Date: 05-25-2022

Case Style:

Dennis R. Cahill v. Shirley A. Jones-Cahill

Case Number: 04-20-00008-CV

Judge:

Irene Rios

Sitting: Rebeca C. Martinez, Chief Justice Patricia O. Alvarez, Justice Irene Rios, Justice

Court:

Fourth Court of Appeals San Antonio, Texas

On appeal from The 451st Judicial District Court, Kendall County, Texas

Plaintiff's Attorney:

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Defendant's Attorney: Marc R. May
Jeffrey Levinger

Description:

San Antonio, Texas - Divorce lawyer represented appellant with a premarital agreement.

Cahill and Jones-Cahill signed a premarital agreement prior to their marriage in 2012. By
this agreement, the parties altered their marital property rights and provided for a division of
property in the event of divorce. The premarital agreement contains an arbitration provision, which
provides: “The parties agree to submit to binding arbitration any dispute or controversy regarding
the validity, interpretation, or enforceability of this agreement, as well as all issues involving its
enforcement in connection with a dissolution proceeding between the parties.”
In 2018 Cahill filed for divorce. Jones-Cahill filed a counter-petition for divorce, alleging
that the premarital agreement is invalid and unenforceable. She also asserted causes of action,
including promissory estoppel and fraud claims. Cahill filed a motion to compel arbitration, which
Jones-Cahill initially opposed; however, the parties reached an agreement that the case would be
referred to binding arbitration if the case was unable to be tried before a specific judge on a specific
date. Pursuant to the parties’ agreement, the trial court entered an “Agreed Order of Referral to
Arbitration.” The order states: “IT IS ORDERED that in the event the Honorable William R.
Palmer, Jr. is unable to conduct the final bench trial of this case on December 12, 2018, this case
shall be submitted to binding arbitration prior to January 31, 2019.” The parties then proceeded
to a five-day arbitration after the specified judge was unable to conduct a trial on the specified
date.
After the arbitration proceeding, the arbitrator delivered a decision that stated the property
awarded to Cahill and the property awarded to Jones-Cahill. The decision also required Cahill to
make capital-account adjustments and the payment of income from mineral interests related to a
limited partnership that Cahill has a controlling interest in and that Jones-Cahill has a minority
interest in. In addition, the arbitrator apportioned the partnership’s debt. After the arbitrator
rendered its decision, Cahill filed a motion to vacate the arbitrator’s decision in the trial court,
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arguing that the decision should be vacated as to the provisions relating to capital-account
adjustments, the payment of mineral interest income, and the apportionment of partnership debt.
The trial court denied Cahill’s motion and confirmed the arbitrator’s decision. Cahill then filed
this interlocutory appeal.
MOTION TO STRIKE
Cahill and Jones-Cahill—each represented by appellate counsel—filed briefs on appeal.
Among other things, Jones-Cahill argues that Cahill has not shown that the arbitrator’s decision
addressed or awarded relief beyond the bounds of interpreting and enforcing the premarital
agreement. Jones-Cahill centers her argument on the arbitrator’s authority stated in the premarital
agreement. Brown, however, who was Jones-Cahill’s trial counsel and who has since withdrawn,
filed an “Intervenor’s Brief in Support of Arbitral Award,” in which she asserts alternative grounds
for affirmance to those given by Jones-Cahill. In general, Brown argues that the “Agreed Order
of Referral to Arbitration” and a 2019 arbitration agreement, which the parties signed just prior to
arbitration, expanded the scope of arbitral matters beyond those agreed to in the premarital
agreement. Cahill moved to strike Brown’s brief, and we carried the motion with the appeal.
We now grant Cahill’s motion and order Brown’s brief stricken. The record before us
indicates Brown did not intervene in the trial court prior to the trial court signing the order appealed
from and Brown does not have grounds to intervene on appeal. Accordingly, we do not consider
Brown’s alternative arguments for affirmance.
1
Here, Brown did not intervene in the trial court prior to the entry of the order appealed
