# Burke v. Houston PT Bac Office Ltd. P'ship Supreme Court of Texas, No. 24-0135 **Burke v. Houston PT Bac Office Ltd. P'ship, No. 24-0135 (Tex. Dec. 19, 2025). Holding: Communications about the case between a party and a potential neutral regarding hiring that neutral as a party-designated appraiser in the matter in dispute must be disclosed to the other party; the court of appeals erred in holding the undisclosed communications nonsubstantive, because they created a reasonable impression of partiality.** Practice areas: arbitration, real property ## Key issues - In a lease dispute over a rent-adjusting appraisal, where the parties invoked arbitration's impartiality principles, communications between one side and a prospective neutral appraiser about the dispute and about hiring him as a party appraiser must be disclosed to the other side, and the undisclosed communications here created a reasonable impression of partiality. - The Court reversed the trial court's order confirming the appraisal valuation and remanded, leaving in place the unchallenged remainder of the judgment and declining to narrow or overrule Burlington Northern v. TUCO or to decide whether appraisers generally must meet arbitrators' disclosure requirements. ## Factual History In 1972, the predecessors of the parties signed a long-term lease of the downtown Houston property housing the Bank of America Building, with rent adjusted periodically based on the property's fair market value "as if free and clear of all improvements, encumbrances, and leases" (Opinion, PDF p. 2). If the parties do not agree on value, each chooses an appraiser, and if those two do not agree they select a third "competent and impartial person" (Opinion, PDF p. 2). The dispute during the first adjustment period concerned whether connectivity with the Houston tunnel system on adjacent land should be part of the valuation (Opinion, PDF pp. 2-3). The landlords, Kevin Burke and other members of the Burke family, chose Ronald Little as their appraiser; the tenant, Houston PT BAC Office Limited Partnership, interviewed prospective appraiser Scott Rando about his qualifications, timeline, experience downtown, and experience with tunnel-connected properties (Opinion, PDF p. 3). Rando emailed that when BAC was ready to hire him it should include a colleague and "the other side's expert (Ron Little)," and BAC replied that it would use a different appraiser because of Rando's ability to meet the lease's tight timelines but that "you will be at the top of our list for that third appraiser designation" (Opinion, PDF p. 3). ## Procedural History Little and BAC's appraiser, Curtis Podlewski, did not agree, and together they chose Rando as the neutral; Little valued the land at $14.4 million, Podlewski and Rando at $8.2 and $8.7 million, and Podlewski and Rando settled on $8.475 million (Opinion, PDF pp. 3-4). The landlords sued for a declaratory judgment on how the lease requires valuation, BAC counterclaimed to enforce the valuation, and in discovery BAC revealed its communications with Rando, after which the landlords added breach-of-contract and fraud claims (Opinion, PDF p. 4). Their appraiser testified he would not have accepted Rando as neutral had he known the extent of those communications (Opinion, PDF p. 4). The trial court granted BAC summary judgment and confirmed the $8.475 million valuation, and the First Court of Appeals affirmed, accepting the parties' reliance on Chapter 171 of the Civil Practice and Remedies Code and holding the communications nonsubstantive (Opinion, PDF pp. 4-5). The landlords petitioned for review on May 3, 2024, the Court requested merits briefing on November 15, 2024, and it decided the case per curiam on December 19, 2025, without oral argument (Docket; Opinion, PDF p. 9). ## Issues Presented The landlords' petition and merits brief present whether a neutral adjudicator may fail to disclose that he previously agreed to serve as a party-advocate adjudicator in the same proceeding, and whether the court of appeals erred in affirming the resolution of factual disputes on a motion to enforce without an evidentiary hearing; the petition labeled a third issue, on the neutral's firm's connections, unbriefed (Brief on the Merits (Petitioner), PDF p. 11; Petition for Review (Petitioner), PDF p. 10). BAC asks whether the court of appeals properly applied settled principles in concluding that a non-substantive conversation about credentials, willingness to perform an appraisal, and schedule did not show evident partiality (Response to Petition (Respondent), PDF p. 8; Brief on the Merits (Respondent), PDF p. 10). The Court decided only whether the undisclosed communications required reversal (Opinion, PDF pp. 1-2, 6). ## Standard(s) of Review The trial court is the arbiter of witness credibility, but whether undisputed facts convey an impression of partiality is a question of law (Opinion, PDF p. 6). The evident-partiality standard is met if an arbitrator fails to disclose facts that "might, to an objective observer, create a reasonable impression of the arbitrator's partiality" (Opinion, PDF p. 5). ## Legal Arguments **Whether the neutral appraiser's undisclosed communications with BAC required reversal.