Court Opinion

ID: 9535639
Source: CourtListenerOpinion
Date Created: 2023-08-07 04:51:31.2098+00
Date Added: 2024-06-11T13:33:17.575259
License: Public Domain

Pashman, J.,
dissenting. The majority today rules that a court may substitute its conclusion for that of an arbitrator simply because it disagrees with his decision. In so holding, it not only departs radically from existing caselaw dealing with the nature of judicial review of arbitrators’ awards but, more importantly, strips commercial arbitration of its basic value. In addition, the majority’s interpretation of the “competent corroborative evidence” clause of the insurance policy is so restrictive as to render the non-contact hit-and-run coverage mandated by our Legislature wholly illusory. I am therefore compelled to register my dissent.
I
The concept of commercial arbitration is not of recent vintage. Rather, it comes to us from ancient roots. See generally Sayre, “Development of Commercial Arbitration Law,” 37 Tale L. J. 595 (1928); Murray, “Arbitration in the Anglo-Saxon and Early Norman Periods,” 16 Arb. J. 193 (1961). In the middle ages binding arbitration tribunals were located in each of the major markets. Their purpose was to provide for the expeditious resolution of mercantile disputes. See J. Cohen, Commercial Arbitration and the Law, 71-83 (1918).
*234Commercial arbitration, today serves much the same purpose as it did in the middle ages. As our courts have noted, arbitration
* * * is a substitution, by consent of the parties, of another tribunal for the tribunal provided by the ordinary processes of law. The object of arbitration is the final disposition, in a speedy, inexpensive, expeditious, and perhaps less formal manner, of the controversial differences between the parties.
[Carpenter v. Bloomer, 54 N. J. Super. 157, 162 (App. Div. 1959) (quoting Eastern Engineering Co. v. Ocean City, 11 N. J. Misc. 508, 510-511 (Sup. Ct. 1933)]
See, e. g., N. J. Manu. Ins. Co. v. Haran, 128 N. J. Super. 265, 269 (App. Div 1974); Utah Const. Co. v. Western Pac. Ry. Co., 174 Cal. 156, 162 P. 631, 632-633 (Sup. Ct. 1917); McRae v. Superior Ct., 221 Cal. App. 2d 166, 34 Cal. Rptr. 346, 349 (Dist. Ct. 1963); Gaer Bros., Ins. v. Mott, 144 Conn. 303, 130 A. 2d 804 (Sup. Ct. E. 1957); First Nat. Bank v. Clay, 231 Iowa 703, 2 N. W. 2d 85 (Sup. Ct. 1942); Wilson v. Gregg, 208 Okl. 291, 255 P. 2d 517 (Sup. Ct. 1953); In re Smith, 381 Pa. 223, 112 A. 2d 625 (Pa. Sup. Ct. 1955), app. dism., 350 U. S. 858, 76 S. Ct. 105, 100 L. Ed. 762; 5 Am. Jur. 2d, “Arbitration” § 1 at 518-519.
We have recognized that in order to effectuate the goal of providing an alternate forum for the speedy resolution of disputes, the arbitrator’s powers must be broad and judicial interference with his role strictly limited. Thus, the arbitrator decides both the facts and the law, Daly v. Komline-Sanderson Eng. Corp., 40 N. J. 175, 178 (1963) — by force of the agreement of the parties “he becomes a judge, with absolute power over the things submitted to his judgment,” Leslie v. Leslie, 50 N. J. Eq. 103, 107 (Ch. 1892), aff’d 52 N. J. Eq. 332 (E. & A. 1894). Moreover, an arbitrator “may do what no other judge has a right to do; he may intentionally decide contrary to law and still have his judgment stand.” Id. 50 N. J. Eq. at 107. See Collingswood Hosiery Mills v. American Fed. of Hosiery Wkrs., 31 N. J. Super. 466, 471 *235(App. Div. 1954) (court will not interfere when arbitrator decides "according to his own concept as to what is just and right * * *”) 1
Not only is the arbitrator’s power broad but, more importantly, judicial review of his decision is confined to narrow channels so that arbitration will be an end to litigation rather than the beginning of. it. Collingswood Hosiery Mills v. American Fed. of Hosiery Wkrs., supra, 31 N. J. Super. at 473. See, e. g., Igoe Bros., Inc. v. Nat'l Ben Franklin Fire Ins. Co., 110 N. J. Eq. 373, 377 (E. & A. 1932); Ukranian Nat'l Urb. Ren. Corp. v. Joseph L. Muscarelle, Inc., 151 N. J. Super. 386, 401 (App. Div.), certif. den., 75 N. J. 529 (1977). In line with this policy, "every intendment is indulged in favor of the award and it is subject to impeachment only in a clear case. It will not be set aside merely because the- court would have decided the facts or construed the law differently.” Carpenter v. Bloomer, supra, 54 N. J. Super. at 168; see Harsen v. Bd. of Ed. of West Milford Tp., 132 N. J. Super. 365, 373 (Law Div. 1975).2
The majority today ignores these principles of law and, instead, impermissibly substitutes its judgment for that of the arbitrator. Although properly finding that the arbi*236trator had jurisdiction to assess whether “competent corroborative evidence” existed within the meaning of the parties’ contract, it nevertheless disagrees with his factual determination and hence vacates the award. This it clearly may not do. Daly v. Komline-Sanderson Eng. Corp., supra, 40 N. J. at 178-179; Bell v. Price, 22 N. J. L. 578, 589-590 (E. & A. 1849); Ukranian Nat’l Urb. Ren. Corp. v. Joseph L. Muscarelle, Inc., supra, 151 N. J. Super. at 396; Carpenter v. Bloomer, supra, 54 N. J. Super. at 168; Harsen v. Bd. of Ed. of West Milford Tp., 132 N. J. Super. 365, 371 (Law Div. 1975).