from, and the trial court has not set aside that order. Under these circumstances, Brown is not a
named party to this appeal. “[O]ur common law dictates that a party may not intervene post1 We also carried Brown’s motion to file a sur-reply in support of her brief, which we now deny.
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judgment unless the trial court first sets aside the judgment.” State v. Naylor, 466 S.W.3d 783,
788 (Tex. 2015). When orders, rather than judgments are appealed, we have held that an
intervention made after orders were entered was ineffective. See In re Guardianship of Thrash,
No. 04-19-00104-CV, 2019 WL 6499225, at *4 (Tex. App.—San Antonio Dec. 4, 2019, pet.
denied) (dismissing appeal because the appellant was not a party of record in the trial court prior
to the signing of the challenged orders). Appellate Rule 25.1(b) is in accordance with the common
law; the Rule grants us jurisdiction over the parties to the judgment or order appealed from. See
TEX. R. APP. P. 25.1(b) (“The filing of a notice of appeal by any party invokes the appellate court’s
jurisdiction over all parties to the trial court’s judgment or order appealed from.”). Therefore,
under the common law and our rules, Brown is not a party to this appeal because she did not
intervene prior to the trial court’s entry of the order appealed from. See id.; Naylor, 466 S.W.3d
at 788; Thrash, 2019 WL 6499225, at *4; see also Salinas v. Dimas, 310 S.W.3d 106, 112 (Tex.
App.—Corpus Christi-Edinburg 2010, pet. denied) (granting an attorney’s motion to dismiss after
the appellant listed the attorney as an appellee because the attorney was not a party to the order
appealed from); Tex. State Tech. Coll. v. Cressman, 172 S.W.3d 61, 64 (Tex. App.—Waco 2005,
pet. denied) (concluding appeal brought by an entity that was not a party to the summary judgment
motion presented nothing for appellate review).2
Brown argues that her brief should stand because she satisfies the equitable principles for
virtual representation. “On a few occasions” the Texas Supreme Court has “determined that a
person or entity who was not a named party in the trial court may pursue an appeal in order to
vindicate important rights” under the doctrine of virtual representation. In re Lumbermens Mut.
Cas. Co., 184 S.W.3d 718, 723 (Tex. 2006) (original proceeding). In Lumbermens, the court
2 As a non-party, Brown is also not an “appellee” under our rules which define “appellee” as “a party adverse to an
appellant.” TEX. R. APP. P. 3.1(c) (emphasis added).
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applied the doctrine to allow an insurer, who posted a bond to supersede an adverse judgment
against its insured, the right to intervene as an appellee in the insured’s appeal in order to assert a
potentially dispositive issue that the insured had abandoned. See id. at 720.3
Under the virtualrepresentation doctrine, “a litigant is deemed to be a party if it will be bound by the judgment, its
privity of interest appears from the record, and there is an identity of interest between the litigant
and a named party to the judgment.” Id. at 722. In addition, the litigant seeking named-party
status must satisfy equitable considerations. Id. at 725.
Here, Brown neglects to argue or show that she will be bound by the trial court’s order
confirming the arbitrator’s decision. See id. at 722. The arbitrator’s decision does not award
attorney’s fees to Brown, does not compel Brown to act, and does not impose potential liability on
Brown. Brown asserts that she intervened to secure the payment of attorney’s fees purportedly
owed to her. While Brown avers that she is entitled to fees by virtue of her representation
agreement with Jones-Cahill, which allows for payment from the arbitrator’s award through an
endorsement agreement, this indirect connection does not bind Brown, in the same way the insurer
in Lumbermens was bound by its supersedeas bond. See id. at 729 (holding an insurer that posted
a supersedeas bond and was potentially liable for a judgment was bound by that judgment and
could obtain the status of a named-party under the virtual-representation doctrine). Brown has
presented no legal authority suggesting that she is bound by the trial court’s order or the arbitrator’s
decision, and without argument or authority on this point, Brown cannot attain named-party status,
