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FIRST QUARTER 2013
VOLUME 20 NUMBER 1
INSIDE…
Some Tips for Conducting Muscular ArbitrationHearings
REPORT: December 2012Conference
REPORT: Board of DirectorsElection Results
OFF THE CUFF: The BlighterStrikes Back
CASE NOTES CORNER:Federal Court Denies Second Bite at theEvidentiary Apple
(Belated) Happy New Year to one and all.
We lead off this issue with a particularly rewarding discussion of two different but atthe same time quite similar juridical concepts: res judicata and collateral estoppel.These principles have at times stumped even hardened professionals, and it iscertainly no wonder that non-lawyer arbitrators (and clients) sometimes find themdifficult to grapple with. Mary Ann D’Amato and Benjamin Hincks have provided ananalysis that is clear, interesting, and above all helpful.
Charles Moxley has dug into his personal treasure house of arbitration experience togive us a portrait of what he terms a “muscular arbitration” should be. As you willsee, the article is really a series of bullet points. There was some discussion aboutwhether it should be expanded into a more conventional narrative format, but Ithought (yes, the buck stops here) that this approach was more consistent with hisbasic lean-and-mean concept. Visions of old Jack LaLanne TV commercials keptpopping into my head, and he practically spoke in bullet points! You will note alsothat his hypothetical arbitrator is a “she,” which is an excellent escape from theincorrect “they” and the cumbersome “he or she.” One more small step…..
Ron Gass’s semi-annual case notes continue to reflect the high quality of both hisresearch and his mind. The best I can say for my piece is that it continues to reflectmy obsession with linguistic precision; like a serial killer on a crime show, I just can’thelp myself.
For deadline reasons this thought didn’t make it into the Fourth Quarter 2012 issue,but it’s never too late to acknowledge something extraordinary: Special kudos to theARIAS•U.S. Board for the way they responded to Sandy, including all the last-minutecancellations, re-scheduling, timetable juggling, full and partial refunds, and all theconcomitant complications and aggravations. And an affectionate farewell to ElaineCaprio Brady as she conquers new fields.
EDITORIAL BOARDEditorEugene [email protected]
Associate EditorsPeter R. [email protected]
Susan E. [email protected]
Mark S. [email protected]
Daniel E. Schmidt, [email protected]
Teresa [email protected]
Managing EditorWilliam H. [email protected]
International EditorsChristian H. [email protected]
Jonathan [email protected]
Ex-OfficioMary Kay VyskocilJeffrey M. RubinEric S. Kobrick____________________Production/Art Director Gina Marie Balog
VOL. 20 NO. 1FIRST QTR. 2013
editor’scomments
The ARIAS•U.S. Quarterly (ISSN 7132-698X) is published Quarterly, 4 times a year byARIAS•U.S., 131 Alta Avenue, Yonkers, NY 10705.Periodicals postage pending at Yonkers, NY andadditional mailing offices.
POSTMASTER: Send address changes toARIAS•U.S., P.O. Box 9001, Mt. Vernon, NY 10552
ARIAS•U.S.P.O. Box 9001Mt. Vernon, NY 10552914.966.3180, x112914.966.3264 [email protected]
Eugene Wollan
Editor’s Comments Inside Front Cover
Table of Contents Page 1
FEATURE: Res Judicata and Collateral Estoppel: The Preclusive Effect of Arbitration Awards in Subsequent Judicial ProceedingsBY MARY ANN D’AMATO AND BENJAMIN HINCKS Page 2
News and Notices Page 11
FEATURE: Some Tips for Conducting Muscular Arbitration HearingsBY CHARLES J. MOXLEY, JR. Page 12
REPORT: December 2012 Conference Page 16
REPORT: Board of Directors Election Results Page 22
Members on the Move Page 23
OFF THE CUFF: The Blighter Strikes BackBY EUGENE WOLLAN Page 24
CASE NOTES CORNER: Federal Court Denies Second Bite at the Evidentiary Apple BY RONALD S. GASS Page 27
IN FOCUS: Recently Certified Arbitrators Page 30
Invitation to Join ARIAS•U.S. Page 32
Membership Application Inside Back Cover
ARIAS•U.S. Board of Directors Back Cover
contentsVO L U M E 2 0 N U M B E R 1
1 P A G E
Editorial PolicyARIAS•U.S. welcomes manuscripts of original articles, book reviews, comments, and case notes from our membersdealing with current and emerging issues in the field of insurance and reinsurance arbitration and dispute resolution.All contributions must be double-spaced electronic files in Microsoft Word or rich text format, with all references andfootnotes numbered consecutively. The text supplied must contain all editorial revisions. Please include also a briefbiographical statement and a portrait-style photograph in electronic form. Manuscripts should be submitted as email attachments to [email protected] .Manuscripts are submitted at the sender's risk, and no responsibility is assumed for the return of the material. Materialaccepted for publication becomes the property of ARIAS•U.S. No compensation is paid for published articles.Opinions and views expressed by the authors are not those of ARIAS•U.S., its Board of Directors, or its Editorial Board, norshould publication be deemed an endorsement of any views or positions contained therein.
Copyright NoticeCopyright 2013 ARIAS•U.S. The contents of this publication may not be reproduced, in whole or in part, without writtenpermission of ARIAS•U.S. Requests for permission to reproduce or republish material from the ARIAS•U.S. Quarterlyshould be addressed to William Yankus, Executive Director, ARIAS•U.S., P.O. Box 9001, Mount Vernon, NY 10552 [email protected] .
P A G E 2
the plaintiff had lost.’” AVX Corp. v. CabotCorp., 424 F.3d 28, 30 (1st Cir. 2005).
• Generally, “[t]he operation of res judicatarequires the presence of three elements:
(1) the identity or privity of the parties tothe present and prior actions,
(2) identity of the cause of action, and
(3) prior final judgment on the merits.”Andrew Robinson Int’l, Inc., 547 F.3d at53 (citing Kobrin v. Bd. of Regist. inMed., 444 Mass. 837, 832 (2005).
• Some courts have added to this inquiry afourth element: that the earlier decision bedecided by a court of competentjurisdiction. See, e.g., In re TeltronicsServices, Inc., 762 F.2d 185, 190 (2d Cir. 1985).
Collateral estoppel (issue preclusion)• Whereas res judicata bars any claims that
were or could have been adjudicated in aprior action, collateral estoppel (issuepreclusion) “applies to prevent, or estop,relitigation of the same issues insubsequent cases.” MOORE’S § 132.01(1).
• “For collateral estoppel to apply,
(1) the issue sought to be precludedmust be the same as that involved inthe prior action,
(2) the issue must have been actuallylitigated,
3) the determination of the issue musthave been essential to the finaljudgment, and
(4) the party against whom estoppel isinvoked must be fully represented inthe prior action.” People Who Care v.Rockford Bd. Of Educ., 68 F.3d 172, 178(7th Cir. 1995) (citing Freeman UnitedCoal Mining Co. v. Office of Workers’Comp. Program, 20 F.3d 289, 293-294(7th Cir. 1994)). See Moron-Barradas v.Dep’t of Ed. of the Commonwealth ofPuerto Rico, 488 F.3d 472, 479 (1st Cir.
feature
Mary AnnD’Amato
Mary Ann D’Amato is a partner atMendes & Mount LLP where she is thehead of the Litigation Department.Benjamin Hincks is a partner in theBoston office of Mintz Levin CohnFerris Glovsky and Popeo, PC where hepractices as a litigator in the firm’sInsurance/Reinsurance Practice Group
Mary Ann D’Amato Benjamin Hincks
DEFINITION AND REQUIREMENTSOverviewThe doctrines of res judicata and collateralestoppel are “closely related,” as both aim toforeclose the possibility that a right, aquestion, or a fact distinctly put in issue anddirectly determined by a court of competentjurisdiction will be disputed again in asubsequent suit between the same partiesor their privies. See 18 JAMES WM. MOORE ETAL., MOORE’S FEDERAL PRACTICE§132.01(4)(a)(3d ed. 1997)
The term “res judicata” is sometimes usedbroadly to describe the general body of lawgoverning the preclusive effect of prioractions, with “true res judicata” (or claimpreclusion) and collateral estoppel (issuepreclusion) resting as narrower doctrinesunderneath it. See Kaspar Wire Works, Inc. v.Leco Eng’g & Mach., Inc., 575 F.2d 530, 535-536(5th Cir. 1978). For the purposes of thisdiscussion, any reference to “res judicata”denotes the narrower understanding of theterm (i.e., the doctrine of claim preclusion).
Res judicata (claim preclusion):• The doctrine of res judicata (or claim
preclusion) “makes a valid final judgmentconclusive on the parties . . . and preventsrelitigation of all matters that were or couldhave been adjudicated in the [prior] action.”Andrew Robinson Int’l, Inc. v. Hartford FireInsurance Co., 547 F.3d 48, 52 (1st Cir. 2008).See Cromwell v. Sac. County, 94 U.S. 351, 352(1876) (classic formulation of res judicatadoctrine).
• The doctrine is sometimes known as“merger and bar” — “the re-asserted claimis deemed ‘merged’ into the prior judgmentif the plaintiff had won or ‘barred’ by it if
Res Judicata and CollateralEstoppel: The Preclusive Effect ofArbitration Awards in SubsequentJudicial Proceedings
BenjaminHincks
The doctrine of resjudicata (or claimpreclusion) “makes avalid final judgmentconclusive on theparties . . . and pre-vents relitigation ofall matters that wereor could have beenadjudicated in the[prior] action.”
bound by the determination ofissues in an action betweenothers;
o [A] substantive legal relationship— i.e. traditional privity - existsthat binds the nonparty;
o The nonparty was ‘adequatelyrepresented by someone with thesame interests who [wa]s a party[in the prior action]’;
o The nonparty assumes controlover the litigation in which thejudgment is rendered;
o The nonparty attempts to bringsuit as the designatedrepresentative of someone whowas a party in the prior litigation;and,
o The nonparty falls under a specialstatutory scheme that expresslyforeclose[es] successive litigationby nonlitigants.’” Id.
