Court Opinion

ID: 6114052
Source: CourtListenerOpinion
Date Created: 2022-01-31 19:03:00.452185+00
Date Added: 2024-06-11T08:13:11.002787
License: Public Domain

FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

                                           Electronically Filed
                                           Intermediate Court of Appeals
                                           CAAP-XX-XXXXXXX
                                           31-JAN-2022
                                           08:07 AM
                                           Dkt. 269 OP

              IN THE INTERMEDIATE COURT OF APPEALS

                     OF THE STATE OF HAWAI#I

                            –––O0O–––

        ASSOCIATION OF APARTMENT OWNERS OF THE PALM VILLAS
         AT MAUNA LANI RESORT, by and through its Board of
           Directors, Claimant-Appellee/Cross-Appellee,
                                v.
     CONSTRX, LTD., Respondent-Appellee/Cross-Appellant, and
 KNOX HOVERSLAND ARCHITECTS, Respondent-Appellant/Cross-Appellee

                       NO. CAAP-XX-XXXXXXX

       APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT
                    (S.P. NO. 14-1-000564-12)

                        JANUARY 31, 2022

          WADSWORTH, PRESIDING JUDGE, AND NAKASONE, J.,
                   AND McCULLEN, J., DISSENTING

              OPINION OF THE COURT BY WADSWORTH, J.

          This appeal arises out of a dispute concerning two
arbitration awards, which were issued in favor of Respondent-
Appellant/Cross-Appellee Knox Hoversland Architects, Ltd. (KHA)
and Respondent-Appellee/Cross-Appellant ConstRX, Ltd. (CRX)
(collectively, Respondents) and against Claimant-Appellee/Cross-
Appellee Association of Apartment Owners of the Palm Villas at
Mauna Lani Resort (AOAO). KHA appeals and CRX cross-appeals from
the April 3, 2017 Amended Findings of Fact, Conclusions of Law
and Order (Amended FOF/COL/Order), entered in the Circuit Court
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of the First Circuit1/ (Circuit Court), which: (1) granted AOAO's
October 31, 2014 motion to vacate the September 16, 2014 Interim
Arbitration Award (Interim Award); (2) granted AOAO's April 1,
2015 motion to vacate the February 9, 2015 Final Arbitration
Award (Final Award); and (3) denied CRX's February 13, 2015
motion to confirm the Final Award, which KHA joined on March 10,
2015.
          On appeal, Respondents contend that the Circuit Court
erred in vacating the Interim Award and the Final Award
(collectively, the Arbitration Awards) due to evident partiality.
In particular, Respondents contend that the Circuit Court erred
in concluding that: (1) the arbitrator, Judge Riki May Amano
(Ret.) (the Arbitrator or Judge Amano), failed to make reasonable
inquiries and failed to make full and appropriate disclosures of
her relationships with the parties and counsel prior to and
during the arbitration; and (2) AOAO did not waive its right to
object to the Arbitrator.2/
          We hold that under the circumstances of this case, the
Arbitrator's failure to timely disclose to the parties that she
recently had been appointed as an arbitrator in another matter,
involving an attorney who also had been involved in the present
matter, could reasonably have been perceived as likely to affect
the Arbitrator's impartiality in the arbitration underlying this
appeal. Thus, the Circuit Court did not clearly err in ruling
that a reasonable impression of partiality, and thus evident
partiality, was established on this ground. We further hold that
the Circuit Court did not clearly err in ruling that AOAO did not
waive its right to challenge the Arbitrator on this ground.
Accordingly, we affirm the Amended FOF/COL/Order.

                               I. Background

          The following findings of fact by the Circuit Court are
unchallenged on appeal and are thus binding on the parties and

      1/
            The Honorable Jeannette H. Castagnetti presided.
      2/
            Respondents' respective points of error have been restated and
condensed for organizational clarity.

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this court, see State v. Rodrigues, 145 Hawai#i 487, 494, 454
P.3d 428, 435 (2019):

                6. On April 18, 2012, [AOAO] and Respondents entered
          into a Remediation Agreement to complete [certain]
          repairs. . . .
                7. Pursuant to Article 13 of the Remediation
          Agreement, any dispute arising thereunder that could not be
          resolved via the Initial Decision Maker (the
          Owner's/[AOAO's] Representative) or mediation was to be
          submitted to Dispute Prevention & Resolution, Inc. ("DPR")
          for binding arbitration. . . .
                8. CRX performed remediation work from July 2012 to
          September 2013.
                9. A dispute arose regarding payment under the
          Remediation Agreement.
                10. On October 24, 2013, this matter came before
          Keith Hunter, President and Chief Executive Officer of DPR,
          for mediation.

                11. Attorney [Jeffre W.] Juliano (O'Connor Playdon)
          could not attend the October 24, 2013 mediation and asked
          his partner, Cid Inouye, Esq., to prepare for and attend the
          mediation on Attorney Juliano's behalf [for CRX].
                12. Attorney Inouye billed 11.3 hours in this matter
          to prepare for and stand in for Attorney Juliano at said
          mediation.

                13. The mediation was unsuccessful and on October 28,
          2013, [AOAO] emailed DPR its demand for arbitration against
          Respondents.

                14. Also on October 28, 2013, CRX filed a demand for
          arbitration with DPR.
                15. On November 14, 2013, using the strike-off
          method, DPR appointed Judge Amano to serve as
          arbitrator.
                . . . .

          . . . .
                17. On November 18, 2013, Judge Amano, through Kelly
          Bryant, Case Manager at DPR, provided the following
          disclosure by email addressed to Attorneys [Terrance M.]
          Revere [(for AOAO)] and Juliano:

                I know counsels Terry Revere, Cid Inouye and
                Jeff Juliano, and I have worked with other
                lawyers in their respective law firms, in my
                capacity as a former state court judge between
                1992-2003 or in my post-retirement years as an
                arbitrator or mediator with DPR; I do not know
                Malia Nickison-Beazley.
                I have no other professional, social or personal
                interactions with anyone involved in this case.

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              There are no relationships or interests, past or
              present that would affect my neutrality as an
              arbitrator in this case.
              18.   In the same email, Ms. Bryant advised that:

              The Judge has made a diligent effort to disclose
              all relevant matters. If any party has
              additional information that should be disclosed
              but has not been, or you have any comments or
              objections, please submit them in writing to DPR
              by November 21, 2013. (Emphasis in original.)
              19. Ms. Bryant copied Attorney Inouye (O'Connor
        Playdon), Alison Shigekuni, Esq. (O'Connor Playdon), Mea
        Mitchell, Esq. (Revere & Associates), and Attorney
        Nickison-Beazley (Revere & Associates) on the November 18,
        2013 email containing Judge Amano's initial disclosure.

              20. No party submitted comment or objection to Judge
        Amano serving as arbitrator in response to her November 18,
        2013 initial disclosure.

              21. In January 2014, CRX's insurer retained Attorneys
        [Roy F.] Hughes and [Samantha] Storm of Hughes Storm to
        litigate CRX's defense claims, while Attorneys Juliano and
        [Lahela H.F.] Hite of O'Connor Playdon continued to litigate
        CRX's affirmative claims against [AOAO].

              22. In February 2014, KHA's insurer retained Attorney
        [Randall K.] Schmitt of McCorriston Mukai to litigate its
        claims against [AOAO].

