HOUSTON -- An appeals court has affirmed a $334,922 arbitration award for a car mechanic after he sued a Houston car dealership that he had accused of insurance fraud.
Chris Singleton originally won the award in Harris County District Court, and the Texas Court of Appeals First District affirmed the decision.
Stadium Motorcars LLC (doing business as /a Central Houston Nissan) and Central Houston Motorcars LLC, doing business as Central Houston Cadillac, filed the appeal in response to the lower court granting Singleton the arbitration award. Justices Russell Lloyd, Gordon Goodman and Sarah Beth Landau agreed with the lower court decision.
Justice Russell Lloyd, Court of Appeals for the First District of Texas
Although Central Nissan argued that arbitration awards can be vacated if they clash with public policy, Russell wrote, “Because the arbitration award in this case stems from an arbitration proceeding governed by the TAA, the statute, not common law, is controlling.”
The court also disagreed with Central Nissan’s notion that the award doesn’t comply with Texas public policy as it is an employment-at-will state. It said it never actually asked Singleton to take part in the fraud he witnessed. However, the judges determined, “Singleton’s refusal to participate in an ongoing criminal insurance fraud perpetrated by employees of Central Nissan directly resulted in his firing.”
Singleton also asked the court to subject Central Nissan for sanctions for filing what he said was a frivolous appeal. The judges denied the appeal and pointed out that thanks to Rule 45, a court does not have to impose sanctions simply because an appeal is frivolous.
According to the complaint, Singleton was hired by Houston’s Central Nissan in February 2016 and signed a one-year guaranteed employment contract at the time. He also signed an arbitration clause that subjected him to arbitration in any legal issues.
Interestingly enough, both Singleton and Central Nissan agreed that the arbitrator’s award would “be binding and not subject to appeal, except for the limited grounds set forth in Texas Civil Practice & Remedies Code section 171.088,” according to the appeals court opinion.
Singleton’s time at the dealership was short as he was fired just months later. He said he discovered evidence that Central Nissan workers and a sister company were committing insurance fraud. He alleged they would make claims with insurance companies and receive reimbursements for repairs that never happened.
In May 2016, Singleton created a spreadsheet to prove the alleged fraud and gave it to this supervisor. He also said he told Central Nissan’s owner and controller. The suit states he was fired the next day, despite never receiving any disciplinary action previously.
The arbitrator determined that Singleton was indeed fired because he did not want to take part in the illegal conduct and was awarded $334,922. Despite Central Nissan’s attempt to get the court to vacate the arbitration award, stating that Texas is an at-will employment state, the lower court confirmed the arbitration in September 2018, sparking the appeal.