• With regard to the relationshipbetween the party and nonparty:
o “The kinds of legal relationshipsthat create privity fall into threegeneral categories:
• (1) relationships based ontransfer of property (e.g.,successors in interest);
• (2) contractual relationships(e.g., authorized legalrepresentatives or agents); and
• (3) status relationships (e.g.,trustee and beneficiary).”MOORE’ S §131.40(3)(a)(citations omitted).
o The Supreme Court has recentlyemployed the phrase “pre-existingsubstantive legal relationship” todescribe the notion of traditional“privity.” Taylor v. Sturgell, 538 U.S.880, 894 (2008). Withoutproviding an exhaustive list ofsuch relationships, the Courtnoted that the realm of“[q]ualifying relationshipsinclude[s], but [is] not limited to,preceding and succeeding ownersof property, bailee and bailor, andassignee and assignor.” Id.
• Turning to the relationship amongcorporations and their affiliates:
3 P A G E2007) (“In order for collateralestoppel to apply here, [theparties] must have actuallylitigated the facts in question,and those facts must have beenessential to a valid and finaljudgment in a prior action.”).
• Traditionally, courts had required anidentity of both parties to the prior andpending cases; that is, “unless bothparties (or their privies) in a subse-quent action would be bound by ajudgment in a previous case, neitherparty (nor that party’s privy) in the sec-ond action may use the prior judgmentas determinative of an issue in the sec-ond action.” MOORE’S§ 132.04 (2)(a). SeeBlonder-Tongue Lab, Inc. v. University ofIll. Found., 402 U.S. 313, 320-322 (1971).The Supreme Court, however, aban-doned this strict “mutuality” require-ment, so that a stranger to the prior lit-igation now may benefit from issuepreclusion in a subsequent action. SeeParklane Hosiery Co. v. Shore, 439 U.S.322, 326 (1979). (That said, issue preclu-sion, of course, only will bind a party tothe prior litigation or his privy.MOORE’S 132.04(2)(a)).
Additional notes• The party seeking the benefit of res
judicata or collateral estoppel bearsthe burden of proving the requisite ele-ments. See, e.g., Thomas v. New YorkCity, 814 F. Supp. 1139, 1148 (E.D.N.Y. 1993).
• Barring a statutory provisionprohibiting this power, courts mayraise the issue sua sponte. Plaut v.Spendthrift Farm, Inc., 514 U.S. 211, 231,n.6 (1995).
• Even if the elements of res judicata orcollateral estoppel are satisfied, courtswill require that the party againstwhom the doctrine is applied hadbeen given a full and fair opportunityto litigate the cause of action or claimin the prior proceeding. MOORE’S §§131.141(1) (res judicata) and 132.04(1)(a)(collateral estoppel).
JUDICIAL APPLICATION OFTHE REQUIRED ELEMENTS Privity• A prior judgment bars subsequent
action on the same claim only against
the same parties or their privies: thereis no “preclusion by association.” CasaMarie, Inc. v. Superior Court, 988 F.2d252, 264 (1st Cir. 1993). (As noted, theSupreme Court has lifted therequirement of mutuality for collateralestoppel, so that a stranger to the prioraction may raise the doctrine against aparty to the prior action or the party’sprivy.)
• The concept of privity lacks precisedefinition — it is “merely a word” usedto say that the relationship betweenthe party and nonparty is sufficientlyclose to support preclusion. Bruzwesksiv. United States, 181 F.2d 419, 423 (3d Cir.1950) (Goodrich, J., concurring).Consequently, the privity inquiry is oneof substance, rather than form. See id.at 1017.
• Although there is no bright-line rulegoverning the privity analysis, somecommon themes have emerged:
o Courts have considered whetherthere is a “commonality ofinterests” between the parties tothe prior and pending litigation.See Tahoe-Sierra Pres. Council, Inc. v.Tahoe Reg’l Planning Agency, 322F.3d 1064, 1081 (9th Cir. 2003).
• A mere interest in “the samequestion or in proving ordisproving the same set offacts” is insufficient. SeeHartford Accident & Indem. Co.v. Columbia Cas. Co., 98 F. Supp.2d 251, 256 (D. Conn. 2000)(quoting Marziotti, 695 A.2d at 1017)).
o “It has been held that ‘a keyconsideration for [the existence ofprivity] is the sharing of the samelegal right by the parties allegedlyin privity.’” Hartford Accident &Indem. Co., 98 F. Supp. 2d at 256(quoting Aetna Casualty & SuretyCo. v. Jones, 220 Conn. 285, 596 A.2d414 (1991)).
• The Supreme Court also recently“identified six categories wherenonparty preclusion may beappropriate.” Nationwide Mut. Fire Ins.Co., v. Hamilton, 571 F.3d 299, 312 (3d Cir.2009) (quoting Taylor v. Sturgell, 538U.S. 880, 894-895 (2008)). They are:
o “[T]he nonparty agrees to be
o Parent companies and wholly-owned subsidiaries may stand inprivity with one another. SeePickman v. Am. Express Co., 2012U.S. Dist. Lexis 9662 (N.D. Cal. Jan.27, 2012) (plaintiff had broughtand dismissed two identical suitsagainst defendant’s subsidiaries;in third case brought againstdefendant and same subsidiaries,defendant parent deemed to bein privity with subsidiaries forpurposes of res judicata).
o While some courts have foundprivity between such entitiesfrom the fact of their corporaterelationship, see id. and In reTeltronics Services, Inc., 762 F.2d 185,191 (2d Cir. 1985), others havereasoned that “mere`independent corporateaffiliation, by itself, does notcreate a master/servant orprincipal agent relationship’” forthe purposes of privity. HartfordAccident & Indem. Co., 98 F. Supp.2d at 256 (rejecting argumentthat wholly-owned subsidiarywas in privity with parent “basedon the close functionalrelationship” between the two)(quoting Usina Costa Pinto, S.A. v.Louis Dreyfus Sugar Co., 933 F.Supp. 1170 (S.D.N.Y. 1996)).
o Some factors that courts haveconsidered, in addition to thecorporate relationship, include:
• An absence of a legallydistinct basis for recoveryagainst a corporate parent (inwhich case, final judgmentagainst the subsidiary willresult in claim preclusion). SeePricaspian Dev. Corp. v. RoyalDutch Shell, PLC, 382 Fed.Appx. 100, 2010 U.S. App. Lexis13211 (2d Cir. June 29, 2010)(quoting Strekal v. Espe, 114 P.3d67, 70 (Colo. Ct. App. 2000)).
• Whether the subsidiary“sufficiently represents” theprincipal’s interests (in whichcase, res judicata may attach).See Wilson v. Limited Brands,Inc., 2009 U.S. Dist. Lexis 37576(S.D.N.Y. April 17, 2009)(quoting G&T Terminal
P A G E 4Packaging Co. v. Consol. RailCorp., 719 F. Supp. 153, 159(S.D.N.Y. 1989).
• There is one case in which a federaldistrict court has recognized, for thepurposes of res judicata, privitybetween a reinsurer and anotherreinsurer with whom it had contracted.See Guarantee Trust Life Ins. Co. v. FirstStudent Progs., LLC, 2009 U.S. Dist. Lexis81136 (N.D. Ill. Sept. 8, 2009) (notingthat both companies had identicalpositions in prior and pending matters,and that nonparty reinsurer was“actively involved” in prior arbitration).But see Hartford Accident &Indem. Co.,98 F. Supp. 2d at 256-257 (concludingthat two reinsurers were not in privityfor purposes of collateral estoppel anddeclining to give preclusive effect toarbitration decision where onereinsurer was not a party to thearbitration and its contracts with theinsured were not considered by thearbitration panel, even though thereinsurers were affiliated with eachother, their contracts with the insuredwere similar, and they used the samecounsel and coordinated theirdiscovery efforts during litigation).
Identity of Cause of Action or Issue
Res judicata and cause of action• The doctrine of res judicata requires an
“identity of the cause of action.”Andrew Robinson Int’l, Inc., 547 F.3d at53. The phrase “cause of action” isinterchangeable with the phrase “claimto relief” and the word “claim.”MOORE’S §131.10(3)(a). For the purposesof res judicata, it encompasses:
o Matters addressed by the priorjudgment
o Matters that could have beenraised in the prior action
o Defenses that could have beenasserted in the prior action. Id.
• Although there is no uniform test todiscern whether an identity of claimsexists, most federal court have adoptedthe “same transactions” or“transactional” approach.
o As explained in §24 of theRestatement (Second) ofJudgments, this approach holds
that: “When a valid and finaljudgment rendered in an actionextinguishes the plaintiff’s claimpursuant to the rules of merger orbar (i.e., res judicata) . . . the claimextinguished includes all rights ofthe plaintiff to remedies againstthe defendant with respect to allor any part of the transaction, orseries of connected transactions,out of which the action arose.” SeeNortheast Data Systems, Inc. v.Genesis Computer Corp., 1992 U.S.Dist. Lexis 3552 at *14 (D. Mass.March 23, 1992).
o “A cause of action is defined as aset of facts which can becharacterized as a singletransaction or a series of relatedtransactions. The cause of action,therefore, is a transaction that isidentified by a common nucleusof operative facts.” Apparel ArtInt’l, Inc. v. Amertex Enters., Ltd., 48F.3d 576, 583 (1st Cir. 1995)(citations omitted).
