PETER v. PIROZZI GENERAL CONTRACTING, LLC VS. COUNTY OF CUMBERLAND (C-000012-18, CUMBERLAND COUNTY AND STATEWIDE)

• Court: New Jersey Superior Court Appellate Division
• Decided: May 21, 2019
• Docket: A-5089-17T2
• Status: Unpublished

Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-5089-17T2

PETER V. PIROZZI GENERAL CONTRACTING, LLC and UNITED STATES SURETY COMPANY,

Plaintiffs-Appellants,

v.

COUNTY OF CUMBERLAND,

Defendant-Respondent. _________________________________

Submitted May 7, 2019 – Decided May 21, 2019

Before Judges Fisher and Enright.

On appeal from Superior Court of New Jersey, Chancery Division, Cumberland County, Docket No. C-000012-18.

Devlieger Hilser, PC, attorneys for appellants (Robert M. Dunn, on the brief).

Theodore E. Baker, Cumberland County Counsel, attorney for respondent (Melissa D. Strickland, Deputy County Counsel, on the brief).

PER CURIAM In this appeal, we consider a trial court's decision to remove an appointed

arbitrator based on a finding of "evident partiality." We affirm this decision.

Plaintiff, Peter V. Pirozzi General Contracting, LLC (PVPGC), entered

into an agreement in 2015 with defendant, Cumberland County (County), to

complete a window replacement project at the county library. A dispute arose

regarding the project so, consistent with the terms of the parties' contract,

PVPGC filed a demand for arbitration with the American Arbitration

Association (AAA). County then joined United States Surety Company in the

litigation. Before selecting the arbitrator, County confirmed that any arbitrator

had to be an attorney with "no prior experience with regard to the representation

of any of the parties." In March 2017, the parties agreed to appoint a New Jersey

attorney as their arbitrator. During the selection process, the arbitrator had

denied suing "either party or its representative."

Although arbitration commenced on January 23, 2018, during the second

day of hearings, the County Administrator came in to observe the proceedings

and recognized the arbitrator as an attorney who had sued the County's Board of

Chosen Freeholders. This revelation caused County to become concerned about

his neutrality. It promptly initiated an offsite records search that confirmed the

arbitrator's firm had represented a union group against the Freeholder Board in

A-5089-17T2 2 September 2012. That suit had concluded in January 2013. Based on this new

information, County immediately notified all parties of its objection to the

arbitrator's continuing involvement in arbitration.

While the arbitrator did not deny his firm had sued the Freeholder Board,

he maintained this suit would not affect his impartiality in arbitration. He also

contended County and the Freeholder Board were different entities. AAA then

reaffirmed him as the arbitrator and notified the parties of its decision.

In response to AAA's decision, County declined to participate in any

additional arbitration proceedings, claiming the arbitrator lacked impartiality.

Still, arbitration continued without County. Therefore, County filed a complaint

and an order to show cause, requesting that the arbitrator, AAA, PVPGC and

United States Surety Company be restrained from proceeding with arbitration.

County's application was denied and its complaint was dismissed. On March 5,

2018, after arbitration concluded, the arbitrator awarded PVPGC $71,526.22.

He also denied County's claims against United States Surety Company.

County promptly sought to vacate this arbitration award, pointing to the

arbitrator's failure to disclose his prior suit against the Freeholder Board and his

misrepresentation that County and the Freeholder Board were different entities.

A-5089-17T2 3 On June 15, 2018, the trial court granted County's motion to vacate the award

and denied plaintiffs' request to confirm the award. The instant appeal followed.

PVPGC and United States Surety Company argue the trial court's vacatur

was improper because no statutory grounds existed to vacate the arbitration

award. County disagrees, reiterating that once the selection for an arbitrator

began, it plainly indicated the appointee had to be an attorney who had no

previous experience regarding representation of any of the parties. Additionally,

it claims the arbitrator was obliged to, but did not reveal his past adversarial

relationship with County and when it was brought to his attention, he improperly

asserted County and its governing body (the Freeholder Board) were not the

same entity. County cites to N.J.S.A. 40:20-1 to confirm County and the

Freeholder Board, in fact, are the same legal entity, and the Freeholder Board

has exclusive jurisdiction over all matters pertaining to county affairs.

