Proceedings. 24
R-30. Interpreters. 25
R-31. Postponements 25
R-32. Arbitration in the Absence of a Party or Representative 25
R-33. Conduct of Proceedings. 25
R-34. Dispositive Motions 26
R-35, Evidence : 26
R-36. Evidence by Written Statements an: d Post-Hearing Ping of Documents or
Other Evidence ... 26
R-37. Inspection or Investigation 27
R-38. Interim Measures . . 27
R-39. Emergency Measures of Protection 27
R-40. Closing of Hearing 29
R-41. Reopening of Hearing. ... 29
R-42. Waiver of Rules 29
R-43. Extensions of Time. 29
R-44. Serving of Notice and Communications 30
R-45. Confidentiality 30
R-46. Majority Decision 30
R-47. Time of Award. seen 34
R-48. Form of Award. 31
R-49, Scope of Award. ... 31
R-50, Award Upon Settlement — Consent Award. .
R-51. Delivery of Award to Parties se
R-52. Modification of Award. . 32
R-53. Release of Documents for Judicial Proceedings. 32
R-54. Applications to Court and Exclusion of Liability 32
R-55, Administrative Fees
-56. Expenses . 33
R-57. Neutral Arbitrator’s Compensation. ..... 33
R-58. Deposits 34
R-59. Remedies for Nonpayment. rogue 34
R-60. Sanctions. 35
4 RULES AND MEDIATION PROCEDURES American Arbiration Associaton
Preliminary Hearing Procedures... 36
P-1. General 36
P-2. Checklist 36
Expedited Procedures 39
E-1. Limitation on Extensions. 39
E-2. Changes of Claim or Counterclaim. .... 39
E-3. Serving of Notice 39
E-4, Appointment and Qualifications of Arbitrator. . 39
E-5. Discovery, Motions, and Conduct of Proceedings 40
E-6. Proceedings on Documents and Procedures for the Resolution of Disputes
Through Document Submission . 40
E-7, Date, Time, Place, and Method of Hearing 4)
E-8. The Hearing 4)
E-9. Time of Award al
E-10. Arbitrator's Compensation. ..... wie seek 4)
Procedures far Large, Complex Commercial Disputes. . 42
L-1. Administrative Conference. 42
L-2. Arbitrators 42
L-3. Management of Proceedings ... . 43
Administrative Fee Schedules (Standard and Flexible Fees} 43
Commercial Mediation Procedures. .. 44
M-1. Agreement of Parties 44
M-2. Initiation of Mediation .. 44
M-3. Representation ‘ 44
M-4. Appointment of the Mediator .. 45
M-5. Mediator's Impartiality and Duty to Disclose .. 45
M-6. Vacancies 46
M-7. Duties and & ssnonsisibicn of the Mediator 46
M-8. Responsibilities of the Parties .... EJ ete oiweaner, 47
M-9. Privacy 47
M-10. Confidentiality... 47
M-11, No Stenographic Record Pres eeceses 48
M-12. Termination of Mediation 48
M-13, Exclusion of Liability Lenote 48
Rules Amended and Elective September 1, 2022. COMMERGIAL RULES §
M-14. Interpretation and Application of Procedures 48
M-15. Deposits. ... 48
M-16, Expenses . 49
M-17, Cost of the Mediatior 49
6 RULES AND MEDIATION PROCEDURES Amenean Arbitration Asséeatén
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Important Notice
These rules and any amendment of them shall apply in the form in effect at the
time the administrative filing requirements are met for a demand for arbitration
or submission agreement received by the AAA®. To ensure that you have the
most current information, see our web site at www.adr.org.
Introduction
Each year, many millions of business transactions take place. Occasionally,
disagreements develop over these business transactions. Many of these disputes
are resolved by arbitration, the voluntary submission of a dispute to an impartial
person or persons for final and binding determination. Arbitration has proven to be
an effective way to resolve these disputes privately, promptly, and economically.
The American Arbitration Association® (AAA), a not-for-profit, public service
organization, offers a broad range of dispute resolution services to business
executives, attorneys, individuals, trade associations, unions, management,
consumers, families, communities, and all levels of government. Services are
available through AAA headquarters in New York and through offices located in
major cities throughout the United States. Hearings may be held at locations
convenient for the parties and are not limited to cities with AAA offices. In
addition, the AAA serves as a center for education and training, issues
specialized publications, and conducts research on various forms of alternative
dispute resolution.
Rules Amended and Effective September 1, 2022 COMMERCIAL RULES 7
Standard Arbitration Clause
The parties can provide for arbitration of future disputes by inserting the
following clause into their contracts:
Any controversy or claim arising out of or relating to this contract, or the
breach thereof, shall be settled by arbitration administered by the
American Arbitration Association under its Commercial Arbitration Rules,
and judgment on the award rendered by the arbitrator(s) may be entered
in any court having jurisdiction thereof.
Arbitration of existing disputes may be accomplished by use of the following:
We, the undersigned parties, hereby agree to submit to arbitration
administered by the American Arbitration Association under its
Commercial Arbitration Rules the following Controversy: (describe briefly).
We further agree that the above controversy be submitted to (one) (three)
arbitrator(s). We further agree that we will faithfully observe this
agreement and the rules, that we will abide by and perform any award
rendered by the arbitrator(s), and that a judgment of any court having
jurisdiction may be entered on the award.
The services of the AAA are generally concluded with the transmittal of the
award. Although there is voluntary compliance with the majority of awards,
judgment on the award can be entered in a court having appropriate jurisdiction
if necessary.
Administrative Fees
The AAA charges a filing fee based on the amount of the claim or counterclaim.
This fee information, which is included with these rules, allows the parties to
exercise control over their administrative fees. The fees cover AAA administrative
services; they do not cover arbitrator compensation or expenses, if any, reporting
services, or any post-award charges incurred by the parties in enforcing the award,
Mediation
Subject to the right of any party to opt out, in cases where a claim or counterclaim
exceeds $100,000, the Rules provide that the parties shall mediate their dispute
upon the administration of the arbitration or at any time when the arbitration
is pending. In mediation, the neutral mediator assists the parties in reaching a
B RULES AND MEDIATION PROCEDURES amencan Arbitration Assocntin
a ai
settlement but does not have the authority to make a binding decision or award.
Mediation is administered by the AAA in accordance with its Commercial
Mediation Procedures. There is no additional filing fee where parties to a
pending arbitration attempt to mediate their dispute under the AAAs auspices.
Although these rules include a mediation procedure that will apply to many
cases, parties may still want to incorporate mediation into their contractual dispute
settlement process. Parties can do so by inserting the following mediation clause
into their contract in conjunction with a standard arbitration provision:
If a dispute arises out of or relates to this contract, or the breach thereof,
and if the dispute cannot be settled through negotiation, the parties
agree first to try in good faith to settle the dispute by mediation
administered by the American Arbitration Association under its
Commercial Mediation Procedures before resorting to arbitration,
litigation, or some other dispute resolution procedure.