• The Seventh Circuit has refined thetransactional approach, holding that“two claims are one for the purposesof res judicata if they are based on thesame, or nearly the same, factualallegations.” Anderson v. Chrysler Corp.,99 F.3d 846, 852 (7th Cir. 1996) (citingHerrmann v. Cencom Cable Assocs., 999F.2d 223, 226 (7th Cir. 1993).
Collateral estoppel and identity of issues• The doctrine of collateral estoppel
requires that “the issue sought to beprecluded [is] the same as that involvedin the prior action, [and that] the issuemust have been actually litigated.”People Who Care, 68 F.3d at 178.
• With regard to the identity of theissues:
o The focus of the inquiry is on theissues in the prior and pendingactions — there is no requirementunder this doctrine that thecauses of action are the same. See,e.g., Leather v. Eyck, 180 F.3d 420,425 (2d Cir. 1999).
o The issue raised in the subsequentcase must be “precise andidentical” to that raised in thefirst; “[s]imiliarity does not
5 P A G Esuffice.” Boim v. Holy Land Found. ForRelief & Dev., 511 F.3d 707, 727 (7th Cir.2007).
• For the doctrine to apply, the issue at handmust have been actually litigated andactually decided.
o This element requires “the issue tohave been raised, contested by theparties, submitted for determinationby the court, and determined.”MOORE’S § 132.03(2)(A).
o “An issue may be ‘actually decidedeven if it is not explicitly decided, for itmay have constituted logically or prac-tically, a necessary component of thedecision reached in the prior litiga-tion.’” Stoehr v. Mohamed Bin AbdulRahman Al Saud, 244 F.3d 206, 208 (1stCir. 2001) (quoting Palmacci v. Umpier-rez, 125 F.3d 781, 786 (1st Cir. 1997)).
• Ambiguity as to whether an issuehas been litigated and decided isresolved in favor of finding nopreclusion. Mitchell v. HumanaHosp.-Shoals, 942 F.2d 1581, 1583-1584 (11th Cir. 1991).
• The issue also must have been necessaryto support the judgment entered in thefirst action. Bobby v. Bies, 556 U.S. 825, 826(2009). See Whitey v Seibel, 676 E 2d 245,248 (7th Cir. 1982).
o This factor may pose additionaltrouble for litigants raising thepreclusive effect of an unreasonedarbitration award (i.e., an award withno factual findings or written or oralexplanations). See In Re Lambert, 233Fed. Appx. 589, 599 n. 1, 2007 U.S. Dist.Lexis 7258 (9th Cir. 2007)(“Because thejudgment [in arbitration]generallyawards damages for all threecauses of action, we cannot say thatany one cause of action was necessaryto support the award”).
o In these circumstances, however,courts have adopted the standard forassessing whether an issue wasnecessarily determined by a generalverdict: “in that instance, the inquirymust be ‘whether a rational [fact-finder] could have reached aconclusion based on an issue otherthan that which the party assertingcollateral estoppel wishes to foreclosefrom consideration.” DacotahMarketing and Research, LLC. v.
Versatility, Inc., 21 F. Supp. 2d 570, 580-581 (E.D. Va. 1998) (citing Ashe v.Swenson, 397 U.S.436, 444 (1970)). SeeWellons v. T.E. Ibberson Co., 869 F.2d1166, 1170 (8th Cir. 1989).
Finality of the Arbitration Award• Courts have recognized the preclusive
effect of arbitration awards under thedoctrines of res judicata and collateralestoppel in a subsequent judicialproceeding that necessarily requires afinding that the arbitration award is a finaldisposition of the claim or issue in dispute.However, the “rules” for claim/issuepreclusion with respect to the “finality” ofan arbitration award are not uniform acrossjurisdictions.
o With respect to claim preclusion (resjudicata), “...it seems safe to infer thatmost agreements to submit disputesto arbitration contemplate that theaward will merge or bar all of theclaims and defenses involved in thesubmission, whether the agreement ismade before or after the dispute hasarisen. If any party dissatisfied with theaward were left free to pursueindependent judicial proceedings onthe same claim or defenses, arbitrationwould be substantially worthless.”(Wright, Miller & Cooper 18B Fed. Prac.& Proc. Juris. § 4475.1).
o With respect to issue preclusion,“Decisions of an arbitral panelnormally provide the type of finalitysought by courts to be protected bycollateral estoppel.” Hammad v. Lewis,638 F. Supp. 2d 70, 74 (D.C. Cir. 2009).
o Courts have accepted an arbitrationaward as the predicate for issuepreclusion notwithstandingarguments that because an arbitrationis a private rather than a judicialprocess, the application of doctrines ofpreclusion does not serve the sameinterests in judicial economy andavoidance of piecemeal litigation. “Wedo not believe, however, that parties toan arbitration agreement couldreasonably intend to allow the losingparty to have a second chance to winin court on the very issue that he lostin arbitration. Such a result wouldundermine the legitimacy of thearbitration award itself, and of thearbitration process.” B-S Steel of Kan.,
Courts haverecognized the
preclusive effect ofarbitration awards
under the doctrinesof res judicata andcollateral estoppel
in a subsequentjudicial proceeding
that necessarilyrequires a finding
that the arbitrationaward is a final
disposition of theclaim or issue indispute. However,
the “rules” forclaim/issue
preclusion withrespect to the“finality” of an
arbitration awardare not uniform
across jurisdictions.
P A G E 6firmed in an appropriate court iswithout effect and denied theapplication of collateral estoppelbased on the award. Leddy at 385,(citing Flora Fashions Inc. v. Com-merce Realty Corp., 80 N.Y.S.2d 384,386 (Sup. Ct. 1948).
o Eight years later, however, inJacobson v. Fireman’s Fund Insur-ance Co., 111 F.3d 261 (2d Cir. 1997),the Second Circuit held that thelack of confirmation of an arbitra-tion award did not vitiate thefinality of the award for purposesof res judicata. The Jacobson court,also looking to New York law,acknowledged the holding in Led-dy but predicted that the NewYork Court of Appeals (New York’shighest court) would now holdthat an arbitral award will be giv-en preclusive effect even if theaward had not been confirmed. Id.at 267. “We therefore hold, in keep-ing with the courts of the Firstand Second Departments, (NewYork intermediate appellatecourts) that res judicata and col-lateral estoppel apply to issuesresolved by arbitration ‘wherethere has been a final determina-tion on the merits, notwithstand-ing a lack of confirmation of theaward.’” Jacobson at 268, (quotingHilowitz v. Hilowitz, 85 A.D.2d 621,444 N.Y.S. 2d 948, 949 (2d Dept1981)). Hilowitz held that the “con-tention that only a judicially con-firmed arbitration award mayform the basis for the defenses ofres judicata and collateral estop-pel is without merit. . . . [These]doctrines are applicable to issuesresolved by arbitration wherethere has been a final determina-tion on the merits, notwithstand-ing a lack of confirmation of theaward.” Hilowitz v. Hilowitz, 85A.D.2d 621, 444 N.Y.S.2d 948, 949(2d Dep’t 1981).
o To date, the New York Court ofAppeals has not ruled on theissue. However, New York trial andintermediate appellate courtshave adhered to the position thatan arbitration award, even onenever confirmed, can serve as thebasis for the defense of collateral
Inc. v. Tex. Indus., Inc., 439 F.3d 653,666 (10t Cir. 2006).
o Claim and issue preclusion areviewed to be in the discretion ofthe courts, (Miller § 4475.1)
• Courts differ as to whethersatisfaction of the “finality” requisiterequires judicial confirmation of anarbitration award in order to give theaward preclusive effect in asubsequent judicial action.
• The federal circuits are split onwhether an award must be confirmedfor purposes of preclusion. A numberof courts have expressed concern thatbecause arbitral findings typically lackthe supervisory scrutiny ofauthoritative review, “...courts must becautious of procedural variancesbetween arbitral proceedings andjudicial proceedings when decidingwhether to give preclusive effect tothe former.” See Gruntal v. Steinberg,854 F. Supp. 324, 337 (D.N.J. 1994).
o In Gruntal, relying on bothMaryland law and guidance fromthe Second and Third Circuits, aNew Jersey Court held that“absent judicial confirmation, anarbitration award will not resultin a ‘final judgment’ and cannot,therefore, have preclusive effecton subsequent litigation.” Gruntal,at 337-38.
o In Leddy v. Standard Drywall, 875F.2d 383, 385 (2d Cir. 1989), afternoting that arbitration proceed-ings can, but do not necessarily,have preclusive effect on subse-quent federal court proceedings,the Second Circuit rejected thepreclusive effect of a prior arbitra-tion award because the awardwas never confirmed and enteredas a judgment pursuant to NewYork’s civil practice rules. The Courtheld that “‘under New York law, itis the judgment entered on anarbitration award that is givenpreclusive effect in subsequent lit-igation.’” Id. (quoting Springs Cot-ton Mills v. Buster Boy Suit Co., 275A.D. 196, 88 N.Y.S.2d 295, 298 (1stDept), affd, 300 N.Y. 586, 89 N.E.2d877 (1949). The Second Circuit thenconcluded that an arbitrationaward that is not filed and con-
estoppel in a subsequent action.See Williamson v. Stallone, 905N.Y.S.2d 740, 754-55 (N.Y. Sup.Ct.2010).
