Opinion
DOCKET NO. A-4907-11T1
03-28-2013
JML MEDICAL, INC., Plaintiff-Respondent, v. MARC SILVER,1 Defendant-Appellant, and SILVER CARE ESTATES, INC., SILVER CARE CENTER, and SILVER CARE OPERATIONS, LLC, Defendants.
Marc Silver, appellant, argued the cause pro se. Timothy J. Petrin argued the cause for respondent (Law Offices of James J. Curry, attorneys; Mr. Petrin, on the brief).
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Defendant-Appellant,
Before Judges Fisher and Waugh.
On appeal from the Superior Court of New Jersey, Law Division, Ocean County, Docket No. L-2537-09.
Marc Silver, appellant, argued the cause pro se.
Timothy J. Petrin argued the cause for respondent (Law Offices of James J. Curry, attorneys; Mr. Petrin, on the brief). PER CURIAM
Defendant Marc Silver appeals the Law Division's April 27, 2012 order denying his application to set aside an arbitration award. We affirm.
I.
We discern the following facts and procedural history from the record on appeal.
This action arose out of an arbitration that took place in February 2010. The arbitration involved a claim by plaintiff JML Medical, Inc. (JML), against Silver and several companies with which Silver is affiliated. JML originally sought payment for medical supplies delivered to defendant Silver Care Estates, Inc. JML obtained a default judgment against the corporation, which was judgment proof. JML then sought a judgment against Silver individually. While the matter was pending, the parties agreed to resolve it through binding arbitration.
M. Allan Vogelson, a retired judge, was chosen as the arbitrator. After hearing the arbitration, Vogelson found in favor of JML and made an award of $87,513. The award was against Silver personally, in addition to the defendant corporations. The award was confirmed by a Law Division order of August 27, 2010. Silver, who had sought to have the award set aside, appealed. We affirmed. JML Medical, Inc. v. Mark Silver, A-0773-10 (App. Div. Nov. 1, 2011).
On December 22, 2011, Silver filed a motion for reconsideration before us, citing newly discovered evidence concerning a conflict on the part of the arbitrator. On February 7, 2012, we denied his motion on grounds that the issue had not been raised in the trial court or as part of the original appeal. Silver filed and then withdrew an application to the Supreme Court for certification.
On February 20, 2012, Silver filed a motion in the Law Division, seeking to vacate the arbitration award. He alleged that Vogelson failed to disclose that his mother had been a patient at the nursing home operated by defendant Silver Care Center (Silver Care) in the early 1990s. According to Silver, Vogelson's wife had been called as a witness by Silver Care at an arbitration involving an employee terminated by Silver Care for abusive conduct towards patients. According to Silver Care's then attorney, Silver's wife Dale Silver, Vogelson's wife testified on behalf of Silver Care.
Following an initial oral argument on April 13, the motion judge, who had indicated his belief that Silver's arguments might have validity, gave the parties an opportunity to submit further papers on the motion. In addition to a letter brief, JML submitted a certification from Vogelson, who related that the patient was his wife's grandmother and that she remained a patient at the nursing home until her death in February 1990. The incident at issue had taken place during the late 1980s, and did not involve serious injury to his grandmother-in-law. Vogelson added that his wife had been asked to appear as a witness on behalf of Silver Care, and that she agreed to do so voluntarily.
Vogelson further certified that, at the time he was selected to serve as arbitrator in the present matter, he had no recollection of the incident involving his grandmother-in-law and Silver Care. He would have disclosed the event had he remembered it. Vogelson denied Silver's assertion that he had decided the arbitration against him as a form of revenge for the treatment of his grandmother-in-law.
The judge delivered an oral decision denying Silver's motion on April 27. The judge concluded that there was no basis in the record to conclude that a reasonable person would believe that Vogelson had an interest in the outcome of the arbitration or to support a reasonable inference of partiality on his part. This appeal followed.
II.
