Kevin Burke, et al. v. Houston PT BAC Office Limited Partnership, 24-0135, December 19, 2025.
On appeal from Court of Appeals for the First District of Texas
Synopsis
The Supreme Court held that communications between a potential neutral appraiser and a party about serving as that party’s appraiser in the pending dispute must be disclosed to the opposing party; nondisclosure requires reversal of the court of appeals and remand for further proceedings. The Court applied impartiality principles from arbitration law to the appraisal context and required disclosure of facts that could create a reasonable impression of partiality.
Relevance to Family Law
Although the dispute arose under a commercial lease appraisal clause, the holding has direct implications for family-law litigation involving expert selection and neutral evaluators. In divorce and property-division cases where parties use appraisers (real estate, business valuation), forensic accountants, custody evaluators, or mental-health neutrals, undisclosed communications between a potential neutral/expert and one party — especially communications about willingness to serve — can create a reasonable impression of partiality and infect the expert’s neutrality. Practitioners must therefore treat candidate communications as potentially disclosable, revise engagement and disclosure practices for party-designated and court-appointed experts, and be prepared to seek remedies (exclusion, vacatur of an appraisal/opinion, or remand for a new evaluation) where nondisclosures create prejudice.
Case Summary
Fact Summary
The parties’ long-term downtown Houston lease required periodic rent adjustments determined by appraisal if the parties disagreed. Each side selected an appraiser, and if those two could not agree, they were to appoint a third “competent and impartial person.” The tenant (BAC) interviewed Scott Rando about serving as its party appraiser but later told Rando he would be “at the top of our list” to serve as the neutral if the dispute progressed to a third appraiser. The landlords’ appraiser objected that, had he known of BAC’s prior communications with Rando, he would not have agreed to Rando as neutral. After the two party appraisers could not agree, they selected Rando as the neutral appraiser; the neutral’s valuation favored the tenant. Disclosure of BAC’s communications came out during discovery, the trial court confirmed the appraisal, and the court of appeals upheld that decision finding the communications non‑substantive. The Supreme Court reversed.
Issues Decided
The Court decided whether communications between a party and a potential neutral appraiser about serving as that party’s appraiser or as the neutral must be disclosed to the other party under impartiality principles analogous to arbitration law, and whether nondisclosure required reversal of the appraisal confirmation.
Rules Applied
The Court imported impartiality and disclosure principles from arbitration jurisprudence, principally the statutory standard in Chapter 171 of the Civil Practice and Remedies Code (vacatur for “evident partiality” of a neutral arbitrator, TEX. CIV. PRAC. & REM. CODE § 171.088(a)(2)(A)) and the Tenaska standard that nondisclosed facts that “might, to an objective observer, create a reasonable impression of the arbitrator’s partiality” warrant vacatur. The Court also relied on long-standing notions that appraisers, like arbitrators, must be impartial (Del. Underwriters v. Brock) and on prior arbitration and appraisal-related cases (e.g., Forest Oil, In re Allstate) to frame its analysis.
Application
The Court treated the appraisal process’s neutral appraiser like an arbitrator in respect of disclosure duties. It reasoned that communications between a party and a prospective neutral about that prospective neutral serving as the party’s appraiser — including statements that the prospective neutral would be “at the top of our list” to serve as the neutral — are not merely administrative, but are the sort of facts that an objective observer could perceive as creating a reasonable impression of partiality. Because the respondent (tenant) had interviewed and told the prospective appraiser he was a preferred candidate, and the prospective appraiser later served as neutral, the failure to disclose those communications to the landlords prejudiced the appraisal process. The Court therefore reversed the court of appeals’ affirmation and remanded for further proceedings consistent with the obligation to disclose such communications.
Holding
The Court held that communications about the case with a potential neutral regarding hiring that neutral as a party-designated appraiser must be disclosed to the other party. This holding required reversal of the court of appeals’ judgment affirming confirmation of the appraisal and remand to the trial court for further proceedings. The Court made clear that principles of evident partiality borrowed from Chapter 171 arbitration law inform disclosure duties in appraisal processes: omissions of facts that could create a reasonable impression of partiality are material and can necessitate vacatur/remand.
Practical Application
For family-law litigators, the ruling mandates a more conservative, disclosure‑first approach to expert and neutral selection. In property division, business valuation, and forensic accounting disputes where appraisal-like or neutral processes are used, counsel must investigate and disclose any prior contacts between a candidate neutral and either party. For custody and CPS matters involving court‑appointed or jointly selected evaluators, the opinion supports aggressively probing and disclosing communications (including informal interviews, emails, or guarantees of future selection) because such interactions can compromise perceived neutrality. Practically, this affects retention practices, discovery requests, motions in limine, and challenges to experts’ qualifications or impartiality; failure to disclose relevant communications may produce exclusion of the expert’s opinion, a new neutral selection, or other remedial relief on appeal.
Checklists
Preparing to select or oppose a neutral/expert
- Before agreeing to a neutral, obtain written confirmation that the candidate has disclosed all prior communications with either party or representatives.
- Require a written conflict/disclosure statement from the candidate covering previous contacts, interviews, or discussions about the present dispute.
- Interview potential neutrals with opposing counsel present or on a shared-record basis where feasible.
Gathering evidence of nondisclosure
- Serve targeted discovery early: requests for communications between the opponent and the expert or any third-party interview notes.
- Subpoena email and calendaring information for the candidate expert and the party representative who conducted the interview.
- Preserve and collect all engagement emails and draft engagement letters.
Challenging a neutral/expert on impartiality
- File motions to compel full disclosure of any prior communications and to produce engagement-related documents.
- If disclosure comes late or is evasive, move to strike the expert, exclude the opinion, or for a new neutral appointment; alternatively, seek continuance and forensic re-evaluation.
- Preserve appellate issues: create a record showing prejudice (e.g., show your party would not have agreed to that neutral had they known).
Drafting engagement and retention terms
- Include express warranties in engagement letters that the expert has disclosed all prior communications about the dispute and will update disclosures promptly.
- Require experts to certify in writing their prior involvement with parties, counsel, or related counsel and to affirm they understand disclosure obligations.
- Include termination and remedial clauses tied to nondisclosure (e.g., fee disgorgement, removal).
Client counseling and litigation strategy
- Advise clients that informal outreach to potential neutrals can trigger disclosure obligations and risk neutral disqualification.
- Use meet and confer to limit contacts with potential neutrals and impose a communications protocol.
- Consider stipulations about timelines and disclosures when selecting a neutral appraiser or evaluator to avoid later disputes.
Citation
Kevin Burke v. Houston PT BAC Office Limited Partnership, No. 24-0135 (Tex. Dec. 19, 2025).
Full Opinion
The full opinion is available here: http://docs.texasappellate.com/scotx/op/24-0135/2025-12-19.pc.pdf
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