              23. A summary of the parties and counsel who appeared
        before Judge Amano for the subject arbitration is as
        follows:
              [AOAO]             Revere & Associates
                                 Terrance Revere, Esq.
                                 Malia Nickison-Beazley, Esq.

              Respondent CRX     O'Connor Playdon (affirmative claims)
                                 Lahela Hite, Esq.
                                 Jeffre Juliano, Esq.
                                 Hughes Storm (defense claims)
                                 Roy Hughes, Esq.
                                 Samantha Storm, Esq.

              Respondent KHA     McCorriston Mukai
                                 Randall Schmitt, Esq.
        . . . .
              24. On March 25, 2014, Judge Amano issued the
        following supplemental disclosure by email through Ms.
        Bryant:
              I do not know nor have I had any affiliation
              past or present with [KHA.] I know counsel
              Randy Schmitt from my work as a former state
              court judge between 1992-2003 and/or in my
              post-retirment [sic] work as an arbitrator or
              mediator with DPR; I have also worked with other
              lawyers in his law firm, McCorriston Miller, in
              the capacities I have identified herein; I have
              no social or personal relationships with Mr.

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              Schmitt or anyone in his law firm [sic]
              I am currently the Claims Administrator in a
              settled case in which Mr. Schmitt represented a
              named defendant; my present duties require me to
              seek and pay qualified class plaintiffs from
              settlement monies already paid; I do not have
              contact with Mr. Schmitt in this regard although
              he will be receiving a copy of my reports as the
              legal representative for a party to the case
              [sic]
              I have no other professional, social or personal
              relationships or interactions with anyone
              involved in this case [sic]
              I continue to believe that my neutrality as an
              arbitrator in this case is unaffected [sic]

              25. No party submitted comment or objection to Judge
        Amano serving as arbitrator in response to her March 25,
        2014 supplemental disclosure.
              . . . .

              28. On May 1, 2014, counsel for all the parties
        herein attended a pre-arbitration conference before Judge
        Amano at DPR's office.
              29. At said pre-arbitration conference, Attorney
        Juliano disclosed that Attorneys Inouye and Maxwell K.
        Kopper (previously an associate at O'Connor Playdon) were
        before Judge Amano the day before, April 30, 2014, arguing
        an unrelated motion for summary judgment.

              30. In said unrelated matter, unbeknownst to [AOAO],
        Ms. Bryant had confirmed on November 6, 2013, that Judge
        Amano was selected as the arbitrator, eight days before
        Judge Amano was selected as arbitrator in this matter.

              31. There was no objection made at the May 1, 2014
        pre-arbitration conference with respect to Judge Amano
        serving as arbitrator in this matter.

              32. Beginning May 5, 2014, the arbitration took place
        at the office of McCorriston Mukai on May 5, 6, 7, 8, 9, and
        12.

              . . . .
              35. On May 16, 2014, Ms. Bryant sent an email to
        Attorneys Hughes, Nickison-Beazley, Juliano, Revere,
        Mitchell, Shigekuni, Inouye, Schmitt, and Storm, among
        others who had not appeared before Judge Amano in this
        matter, to disclose that Judge Amano had been appointed by
        the court to serve as a discovery master in a matter in
        which Attorney Schmitt represented a party.

        . . . .
              . . . .
              37. On September 16, 2014, Judge Amano issued an
        Interim Arbitration Award against [AOAO] and in favor of CRX
        for $205,539.49, representing the unpaid balance owed by
        [AOAO] and $431,462.47 in retainage, pursuant to the
        Remediation Agreement. Judge Amano denied CRX's remaining
        affirmative claims against [AOAO].

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              . . . .
              39. On September 23, 2014, Attorney Revere sent an
        email to Ms. Bryant, copying, among others, all counsel
        present at the May 2014 arbitration, representing that
        [AOAO] sought additional disclosures from Judge Amano
        pertaining to:
              [A]ny and all matters in which Judge Amano
              served as mediator, arbitrator or in any other
              capacity for any matters involving any of the
              parties or law firms retained in this matter in
              the last seven years, including dates when the
              retentions began and when they terminated. We
              also ask that if there are any other personal or
              professional relationships involving any of the
              parties or lawyers in the law firms (not limited
              to just counsel that appeared in this matter)
              that they be disclosed.

              40. On September 23, 2014, in response to Attorney
        Revere's email, counsel emailed the following disclosures:

                    [Disclosures by Schmitt and Storm not
              related to the disclosure at issue.]
              41. On September 24, 2014, Attorney Juliano (O'Connor
        Playdon) disclosed by email that his "last experience with
        Judge Amano was when she acted as a mediator in a case in
        which I represented one of the parties in October 2008. I'm
        sure as Judge Amano has already disclosed, she has acted as
        a Judge, Mediator and or Arbitrator with other counsel in my
        office."

              42. On September 25, 2014, Attorney Juliano further
        disclosed by email the following matters in which Judge
        Amano was involved, and the O'Connor Playdon attorneys who
        handled them:

              Mediations
              . . . .

              2014: Cid Inouye/Maxwell Kopper

              Discovery Master
              . . . .
              Arbitration
              2010: Cid lnouye/Lahela Hite. . . .

              . . . .
              43. On September 29, 2014, [AOAO] filed with DPR a
        Motion to Disqualify Judge Amano and a Motion to Correct
        and/or Otherwise Modify Interim Arbitration Award, and
        submitted two subpoena duces tecum for Judge Amano's
        execution.
              44. On October 17, 2014, Mr. Hunter denied [AOAO]'s
        Motion to Disqualify Judge Amano.

              45. On October 21, 2014, Judge Amano provided the
        following supplemental disclosure by email through Ms.
        Bryant:

              . . . .

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                • Cid Inouye was counsel in a case in which I
                was the selected arbitrator; the case began as
                an arbitration in late 2013 and turned into a
                mediation during the summer of 2014; the matter
                settled

                . . . .
                46. Ms. Bryant further advised in the October 21,
          2014 email that "[a]ny comments regarding this disclosure
          should be filed in writing with DPR by October 23, 2014."
          (emphasis in original).
                . . . .

                49. On October 21, 2014, Attorney Revere emailed
          [AOAO's] objection to Judge Amano's continued service as an
          arbitrator and moved a second time for Judge Amano's
          disqualification.

                50. On October 29, 2014, Mr. Hunter denied [AOAO's]
          Second Motion to Disqualify.

                51. On October 31, 2014, [AOAO] filed a Motion to
          Vacate Interim Arbitration Award in the Third Circuit Court.
                52. On November 7, 2014, Judge Amano issued an Order
          Denying [AOAO's] Motion to Correct and/or Otherwise Modify
          Interim Arbitration Award, Dated September 16, 2014, and
          advised of her determination not to issue [AOAO's]
          previously submitted subpoenas.
                . . . .

                54. On February 9, 2015, Judge Amano issued a Final
          Arbitration Award, which affirmed the amounts awarded to CRX
          under the Interim Arbitration Award: $205,539.49 for the
          unpaid balance owed by [AOAO], and $431,462.47 in retainage.

                55. Judge Amano further awarded attorneys' fees and
          costs incurred by counsel for CRX and KHA as follows:
          $235,398.21 for Hughes Storm; $223,569.26 for O'Connor
          Playdon; and $163,019.32 for McCorriston Mukai.

