United States: No Good Deed Goes Unpunished? Arbitrator’s Suggestions To Resolve Unrelated Issues Lead To Arbitration Award Being Vacated

Last Updated: November 22 2013
Article by Eric S. Solotoff

B.M. – that is before the Minkowitz decision that we previously blogged on (which lead to a second post on arbitration best practices), it was common practice at the start of an arbitration, just like it is common practice before the start of a trial, to take one last crack at trying a case.  Sometimes it even happens after some of the testimony has gone in, again, both at trial and at an arbitration.  As we learned from Minkowitz, that is now verboten unless the parties agree in advance and in writing that the arbitrator can also serve in a mediation/settlement role.

Yesterday we learned that this applies to cases that were arbitrated before the Minkowitz case was decided.  Specifically, in N.L. v. V.M., an unreported (non-precedential) opinion, that is what occurred, even though the court "recognized [sic] that the arbitrator's ultimate rulings on the merits of the divorce issues do not
appear to have been manifestly lopsided, at least in terms of the parties' respective litigation positions."  The Appellate Division found that the wife "during the arbitration was extremely contentious and adversarial" and was "frequently unreasonable."  In fact, the court noted that

we begin with a general observation that the conduct of the wife during the arbitration was extremely contentious and adversarial. On several occasions, the arbitrator was forced to deal with interruptions, non-responsive witness answers, and to rule on persistent objections.  The wife expressed open antipathy for the husband's attorney. She was frequently rude, sarcastic, and argumentative during her testimony. For example, on one occasion, she told her husband's attorney to "clean [his] ears" in response to a question that he posed to her on cross- examination.    In another illustrative instance, the wife referred to opposing counsel on the record as "the biggest jerk in the world" because he had sought her mother's  testimony. The arbitrator commendably displayed considerable restraint and patience during the proceedings. That calm exercise of control over the proceedings should not be overlooked, in spite of the arbitrator's two improvident efforts, which we discuss, infra, to resolve certain matters in a manner outside of his assigned role as arbitrator.

The Appellate Division rejected the wife's claims that the arbitrator was unfair or biased. That said, because the process was corrupted by "well intentioned" attempts to resolve unrelated issues, the whole arbitration (which took 13 days) will have be re-done with a new arbitrator.

Just for context, the arbitration centered on some pretty standard equitable distribution issues and alimony where the husband's income was a found to average $366,000 and the wife's income was the equivalent of $24,000 and she had previously earned $60,000.  Again, this seems to be pretty garden variety stuff.

So what was the arbitrator's big sin causing this reversal.

In one instance, the arbitrator suggested to the  wife that she consider voluntarily dismissing her pending municipal complaints alleging criminal conduct by the husband. In the other instance, the arbitrator placed an ex parte telephone call to the wife, urging her to allow the children to be with their father on Father's Day in accordance with the terms of a pendente lite parenting agreement.

The Court noted that there concerns about the wife's municipal complaints potentially being used to gain leverage in the matrimonial case and the arbitrator had suggested that there were other ways to address those issues.

At the end of the day, the arbitrator, thinking he was acting in everyone's best interests, strayed from his decision making role and now the parties have to start over.  As they say, no good deed goes unpunished.  Given the report of the wife's conduct, maybe this is exactly what she wants.

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