On appeal, Silver argues that the motion judge erred in denying his application to set aside the arbitration. He also contends that the judge should have allowed him to depose Vogelson and his wife.
"The scope of judicial review of [a private sector] arbitration award is quite limited." S. Plainfield Bd. of Educ. v. S. Plainfield Educ. Ass'n, 320 N.J. Super. 281, 287 (App. Div.), certif. denied, 161 N.J. 332 (1999); see also Tretina Printing, Inc. v. Fitzpatrick & Assocs., Inc., 135 N.J. 349, 357-58 (1994). Our Supreme Court has held that arbitrators must maintain "high standards of honesty, fairness and impartiality." Barcon Assocs., Inc. v. Tri-County Asphalt Corp., 86 N.J. 179, 188 (1981). Arbitration awards may be vacated, among other circumstances, where "the award was procured by corruption, fraud, or other undue means," N.J.S.A. 2A:23B-23(a)(1), or where the court finds that evident partiality, corruption, or misconduct on the part of the arbitrator has prejudiced a party's rights, N.J.S.A. 2A:23B-23(a)(2). The party alleging that an arbitrator has violated the duty of honesty, fairness, and impartiality must prove the alleged violation by a preponderance of the evidence. Barcon, supra, 8 6 N.J. at 191.
In order to assure impartiality, N.J.S.A. 2A:23B-12 requires certain disclosures by an arbitrator:
a. Before accepting appointment, an individual who is requested to serve as an arbitrator, after making a reasonable inquiry, shall disclose to all parties to
the agreement to arbitrate and arbitration proceeding and to any other arbitrators any known facts that a reasonable person would consider likely to affect the impartiality of the arbitrator in the arbitration proceeding, including:
(1) a financial or personal interest in the outcome of the arbitration proceeding; and
(2) an existing or past relationship with any of the parties to the agreement to arbitrate or the arbitration proceeding, their counsel or representatives, a witness, or other arbitrators.
b. An arbitrator has a continuing obligation to disclose to all parties to the agreement to arbitrate and arbitration proceeding and to any other arbitrators any facts that the arbitrator learns after accepting appointment which a reasonable person would consider likely to affect the impartiality of the arbitrator.
c. If an arbitrator discloses a fact required by subsection a. or b. of this section to be disclosed and a party timely objects to the appointment or continued service of the arbitrator based upon the fact disclosed, subject to the provisions of section 11d. of this act, the objection may be a ground pursuant to paragraph (2) of subsection a. of section 23 of this act for vacating an award made by the arbitrator.
d. If the arbitrator did not disclose a fact as required by subsection a. or b. of this section, upon timely objection by a party, the court pursuant to paragraph (2) of subsection a. of section 23 may vacate an award.
e. An individual appointed as an neutral arbitrator who does not disclose a known, direct and material interest in the outcome of the arbitration proceeding or a known, existing, and substantial relationship with a party is presumed to act with evident partiality pursuant to paragraph (2) of subsection a. of section 23 of this act.
. . . .
h. Should an individual designated as an arbitrator make full disclosure as required by this section and a party fails to object within a reasonable time, the party receiving such information shall be held to have waived any right to object to the designation of the arbitrator on the grounds so revealed.
There is no question that Vogelson did not disclose the facts concerning his grandmother-in-law prior to the arbitration. There is, however, no basis in the record to conclude that his failure to do so was knowing. Silver, who had access to the same facts, did not raise the issue at the time of the arbitration or during the initial appeal, having apparently also forgotten the incident. It can hardly be surprising that neither Vogelson nor Silver recalled the events at issue, which occurred in the late 1980s, more than twenty years before the arbitration in this case. Consequently, there is no presumption that Vogelson acted with "evident partiality" pursuant to N.J.S.A. 2A:23B-12(e).
