## Facts

- Robert L. Myer and Strider Marketing Group, Inc. sold a group of insurance companies to Americo Life, Inc. and related entities in 1998.
- The parties executed a “trailer agreement” providing contingent, performance-based payments tied to future business results.
- The trailer agreement required arbitration before three arbitrators: each side would appoint one, and those two would select the third; each arbitrator had to be a “knowledgeable, independent businessperson or professional.”
- The agreement also incorporated the AAA Commercial Arbitration Rules to govern the arbitration proceedings, with stated modifications.
- When Americo later invoked arbitration, the then-current AAA rules included an impartiality requirement and allowed disqualification for partiality or lack of independence.
- Myer challenged Americo’s first-choice arbitrator for partiality; the AAA disqualified that arbitrator, and then disqualified Americo’s second choice as well.
- Americo’s third appointee was not challenged; a panel was formed, heard the dispute, and issued a substantial award in Myer’s favor.
- In court, Americo argued the AAA’s disqualification of its first-choice arbitrator altered the parties’ agreed arbitrator-selection method and qualifications.

## Issues

1. Whether the arbitration panel was formed contrary to the express arbitrator-selection and qualification terms of the parties’ agreement when the AAA disqualified Americo’s party-appointed arbitrator for partiality under later-amended AAA rules.
2. Whether a panel constituted contrary to the parties’ agreement “exceeded its powers,” requiring vacatur of the arbitration award.

## Decision

- The Texas Supreme Court reversed the court of appeals and required vacatur of the arbitration award.
- The Court held that disqualifying Americo’s first-choice arbitrator for partiality resulted in a panel formed contrary to the agreement’s express terms.
- Because the panel was not constituted in accordance with the contractually specified selection method, the arbitrators exceeded their authority in resolving the dispute.

## Legal Principles

- Arbitration is a matter of contract; courts must enforce arbitration agreements as written, including express terms governing arbitrator selection and qualifications.
- Incorporation of institutional arbitration rules generally governs the conduct of proceedings and does not override conflicting, expressly negotiated provisions on panel formation unless the contract clearly authorizes that displacement.
- A tribunal not formed in compliance with the parties’ agreed method of selection acts outside the powers conferred by the agreement; an award issued by such a tribunal must be vacated for excess of authority.

## Conclusion

The court vacated the award because the AAA’s disqualification of Americo’s party-appointed arbitrator for partiality applied a qualification that conflicted with the agreement’s express arbitrator-selection terms, so the resulting panel exceeded the authority granted by the parties’ contract.


Americo Life, Inc. v. Myer, 440 S.W.3d 18 (Tex. 2014)