DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA

FOURTH DISTRICT

MANAGED CARE INSURANCE CONSULTANTS, INC.,

Appellant,

v.

UNITED HEALTHCARE INSURANCE COMPANY; UNITED 

HEALTHCARE OF FLORIDA, INC.; and any and all entities that are its 

affiliates,

Appellees.

No. 4D16-2767

[July 19, 2017]

Appeal from the Circuit Court for the Seventeenth Judicial Circuit, 

Broward County; Jack B. Tuter, Judge; L.T. Case No. 15-018699CACE 

(07).

Glenn J. Waldman and Douglas T. Marx of Waldman Trigoboff 

Hildebrandt Marx & Calnan, P.A., Fort Lauderdale, for appellant.

Todd R. Legon and William F. Rhoads of Legon Fodiman, P.A., Miami, 

and David B. Potter and Archana Nath of Fox Rothschild LLP, Minneapolis, 

for appellees.

WARNER, J.

Managed Care Insurance Consultants, Inc., appeals the order denying 

its motion to vacate an arbitration award based on the partiality of one of 

the arbitrators. It contends it showed that the arbitrator had an actual 

conflict, as her husband’s medical practice had a business connection with 

the appellee, United Healthcare of Florida. Because the court found that 

the arbitrator did not have “actual knowledge of such a relationship or 

potential conflict prior to or during the subject arbitration,” nor was there 

any actual bias shown, the court did not err in denying the motion. We 

affirm.

United Health Care (“United”) contracted with Centers for Medicare & 

Medicaid Services (“CMS”) to offer Medicare Advantage health plans to 

Medicare beneficiaries in South Florida. In exchange for United providing 

Medicare benefits, CMS made monthly payments to United for each of its 
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Medicare Advantage members. United entered into a delegation agreement 

with Managed Care Insurance Consultants, Inc. (“MCIC”), whereby United 

delegated to MCIC some of its medical management responsibilities under 

the contract with CMS. In return, United was to pay the authorized claims 

and to fund the payments with monies it received from CMS. MCIC was 

to be compensated from revenue placed into a risk pool, based upon a ratio 

of expenses to revenue. Both parties claimed that the other breached the 

agreement.

The contract had an arbitration provision through the American 

Arbitration Association (“AAA”). The AAA appointed three arbiters to hear 

the dispute, including the chairperson. 

We need not detail the claims and the arbitral proceedings. In short, 

MCIC contended that United had not funded the risk pool properly, nor 

had it paid only authorized expenses from the pool. MCIC claimed lost 

revenues between $14 million and $21 million. United, on the other hand, 

claimed that there were deficits in the risk pool due to MCIC’s management 

of patient care. It sought damages in the millions of dollars.

In the Final Arbitration Award, the panel found that United had 

breached the agreement for funding the risk pool, but did not award any 

damages to MCIC because it found the evidence in support of the claimed 

damages was too speculative. Similarly, the panel found for MCIC on its 

claim that certain patient expenses should have been removed from the 

risk pool reconciliation. Again, however, it did not award damages because 

of “its inability to quantify with reasonable certainty the amount of invalid 

claims that were paid by United.” As to United’s claim against MCIC, the 

panel denied relief because United could not establish that it had 

performed its part of the contract. Thus, neither party obtained a damage 

award from the other party. MCIC made a motion to affirm the portion of 

the arbitration award which found that United had breached the 

agreement and to vacate the portion which refused to award MCIC 

damages. The panel denied the motion and the order became final.

Subsequently, MCIC filed a petition in circuit court to confirm the 

award as to its findings of liability in its favor but to vacate the denial of 

damages. It claimed that the lack of damage award was contrary to Florida 

law, and the evidence was clear that it was entitled to at least $24 million 

in damages.