                56. On February 13, 2015, CRX filed the Motion to
          Confirm Final Arbitration Award Dated February 9, 2015,
          which KHA joined on March 10, 2015.
                57. On April 1, 2015, [AOAO] filed the Motion to
          Vacate Final Arbitration Award.

(Record citations omitted; some brackets in original.)
          On March 1, 2016, the Circuit Court held a status
conference regarding the pending motions to vacate the Interim
Award and the Final Award and the pending motion to confirm the
Final Award, all of which had been consolidated for a hearing.
At that time, "all counsel agreed that no evidentiary hearing
would be necessary to dispose of the consolidated motions. . . ."
          On August 17, 2016, the Circuit Court heard the
consolidated motions.

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          On March 3, 2017, the Circuit Court issued its Findings
of Fact, Conclusions of Law, and Order, which granted AOAO's
motions to vacate the Interim Award and the Final Award, and
denied Respondents' motion to confirm the Final Award. On
April 3, 2017, the Circuit Court issued the Amended
FOF/COL/Order.
          The Circuit Court concluded that "the cumulative effect
of undisclosed prior and ongoing relationships between Judge
Amano and the Respondents' attorneys and their respective firms
demonstrates a reasonable impression of partiality that warrants
vacatur of the arbitration award." The Circuit Court further
concluded, among other things:

                30. The evidence supports this Court's conclusion
          that Judge Amano violated the disclosure requirements of
          [Hawaii Revised Statutes (HRS)] chapter 658A and DPR Rule 9
          by failing to make reasonable inquiries of all past,
          current, and anticipated future relationships with the
          parties' attorneys or representatives, and by failing to
          disclose them, thus creating a reasonable impression of
          partiality.

                31. In particular, Judge Amano did not disclose to
          the parties that she had been appointed as arbitrator in a
          matter involving O'Connor Playdon Attorneys Inouye and
          Kopper (formerly of O'Connor Playdon) on November 6, 2013,
          eight days before appointment in the underlying arbitration.

                . . . .

                36. Under the circumstances, including the close
          proximity in time of Judge Amano's appointment as
          arbitrator, a reasonable person would consider the fact that
          on November 18, 2013, Judge Amano stated that she knew
          Attorney Inouye and worked with other lawyers in his firm
          yet did not disclose that he was involved in another matter
          where she was appointed arbitrator on November 6, 2013,
          creates an impression of possible bias.
                . . . .
                42. This Court, therefore, concludes that [AOAO] has
          adequately established evident partiality by Judge Amano, a
          neutral arbitrator.
                43. Consequently, the interim and final arbitration
          awards are hereby vacated pursuant to HRS
          § 658A-23(a)(2)(A).

                . . . .
                48. This Court concludes that [AOAO] has not waived
          its right to challenge Judge Amano on the ground of evident
          partiality.

                49. . . . [AOAO] has proffered sufficient evidence to
          support the contention that had Judge Amano disclosed that

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          she had been retained by O'Connor Playdon eight days before
          being appointed in the underlying arbitration, or had she
          disclosed the number of times she had been retained by the
          law firms representing Respondents, [AOAO] would not have
          agreed to her appointment.

This appeal and cross-appeal followed.

                       II. Standards of Review

          The Hawai#i Supreme Court has set out the applicable
standards for judicial review of an arbitration award as follows:

                Judicial review of an arbitration award is limited to
          the statutory grounds for confirmation, vacatur,
          modification, and correction. See HRS § 658A-28(a)(3)-(5)
          (Supp. 2001). Review of a motion to vacate an arbitration
          award "does not involve review of an arbitrator's findings
          of fact or conclusions of law." Nordic[ PCL Const., Inc. v.
          LPIHGC, LLC], 136 Hawai#i [29, ]42, 358 P.3d [1, ]14
          [ (2015)]. "Rather, it involves review of a circuit court's
          factual findings and conclusions of law as to whether the
          statutorily outlined grounds for vacatur exist." Id.

                 We review a circuit court's findings of fact under the
          clearly erroneous standard. [Noel ]Madamba[ Contracting LLC
          v. Romero], 137 Hawai#i [1, ]8, 364 P.3d [518, ]525
          [ (2015)]. . . . We review a circuit court's conclusions of
          law de novo under the right/wrong standard. Nordic, 136
          Hawai#i at 41, 358 P.3d at 13 (quoting Daiichi[ Hawai #i Real
          Estate Corp. v. Lichter], 103 Hawai#i [325, ]336, 82 P.3d
          [411, ]422[ (2003)]). Where a conclusion of law presents a
          mixed question of law and fact, we review this conclusion
          under the clearly erroneous standard. Madamba, 137 Hawai #i
          at 8, 364 P.3d at 525 (citing Estate of Klink ex rel. Klink
          v. State, 113 Hawai#i 332, 351, 152 P.3d 504, 523 (2007)).
          A mixed question of law and fact is a conclusion "dependent
          upon the facts and circumstances of the particular case."
          Price v. Zoning Bd. of Appeals, 77 Hawai#i 168, 172, 883
          P.2d 629, 633 (1994).

                We review a circuit court's rulings on a motion to
          vacate for evident partiality under the "clearly erroneous
          standard" where the court's challenged conclusion was based
          on a "mixed question of law and fact." Madamba, 137 Hawai #i
          at 9, 364 P.3d at 526.

Narayan v. Ass'n of Apartment Owners of Kapalua Bay Condo., 140
Hawai#i 75, 83, 398 P.3d 664, 672 (2017).

                            III. Discussion

A. Evident Partiality and Failure to Make Necessary Disclosures

          Respondents contend that the       Circuit Court erred in
vacating the Arbitration Awards due to       evident partiality.
Respondents argue, among other things,       that the Arbitrator's
disclosures to the parties were proper       and timely. In response,

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AOAO contends that the Circuit Court correctly found that the
Arbitrator failed to make full and appropriate disclosures.
           The supreme court has addressed an arbitrator's
statutory disclosure requirements, as well as vacatur based on
evident partiality, in a series of three decisions. See Narayan,
140 Hawai#i at 83–90, 398 P.3d at 672–79; Madamba, 137 Hawai#i at
9-16, 364 P.3d at 526-33; Nordic, 136 Hawai#i at 42-52, 358 P.3d
at 14-24. In Narayan, the court stated:

          An arbitration award may be vacated only upon the grounds
          specified in HRS § 658A-23. Pursuant to HRS
          § 658A-23(a)(2)(A), the court must vacate an arbitration
          award if there was evident partiality by an arbitrator
          appointed to serve as a neutral. Madamba, 137 Hawai #i at 3,
          364 P.3d at 520. Evident partiality may be found in two
          situations: when an arbitrator fails to make necessary
          disclosures to the parties, or when additional facts show
          actual bias or improper motive, even if the arbitrator makes
          the necessary disclosures. See Valrose Maui, Inc. v. Maclyn
          Morris, Inc., 105 F. Supp. 2d 1118, 1124 (D. Haw. 2000); see
          also Schmitz v. Zilveti, 20 F.3d 1043, 1045-47 (9th Cir.
          1994) (distinguishing the evident partiality standards
          applied in "nondisclosure" cases and "actual bias" cases).