If the parties want to use a mediator to resolve an existing dispute, they can
enter into the following submission agreement:
The parties hereby submit the following dispute to mediation
administered by the American Arbitration Association under its
Commercial Mediation Procedures. (The clause may also provide for the
qualifications of the mediator(s), method of payment, locale of meetings,
and any other item of concern to the parties.)
Large, Complex Cases
Unless the parties agree otherwise, the Procedures for Large, Complex Commercial
Disputes, which appear in this pamphlet, will be applied to all cases administered
by the AAA under the Commercial Arbitration Rules in which the disclosed claim
or counterclaim of any party is at least $1,000,000 exclusive of claimed interest,
arbitration fees and costs. The key features of these Procedures include:
> A highly qualified, trained Roster of Neutrals;
> A mandatory preliminary hearing with the arbitrators, which may be conducted by
teleconference or other electronic means;
Broad arbitrator authority to order and control the exchange of information,
including depositions;
A presumption that hearings will proceed on a consecutive or block basis.
Rules Amended and Effective September 1, 2022 IMMERCIAL RULES 9
Commercial Arbitration Rules
R-1, Agreement of Parties”
(a) The parties shall be deemed to have made these Rules a part of their arbitration
agreement whenever they have provided for arbitration by the American Arbitration
Association ("AAA") under its Commercial Arbitration Rules or for arbitration by
the AAA of a domestic commercial dispute without specifying particular rules
These Rules and any amendment to them shall apply in the form in effect at the
time the administrative requirements are met for a Demand for Arbitration or
Submission Agreement received by the AAA, Any disputes regarding which AAA
tules shall apply shall be decided by the AAA. The parties, by written agreement,
may vary the procedures set forth in these Rules. After appointment of the
arbitrator, such modifications may be made only with the consent of the arbitrator.
(b) Unless the parties agree or the AAA determines otherwise, the Expedited
Procedures shall apply in any case in which no disclosed claim or counterclaim
‘exceeds $100,000, exclusive of interest, attorneys’ fees, and arbitration fees and
costs. Parties may also agree to use these Procedures in larger cases. Unless the
parties agree otherwise, these Procedures will not apply in cases involving more
than two parties. The Expedited Procedures shall be applied as described in
Procedures E-1 through E-10, in addition to any other portion of these Rules that
is not in conflict with the Expedited Procedures.
{c) Unless the parties agree otherwise, the Procedures for Large, Complex
Commercial Disputes shall apply to all cases in which the disclosed claim or
counterclaim of any party is at least $1,000,000, exclusive of claimed interest,
attorneys’ fees, arbitration fees and costs. Parties may also agree to use the
Procedures in cases involving claims or counterclaims under $1,000,000 or in
nonmonetary cases. The Procedures for Large, Complex Commercial Disputes
shall be applied as described in Procedures L-1 through L-3 in addition to any
other portion of these Rules that is not in conflict with the Procedures for Large,
Complex Commercial Disputes.
(d) Parties may, by agreement, apply the Expedited Procedures; the Procedures for
Large, Complex Commercial Disputes; or the Procedures for the Resolution of
Disputes Through Document Submission (Procedure E-6) to any dispute
(e) All other cases shall be administered in accordance with Rules R-1 through R-60 of
these Rules,
* The AAA will apply the Employment Fee Schedule to any dispute between an individual employee or an
independent contractor (working or performing as an individual and not incorporated) and a business or
organization and the dispute involves work or work-related claims, including any statutory claims and including
work-related claims under independent contractor agreements. A dispute arising out of an employment plan will
be administered under the AAA's Employment Arbitration Rules and Mediation Procedures, A dispute arising out
of @ consumer arbitration agreement will be administered under the AAA’ Consumer Arbitration Rules.
Beginning June 1, 2021, the AAA will apply the Consumer Arbitration Fee Schedule to any dispute between an
online marketplace or platform and an individual user or subscriber (using or subscribed to the service as 6”
individual and net incorporated) and the dispute does not involve work or work-related claims.
10 RULES AND MEDIATION PROCEDURES deercan Arbatration Assoriaien
a _ —
R-2. SAA, Delegation ef Duties, Conduc it Parties, Administrative Review Counell
(a) When parties agree to arbitrate under these Rules, or when they provide for
arbitration by the AAA and an arbitration is initiated under these Rules, they
thereby authorize the AAA to administer the arbitration.
(b) The authority and duties of the AAA are prescribed in the agreement of the
parties and in these Rules, and may be carried out through such of the AAAS
representatives as it may direct. The AAA may, in its discretion, assign the
administration of an arbitration to any of its offices. Arbitrations administered
under these Rules shall only be administered by the AAA or by an individual or
organization authorized by the AAA to do so.
(c) The AAA requires that parties and their representatives conduct themselves in
accordance with the AAA's Standards of Conduct for Parties and Representatives
when utilizing the AAA‘s services. Failure to do so may result in the AAAs declining
to further administer a particular case or caseload.
(d) For cases proceeding under the Procedures for Large, Complex Commercial
Disputes, and for other cases where the AAA, in its sole discretion, deems it
appropriate, the AAA may act through its Administrative Review Council to take
the following administrative actions:
i) determine challenges to the appointment or continuing service of an
arbitrator;
ii) make an initial determination as to the locale of the arbitration, subject to the
power of the arbitrator to make a final determination; or
iii) decide whether a party has met the administrative requirements to file an
arbitration under these Rules.
R-3, National Roster of Acbitrators
The AAA shall establish and maintain a National Roster of Arbitrators (“National
Roster”) and shall appoint arbitrators as provided in these Rules. The term
“arbitrator” in these Rules refers to the arbitration panel, constituted for a
particular case, whether composed of one or more arbitrators, or to an individual
arbitrator, as the context requires.
R-4, Filing Requirements and Procedures
(a) Filing Requirements
i) Arbitration under an arbitration provision in a contract shall be initiated by the
initiating party (“claimant”) filing with the AAA a Demand for Arbitration, the
administrative filing fee, and a copy of the applicable arbitration agreement
from the parties’ contract which provides for arbitration. The filing fee must
be paid before a matter is considered properly filed.
Rules Amended and Effective September 1, 2022, OME CIAL Hut yn
-_ ii
ii) Arbitration pursuant to a court order shall be initiated by the initiating party
filing with the AAA a Demand for Arbitration, the administrative filing fee,
and a copy of any applicable arbitration agreement from the parties’ contract
which provides for arbitration
a) The filing party shall include a copy of the court order.
b) The filing fee must be paid before a matter is considered properly filed.
if the court order directs that a specific party is responsible for the filing
fee, it is the responsibility of the filing party to either make such payment
to the AAA and seek reimbursement as directed in the court order or to
make other such arrangements so that the filing fee is submitted to the
AAA with the Demand.