The relationship between Vogelson and Silver, based upon a twenty-year-old incident, was not "a financial or personal interest in the outcome of the arbitration proceeding" within the meaning of N.J.S.A. 2A:23B-12(a)(1). Silver's contention that Vogelson was seeking to get back at the nursing home because of its treatment of his wife's grandmother is untenable in light of the information contained in Dale Silver's certification that she called his wife as a witness for the nursing home, as well as the fact that the grandmother remained at the nursing home until her death.
There was arguably a "relationship" between Vogelson and Silver within the meaning of N.J.S.A. 2A:23B-12(a)(2). Vogelson certified that he would have made disclosure had he remembered the incident at the time he was asked to serve as the arbitrator. Consequently, Silver had grounds to seek vacation of the award under N.J.S.A. 2A:23B-23(a)(2), as provided by N.J.S.A. 2A:23B-12(d).
In order to vacate an award under N.J.S.A. 2A:23B-23(a)(2), the court must find "evident partiality by an arbitrator; corruption by an arbitrator; or misconduct by an arbitrator prejudicing the rights of a party to the arbitration proceeding." In Barcon, supra, 86 N.J. at 195, which was decided prior to enactment of N.J.S.A. 2A:23B-23(a)(2), the Supreme Court articulated a somewhat different standard:
The Arbitration Act of 2003, N.J.S.A. 2A:23B-1 to -32, applies to all agreements to arbitrate except those entered into between employers and employee representatives as part of collective bargaining or collectively negotiated agreements. N.J.S.A. 2A:23B-3(c).
When a relevant fact is not disclosed at the outset of the proceedings and the award is later challenged, the reviewing court may vacate the award if it concludes that the undisclosed fact would have been such as to lead a reasonable person to object to the designation of the arbitrator in question. There need not be evidence that the arbitrator was actually biased.We note that the Court in Barcon held that the reviewing court "may" vacate the award under such circumstances, and not that it must do so.
The parties have not addressed whether the Supreme Court's 1981 holding in Barcon governs in light of the Legislature's establishment of an arguably different standard in 2003. We need not reach that issue because we conclude that neither standard warrants vacation of the award in this case.
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We conclude that the facts in the record would not have provided a basis for the removal of Vogelson as the arbitrator at Silver's request, even if the information had been available prior to commencement of the arbitration. The events took place at least twenty years prior to the arbitration. Vogelson's wife participated in the earlier arbitration at the specific request of Silver Care, and she supported Silver Care's position in the arbitration. The grandmother remained at Silver Care after the incident involving the discharged employee. A reasonable person in Silver's position would not, under those circumstances, have had a basis to conclude that the events at issue were "likely to affect the impartiality of the arbitrator in the arbitration proceeding." N . J .S.A. 2A:23B-12(a).
As noted above, the Court in Barcon did not mandate that awards be set aside upon a finding that "the undisclosed fact would have been such as to lead a reasonable person to object to the designation of the arbitrator in question," it merely gave the reviewing court the discretion to do so. 86 N.J. at 195. Even if we were to conclude that Silver might have had a basis for a successful challenge of Vogelson's participation prior to the arbitration, we would not order vacation of the award under the circumstances of this case without a finding of actual bias.
We conclude that there is no evidence of actual bias in the record. We have already rejected as untenable Silver's assertion that Vogelson was motivated to rule against him by those earlier events. In addition, the facts related to the relationship between Silver and Vogelson's grandmother-in-law were equally available to Vogelson and Silver. They were not facts known only to Vogelson, who was not even a direct participant in the earlier events. Consequently, we are satisfied that the motion judge did not err in denying Silver's application to set the award aside.
We have reviewed Silver's remaining arguments in light of the applicable law and the record on appeal, and find them to be without merit and not warranting discussion in a written opinion. R. 2:11-3(e)(1)(E). We add only that there was no need for discovery in this case because the operative facts were not disputed in their essentials. In many important instances, they came from the papers filed by Silver.
For all of these reasons, we affirm the order on appeal.
Affirmed.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION