Preview
Received and E-Filed for Record
4/15/2020 8:25 PM
Melisa Miller, District Clerk
Montgomery County, Texas
Deputy Clerk, Vanessa Medina
CAUSE NO. 2018-12-15871
THOMAS N. CAMPBELL, §
CHRISTY W. KOLVA, § IN THE DISTRICT COURT
ISABELLE CAMPBELL, §
ASHLEY GATES §
FOSTER MANAGEMENT, L.L.C., §
FOSTER TIMBER, LTD. § MONTGOMERY COUNTY, TEXAS
§
Plaintiffs, §
§
v. §
§ 284th JUDICIAL DISTRICT
NEIL F. CAMPBELL, JR., §
ROBIN S. ROUSE, §
TERRILL A. SCATENA, §
SABRINA ROUSE, §
BENJAMIN CAMPBELL, §
MORGAN PETERSON, §
RYAN PETERSON, §
JPMORGAN CHASE BANK, N.A., §
TRUSTEE OF THE LETITIA FOSTER §
CAMPBELL TRUST U/A/D/ MAY 14, 1946. §
§
Defendants. §
PLAINTIFFS’ APPLICATION FOR ORDER IN SUPPORT OF ARBITRATION AGAINST
JPMORGAN UNDER TEX. CIV. PRAC. & REM. CODE § 171.086
Plaintiffs Thomas Campbell, Christy Kolva, Isabelle Campbell, Ashley Gates, Foster
Management, LLC (“Foster Management”), and Foster Timber, Ltd. (“Foster Timber”) (collectively
“Plaintiffs”) file this Application for Order in Support of Arbitration under Texas Civil Practice &
Remedies Code § 171.086 in support of Arbitration against JPMorgan Chase Bank, N.A.
(“JPMorgan”), and in support thereof show as follows.
INTRODUCTION
On March 23, 2020, Arbitrator Weiss issued his Final Award in the underlying AAA
Arbitration, granting Plaintiffs’ request to dissolve and liquidate Foster Management and Foster
Timber. That same day, Plaintiffs filed their application to confirm the Final Award and request for
modification of the LFC46 Trust in this Court. Seven days later, JPMorgan filed a competing lawsuit
seeking judicial instructions in Chicago, Illinois. JPMorgan’s Illinois Petition seeks a variety of
instructions concerning “implementation of the arbitration award,” including an instruction that
JPMorgan should transfer situs of the LFC46 Trust to Delaware, split the Trust into five separate
trusts, and fund each separate trust with in-kind assets as “recommended by the arbitrator or in some
other manner.”1 Incredibly, this Petition asks the Illinois court to answer these questions by applying
Illinois law, and notes that “JPMorgan does not believe that the Texas courts possess jurisdiction to
modify [the LFC46] Trust.”2 Later, in its Response to Plaintiffs’ Application for Confirmation of
Arbitral Award—filed in this Court—JPMorgan again noted that the Illinois court is “the only court
with proper jurisdiction over … trust administration and modification issues.”3
JPMorgan’s claims beggar belief. Not only does this Court have jurisdiction over all issues
concerning implementation of the Final Award and modification of the LFC46 Trust—its jurisdiction
to decide these matters under Texas law is exclusive of any other court under “ancient and well-
settled” jurisprudential principles.4 As to the “implementation of the Final Award”—concerning
which JPMorgan now seeks a ruling in Illinois—this Court has exclusive jurisdiction to “enforce the
[parties’ arbitration] agreement,” “to render judgment on an [arbitral] award,” and to hear any
1 In re: Letitia Foster Campbell Trust u/a/d May 14, 1946, JPMorgan Chase Bank, N.A.’s Petition for Instructions and
for Declaratory Relief, Case No. 2020-CH-03636 (Cook Cty, Ill.), filed March 30, 2020 (henceforth “JPMorgan Illinois
Petition” or “IllinoisPetition”), ¶¶ 113-123 (seeking “instructions as to implementation of arbitration award”).
JPMorgan’s Petition is attached as Exhibit A.
2 Ex. A, JPMorgan Illinois Petition, ¶¶ 9, 25, 26, 27, 125, 131 (seeking instructions “consistent with Illinois law”).
3 JPMorgan’s Response to Plaintiffs’ Application for Confirmation of Arbitration Award (henceforth “JPMorgan
Response”), at *2.
4 Martinez v. Gutierrez, 66 S.W.2d 678, 681 (Tex. Comm’n App. 1933) (rejecting decisions that “r[an] counter to the
ancient and well-settled doctrine that real estate, its ownership, conveyance, and descent, are exclusively subject to the
laws of the state or nation in which it is situated”); see, e.g., RESTATEMENT (SECOND) OF CONFLICT OF LAWS § 276 (1971)
(providing that “[t]he administration of a trust of an interest in land is supervised by the courts of the situs as long as the
land remains subject to the trust, and that “court other than that of the situs … will not ordinarily give instructions to the
trustee as to his powers and duties” (emphasis added)). Compare Ex. A, JPMorgan Petition at 1 (“respectfully
petition[ing] the [Illinois] Court for instructions regarding … the handling of [the] trust.”).
2
“subsequent application relating to [this] arbitration” under the Texas Civil Practice and Remedies
Code.5 As to JPMorgan’s argument concerning the Trust issues—which JPMorgan says this Court
does not have jurisdiction to decide—compare the following statement, from the leading trust-law
treatise: “Interests in land that are held by a trust are subject to in rem jurisdiction in the state in which
the land is located,” and “if trust land is within its jurisdiction the forum court will have, and generally
will exercise, primary jurisdiction over questions of title to the land and questions relating to
the construction, validity, legal effect and administration of the trust.”6 This is true regardless
whether the corporate trustee or beneficiaries are located in a different state.7 What’s more, where
“the jurisdiction of a court has attached, and the proceeding in quasi in rem, as is the administration
of a trust, other courts should not interfere with that jurisdiction”—and dismissal of the second-filed
suit is automatic and mandatory under the doctrine of prior exclusive jurisdiction.8 These are not
errant statements. As set out in detail below, the authority supporting these fundamental legal
principles is overwhelming.
These authorities and the undisputed facts show that JPMorgan is dead wrong about this
Court’s jurisdiction. The Foster Entities and the LFC46 Trust hold forty-thousand acres of
5 TEX. CIV. PRAC. & REM. CODE §§ 171.081, 171.096.
6 Gary Bogert, et al., Bogert’s Law of Trusts and Trustees, § 292 (June 2019 update). Courts nationwide have cited
Bogert’s as the “leading treatise” on trust-law issues for decades.
See, e.g., In re Russo, 762 F.2d 239, 242 (2d Cir. 1985)
(describing Bogert’s as “leading treatise”).
7 Id.; see, e.g., Gardner v. Union Bank & Tr. Co., 159 S.W.2d 932, 935 (Tex. Civ. App.—Fort Worth 1942, writ ref'd
w.o.m.) (noting that it was “unnecessary to cite authority in support of the well settled rules” that the county in which
trust property is located has jurisdiction in all matters relating to the estate, and that any ruling in this respect is “in rem
and binding on everybody everywhere”).
8 Interfirst Bank-Houston, N.A. v. Quintana Petroleum Corp., 699 S.W.2d 864, 878 (Tex. App.—Houston [1st Dist.]
1985, writ ref'd n.r.e.) (“[A]s a general rule it is held that the administration of a trust imposed on land is governed by the
law of the state where the land is located and must be supervised by courts of that state … Where the jurisdiction of a
court has attached, and the proceeding is quasi in rem, as is the administration of a trust, other courts should not interfere
with that jurisdiction.”); see, e.g., 1 Cyc. of Federal Proc. § 2:178 (describing doctrine of prior exclusive jurisdiction as a
“mandatory rule, not a matter of judicial discretion,” requiring dismissal of later-filed suits concerning administration of
trusts in land).
3
timberland, real estate, and mineral interests located in Montgomery, Trinity, and Polk Counties,
Texas—none of these entities owns a single tree or patch of dirt in Illinois or anywhere else. It is no
surprise, then, that Foster Management and Foster Timber’s governing agreements—which were
expressly adopted by the California court order that approved the 1995 modification of the LFC46
Trust—specify that Texas law governs for all purposes and require that all disputes under those
agreements be resolved by a Texas arbitration.9 For all its attempts to evade Texas law, even
JPMorgan does not deny that it is a party to the Foster Timber Limited Partnership Agreement. In
fact, as the Arbitrator has conclusively held,10 JPMorgan entered into and filed in this Court a Rule
11 Agreement, in which it “agreed not to interfere with the ADR Process” and likewise “agree[d] to
comply with the ADR Process.”11 JPMorgan then demanded that it be made part of the Arbitration
process before reversing course. On these facts, it defies belief that a foreign court applying foreign
law would have superior jurisdiction to this Court to decide the fate of Texas assets that were the
subject of a Texas arbitration.