After filing its petition, MCIC filed an amended petition to vacate the 

award in its entirety because of the chairperson’s failure to disclose the 

relationship between her physician husband and United. The 
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chairperson’s husband was a cardiologist associated with HeartWell, a 

large cardiology group in South Florida. He treated patients at HeartWell 

who were insured by United. He was also on the Board of Directors of 

HeartWell. The motion alleged that the chairperson was the primary 

architect of the arbitration award based on the amounts she charged to 

the parties after the close of the final hearing. The motion also alleged she 

never disclosed that her husband had a contractual relationship with 

United or that some of the medical claims at issue were actually paid to 

her spouse. Because HeartWell was part of United’s network—and United 

reimbursed HeartWell for its doctors’ treatment of patients insured by 

United—the chairperson’s failure to disclose that she was married to a 

physician receiving payments from United established partiality on her 

part.

The court allowed limited discovery from the chairperson. In the

chairperson’s deposition via written questions, she testified that she had 

asked her husband if he had any relationship with United and he told her 

he didn’t. She had him look at the witness lists, as well as the parties, 

and he said he had no dealings with any of them. She stated that if she 

had known he had a relationship she would have disclosed it, but “[m]ost 

of the times he probably doesn’t even know who the insurance companies 

are for his patients, and he did not tell me that he had any relationship 

with United Healthcare.” She was not aware of any money that her 

husband, or his practice, received from United; nor was she aware that 

HeartWell had a contract with United. She was asked whether, between 

2010 and 2015, HeartWell billed United $12.9 million1 for medical 

services, something she should have disclosed. She testified that she had 

no idea that there was a relationship. After reviewing the AAA oath, which 

required her to do a reasonable investigation of potential conflicts, she 

testified that she had made that investigation by questioning her husband 

and presenting him with the conflicts checklist of the parties and 

witnesses. 

In lieu of testimony at the hearing on the motion to vacate, MCIC 

submitted the affidavit of another arbitrator. That arbitrator testified that 

the relationship between the physician husband and United should have 

been disclosed and that the chairperson arbitrator was obligated to do an 

investigation to ascertain the business relationship. The affidavit did not 

opine on what a reasonable investigation would include.

 

1 When this question was re-asked, the figure used was $41.3 million according 

to the transcript. There is no explanation for the discrepancy in the numbers.
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The trial court denied both motions to vacate the award. As to the issue 

of conflict on the part of the chairperson, the court relied on Gianelli Money 

Purchase Plan & Trust v. ADM Investor Services, Inc., 146 F.3d 1309, 1313 

(11th Cir. 1998), to conclude that MCIC had not proved an actual conflict 

nor that actual bias had been shown. The court ruled that “although there 

was evidence that [the arbitrator’s husband] treats patients who are 

insured by United and, as a result, receives reimbursement from United, 

there was insufficient evidence demonstrating [that the arbitrator] had 

actual knowledge of such a relationship or potential conflict prior to or 

during the subject arbitration.” As to the original claim that the arbitration 

panel had exceeded its powers by not applying the correct law, the court 

found that this was not a statutory ground for vacating the award and 

denied the petition. From this order, MCIC appeals.

In order to vacate an arbitration award, one of the statutory grounds 

listed in section 682.13(1), Florida Statutes (2015), must be present. One 

of those grounds warranting vacatur is a showing that there was “[e]vident 

partiality by an arbitrator appointed as a neutral arbitrator[.]” 

§ 682.13(1)(b)1., Fla. Stat. An arbitrator has an affirmative duty to 

disclose to the parties any business relationships that the arbitrator might 

have which might create the impression of possible bias. See Weinger v. 

State Farm Fire & Cas. Co., 620 So. 2d 1298, 1299 (Fla. 4th DCA 1993).

The Federal Arbitration Act, which applies in this case, likewise permits 

vacatur of an arbitration award where a litigant shows “evident partiality 

or corruption in the arbitrators[.]” 9 U.S.C. § 10(a)(2) (2015). In Gianelli,

the Eleventh Circuit followed its prior precedent and held that “an 

arbitration award may be vacated due to the ‘evident partiality’ of an 

arbitrator only when either (1) an actual conflict exists, or (2) the arbitrator 

knows of, but fails to disclose, information which would lead a reasonable 

person to believe that a potential conflict exists.” Gianelli, 146 F.3d at 

1312.

In Gianelli, the office manager of the Gray Harris law firm was chosen 

as an arbitrator for a dispute between Gianelli and an investor service. Id.

at 1310. Before the arbitration commenced, Gianelli discovered that Gray 

Harris represented the principal of the adverse party, Kelly, in a lawsuit. 