** **Petitioners (Landlords):** A neutral has an obligation to disclose all information that a reasonable person could conclude "might" affect impartiality, and the only exception is for trivial matters; the court of appeals held it trivial that the only neutral on a three-person panel had previously agreed to act as BAC's party appraiser in the same proceeding, which lacks precedential support and undermines the transparency fundamental to out-of-court adjudication (Brief on the Merits (Petitioner), PDF p. 27). They argue that a party deserves to know whether an adversary has already pursued a potential neutral and whether he agreed to serve as its party-arbitrator or party-appraiser, as *TUCO* requires (Petition for Review (Petitioner), PDF p. 21). **Respondent (BAC):** The landlords did not meet their heavy burden to show evident partiality, since BAC and Rando discussed schedules and qualifications and Rando was willing to be hired, but BAC did not engage him because of a scheduling conflict, and the record supports nothing more (Brief on the Merits (Respondent), PDF p. 26; Response to Petition (Respondent), PDF p. 15). It also argues that the landlords did not preserve their request for an evidentiary hearing and that other, unbriefed contacts between other employees of Rando's large firm and BAC's affiliates were unknown to him (Response to Petition (Respondent), PDF pp. 8, 15). It asked the Court to narrow or overrule *TUCO* in light of federal case law (Opinion, PDF p. 8). ## Stated Reasons the Court Should Take the Case The landlords argued that the court of appeals' holding that a neutral need not disclose that he had agreed to serve as a party advocate in the same proceeding conflicts with *TUCO* and threatens the integrity of out-of-court adjudication (Petition for Review (Petitioner), PDF p. 21). BAC responded that the landlords could show no error in the First Court's opinion, much less one that matters to Texas jurisprudence (Response to Petition (Respondent), PDF p. 15). ## Practice Area Tags arbitration, real-property ## Procedural Posture/Vehicle Petition for review from the First Court of Appeals after summary judgment; decided per curiam without oral argument under Rule of Appellate Procedure 59.1 (Opinion, PDF pp. 1, 9). ## Amicus Involvement None. The docket shows no amicus filings. ## Holding Communications about the case between a party and a potential neutral regarding hiring that neutral as a party-designated appraiser in the matter in dispute must be disclosed to the other party; the court of appeals erred in holding the undisclosed communications nonsubstantive, because they created a reasonable impression of partiality (Opinion, PDF pp. 2, 6-8). ## Court's Reasoning Appraisals are not arbitrations, but like arbitrators appraisers must be impartial, and the Court assumed without deciding, because the parties invoked arbitration law, that arbitration's impartiality standards apply to appraisers (Opinion, PDF pp. 5-6 & n.3). Under *TUCO*, a prospective neutral exhibits evident partiality if he does not disclose facts that might create a reasonable impression of partiality, and the nondisclosure itself is a basis for vacatur even without proof of bias, though trivial or immaterial matters need not be disclosed (Opinion, PDF p. 6). In *TUCO* the undisclosed relationship was unrelated to the arbitrated matter; here the undisclosed communications directly related to the matter and preceded Rando's appointment, and BAC promised on the basis of those discussions to put him "at the top of our list" for the neutral position (Opinion, PDF p. 7). Substantive communications between a party and a potential neutral regarding the very matter under consideration are material, and the record belies BAC's claim that they were mere scheduling discussions: they covered his experience with tunnel-connected properties and Rando's email called the landlords "the other side" (Opinion, PDF p. 8). The Court declined BAC's request to narrow or overrule *TUCO*, in a case that does not feature an arbitration agreement (Opinion, PDF pp. 8-9). ## Disposition Without hearing oral argument, the Court granted the petition for review, reversed the trial court's order confirming the appraisal valuation, left in effect the unchallenged remainder of the court of appeals' judgment, and remanded to the trial court for further proceedings (Opinion, PDF p. 9). ## Vote Breakdown Per curiam opinion of the Court; Justice Devine did not participate in the decision (Opinion, PDF p. 1). --- Source: The SCOTX Report, https://scotxreport.com/cases/24-0135. AI-generated summary of the Court's opinion, orders and the parties' briefs, with pin cites to the page of each document; verify against the Court's own documents at search.txcourts.gov.