SUCHARITHA PATI VS. RAJESH KOMAKULA (L-4841-17, MIDDLESEX COUNTY AND STATEWIDE)

• Court: New Jersey Superior Court Appellate Division
• Decided: July 24, 2018
• Docket: A-2591-17T2
• Status: Unpublished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NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court."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-2591-17T2

SUCHARITHA PATI,

Plaintiff-Appellant,

v.

RAJESH KOMAKULA,

Defendant-Respondent. ___________________________________

Submitted June 4, 2018 – Decided July 24, 2018

Before Judges Sabatino and Ostrer.

On appeal from Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L- 4841-17.

Robert H. Goodwin, attorney for appellant.

Susheela Verma, attorney for respondent.

PER CURIAM

Plaintiff Sucharitha Pati appeals from the trial court's

order vacating, on conflict of interest grounds, a July 2017 award

of an umpire acting pursuant to the New Jersey Alternative

Procedure for Dispute Resolution Act (APDRA), N.J.S.A. 2A:23A-1

to -30. We remand for the trial court to consider a letter from the umpire addressing the claimed conflict, which we deem a

clarification of the umpire's decision.

The umpire is a retired Superior Court judge affiliated with

a law firm in the county where he served. The parties selected

the umpire to resolve various property and financial issues that

remained after entry of their 2012 final judgment of divorce. A

November 2015 consent order formalized the parties' selection.

After numerous testimonial hearings in 2016, and written

summations in early 2017, the umpire issued an initial decision

and a supplement to that decision in July 2017.

In an "amended verified complaint,"1 defendant Rajesh

Komakula identified various alleged flaws in the alternative

dispute resolution (ADR) process that justified vacatur. Of

principal interest to us at this stage is defendant's allegation

he was prejudiced by the umpire's partiality. See N.J.S.A. 2A:23A-

13(c)(2). The trial court ordered vacatur solely on that ground,

1 Defendant did not swear or certify the allegations were true. See R. 1:4-4(b). Rather he stated "the statements contained in the [complaint] are true and correct to the best of my knowledge and recollection." A certification made upon information and belief is not a valid certification. See Pascack Cmty. Bank v. Universal Funding, LLP, 419 N.J. Super. 279, 288 (App. Div. 2011) (rejecting "certification" that lacked the language mandated by Rule 1:4-4(b)).

2 A-2591-17T2 and the umpire addressed it in his clarification, which the trial

court declined to consider.2

Defendant asserted that the umpire failed to disclose a prior

relationship with plaintiff's attorney. He alleged that in January

2017 – which was after the testimonial ADR hearings had been

completed and before submission of written summations – he learned

that the umpire and plaintiff's attorney had both served, and met

often, as trustees of a county bar foundation.3 He also learned

that the umpire's secretary and plaintiff's attorney participated

in the same community theater group. Defendant stated he would

not have consented to the umpire's selection, had he known of

those relationships. In subsequent submissions to the court,

defendant alleged the umpire repeatedly addressed plaintiff's

counsel during the ADR proceedings by his first name, but always

referred formally to defendant's counsel. Defendant also

2 Defendant also alleged: (1) the umpire engaged in misconduct, see N.J.S.A. 2A:23A-13(c)(1), by engaging in ex parte communications with plaintiff's counsel, failing to enforce prior commitments between the parties, and compelling defendant to execute a so-called agreement regarding two properties in India; (2) the umpire exceeded his powers, see N.J.S.A. 2A:23A-13(c)(3), by deciding issues that were not referred to him, and failing to decide issues that were; and (3) the umpire acted as a mediator instead of an arbitrator. On the basis of many of these allegations, defendant also contended the umpire failed to follow APDRA's procedures. See N.J.S.A. 2A:23A-13(c)(4). 3 The complaint alleged "bar association," but it was later clarified that the two served on the related foundation.

3 A-2591-17T2 contended the umpire's substantive decisions reflected his

partiality.

Defendant's allegations should have come as no surprise. He

and his counsel claimed bias in the umpire's decisions throughout

the ADR process. In defense counsel's February 2017 written

summation, she asked the umpire to withdraw based upon his "pre-

existing relationship with the Plaintiff's counsel," and his

alleged ex parte communications.

The umpire rejected these arguments in his initial written

decision, stating he had "neither a personal, nor business, nor

recreational relationship" with plaintiff's counsel. He

acknowledged, as a member of the county bar, he had seen and spoken

to plaintiff's counsel at bar related meetings. He noted that he

also saw defendant's counsel at other dinners that judges and

attorneys attended. He denied any bias for or against any attorney

who participated in bar functions. He could not recall plaintiff's

counsel ever appearing before him when he was a judge, and he was

unaware, until recently, that his secretary and counsel

participated in the same theater.