In an attempt to avoid application of these well-settled principles of law, the majority asserts that the arbitrator failed to take into consideration the contractual requirement of corroboration. See ante at 230-231. However, proof to the contrary can be found within the majority’s own opinion! As the majority notes, no transcript was made of the first arbitral hearing. Moreover, no statement of reasons was given for the award. This lack of reasons, however, is not cause for vacating an award and, in fact, is entirely permissible. See, e. g., Korshalla v. Liberty Mut. Ins. Co., 154 N. J. Super. 235, 238 (Law Div. 1977); Harsen v. Bd. of Ed. of West Milford Tp., supra, 132 N. J. Super. at 374; Tave Construction Co., Inc. v. Wiesenfeld, 82 N. J. Super. 562 (Ch. Div. 1964), aff’d o. b., 90 N. J. Super. 244 (App. Div. 1966). In such a case a court must assume, absent clear extrinsic evidence to the contrary, that the arbitrator has considered all legally relevant criteria. Daly v. Komline-Sanderson Eng. Corp., supra; Bell v. Price, supra; Carpenter v. Bloomer, supra.
Furthermore, the transcript of the second arbitration hearing clearly reveals that the arbitrator did consider whether Grover’s testimony was corroborated by competent evidence. The majority specifically notes that the arbitrator found — correctly — that he was not hound by the formal rules of evidence and that he concluded that the report did constitute competent corroboration. Thus, the majority *237cannot seriously urge that the issue of corroboration was not considered by the arbitrator. Rather, it vacates the award merely because it concludes that his determination was incorrect, thereby violating a principal tenet regarding judicial review of arbitral determinations — that a court “will not inquire whether the arbitrators have judged right or wrong upon the facts * * Bell v. Price, supra, 22 N. J. L. at 589.
The tragedy of the majority’s opinion lies not in the fact that Wilmer Grover will be denied an arbitral award of which he is deserving. That is merely unfortunate. What is truly tragic is the precedent which is created for unbounded judicial review of arbitration proceedings. No longer will judicial review be “confined to matters of corruption or errors appearing on the face of the award.” Daly v. Komline-Sanderson Eng. Corp., supra, 40 N. J. at 178. Instead, the parties will be in effect accorded a heretofore condemned hearing de novo. See, e. g., Bell v. Price, supra, 22 N. J. L. at 589. Appellate courts are hereby given a license to substitute their conclusions for those of the arbitrator on a mere determination that he was incorrect. Thus, arbitration will no longer be the speedy, inexpensive, and informal alternative to litigation which its proponents envisioned. Rather, it will merely constitute the springboard to litigation which we have formerly eschewed. See, e. g., Igoe Bros., Inc. v. Nat’l Ben Franklin Fire Ins. Co., 110 N. J. Eq. 373, 377 (E. & A. 1932); Ukranian Nat’l Urb. Ren. Corp. v. Joseph L. Muscarelle, Inc., supra, 151 N. J. Super. at 401; Collingswood Hosiery Mills v. American Fed. of Hosiery Wkrs., 31 N. J. Super. at 473; Korshalla v. Liberty Mut. Ins. Co., supra, 154 N. J. Super, at 240. One can only hope that the majority has acted aberrationally and that it will correct its error in future cases.
II
Although the majority does not discuss in any depth the proper interpretation of the competent corroborating evi-*238deuce requirement, its conclusion that corroboration was lacking in this ease impels me to add several thoughts oh the subject. ' .
’ The' 'majority rules that it' is' the existence of another vehicle which must be corroborated rather than merely the occurrence of' an accident. To this extent I concur. However, it also appears to hold that the circumstances of the accident and the existence of a police report do not create a sufficient inference that a “phantom” vehicle precipitated the incident. I must disagree with any such implication. It is enough that the evidence raise a credible belief that the accident occurred in the manner alleged by the claimant.
Two justifications underlie this broad interpretation. Eirst, our policy of' affording maximum coverage to insured members of the public dictates that language contained in an insurance policy be interpreted so as to protect the reasonable expectations of the average insured. See, e.g., Bryan Const. Co., Inc. v. Employers’ Surplus Lines Ins. Co., 60 N. J. 375 (1972); Mazzilli v. Accident & Cas. Ins. Co., 35 N. J. 1, 7-8 (1961). It is obvious that the average insured would not expect coverage to depend upon technical application of strict rules of evidence.
Eurthermore, an expansive reading of the corroboration requirement is necessary if the .promise of non-contact coverage is to have any real meaning.3 In most cases there will be ho available eyewitnesses not involved in the accident. Scientific proof of the existence of another vehicle will likewise be difficult to come by. Thus, unless an inference may be raised *239by the conduct of the parties and a police investigation which corroborates portions of the claimant’s story, coverage under the policy will, in contravention of our general policy, be severely curtailed.4
For the foregoing reasons I would affirm the judgment of the Appellate Division.
For reversal — Chief Justice Hughes and Justices Mountain, Clieeokd, Schbeibek and Handles — 5.
For affirmance — Justice Pashman — 1.