JPMorgan’s claim that an Illinois court should decide the “implementation” of the Final
Award and the fate of the LFC46 Trust is a brazen challenge to this Court’s clear authority and an
invitation for the Illinois court to err.12 Plaintiffs are thus forced, again, to seek this Court’s
9 Foster Management Regulations, § 14.7 (“THESE REGULATIONS ARE GOVERNED BY AND SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, EXCLUDING ANY CONFLICT-
OF-LAWS RULES OR PRINCIPLE THAT MIGHT REFER THE GOVERNANCE OR THE CONSTRUCTION OF
THESE REGULATIONS TO THE LAW OF ANOTHER JURISDICTION”) (emphasis in original);Foster Timber
Limited Partnership Agreement, § 15.2 (“This Agreement and all right and liabilities of the parties hereto with reference
to this Partnership shall be governed by the [Texas Limited Partnership] Act and all other applicable laws of the state of
Texas.”).
10See infra n.13.
11See Ex. B, Rule 11 Agreement (filed in this Court on December 18, 2018) (attached as Exhibit B).
12The Illinois courts have not yet taken any action on JPMorgan’s Petition. Upon service and entry of a schedule in that
case, Plaintiffs intend to move to dismiss JPMorgan’s suit in its entirety and are confident that, for the same reasons set
out herein, the capable Illinois courts will do so.s
4
intervention. As permitted by the Texas Civil Practice & Remedies Code § 171.086, Plaintiffs now
request that this Court issue an order verifying its sole and exclusive jurisdiction over (a) confirmation
and implementation of Arbitrator Weiss’s Final Award, (b) JPMorgan’s liability for its conduct in
failing to comply with (and impeding) the Arbitration, and (c) JPMorgan’s disentitlement to
reimbursement of attorneys’ fees on account of its culpable obstruction.
BACKGROUND
On March 23, 2020, Arbitrator Weiss issued his Final Award in the underlying AAA
Arbitration, granting Plaintiffs’ request to dissolve and liquidate Foster Management and Foster
Timber in light of the longstanding dysfunction afflicting this family timber business, and awarding
Plaintiffs all of the attorneys’ fees they sought against Robin Rouse, Terrill Scatena, Neil Campbell.
As Arbitrator Weiss had long promised, the Final Award does not include any relief against
JPMorgan; but it does hold that JPMorgan is a proper party to the Arbitration and is bound by the
Award for a myriad of reasons. That Award, like all arbitration awards in Texas, is conclusive on all
matter of fact and law it addresses, and is entitled to preclusive, res judicata effect.13
The very same day the Final Award issued, Plaintiffs filed their application to confirm the
award and to modify the LFC46 Trust to implement the Final Award and allow the timberlands to be
fairly divided in kind among the dueling family branches—so that the family members can finally go
their separate ways after nearly two decades of bitter infighting. As the Court knows, Plaintiffs have
been surprised and dismayed that the trustee of the family Trust, JPMorgan, has failed to meet its
contractual and fiduciary obligations to participate in the Arbitration and not to interfere with the
13See Premium Plastics Supply, Inc. v. Howell, 537 S.W.3d 201, 204 (Tex. App.—Houston [1st Dist.] 2017, no pet.) (“An
arbitration award has preclusive effect for purposes of res judicata.” (citing cases)); Anzilotti v. Gene D. Liggin, Inc., 899
S.W.2d 264, 266 (Tex. App.—Houston [14th Dist.] 1995, no writ) (“An arbitration award is conclusive on the parties as
to all matters of fact and law because the award has the effect of a judgment of a court of last resort.”); see also Casa Del
Mar Ass'n, Inc. v. Gossen Livingston Associates, Inc., 434 S.W.3d 211, 219 (Tex. App.—Houston [1st Dist.] 2014, pet.
denied) (“Courts apply collateral estoppel principles to arbitration awards.”).
5
Arbitration. Among other things, JPMorgan refused to present a single witness in the final hearing
in December 2019, openly defied Orders issued by the Arbitrator, filed an “emergency” motion
seeking this Court’s endorsement of its open defiance, ran up steep attorneys’ bills (for which it now
seeks reimbursement from Tom, Christy, and the other Trust beneficiaries), refused to be bound by
any aspect of the Arbitration, and even sued the Trust’s beneficiaries in this Court seeking a
significant monetary award for the attorneys’ fees JPMorgan incurred through its repeated
interference in the Arbitration.
JPMorgan’s intransigence breached its contractual commitments under Foster Management
and Foster Timber’s governing agreements (each of which contains a broad arbitration clause) and its
commitments to Plaintiffs and to this Court under its Rule 11 Agreement to participate in (and not
obstruct) the ADR process. Similarly, JPMorgan’s refusal to provide information about the LFC46
Trust’s administration to the beneficiaries and the Arbitrator—who repeatedly (and exasperatedly)
voiced his need to hear from a JPMorgan representative14—breached what JPMorgan admits was its
“fiduciary duty to disclose material facts regarding the Trust to the beneficiaries.”15
Making JPMorgan’s conduct all the more perplexing and disappointing is that the Arbitrator
repeatedly made clear that he did not intend to award any relief against JPMorgan. Likewise,
14See Arb. Hearing Trans. Day 1 (attached as Exhibit F) at 125:24-126:3 (“I need JPMorgan’s information. I know
you’re saying, ‘Well, he’s not important.’ I don’t know that until I hear him.” (emphasis added)); Ex. G, Arb. Hearing
Trans. Day 4 (attached as Exhibit G) at 11:12-22 (“I have heard his [i.e., Mr. Cress’s] name over and over in the last
three days of testimony, and I’ve seen his name on numerous documents and I now have expressions of concern from
respondents about relief that I might or might not grant with respect to the trust. Under those circumstances, it becomes
even more important that I hear from a representative of the trust in connection with whatever matters counsel chooses
to ask him about and I may have some questions for him myself.” (emphasis added)); Ex. F, Arb. Hearing Trans. Day 1
at 129:20-22 (“I feel like I also need the live testimony and, you know, that’s going to help me have a better understanding
….” (emphasis added)); Ex. F, Arb. Hearing Trans. Day 1 at 101:20-21 (“I mean I can read his deposition but, you know,
I think I may have questions that were not asked …” (emphasis added)); Ex. G, Arb. Hearing Trans. Day 4 at 17:7-11
(“I’m not going to have an opportunity to hear all the evidence that I need to hear. Deposition is not going to help me ….
I’m getting frustrated.” (emphasis added)).
15JPMorgan Motion to Dismiss Pursuant to the Texas Citizens Participation Act, Cause No. 18-12-15871, filed in this
Court on March 10, 2020 (henceforth “JPMorgan TCPA Motion” attached as Exhibit K), at 29.
6
Plaintiffs made clear at the outset that they bore no ill will against JPMorgan and did not intend to
seek relief against JPMorgan, whom Plaintiffs initially named only as a “Nominal” Defendant in this
Action. However, JPMorgan’s conduct throughout the Arbitration changed the landscape and caused
Plaintiffs significant harm. Thus, Plaintiffs now seek to redress this wrong through their
Counterclaims against JPMorgan, including breach of the Rule 11 Agreement and breach of
JPMorgan’s fiduciary duties. Among other relief Plaintiffs seek against JPMorgan is a finding that,
because JPMorgan incurred significant attorneys’ fees throughout this Arbitration by doing precisely
what it promised not to do, JPMorgan is not entitled to recoup any such fees from either the Foster
Entities or the LFC46 Trust.
Unfortunately, JPMorgan’s inexplicable interference with the Arbitration has only worsened
since Plaintiffs brought their claims against it.
First, JPMorgan filed a motion to dismiss Plaintiffs’ claims on the merits under the Texas
Citizens Participation Act (“JPMorgan’s TCPA Motion”).16 Perhaps recognizing the likelihood that
its TCPA Motion would be denied, JPMorgan has telegraphed its intent to seek an interlocutory
appeal, which JPMorgan contends would stay these proceedings and prevent the parties from
confirming the Arbitrator’s Final Award.17 Then, on March 30th, just seven days after the Arbitrator
issued his Final Award, JPMorgan filed its new lawsuit in Chicago, Illinois against Plaintiffs and all
16See Better Bus. Bureau of Metro. Houston, Inc. v. John Moore Services, Inc., 500 S.W.3d 26, 40 (Tex. App.—Houston
[1st Dist.] 2016, pet. denied) (“A dismissal with prejudice under the TCPA constitutes a final
determination on the merits for res judicata purposes.”) (citing Harris Cty. v. Sykes, 136 S.W.3d 635, 640 (Tex. 2004)
(emphasis added)).