• A cautionary note with respect to thetiming of reliance on arbitrationawards for res judicata or issue preclu-sion purposes. The Colorado Court ofAppeals, in a matter of first impressionin that state, held that an arbitrationaward is not final until all appellateremedies applicable to an order con-firming the award have been exhaust-ed, including writs of certiorari to theColorado Supreme Court and the U.S.Supreme Court. Barnett v. Elite Props. OfAm., Inc., 252 P.3d 14, 22-23 (Colo. App.2010). “Where arbitrator’s award wasopen to direct attack by appeal or oth-erwise, it was not final for issue preclu-sion purposes.” Id. at 23 (citing NationalUnion Fire Ins. Co. v. Stites Profl LawCorp., 235 Cal. App. 3d 1718, 1 Cal. Rptr. 2d570, 574 (Cal. Ct. App. 1991). The Col-orado court’s ruling regarding the final-ity of a judgment entered confirmingan award is consistent with rulings invarious other states concerning thefinality of judgments for purposes ofcollateral estoppel.
o Logically, an award cannot be usedfor preclusion effects until thetime to seek to vacate the awardhas expired, and a confirmedaward cannot be used until alldirect appellate remediesregarding the judgment enteredon confirmation have beenexhausted burden. Id.
Choice of Law Considerations• For matters pending in federal courts,
the applicable law determining thepreclusive effect of an arbitrationaward depends on the basis of thefederal court’s jurisdiction. State lawdetermines the applicability of thedoctrine of collateral estoppel in adiversity action, while federal lawdetermines the preclusive effect to begiven in federal question cases.Weizmann Inst. Of Science v. Neschis,421 F. Supp. 2d 654, 675 n.21 (S.D.N.Y.2005) (internal citations omitted).
• Where a state court judgment isentered confirming an award, statelaw controls the preclusive effect ofthat judgment. “[A] federal court must
7 P A G Egive to a state court judgment the samepreclusive effect as would be given thatjudgment under the law of the State inwhich the judgment was rendered.” Migrav. Warren City School Dist. Bd. of Educ., 465U.S. 75, 84, 81, 79 L. Ed. 2d 56, 104 S. Ct. 892(1984); See Burgos v. Hopkins, 14 F.3d 787,790 (2d Cir. 1994).
• Where an award is not confirmed, andthus no judgment entered, the law of thestate in which the award was rendered willcontrol absent contrary contractualprovisions or federal question jurisdiction.
o The court in Jacobson v. Fireman’s Fundheld that because the umpire’sawards against Jacobson wererendered in of a New York arbitration“the preclusive effect in federal courtof [those] state-court judgments isdetermined by [New York] law.” 111 F.3dat 265 (quoting Migra, 465 U.S. at 81).
• Insurance and reinsurance disputes in arbi-tration are usually subject to the FederalArbitration Act. With one notable excep-tion, the FAA does not confer federal sub-ject matter jurisdiction so that jurisdictionin the District Court is usually diversity-based. See F. Hoffman-La Roche, Ltd. V. Qia-gen Gaithersburg, Inc., 730 F. Supp. 2d 318,324 (S.D.N.Y 2010); Hall Street Assoc. v. Mat-tel, Inc., 552 U.S. 576, 581-82 (2008). Conse-quently, the federal courts will look to thelaw of the state in which the award wasrendered in determining preclusion issues.
o However, matters within theConvention on the Recognition andEnforcement of Foreign Arbitralawards (“NY Convention”) are deemedto arise under the laws and treaties ofthe United States. In thesecircumstances, one would expectfederal courts to rely on federal law forresolving preclusion issues.
Limitations on Preclusive Applicationof Arbitration Awards• There is a lingering concern that because
of the differences between arbitrationsand litigation in terms of procedure,decision-making, and post-decision review,application of res judicata or collateralestoppel is inappropriate or unfair, evenwhere there is identity of parties andidentity of claims or issues, the issues wereactually decided, and the award is final. Toaccord preclusive effect to an arbitrationaward, the court in a subsequent
proceeding must consider whether theparty against whom the award is assertedhad a “full and fair opportunity” to litigatethe issue in the prior proceeding. Greenblattv. Drexel Burnham Lambert Inc., 763 F.2d1352, 1359 (11th Cir. 1985).
• The courts’ concerns with the use ofarbitration awards for res judicata orcollateral estoppel relating to thedifferences in procedure are illustrated inthe Restatement of Law (Second)Judgments § 84. The Restatement providesthat an arbitration should have the sameeffects under the rules of res judicata as ajudgment of a court, unless “[a]ccordingpreclusive effect to determination of theissue would be incompatible with a legalpolicy or contractual provision...” or “[t]heprocedure leading to the award lacked theelements of adjudicatory procedure” suchas those set forth in § 83(2).
o The factors set forth in § 83(2) are:
(a) Adequate notice to persons whoare to be bound by theadjudication ...;
(b) The right on behalf of a party topresent evidence and legal argu-ment in support of the party’scontentions and fair opportunityto rebut evidence and argumentby opposing parties;
(c) A formulation of issues of lawand fact in terms of theapplication of rules with respectto specified parties concerning aspecific transaction, situation, orstatus, or a specific series ofthem;
(d) A rule of finality, specifying apoint in the proceeding whenpresentations are terminatedand a final decision is rendered;and
(e) Such other procedural elementsas may be necessary toconstitute the proceeding asufficient means of conclusivelydetermining the matter inquestion, having regard for themagnitude and complexity of thematter in question, the urgencywith which the matter must beresolved, and the opportunity ofthe parties to obtain evidenceand formulate legal contentions.
There is a lingeringconcern that
because of thedifferences between
arbitrations andlitigation in terms
of procedure,decision-making,
and post-decisionreview, applicationof res judicata or
collateral estoppel isinappropriate or
unfair, even wherethere is identity of parties and
identity of claims orissues, the issues
were actuallydecided, and the
award is final.
P A G E 8• Arbitrations may involve procedures agreed
upon by the parties that might nullify thepreclusive effect of an award on laterlitigation.
o For instance, the parties’ arbitrationagreement might not allow for certaindiscovery, or, for purposes of efficiencyor to save time, the parties mightvoluntarily agree to truncate thediscovery process during thearbitration.
o Arbitration panels are generally morelimited than courts with respect tocertain subpoena powers, especiallywith respect to entities that are notparties to the arbitration itself.Accordingly, procedures that can resultin limited discovery might strikeagainst the application of res judicataor collateral estoppel in a subsequentlitigation of the same issues. See, e.g.,FleetBoston Financial Corp. v. Alt, 638F.3d 70, 80 (1st Cir. 2011)(acknowledging that differencesbetween arbitration and litigationmake it “particularly difficult” in“applying res judicata to arbitralawards.”)
• The evidence presented to a Panel, notsubject to judicial “rules of evidence”, maybe of sufficient significance to discouragethe preclusive effect of an award.
o Typically, arbitrators are not bound byrules of evidence that precludeadmission of hearsay evidence,privileged information, etc.
o Arbitrators are often directed to decideissues on the basis of industry customand practice; such evidence is notnecessarily admissible in a contractdispute.
• Courts have expressed reservations ingranting preclusive effect to arbitrators’awards where matters of public policy areinvolved. Basically, courts believe that theyshould be the decision makers, at a judiciallevel, where resolution involves publicpolicy. Arbitrations are private proceedingsborn of the parties’ agreement; thearbitrators are private individuals, usuallyselected by the parties. While the partieshave agreed to be bound by the arbitrators’determinations within the confines of thearbitration, a question arises as to whethermatters of public policy outside theconfines of an arbitration should be
determined by the arbitrators’ prior ruling.
o For instance, the Eighth Circuit refusedto apply the doctrine of issue preclu-sion, where the arbitration awardraised a question of public policy. AirLine Pilots Ass’n Int’l v. Trans StatesAirlines, LLC, 638 F.3d 572 (8th Cir. 2011).There, an airline pilot filed a grievancewith his labor organization, Air LinePilots Association International (“ALPA”),to recover lost wages and benefits.ALPA demanded arbitration against theairline, Trans States Airlines (“TSA”), forreimbursement. TSA lost at arbitration,and was ordered to reinstate the pilotand pay his lost wages and benefits.ALPA moved to confirm the award indistrict court, and TSA moved to vacatethe award on the ground that theaward was contrary to public policy.ALPA argued that a prior awardbetween ALPA and TSA concerning theimproper discharge of a different airlinepilot should be given preclusive effect.That prior arbitration resulted in a find-ing that the payment of lost wages andbenefits to a union employee for hiswrongful dismissal did not constitutean illegal loan, and therefore did notviolate public policy. The parties to thatarbitration settled before the awardcould be confirmed or vacated by a dis-trict court. Although the requisite ele-ments of collateral estoppel were allpresent, the Eighth Circuit neverthelessrefused to apply the doctrine. The courtexplained, “where, as here, a challengeto an arbitration award raises a ques-tion of public policy, we do not give aprior award, specifically one which hasnot been subject to judicial review, anypreclusive effect on a matter of publicpolicy.” Id. at 579. The court continued,“...the question of public policy is ulti-mately one for resolution by thecourts.” Id.
• The United States Supreme Court has alsostated that an arbitration award might nothave a preclusive effect on subsequentlitigation if the arbitration involved certainfederal rights that are best resolved by thecourts. Dean Witter Reynolds Inc. v. Byrd, 470U.S. 213, 223 (1985) (explaining that“arbitration cannot provide an adequatesubstitute for a judicial proceeding inprotecting federal statutory andconstitutional rights...”); See McDonald v. Cityof West Branch, 466 U.S. 284 (1984).
Courts haveexpressedreservations ingranting preclusiveeffect to arbitrators’awards wherematters of publicpolicy are involved.Basically, courtsbelieve that theyshould be thedecision makers, ata judicial level,where resolutioninvolves publicpolicy. Arbitrationsare privateproceedings born ofthe parties’agreement; thearbitrators areprivate individuals,usually selected bythe parties.