Tliis deference to the equitable power of an arbitrator was recognized as far back as Aristotle, who stated that:
The arbitrator looks to what is equitable, the judge to what is law, and it was for this purpose that arbitration was introduced, namely, that equity might prevail.
[Aristotle, “Rhetoric,” Book 1, Chapter 13]

This judicial partiality in favor of arbitration was, contrary to the experience in many states, evidenced in our courts at an early age. Thus, in 1792, Chief Justice Kinsey stated:
I own that I am a great friend to arbitrations; I believe them to be frequently productive of real advantage, and they are not to be hastily or inconsiderately set aside.

[Moore v. Ewing & Bowen,

1 N. J. L. 167, 169 (Sup. Ct. 1792)]
See generally, Boskey, “A History of Commercial Arbitration iii New Jersey,” 8 Rutgers-0amden L. J. 1 (1976).

 I agree with the majority, however, that we should not presently decide whether the corroboration requirement violates the legislative mandate of coverage. Although this might appear anomalous in light of the fact that a finding of invalidity would change the outcome of this case, nevertheless the issue was neither briefed nor argued and, furthermore, requires the participation of the Commissioner . of ■ Insurance to fully resolve .its complexities. .Thus, I. am satisfied that the question should be deferred until a more appropriate case arises.

One might also question the efficacy, from the standpoint of preventing fraud, of the corroboration requirement. Had Grover alleged that the other vehicle had grazed part of his body or vehicle, no corroboration would be required. Acceptance of his credibility by the arbitrator would have sufficed. Inasmuch as damage to the vehicle is likely to occur in most such cases — here, for example, the vehicle hit a fence • — - it is difficult to see how lack of contact can be shown by the insurer. Thus,. a restrictive interpretation of the corroboration requirement is likely to spawn fraud and prevarication rather than reduce it. . ’ ■