17 See Feb. 21 Letter from Greenberg Traurig, at 2 (attached as Exhibit C) (demanding that Plaintiffsdrop their
Counterclaims on the threat of derailing the Arbitration by seeking an interlocutory appeal: “any appeal from an anti-
SLAPP decision is immediate and stays the underlying matter”); TEX. CIV. PRAC. & REM. CODE § 51.014(b) (“An
interlocutory appeal under Subsection (a)”—which, in Part (a)(12), lists denied TCPA motions among the rulings from
which an interlocutory appeal lies—“stays the commencement of a trial in the trial court pending resolution of the appeal.
An interlocutory appeal under Subsection … [(a)](12) also stays all other proceedings in the trial court pending resolution
of that appeal.”).
7
beneficiaries of the LFC46 trust. In this suit lawsuit, JPMorgan seeks findings relating to, among
other things:
a. the propriety and confirmation of the Final Award, including with respect to
Arbitrator Weiss’s now conclusive finding that JPMorgan is a proper party to the
Arbitration and is bound by the Arbitration results18;
b. the “implementation” of the Final Award, including the liquidation process triggered
by the dissolution of Foster Timber, Ltd. and Foster Management, LLC and the
potential modification and division of the LFC46 trust into five separate trusts19;
c. whether JPMorgan’s “actions taken to date” in “the arbitration in Montgomery
County, Texas” should be “approved”20; and
d. whether JPMorgan is entitled to be reimbursed for its attorneys’ fees incurred
throughout the Arbitration. 21
JPMorgan’s bold forum shopping shows that it is not only willing to flout Arbitrator Weiss’s
jurisdiction—it is willing to flout this Court’s jurisdiction as well. Through its new suit in Illinois,
JPMorgan seeks relief that completely overlaps with pending claims in this Action, including with
respect to the propriety and implementation of the Final Award currently before the Court. Worse,
with respect Plaintiffs’ claims against JPMorgan arising from its conduct during the Arbitration
proceeding (claims that are separate and distinct from whether the Final Award should be confirmed),
JPMorgan’s Illinois suit asks for blanket “approval” of “all of [JPMorgan’s] actions taken to date” in
“the arbitration in Montgomery County, Texas”22 even though JPMorgan has already sought an on-
the-merits adjudication of these claims from this Court in its TCPA Motion. JPMorgan appears to be
treating its Illinois suit as a sort of safety valve—a forum to which it can turn for relief in case this
18Ex. A, JPMorgan Illinois Petition, ¶ 109 (“JPMorgan believes that it is not properly subject to the jurisdiction of the
arbitrator and has preserved that position throughout the proceedings.”).
19 Ex. A, JPMorgan IllinoisPetition,¶¶ 113-123 (seeking “instructionsas to implementation of arbitration award,”
including request for approval of division of LFC46 Trust).
20Ex. A, JPMorgan Illinois Petition, ¶¶ 126-131 (seeking “declaratory judgment approving all of [JPMorgan’s] actions
taken to date” in relation to trust administration and the arbitration proceedings).
21Ex. A, JPMorgan Illinois Petition, ¶¶ 132-133 (seeking “declaratory judgment as to right of trustee to be reimbursed
costs and fees from trust”).
22Ex. A, JPMorgan Illinois Petition, ¶¶ 126-31.
8
Court does anything it dislikes. This two-track-litigation strategy is a gross waste of both judicial and
Trust resources. It also runs counter to JPMorgan’s own prior conduct, by which it invoked this
Court’s jurisdiction and sought its intervention in disputes arising from the parties’ Arbitration.
ARGUMENT
This Court has unquestionable and exclusive jurisdiction over the confirmation and
implementation of the Final Award. “The making of an agreement [to arbitrate] … that provides for
or authorizes an arbitration in this state … confers jurisdiction on the court to enforce the agreement
and to render judgment on an award under this chapter.”23 JPMorgan’s Illinois suit interferes with
the Court’s jurisdiction and violates JPMorgan’s contractual commitments to participate in and be
bound by the results of the Arbitration process. In addition, JPMorgan’s baseless claims that this
Court is without jurisdiction to determine the implementation of the Final Award and ancillary trust-
modification issues threaten to derail the orderly dissolution and liquidation of the Foster Entities and
the trust modification Plaintiffs now seek.24
This Court has broad powers to issue orders in support of arbitration under Texas Civil
Practice & Remedies Code § 171.086, including orders to “invoke the jurisdiction of the court over
an adverse party,” to “invoke the jurisdiction of the court over an ancillary proceeding in rem,” to
“require compliance by an adverse party or witness with an order made … by the arbitrators during
the arbitration,” or, generally, that is needed “to permit the arbitration to be conducted in an orderly
manner and to prevent improper interference or delay of the arbitration” or confirmation thereof.25
23TEX. CIV. PRAC. & REM. CODE § 171.081; see Foster Management Regulations, § 13.5 (agreeing to Texas arbitration);
Foster Timber Limited Partnership Agreement, § 13.5 (same).
24Although Arbitrator Weiss’s Final Award did not divide or in any way affect the LFC46 Trust, the Award did include
a finding that the recommendations of Plaintiffs’ expert witness concerning in-kind division of the Foster Entities’ assets
“deserves careful consideration in any future proceedings concerning the division of the timberland assets in Foster
Timber or the LFC46 Trust.” Final Award, ¶ 15 (attached hereto as Exhibit D).
25TEX. CIV. PRAC & REM. CODE § 171.086(a), (b)(1).
9
Plaintiffs request that the Court issue just such an order, dictating that (i) the matters alleged in
JPMorgan’s Illinois suit are properly subject to this Court’s jurisdiction, and must necessarily be
decided by this Court; (ii) JPMorgan, acting as the Sole Limited Partner of Foster Timber, Ltd., is
required to name a Liquidator for Foster Timber, Ltd. and must do so immediately as contemplated
in the Final Award, and; (iii)JPMorgan should cease all further conduct delaying or otherwise
interfering with the orderly confirmation and implementation of the Final Award and the ancillary in
rem proceedings concerning trust modification. Such an award is entirely justified and indeed
necessary for the reasons set out below.
I. JPMorgan’s Illinois Suit Wrongfully Shops for an Alternative Forum to
Challenge the Propriety of the Final Award
JPMorgan’s Illinois suit collaterally attacks Arbitrator Weiss’s finding that JPMorgan is a
proper party to the Arbitration and is bound by the results of the Arbitration. For instance, JPMorgan
claims in its Illinois Petition that “JPMorgan believes that it was not properly subject to the
jurisdiction of the arbitrator and has preserved that position throughout the proceedings,” and seeks
blanket judicial approval of all of its actions to date.26 What’s more, in shopping for a more
accommodating forum than JPMorgan has apparently found in Texas—where all the Trust assets are
located—JPMorgan has presented the Illinois Court a painfully incomplete and inaccurate recitation
of the events over the past year and a half in the Arbitration and in this Court.
In the Illinois suit, JPMorgan attacks Arbitrator Weiss and the Arbitration process by claiming
that while Arbitrator Weiss found JPMorgan was a necessary party to the Arbitration, he provided
26Ex. A, JPMorgan Illinois Petition, ¶¶ 109, 126-131.
10
“no analysis on the topic.”27 This is a misstatement, and a bold one.28 Arbitrator Weiss repeatedly
explained the basis on which he found JPMorgan was a necessary party to the Arbitration and bound
by the Arbitration process and result. Arbitrator Weiss discussed this issue extensively in the Final
Award, which JPMorgan completely ignores in its Illinois suit. Arbitrator Weiss explained his
holding in this regard at length at Paragraph 3 of his Conclusions of Law, setting out four independent
reasons that JPMorgan was a proper party to, and bound by, the results of the Arbitration29:
JPMorgan is bound by the dispute resolution provisions of the Foster Management
Regulations and the Foster Timber Partnership Agreement and the results of this
arbitration for the following reasons. First, in Preliminary Hearing Order # 2, the
Arbitrator determined that JPMorgan is a necessary party in this arbitration under
the applicable Rules of the American Arbitration Association. JPMorgan then filed
a Motion to reverse this Order in the Montgomery County District Court, but never
pursued the Motion to seek a ruling from the Court. Second, because the Regulations
and Partnership Agreement are closely intertwined and interdependent, the
requirement to arbitrate under the Foster Management Regulations applies to
JPMorgan under the unity of purpose doctrine. Third, JPMorgan has received
27Ex. A, JPMorgan Illinois Petition, ¶ 92.
28JPMorgan’s incomplete and inaccurate characterizations do not stop with the Arbitrator’s Orders. In describing this
Court’s Order enforcing the Arbitrator’s Order No. 22 and directing JPMorgan to produces its employee for live
testimony, JPMorgan says that this Court did not “comment[] or rul[e] on the propriety of that [A]rbitration [O]rder [No.
22].” Ex. A, JPMorgan Illinois Petition, ¶ 130. First, the insinuation that this Court would enforce an order it found
improper is deeply misguided. More to the point, this Court did “comment on” the propriety of Arbitration Order No. 22:
“JUDGE BAYS: It’s not unreasonable for them [i.e. Plaintiffs] to expect that the human who is doing the key work of the
party trustee, [JPMorgan] Chase, would be someone who would come testify.” Hearing of Jan. 17, 2020 at 49:11-14.
29Arbitrator Weiss had also thoroughly explained the basis for his holding in two prior Arbitration Orders. First, in his
May 29, 2019 Preliminary Order No. 2, he cited both the underlying authority and rationale of his holding that JPMorgan
is a necessary party: “Under AAA Rule P-2(a)(ii), JPMorgan Chase Bank, N.A. is a necessary party in this Arbitration.
The issues raised by the Demand for Arbitration cannot be properly considered and decided without the participation of
JPMorgan Chase Bank as a party.” Preliminary Order No. 2 (attached as Exhibit H) at ¶ 3. Then, in response to
JPMorgan’s insistence that (a) it should not be required to arbitrate and (b) any Arbitration orders would not bind it,
Arbitrator Weiss was forced to issue another Order on August 4, 2019 “to clarify the reasons for the ruling he made in
Preliminary Hearing Order # 2 that JPMorgan is a necessary party in this arbitration under Rule P-2(a)(ii) of the AAA
Commercial Arbitration Rules.” Protective Order (attached as Exhibit I) at 2.After first noting that the AAA rules on
joinder of parties are “intended to be more flexible and adaptable than the procedural rules in civil courts applicable to
traditional litigation,” Arbitrator Weiss then explained that JPMorgan “has been serving for many years as the trustee of
the [LFC46 Trust],” “owes a fiduciary duty to the five members of Foster Management [in that capacity],” and effectively
“owns 99 percent of the assets that are central to the issues in this arbitration.”
Id. at 2-3.He continued: “the Arbitrator
… continues to feel[] thatbecause of itsinvolvement with the entitiesthat are Claimants and Respondents in this
proceeding, evidence from JPMorgan would be needed in order for him to fully understand and properly decide the issues
that Claimants have raised.” Id. at 3 (emphasis added). Arbitrator Weiss added that “given JPMorgan’s interests in this
matter, [he] felt that the bank would want to participate,” and offered to “certainly address [any] concerns” JPMorgan
might have about “unduly burden[some] … discovery requests.” Id. In no way can Arbitrator Weiss be said to have
provided “no analysis” on this matter.
11
significant benefits under the Foster Management Regulations by invoking
indemnification rights against the assets of Foster Management in this arbitration and
by receiving fees as Trustee of the LFC46 Trust without having the responsibility of
managing the assets of the Trust. JPMorgan cannot claim these benefits and at the
same time deny its obligation to participate in this arbitration proceeding under the
Foster Management Regulations and the Foster Timber Partnership Agreement.
Fourth, despite its continuing objection to being included as a party in this arbitration,
at the invitation of the Arbitrator, JPMorgan has actively joined in these proceedings,
including having one or more attorneys present and participating in the nine days of
the hearing. And finally, JPMorgan signed a Rule 11 Agreement with the other
parties before the arbitration began in which it agreed to be bound by the dispute
resolution provisions of the Foster Management Regulations.30
Likewise, nowhere in its Illinois suit does JPMorgan even mention that it signed and filed in
this Court a binding Rule 11 Agreement in which (as the Arbitrator has now definitively held)
JPMorgan agreed to participate in “agreed[d] to comply with the ADR Process” and further agreed
“not to interfere with the ADR Process.”31 Nor does JPMorgan mention in its Illinois suit that at the
outset of the Arbitration, JPMorgan’s previous lawyers threatened that if JPMorgan were not made a
formal party to the Arbitration, JPMorgan would lack due process and thus would not be bound by
the Arbitration and could seek inconsistent relief in another forum.32 What’s more, that same
Answering Statement conceded that it was within the Arbitrator’s authority to determine whether
30Ex. D, Final Award, at 10-11.
31Ex. B, Rule 11 Agreement, at 2.
32See JPMorgan’s Answering Statement at 24 (attached hereto as Exhibit E) (“If JPMorgan is not joined as a party to the
Arbitration, JPMorgan maintains that it would not be bound by the Arbitration Award in a subsequent proceeding …. In
the event the Arbitration Award on these issues in any way negatively impacts JPMorgan, JPMorgan is free to seek a
declaratory judgment or similar relief ... by a formal court proceeding ….” (emphasis JPMorgan’s)). In its Illinois lawsuit,
JPMorgan says that in its “Answer[] … [JPMorgan] maintained that it was not a proper party to the arbitration.” Ill Suit
at ¶ 88. But this isn’t accurate.What its Answer actually “maintained” was that JPMorgan was not currently a party to
the Arbitration—which is an altogether different thing than whether JPMorgan should be made a party to the Arbitration.
See Ex. E, JPMorgan Answering Statement at 2 (“The parties to the Arbitration currently are [the five Foster Management
members] …. JPMorgan has not been formally joined as a party.” (emphasis added)). As to whether it should be named
a party to the Arbitration, JPMorgan’s Answering Statement squarely says “[w]hether JPMorgan may be joined as a third
party to the Arbitration, and if so, whether JPMorgan should be joined as a third party to the Arbitration are addressed in
greater detail in Part VI of this Answering Statement.”Id. at 4.And in Part VI of the Answering Statement, emphasizing
that it is “in an intertwined multiparty relationship” with the five Foster Management owners and “is inextricably tied to”
their dispute, JPMorgan demanded that “JPMorgan should be joined as a party to the Arbitration if [a] ruling is expected
on the trust issues or the indemnification issue.”Id. at 3. Finding that such issues would be implicated, the Arbitrator
agreed with JPMorgan and joined it as a party. See Ex. H, Preliminary Order No. 2.
12
JPMorgan should be joined as a party: “JPMorgan may be joined in the Arbitration only if the
Arbitrator so decides.” Of course, JPMorgan has now abandoned this position and asked both Texas
and Illinois courts to overrule the Arbitrator’s finding that it was contractually bound to arbitrate.
The sole and exclusive forum in which to challenge Arbitrator Weiss’s findings that JPMorgan
is a proper party to the Arbitration is this Court, which has presided over the Arbitration over the past
18 months. Not only does this Court have exclusive jurisdiction over the arbitral process under the
Texas Civil Practice and Remedies Code, but—as the Texas Supreme Court has held—“when cases
involving the same subject matter are brought in different courts, the court with the first-filed case
has dominant jurisdiction and should proceed,” while “the other case[] should abate.”33 By seeking
to collaterally attack Arbitrator Weiss’s Final Award and previous rulings in Illinois, JPMorgan
brazenly seeks to undermine this Court’s jurisdiction over the Arbitration and its proper role
determining whether the Final Award should be confirmed.
II. JPMorgan’s Illinois Suit Wrongfully Shops for an Alternative Forum with
Respect to the “Implementation” of the Final Award.
Worse still, as described above, JPMorgan’s Illinois Petition seeks a variety of instructions
under Illinois law concerning the “implementation” of the Final Award, including (i) the liquidation
process triggered by the dissolution of Foster Timber and Foster Management and (ii) the potential
modification and the LFC46 Trust and in-kind distribution of Trust assets. Incredibly, JPMorgan’s
Petition and its Response to Plaintiffs’ Application for Confirmation of the Final Award go so far as
33Perry v. Del Rio, 66 S.W.3d 239, 252–53 (Tex. 2001) (“As a rule, when cases involving the same subject matter are
brought in different courts, the court with the first-filed case has dominant jurisdiction and should proceed, and the other
cases should abate …. The first-filed rule [] has several justifications. The jurisprudential reason for the rule is that once
a matter is before a court of competent jurisdiction, its action must necessarily be exclusive because it is impossible that
two courts can, at the same time, possess the power to make a final determination of the same controversy between the
same parties. A pragmatic justification for the first-filed rule is efficiency: proceedings earlier begun may be expected to
be earlier concluded. A further justification is simple fairness: in a race to the courthouse, the winner's suit should have
dominant jurisdiction.” (internal citations and quotations omitted)).
13
to indicate that “JPMorgan does not believe that the Texas courts possess jurisdiction to modify [the
LFC46] Trust.”34 In other words, JPMorgan now claims that this proceeding—concerning the
implementation of a Texas arbitration award and the fate of 40,000 acres of Texas timberland—is
subordinate to the jurisdiction of Illinois courts and bound by Illinois law. This is wrong.
A. Liquidation Process
As to the liquidation process triggered by the order of dissolution included in the Final Award,
JPMorgan seeks instructions from the Illinois Court on whether it has an obligation to appoint a
Liquidator under the Foster Timber, Ltd. Limited Partnership Agreement and Illinois law.35
JPMorgan does so despite the fact that the Limited Partnership Agreement—to which JPMorgan does
not dispute that it is a party—dictates that “[t]his Agreement and all rights and liabilities of the parties
hereto with reference to this Partnership shall be governed by the [Texas Limited Partnership] Act
and all other applicable laws of the State of Texas.”36
There is no mystery here: JPMorgan itself is on record stating that if Arbitrator Weiss ordered
dissolution, JPMorgan would appoint a Liquidator.37 Now, however, JPMorgan equivocates, and
34Ex. A, JPMorgan Illinois Petition, ¶ 9; JPMorgan Response at 2 (describing Illinois court as “the only court with proper
jurisdiction over … Trusts administration and modification issues”).
