Arbitrator’s Reading of Prior Mediator Decision Did Not Upset Award.
If you believe that an arbitrator exceeded his powers or did something improper, make sure you raise it clearly–in writing–during arbitration proceedings. If you proceed, without making a record, the next case tells us you do so at your peril!
BH Partnership v. Zytko, Case No. D056241 (4th Dist., Div. 1 Dec. 13, 2010) (unpublished) involved an arbitration during which plaintiffs referred to a mediator’s findings in a prior mediation in contravention of the mediation confidentiality statutes, with the arbitrator reaching the same result as the mediator–namely, an anti-litigation clause in partnership agreements triggered a forced buyout of defendants’ interests in the partnerships. The arbitrator also awarded plaintiffs $952,451.51 in attorney’s fees and costs.
Defendants unsuccessfully appealed.
The main problem was forfeiture: defendants did not raise the issue in the arbitration, and freely participated in the proceedings. Beyond that, defendants conceded a lack of prejudice, admitting that the arbitrator’s reading of the mediator’s letter was inadvertent. The arbitrator also diffused prejudice by indicating that he did not consider the letter when coming to a decision (although we would bet it made his final determination a lot easier to make).