The Purported Conflict Did Not Come Within Any Of Those Specifically Listed Matters That Must Be Disclosed
Plaintiff Diamond Manufacturing & Engineering Co. (Diamond) obtained a favorable arbitration award against defendant Equipment Parts Wholesale, LLC (EPW). When Diamond petitioned the trial court to confirm the award, EPW requested – unsuccessfully – that the trial court vacate the award because of the arbitrator’s alleged failure to disclose a potential conflict, and that the trial court correct the amount of the award based on an alleged miscalculation of figures. EPW appealed the denial of the order confirming the award and entering judgment. Diamond Manufacturing & Engineering Co. v. Equipment Parts Wholesale, LLC, Case No. F064701 (5th Dist. Nov. 4, 2013) (Kane, Acting P.J. author 3:0) (unpublished).
The purported conflict the arbitrator did not disclose stemmed from the arbitrator’s representation of a client in a federal action where the opposing party was represented by an attorney in the law firm representing EPW in the arbitration. However, that purported conflict does not fit into any of the categories specifically listed as matters that must be disclosed by an arbitrator under CCP section 1281.9. Consequently, EPW had to argue that the conflict had to be disclosed under the general catch-all requirement that an arbitrator must “disclose all matters that could cause a person aware of the facts to reasonably entertain a doubt that the . . . arbitrator would be able to be impartial . . . “
But the Court of Appeal did not “see how the relationship at issue would lead a reasonably objective person to doubt the arbitrator’s ability to be impartial.” The two cases and parties involved were entirely unrelated.
Two additional attenuating factors supported the Court’s conclusion. First, different attorneys from EPW’s law firm were involved in the federal action and the arbitration. Second, the parties and the arbitrator did not learn of the purported conflict until after the arbitration hearings were over and the process was close to completion.
Additionally, EPW’s attorneys, after learning of the purported conflict, did not move immediately to disqualify the arbitrator, but waited until after the arbitrator delivered an award. Without using the pejorative word, the Court apparently viewed this as sandbagging, and treated the delay as a waiver.
As for correcting the award, “EPW is . . . asking us to remedy the arbitrator’s allegedly flawed reasoning and/or factual determinations – something we may not due.”