Preview
Received and E-Filed for Record 4/15/2020 8:25 PM Melisa Miller, District Clerk Montgomery County, Texas Deputy Clerk, Vanessa Medina CAUSE NO. 2018-12-15871 THOMAS N. CAMPBELL, § CHRISTY W. KOLVA, § IN THE DISTRICT COURT ISABELLE CAMPBELL, § ASHLEY GATES § FOSTER MANAGEMENT, L.L.C., § FOSTER TIMBER, LTD. § MONTGOMERY COUNTY, TEXAS § Plaintiffs, § § v. § § 284th JUDICIAL DISTRICT NEIL F. CAMPBELL, JR., § ROBIN S. ROUSE, § TERRILL A. SCATENA, § SABRINA ROUSE, § BENJAMIN CAMPBELL, § MORGAN PETERSON, § RYAN PETERSON, § JPMORGAN CHASE BANK, N.A., § TRUSTEE OF THE LETITIA FOSTER § CAMPBELL TRUST U/A/D/ MAY 14, 1946. § § Defendants. § PLAINTIFFS’ APPLICATION FOR ORDER IN SUPPORT OF ARBITRATION AGAINST JPMORGAN UNDER TEX. CIV. PRAC. & REM. CODE § 171.086 Plaintiffs Thomas Campbell, Christy Kolva, Isabelle Campbell, Ashley Gates, Foster Management, LLC (“Foster Management”), and Foster Timber, Ltd. (“Foster Timber”) (collectively “Plaintiffs”) file this Application for Order in Support of Arbitration under Texas Civil Practice & Remedies Code § 171.086 in support of Arbitration against JPMorgan Chase Bank, N.A. (“JPMorgan”), and in support thereof show as follows. INTRODUCTION On March 23, 2020, Arbitrator Weiss issued his Final Award in the underlying AAA Arbitration, granting Plaintiffs’ request to dissolve and liquidate Foster Management and Foster Timber. That same day, Plaintiffs filed their application to confirm the Final Award and request for modification of the LFC46 Trust in this Court. Seven days later, JPMorgan filed a competing lawsuit seeking judicial instructions in Chicago, Illinois. JPMorgan’s Illinois Petition seeks a variety of instructions concerning “implementation of the arbitration award,” including an instruction that JPMorgan should transfer situs of the LFC46 Trust to Delaware, split the Trust into five separate trusts, and fund each separate trust with in-kind assets as “recommended by the arbitrator or in some other manner.”1 Incredibly, this Petition asks the Illinois court to answer these questions by applying Illinois law, and notes that “JPMorgan does not believe that the Texas courts possess jurisdiction to modify [the LFC46] Trust.”2 Later, in its Response to Plaintiffs’ Application for Confirmation of Arbitral Award—filed in this Court—JPMorgan again noted that the Illinois court is “the only court with proper jurisdiction over … trust administration and modification issues.”3 JPMorgan’s claims beggar belief. Not only does this Court have jurisdiction over all issues concerning implementation of the Final Award and modification of the LFC46 Trust—its jurisdiction to decide these matters under Texas law is exclusive of any other court under “ancient and well- settled” jurisprudential principles.4 As to the “implementation of the Final Award”—concerning which JPMorgan now seeks a ruling in Illinois—this Court has exclusive jurisdiction to “enforce the [parties’ arbitration] agreement,” “to render judgment on an [arbitral] award,” and to hear any 1 In re: Letitia Foster Campbell Trust u/a/d May 14, 1946, JPMorgan Chase Bank, N.A.’s Petition for Instructions and for Declaratory Relief, Case No. 2020-CH-03636 (Cook Cty, Ill.), filed March 30, 2020 (henceforth “JPMorgan Illinois Petition” or “IllinoisPetition”), ¶¶ 113-123 (seeking “instructions as to implementation of arbitration award”). JPMorgan’s Petition is attached as Exhibit A. 2 Ex. A, JPMorgan Illinois Petition, ¶¶ 9, 25, 26, 27, 125, 131 (seeking instructions “consistent with Illinois law”). 3 JPMorgan’s Response to Plaintiffs’ Application for Confirmation of Arbitration Award (henceforth “JPMorgan Response”), at *2. 4 Martinez v. Gutierrez, 66 S.W.2d 678, 681 (Tex. Comm’n App. 1933) (rejecting decisions that “r[an] counter to the ancient and well-settled doctrine that real estate, its ownership, conveyance, and descent, are exclusively subject to the laws of the state or nation in which it is situated”); see, e.g., RESTATEMENT (SECOND) OF CONFLICT OF LAWS § 276 (1971) (providing that “[t]he administration of a trust of an interest in land is supervised by the courts of the situs as long as the land remains subject to the trust, and that “court other than that of the situs … will not ordinarily give instructions to the trustee as to his powers and duties” (emphasis added)). Compare Ex. A, JPMorgan Petition at 1 (“respectfully petition[ing] the [Illinois] Court for instructions regarding … the handling of [the] trust.”). 2 “subsequent application relating to [this] arbitration” under the Texas Civil Practice and Remedies Code.5 As to JPMorgan’s argument concerning the Trust issues—which JPMorgan says this Court does not have jurisdiction to decide—compare the following statement, from the leading trust-law treatise: “Interests in land that are held by a trust are subject to in rem jurisdiction in the state in which the land is located,” and “if trust land is within its jurisdiction the forum court will have, and generally will exercise, primary jurisdiction over questions of title to the land and questions relating to the construction, validity, legal effect and administration of the trust.”6 This is true regardless whether the corporate trustee or beneficiaries are located in a different state.7 What’s more, where “the jurisdiction of a court has attached, and the proceeding in quasi in rem, as is the administration of a trust, other courts should not interfere with that jurisdiction”—and dismissal of the second-filed suit is automatic and mandatory under the doctrine of prior exclusive jurisdiction.8 These are not errant statements. As set out in detail below, the authority supporting these fundamental legal principles is overwhelming. These authorities and the undisputed facts show that JPMorgan is dead wrong about this Court’s jurisdiction. The Foster Entities and the LFC46 Trust hold forty-thousand acres of 5 TEX. CIV. PRAC. & REM. CODE §§ 171.081, 171.096. 6 Gary Bogert, et al., Bogert’s Law of Trusts and Trustees, § 292 (June 2019 update). Courts nationwide have cited Bogert’s as the “leading treatise” on trust-law issues for decades. See, e.g., In re Russo, 762 F.2d 239, 242 (2d Cir. 1985) (describing Bogert’s as “leading treatise”). 7 Id.; see, e.g., Gardner v. Union Bank & Tr. Co., 159 S.W.2d 932, 935 (Tex. Civ. App.—Fort Worth 1942, writ ref'd w.o.m.) (noting that it was “unnecessary to cite authority in support of the well settled rules” that the county in which trust property is located has jurisdiction in all matters relating to the estate, and that any ruling in this respect is “in rem and binding on everybody everywhere”). 8 Interfirst Bank-Houston, N.A. v. Quintana Petroleum Corp., 699 S.W.2d 864, 878 (Tex. App.—Houston [1st Dist.] 1985, writ ref'd n.r.e.) (“[A]s a general rule it is held that the administration of a trust imposed on land is governed by the law of the state where the land is located and must be supervised by courts of that state … Where the jurisdiction of a court has attached, and the proceeding is quasi in rem, as is the administration of a trust, other courts should not interfere with that jurisdiction.”); see, e.g., 1 Cyc. of Federal Proc. § 2:178 (describing doctrine of prior exclusive jurisdiction as a “mandatory rule, not a matter of judicial discretion,” requiring dismissal of later-filed suits concerning administration of trusts in land). 3 timberland, real estate, and mineral interests located in Montgomery, Trinity, and Polk Counties, Texas—none of these entities owns a single tree or patch of dirt in Illinois or anywhere else. It is no surprise, then, that Foster Management and Foster Timber’s governing agreements—which were expressly adopted by the California court order that approved the 1995 modification of the LFC46 Trust—specify that Texas law governs for all purposes and require that all disputes under those agreements be resolved by a Texas arbitration.9 For all its attempts to evade Texas law, even JPMorgan does not deny that it is a party to the Foster Timber Limited Partnership Agreement. In fact, as the Arbitrator has conclusively held,10 JPMorgan entered into and filed in this Court a Rule 11 Agreement, in which it “agreed not to interfere with the ADR Process” and likewise “agree[d] to comply with the ADR Process.”11 JPMorgan then demanded that it be made part of the Arbitration process before reversing course. On these facts, it defies belief that a foreign court applying foreign law would have superior jurisdiction to this Court to decide the fate of Texas assets that were the subject of a Texas arbitration. JPMorgan’s claim that an Illinois court should decide the “implementation” of the Final Award and the fate of the LFC46 Trust is a brazen challenge to this Court’s clear authority and an invitation for the Illinois court to err.12 Plaintiffs are thus forced, again, to seek this Court’s 9 Foster Management Regulations, § 14.7 (“THESE REGULATIONS ARE GOVERNED BY AND SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, EXCLUDING ANY CONFLICT- OF-LAWS RULES OR PRINCIPLE THAT MIGHT REFER THE GOVERNANCE OR THE CONSTRUCTION OF THESE REGULATIONS TO THE LAW OF ANOTHER JURISDICTION”) (emphasis in original);Foster Timber Limited Partnership Agreement, § 15.2 (“This Agreement and all right and liabilities of the parties hereto with reference to this Partnership shall be governed by the [Texas Limited Partnership] Act and all other applicable laws of the state of Texas.”). 