Court Opinion

ID: 9850292
Source: CourtListenerOpinion
Date Created: 2023-09-24 04:54:41.473379+00
Date Added: 2024-06-11T09:20:34.630861
License: Public Domain

M. B. Breighner, J.
(dissenting). I respectfully dissent.
Application Was Timely Filed
I agree that plaintiff’s application was timely filed because the alleged arbitrator misconduct did not occur on the face of the award nor overtly in the proceedings. 5 Honigman & Hawkins, Michigan Court Rules Annotated (2d ed), p 449.
Application States Adequate Grounds To Vacate
In addition to filing a timely application, a party seeking to vacate an arbitration award must state grounds under GCR 1963, 769.9(1). That subsection states the sole grounds for vacating an arbitration *116award. Detroit Automobile Inter-Insurance Exchange v Ayvazian, 62 Mich App 94, 98; 233 NW2d 200 (1975).
Plaintiffs allegation of arbitrator misconduct does not state grounds to vacate under subsection 769.9(1)(a). That subsection was intended to apply only to the conduct of the opposing parties or third parties, other than the arbitrators themselves. Cf., Persig, Some Comments on Arbitration Legislation and the Uniform Act, 10 Vand L Rev, 685, 704 (1957) (drafter’s interpretation of identical language in the Uniform Arbitration Act). Plaintiffs application does raise a substantial issue of "misconduct prejudicing the rights of any party”, which is a ground for vacating an arbitration award under subsection 769.9(1)(b). The phrase "undue means” as used in subsection 769.9(2) is broad enough to cover misconduct by an arbitrator that prejudices the rights of any party.
Decision To Vacate Not Supported By The Record
There exists strong public policy favoring finality of arbitration awards. The party seeking to vacate such an award bears a heavy burden of proof by clear and convincing evidence. Brush v Fisher, 70 Mich 469; 38 NW 446 (1888).
To support a finding of prejudicial arbitrator misconduct, there must be positive evidence of both misconduct and prejudice. Misconduct by a juror may be sufficient to set aside a jury verdict without showing such misconduct influenced the verdict. By contrast, a showing of arbitrator misconduct, other than corruption or fraud, must be coupled by positive proof of prejudice before an arbitrator’s award will be set aside. The court rules so require. Also, arbitration proceedings are *117not governed by the same standards as judicial proceedings. Port Huron & N R Co v Callanan, 61 Mich 22; 34 NW 678 (1887).
On appeal from a judgment confirming or vacating an arbitration award this Court exercises a limited scope of review. Werner v The Travelers Indemnity Co, 55 Mich App 390, 394; 222 NW2d 254 (1974).
Although there is evidence on the record of this case to support findings of arbitrator misconduct and prejudice, the record does not establish that the trial court found prejudice, or, if it did find prejudice, that it applied the appropriate standard of proof.
Testimony of Ministrelli’s employee was sufficient to establish the fact and the nature of the ex parte communication. It is generally agreed that outside consultation regarding the subject matter of an arbitration award is misconduct, warranting the setting aside of the award, where such misconduct had an influence on the decision reached. Anno: Arbitrator's consultation with outsider or outsiders as misconduct justifying vacation of award, 47 ALR2d 1362.
It is possible to infer prejudice from other facts in this case. Information revealed by Ministrelli’s employee during the ex parte communication was actively solicited by one of the arbitrators. This communication was at the behest of all of the arbitrators. This evidences that all thought it was important to their decision. Information gathered went to the heart of the damage issue.
However, the trial court did not deal directly with the issue of prejudice. At the original hearing on plaintiff’s motion to vacate, the trial court indicated it did not specifically find prejudice. On the other hand, at the rehearing, the trial court *118found "It was * * * highly probable that the information gathered influenced the ultimate decision”. That finding was based on "the fact that the calls were made” and the fact that the information gathered went to "the heart of the issue” of damages. Further on, the court again suggested that positive proof of prejudice was not essential or that such proof need not be clear and convincing. It analogized the situation with a judicial proceeding and concluded that the arbitrators’ misconduct, "under these very touchy situations, could result in at least the appearance of impropriety, the possibility of prejudice, and * * * that is highly likely under these circumstances”.
I would remand for a hearing in which the issue of prejudice should be determined under the appropriate standard of proof.