Ultimately, County insists the arbitrator's prior representation against the

Freeholder Board caused him to be impermissibly biased.

Our review of the trial court's decision is de novo. Minkowitz v. Israeli,

433 N.J. Super. 111, 136 (App. Div. 2013). We owe no special deference to

"[t]he 'trial court's interpretation of the law and the legal consequences that flow

from the established facts…."' Town of Kearny v. Brandt, 214 N.J. 76, 92

A-5089-17T2 4 (2013) (quoting Manalapan Realty, LP v. Twp. Comm. of Manalapan, 140 N.J.

366, 378 (1995)). That being said, public policy in this state favors resolution

of disputes through arbitration, especially in matters involving the public sector.

For that reason, there is a "strong judicial presumption in favor of the validity

of an arbitral award [and] the party seeking to vacate it bears a heavy burden."

Del Piano v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 372 N.J. Super. 503,

510 (App. Div. 2004). "[T]he party opposing confirmation ha[s] the burden of

establishing that the award should be vacated pursuant to N.J.S.A. 2A:24 -8."

Twp. of Wyckoff v. PBA Local 261, 409 N.J. Super. 344, 354 (App. Div. 2009)

(second alteration in original) (quoting Jersey City Educ. Ass'n v. Bd. of Educ.

of City of Jersey City, 218 N.J. Super. 177, 187 (App. Div. 1987)).

N.J.S.A. 2A:24-8 provides four circumstances that authorize the vacation

of an arbitration award. Of relevance here is only N.J.S.A. 2A:24-8(b), which

permits vacatur "[w]here there was either evident partiality or corruption in the

arbitrators, or any thereof."

We are satisfied the trial court properly considered the arbitrator's

involvement in the 2012 suit, his initial failure to disclose his par ticipation in

this suit and his response to County's timely objection to his decision to remain

in the role of arbitrator. The trial court not only ruled that County and the

A-5089-17T2 5 Freeholder Board are one and the same entity, but surmised that if the arbitrator

had not made that mistake of law, he would have conflicted himself out of this

particular arbitration. The trial court explained:

[i]t appears from the record that the past representation was probably not-he was not aware of it at the time that he signed the oath form, however, that oath form requires you to do a conflicts check. And the fact that he made an error of law in thinking that a suit against the Board of Chosen Freeholders of Cumberland County was somehow different than a suit against the County of Cumberland caused him to make that error.

With these findings, the trial court determined the arbitrator's prior

adversarial relationship with the Freeholder Board constituted evident partiality

and that County had "been clear since the time it realized who [the arbitrator

was] that it would not have agreed to his appointment as arbitrator or to the

appointment of any lawyer who had sued the County."

It is undisputed the arbitrator's suit against the Freeholder Board

concluded a little more than four years after he was named arbitrator in this case.

We are not satisfied this 2012 suit, which lasted into 2013, was too remote to

affect the arbitrator's neutrality as an arbitrator. Moreover, if the arbitrator's

participation in the 2012 suit against the Freeholder Board did not surface during

his conflict checks, it is readily apparent his conflict checks were deficient.

Furthermore, AAA's rules compel arbitrators to disclose any circumstance likely

A-5089-17T2 6 to give rise to justifiable doubt as to the arbitrator's impartiality or independence

so we find the arbitrator was bound to disclose his involvement in the 2012 suit

under AAA's rules.

County only needed to prove evident partiality by a preponderance of

evidence to prevail on its motion to vacate. Del Piano v. Merrill Lynch, Pierce,

Fenner & Smith, Inc., 372 N.J. Super. at 509-10. We are satisfied the trial court

properly found County met that low burden.

Affirmed.

A-5089-17T2 7