10See infra n.13. 11See Ex. B, Rule 11 Agreement (filed in this Court on December 18, 2018) (attached as Exhibit B). 12The Illinois courts have not yet taken any action on JPMorgan’s Petition. Upon service and entry of a schedule in that case, Plaintiffs intend to move to dismiss JPMorgan’s suit in its entirety and are confident that, for the same reasons set out herein, the capable Illinois courts will do so.s 4 intervention. As permitted by the Texas Civil Practice & Remedies Code § 171.086, Plaintiffs now request that this Court issue an order verifying its sole and exclusive jurisdiction over (a) confirmation and implementation of Arbitrator Weiss’s Final Award, (b) JPMorgan’s liability for its conduct in failing to comply with (and impeding) the Arbitration, and (c) JPMorgan’s disentitlement to reimbursement of attorneys’ fees on account of its culpable obstruction. BACKGROUND On March 23, 2020, Arbitrator Weiss issued his Final Award in the underlying AAA Arbitration, granting Plaintiffs’ request to dissolve and liquidate Foster Management and Foster Timber in light of the longstanding dysfunction afflicting this family timber business, and awarding Plaintiffs all of the attorneys’ fees they sought against Robin Rouse, Terrill Scatena, Neil Campbell. As Arbitrator Weiss had long promised, the Final Award does not include any relief against JPMorgan; but it does hold that JPMorgan is a proper party to the Arbitration and is bound by the Award for a myriad of reasons. That Award, like all arbitration awards in Texas, is conclusive on all matter of fact and law it addresses, and is entitled to preclusive, res judicata effect.13 The very same day the Final Award issued, Plaintiffs filed their application to confirm the award and to modify the LFC46 Trust to implement the Final Award and allow the timberlands to be fairly divided in kind among the dueling family branches—so that the family members can finally go their separate ways after nearly two decades of bitter infighting. As the Court knows, Plaintiffs have been surprised and dismayed that the trustee of the family Trust, JPMorgan, has failed to meet its contractual and fiduciary obligations to participate in the Arbitration and not to interfere with the 13See Premium Plastics Supply, Inc. v. Howell, 537 S.W.3d 201, 204 (Tex. App.—Houston [1st Dist.] 2017, no pet.) (“An arbitration award has preclusive effect for purposes of res judicata.” (citing cases)); Anzilotti v. Gene D. Liggin, Inc., 899 S.W.2d 264, 266 (Tex. App.—Houston [14th Dist.] 1995, no writ) (“An arbitration award is conclusive on the parties as to all matters of fact and law because the award has the effect of a judgment of a court of last resort.”); see also Casa Del Mar Ass'n, Inc. v. Gossen Livingston Associates, Inc., 434 S.W.3d 211, 219 (Tex. App.—Houston [1st Dist.] 2014, pet. denied) (“Courts apply collateral estoppel principles to arbitration awards.”). 5 Arbitration. Among other things, JPMorgan refused to present a single witness in the final hearing in December 2019, openly defied Orders issued by the Arbitrator, filed an “emergency” motion seeking this Court’s endorsement of its open defiance, ran up steep attorneys’ bills (for which it now seeks reimbursement from Tom, Christy, and the other Trust beneficiaries), refused to be bound by any aspect of the Arbitration, and even sued the Trust’s beneficiaries in this Court seeking a significant monetary award for the attorneys’ fees JPMorgan incurred through its repeated interference in the Arbitration. JPMorgan’s intransigence breached its contractual commitments under Foster Management and Foster Timber’s governing agreements (each of which contains a broad arbitration clause) and its commitments to Plaintiffs and to this Court under its Rule 11 Agreement to participate in (and not obstruct) the ADR process. Similarly, JPMorgan’s refusal to provide information about the LFC46 Trust’s administration to the beneficiaries and the Arbitrator—who repeatedly (and exasperatedly) voiced his need to hear from a JPMorgan representative14—breached what JPMorgan admits was its “fiduciary duty to disclose material facts regarding the Trust to the beneficiaries.”15 Making JPMorgan’s conduct all the more perplexing and disappointing is that the Arbitrator repeatedly made clear that he did not intend to award any relief against JPMorgan. Likewise, 14See Arb. Hearing Trans. Day 1 (attached as Exhibit F) at 125:24-126:3 (“I need JPMorgan’s information. I know you’re saying, ‘Well, he’s not important.’ I don’t know that until I hear him.” (emphasis added)); Ex. G, Arb. Hearing Trans. Day 4 (attached as Exhibit G) at 11:12-22 (“I have heard his [i.e., Mr. Cress’s] name over and over in the last three days of testimony, and I’ve seen his name on numerous documents and I now have expressions of concern from respondents about relief that I might or might not grant with respect to the trust. Under those circumstances, it becomes even more important that I hear from a representative of the trust in connection with whatever matters counsel chooses to ask him about and I may have some questions for him myself.” (emphasis added)); Ex. F, Arb. Hearing Trans. Day 1 at 129:20-22 (“I feel like I also need the live testimony and, you know, that’s going to help me have a better understanding ….” (emphasis added)); Ex. F, Arb. Hearing Trans. Day 1 at 101:20-21 (“I mean I can read his deposition but, you know, I think I may have questions that were not asked …” (emphasis added)); Ex. G, Arb. Hearing Trans. Day 4 at 17:7-11 (“I’m not going to have an opportunity to hear all the evidence that I need to hear. Deposition is not going to help me …. I’m getting frustrated.” (emphasis added)). 15JPMorgan Motion to Dismiss Pursuant to the Texas Citizens Participation Act, Cause No. 18-12-15871, filed in this Court on March 10, 2020 (henceforth “JPMorgan TCPA Motion” attached as Exhibit K), at 29. 6 Plaintiffs made clear at the outset that they bore no ill will against JPMorgan and did not intend to seek relief against JPMorgan, whom Plaintiffs initially named only as a “Nominal” Defendant in this Action. However, JPMorgan’s conduct throughout the Arbitration changed the landscape and caused Plaintiffs significant harm. Thus, Plaintiffs now seek to redress this wrong through their Counterclaims against JPMorgan, including breach of the Rule 11 Agreement and breach of JPMorgan’s fiduciary duties. Among other relief Plaintiffs seek against JPMorgan is a finding that, because JPMorgan incurred significant attorneys’ fees throughout this Arbitration by doing precisely what it promised not to do, JPMorgan is not entitled to recoup any such fees from either the Foster Entities or the LFC46 Trust. Unfortunately, JPMorgan’s inexplicable interference with the Arbitration has only worsened since Plaintiffs brought their claims against it. First, JPMorgan filed a motion to dismiss Plaintiffs’ claims on the merits under the Texas Citizens Participation Act (“JPMorgan’s TCPA Motion”).16 Perhaps recognizing the likelihood that its TCPA Motion would be denied, JPMorgan has telegraphed its intent to seek an interlocutory appeal, which JPMorgan contends would stay these proceedings and prevent the parties from confirming the Arbitrator’s Final Award.17 Then, on March 30th, just seven days after the Arbitrator issued his Final Award, JPMorgan filed its new lawsuit in Chicago, Illinois against Plaintiffs and all 16See Better Bus. Bureau of Metro. Houston, Inc. v. John Moore Services, Inc., 500 S.W.3d 26, 40 (Tex. App.—Houston [1st Dist.] 2016, pet. denied) (“A dismissal with prejudice under the TCPA constitutes a final determination on the merits for res judicata purposes.”) (citing Harris Cty. v. Sykes, 136 S.W.3d 635, 640 (Tex. 2004) (emphasis added)). 17 See Feb. 21 Letter from Greenberg Traurig, at 2 (attached as Exhibit C) (demanding that Plaintiffsdrop their Counterclaims on the threat of derailing the Arbitration by seeking an interlocutory appeal: “any appeal from an anti- SLAPP decision is immediate and stays the underlying matter”); TEX. CIV. PRAC. & REM. CODE § 51.014(b) (“An interlocutory appeal under Subsection (a)”—which, in Part (a)(12), lists denied TCPA motions among the rulings from which an interlocutory appeal lies—“stays the commencement of a trial in the trial court pending resolution of the appeal. An interlocutory appeal under Subsection … [(a)](12) also stays all other proceedings in the trial court pending resolution of that appeal.”). 7 beneficiaries of the LFC46 trust. In this suit lawsuit, JPMorgan seeks findings relating to, among other things: a. the propriety and confirmation of the Final Award, including with respect to Arbitrator Weiss’s now conclusive finding that JPMorgan is a proper party to the Arbitration and is bound by the Arbitration results18; b. the “implementation” of the Final Award, including the liquidation process triggered by the dissolution of Foster Timber, Ltd. and Foster Management, LLC and the potential modification and division of the LFC46 trust into five separate trusts19; c. whether JPMorgan’s “actions taken to date” in “the arbitration in Montgomery County, Texas” should be “approved”20; and d. whether JPMorgan is entitled to be reimbursed for its attorneys’ fees incurred throughout the Arbitration. 