¢) The party filing the Demand with the AAA is the claimant and the
opposing party is the respondent regardless of which party initiated the
court action, Parties may request that the arbitrator alter the order of
proceedings if necessary pursuant to Rule R-33.
iii) Parties to any existing dispute who have not previously agreed to use these
Rules may commence an arbitration under these Rules by filing a written
Submission Agreement and the administrative filing fee, To the extent that
the parties’ Submission Agreement contains any variances from these Rules,
such variances should be clearly stated in the Submission Agreement.
iv) Information to be included with any arbitration filing includes:
a) the name of each party;
b) the address of each party and, if known, the telephone number and email
address;
°) if applicable, the name, address, telephone number, and email address of
any known representative for each party;
d) a statement setting forth the nature of the claim including the relief
sought and the amount involved; and
e) the locale requested if the arbitration agreement does not specify one.
(b) Filing Procedures
i) The initiating party may file or submit a dispute to the AAA in the following
manner:
a) through AAA WebfFile®, located at www.adr.org;
b) by filing the complete Demand or Submission with any AAA office,
regardless of the intended locale of hearing; or
) by emailing the complete Demand or Submission to casefiling@adr.org,
with payment to follow as directed by the AAA.
ii) The filing party shall simultaneously provide a copy of the Demand and any
supporting documents ta the opposing party,
12. RULES AND MEDIATION PROCEDURES American Arbtraven Aestession
iii) Any papers, notices, or process necessary or proper for the initiation of an
arbitration under this Rule may be served on a party:
a) by mail addressed to the party or its authorized representative at their last
known address;
b) by electronic service/email, with the prior agreement of the party being
served;
¢) by personal service; or
d) by any other service methods provided for under the applicable
procedures of the courts of the state where the party to be served is
located
iv) The AAA shall provide notice to the parties (or their representatives if so named)
of the receipt of a Demand or Submission when the administrative filing
requirements have been satisfied. The date on which the filing requirements
are satisfied shall establish the date of filing the dispute for administration
However, all disputes in connection with the AAAs determination of the date
of filing may be decided by the arbitrator.
v) Itis the responsibility of the filing party to ensure that any conditions precedent
to the filing of a case are met prior to filing an arbitration, as well as any time
requirements associated with the filing. Any dispute regarding whether a
condition precedent has been met may be raised with the arbitrator for
determination
vi) The AAA has the authority to make an administrative determination whether
the filing requirements set forth in this Rule have been met
vii) If the filing does not satisfy the filing requirements set forth in Section (a)
above, the AAA shall acknowledge to all named parties receipt of the
incomplete filing, and the filing may be returned to the initiating party.
(c) Authority of arbitrator. Any decision made by the AAA regarding filing
requirements and procedures shall not interfere with the arbitrator's authority to
determine jurisdiction pursuant to Rule R-7.
RS Answers and Counterclaims
(a) Arespondent may file an answering statement with the AAA within 14 calendar
days after notice of the filing of the Demand is sent by the AAA. The respondent
shall, at the time of any such filing, send a copy of any answering statement to
the claimant and to all other parties to the arbitration. If no answering statement
is filed within the stated time, the respondent will be deemed to deny the claim.
Failure to file an answering statement shall not operate to delay the arbitration.
(b) Arespondent may file a counterclaim at any time after notice of the filing of the
Demand is sent by the AAA, subject to the limitations set forth in Rule R-6, The
respondent shall send a copy of the counterclaim to the claimant and all other
parties to the arbitration. If a counterclaim is asserted, jt shall include a statement
setting forth the nature of the counterclaim including the relief sought and the
Rules Amended and Effective September 1, 2022 MMERCIAL RULE 13
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amount involved, The filing fee as specified in the applicable AAA Fee Schedule
must be paid at the time of filing, The claimant may file an answering statement
or reply in response to the counterclaim with the AAA within 14 calendar days
after notice of the filing of the counterclaim is sent by the AAA.
{c) If the respondent alleges that a different arbitration provision is controlling, the
matter will be administered in accordance with the arbitration provision submitted
by the initiating party subject to a final determination by the arbitrator.
(d) {f the counterclaim does not meet the requirements for filing a claim and the
deficiency is not cured by the date specified by the AAA, it may be returned to the
filing party.
R-6, Changes of Claim
(a) A party may at any time prior to the close of the hearing or by any earlier date
established by the arbitrator increase or decrease the amount of its claim or
counterclaim, Written notice of the change of claim amount must be provided
to the AAA and all parties. If the change of claim amount results in an increase in
the administrative fee, the balance of the fee is due before the change of clair
or counterclaim amount may be accepted by the arbitrator. After the arbitrator is
appointed, however, a party may increase the amount of its claim or counterclaim,
or alter its request for non-monetary relief, only with the arbitrator's consent.
(b) Any new or different claim or counterclaim, as opposed to an increase or decrease
in the amount of a pending claim or counterclaim, shall be made in writing and
filed with the AAA, and a copy shall be provided to the other party, who shall have
14 calendar days from the date of such transmittal within which to file an answer to
the proposed change of clain or counterclaim with the AAA. After the arbitrator is
appointed, however, no new or different claim or counterclaim may be submitted
except with the arbitrator's consent
(c) A party that filed a claim or counterclaim of an undisclosed or undetermined
amount must specify the amount of the claim or counterclaim to the AAA, all
parties, and the arbitrator at least seven calendar days prior to the commencement
of the hearing or by any other date established by the arbitrator. If the disclosed
amount of the claim or counterclaim results in an increased filing fee, that fee
must be paid at the time the claim or counterclaim amount is disclosed. For good
cause shown and with the consent of the arbitrator, a party may proceed to the
hearing with an undisclosed or undetermined claim or counterclaim, provided that
the final amount of the claim or counterclaim is set forth in a post-hearing brief or
submission and any appropriate filing fee is paid
R-?7. Jurisdiction
(a) The arbitrator shall have the power to rule on his or her own jurisdiction, including
any objections with respect to the existence, scope, or validity of the arbitration
agreement or to the arbitrability of any claim or counterclaim, without any need to
refer such matters first to. court.
14 RULES AND MEDIATION PROCEDURES American Arbitration Associath
a
(b) The arbitrator shall have the power to determine the existence or validity of a
contract of which an arbitration clause forms a part. Such an arbitration clause
shall be treated as an agreement independent of the other terms of the contract
A decision by the arbitrator that the contract is null and void shall not for that
reason alone render invalid the arbitration clause.