Id. The office manager professed no knowledge of the case, and the 

principal indicated that it was an isolated incident. Id. After the officer 

manager arbitrator rendered a ruling in favor of ADM, Gianelli discovered 

that the relationship between Kelly and Gray Harris was considerably more 

extensive. Id. Prior to the office manager’s employment with the Gray 

Harris firm, the firm had extensive representation of Kelly, but the 

arbitrator did not know of the representation. Id. While the district court 
5

granted the motion to vacate for evident partiality, the circuit court 

reversed. Id. It concluded that there was no showing of actual bias, and 

thus the first criteria of actual conflict did not exist. Id. at 1313. As to the 

second criteria, it found that nothing in the record showed that the 

arbitrator knew of the prior representation of Kelly. Id. “Because [the 

arbitrator] did not have actual knowledge of the information upon which 

the alleged ‘conflict’ was founded, the second ‘evident partiality’ condition 

is not present in this case.” Id. 

Gianelli has been criticized in several courts for requiring actual 

knowledge of a conflict without requiring that the arbitrator conduct an 

investigation to ascertain whether a conflict exists. See, e.g., New Regency 

Prod., Inc. v. Nippon Herald Films, Inc., 501 F.3d 1101, 1109 (9th Cir. 

2007). Those courts impose a duty to investigate potential conflicts. Id.;

see also Schmitz v. Zilveti, 20 F.3d 1043 (9th Cir. 1994); Applied Indus. 

Materials Corp. v. Ovalar Makine Ticaret Ve Sanayi, A.S., 492 F.3d 132 (2d 

Cir. 2007); ANR Coal Co., v. Cogentrix of N.C., Inc., 173 F.3d 493 (4th Cir.

1999). 

The cases requiring investigation deal with instances in which lawyers 

have not made a conflicts check within their own firm or a business person 

has not make a check of business relationships of the arbitrator’s own 

business with the arbitration parties. In this case, however, the business 

relationship is between the arbitrator’s husband’s business and one of the 

parties to the arbitration. The arbitrator did investigate by asking her 

husband about any conflicts and presenting him with a conflicts checklist. 

Thus, even if a duty to investigate is required, the arbitrator complied. We 

do not believe that the arbitrator is compelled to disbelieve the information 

she is given by her husband and investigate further. We are not even sure 

that the arbitrator would have the ability to probe the corporate business 

to determine whether a conflict exists. 

Under Florida law, section 682.041, Fla. Stat. (2015), requires that an 

arbitrator disclose any “known facts that a reasonable person would 

consider likely to affect the person’s impartiality as an arbitrator in the 

arbitration proceeding[.]” § 682.041(1), Fla. Stat. (emphasis added). If 

there was no evidence that the arbitrator knew of the facts, then there 

would be no basis for vacatur. Thus, the Florida Arbitration Code adheres 

most closely to Gianelli. 

There was no actual bias shown by the arbitrator in this case, nor was 

there an actual conflict. The arbitrator did not know of the business 

relationship between her husband’s corporate employer and United (nor,
6

apparently, did her husband). The trial court did not err in denying the 

motion to vacate.

In its other claim for vacatur of the arbitration award, MCIC claims that 

the arbitrators exceeded their powers under the agreement by failing to 

apply controlling Florida law in denying any damage award. As found by 

the trial court, this is an attempt to disguise what is clearly a claim of legal 

error by the arbitration panel, which is not a ground to vacate an 

arbitration award. See Hall St. Assocs., LLC v. Mattel, Inc., 552 U.S. 576, 

585-86 (2008) (holding that arbitrator’s legal error is not reviewable under 

the Federal Arbitration Act, and private contract cannot expand grounds 

for vacating award under act); see also Visiting Nurse Ass’n of Florida, Inc. 

v. Jupiter Med. Ctr, Inc., 154 So. 3d 1115, 1138 (Fla. 2014).

For the foregoing reasons, we affirm the order denying the motion to 

vacate the arbitration award.

DAMOORGIAN and FORST, JJ., concur.

* * *

Not final until disposition of timely filed motion for rehearing.