Court Opinion

ID: 5736985
Source: CourtListenerOpinion
Date Created: 2022-01-12 16:35:24.104023+00
Date Added: 2024-06-11T08:40:59.179704
License: Public Domain

Valente, J. (dissenting).
I dissent. I would reverse the order confirming the award of the arbitrators and the judgment entered thereon and would vacate the award. The award was assailed upon four grounds: (1) that the arbitrator Spear failed to disclose his former relationships with respondent; (2) that Spear, during the course of the arbitration, employed Caverly, a fellow arbitrator, to act as a business associate in matters as to which Caverly expected substantial compensation; (3) that the third arbitrator, Reinhard, made independent visits to the property involved in the arbitration; and (4) that the method of selecting the arbitrators was unfair.
*915I find it necessary to go no further than the first objection to vitiate the award. In Matter of Milliken Woolens (Weber Knit Sportswear) (11 A D 2d 166, affd. 9 N Y 2d 878) this court announced a firm policy on the maintenance of the integrity of the arbitration process by insisting that no award should stand where disqualifying relationships between an arbitrator and a party are not adequately disclosed.
The conflict in the findings and testimony demonstrates an awareness of the philosophy in the Milliken ease and a studious attempt to avoid its application. An examination of the record indicates that there were a series of business relationships between Spear, or his company, and the respondent, Gimbel Brothers Inc., that antedated the arbitration and which cannot be regarded as mere casual and occasional dealings.
At the hearing before the Referee, Spear testified that he had made some disclosure of these relationships to the Tribunal Clerk of the Arbitration Association. However, the Tribunal Clerk testified he had no recollection of being told anything by Spear about the matter he had with Gimbel Brothers. The Tribunal Clerk further testified that if such disclosure had been made it would have been noted in the log. But the log contained no such notation. The Referee found that there was a failure by Spear “ sufficiently to describe his contact with Mr. Broido and Gimbel in connection with the disputed commission so as to catch the attention of the A. A. A.” and that Spear had mentioned it “ in such a fashion as to not cause a record to be made in the telephone log of the A. A. A.”
Following this equivocal finding — on whether disclosure had been made and the nature thereof—'¡Special Term concluded that “it is fair to say that there was no disclosure and Mr. Spear was in error”. That conclusion is consistent only with the assumption that Spear did not testify correctly as to the matters which he claims to have disclosed to the Arbitration Association. Whether or no they were disclosed, the stark fact remains that Cross Properties, Inc., was not apprised of them.
It cannot be gainsaid that Spear may have been in a better position than either the learned Special Term Justice or the Referee to know if he disclosed anything to the Tribunal Clerk, and what he meant by it. On argument of this appeal respondent conceded that if Spear had made any disclosure to the Tribunal Clerk that was not transmitted to appellant, then Rogers v. Schering Corp. (165 F. Supp. 295, affd. 271 F. 2d 266) would apply and the award would have to be vacated. Thus, if we accept Spear’s testimony that he made the disclosure, then the award must be set aside because the Tribunal Clerk did not transmit it to Cross Properties, Inc. If, on the other hand, Spear made no disclosure, then in the light of his business relationships with Gimbel Brothers, Inc., he should have disclosed them and, on the authority of Milliken (supra) his failure to do so requires that the award be vacated.
Although the other grounds for objection to the award may not, in and of themselves, have necessitated a vacatur of the award, they do not lessen the impact of the objection discussed hereinabove, and certainly fortify the conclusion that the appellant “was not accorded that complete impartiality and indifference which it was entitled to expect from a disinterested board of arbitrators” (Matter of Milliken Woolens [Weber Knit Sportswear], supra, p. 169).
Hence, if the integrity of the arbitration system is to be preserved, the award arrived at under the circumstances revealed herein should be vacated.
Rabin, J. P., McNally, Stevens and Steuer, JJ., concur in Per Curiam, opinion; Yalente, J., dissents in opinion.
Order and judgment affirmed, with costs to respondent.