{c) A party must object to the jurisdiction of the arbitrator or to the arbitrability of a
claim or counterclaim no later than the filing of the answering statement to the
claim or counterclaim that gives rise to the objection. The arbitrator may rule on
such objections as a preliminary matter or as part of the final award,
R-8, Consolidation and Joinder
(a) Consolidation
i Two or more arbitrations may be consolidated if all parties to all of the
arbitrations to be consolidated so agree.
ii) Unless all parties agree to consolidation, the party requesting consolidation
of two or more arbitrations must file with the AAA and serve on all other
parties a written request for consolidation with the supporting reasons for
such request within 90 days of the date the AAA determines that all
administrative filing requirements were satisfied for the last-filed case that is
part of the consolidation request. Such time limit may be extended by the
arbitrator appointed in the first-filed case upon a showing of good cause for
the late request. The other parties to the arbitrations shall provide their
written responses to the consolidation request within 10 calendar days after
the AAA sends notice of receipt of the request.
iii) At its discretion, the AAA either may direct that the consolidation request be
decided by the arbitrator appointed in the first-filed case or may appoint a
consolidation arbitrator for the sole purpose of deciding the consolidation
request.
iv) The arbitrator deciding consolidation may order consolidation of two or more
cases for all purposes or for such limited purposes and under such conditions
as the arbitrator may direct.
v) Absent agreement of all parties, an arbitrator appointed for the sole purpose
of deciding the consolidation request shall have no further power to act, and
shall be removed from the case, after the consolidation request is decided.
vi) In deciding whether to consolidate, the arbitrator or consolidation arbitrator
shall take into account all relevant circumstances, including:
a) the terms and compatibility of the agreements to arbitrate,
b) applicable law,
¢) the timeliness of the request to consolidate and the progress already
made in the arbitrations,
4) whether the arbitrations raise common issues of law and/or fact, and
Rules Amended and Effective September 1, 2022 OMMERCIOL RULES 15
——
e) whether consolidation of the arbitrations would serve the interests of
justice and efficiency
(b) Joinder
i) Additional parties may be joined to an arbitration if all parties to the
arbitration and the parties proposed to be joined so agree
ii) Absent such consent, all requests for joinder must be submitted to the AAA
prior to the appointment of an arbitrator pursuant to these Rules or within
90 days of the date the AAA determines that all administrative filing
requirements have been satisfied. The arbitrator
Preview
Cause Number 22-05-05551 Suchmor Thomas, M.D. and In the District Court Thomas Developers, L.L.C., Plaintiffs, versus of Montgomery County, Texas Charles Davis, Defendant 457" Judicial District Plaintiffs’ Reply to Defendant’s Response to Motion to Stay and Compel Arbitration To the Honorable Vincenzo J. Santini, District Judge: Plaintiffs Suchmor Thomas, M.D., and Thomas Developers, L.L.C., file this Reply to Defendant’s Response to Motion to Stay and to Compel Arbitration: No Waiver 1 Plaintiffs have not waived arbitration. The arbitration agreement specifically provides the Commercial Rules of the American Arbitration Association control their agreement. See paragraph 20.3 of the Company Agreement (as Plaintiffs define and use such term in their Motion to Stay and Compel Arbitration). Rule 54(a) of the Commercial Arbitration Rules (annexed hereto as Exhibit “A”) provides: “No judicial proceeding by a party relating to the subject matter of the arbitration shall be deemed a waiver of the party’s right to arbitrate.” Asa result, the parties’ agreement bars a finding of waiver with respect to this judicial proceeding. There is a strong presumption against waiver of arbitration in Texas and where it exists, waiver must be intentional.” Jn re Bank One, N.A., 216 S.W.3d 825, 827 (Tex.2007) (quoting EZ Pawn Corp. v. Mancias, 934 S.W.2d 87, 89 (Tex.1996)); In re Citgo Petroleum Corp., 248 S.W.3d 769, 777-78 (Tex. App. — Beaumont 2008, orig. proceeding). Generally, delay alone does not establish waiver. Jn re Vesta Ins. Group, Inc., 192 S.W.3d 759, 763 (Tex.2006). Public policy favors the enforcement of contracts, including those related to arbitration, therefore the law imposes a strong presumption against waiver. /n re Bruce Terminix Co., 988 S.W.2d 702, 704 (Tex. 1998) (orig. proceeding) (per curiam). The parties asserting waiver bears the burden of proof. Jd. at 705. The Supreme Court of Texas has noted that no one factor is, by itself, dispositive, among the factors courts should consider whether waiver has occurred. RSL Funding, L.L.C., v. Pippins, 499 8.W.3d 423, 430 (Tex. 2016). Thus, even if waiver under the common law, outside of the parties’ agreement, were possible, the Court should consider the ten factors set forth in Perry Homes v. Cull, 258 S.W.3d 580, 598 (Tex. 2008), before finding waiver. Those ten factors are (1) whether the party asserting the right to arbitrate is the plaintiff or defendant in the lawsuit; (2) how long the party waited before seeking arbitration; (3) the reasons for any delay in seeking to arbitrate; (4) whether and when the movant knew of the arbitration agreement during the period of delay; (5) how much discovery and other pretrial activity the party seeking to arbitrate conducted before seeking arbitration; (6) whether the party seeking to arbitrate requested the court to dispose of claims on the merits; (7) whether the party seeking to arbitrate asserted affirmative claims for relief in court; (8) the amount of time and expense the parties have expended in litigation; (9) whether the discovery conducted would be unavailable or useful in arbitration; and (10) when the case was to be tried. Id. at 590-92. Plaintiffs are, of course, the Plaintiffs in this lawsuit. Their delay in seeking arbitration, however, occurred entirely because of the misconduct of Defendant Charles Davis. The Court entered an Agreed Temporary Injunction on August 25, 2022, to establish an orderly procedure to sell certain real properties and manage certain rentals in dispute. Since that time, Defendant Charles Davis has continuously violated the Court’s Agreed Temporary Injunction Order by refusing to execute releases of the notices of lis pendens he filed in the Real Property Records. To date, Defendant has continued to refuse to execute the release of the notice of lis pendens pertaining to 1308 North Frazier, Conroe, Texas 77301, even though the Court ordered him to do so. Clearly, Plaintiffs need equitable relief from a judicial court, which has the ability to enforce by contempt or otherwise. The Motion to Stay and Compel Arbitration is only eight months after the filing of this lawsuit. Other than repeated attempts by Plaintiffs to enforce this Court’s Agreed Temporary Injunction Order, little has occurred. There has been no discovery whatsoever in this lawsuit, in the form of depositions, written discovery, or otherwise, While the case is set for trial on a first setting in April, the parties most clearly are not ready for trial, since the entirety of this case to date has involved the Court’s injunctive relief and attempts by Plaintiffs to enforce the Court’s Order. Mere delay alone does not suffice to show prejudice. Jn re Serv. Corp. Int'l, 85 S.W.3d 171, 174 (Tex.2002); In re Bath Junkie Franchise, Inc., 246 S.W.3d 356, 368 (Tex. App. — Beaumont 2008, orig. proceeding) (14 month delay not waiver of right to arbitrate). A court should not ordinarily infer waiver based on prejudice if a party seeking arbitration has conducted only a minimal amount of discovery, and the party opposing arbitration has not met its burden of showing sufficient prejudice. Citgo Petroleum Corp., 248 S.W.3d at 778. In this instance, Defendant has done little more than flash the claim of unfair prejudice without showing any prejudice whatsoever. Defendant could not show such prejudice in this instance, because Defendant caused the delays by continuously refusing to abide by the Court’s Agreed Temporary Injunction Order. Parties to Arbitration The agreement encompasses “[a]ny controversy or claim between or among the Parties...” See paragraph 20.3 of the Company Agreement. It is broad enough to encompass this dispute between Suchmor Thomas, M.D., and Charles Davis, both of whom were the signatories to that Company Agreement. 