pursuant to the virtual-representation doctrine. See id. at 722; BJVSD Bird Family P’ship, L.P. v.
Star Elec., L.L.C., 413 S.W.3d 780, 784 (Tex. App.—Houston [1st Dist.] 2013, no pet.) (holding
3 As the supreme court noted, the term “intervene” is misleading “[b]ecause one who is virtually represented is already
deemed to be a party, [and] theoretically it is not required to intervene in order to appeal.” In re Lumbermens Mut.
Cas. Co., 184 S.W.3d 718, 722 (Tex. 2006) (original proceeding) (internal quotations omitted).
04-20-00008-CV
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that a limited partner could not assert virtual representation to appeal a judgment against the limited
partnership when the limited partner cited no legal support for its contention that it would be bound
by the judgment).
In the alternative, Brown asks that we consider her brief an amicus curiae brief pursuant to
Rule 11 of the Texas Rules of Appellate Procedure. Rule 11 provides: “An appellate clerk may
receive, but not file, an amicus curiae brief. But the court for good cause may refuse to consider
the brief and order that it be returned.” TEX. R. APP. P. 11. Cahill argues that we have good cause
to refuse the brief because Brown’s brief is meant as a substitute for Jones-Cahill’s brief. We
agree with Cahill and, accordingly, do not consider Brown’s brief as an amicus curiae brief. See
Rahman v. Discover Bank, No. 02-19-00182-CV, 2020 WL 2202450, at *2 n.1 (Tex. App.—Fort
Worth May 7, 2020, no pet.) (per curiam) (mem. op.) (denying a request by a non-lawyer to file
an amicus curiae brief on behalf of a pro se appellant whose brief was deficient because “the
proposed brief would function as advocacy on [the appellant’s] behalf and would be the equivalent
of an appellant’s brief.”); see also Johnson v. Conner, No. 07-11-00055-CV, 2011 WL 3587425,
at *2 (Tex. App.—Amarillo Aug. 16, 2011, no pet.) (mem. op.) (“An amicus curiae is a ‘bystander’
whose mission is to aid the court, to act only for the benefit of the court.”).
Accordingly, we consider only the arguments presented by Cahill and Jones-Cahill in their
briefs.
THE ARBITRATOR’S DECISION
Cahill challenges only certain portions of the arbitrator’s decision as exceeding the
arbitrator’s authority. As mentioned, both parties look to the premarital agreement to determine
the extent of the arbitrator’s authority. Cahill argues that the trial court should have vacated the
decision as it relates to provisions that impact the limited partnership owned by Cahill and CahillJones.
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At the time Cahill filed his petition for divorce, Cahill and Jones-Cahill jointly owned a
limited partnership and two closely held companies: (1) D&F Resources, Ltd. (“D&F”), which is
an oil and gas partnership, (2) Denflo Enterprises, Inc. (“Denflo”), and (3) Renovatio Creations,
LLC (“Renovatio Creations”). At the time of arbitration, Cahill owned seventy percent of D&F,
while Jones-Cahill owned twenty percent. Nine percent of D&F was owned by an irrevocable
trust, and D&F’s general partner, Denflo owned one percent. As to Denflo, Cahill owned ninety
percent, and Cahill-Jones owned the other ten percent. Cahill and Jones-Cahill owned Renovatio
Creations equally.
In accordance with the premarital agreement, the arbitrator awarded to Jones-Cahill a
twenty percent interest in D&F, a ten percent interest in Denflo, and a fifty percent interest in
Renovatio Creations. Cahill does not contest these awards; however, he contends that the
arbitrator’s clarifications exceeded the arbitrator’s authority because the clarifications increased
Jones-Cahill’s ownership of D&F beyond the twenty percent she was entitled to, under the
premarital agreement. In a section of “[f]urther rulings” regarding Jones-Cahill’s ownership
interest in D&F, Denflo, and Renovatio Creations, the arbitrator ruled that Jones-Cahill’s “D&F
capital account shall be adjusted and corrected to $164,560.00” and “[Cahill] shall pay to [JonesCahill] $200,000.00.” The arbitrator based the adjustments on factors including, “[i]tems
improperly charged to [Jones-Cahill’s] D&F capital account; correction of amounts due to [JonesCahill] based upon her increasing ownership interest in D&F during the marriage; [and] loans
made using [Jones-Cahill’s] D&F interest without her consent.”
The arbitrator also clarified: “On and after June 8, 2019, 20% of the net mineral income,