21 JPMorgan’s bold forum shopping shows that it is not only willing to flout Arbitrator Weiss’s jurisdiction—it is willing to flout this Court’s jurisdiction as well. Through its new suit in Illinois, JPMorgan seeks relief that completely overlaps with pending claims in this Action, including with respect to the propriety and implementation of the Final Award currently before the Court. Worse, with respect Plaintiffs’ claims against JPMorgan arising from its conduct during the Arbitration proceeding (claims that are separate and distinct from whether the Final Award should be confirmed), JPMorgan’s Illinois suit asks for blanket “approval” of “all of [JPMorgan’s] actions taken to date” in “the arbitration in Montgomery County, Texas”22 even though JPMorgan has already sought an on- the-merits adjudication of these claims from this Court in its TCPA Motion. JPMorgan appears to be treating its Illinois suit as a sort of safety valve—a forum to which it can turn for relief in case this 18Ex. A, JPMorgan Illinois Petition, ¶ 109 (“JPMorgan believes that it is not properly subject to the jurisdiction of the arbitrator and has preserved that position throughout the proceedings.”). 19 Ex. A, JPMorgan IllinoisPetition,¶¶ 113-123 (seeking “instructionsas to implementation of arbitration award,” including request for approval of division of LFC46 Trust). 20Ex. A, JPMorgan Illinois Petition, ¶¶ 126-131 (seeking “declaratory judgment approving all of [JPMorgan’s] actions taken to date” in relation to trust administration and the arbitration proceedings). 21Ex. A, JPMorgan Illinois Petition, ¶¶ 132-133 (seeking “declaratory judgment as to right of trustee to be reimbursed costs and fees from trust”). 22Ex. A, JPMorgan Illinois Petition, ¶¶ 126-31. 8 Court does anything it dislikes. This two-track-litigation strategy is a gross waste of both judicial and Trust resources. It also runs counter to JPMorgan’s own prior conduct, by which it invoked this Court’s jurisdiction and sought its intervention in disputes arising from the parties’ Arbitration. ARGUMENT This Court has unquestionable and exclusive jurisdiction over the confirmation and implementation of the Final Award. “The making of an agreement [to arbitrate] … that provides for or authorizes an arbitration in this state … confers jurisdiction on the court to enforce the agreement and to render judgment on an award under this chapter.”23 JPMorgan’s Illinois suit interferes with the Court’s jurisdiction and violates JPMorgan’s contractual commitments to participate in and be bound by the results of the Arbitration process. In addition, JPMorgan’s baseless claims that this Court is without jurisdiction to determine the implementation of the Final Award and ancillary trust- modification issues threaten to derail the orderly dissolution and liquidation of the Foster Entities and the trust modification Plaintiffs now seek.24 This Court has broad powers to issue orders in support of arbitration under Texas Civil Practice & Remedies Code § 171.086, including orders to “invoke the jurisdiction of the court over an adverse party,” to “invoke the jurisdiction of the court over an ancillary proceeding in rem,” to “require compliance by an adverse party or witness with an order made … by the arbitrators during the arbitration,” or, generally, that is needed “to permit the arbitration to be conducted in an orderly manner and to prevent improper interference or delay of the arbitration” or confirmation thereof.25 23TEX. CIV. PRAC. & REM. CODE § 171.081; see Foster Management Regulations, § 13.5 (agreeing to Texas arbitration); Foster Timber Limited Partnership Agreement, § 13.5 (same). 24Although Arbitrator Weiss’s Final Award did not divide or in any way affect the LFC46 Trust, the Award did include a finding that the recommendations of Plaintiffs’ expert witness concerning in-kind division of the Foster Entities’ assets “deserves careful consideration in any future proceedings concerning the division of the timberland assets in Foster Timber or the LFC46 Trust.” Final Award, ¶ 15 (attached hereto as Exhibit D). 25TEX. CIV. PRAC & REM. CODE § 171.086(a), (b)(1). 9 Plaintiffs request that the Court issue just such an order, dictating that (i) the matters alleged in JPMorgan’s Illinois suit are properly subject to this Court’s jurisdiction, and must necessarily be decided by this Court; (ii) JPMorgan, acting as the Sole Limited Partner of Foster Timber, Ltd., is required to name a Liquidator for Foster Timber, Ltd. and must do so immediately as contemplated in the Final Award, and; (iii)JPMorgan should cease all further conduct delaying or otherwise interfering with the orderly confirmation and implementation of the Final Award and the ancillary in rem proceedings concerning trust modification. Such an award is entirely justified and indeed necessary for the reasons set out below. I. JPMorgan’s Illinois Suit Wrongfully Shops for an Alternative Forum to Challenge the Propriety of the Final Award JPMorgan’s Illinois suit collaterally attacks Arbitrator Weiss’s finding that JPMorgan is a proper party to the Arbitration and is bound by the results of the Arbitration. For instance, JPMorgan claims in its Illinois Petition that “JPMorgan believes that it was not properly subject to the jurisdiction of the arbitrator and has preserved that position throughout the proceedings,” and seeks blanket judicial approval of all of its actions to date.26 What’s more, in shopping for a more accommodating forum than JPMorgan has apparently found in Texas—where all the Trust assets are located—JPMorgan has presented the Illinois Court a painfully incomplete and inaccurate recitation of the events over the past year and a half in the Arbitration and in this Court. In the Illinois suit, JPMorgan attacks Arbitrator Weiss and the Arbitration process by claiming that while Arbitrator Weiss found JPMorgan was a necessary party to the Arbitration, he provided 26Ex. A, JPMorgan Illinois Petition, ¶¶ 109, 126-131. 10 “no analysis on the topic.”27 This is a misstatement, and a bold one.28 Arbitrator Weiss repeatedly explained the basis on which he found JPMorgan was a necessary party to the Arbitration and bound by the Arbitration process and result. Arbitrator Weiss discussed this issue extensively in the Final Award, which JPMorgan completely ignores in its Illinois suit. Arbitrator Weiss explained his holding in this regard at length at Paragraph 3 of his Conclusions of Law, setting out four independent reasons that JPMorgan was a proper party to, and bound by, the results of the Arbitration29: JPMorgan is bound by the dispute resolution provisions of the Foster Management Regulations and the Foster Timber Partnership Agreement and the results of this arbitration for the following reasons. First, in Preliminary Hearing Order # 2, the Arbitrator determined that JPMorgan is a necessary party in this arbitration under the applicable Rules of the American Arbitration Association. JPMorgan then filed a Motion to reverse this Order in the Montgomery County District Court, but never pursued the Motion to seek a ruling from the Court. Second, because the Regulations and Partnership Agreement are closely intertwined and interdependent, the requirement to arbitrate under the Foster Management Regulations applies to JPMorgan under the unity of purpose doctrine. Third, JPMorgan has received 27Ex. A, JPMorgan Illinois Petition, ¶ 92. 28JPMorgan’s incomplete and inaccurate characterizations do not stop with the Arbitrator’s Orders. In describing this Court’s Order enforcing the Arbitrator’s Order No. 22 and directing JPMorgan to produces its employee for live testimony, JPMorgan says that this Court did not “comment[] or rul[e] on the propriety of that [A]rbitration [O]rder [No. 22].” Ex. A, JPMorgan Illinois Petition, ¶ 130. First, the insinuation that this Court would enforce an order it found improper is deeply misguided. More to the point, this Court did “comment on” the propriety of Arbitration Order No. 22: “JUDGE BAYS: It’s not unreasonable for them [i.e. Plaintiffs] to expect that the human who is doing the key work of the party trustee, [JPMorgan] Chase, would be someone who would come testify.” Hearing of Jan. 17, 2020 at 49:11-14. 