140 Hawai#i at 84, 398 P.3d at 673 (footnote omitted).
           In a nondisclosure case, "evident partiality is
established where 'undisclosed facts demonstrate a reasonable
impression of partiality.'" Madamba, 137 Hawai#i at 10, 364 P.3d
at 527 (quoting Nordic, 136 Hawai#i at 51, 358 P.3d at 23).
"Under this standard, a finding of evident partiality 'is not
dependent on a showing that the arbitrator was actually biased,
but instead stems from the nondisclosure itself.'" Narayan, 140
Hawai#i at 84, 398 P.3d at 673 (quoting Madamba, 137 Hawai#i at
10, 364 P.3d at 527).
           HRS § 658A-12 (Supp. 2013) codifies an arbitrator's
duty to disclose facts that may create an appearance of bias.
Section 658A-12 provides, in relevant part:

                (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

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                (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 another
                      arbitrator.

                (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.

Pursuant to these provisions, "arbitrators must at the outset
disclose, then continually disclose throughout the course of an
arbitration proceeding, any known facts that a reasonable person
would consider likely to affect the arbitrator's impartiality."
Nordic, 136 Hawai#i at 47, 358 P.3d at 19.
          The supreme court has held that "a neutral arbitrator's
violation of statutory disclosure requirements under HRS §
658A-12(a) or (b) 'constitutes "evident partiality" as a matter
of law.'" Narayan, 140 Hawai#i at 85, 398 P.3d at 674 (quoting
Nordic, 136 Hawai#i at 50, 358 P.3d at 22). In this context,
"once evident partiality as to a neutral arbitrator is
established, the arbitration award must be vacated." Id. at 86,
398 P.3d at 675 (brackets omitted) (quoting Madamba, 137 Hawai#i
at 16 n.20, 364 P.3d at 533 n.20).
          In Narayan, the supreme court "clarif[ied] the scope of
the arbitrator's disclosure requirements as well as
contextualize[d] the reasonable person standard in light of the
undisclosed facts revealed through post-award discovery." Id. at
86, 398 P.3d at 675. "The 'fundamental standard' of the
disclosure obligation 'is an objective one: disclosure is
required of facts that a reasonable person would consider likely
to affect the arbitrator's impartiality in the arbitration
proceeding.'" Id. (quoting Nordic, 136 Hawai#i at 47, 358 P.3d
at 19). "It is thus the circuit court's role to determine
whether the undisclosed facts meet this objective standard." Id.
          The supreme court also has observed:

                Patterns emerging in case law have evolved through
          court efforts to identify undisclosed relationships that are
          "more than trivial" and thus require vacatur due to evident
          partiality, and those that are "too insubstantial to warrant
          vacating an award." Commonwealth Coatings[ Corp. v.

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          Continental Casualty Co.], 393 U.S. [145, ]152, 89 S. Ct.
          337[, 340-41 (1968) ](White, J., concurring) (emphasis
          added). Courts will weigh factors in a case-by-case
          approach to determine how a reasonable person would
          objectively perceive the relationship and its potential
          impact on the arbitration proceeding.

Id. at 87, 398 P.3d at 676.
          Determining whether a relationship is "substantive" –
for the purpose of determining whether the relationship would
give a reasonable impression of partiality – may involve the
consideration of several factors, including: (1) the directness
of the connection between the arbitrator and a party; (2) the
type of connection or activity at issue; and (3) the timing of
the connection or activity. See id. Accordingly, in evaluating
the disclosure issue in the present case, we analyze each of
these factors below.

          1.   Connection Between the Arbitrator and a Party

          "The more direct an undisclosed connection between the
arbitrator and a party, the more likely that it will create a
reasonable impression of partiality." Narayan, 140 Hawai#i at
88, 398 P.3d at 677. Thus, "a current direct relationship
between an arbitrator and 'a party, its counsel, principal, or
agent' will almost always require disclosure." Id. (quoting
Valrose, 105 F. Supp. 2d at 1124). In contrast, "[t]he more
'attenuated' and less direct the connections between a party and
an arbitrator, the less likely it will be that the relationship
will require disclosure, even if those relationships are
current." Id. (citing New Regency Prods., Inc. v. Nippon Herald
Films, Inc., 501 F.3d 1101, 1110 (9th Cir. 2007)).
          Here, on November 18, 2013, the Arbitrator disclosed to
the parties:

          I know counsels Terry Revere, Cid Inouye and Jeff Juliano,
          and I have worked with other lawyers in their respective law
          firms, in my capacity as a former state court judge between
          1992-2003 or in my post-retirement years as an arbitrator or
          mediator with DPR; I do not know Malia Nickison-Beazley.

          I have no other professional, social or personal
          interactions with anyone involved in this case.

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However, the Arbitrator did not disclose to the parties that on
November 6, 2013, she had been appointed as an arbitrator in an
unrelated matter in which Attorneys Inouye and Kopper represented
a party.
          KHA argues that "the Arbitrator did not have a duty to
disclose her relationship with Attorneys Inouye and Kopper
because they did not participate in the arbitration proceedings."
CRX makes a similar argument. Respondents are correct that under
HRS § 658A-12(a)(2), supra, the term "counsel" "does not include
all attorneys in the law firm of an attorney representing a party
to an arbitration[.]" Madamba, 137 Hawai#i at 12 n.18, 364 P.3d
at 529 n.18 (quoting Nordic, 136 Hawai#i at 48, 358 P.3d at 20).
However, HRS § 658A–12(a) "requires that an arbitrator disclose
facts that a reasonable person would consider likely to affect
the arbitrator's impartiality." Id. (quoting Nordic, 136 Hawai#i
at 48, 358 P.3d at 20). Thus, "[d]epending on the circumstances,
such facts could include an arbitrator's relationships with other
attorneys within a law firm of counsel representing a party to
the arbitration." Id. (quoting Nordic, 136 Hawai#i at 48, 358
P.3d at 20).
          Here, while Attorney Inouye did not represent CRX in
the underlying arbitration itself, it is undisputed that he did
prepare for and attend the October 24, 2013 mediation that
immediately preceded the arbitration, on behalf of Attorney
Juliano, representing CRX. It is similarly undisputed that
Attorney Inouye billed CRX 11.3 hours for his work relating to
the mediation. As the Circuit Court found, and Respondents do
not dispute:

          Judge Amano was aware that Attorney Inouye had been involved
          in this matter, albeit he did not participate in the
          arbitration, when she specifically disclosed on November 18,
          2013, that she knew "Terry Revere, Cid Inouye and Jeff
          Juliano" and had worked with other lawyers in Attorney
          Inouye's firm in her capacity as a former state court judge
          and as an arbitrator or mediator with DPR.

Additionally, the Circuit Court found, and Respondents do not
dispute, that "the attorneys, DPR, and Judge Amano considered
Attorney Inouye's involvement in this matter significant enough
to copy him in email correspondence, in particular, those
containing disclosures."

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          Under these circumstances, the then-current
relationship between the Arbitrator and Attorney Inouye, who
represented CRX in the mediation immediately preceding the
underlying arbitration, was more direct than attenuated. This
factor thus weighed in favor of the Arbitrator disclosing that
she recently had been appointed as an arbitrator in another
matter involving O'Connor Playdon Attorney Inouye.