as defined herein, of D&F shall be paid by [Cahill], through D&F, to Shirley in periodic payments
not less frequent than monthly . . . .” The arbitrator ruled additionally that Jones-Cahill would not
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be liable to Cahill for past debts of D&F or for future D&F debts, unless she expressly consented.
The arbitrator further prohibited Cahill from taking actions adverse to Jones-Cahill, as follows:
[Cahill] controls Denflo, D&F and Renovatio Creations. It is ordered that [Cahill]
shall use his best faith efforts to in all ways comply with this ruling, and shall take
no action, at any time after June 8, 2019, individually or through entities owned or
otherwise controlled by [Cahill] currently or in the future, to diminish [JonesCahill’s] rights as set out in this ruling . . . nor to diminish the existing D&F mineral
interests which produce D&F net mineral income. Further, [Cahill] shall not make
or allow changes to D&F, Denflo[] or Renovatio Creations which would allow
other persons or entities to diminish [Jones-Cahill’s] said rights, or to diminish said
existing D&F mineral interests. Therefore, any future transactions taken or
authorized by [Cahill] which affect [Jones-Cahill’s] D&F interest, [Jones-Cahill’s]
Denflo interest or [Jones-Cahill’s Renovatio Creations] interest shall include
requirements to protect said interests of [Jones-Cahill] as set out in this ruling.
Further, [Cahill] is specifically prohibited from disposing of or encumbering
[Jones-Cahill’s] D&F interest, [Jones-Cahill’s] Denflo interest or [Jones-Cahill’s
Renovatio Creations’s] interest, including without limitation by loans, investments
or discretionary decisions, without the express, written consent of [Jones-Cahill.]
In support of these rulings, the arbitrator cited the premarital agreement and the creation
agreements for the partnership and companies. According to the arbitrator, the premarital
agreement and the D&F limited partnership agreement “vary significantly regarding which party
has control of [Jones-Cahill’s] 20% interest in D&F.” The arbitrator wrote:
While the D&F Agreement vests control in [Cahill], by virtue of his control of
Denflo and his majority interest in D&F, the [premarital agreement] provides in
multiple provisions that the owner of separate property of a spouse shall have full
control of that spouse’s separate property, and the other spouse shall not dispose of
or encumber the separate property of the other spouse without that spouse’s express
consent. Interpreting the contracts in a manner which gives the D&F Agreement
(or the Denflo or Renovatio Creations entity documents) precedence over the
[premarital agreement’s] intent and express language on this issue would result in
[Cahill] having the authority to dispose of and encumber [Jones-Cahill’s] D&F
interest (and [Jones-Cahill’s] Denflo interest and [Jones-Cahill’s Renovatio
Creations] interest) in a manner that could extinguish, by his discretionary control
and actions, the value of her interests; which the arbitrator finds is not the intent of
the parties in executing the agreements and would not be a tenable or just
interpretation. Therefore, while the D&F Agreement (and the Denflo and
Renovatio Creations entity documents) will continue to provide structure on issues
other than control of [Jones-Cahill’s] D&F Interest, [Jones-Cahill’s] Denflo interest
and [Jones-Cahill’s] Renovatio Creations interest, interpreting the agreements
together the following rulings are made to provide [Jones-Cahill] the control of her
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D&F interest (and Denflo and Renovatio Creations interests) as provided in the
[premarital agreement], as carried out by these rulings: . . . .
Cahill argues that, by these clarifications, the arbitrator exceeded his powers because he
(1) directed the conduct of non-parties (D&F, Denflo, Renovatio Creations, and the Cahill Trust),
(2) decided matters beyond those submitted to him through the arbitration clause in the premarital
agreement, and (3) granted relief beyond that allowed by the premarital agreement.
We review a trial court’s decision to confirm or vacate an arbitration award under a de
novo standard of review. Shah v. Star Anesthesia, P.A., 580 S.W.3d 260, 267 (Tex. App.—San
Antonio 2019, no pet.). The premarital agreement provides for binding arbitration in accordance