9 P A G E
CONFIDENTIALITYAGREEMENTS• Reliance on a prior arbitration award to
preclude relitigation of a claim or issue in alater case may prove particularlychallenging where the parties executed aconfidentiality agreement for thearbitration. See John M. Nonna, Larry P.Schiffer & Lisa A. Joedecke, Res Judicata andCollateral Estoppel, ARIAS•U.S. QUARTERLY,Third Quarter 2003 (discussing difficultiesof investing confidential arbitration awardswith preclusive effect). See also Hans Smit,Breach of Confidentiality as a Ground forAvoidance of the Arbitration Award, 11 AM.REV. INT’L. ARB. 567 (2000) (positing that, “if a party could not plead that an earlierarbitral award had res judicata effect . . ., aparty agreeing to arbitration would foregoa substantial right that also serves thepublic interests of forestalling repetitivelitigation. It is not readily to be assumedthat confidentiality can be invoked toproduce an effect so adverse to theimportant social considerations thatunderlie the doctrine of res judicata”).
• The standard ARIAS confidentialityagreement contains this exception:“Disclosure of Arbitration Information maybe made: ... (b) in connection with courtproceedings relating to any aspect of thearbitration, including but not limited tomotions to confirm, modify or vacate anarbitration award.”
A party seeking to invoke res judicata orcollateral estoppel on the basis of on anarbitration award that is subject to thestandard ARIAS confidentiality provisioncould argue that the quoted exceptionpermits disclosure of the confidentialarbitration award.
o The list of exceptions toconfidentiality is not exhaustive(“including but not limited to ...”).
o Just as a motion to confirm is anaction “relating to any aspect of theaward,” so too is a motion seeking toinvest the arbitration award withpreclusive effect.
o Note, however, that the exception per-mits disclosure only in connectionwith “court proceedings.” This excep-tion may not authorize disclosure toanother arbitration panel.
• A party seeking to oppose the application
of res judicata or collateral estoppel inreliance on an arbitration award that issubject to the standard ARIASconfidentiality provision could argue thatthe quoted exception permits disclosure ofconfidential arbitration information only inconnection with subsequent proceedingsrelating to the arbitration itself, not inconnection with an unrelated proceeding inwhich res judicata or collateral estoppel isinvoked.
o The listed exceptions (“motions toconfirm, modify or vacate anarbitration award”), while admittedlynot exhaustive, all address the integrityof the arbitration itself, whether toenable the prevailing party to judiciallyenforce the arbitration award or topermit the losing party to obtainjudicial correction of a defective award.Nothing in the list of exceptionssuggests that disclosure is permittedto advance the interests of a party in asubsequent proceeding that isunrelated to the arbitration itself.
o An interpretation of exception (b) tothe standard ARIAS confidentialityagreement that permits disclosure ofconfidential arbitration information toinvoke res judicata or collateralestoppel would swallow the rule.Under this pro-disclosure logic, a partycould always disclose confidentialarbitration information to a courtbecause, simply by doing so, thedisclosing party could argue that thecourt proceedings now “relat[es]” tothe arbitration, which would make thedisclosure permitted under exception(b). This logic is circular and has nolimitation.
o Disclosing confidential arbitrationinformation to obtain the benefits ofres judicata or collateral estoppeldestroys the protections ofconfidentiality that both partiesagreed to at the outset of thearbitration and that is one of theprinciple reasons why parties choosearbitration in the first instance.
o Unlike court proceedings, arbitrationawards were never intended to haveprecedential, let alone preclusive, effectupon subsequent disputes. The uniquecharacteristics of arbitration, includingrelaxed procedural and evidentiarystandards, truncated discovery, and
A party seeking tooppose the
application of resjudicata or collateralestoppel in reliance
on an arbitrationaward that issubject to the
standard ARIASconfidentiality
provision couldargue that the
quoted exceptionpermits disclosure
of confidentialarbitration
information only inconnection with
subsequentproceedings relating
to the arbitrationitself, not in
connection with anunrelated
proceeding in whichres judicata or
collateral estoppel isinvoked.
decision-makers who are typicallynot bound by law and who arepermitted to arrive at theirdecisions by compromise, renderarbitration awards particularlyunsuitable bases for res judicataor collateral estoppel.
OFFENSIVE AND DEFENSIVEUSE OF RES JUDICATA ANDCOLLATERAL ESTOPPEL• “The Sword”: Offensive Collateral
Estoppel: a prior finding against thedefendant is used to preclude thedefendant from relitigating the issuein a subsequent judicial proceeding. Insuch an instance, the Plaintiff would,in the subsequent action, attempt tostrike the relevant defense (s) or obtainsummary adjudication in its favor byvirtue of collateral estoppel.
o Plaintiff in the subsequent actiondoes not necessarily have to havebeen a party to the priorarbitration .
o Defendant must have been aparty to the prior proceeding, or inprivity with the party in the priorproceeding.
• “The Shield”: Defensive CollateralEstoppel: a prior finding against theplaintiff is used to preclude theplaintiff from relitigating the issue in asubsequent judicial proceeding. Insuch an instance, the defendant usescollateral estoppel as a defense and/orgrounds for dismissal.
o Plaintiff, or someone in privitywith Plaintiff must have been aparty to prior action.
o Defendant does not necessarilyhave to have been a party to theprior proceeding
• Courts might apply greater scrutiny inapplying res judicata or collateralestoppel in an offensive, as opposed toa defensive, manner. See Westerlind,James, “The Preclusive Effect ofArbitration Awards”, Mealey’sLitigation Report: Reinsurance, Vol. 21,No. 8, August 20, 2010 (explaining thatthe courts allow both offensive anddefensive uses of collateral estoppel).
P A G E 1 0• Courts have allowed the offensive use
of res judicata and collateral estoppel.See, e.g., the United States SupremeCourt in Parklane Hosiery Co. v. Shore,439 U.S. 322 (1979) and the New YorkCourt of Appeals in B.R. DeWitt, Inc. v.Hall, 19 N.Y. 2d 141 (1967) (explaining,“While it is true that most of therelevant cases in this area in New Yorkhave arisen under circumstanceswherein the defendant sought to usethe prior adjudication against theplaintiff, there seems to be no reasonin policy or precedent to prevent the‘offensive’ use of a prior judgment.”).
• However, courts also have explainedthat the application of collateralestoppel is controlled by “principles ofequity”, so the offensive application ofthe doctrine should only be allowedwhere its application would be “fair” tothe parties involved.
o See, e.g., Jack Faucett Associates,Inc. v. American Tel. & Tel. Co., 744F.2d 118, 125 (D.C. Cir. 1984) (“Whereoffensive estoppel is involved, theelement of ‘fairness’ gains specialimportance.”).
o Collateral estoppel is an equitabledoctrine. Offensive collateralestoppel is even a cut above thatin the scale of equitable values. Itis a doctrine of equitablediscretion to be applied onlywhen the alignment of theparties and the legal and factual
issues raised warrant it. Thediscretion vested in trial courts todetermine when it should beapplied is broad. (Citing ParklaneHosiery, supra, at 331). Itsapplication is controlled by theprinciples of equity. “This courthas previously admonished thatfairness to both parties must beconsidered when it is applied.”Nations v. Sun Oil Co., 705 F.2d 742,745-46 (5th Cir. 1983).
o To determine whether it would be“fair” to invoke the application ofoffensive res judicata or collateralestoppel, courts have exercisedtheir “broad discretion” and havelooked to the four non-exclusivefactors set forth by the USSupreme Court in ParklaneHosiery:
• (1) whether the party assertingthe doctrine could easily havejoined in the action upon whichreliance is placed;
• (2) whether the party againstwhom the doctrine is to beapplied had any incentive tovigorously defend the first action;
• (3) whether the second actionoffers procedural opportunitiesunavailable in the first action; and
• (4) where the prior judgmentrelied on is inconsistent withother decisions. Id. at 332.▼
DID YOU KNOW…?THAT THE BEST WAY TO FAMILIARIZE YOURSELF WITH THE RECENTLYREDESIGNED ARIAS•U.S. WEBSITE IS TO ROLL YOUR POINTER HORIZONTAL-LY ACROSS THE MENU HEADINGS AT THE TOP OF THE PAGE AND SCAN THEITEMS IN EACH DROPDOWN LIST.
1 1 P A G E
CEO of Zurich GeneralInsurance Business IsKeynote for SpringConferenceMichael G. Kerner, CEO of the generalinsurance arm of Zurich InsuranceGroup (Zurich), will provide the keynoteaddress to open the ARIAS 2013 SpringConference at The Breakers in PalmBeach, Florida. Mr. Kerner, was named tothis new role last August, after previous-ly serving as CEO for Zurich's Global Cor-porate business in North America. Hehas held various executive positionswith Zurich since 1992, including theHead of Group Reinsurance.
Mr. Kerner is a graduate of the StateUniversity of New York at Binghamton,having earned a Bachelor of Sciencedegree in Mathematics and Economics.He is a Fellow of the Casualty ActuarialSociety and a Member of the AmericanAcademy of Actuaries.
Elaine Caprio Brady in New Position at Liberty MutualElaine Caprio Brady, who retired asChairman of ARIAS•U.S. in December,changed roles at Liberty Mutual Insur-ance recently. She is now Vice Presidentand Manager of Corporate Procurementfor Liberty Mutual Insurance. ARIAS•U.S.wishes her the best of success in thissignificant undertaking.▼
Breakers Reservations Are OpenThe Breakers reservation system is nowopen for those who wish to reservetheir rooms for the ARIAS 2013 SpringConference. The yellow button near thetop of the ARIAS Home page links to the“Welcome ARIAS” page of the hotel’sonline system. Rooms are available at$315 for a Deluxe Room, $385 for aPremium Room, and $470 for anOceanfront Room, the last room type ison an “if available” basis.
