Opinion
No. C7-99-882.
Filed January 11, 2000.
Appeal from the District Court, Olmsted County, File No. C4983699.
George F. Restovich, Richard W. Kimlinger, (for appellants)
J. Mark Catron, Carrie L. Hund, (for respondent)
Considered and decided by Amundson, Presiding Judge, Kalitowski, Judge, and Harten, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (1998).
UNPUBLISHED OPINION
This case arises from an arbitration of appellants' claim for underinsured motorist benefits against respondent, their automobile insurer. Appellants argue the district court erred in refusing to vacate the arbitration award for evident partiality. We affirm.
DECISION
A district court will vacate an arbitration award only upon proof by the challenging party of one or more of the grounds stated in Minn. Stat. § 572.19 (1998). Pirsig v. Pleasant Mound Mut. Fire Ins. Co., 512 N.W.2d 342, 343 (Minn.App. 1994). Minn. Stat. § 572.19, subd. 1(2), provides that the court shall vacate an award due to "evident partiality by an arbitrator appointed as a neutral." When a party alleges evident partiality, the district court resolves any factual disputes regarding the arbitration proceedings. Pirsig, 512 N.W.2d at 344. Whether conduct constitutes evident partiality is a question of law, subject to de novo review. Id. at 343. "Evident partiality" includes contacts between an arbitrator and a party, or between arbitrators, that might create an impression of possible bias. Id. at 344 (citations omitted). Not every contact between arbitrators results in a finding of evident partiality. See id. (holding that where respondent's appraiser contacted the neutral appraiser to set a date and time of hearing and mailed him information, there was no evident partiality).
The record indicates the arbitration hearing was held on Friday, October 2, 1998, and the three arbitrators deliberated in the afternoon following the hearing. It is undisputed that when deliberations ended, the neutral arbitrator stated he needed to "sleep on it" before making his decision. The district court found, based on the neutral arbitrator's sworn affidavit, that the neutral arbitrator reached his own decision over the weekend and drafted the award accordingly.
Appellants argue that the neutral arbitrator gave the impression of partiality by two subsequent contacts with respondent's arbitrator. We disagree. The record supports the district court's findings that: (1) both of the contacts occurred after the neutral arbitrator reached his decision; (2) the two arbitrators did not discuss the merits of the dispute; and (3) the contacts did not alter the neutral arbitrator's decision.
Appellants rely on their arbitrator's belief that the neutral arbitrator agreed with appellants' position when deliberations ended late Friday afternoon. But this belief does not support a finding of partiality. No vote was taken at that time and all the arbitrators agree that the neutral arbitrator said he needed to "sleep on it" before making a final decision. The record supports the district court's finding that the neutral arbitrator reached his decision and prepared the award over the weekend before any further contacts.
Appellants also argue there was evident partiality because the neutral arbitrator did not disclose that he was simultaneously participating in another arbitration with respondent's arbitrator. We disagree. A neutral arbitrator must disclose
any relationships the person has with any of the parties, their counsel, insurers, or representatives and any conflict of interest, or potential conflict of interest, the person may have.
Minn. Stat § 572.10, subd. 2(b) (1998). Arbitration awards have been reversed where the nature of the alleged improper relationship was long-standing and repeated. But more limited contacts generally do not constitute evident partiality. See, e.g., Ronning v. Citizens Sec. Mut. Ins. Co., 557 N.W.2d 363, 366-67 (Minn.App. 1996) (holding that neutral arbitrator's failure to disclose relationship to one of the party's attorneys was not a basis to vacate the award where there was no evidence that the conflict impacted the decision or "tainted the outcome").
We conclude that the facts here do not support a duty to disclose. The two arbitrations involved separate and unrelated matters. Moreover, there is no evidence that the two arbitrators have a long-standing relationship or that the contact in the other arbitration had any effect on the decision in this matter.
Finally, because we agree with respondent that the district court did not err in denying appellants' motion to vacate, we need not address respondent's argument regarding insufficient service of process.