In granting vacatur, the trial court held in an oral decision

that an arbitrator was responsible "to disclose any relationship

or transactions that he may have with the parties" or their

representatives (citing Barcon Assocs., Inc. v. Tri-County Asphalt

4 A-2591-17T2 Corp., 86 N.J. 179, 192 (1981)). The trial court added that when

an arbitrator fails to do so, "'the reviewing court may vacate the

award if it concludes the undisclosed fact would have been such

as to lead a reasonable person to object to the designation of the

arbitrator in question'" (quoting Barcon Assocs., 86 N.J. at 195).

The court held that the umpire's and plaintiff's counsel's

undisclosed joint service on "a small foundation that meets on a

monthly basis" met that standard for vacatur.

The judge added that "[a]n arbitrator, like a judge, must

avoid even the appearance of bias" (citing Commonwealth Coatings

Corp. v. Cont'l Cas. Corp., 393 U.S. 145, 150 (1969)). The court

held that a person would question the umpire's impartiality because

he referred to plaintiff's counsel by his first name sixteen times

during the ADR hearings, and always formally addressed defense

counsel. The court ordered the selection of a new umpire and a

new ADR process.

Plaintiff moved for reconsideration. At that point, the

umpire learned of defendant's complaint and the vacatur order. In

January 2018, the umpire submitted a letter to the judge, which

addressed, in greater detail than in his award decision: (1) the

nature of his and plaintiff's counsel's joint service on the county

bar foundation; and (2) his form of addressing both attorneys in

the ADR hearings. The umpire noted the foundation's board

5 A-2591-17T2 consisted of twenty-two members. Its monthly meetings lasted no

more than hour. There was no meal or beverage service, or social

gathering connected to the meetings. Because of their respective

absences, the umpire and attorney were present at only nine

meetings since the umpire was appointed to the foundation in June

2015.

The umpire also observed that, in the course of four selected

days of hearings, he addressed plaintiff's counsel as "Mr." twenty

times, and by his first name only four times. The umpire explained

that he had difficulty pronouncing defense counsel's first name.

He regretted not making the effort to learn it. The umpire

contended that his relationship with plaintiff's counsel was not

"substantial" and suggested that it did not create an appearance

of bias, impropriety, or interest. He contended that appearance

alone is not a basis for vacatur.

In a February 2018 written decision denying the

reconsideration motion, the trial court declined to consider the

umpire's letter, stating, "No rule or precedent is cited that

authorizes the Court to consider such a submission." The trial

court adhered to its original view that the umpire's failure to

disclose his contemporaneous participation "on a small board of

directors" was a sufficient basis to vacate the award. The

6 A-2591-17T2 umpire's manner of address "provide[d] additional evidence for a

reasonable person to perceive partiality."

We granted plaintiff's motion for leave to appeal from the

trial court's vacatur order. Plaintiff contends that there were

insufficient grounds to question the umpire's impartiality and to

vacate the award.

We decline to reach the merits of the appeal, as we conclude,

procedurally, the trial court erred in refusing to consider the

umpire's letter. The letter constitutes a clarification and

explanation of the umpire's original decision. It did not alter

or modify the result. It was not untimely, as it was submitted

in advance of the trial court's decision on the motion for

reconsideration.

We recognize that APDRA does not expressly authorize an umpire

to supplement or clarify his decision, as the umpire did in this

case. However, the statute does not prohibit it either.

We are cognizant of the common law doctrine of functus

officio, which literally means "office performed," and generally

means that with issuance of a final award, an arbitrator's

commission is terminated, as is the authority to go back and modify

or revise the award. See Tretina Printing, Inc. v. Fitzpatrick &

Assocs., Inc., 135 N.J. 349, 360-61 (1994); Kimm v. Bisset, LLC,

388 N.J. Super. 14, 26-27 (App. Div. 2006); Held v. Comfort Bus

7 A-2591-17T2 Line, Inc., 136 N.J.L. 640, 641 (Sup. Ct. 1948); see also Glass,

Molders, Pottery, Plastics & Allied Workers Int'l Union, Local

182B v. Excelsior Foundry Co., 56 F.3d 844, 845-47 (7th Cir. 1995).

The doctrine is designed to shield a sporadic quasi-judicial

officer from "the potential evil of outside communication and

unilateral influence which might affect a new conclusion." La

Vale Plaza, Inc. v. R.S. Noonan, Inc., 378 F.2d 569, 572 (3d Cir.