The conference runs from Wednesdaynoon until Friday noon, May 8-10.Registration opened on the website in
the middle of February. ▼
Foss Is Recipient ofARIAS AwardAt the 2012 Annual Meeting onDecember 17th at the Hilton New York,new Chairman Mary Kay Vyskocilpresented The ARIAS Award to Charles M. Foss.
Charlie Foss was a founding memberwho took on a number of key initiativesbefore he was Chairman during 2003and 2004. In 2000, he created theARIAS•U.S. Umpire Selection Procedurethat provided a system for randomlyselecting names from among ARIAS•U.S.Certified Arbitrators or Umpires andbringing them down to a singleselection. In 2001, he conceived of theIntensive Arbitrator Training Workshop,created the scenario that has been usedfor the mock sessions ever since, and ledthe workshop for three years. In 2002, hedrafted and submitted for Boardapproval a resolution that establishedthat Board members could serve onlytwo three-year terms before retiring. In2004, he created the ARIAS•U.S. Awardand recommended that it be presentedto Founding Chairman T. RichardKennedy.
Upon mandatory retirement from theARIAS•U.S. Board in 2004, Charlie servedon the Editorial Board of the ARIAS•U.S.Quarterly from 2005 through 2008.▼
Karnell and VidovichApproved as Certified Arbitrators At its meeting on December 17, theARIAS•U.S. Board of Directors approvedG. Kathleen Karnell and AnthonyVidovich as Certified Arbitrators,bringing the number of arbitrators to241. Their biographies are on page 30 ofthis issue.▼
Richard Marrs NamedCertified Umpire At the same meeting, the Board ofDirectors approved Richard E. Marrs as aCertified Umpire, bringing the numberof umpires to 54. ▼
news and notices
ARIAS CertificationRequirement Extensions Revised At its meeting on December 17, theARIAS-U.S. Board of Directors revised theextension of certification for those whohad registered for one of the twoOctober 31 seminars, which werecanceled because of Hurricane Sandy.Any arbitrator who was due to berenewed on January 1, 2013 on the basisof that attendance will have his/hercertification extended until nextNovember 1 to allow attendance at oneof the seminars scheduled for October30, 2013. Seminar credit could also havebeen achieved through attendance atthe recent December 17 event or one ofthe seminars (two tracks) on March 14 in New York.
This extension is similar to the extensiongranted to those whose certificationsexpired at the end of 2012 and hadplanned to attend the Fall Conference forconference credit; they have beenextended until November 2013 so thatthe 2013 Fall Conference can applyretroactively toward their renewal onJanuary 1, 2013.
The Board felt that those arbitratorswho had planned to meet the tworequirements (conference and seminar)with a single trip to New York lastmonth would be subjected to an unfairadditional financial burden by having toattend a stand-alone seminar.
In both cases, the date for the nextexpiration does not change; it remainsat December 2014. If these attendancesare to be applied in reverse toward therenewal date of January 2013, theycannot also support renewal in January2015. Therefore, those taking advantageof these extensions must attendseminars and/or conferences during2014, as well.▼
P A G E 1 2
add wonders to an opening statement—and, with a good one, the arbitrators mayrefer to it throughout the hearing.
All the Exhibits Are In • Arbitrators should be very clear (unless
there is a reason to do it differently in aparticular case) that all previously markedexhibits, except ones that have beenobjected to, are fully in evidence as of thebeginning of the hearing.
• And further — that objections to objected-to documents will be heard when thedocuments are offered.
• This should be in the context of making theparties understand that, generally speaking,all exhibits come in, subject to issues as toauthenticity, privilege, extremeirrelevance/prejudice, or prior failure todesignate the documents in advance.
Study the Witness Statements andExperts’ Reports in a Timely Way• The Muscular Arbitrator will study the
Witness Statements/Expert Reports andrelated exhibits in advance — and willreview them closely the night before, inorder to be as familiar with them as shewould have been had their substance beenpresented by live testimony.
• The Muscular Arbitrator will tell the partiesat the opening of the hearing that she willbe doing this and that they can count on it.
• The same applies to reviewing the KeyExhibits in advance.
• Tips to Counsel:
• Remember that Arbitrators do not havea staff or junior attorneys andparalegals working with them on thearbitration.
• Facilitate the arbitrators’ access toWitness Statements, Expert Reports for
feature
Charles J.Moxley, Jr.
An ARIAS Certified Arbitrator and theprincipal in MoxleyADR LLC, Mr.Moxley has presided over more than250 commercial arbitrations, many ofthem in the insurance area, over thepast 30+ years. An Adjunct Professorat Fordham Law School teaching arbi-tration law, Mr. Moxley is theDistinguished ADR Practitioner inResidence at Cardozo Law School, aFellow of the College of CommercialArbitrators and a Fellow of theChartered Institute of Arbitrators.
Here are some tipsthat have occurredto me in presidingover many arbitra-tions, as to howarbitrators mightbegin to become thevaunted “MuscularArbitrator”…
Charles J. Moxley, Jr.
The Overriding ImperativeThat We Become “MuscularArbitrators” and Choose“Muscular Arbitrators” for Our Cases We have all known for some time that weneed to up our games as arbitrators andadvocates if arbitration is to achieve itsfundamental objective of providing a betteralternative to litigation, delivering a processthat is more flexible, quicker, and lessexpensive than litigation while providing thesame fairness of process and result.
Here are some tips that have occurred to mein presiding over many arbitrations, as tohow arbitrators might begin to become thevaunted “Muscular Arbitrator” and as to howlitigators in arbitration can improve theprospects of their receiving a “MuscularArbitration.”
The Muscular Arbitrator • The Muscular Arbitrator will proactively
manage the hearing from the beginning.
• The Message: Both sides will get a full andfair opportunity to present theircase/defense, but we will move it along.
• Limit opening statements whereappropriate and enforce the limits.
• Give guidance to counsel, at the firstprovocation, not to engage in repetitive orcumulative testimony or argumentativebehavior and advise that redirect andrecross will be limited.
Opening Statements: Tip to Counsel • A colorful and engaging PowerPoint can
Some Tips for Conducting MuscularArbitration HearingsThis article is based on a paper presented at the ARIAS•U.S. December 2012 Conference.
1 3 P A G Eupcoming witnesses, and the like, andkeep them advised of changes in theorder of witnesses.
• It is generally a good idea for counselto provide the arbitrators withdramatis personae, summaries, copiesof earlier papers — whatever counselwould like the arbitrators to be lookingat or thinking about at any given time.
Having the Necessary Papers • The Muscular Arbitrator will have copies of
the pleadings and other important papersat ready access.
Paper Exhibits• It is a very nice touch when the exhibits
are in binders that are small enough to beopened and closed without it being a back-breaking job.
• Two-sided copies save a lot of trees and areeasy on arbitrators’ backs.
• It also can be a wonderful if thedocuments are organized in some sensibleway, whether by chronology or by topic orthe like.
• Another very handy device is for counsel toBates stamp the individual pages of all theexhibits consecutively before having thecopies made, so that any page of anyexhibit can be located by its unique pagenumber.
• Further Tip to Counsel: Some arbitratorsaren’t in firms and have no real supportstaff. Helping the arbitrators with the set-up of the Exhibits and the shipping and/orstorage of them between hearing days,when there are gaps, can be a nice touch.
The Electronic Hearing• The Muscular Arbitrator will increasingly
be ready for the fully electronic hearing.
• Tips for Counsel:
• Providing a thumb drive or the likecontaining all of the pleadings,Witness Statements, Expert Reports,briefs, transcripts (if any), exhibits,copies of cases, etc. can be very helpfulto arbitrators in evaluating the caseand writing the award. Particularlyhelpful are briefs that are hyperlinked
to the exhibits and authorities cited.
• It can also be helpful, with thepermission of the arbitrators, to markup the important parts of exhibits andcases, etc.
Some Nice Touches with Respect toIndividual Witnesses• In a long case, it can be a nice touch for
counsel to provide photos of individualwitnesses.
• It is often a good idea to provide a CV ofeach witness, where applicable, in advanceof the testimony, and to hand a copy of theCV to the arbitrators as the witness startsto testify, thereby making it possible to savetime on foundations.
• Tip to Counsel: It’s not unreasonable forcounsel in such circumstances to make anice summary statement of what the CVshows.
Organizational Charts as to thePositions and Responsibility ofWitnesses and other Such GuidesCan Be Helpful • Tips to Counsel:
• Basic chronologies can be helpful.
• A dramatis personae can be helpfulwhere there are many witnesses.
• Again, counsel are well advised to recallthat the arbitrators do not have a teamof junior lawyers and paralegals toassist them in organizing materials forthe arbitration.
• In addition, arbitrators don’t necessarilylive with the case during the breaks, soit can be helpful to provide copies ofmaterials like these to the arbitratorswhen the hearings resume to bring thearbitrators back into the picture(though the Muscular Arbitrator willobviously have done this on her own).
• Accordingly, it is always a good idea forcounsel to make available to thearbitrators whatever they would likethe arbitrators to be looking at orthinking about at the time.
Again, counsel arewell advised torecall that the
arbitrators do nothave a team of
junior lawyers andparalegals to assistthem in organizing
materials for thearbitration.
In addition,arbitrators don’t
necessarily live withthe case during thebreaks, so it can be
helpful to providecopies of materials
like these to thearbitrators when the
hearings resume to bring the
arbitrators back intothe picture (though
the MuscularArbitrator will
obviously have donethis on her own).
P A G E 1 4Argumentative Counsel • It not infrequently happens that
counsel are inclined to engage inheavy and sometimes vituperativecolloquy among themselves.
• While parties have a right to makeany objections they want and to beheard with respect to objections,there is no room for vituperation (notto mention that it is counter -productive), nor is extended colloquyhelpful.
• These practices must be squelchedwhen they first appear.