with the Texas General Arbitration Act (“TAA”). See TEX. CIV. PRAC. & REM. CODE §§ 171.001–
.098.4
“Because Texas law favors arbitration, judicial review of an arbitration award is
extraordinarily narrow.” E. Tex. Salt Water Disposal Co., Inc. v. Werline, 307 S.W.3d 267, 271
(Tex. 2010). Under the TAA, “a party may avoid confirmation only by demonstrating a ground
expressly listed in section 171.088.” Hoskins v. Hoskins, 497 S.W.3d 490, 495 (Tex. 2016).
Section 171.088(a)(3)(A) requires vacatur of an arbitration decision if the arbitrators “exceeded
their powers.” TEX. CIV. PRAC. & REM. CODE §§ 171.088(a)(3)(A).
“To ensure arbitration awards are afforded the same effect as the judgment of a court of
last resort, all reasonable presumptions are indulged in favor of the award, and none against it.”
Shah, 580 S.W.3d at 265 (internal quotations omitted). A party seeking to vacate an arbitration
award bears the burden of presenting a complete record that establishes grounds for vacatur. Id.
4 The arbitration provision in the premarital agreement provides: “The provisions for binding arbitration must be made
in accordance with Texas arbitration law . . . .” Based on this provision, we apply the TAA to our analysis. However,
we look to cases regarding the Federal Arbitration Act (“FAA”) as persuasive. “Texas and federal vacatur standards
do not significantly differ,” Vantage Deepwater Co. v. Petrobras Am., Inc., 966 F.3d 361, 375 n.2 (5th Cir. 2020), and
Cahill argues that the challenged provisions of the arbitrator’s decision must be vacated “under either the TAA or
FAA.” See also Robinson v. Home Owners Mgmt. Enterprises, Inc., 590 S.W.3d 518, 526 n.31 (Tex. 2019) (noting
the TAA grounds for vacatur of arbitral award are similar, but not identical, to those in the FAA).
04-20-00008-CV
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When, as here, there is no transcript of the arbitration hearing, appellate courts presume the
evidence was adequate to support the award. Id.
Cahill first complains that the arbitrator’s decision “is directed to and affects nonparties to
the premarital agreement and the arbitration proceeding.” According to Cahill, the capital-account
adjustments, the payment of mineral income, and the division of partnership debt require action
by D&F and its general partner, Denflo, and these actions will affect the funds that can be
distributed to all owners, including D&F, Denflo, and the irrevocable trust that owns nine percent
of D&F. In support, Cahill cites cases that stand for the proposition that an arbitrator exceeds his
authority by determining the obligations of entities that are not parties to arbitration agreements or
arbitration proceedings. See Orion Shipping & Trading Co. v. E. States Petroleum Corp. of
Panama, S.A., 312 F.2d 299, 300–01 (2d Cir. 1963) (vacating the portion of an arbitration award
that held an entity liable as a guarantor because that entity was not a party to the arbitration
proceeding); NCR Corp. v. Sac-Co., 43 F.3d 1076, 1080 (6th Cir. 1995) (noting that the parties
agreed “that the arbitrator exceeded his powers when he awarded punitive damages to
nonparties”). However, unlike in those cases, the arbitrator’s award, here, does not purport to bind
or benefit non-parties. Instead, it imposes obligations upon Cahill that he can carry out based upon
the arbitrator’s determination that Cahill controls Denflo, D&F and Renovatio Creations. Cahill
cites no authority for his sweeping argument that an arbitrator exceeds his authority whenever his
decision affects a non-party.
Cahill’s remaining arguments are variations of a broader argument that the arbitrator
incorrectly interpreted the provisions of the premarital agreement. First, Cahill argues that JonesCahill agreed through the premarital agreement that she would not take any legal action or seek
any legal relief that “would in any way restrict, inhibit, or affect” D&F and Denflo “from operating
their business affairs as each entity deems appropriate.” According to Cahill, the arbitrator’s
04-20-00008-CV
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decision regarding adjustment of the D&F capital account, D&F’s payment of mineral income,
and the division of D&F’s debt violate this contract provision. Likewise, Cahill argues that the
premarital agreement both establishes there will be no marital estate and prohibits each spouse
