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ARBITRATION - J. DON GORDON CONSTRUCTION CO., INC. V. BROWN

J. Don Gordon Construction Co., Inc. v. Brown, [Ms. 1131129, June 5, 2015] __ So. 3d __ (Ala. 2015). The Court affirms a summary judgment declining to set aside an arbitration award. The dispute arose from construction of a building to be used by the plaintiff in her veterinary practice. The arbitrator awarded damages both to the plaintiff and to the defendants on the counterclaim, for a net award of just over $66,000 to the plaintiff. The arbitrator also awarded $362,287 in legal fees to the plaintiff. Defendants argued that the award should be set aside for several reasons. First, defendants argued that the award was to two entities other than the individual who signed the contract. Defendants did not make this argument to the arbitrator and, moreover, it is unpersuasive because the arbitrator had the authority to determine whether the two entities it substituted as plaintiffs were the real parties in interest. “Underlying legal error is not a ground for vacating an award,” so whether the arbitrator correctly made that decision is not a ground for setting aside the award. The defendants also made three arguments alleging “evident partiality” by the arbitrator. The first had to do with alleged connections between the arbitrator and the attorney representing the plaintiffs. The correct standard for evident partiality is whether there is a “reasonable impression of partiality,” and the defendants did not meet that standard. The relationship here is no closer than one found to be insignificant in a case the Supreme Court cites from the Sixth Circuit. “An arbitrator’s failure to disclose must involve a significant compromising connection to the parties.” Defendants also argue that the arbitrator by providing an affidavit at the request of the plaintiffs was showing the evident partiality, but the Court holds that he was “simply defending himself against the defendants’ allegations of bias.” Finally, the Court rejects the argument that the arbitrator showed evident partiality by refusing to recuse himself and then levying the legal fees.

Related Documents: Don Gordon 6-5-15

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