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Florida Fourth DCA affirms trial court's denial of motion to vacate arbitration award; no actual arbitrator bias shown where arbitrator had no knowledge of conflict of interest

On October 4, 2017, in Managed Care Insurance Consultants v. United Healthcare Insurance Company, No. 4D16-2767, the Florida Fourth DCA issued a substituted and clarified opinion affirming a trial court’s order denying the appellant’s motion to vacate an arbitration award. The appellant had maintained that the arbitration award should be vacated because it had been determined after the entry of the award that one of the arbitrators was married to a physician whose practice had a business connection with the appellee. The trial court had allowed limited discovery on the motion, and the arbitrator testified that she had been told by her husband that he had no relationship with the appellee. As to the issue of conflict on the part of the arbitrator, the trial court cited Gianelli Money Purchase Plan & Trust v. ADM Investor Services, Inc., 146 F.3d 1309, 1312 (11th Cir. 1998), in which the Eleventh Circuit Court of Appeals followed its prior precedent and held that “an arbitration award may be vacated due to the ‘evident partiality’ of an arbitrator only when either (1) an actual conflict exists, or (2) the arbitrator knows of, but fails to disclose, information which would lead a reasonable person to believe that a potential conflict exists.”

On appeal, the Fourth DCA observed that to vacate an arbitration award, one of the statutory grounds listed in section 682.13(1), Florida Statutes, must be present. One of the statutory grounds warranting vacatur is that there was “[e]vident partiality by an arbitrator appointed as a neutral arbitrator[.]” § 682.13(1)(b)1., Fla. Stat. An arbitrator has an affirmative duty to disclose to the parties any business relationships that the arbitrator might have which might create the impression of possible bias. See Weinger v. State Farm Fire & Cas. Co., 620 So. 2d 1298, 1299 (Fla. 4th DCA 1993). In addition, an arbitrator must disclose any “known facts that a reasonable person would consider likely to affect the person’s impartiality as an arbitrator in the arbitration proceeding[.]” § 682.041(1), Fla. Stat. (emphasis added). While Gianelli has been criticized in several federal courts in other jurisdictions for requiring actual knowledge of a conflict without requiring that the arbitrator conduct an investigation to ascertain whether a conflict exists, the Fourth DCA concluded that Florida Arbitration Code’s provisions, as set forth above, adhere closely to the findings in Gianelli.

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