Americo Life, Inc. v. Myer
Texas Supreme Court
2014 WL 2789429 (2014)
- Written by Mary Katherine Cunningham, JD
Facts
In 1998, Robert Myer and Strider Marketing Group, Inc. (collectively, Myer) (plaintiff) sold a collection of insurance companies to Americo Life, Inc. (Americo) (defendant). The parties agreed that Americo would provide an up-front payment to Myer for the businesses. The parties then executed a trailer agreement for additional payments to Myer based on the businesses’ future earnings. The trailer agreement also contained a clause, providing that the parties would refer disputes to three arbitrators who were knowledgeable, independent businesspeople or professionals. The arbitration clause also provided that each party would appoint an individual arbitrator and that the two arbitrators would select a third arbitrator to complete the panel. The arbitration clause also provided the arbitration would comply with the rules of the American Arbitration Association (AAA). A dispute arose between the parties, and Americo invoked the arbitration clause in 2005. The AAA Rules in 2005 required that arbitrators must be impartial and independent and that arbitrators would be disqualified for partiality or lack of independence. Myer alleged Americo’s first-choice and second-choice arbitrator were partial to Americo, and the AAA struck both candidates over Americo’s objections. The arbitration proceeded, and the arbitration panel awarded Myer damages. When Myer filed a motion to confirm the award in the trial court, Americo renewed its objection to the first-choice arbitrator’s disqualification. Americo argued that the AAA failed to follow the parties’ agreement that “each arbitrator shall be a knowledgeable, independent businessperson or professional.” The district court vacated the award, and Myer appealed to the Texas Court of Appeals. After various appellate proceedings, the Texas Court of Appeals found the arbitration panel was appropriately formed under the agreement. Americo appealed to the Texas Supreme Court.
Rule of Law
Issue
Holding and Reasoning (Brown, J.)
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