• Approaches:
• Direct counsel, when they are toodisputatious with each other, todirect everything to thearbitrators; and
• Don’t be afraid to limit argumentonce the point has been made.
Reviewing Upcoming Witnessesand Areas of Testimony at the Endof the Day • The Muscular Arbitrator will review
upcoming witnesses and theiranticipated areas of testimony withcounsel at the end of each day.
• Particularly after the matter has goneon for a while and the arbitrator hasheard enough testimony to have asense of the matter, she will advisecounsel as the case proceeds as towhat witnesses and which areas oftestimony seem potentially helpful,and which do not.
• The Muscular Arbitrator will providefor extended days when necessary toget the job done on time —- and willremember that the court reporter (ifthere is one) has to be on board forextended days to be an option.
Limiting Direct Testimony Whenthe Witness’s Direct Testimony• Has Been Presented by Witness
Statement, Expert Report or the Like
A lot of time can be saved by avoidingextensive repetition of direct testimonywhen that testimony has already beenprovided by a Witness Statement,Expert Report, or the like.
Offers of Proof and UnnecessaryTestimony • The situation will arise where a party
is going to put a witness on to testifyto something that the party needs toestablish but that the other side is notreally going to be in a position todispute anyhow, although they wouldnot necessarily stipulate to it.
• In this situation, a quick compromisecan be to have an Offer of Proof put onthe record by offering counsel — andhave that offer be stipulated to astestimony, i. e. , not that the matter istrue, but that this is what the witnesswould have testified to.
Hearing Expert Witnesses on aParticular Topic at the Same Time • It can save time to have expert wit-
nesses on a particular topic testify atthe same time, with all such witnessesbeing present when each testifies.
Arbitrator’s Stream ofConsciousness Notes at the End ofEach Day• A practice that some arbitrators follow
— and that can be quite helpful interms of assisting the arbitrator tounderstand a case and organize herthoughts on it, and also to get backinto it promptly again after a break —is to dictate a stream of consciousnessmemorandum at the end of each day’shearing, setting forth in some detailthe arbitrator’s impressions andtentative conclusions based on theday’s testimony and her overallanalysis of the issues in the case, asthey appear in the hearing to date,along with any questions thearbitrator has going forward.
• These dictated notes can be muchmore helpful than the notesarbitrators take on yellow pads orlaptops during the hearing, since theytypically provide more of an overviewand analysis.
• Arbitrators who follow this practicefind that it increases theirunderstanding of the case and theirsense of what will be most helpful inthe case going forward.
Form of Award• Reasoned awards are expensive and
time-consuming.
• The Muscular Arbitrator will challengethe parties, as with discovery andmotion practice, as to why they want areasoned award, and will point outthat, given the limited scope of review,in many instances a standard awardmay be sufficient.
• Where the parties want a reasonedaward, the question becomes whatlevel of reasoning they want.
• Different arbitrators and counsel havemarkedly different views of what ismeant by a “reasoned award.”
• This should be a matter of explicitdiscussion: The Muscular Arbitratorwill discuss with counsel what level ofreasoning they want, conducting thisdiscussion with reference to thepotential costs of different levels ofreasoned awards.
• The Muscular Arbitrator will alsoremember that at times, when counseladvise that they want a standard, non-reasoned award, this means not onlythat they do not want to incur theexpense of a reasoned award, but alsothat they affirmatively want to avoidhaving a reasoned award. When this isthe case, obviously the arbitrator willwant to respect this.
Avoiding Post-Hearing Briefs WhenIt Makes Sense/The ClosingStatement Alternative• Post-hearing briefing adds a
considerable level of expense toarbitrations and results not only insubstantial delay, but also in thearbitrators’ not addressing the matterand writing their awards until weeks,or more typically months, after theclose of the hearing.
• Often — although counsel may have ahard time letting go — the arbitratorswill know the case as well as counselby the end of the hearing, so that post-hearing argument and briefing will notreally be all that helpful to thearbitrators. This is worth discussingwith counsel. Nonetheless, if, as oftenhappens, counsel nonetheless want to
1 5 P A G Eanyhow. Moreover, having the twosubmissions to review can be helpful as toreasonableness.
• The alternative — the submission of feesapplications after the award — can take upmuch more time, as the losing party may,by that time, be quite uncooperative.
Dealing with Those Last MinuteTroublesome Issues That Come Up • It often happens that issues come up late
— sometimes quite late in the arbitration— that are really a nuisance.
• The Muscular Arbitrator, to protect therecord of the case and avoid the risk ofissuing an award that is unclear or insome way subject to challenge, will givefair consideration to such matters and, asappropriate, create a record as to thatconsideration, rather than simply brushingsuch matters aside.
Important Words to Add at the Very End • Nothing can more derail the efficiency and
economy of arbitration than to have theaward be subject to challenge in court.
• Running a good hearing is obviously a wayto decrease the likelihood that any suchcourt challenge will have merit.
• One important stopgap is to very carefullyand comprehensively inquire of counsel atthe end of the hearing questions alongthese lines: Have you had an opportunity tooffer whatever proof you feel you’re entitledto offer and to say whatever you feel youneed to say? Do you feel you’ve had a fulland fair hearing? Is there anything furtheryou need in order to feel that you have afull and fair hearing?
• While this may seem like looking fortrouble, it can save a lot of time in the long run.▼
brief the matter and/or have closingstatements a week or two subsequent tothe closing statements, that shouldgenerally be permitted.
• Closing statements can be an efficientalternative to post-hearing memorandawhen counsel are satisfied with them.
• Where the parties and counsel are local, itis often convenient for them to come backa week or two after the hearing to providetheir closing statements, in some instancesafter the transcripts (if any) are received.
• While this takes some time, it is generallymore efficient and quicker than post-hearing briefs and, in many cases, may bemore helpful to arbitrators because of thedialogue the closing statements makepossible.
• Tips to Counsel:
• A good closing PowerPointpresentation, annotated to the record,can be helpful in an appropriate case(if counsel don’t then just read it).
• Also quite helpful and handy is a smallbinder of the key documents from thehearing, marked up to highlight thepoints counsel like (it can be particular-ly handy if the documents are some-what reduced in size and two-sided).
Attorneys’ Fees and Costs • In cases in which the arbitrators will be
awarding attorneys’ fees and costs, itbecomes very important how this processis administered.
• Many arbitrators believe that the bestpractice is to ask both sides to submit theirstatement of their fees with their finalbriefs and to agree that the arbitratorsmay decide attorneys’ fees on the basis ofthose submissions.
• If this approach is adopted, substantialpotential delay in the future can beavoided. However, in the unusual casewhere either side objects and reserves theright to have a hearing as to fees,allowance will have to be made at a latertime for such a hearing, since factualquestions will presumably be presented.
• While this approach results in the winningparty’s having had to submit its fees aswell, this should not be a significantburden because lawyers in most cases willhave recorded their time on a regular basis
One importantstopgap is to very
carefully andcomprehensively
inquire of counsel atthe end of the
hearing questionsalong these lines:Have you had an
opportunity to offerwhatever proof youfeel you’re entitledto offer and to saywhatever you feel
you need to say? Doyou feel you’ve had
a full and fairhearing? Is there
anything further youneed in order to
feel that you have afull and fair
hearing?
P A G E 1 6
ReplacementConference Draws 210
1 7 P A G E
As Hurricane Sandy was bearing downon the New York and New Jerseycoastlines on October 29, ARIAS•U.S.chose to scrap six months of preparationbefore everyone’s power went out,rather than risk having people attemptto get to New York only to find that theconference could not be done. As itturned out, the decision was a good one.On November 1, the opening day of theconference, with the subways still shutdown, the hotel had few employees, andflooded-out refugees were standing inline in the Lobby, hoping to get rooms.Power was out for the bulk of the areasurrounding New York and for somelarge parts of Manhattan, as well.
With the 2012 Fall Conference gone,ARIAS•U.S. worked with the Hilton tofind a date when at least part of theagenda could be staged. As a result, asmaller event was scheduled forDecember 17 that included the 2012
Annual Meeting, three of the generalsession panels, a luncheon, and areception. The conference was stillentitled “ARIAS•U.S. Moving Forward,”but was informally called the “December Conference” to distinguish it from the original event. The turnoutwas impressive. When all wereaccounted for, the number of attendeesreached 210, versus the 409 who hadregistered for the Fall Conference.
In the opening general session, members of the Arbitration Task Force,Jeffrey M. Rubin, Michael A. Frantz, and Anthony Vidovich, discussed theprogress of several initiatives to explore improvements to thearbitration process, including utilizingneutral panels, adopting an appealprocess, recapturing best practices of thepast, and using mediation duringarbitration. Many specific ideas hadbeen raised in the Task Force
Michael A. Frantz
Jeffrey M. Rubin
Anthony Vidovich
P A G E 1 8
deliberations, but none has yet been recommended to the Board. All are stillin the analysis and consideration stage. The slides from this presentation areavailable on the website under the About ARIAS•U.S. menu at the bottom ofthe Arbitration Task Force page.
After lunch, the Annual Meeting elected three new Board members, MichaelA. Frantz, Mark T. Megaw, and James I. Rubin. New Chairman Mary KayVyskocil presented awards to retiring members, Elaine Caprio Brady, Susan A.Stone, and Damon Vocke (in absentia). She also presented The ARIAS Awardto Charles M. Foss, one of the founders of ARIAS•U.S., who had pioneeredmany of the programs of the Society. This was only the third time that theaward had been presented, since it was created (by Charlie Foss) in 2004.Finally, the ARIAS•U.S. financial results through the end of the last fiscal year(June 30) were presented by Bill Yankus, in Treasurer Peter Gentile’s absence.The slides from this presentation are available in the Members Area of thewebsite, accessed through the Membership menu. In an update to thatpresentation, he pointed out that the cancelation of the Fall Conference hadseriously affected the current year results for ARIAS•U.S., estimating a net loss
ANNUAL MEETING
William Yankus, Elaine Caprio Brady, and Mary Kay Vyskocil address the 2012 Annual Meeting.