10. Defendant’s struggle to understand who the “parties” (with or without capitalization of the letter p) to the Company Agreement is disingenuous at best. Clearly, the parties to a contract are the people who sign it. See, e.g., DeClaire v. G&B McIntosh Family Ltd. P'ship, 260 S.W.3d 34, 44 (Tex. App. — Houston [1* Dist.] 2008, no pet.) (a person who signs a contract is a party). Plaintiff Suchmor Thomas, M.D., and Defendant Charles Davis were the parties to the Company Agreement, because they signed it. 11 As for Thomas Developers, L.L.C., if Defendant really would prefer to have two proceedings — one in this Court and an arbitration before the American Arbitration Association to which Defendant agreed — then Thomas Developers, L.L.C., will go along with that. It does make for more judicial economy, however, to combine all of this dispute into the arbitration, which such combination to which Thomas Developers, L.L.C., would agree. Plaintiffs Suchmor Thomas, M.D., and Thomas Developers, L.L.C., pray that the Court stay this proceeding until the parties have completed an arbitration and the arbitrator has rendered an award, order Plaintiffs Suchmor Thomas, M.D. and Thomas Developers, L.L.C., to commence an arbitration regarding this dispute consistent with the aforementioned Company Agreement, and grant such other and further relief to which Plaintiffs Suchmor Thomas, M.D., and Thomas Developers, L.L.C., may show themselves justly entitled. Respectfully submitted, /s/ Eric Yollick State Bar Number 22160100 104 West Davis Street Conroe, Texas 77301 Telephone 281.363.3591 Email eyollick@yollicklawfirm.com Attorney-in-Charge for Plaintiffs Suchmor Thomas, M.D., and Thomas Developers, L.L.C. Certificate of Service I served this instrument in accordance with Rules 21 and 21a by electronic service, on this 24" day of January, 2023, to: J. Randal Bays randy @baysfirm.com /s/ericyollick/s/ Eric Yollick Commercial Arbitration Rules and Mediation Procedures Including Procedures for Large, Complex Commercial Disputes GG) 2:00 ssatr0w assoerano Available online at adr.org/commercial Rules Amended and Effective September 1, 2022 f& Regional Vice Presidents States: Delaware, District of Columbia, States: Connecticut, Maine, Massachusetts, Maryland, New Jersey, Pennsylvania, Virginia New Hampshire, Rhode Island, Vermont P. Jean Baker, Esq. Karen Jalkut Vice President Vice President Phone; 202.223.7093 Phone:.617.695,6062 Email: BakerJ@adr.org Email: JalkutK@adrorg States: Oklahoma, Texas States: Indiana, Kentucky, North Carolina, Andrew Barton Ohio, South Carolina, Tennessee, West Virginia Vice President Michelle M. Skipper Phone: 210.998.5750 Vice President Email: BartonA@adrorg Phone: 704.643.8605 Email: SkipperM@adrorg States: Alabama, Georgia John M. Bishop States: Florida Vice President Rebecca Storrow, Ph.D. Phone: 404.320.5150 Vice President Email: BishopJ@adr.org Phone: 954.372.4341 Email: StorrowR@adrorg States: Arkansas, Illinois, lowa, Michigan, Minnesota, Missouri, North Dakota, States: Arizona, Colorado, Kansas, Hawaii, South Dakota, Wisconsin Idaho, Montana, Nebraska, Nevada, Svetlana Gitman, Esq New Mexico, Utah, Wyoming Vice President Lance K. Tanaka Phone: 773.820.7801 Vice President Email: GitmanS@adrorg Phone: 303.831.0824 Email: Tanakal@adr org States: Alaska, California, Oregon. States: New York wae Gothelf, Esq. Jeffrey T. Zaino, Esq Vice President Vice President Phone: 415.671.4053 Phone: 212.484.3224 Email: GothelfA@adr.org Email: ZainoJ@adrorg States: City of Houston, Louisiana, Mississippi Ingeuneal C. Gray, Esq Vice President Phone: 832.308.7893 Email: Grayl@adrorg Case Management John M. Bishop Rod Toben Vice President Vice President Phone: 404.320.5150 Phone: 972.774.6923 Email: BishopJ@adr.org Email: TobenR@adr.org Administers cases in: AL, DC, FL. GA, IN, KY, Administers Cases in: AR, IL, 1A, KS, LA, MN, MD, NC, OH, SC, TN, VA MS, MO, NE, ND, OK, SD, TX, Sandra Marshall Yvonne Baglini Vice President Assistant Vice President Phone: 559.490.1906 Phone: 866.293.4053 Email: MarshallS@adrorg Email: BagliniV@adr.org Administers cases in: AK, AZ, CA, CO, Hi, ID, Administers cases in: CT, DE, MA, ME, MI, NH, MT, NV, NM, OR, UT, WA, WY NJ, NY, PA, RI, VT, WV 2 RULES AND MEDIATION PROCEDURES Jmencan Arbvitation Associaton — =— i Table of Contents Important Notice Introduction Standard Arbitration Clause Administrative Fees Mediation arge, Complex Cases Commercial Arbitration Rules. 10 R-1. Agreement of Parties* 10 R-2. AAA, Delegation of Duties, Conduct of Parties, Administrative Review Council Nn R-3. National Roster of Arbitrators nN R-4, Filing Requirements and Procedures fa REDS awe genSy N R-5. Answers and Counterclaims 13 R-6. Changes of Claim 14 R-7, Jurisdiction kwititermes camer ang 14 R-8. Consolidation and Joinder 15 R-9. Interpretation and Application of Rules. 7 R-10. Mediation V7 R-11. Administrative Conference 7 R12. Fixing of Locale. .......2:0000++ 7 R-13. Appointment from National Roster. par aie 18 R-14. Direct Appointment by Party 19 R-15. Appointment of snelpeiee by Pay PAepointed) Arbitrators, Parties, or the AAA 79 R-16. Nationality of Arbitrator 20 R-17. Number of Arbitrators. 20 R-18. Disclosure 20 R-19. Disqualification of Arbitrator 21 R-20. Communication with Arbitrator 21 R-21. Vacancies. 22 R-22. Preliminary Hearing 22 R-23. Pre-Hearing Exchange and Production of Information 22 R-24. Enforcernent Powers of Arbitrator. 23 R-25. Date, Time, Place, and Method of Hearing 23 Rules Amended and Effective September 1, 2022, COMMERCIAL RUL R-26. Attendance at Hearing... 24 R-27. Representation 24 R-28. Oaths . . 24 R-29. Official Record of Proceedings. 24 R-30. Interpreters. 25 R-31. Postponements 25 R-32. Arbitration in the Absence of a Party or Representative 25 R-33. Conduct of Proceedings. 25 R-34. Dispositive Motions 26 R-35, Evidence : 26 R-36. Evidence by Written Statements an: d Post-Hearing Ping of Documents or Other Evidence ... 26 R-37. Inspection or Investigation 27 R-38. Interim Measures . . 27 R-39. Emergency Measures of Protection 27 R-40. Closing of Hearing 29 R-41. Reopening of Hearing. ... 29 R-42. Waiver of Rules 29 R-43. Extensions of Time. 29 R-44. Serving of Notice and Communications 30 R-45. Confidentiality 30 R-46. Majority Decision 30 R-47. Time of Award. seen 34 R-48. Form of Award. 31 R-49, Scope of Award. ... 31 R-50, Award Upon Settlement — Consent Award. . R-51. Delivery of Award to Parties se R-52. Modification of Award. . 32 R-53. Release of Documents for Judicial Proceedings. 32 R-54. Applications to Court and Exclusion of Liability 32 R-55, Administrative Fees -56. Expenses . 33 R-57. Neutral Arbitrator’s Compensation. ..... 33 R-58. Deposits 34 R-59. Remedies for Nonpayment. rogue 34 R-60. Sanctions. 35 4 RULES AND MEDIATION PROCEDURES American Arbiration Associaton Preliminary Hearing Procedures... 36 P-1. General 36 P-2. Checklist 36 Expedited Procedures 39 E-1. Limitation on Extensions. 39 E-2. Changes of Claim or Counterclaim. .... 39 E-3. Serving of Notice 39 E-4, Appointment and Qualifications of Arbitrator. . 39 E-5. Discovery, Motions, and Conduct of Proceedings 40 E-6. Proceedings on Documents and Procedures for the Resolution of Disputes Through Document Submission . 40 E-7, Date, Time, Place, and Method of Hearing 4) E-8. The Hearing 4) E-9. Time of Award al E-10. Arbitrator's Compensation. ..... wie seek 4) Procedures far Large, Complex Commercial Disputes. . 42 L-1. Administrative Conference. 