          2. Type of Connection or Activity

          The supreme court has recognized that "[c]ertain types
of relationships will also weigh more heavily toward disclosure
than others." Narayan, 140 Hawai#i at 88, 398 P.3d at 677. For
example, "[b]usiness relationships and financial dealings will .
. . tend to weigh in favor of disclosure, depending on the weight
of other considerations, including the regularity and recency of
the dealings, the length of the relationship, and the extent of
pecuniary interest involved." Id. at 89, 398 P.3d at 678.
Moreover, "[w]here the relationship involves an exchange of money
or other consideration, it is likely to require disclosure,
particularly if the exchange was recent or ongoing during the
arbitration." Id.
          In Narayan, the supreme court held in part that the
circuit court did not clearly err in ruling that the arbitrator's
duty of disclosure did not include her retention in unrelated
matters by the law firm of an alleged "hearsay witness." Id. at
91, 398 P.3d at 680. The court noted that the "hearsay witness"
was not a witness in the arbitration proceeding at issue, and it
"[wa]s unclear how Appellants' allegations make him a 'hearsay
witness.'" Id. at 91 n.17, 398 P.3d at 680 n.17. In that
context, the supreme court concluded: "The [a]rbitrator's
employment by [the law firm] in unrelated matters does not have a
sufficient nexus to this arbitration to require a holding that
the circuit court clearly erred. There is no actual direct
connection between [the law firm] and the parties, counsel,

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witnesses, and [a]rbitrator in this arbitration."3/ Id. at 91,
398 P.3d at 680 (emphasis added).
          Here, in contrast, there was a more direct connection
between the Arbitrator and Attorney Inouye, who represented CRX
in the mediation immediately preceding the underlying
arbitration, and who was copied by the Arbitrator in email
correspondence regarding the arbitration. It was in this context
that the Arbitrator was appointed as arbitrator in another matter
involving O'Connor Playdon Attorney Inouye, just eight days
before the Arbitrator's appointment in the underlying arbitration
here. Given the recency of the Arbitrator's appointment in the
other matter, as well as the Circuit Court's other undisputed
findings regarding the Arbitrator's relationship with Inouye, the
Arbitrator's appointment in the other matter was the type of
activity that could reasonably be perceived to affect an
arbitrator's impartiality.4/ See Valrose, 105 F. Supp. 2d at
1123-24 (concluding that a "reasonable impression of partiality"
existed where the arbitrator failed to disclose an ex parte
discussion with one party's counsel regarding "the possibility of
the Arbitrator's mediating in an unrelated legal malpractice
action" and stating that the discussion "was clearly required to
be disclosed" and "the nondisclosure of the discussion and
appointment [as mediator] was clearly a serious failing"). This
factor thus also weighed in favor of the Arbitrator disclosing
that she recently had been appointed as an arbitrator in another
matter involving O'Connor Playdon Attorney Inouye.

      3/
            The supreme court also recognized that the law firm was
representing the developer in a separate action, which was adverse to the
appellants, "but the theory that a positive outcome for the AOAO [ i.e., the
party adverse to the appellants in the arbitration at issue] would lead to a
future appointment for the [a]rbitrator in the [separate action] is
'contingent, attenuated, and merely potential.'" Narayan, 140 Hawai #i at 91,
398 P.3d at 680 (quoting In re Sussex, 781 F.3d 1065, 1075 (9th Cir. 2015).
      4/
            We do not mean to suggest there is any evidence in the record that
Attorney Inouye acted with an improper motive or that the Arbitrator was
actually biased by virtue of her appointment in the unrelated matter. We have
found none. As previously discussed, however, a finding of evident partiality
"is not dependent on a showing that the arbitrator was actually biased," but
stems from the nondisclosure itself. Narayan, 140 Hawai #i at 84, 398 P.3d at
673 (quoting Madamba, 137 Hawai#i at 10, 364 P.3d at 527).

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          3. Timing of the Connection or Activity

           "[R]elationships that are not 'distant in time, but
rather ongoing during the arbitration' will weigh most heavily in
favor of disclosure, while relationships that are 'long past'
will not." Narayan, 140 Hawai#i at 90, 398 P.3d at 679 (quoting
New Regency, 501 F.3d at 1110, and citing Lagstein v. Certain
Underwriters at Lloyd's, London, 607 F.3d 634, 646 (9th Cir.
2010)).
           Here, as noted above, the Circuit Court found, and
Respondents do not dispute, that "[the Arbitrator] did not
disclose to the parties that she had been appointed as arbitrator
in a matter involving O'Connor Playdon Attorneys Inouye and
Kopper (formerly of O'Connor Playdon) on November 6, 2013, eight
days before appointment in the underlying arbitration." Thus,
the recency of the Arbitrator's appointment in the other matter,
and its ongoing nature during the underlying arbitration here,
"weigh[ed] most heavily in favor of disclosure[.]" Narayan, 140
Hawai#i at 90, 398 P.3d at 679.

          4. Weighing All of the Relevant Factors

           We have observed that "[t]he judiciary should play a
minimal role in reviewing impartiality. However, the sine qua
non for minimal review must be the arbitrator's fidelity to the
disclosure obligation." Kay v. Kaiser Found. Health Plan, Inc.,
119 Hawai#i 219, 229, 194 P.3d 1181, 1191 (App. 2008).
           Here, as discussed above, the direct relationship
between the Arbitrator and Attorney Inouye, the type of activity
at issue – i.e., the Arbitrator's recent appointment in another
matter involving O'Connor Playdon Attorney Inouye – and the close
proximity in time between that activity and the underlying
arbitration proceeding here, all weighed in favor of disclosure.
Under these circumstances, we conclude that the Arbitrator's
failure to timely disclose to the parties that she recently had
been appointed as an arbitrator in another matter involving
O'Connor Playdon Attorney Inouye could reasonably have been
perceived as likely to affect the Arbitrator's impartiality in
the underlying arbitration. Accordingly, on this record, the

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Circuit Court did not clearly err in ruling that a reasonable
impression of partiality, and thus evident partiality, was
established on this basis. Relatedly, the Circuit Court did not
err in vacating the Arbitration Awards on this basis.5/

B. Waiver of Objections

          Respondents argue that even if AOAO's objections to the
Arbitrator were properly supported by law, the belated nature of
the objections constitutes a waiver.
          The supreme court has summarized the waiver principle
in the arbitration context as follows:

            HRS § 658A–12(d) provides "[i]f the arbitrator did not
            disclose a fact as required by subsection (a) or (b), upon
            timely objection by a party, the court under section
            658A–23(a)(2) may vacate an award." In addition, a party
            who has actual or constructive knowledge of a relationship
            of the arbitrator requiring disclosure but "fails to raise a
            claim of partiality . . . prior to or during the arbitration
            proceeding is deemed to have waived the right to challenge
            the decision based on 'evident partiality.'" Daiichi, 103
            Hawai#i at 345–46, 82 P.3d at 431–32 ("In the arbitration
            context, waiver has been defined as consisting of knowledge,
            actual or constructive, in the complaining party of the
            tainted relationship or interest of the arbitrator and the
            failure to act on that knowledge.") (internal quotation
            marks and citations omitted).

                   . . . "[T]he question [of] whether a valid waiver
            exists is generally a question of fact, [however] 'when the
            facts are undisputed it may become a question of law.'" 103
            Hawai#i at 346 n. 17, 82 P.3d at 432 n. 17 (quoting Hawaiian
            Homes Comm'n v. Bush, 43 Haw. 281, 286 (Terr. 1959)).