29Arbitrator Weiss had also thoroughly explained the basis for his holding in two prior Arbitration Orders. First, in his May 29, 2019 Preliminary Order No. 2, he cited both the underlying authority and rationale of his holding that JPMorgan is a necessary party: “Under AAA Rule P-2(a)(ii), JPMorgan Chase Bank, N.A. is a necessary party in this Arbitration. The issues raised by the Demand for Arbitration cannot be properly considered and decided without the participation of JPMorgan Chase Bank as a party.” Preliminary Order No. 2 (attached as Exhibit H) at ¶ 3. Then, in response to JPMorgan’s insistence that (a) it should not be required to arbitrate and (b) any Arbitration orders would not bind it, Arbitrator Weiss was forced to issue another Order on August 4, 2019 “to clarify the reasons for the ruling he made in Preliminary Hearing Order # 2 that JPMorgan is a necessary party in this arbitration under Rule P-2(a)(ii) of the AAA Commercial Arbitration Rules.” Protective Order (attached as Exhibit I) at 2.After first noting that the AAA rules on joinder of parties are “intended to be more flexible and adaptable than the procedural rules in civil courts applicable to traditional litigation,” Arbitrator Weiss then explained that JPMorgan “has been serving for many years as the trustee of the [LFC46 Trust],” “owes a fiduciary duty to the five members of Foster Management [in that capacity],” and effectively “owns 99 percent of the assets that are central to the issues in this arbitration.” Id. at 2-3.He continued: “the Arbitrator … continues to feel[] thatbecause of itsinvolvement with the entitiesthat are Claimants and Respondents in this proceeding, evidence from JPMorgan would be needed in order for him to fully understand and properly decide the issues that Claimants have raised.” Id. at 3 (emphasis added). Arbitrator Weiss added that “given JPMorgan’s interests in this matter, [he] felt that the bank would want to participate,” and offered to “certainly address [any] concerns” JPMorgan might have about “unduly burden[some] … discovery requests.” Id. In no way can Arbitrator Weiss be said to have provided “no analysis” on this matter. 11 significant benefits under the Foster Management Regulations by invoking indemnification rights against the assets of Foster Management in this arbitration and by receiving fees as Trustee of the LFC46 Trust without having the responsibility of managing the assets of the Trust. JPMorgan cannot claim these benefits and at the same time deny its obligation to participate in this arbitration proceeding under the Foster Management Regulations and the Foster Timber Partnership Agreement. Fourth, despite its continuing objection to being included as a party in this arbitration, at the invitation of the Arbitrator, JPMorgan has actively joined in these proceedings, including having one or more attorneys present and participating in the nine days of the hearing. And finally, JPMorgan signed a Rule 11 Agreement with the other parties before the arbitration began in which it agreed to be bound by the dispute resolution provisions of the Foster Management Regulations.30 Likewise, nowhere in its Illinois suit does JPMorgan even mention that it signed and filed in this Court a binding Rule 11 Agreement in which (as the Arbitrator has now definitively held) JPMorgan agreed to participate in “agreed[d] to comply with the ADR Process” and further agreed “not to interfere with the ADR Process.”31 Nor does JPMorgan mention in its Illinois suit that at the outset of the Arbitration, JPMorgan’s previous lawyers threatened that if JPMorgan were not made a formal party to the Arbitration, JPMorgan would lack due process and thus would not be bound by the Arbitration and could seek inconsistent relief in another forum.32 What’s more, that same Answering Statement conceded that it was within the Arbitrator’s authority to determine whether 30Ex. D, Final Award, at 10-11. 31Ex. B, Rule 11 Agreement, at 2. 32See JPMorgan’s Answering Statement at 24 (attached hereto as Exhibit E) (“If JPMorgan is not joined as a party to the Arbitration, JPMorgan maintains that it would not be bound by the Arbitration Award in a subsequent proceeding …. In the event the Arbitration Award on these issues in any way negatively impacts JPMorgan, JPMorgan is free to seek a declaratory judgment or similar relief ... by a formal court proceeding ….” (emphasis JPMorgan’s)). In its Illinois lawsuit, JPMorgan says that in its “Answer[] … [JPMorgan] maintained that it was not a proper party to the arbitration.” Ill Suit at ¶ 88. But this isn’t accurate.What its Answer actually “maintained” was that JPMorgan was not currently a party to the Arbitration—which is an altogether different thing than whether JPMorgan should be made a party to the Arbitration. See Ex. E, JPMorgan Answering Statement at 2 (“The parties to the Arbitration currently are [the five Foster Management members] …. JPMorgan has not been formally joined as a party.” (emphasis added)). As to whether it should be named a party to the Arbitration, JPMorgan’s Answering Statement squarely says “[w]hether JPMorgan may be joined as a third party to the Arbitration, and if so, whether JPMorgan should be joined as a third party to the Arbitration are addressed in greater detail in Part VI of this Answering Statement.”Id. at 4.And in Part VI of the Answering Statement, emphasizing that it is “in an intertwined multiparty relationship” with the five Foster Management owners and “is inextricably tied to” their dispute, JPMorgan demanded that “JPMorgan should be joined as a party to the Arbitration if [a] ruling is expected on the trust issues or the indemnification issue.”Id. at 3. Finding that such issues would be implicated, the Arbitrator agreed with JPMorgan and joined it as a party. See Ex. H, Preliminary Order No. 2. 12 JPMorgan should be joined as a party: “JPMorgan may be joined in the Arbitration only if the Arbitrator so decides.” Of course, JPMorgan has now abandoned this position and asked both Texas and Illinois courts to overrule the Arbitrator’s finding that it was contractually bound to arbitrate. The sole and exclusive forum in which to challenge Arbitrator Weiss’s findings that JPMorgan is a proper party to the Arbitration is this Court, which has presided over the Arbitration over the past 18 months. Not only does this Court have exclusive jurisdiction over the arbitral process under the Texas Civil Practice and Remedies Code, but—as the Texas Supreme Court has held—“when cases involving the same subject matter are brought in different courts, the court with the first-filed case has dominant jurisdiction and should proceed,” while “the other case[] should abate.”33 By seeking to collaterally attack Arbitrator Weiss’s Final Award and previous rulings in Illinois, JPMorgan brazenly seeks to undermine this Court’s jurisdiction over the Arbitration and its proper role determining whether the Final Award should be confirmed. II. JPMorgan’s Illinois Suit Wrongfully Shops for an Alternative Forum with Respect to the “Implementation” of the Final Award. Worse still, as described above, JPMorgan’s Illinois Petition seeks a variety of instructions under Illinois law concerning the “implementation” of the Final Award, including (i) the liquidation process triggered by the dissolution of Foster Timber and Foster Management and (ii) the potential modification and the LFC46 Trust and in-kind distribution of Trust assets. Incredibly, JPMorgan’s Petition and its Response to Plaintiffs’ Application for Confirmation of the Final Award go so far as 33Perry v. Del Rio, 66 S.W.3d 239, 252–53 (Tex. 2001) (“As a rule, when cases involving the same subject matter are brought in different courts, the court with the first-filed case has dominant jurisdiction and should proceed, and the other cases should abate …. The first-filed rule [] has several justifications. The jurisprudential reason for the rule is that once a matter is before a court of competent jurisdiction, its action must necessarily be exclusive because it is impossible that two courts can, at the same time, possess the power to make a final determination of the same controversy between the same parties. A pragmatic justification for the first-filed rule is efficiency: proceedings earlier begun may be expected to be earlier concluded. A further justification is simple fairness: in a race to the courthouse, the winner's suit should have dominant jurisdiction.” (internal citations and quotations omitted)). 13 to indicate that “JPMorgan does not believe that the Texas courts possess jurisdiction to modify [the LFC46] Trust.”34 In other words, JPMorgan now claims that this proceeding—concerning the implementation of a Texas arbitration award and the fate of 40,000 acres of Texas timberland—is subordinate to the jurisdiction of Illinois courts and bound by Illinois law. This is wrong. A. Liquidation Process As to the liquidation process triggered by the order of dissolution included in the Final Award, JPMorgan seeks instructions from the Illinois Court on whether it has an obligation to appoint a Liquidator under the Foster Timber, Ltd. Limited Partnership Agreement and Illinois law.35 JPMorgan does so despite the fact that the Limited Partnership Agreement—to which JPMorgan does not dispute that it is a party—dictates that “[t]his Agreement and all rights and liabilities of the parties hereto with reference to this Partnership shall be governed by the [Texas Limited Partnership] Act and all other applicable laws of the State of Texas.”36 There is no mystery here: JPMorgan itself is on record stating that if Arbitrator Weiss ordered dissolution, JPMorgan would appoint a Liquidator.37 Now, however, JPMorgan equivocates, and 34Ex. A, JPMorgan Illinois Petition, ¶ 9; JPMorgan Response at 2 (describing Illinois court as “the only court with proper jurisdiction over … Trusts administration and modification issues”).