1967); see also Glass, Molders, 56 F.3d at 847 (stating that

"arbitrators are less sheltered than sitting judges, and it is

feared that disappointed parties will bombard them with ex parte

communications and that the arbitrators, not being professional

judges or subject to the constraints of judicial ethics, will

yield").

However, exceptions to the doctrine "permit an arbitrator to

correct a mistake, generally of a clerical or computational nature,

. . . to 'adjudicate an issue which has not been submitted' but

not decided, . . . and to 'clarify' an award '[w]here the award,

although seemingly complete, leaves doubt whether the submission

has been fully executed, [such that] an ambiguity arises which the

arbitrator is entitled to clarify.'" Kimm, 388 N.J. Super. at 27

(quoting La Vale Plaza, 378 F.2d at 573). Concededly, the umpire's

letter was not intended to clarify ambiguity in his award.

However, we perceive no basis to bar an umpire under the common

8 A-2591-17T2 law or APDRA from, sua sponte, providing additional reasoning for

a decision, and we discern compelling reasons to allow it.

As the parties chose to submit to APDRA, we need not rely on

the scope of the clarification authority under the revised

Arbitration Act, a different statute. See N.J.S.A. 2A:23B-

20(a)(3), -20(b) (authorizing parties to apply to an arbitrator

to clarify an award within twenty days of notice of the award);

N.J.S.A. 2A:23B-20(d)(3) (authorizing a court to resubmit a matter

to an arbitrator to clarify an award). Yet, we note the revised

Arbitration Act was intended to remove any lingering question

under the prior Act, based on the functus officio doctrine, about

the power to remand to arbitrators for clarification. 7 Uniform

Laws Annotated, Business and Financial Laws, cmt. 2 on § 20 at 70-

71 (Master ed. 2009). The revised Act was intended to "enhance[]

the efficiency of the arbitral process." Id. at 71.

Unlike the Arbitration Act, APDRA requires an umpire to state

fact-findings and legal conclusions in support of the award.

N.J.S.A. 2A:23A-12(a) ("The award shall state findings of all

relevant material facts and make all applicable determinations of

law."). The scope of judicial review of an umpire's decision is

broader than the review of an arbitral award, in that a court may

vacate an award if the umpire "commit[ed] prejudicial error by

erroneously applying law to the issues and facts presented for

9 A-2591-17T2 alternative resolution." N.J.S.A. 2A:23A-13(c)(5). The court may

modify an award on the same ground. N.J.S.A. 2A:23A-13(e)(4).4

To enable effective judicial review, it behooves the umpire

to set forth ample fact-findings and legal conclusions. Cf. Curtis

v. Finneran, 83 N.J. 563, 569-70 (1980) (discussing importance of

adequate findings of fact and conclusions of law under Rule 1:7-4

to enable effective appellate review of trial court decisions).

A supplemental explanation and clarification that does not alter

the final award promotes effective judicial review without

undermining the interest in finality. See Mt. Hope Dev., 154 N.J.

at 149 (noting that APDRA, like the Arbitration Act, promotes

finality).

Allowing a clarifying post-award submission may also promote

efficiency, if the umpire's submission obviates an order vacating

an award and requiring the parties to bear the expense of a re-

run of the ADR process. Particularly where the issue involves the

umpire's personal relationships and alleged partiality, which the

umpire is uniquely situated to address, permitting a clarifying

submission would also promote the search for the truth.

4 On the other hand, APDRA limits the right to appeal from the trial court's decision, subject to certain exceptions based upon public policy. N.J.S.A. 2A:23A-18(b); see Mt. Hope Dev. Assocs. v. Mt. Hope Waterpower Project, L.P., 154 N.J. 141, 150-52 (1998).

10 A-2591-17T2 After the filing of a notice of appeal, a trial court may

supplement, for the benefit of the reviewing court, the reasons

previously given for its order. R. 2:5-6(c). We perceive no

reasoned basis for barring an umpire under APDRA from doing

something similar.

In sum, the trial court was obliged to consider the umpire's

submission before deciding defendant's application for vacatur.

We intend no criticism of the trial judge in this case; he lacked

the guidance of this opinion. Nor do we comment on whether the

trial judge should come to a different conclusion after considering

the submission. We express no opinion at this stage on the merits

of defendant's application, or the substantive points raised on

appeal.

Vacated and remanded for reconsideration. We do not retain

jurisdiction.

11 A-2591-17T2