Nordic, 136 Hawai#i at 52, 358 P.3d at 24.
          Here, we initially note that AOAO first raised
objections to the Arbitrator while the underlying arbitration
proceeding was still pending, albeit after the Interim Award was
issued. Prior to issuance of the Final Award, AOAO sought
additional disclosures from the Arbitrator, and filed with DPR a
motion to disqualify the Arbitrator and a motion to correct or

      5/
            Given our conclusion, we do not address Respondents' argument that
the Circuit Court erred in ruling that the Arbitrator "violated the disclosure
requirements of HRS chapter 658A and DPR Rule 9 by failing to make reasonable
inquiries to all past, current, and anticipated future relationships with the
parties' attorneys or representatives. . . ." For the same reason, we do not
reach Respondents' argument that the Circuit Court erred in ruling that "the
cumulative effect" of undisclosed relationships between the Arbitrator and the
Respondents' attorneys and their respective firms demonstrated a reasonable
impression of partiality.

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otherwise modify the Interim Award. Both motions were denied.
AOAO filed with DPR a second motion to disqualify the Arbitrator,
which was also denied. AOAO then filed the October 31, 2014
motion to vacate the Interim Award in the Circuit Court, which
initiated the special proceeding underlying this appeal. When
the Final Award was issued, AOAO moved to vacate it as well. Cf.
Daiichi, 103 Hawai#i at 348, 82 P.3d at 434 (ruling that,
"inasmuch as Daiichi had actual knowledge of [the arbitrator's]
prior attorney-client relationship with [the adverse-party
trustees], Daiichi, by failing to raise an objection to [the
arbitrator's] appointment as an arbitrator prior to or during the
arbitration proceeding, waived its right to challenge the
propriety of the arbitration decision on grounds of 'evident
partiality'").
          Respondents contend, however, that AOAO took a "wait-
and-see" approach to challenging the arbitration decision.
Daiichi, 103 Hawai#i at 348, 82 P.3d at 434. Respondents argue
that the Arbitrator's initial disclosures, as well as a statement
made by CRX's counsel, Attorney Juliano, at the pre-arbitration
conference, were sufficient, and should have at least triggered a
duty of inquiry or investigation by AOAO into the Arbitrator's
disclosed relationships.
          Regarding the Arbitrator's initial disclosures, the
Circuit Court found that on November 18, 2013, the Arbitrator
stated, in relevant part:

          I know counsels Terry Revere, Cid Inouye and Jeff Juliano,
          and I have worked with other lawyers in their respective law
          firms, in my capacity as a former state court judge between
          1992-2003 or in my post-retirement years as an arbitrator or
          mediator with DPR[.]

Regarding Juliano's statement, the Circuit Court made the
following findings of fact:

                28. On May 1 , 2014, counsel for all the parties
          herein attended a pre-arbitration conference before Judge
          Amano at DPR's office.
                29. At said pre-arbitration conference, Attorney
          Juliano disclosed that Attorneys Inouye and Maxwell K.
          Kopper (previously an associate at O'Connor Playdon) were
          before Judge Amano the day before, April 30, 2014, arguing
          an unrelated motion for summary judgment.

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                30. In said unrelated matter, unbeknownst to [AOAO],
          Ms. Bryant had confirmed on November 6, 2013, that Judge
          Amano was selected as the arbitrator, eight days before
          Judge Amano was selected as arbitrator in this matter.

                31. There was no objection made at the May 1, 2014
          pre-arbitration conference with respect to Judge Amano
          serving as arbitrator in this matter.

          These unchallenged findings are binding on appeal. See
Rodrigues, 145 Hawai#i at 494, 454 P.3d at 435. AOAO argues,
however, that "an alleged oral anecdote by counsel is simply not
a disclosure by an arbitrator." AOAO also maintains:

          HRS § 658A-12 is very clear that disclosures are to be made
          by the arbitrator after making a reasonable inquiry, not the
          parties. Moreover, there is nothing in Judge Amano's
          November 2013 disclosure that would have prompted the AOAO
          to inquire as to 2 pending arbitrations that were not
          disclosed until after the Interim Award was issued[.]

          As to the Arbitrator's initial disclosures, we conclude
that her statement, "I know counsel[] . . . Inouye[,]" was
general, and did not provide AOAO with actual or constructive
notice that she recently had been appointed as an arbitrator in
another matter involving Attorney Inouye. The Arbitrator's
statement, "I have worked with other lawyers in their respective
law firms," was also general, and in context conveyed a completed
action or relationship. The statement did not provide actual or
constructive notice of the Arbitrator's current role as an
arbitrator in another matter involving Attorney Inouye. See
Burlington N.R. Co. v. TUCO Inc., 960 S.W.2d 629, 638 (Tex. 1997)
(vacating an arbitration award for evident partiality where a
neutral arbitrator initially disclosed past ties to one party's
law firm but failed to disclose a post-selection referral by that
party's appointed arbitrator for other arbitration work and
noting that "a person might reasonably differentiate between a
past relationship and one that arises shortly before or during
the arbitration proceedings.").
          Based on FOFs 29 and 30, we further conclude that
Attorney Juliano's May 1, 2014 statement at the pre-arbitration
conference did not provide AOAO with actual or constructive
knowledge of the Arbitrator's November 6, 2013 appointment in
another arbitration matter involving Attorney Inouye. FOF 29

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cites Paragraph 5 of Attorney Juliano's October 7, 2014
declaration, in which he described his May 1, 2014 statement as
follows:

            At this final Pre-Arbitration Conference, I specifically
            brought up with Judge Amano in front of all counsel the fact
            that my partner, Mr. Inouye, and associate, Mr. Kopper, were
            before her the day prior on April 30, 2014 arguing their MSJ
            in the other unrelated arbitration. In particular, I
            inquired as to whether Mr. Kopper argued the motion. 6/

(Footnote added.) Thus, Attorney Juliano's oral statement was
not directed to AOAO's counsel and did not disclose the recent
appointment of the Arbitrator in the other, unspecified matter
involving Attorney Inouye. Morever, on this record, the oral
statement was insufficient to provide AOAO with constructive
knowledge of the recent appointment. Cf. Daiichi, 103 Hawai#i at
348, 82 P.3d at 434 (concluding that Daiichi had constructive
knowledge of a letter written by the arbitrator which was
contained in Daiichi's own files). We note, for example, there
was no finding by the Circuit Court that AOAO's counsel actually
heard Attorney Juliano's oral statement in the context (see supra
note 6) in which it was made.7/ In this regard, we also note that
Respondents could have requested an evidentiary hearing regarding

      6/
            During the December 16, 2015 hearing before the Circuit Court,
Attorney Juliano further explained:

            It's a statement that I made . . . that at a pre-arb
            conference, we discussed the one case with Cid Inouye and
            Max [K]opper in my office, because Max has a very deep
            voice, and we were discussing with Judge Amano in the
            presence of Terry [Revere] and another counsel, Max's deep
            voice, and how he'll probably make a good litigator. That
            raised the fact that that case was there.
      7/
            During the December 16, 2015 hearing before the Circuit Court,
AOAO's counsel, Attorney Revere, stated:
            Mr. Juliano asserted, . . . I made some reference in, I
            believe it was a phone call precall hearing that should have
            indicated to Revere that Judge Amano, we were using her in
            other matters.
                  Again, I won't say that's not true. It could have
            happened before I got in the room. It could have happened
            some other time, but I'm telling you, I never heard that,
            and so they're using that as, well, they knew. That's
            another fact that's in dispute, because we didn't know. We
            had no idea until after the arbitration, when the law firm
            started making disclosures, and then eventually Judge Amano
            made disclosures.

