On appeal from an order confirming an arbitrator’s award of $22 million, including $6 million in attorney’s fees and in favor of the appellee, the Justices reversed the trial court’s order confirming arbitration award and judgment, vacating the arbitration award, and remanding the case for further proceeding.
See entire opinion here (click here to view opinion)
Blake Beckham and The Beckham Group were the appellants in the trial court, shortly after suffering a crushing $22 million award from the Arbitrator. Beckham had discovered that a relationship existed between the arbitrator and counsel for appellee that was not disclosed. The Beckham Group conducted an in depth investigation and found that not only did the arbitrator not disclose the relationship, but that an extensive and ongoing social relationship existed. In the opinion written by Justice FitzGerald, most of the examples of the social relationship revealed by Beckham in the trial court were referenced: clerkship, socializing, expensive dinners, retirement parties, private parties, sporting events, gift baskets, Christmas cards, and vacation advice.
In the appellate court, the appellants contended that their rights were prejudiced by the evident partiality of the arbitrator because the arbitrator failed to disclose his personal and professional relationship with counsel for appellee. When the appellee moved to confirm the award, the appellants sought a continuance, arguing they had not had enough time to develop grounds for vacating the award, based in part on the evident partiality. The trial court denied the continuance and confirmed the arbitration award. They appealed.
The Court of Appeals concluded appellants should have been allowed an adequate opportunity to investigate the evident-partiality issue. The Court of Appeals reversed the trial court’s judgment confirming the arbitration award and remanded the cause.
On remand, the trial court held another evidentiary hearing, where The Beckham Group created an extensive timeline, used in court and entered into the record, showing the development of and the ongoing social and professional relationship between the attorney for appellee and the arbitrator. Further, on examination, the appellant’s expert opined that the arbitrator had a duty to disclose his relationship with counsel for appellee. Once again, the trial court confirmed the award. Once again, they appealed.
The Court of Appeals examination of the entire record showed a direct, personal, professional, social, and business relationship between the arbitrator and counsel for appellee. The Court reversed the trial court’s order confirming arbitration award and judgment, vacated the arbitration award of $22 million and remanded the case for further proceeding. The opinion was heavily weighed on Blake Beckham and The Beckham Group’s investigation and findings of an undisclosed relationship between counsel for the appellee and the arbitrator.