42 L-2. Arbitrators 42 L-3. Management of Proceedings ... . 43 Administrative Fee Schedules (Standard and Flexible Fees} 43 Commercial Mediation Procedures. .. 44 M-1. Agreement of Parties 44 M-2. Initiation of Mediation .. 44 M-3. Representation ‘ 44 M-4. Appointment of the Mediator .. 45 M-5. Mediator's Impartiality and Duty to Disclose .. 45 M-6. Vacancies 46 M-7. Duties and & ssnonsisibicn of the Mediator 46 M-8. Responsibilities of the Parties .... EJ ete oiweaner, 47 M-9. Privacy 47 M-10. Confidentiality... 47 M-11, No Stenographic Record Pres eeceses 48 M-12. Termination of Mediation 48 M-13, Exclusion of Liability Lenote 48 Rules Amended and Elective September 1, 2022. COMMERGIAL RULES § M-14. Interpretation and Application of Procedures 48 M-15. Deposits. ... 48 M-16, Expenses . 49 M-17, Cost of the Mediatior 49 6 RULES AND MEDIATION PROCEDURES Amenean Arbitration Asséeatén = eeRT Ew: ieee Cec FV MiesClim mercy Lees Citar tre tae madaetersts (elem (ell tae olga) 1 (ae TUS Mec Important Notice These rules and any amendment of them shall apply in the form in effect at the time the administrative filing requirements are met for a demand for arbitration or submission agreement received by the AAA®. To ensure that you have the most current information, see our web site at www.adr.org. Introduction Each year, many millions of business transactions take place. Occasionally, disagreements develop over these business transactions. Many of these disputes are resolved by arbitration, the voluntary submission of a dispute to an impartial person or persons for final and binding determination. Arbitration has proven to be an effective way to resolve these disputes privately, promptly, and economically. The American Arbitration Association® (AAA), a not-for-profit, public service organization, offers a broad range of dispute resolution services to business executives, attorneys, individuals, trade associations, unions, management, consumers, families, communities, and all levels of government. Services are available through AAA headquarters in New York and through offices located in major cities throughout the United States. Hearings may be held at locations convenient for the parties and are not limited to cities with AAA offices. In addition, the AAA serves as a center for education and training, issues specialized publications, and conducts research on various forms of alternative dispute resolution. Rules Amended and Effective September 1, 2022 COMMERCIAL RULES 7 Standard Arbitration Clause The parties can provide for arbitration of future disputes by inserting the following clause into their contracts: Any controversy or claim arising out of or relating to this contract, or the breach thereof, shall be settled by arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. Arbitration of existing disputes may be accomplished by use of the following: We, the undersigned parties, hereby agree to submit to arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules the following Controversy: (describe briefly). We further agree that the above controversy be submitted to (one) (three) arbitrator(s). We further agree that we will faithfully observe this agreement and the rules, that we will abide by and perform any award rendered by the arbitrator(s), and that a judgment of any court having jurisdiction may be entered on the award. The services of the AAA are generally concluded with the transmittal of the award. Although there is voluntary compliance with the majority of awards, judgment on the award can be entered in a court having appropriate jurisdiction if necessary. Administrative Fees The AAA charges a filing fee based on the amount of the claim or counterclaim. This fee information, which is included with these rules, allows the parties to exercise control over their administrative fees. The fees cover AAA administrative services; they do not cover arbitrator compensation or expenses, if any, reporting services, or any post-award charges incurred by the parties in enforcing the award, Mediation Subject to the right of any party to opt out, in cases where a claim or counterclaim exceeds $100,000, the Rules provide that the parties shall mediate their dispute upon the administration of the arbitration or at any time when the arbitration is pending. In mediation, the neutral mediator assists the parties in reaching a B RULES AND MEDIATION PROCEDURES amencan Arbitration Assocntin a ai settlement but does not have the authority to make a binding decision or award. Mediation is administered by the AAA in accordance with its Commercial Mediation Procedures. There is no additional filing fee where parties to a pending arbitration attempt to mediate their dispute under the AAAs auspices. Although these rules include a mediation procedure that will apply to many cases, parties may still want to incorporate mediation into their contractual dispute settlement process. Parties can do so by inserting the following mediation clause into their contract in conjunction with a standard arbitration provision: If a dispute arises out of or relates to this contract, or the breach thereof, and if the dispute cannot be settled through negotiation, the parties agree first to try in good faith to settle the dispute by mediation administered by the American Arbitration Association under its Commercial Mediation Procedures before resorting to arbitration, litigation, or some other dispute resolution procedure. If the parties want to use a mediator to resolve an existing dispute, they can enter into the following submission agreement: The parties hereby submit the following dispute to mediation administered by the American Arbitration Association under its Commercial Mediation Procedures. (The clause may also provide for the qualifications of the mediator(s), method of payment, locale of meetings, and any other item of concern to the parties.) Large, Complex Cases Unless the parties agree otherwise, the Procedures for Large, Complex Commercial Disputes, which appear in this pamphlet, will be applied to all cases administered by the AAA under the Commercial Arbitration Rules in which the disclosed claim or counterclaim of any party is at least $1,000,000 exclusive of claimed interest, arbitration fees and costs. The key features of these Procedures include: > A highly qualified, trained Roster of Neutrals; > A mandatory preliminary hearing with the arbitrators, which may be conducted by teleconference or other electronic means; Broad arbitrator authority to order and control the exchange of information, including depositions; A presumption that hearings will proceed on a consecutive or block basis. Rules Amended and Effective September 1, 2022 IMMERCIAL RULES 9 Commercial Arbitration Rules R-1, Agreement of Parties” (a) The parties shall be deemed to have made these Rules a part of their arbitration agreement whenever they have provided for arbitration by the American Arbitration Association ("AAA") under its Commercial Arbitration Rules or for arbitration by the AAA of a domestic commercial dispute without specifying particular rules These Rules and any amendment to them shall apply in the form in effect at the time the administrative requirements are met for a Demand for Arbitration or Submission Agreement received by the AAA, Any disputes regarding which AAA tules shall apply shall be decided by the AAA. The parties, by written agreement, may vary the procedures set forth in these Rules. After appointment of the arbitrator, such modifications may be made only with the consent of the arbitrator. (b) Unless the parties agree or the AAA determines otherwise, the Expedited Procedures shall apply in any case in which no disclosed claim or counterclaim ‘exceeds $100,000, exclusive of interest, attorneys’ fees, and arbitration fees and costs. Parties may also agree to use these Procedures in larger cases. Unless the parties agree otherwise, these Procedures will not apply in cases involving more than two parties. The Expedited Procedures shall be applied as described in Procedures E-1 through E-10, in addition to any other