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AOAO's claim of evident partiality, as well as Respondents'
waiver assertion. The Circuit Court made clear, however, that
"all counsel agreed that no evidentiary hearing would be
necessary to dispose of the consolidated motions[.]" On this
record, we conclude that the Circuit Court did not clearly err in
ruling that AOAO did not waive its right to challenge the
Arbitrator on the ground of evident partiality, based on the
Arbitrator's November 6, 2013 appointment in the other matter
involving Attorney Inouye.

                         IV. Conclusion

          For the reasons discussed above, we affirm the Amended
Findings of Fact, Conclusions of Law and Order, entered on
April 3, 2017, in the Circuit Court of the First Circuit, on the
ground specified in this Opinion.

                                    /s/ Clyde J. Wadsworth
                                    Presiding Judge
On the briefs:
                                   /s/ Karen T. Nakasone
Randall K. Schmitt and             Associate Judge
Jordan K. Inafuku
(McCorriston Miller Mukai
MacKinnon LLP)
for Respondent-Appellant/Cross-Appellee
Knox Hoversland Architects, Ltd.

Jeffre W. Juliano,
Kelvin H. Kaneshiro, and
Lahela H.F. Hite
(O'Connor Playdon Guben &
Inouye LLP)
for Respondent-Appellant/Cross-Appellant
ConstRX, Ltd.

Terrance M. Revere and
Malia R. Nickison-Beazley
(Revere & Associates, LLLC)
for Claimant-Appellee/Cross-Appellee
Association of Apartment Owners
of the Palm Villas at Mauna Lani,
by and through its Board of
Directors

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                DISSENTING OPINION BY MCCULLEN, J.

           I respectfully dissent.   Notwithstanding an

arbitrator's duty to disclose, Hawaii Revised Statutes (HRS)

§ 658A-12 (2016) requires that an objection be timely.     Here, the

Association of Apartment Owners of the Palm Villas at Mauna Lani

Resort's (AOAO) objection was not.

                      I. RELEVANT BACKGROUND

A.   November 18, 2013 - Arbitrator Disclosure

           On November 18, 2013, Arbitrator Judge Riki May Amano
(Ret.) (Arbitrator) disclosed a relationship with attorneys

Terrance M. Revere, Cid H. Inouye, and Jeffre W. Juliano, as well

as attorneys in their firms.   She explained to the parties that

she knew these attorneys and other attorneys in their firms in

her capacity as a former judge and as an arbitrator and mediator

with the Dispute Prevention & Resolution, Inc. (DPR).     Arbitrator

also disclosed that she did not know Malia Nickison-Beazley, who

was Attorney Revere's co-counsel representing AOAO.
B.   May 1, 2014 - Attorney Juliano's Statement

           About five months later, on May 1, 2014, at the pre-

arbitration conference attended by counsel for all parties,

Attorney Juliano stated that Attorney Inouye appeared before

Arbitrator in an unrelated arbitration the day prior.     In that

unrelated matter, Arbitrator was selected by DPR via strike-off

method on November 6, 2013, eight days before she was selected as

arbitrator in this case.   This was previously unknown to Attorney

Revere.   No further inquiry, comment, or objection was made

following Attorney Juliano's statement as to Arbitrator's

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continued service.    The arbitration proceeding soon followed,

commencing on May 5, 2014 and concluding on May 12, 2014.
C.   September 16, 2014 - Interim Arbitration Award

          About ten months after Arbitrator's disclosure that she

knew Attorney Inouye and about four months after Attorney

Juliano's statement that Attorney Inouye appeared before

Arbitrator in an unrelated matter, Arbitrator issued the Interim

Arbitration Award (Interim Award) against AOAO and in favor of

ConstRX, Ltd. (CRX) for $205,539.49 (the unpaid balance owed by

AOAO) and $431,462.47 (retainage) on September 16, 2014.           CRX's

remaining affirmative claims against AOAO were denied.           The

Interim Award resolved all claims as to all parties except for

attorneys' fees and costs, and the parties were asked to submit

briefs addressing attorneys' fees and costs for the forthcoming

Final Arbitration Award (Final Award).

D.   September 23, 2014 - AOAO's Request

          Seven days after the Interim Award, Attorney Revere

requested additional disclosures regarding Arbitrator and the

attorneys in this matter, as well as the attorneys in their

firms, going back seven years as follows:
          [A]ny and all matters in which [the Arbitrator] served as
          mediator, arbitrator, or in any other capacity for any
          matters involving any of the parties or law firms retained
          in this matter in the last seven years, including dates when
          the retentions began and when they terminated. We also ask
          that if there are any other personal or professional
          relationships involving any of the parties or lawyers in the
          law firms (not limited to just counsel that appeared in this
          matter) that they be disclosed.

The parties responded.
E.   AOAO's Motions To Disqualify

          Based on the responses to AOAO's request, AOAO filed a

Motion to Disqualify the Arbitrator with DPR.         DPR denied the

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motion because
          there [was] no rule or statute authorizing DPR to disqualify
          an arbitrator after an award has been issued based on a
          party's post award investigation of the Arbitrator's prior
          disclosures[,] which were not objected to and because there
          exists no stipulation or agreement of the parties vesting
          DPR with such authority.

          In response to Arbitrator's supplemental disclosure

following AOAO's request, AOAO moved a second time to disqualify

Arbitrator, which DPR dismissed.        DPR determined that, "[w]hile

the [second] Motion to Disqualify comes on the heels of the

Arbitrator's Supplemental Disclosure of October 21, it remains

grounded and predicated on [AOAO's] reaction to the Arbitrator's

Interim Award[,] [] its post award investigation of the

Arbitrator's prior disclosures[,] and the conviction that said

disclosures were inadequate."
F.   Circuit Court Proceedings

          After the Final Award affirming the Interim Award and

awarding CRX and Knox Hoversland Architects, Ltd. (KHA)

attorneys' fees and costs was issued, CRX moved to confirm the

Final Award in the Circuit Court of the First Circuit (Circuit

Court), and KHA joined.     AOAO moved to vacate the Final Award.

          During arguments before the Circuit Court regarding

whether an evidentiary hearing was necessary, Attorney Revere

claimed he did not hear Attorney Juliano's statement at the pre-

arbitration conference, "I won't say that's not true. It could

have happened before I got in the room.        It could have happened

some other time, but I'm telling you, I never heard that[.]"

          At a status conference, "all counsel agreed that no

evidentiary hearing would be necessary to dispose of the

consolidated motions[.]"     The parties submitted seventy-five

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joint exhibits to the Circuit Court.         Among these exhibits was a

declaration by Attorney Juliano, in which he described his May 1,

2014 statement at the pre-arbitration conference:
          I specifically brought up with Judge Amano in front of
          counsel the fact that my partner, Mr. Inouye, and associate,
          Mr. Kopper, were before her the day prior on April 30, 2014
          arguing their MSJ in the other unrelated arbitration
          proceeding. In particular, I inquired as to whether
          Mr. Kopper argued the motion.