from encumbering or disposing of the other’s separate property. According to Cahill, the
arbitrator’s order that he pay Jones-Cahill and that the D&F capital account be adjusted and
liability for debt assigned requires a disposition of his separate property and D&F’s property.
Cahill also argues that the arbitrator granted relief greater than that allowed by the premarital
agreement because the arbitrator’s clarifications of Jones-Cahill’s ownership interests awarded
Jones-Cahill more than the percentage of ownership she was entitled to under the premarital
agreement.
However, as the arbitrator explained in his decision, these cited provisions from the
premarital agreement and others can support the decision. Under the arbitrator’s interpretation of
the premarital agreement, provisions that “the owner of separate property of a spouse shall have
full control of that spouse’s separate property, and the other spouse shall not dispose of or
encumber the separate property of the other spouse without that spouse’s express consent” allows
for the clarifications. In the arbitrator’s view, the clarifications are consistent with the premarital
agreement because they prevent Cahill from disposing of or encumbering Jones-Cahill’s interests
“in a manner that could extinguish, by [Cahill’s] discretionary control and actions, the value of
[Jones-Cahill’s] interests.”
Whether the arbitrator’s contract interpretation is correct is inapposite. Under the TAA,
“[a]rbitrators exceed their powers if they lack the authority to decide the issues adjudicated in the
arbitration award; arbitrators do not exceed their authority by erroneously deciding an issue.” Ctr.
Rose Partners, Ltd. v. Bailey, 587 S.W.3d 514, 527–28 (Tex. App.—Houston [14th Dist.] 2019,
no pet.) (citing Forest Oil Corp. v. El Rucio Land & Cattle Co., 518 S.W.3d 422, 431–32 (Tex.
04-20-00008-CV
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2017)). Similarly, under the Federal Arbitration Act (“FAA”), which allows for vacatur of an
arbitration award “where the arbitrators exceeded their powers,” 9 U.S.C.A. § 10(a)(4), “the
Supreme Court has made clear that district courts’ review of arbitrators’ awards under § 10(a)(4)
islimited to the ‘sole question … [of] whether the arbitrator (even arguably) interpreted the parties’
contract.’” BNSF R. Co. v. Alstom Transp., Inc., 777 F.3d 785, 788 (5th Cir. 2015) (quoting Oxford
Health Plans LLC v. Sutter, 569 U.S. 564, 569 (2013)); see also Denbury Onshore, LLC v. Texcal
Energy S. Tex., L.P., 513 S.W.3d 511, 520 (Tex. App.—Houston [14th Dist.] 2016, no pet.)
(“Contentions that the arbitrator’s reasoning was legally erroneous or internally inconsistent, or
that the arbitrator misinterpreted the contract or misapplied the law do not provide a basis for
vacating an award [under the TAA or FAA].”).
Here, the deferential standard is met. The arbitrator interpreted the parties’ premarital
agreement to allow certain clarifications to preserve Jones-Cahill’s ownership interests in D&F,
Denflo, and Renovatio Creations as her separate property, and to preserve her control of that
separate property free from encumbrances. This interpretation is plausibly supported by the
premarital agreement, and the arbitrator explained his decision as effectuating the parties’ intent
as expressed in the premarital agreement. Because the parties bargained for the arbitrator’s binding
resolution of “any dispute or controversy regarding the validity, interpretation, or enforceability of
[the premarital] agreement, as well as all issues involving its enforcement,” the arbitrator’s
decision which arguably construes and applies the premarital agreement must stand. See Oxford
Health, 569 U.S. at 569 (“Because the parties bargained for the arbitrator’s construction of their
agreement, an arbitral decision even arguably construing or applying the contract must stand,
regardless of a court’s view of its (de)merits.” (citation and internal quotations omitted); see also
BNSF R. Co., 777 F.3d at 789 (“That we might interpret the Agreement differently than the
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[Arbitration] Panel is entirely beside the point because it is not our interpretation that the parties
bargained for.”).

Outcome: We affirm the trial court’s order confirming the arbitrator’s decision and denying Cahill’s motion to vacate.

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