portion of these Rules that is not in conflict with the Expedited Procedures. {c) Unless the parties agree otherwise, the Procedures for Large, Complex Commercial Disputes shall apply to all cases in which the disclosed claim or counterclaim of any party is at least $1,000,000, exclusive of claimed interest, attorneys’ fees, arbitration fees and costs. Parties may also agree to use the Procedures in cases involving claims or counterclaims under $1,000,000 or in nonmonetary cases. The Procedures for Large, Complex Commercial Disputes shall be applied as described in Procedures L-1 through L-3 in addition to any other portion of these Rules that is not in conflict with the Procedures for Large, Complex Commercial Disputes. (d) Parties may, by agreement, apply the Expedited Procedures; the Procedures for Large, Complex Commercial Disputes; or the Procedures for the Resolution of Disputes Through Document Submission (Procedure E-6) to any dispute (e) All other cases shall be administered in accordance with Rules R-1 through R-60 of these Rules, * The AAA will apply the Employment Fee Schedule to any dispute between an individual employee or an independent contractor (working or performing as an individual and not incorporated) and a business or organization and the dispute involves work or work-related claims, including any statutory claims and including work-related claims under independent contractor agreements. A dispute arising out of an employment plan will be administered under the AAA's Employment Arbitration Rules and Mediation Procedures, A dispute arising out of @ consumer arbitration agreement will be administered under the AAA’ Consumer Arbitration Rules. Beginning June 1, 2021, the AAA will apply the Consumer Arbitration Fee Schedule to any dispute between an online marketplace or platform and an individual user or subscriber (using or subscribed to the service as 6” individual and net incorporated) and the dispute does not involve work or work-related claims. 10 RULES AND MEDIATION PROCEDURES deercan Arbatration Assoriaien a _ — R-2. SAA, Delegation ef Duties, Conduc it Parties, Administrative Review Counell (a) When parties agree to arbitrate under these Rules, or when they provide for arbitration by the AAA and an arbitration is initiated under these Rules, they thereby authorize the AAA to administer the arbitration. (b) The authority and duties of the AAA are prescribed in the agreement of the parties and in these Rules, and may be carried out through such of the AAAS representatives as it may direct. The AAA may, in its discretion, assign the administration of an arbitration to any of its offices. Arbitrations administered under these Rules shall only be administered by the AAA or by an individual or organization authorized by the AAA to do so. (c) The AAA requires that parties and their representatives conduct themselves in accordance with the AAA's Standards of Conduct for Parties and Representatives when utilizing the AAA‘s services. Failure to do so may result in the AAAs declining to further administer a particular case or caseload. (d) For cases proceeding under the Procedures for Large, Complex Commercial Disputes, and for other cases where the AAA, in its sole discretion, deems it appropriate, the AAA may act through its Administrative Review Council to take the following administrative actions: i) determine challenges to the appointment or continuing service of an arbitrator; ii) make an initial determination as to the locale of the arbitration, subject to the power of the arbitrator to make a final determination; or iii) decide whether a party has met the administrative requirements to file an arbitration under these Rules. R-3, National Roster of Acbitrators The AAA shall establish and maintain a National Roster of Arbitrators (“National Roster”) and shall appoint arbitrators as provided in these Rules. The term “arbitrator” in these Rules refers to the arbitration panel, constituted for a particular case, whether composed of one or more arbitrators, or to an individual arbitrator, as the context requires. R-4, Filing Requirements and Procedures (a) Filing Requirements i) Arbitration under an arbitration provision in a contract shall be initiated by the initiating party (“claimant”) filing with the AAA a Demand for Arbitration, the administrative filing fee, and a copy of the applicable arbitration agreement from the parties’ contract which provides for arbitration. The filing fee must be paid before a matter is considered properly filed. Rules Amended and Effective September 1, 2022, OME CIAL Hut yn -_ ii ii) Arbitration pursuant to a court order shall be initiated by the initiating party filing with the AAA a Demand for Arbitration, the administrative filing fee, and a copy of any applicable arbitration agreement from the parties’ contract which provides for arbitration a) The filing party shall include a copy of the court order. b) The filing fee must be paid before a matter is considered properly filed. if the court order directs that a specific party is responsible for the filing fee, it is the responsibility of the filing party to either make such payment to the AAA and seek reimbursement as directed in the court order or to make other such arrangements so that the filing fee is submitted to the AAA with the Demand. ¢) The party filing the Demand with the AAA is the claimant and the opposing party is the respondent regardless of which party initiated the court action, Parties may request that the arbitrator alter the order of proceedings if necessary pursuant to Rule R-33. iii) Parties to any existing dispute who have not previously agreed to use these Rules may commence an arbitration under these Rules by filing a written Submission Agreement and the administrative filing fee, To the extent that the parties’ Submission Agreement contains any variances from these Rules, such variances should be clearly stated in the Submission Agreement. iv) Information to be included with any arbitration filing includes: a) the name of each party; b) the address of each party and, if known, the telephone number and email address; °) if applicable, the name, address, telephone number, and email address of any known representative for each party; d) a statement setting forth the nature of the claim including the relief sought and the amount involved; and e) the locale requested if the arbitration agreement does not specify one. (b) Filing Procedures i) The initiating party may file or submit a dispute to the AAA in the following manner: a) through AAA WebfFile®, located at www.adr.org; b) by filing the complete Demand or Submission with any AAA office, regardless of the intended locale of hearing; or ) by emailing the complete Demand or Submission to casefiling@adr.org, with payment to follow as directed by the AAA. ii) The filing party shall simultaneously provide a copy of the Demand and any supporting documents ta the opposing party, 12. RULES AND MEDIATION PROCEDURES American Arbtraven Aestession iii) Any papers, notices, or process necessary or proper for the initiation of an arbitration under this Rule may be served on a party: a) by mail addressed to the party or its authorized representative at their last known address; b) by electronic service/email, with the prior agreement of the party being served; ¢) by personal service; or d) by any other service methods provided for under the applicable procedures of the courts of the state where the party to be served is located iv) The AAA shall provide notice to the parties (or their representatives if so named) of the receipt of a Demand or Submission when the administrative filing requirements have been satisfied. The date on which the filing requirements are satisfied shall establish the date of filing the dispute for administration However, all disputes in connection with the AAAs determination of the date of filing may be decided by the arbitrator. v) Itis the responsibility of the filing party to ensure that any conditions precedent to the filing of a case are met prior to filing an arbitration, as