          Parties made their final arguments; the Circuit Court

granted AOAO's motions to vacate, and denied CRX and KHA's motion

to confirm.     The Circuit Court made the following pertinent

findings regarding Arbitrator's disclosure and Attorney Juliano's

statement prior to the arbitration proceeding:
                17.   On November 18, 2013, Judge Amano, through Kelly
          Bryant, Case Manager at DPR, provided the following
          disclosure by email addressed to Attorneys Revere and
          Juliano:
                  I know counsels Terry Revere, Cid Inouye and
                  Jeff Juliano, and I have worked with other
                  lawyers in their respective law firms, in my
                  capacity as a former state court judge between
                  1992-2003 or in my post-retirement years as an
                  arbitrator or mediator with DPR; I do not know
                  Malia Nickison-Beazley.
                  I have no other professional, social or personal
                  interactions with anyone involved in this case.

                  There are no relationships or interests, past or
                  present[,] that would affect my neutrality as an
                  arbitrator in this case.
          Joint Exh. 2.

                  18.   In the same email, Ms. Bryant advised that:

                  The Judge has made a diligent effort to disclose
                  all relevant matters. If any party has
                  additional information that should be disclosed
                  but has not been, or you have any comments or
                  objections, please submit them in writing to DPR
                  by November 21, 2013. (Emphasis in original.)

          Id.
                19.   Ms. Bryant copied Attorney Inouye (O'Connor
          Playdon), Alison Shigekuni, Esq. (O'Connor Playdon), Mea
          Mitchell, Esq. (Revere & Associates), and Attorney
          Nickison-Beazley (Revere & Associates) on the November 18,
          2013 email containing Judge Amano's initial disclosure. Id.

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                 20.   No party submitted comment or objection to
           Judge Amano serving as arbitrator in response to her
           November 18, 2013 initial disclosure.
           . . . .

                 28.   On May 1, 2014, counsel for all the parties
           herein attended a pre-arbitration conference before Judge
           Amano at DPR's office. Joint Exh. 1, Juliano Decl.
           [paragraph] 5.
                 29.   At said pre-arbitration conference, Attorney
           Juliano disclosed that Attorneys Inouye and Maxwell K.
           Kopper (previously an associate at O'Connor Playdon) were
           before Judge Amano the day before, April 30, 2014, arguing
           an unrelated motion for summary judgment. Id.
                 30.   In said unrelated matter, unbeknownst to
           Claimant, Ms. Bryant had confirmed on November 6, 2013, that
           Judge Amano was selected as the arbitrator, eight days
           before Judge Amano was selected as arbitrator in this
           matter.

                 31.   There was no objection made at the May 1, 2014
           pre-arbitration conference with respect to Judge Amano
           serving as arbitrator in this matter.

No party challenged these findings pursuant to Hawai#i Rules of

Appellate Procedure Rule 28(b)(4)(C).        These findings are thus

binding on this Court.     State v. Torres, 125 Hawai#i 382, 388,

262 P.3d 1006, 1012 (2011).      CRX and KHA appealed to this Court.

                             II. DISCUSSION

           HRS § 658A-12 provides, in relevant part, as follows:
           (c)   If an arbitrator discloses a fact required by
           subsection (a) or (b) to be disclosed and a party timely
           objects to the appointment or continued service of the
           arbitrator based upon the fact disclosed, the objection may
           be a ground under section 658A-23(a)(2) for vacating an
           award made by the arbitrator.

           (d)   If the arbitrator did not disclose a fact as required by
           subsection (a) or (b), upon timely objection by a party, the court
           under section 658A-23(a)(2) may vacate an award.

HRS § 658A-12(c) and (d) (2016) (formatting altered and emphases

added).   The well accepted rule in arbitration cases is that a

party who "fails to raise a claim of partiality [against an

arbitrator] prior to or during the arbitration proceeding is

deemed to have waived the right to challenge the decision based

on evident partiality."      Nordic PCL Constr., Inc. v. LPIHGC, LLC,

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136 Hawai#i 29, 52, 358 P.3d 1, 24 (2015) (citation and internal

quotation marks omitted, emphasis added).

           Further, "[i]t is well settled that the legislature

overwhelmingly favors arbitration as a means of dispute

resolution."   Tatibouet v. Ellsworth, 99 Hawai#i 226, 234, 54

P.3d 397, 405 (2002).   Given this policy favoring the finality of

arbitration awards, Hawai#i courts embrace the principle of

waiver in order to discourage parties from adopting the "wait and

see" approach to challenging the arbitration decision based on

information they had or could have ascertained by more thorough

inquiry.   See Nordic, 136 Hawai#i at 53, 358 P.3d at 25.

           Here, in addition to having actual knowledge of

Arbitrator's professional relationship with Attorney Inouye in

her capacity as an arbitrator and mediator with DPR, a reasonable

inference from the Circuit Court's unchallenged findings is that

AOAO had knowledge of Attorney Inouye appearing before Arbitrator

in an unrelated matter.   The Circuit Court found that all parties

attended the pre-arbitration conference, and there, Attorney

Juliano disclosed that Attorney Inouye appeared before Arbitrator

in an unrelated matter the day prior.   See Daiichi Hawai#i Real

Estate Corp. v. Lichter, 103 Hawai#i 325, 346-48, 82 P.3d 411,

432-34 (2003).   See also Black's Law Dictionary 1043 (11th ed.

2019) (defining constructive knowledge as "[k]nowledge that one

using reasonable care or diligence should have").

           Although Attorney Revere, during a hearing on the

necessity of an evidentiary hearing, asserted to the Circuit

Court that he did not hear Attorney Juliano's disclosure, that

assertion was argument, not evidence.   State v. Quitog, 85

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Hawai#i 128, 144, 938 P.2d 559, 575 (1997) ("[I]t is axiomatic

that the arguments of counsel are not evidence.") (citation and

internal quotation marks omitted).     Notably, Attorney Revere did

not provide a declaration to that effect in the joint exhibits

comprising the stipulated record, did not make similar assertions

regarding his co-counsel who appears to have participated

significantly in this case, and stipulated that an evidentiary

hearing was unnecessary.

          In sum, the Interim Award was issued ten months after

Arbitrator disclosed knowing Attorney Inouye in her capacity as

an arbitrator with DPR, and four months after Attorney Juliano

stated at the pre-arbitration conference that Attorney Inouye

appeared before Arbitrator in an unrelated matter.    During that

time, AOAO did not comment on, or object to, Arbitrator's ability

to be a neutral arbitrator.    See Nordic, 136 Hawai#i at 52, 358

P.3d at 24 (explaining that "a party who has actual or

constructive knowledge of a relationship of the arbitrator

requiring disclosure but fails to raise a claim of partiality

prior to or during the arbitration proceeding is deemed to have

waived the right to challenge the decision based on evident

partiality.") (cleaned up and emphasis added).    Instead, AOAO

employed a "wait and see" strategy, requesting more information

and challenging Arbitrator's neutrality only after the Interim

Award did not go its way.
                            III. CONCLUSION

          Therefore, I would hold that AOAO waived its right to

challenge the Arbitrator on the ground of evident partiality

because its objection was untimely, and that the Circuit Court

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abused its discretion in vacating the Final Award.    See id., 136

Hawai#i at 53, 358 P.3d at 25 (explaining that "[a]ny such ruling

of the circuit court under HRS [§]658A-12(d) will be reviewed

under an abuse of discretion standard").

                                    /s/ Sonja M.P. McCullen
                                    Associate Judge

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