well as any time requirements associated with the filing. Any dispute regarding whether a condition precedent has been met may be raised with the arbitrator for determination vi) The AAA has the authority to make an administrative determination whether the filing requirements set forth in this Rule have been met vii) If the filing does not satisfy the filing requirements set forth in Section (a) above, the AAA shall acknowledge to all named parties receipt of the incomplete filing, and the filing may be returned to the initiating party. (c) Authority of arbitrator. Any decision made by the AAA regarding filing requirements and procedures shall not interfere with the arbitrator's authority to determine jurisdiction pursuant to Rule R-7. RS Answers and Counterclaims (a) Arespondent may file an answering statement with the AAA within 14 calendar days after notice of the filing of the Demand is sent by the AAA. The respondent shall, at the time of any such filing, send a copy of any answering statement to the claimant and to all other parties to the arbitration. If no answering statement is filed within the stated time, the respondent will be deemed to deny the claim. Failure to file an answering statement shall not operate to delay the arbitration. (b) Arespondent may file a counterclaim at any time after notice of the filing of the Demand is sent by the AAA, subject to the limitations set forth in Rule R-6, The respondent shall send a copy of the counterclaim to the claimant and all other parties to the arbitration. If a counterclaim is asserted, jt shall include a statement setting forth the nature of the counterclaim including the relief sought and the Rules Amended and Effective September 1, 2022 MMERCIAL RULE 13 ——s ————— amount involved, The filing fee as specified in the applicable AAA Fee Schedule must be paid at the time of filing, The claimant may file an answering statement or reply in response to the counterclaim with the AAA within 14 calendar days after notice of the filing of the counterclaim is sent by the AAA. {c) If the respondent alleges that a different arbitration provision is controlling, the matter will be administered in accordance with the arbitration provision submitted by the initiating party subject to a final determination by the arbitrator. (d) {f the counterclaim does not meet the requirements for filing a claim and the deficiency is not cured by the date specified by the AAA, it may be returned to the filing party. R-6, Changes of Claim (a) A party may at any time prior to the close of the hearing or by any earlier date established by the arbitrator increase or decrease the amount of its claim or counterclaim, Written notice of the change of claim amount must be provided to the AAA and all parties. If the change of claim amount results in an increase in the administrative fee, the balance of the fee is due before the change of clair or counterclaim amount may be accepted by the arbitrator. After the arbitrator is appointed, however, a party may increase the amount of its claim or counterclaim, or alter its request for non-monetary relief, only with the arbitrator's consent. (b) Any new or different claim or counterclaim, as opposed to an increase or decrease in the amount of a pending claim or counterclaim, shall be made in writing and filed with the AAA, and a copy shall be provided to the other party, who shall have 14 calendar days from the date of such transmittal within which to file an answer to the proposed change of clain or counterclaim with the AAA. After the arbitrator is appointed, however, no new or different claim or counterclaim may be submitted except with the arbitrator's consent (c) A party that filed a claim or counterclaim of an undisclosed or undetermined amount must specify the amount of the claim or counterclaim to the AAA, all parties, and the arbitrator at least seven calendar days prior to the commencement of the hearing or by any other date established by the arbitrator. If the disclosed amount of the claim or counterclaim results in an increased filing fee, that fee must be paid at the time the claim or counterclaim amount is disclosed. For good cause shown and with the consent of the arbitrator, a party may proceed to the hearing with an undisclosed or undetermined claim or counterclaim, provided that the final amount of the claim or counterclaim is set forth in a post-hearing brief or submission and any appropriate filing fee is paid R-?7. Jurisdiction (a) The arbitrator shall have the power to rule on his or her own jurisdiction, including any objections with respect to the existence, scope, or validity of the arbitration agreement or to the arbitrability of any claim or counterclaim, without any need to refer such matters first to. court. 14 RULES AND MEDIATION PROCEDURES American Arbitration Associath a (b) The arbitrator shall have the power to determine the existence or validity of a contract of which an arbitration clause forms a part. Such an arbitration clause shall be treated as an agreement independent of the other terms of the contract A decision by the arbitrator that the contract is null and void shall not for that reason alone render invalid the arbitration clause. {c) A party must object to the jurisdiction of the arbitrator or to the arbitrability of a claim or counterclaim no later than the filing of the answering statement to the claim or counterclaim that gives rise to the objection. The arbitrator may rule on such objections as a preliminary matter or as part of the final award, R-8, Consolidation and Joinder (a) Consolidation i Two or more arbitrations may be consolidated if all parties to all of the arbitrations to be consolidated so agree. ii) Unless all parties agree to consolidation, the party requesting consolidation of two or more arbitrations must file with the AAA and serve on all other parties a written request for consolidation with the supporting reasons for such request within 90 days of the date the AAA determines that all administrative filing requirements were satisfied for the last-filed case that is part of the consolidation request. Such time limit may be extended by the arbitrator appointed in the first-filed case upon a showing of good cause for the late request. The other parties to the arbitrations shall provide their written responses to the consolidation request within 10 calendar days after the AAA sends notice of receipt of the request. iii) At its discretion, the AAA either may direct that the consolidation request be decided by the arbitrator appointed in the first-filed case or may appoint a consolidation arbitrator for the sole purpose of deciding the consolidation request. iv) The arbitrator deciding consolidation may order consolidation of two or more cases for all purposes or for such limited purposes and under such conditions as the arbitrator may direct. v) Absent agreement of all parties, an arbitrator appointed for the sole purpose of deciding the consolidation request shall have no further power to act, and shall be removed from the case, after the consolidation request is decided. vi) In deciding whether to consolidate, the arbitrator or consolidation arbitrator shall take into account all relevant circumstances, including: a) the terms and compatibility of the agreements to arbitrate, b) applicable law, ¢) the timeliness of the request to consolidate and the progress already made in the arbitrations, 4) whether the arbitrations raise common issues of law and/or fact, and Rules Amended and Effective September 1, 2022 OMMERCIOL RULES 15 —— e) whether consolidation of the arbitrations would serve the interests of justice and efficiency (b) Joinder i) Additional parties may be joined to an arbitration if all parties to the arbitration and the parties proposed to be joined so agree ii) Absent such consent, all requests for joinder must be submitted to the AAA prior to the appointment of an arbitrator pursuant to these Rules or within 90 days of the date the AAA determines that all administrative filing requirements have been satisfied. The arbitrator