Elaine Caprio Brady reviews her year asChairman.
Former Chairman Susan Stone withMeritorious Service Award.
New Chairman Mary Kay Vyskocil pres-ents “The ARIAS Award” to Charles M.Foss (see News and Notices on Page 11).
Chairman Vyskocil presents MeritoriousService Award to Outgoing ChairmanBrady.
Executive Director Bill Yankus summarizes2012 financial results and 2013 budget.
1 9 P A G E
DIRECT DISPUTES
for the year of roughly $60,000, instead of a net gain of $132,000.
The other two panels that were carried over from the Fall Conferencefocused on Direct Disputes and Use of Evidence.
The first session explained how ARIAS arbitrators can become involved indirect insurance disputes. It also surveyed procedural issues that arise indirect disputes but are not typical in reinsurance disputes and outlined thetypes of substantive issues that frequently arise in direct disputes. Seekingnew opportunities for ARIAS•U.S. arbitrators in other areas of insurance,beyond reinsurance, is a major initiative being examined by the StrategicPlanning Committee. The panelists addressing this subject were John Cole,Howard Denbin, and Joseph Profaizer. Daniel Neppl moderated thediscussion.
The second panel addressed a range of key evidence-related questions.What is the difference between “fact” and “expert” evidence, and when is“expert” evidence useful in an arbitration (and when is it not)? Whatexactly is custom & practice evidence, what is its relevance, and can itsubstitute for a lack of direct evidence? What is the value of “course of
Panel explains procedural and substantive issues in direct disputes. Moderator Daniel J. Neppl
John D. Cole Howard D. Denbin
Joseph R. Profaizer
P A G E 2 0
USE OF EVIDENCE
Panel details characteristics and value of various types of evidence. Moderator Lawrence S. Greengrass
Patricia Taylor Fox Charles J. Moxley, Jr. Peter A. Scarpato
performance” evidence, and what issues are inherent in itsuse? The panel explored these and related questions, bothfrom a procedural and a substantive context. The panelistswere Patricia Taylor Fox, Charles Moxley, and Peter Scarpato.Lawrence Greengrass moderated the discussion.
In all, this modified conference gave attendees some valuabletraining that, while significantly shortened, was worthwhilein refreshing, updating, and expanding memberunderstanding of key knowledge areas. It also affordeduseful opportunities for renewing relationships with
associates and meeting new participants in the field.
The clothing drive for disadvantaged job seekers, originallyplanned for the November Conference was carried over to theDecember event. Volunteers from Mound Cotton Wollan andGreengrass staffed the collection station. A significantnumber of contributions were made by attendees. Nine largeboxes of clothing were sent to Dress for Success (women) andCareerGear (men).▼
2 1 P A G E
RECEPTION
Miguel Roure, Mina Matin, AndrewLewner, and Tom Perry
Michael Collins, Denis Loring, andLarry Greengrass
Paul Dassenko and David Thirkill Joe Carney and Larry Magnant Amy Kline and Lydia Kam Lyew
P A G E 2 2
Mary Kay Vyskocil, a Litigation Partnerat Simpson Thacher & Bartlett LLP, waselected Chairman of ARIAS•U.S. at its2012 Annual Conference in New YorkCity. She succeeds Elaine Caprio Brady,Vice President at Liberty Mutual Group,who has retired from the Board. JeffreyM. Rubin, Senior Vice President, DirectorGlobal Claims of Odyssey ReinsuranceCompany, was elected President suc-ceeding Ms. Vyskocil.Also at the conference, Eric S. Kobrick,Deputy General Counsel and Chief Rein-surance Legal Officer at American Inter-national Group, Inc., was elected VicePresident (President Elect). Elizabeth A.Mullins, Managing Director and head ofGlobal Dispute Resolution & Litigationof Swiss Re America Holding Corpora-tion, was elected Vice President.In addition, ARIAS•U.S. members electedthree new Board members. They wereMichael A. Frantz, Senior Vice Presidentand Claim Department Manager ofMunich Reinsurance America, Inc., MarkT. Megaw, Director of Reinsurance Liti-gation for ACE Group Holdings, andJames I. Rubin, head of the reinsurancelitigation and arbitration practice at But-ler Rubin Saltarelli & Boyd LLP. Theyreplaced Elaine Caprio Brady, Susan A.Stone, and Damon N. Vocke, who retiredfrom the Board. As a Litigation Partner at SimpsonThacher & Bartlett LLP, Mary Kay Vyskocil handles general commercial litigation. Her practice is concentrated ininsurance and reinsurance coverage litigation and cases involving the financial services industry. Ms. Vyskocil has represented major
domestic and foreign insurers in com-plex coverage litigations (includingnumerous jury trials and appellatearguments) throughout the U.S. in awide variety of contexts, including envi-ronmental, asbestos, breast implantsand other mass tort claims. She is alsoactive in reinsurance litigations andarbitrations in the U.S., Great Britainand Bermuda. At ARIAS•U.S., she haschaired the Education and InternationalCommittees. Outside the insurance area, Ms. Vyskocilcurrently represents UBS in connectionwith major litigations involving residen-tial mortgage backed securities and for-mer officers of Washington MutualBank in litigation with the FDIC. Shehas also served as outside counsel tothe Archdiocese of New York. Ms. Vyskocil is co-author of the leadingtreatise, Modern Reinsurance Law &Practice, 2d ed. (Glasser LegalWorks2000) and is a frequent lecturer andauthor on insurance and reinsurancecoverage issues and on litigation andtrial skills.As Senior Vice President, Director GlobalClaims of Odyssey Reinsurance Compa-ny, Jeffrey Rubin is responsible for over-sight of group-wide claims. AtARIAS•U.S., he is Co-Chair of the FinanceCommittee. Prior to working on the business side ofthe reinsurance industry, Mr. Rubinpracticed law in Chicago for 16 yearswhere he was a partner at Phelan, Pope& John, Ltd. He is a graduate of CornellUniversity Law School and State Univer-sity of New York, Oneonta College.▼
feature Mary Kay Vyskociland Jeffrey RubinChosen as Chairmanand PresidentKobrick elected Vice President (PresidentElect); Mullins is Vice President; MichaelFrantz, Mark Megaw, and James Rubinare New Board Members
Eric S. Kobrick
Elizabeth A.Mullins
Michael A.Frantz
Mark. T.Megaw
James I.Rubin
Mary KayVyskocil
Jeffrey M.Rubin
In each issue of the Quarterly, thiscolumn lists employment changes, re-locations, and address changes, bothpostal and email that have come induring the last quarter, so thatmembers can adjust their addressdirectories.
Although we will continue to highlightchanges and moves, remember that theARIAS•U.S. Membership Directory on thewebsite is updated frequently; you canalways find there the most currentinformation that we have on file. If yousee any errors in that directory, pleasenotify us at [email protected].
Do not forget to notify us when youraddress changes. Also, if we missedyour change below, please let us know,so that it can be included in the nextQuarterly.
Recent Moves andAnnouncementsMitchell L. Lathrop can now be reachedat Law Office of Mitchell L. Lathrop,3580 Carmel Mountain Road, Suite 300,San Diego, CA 92130-6768, phone 619-985-8262, fax 619-226-2762,email [email protected]. He has a website atwww.LathropADR.com.
Susan Claflin’s address is now ClaflinConsulting Services LLC, c/o Alea Group,55 Capital Boulevard, Rocky Hill CT06067, phone 860-258-6550, cell 203-907-9141, [email protected] [email protected].▼
memberson themove
SAVE T
HE DA
TEARIAS•U.S.Fall Conference and Annual Meeting
October 31 —November 1, 2013
The 2013 Fall
Conference will
return to the
Hilton New York
on October 31st.
Details will be
on the website
as they develop.
The 2013 Fall
Conference will
return to the
Hilton New York
on October 31st.
Details will be
on the website
as they develop.
ARIAS•U.S.Fall Conference and Annual Meeting
October 31 —November 1, 2013
P A G E 2 4
In My Fair Lady, Eliza Doolittle at one pointprotests (if memory serves) “I get words allday through, first from him then from you; isthat all you blighters can do?” I can identifywith her complaint because there seem tobe a number of people out there whobelieve that “words” is just about all thisparticular blighter can do.
I am often approached at industry andprofessional gatherings by folks who haveread one or two of my pieces dealing withlanguage or writing, and who generally havenew insights to offer, along the line of “Whydidn’t you list splitting infinitives as acardinal sin?” [Answer: because sometimesit’s perfectly ok.] Or “How about ending asentence with a preposition?” [Answer:Winston Churchill, on being accused ofcommitting this solecism, is said to haveresponded, “Your arrant snobbishnessconcerning the English language issomething up with which I will not put.”]
The folks who offer these comments arealways pleasant and well-meaning, and I’mdelighted to chat with them. What ranklesdeep down inside, however, is that theyseem to think that I’m a Johnny-One-Note,whose only role in life is as a sort oflanguage monitor, a bush-league WilliamSafire, if you will. No one approaches me atthese gatherings to compliment me on mylawyering or advocacy skills, or to discussany of my cases, or to debate a position I’vetaken in one of my writings on legal orinsurance issues. As Eliza said, it’s all about“Words, words, words.”
Now that I have groused about beingknown only as a linguistic pedant, I willproceed to reinforce the stereotype byoffering another article on the same subject.
Over the years I have made it a practice tocollect and retain examples of bad orungrammatical writing that have jumpedout at me from various law-related writingsI have encountered – briefs, memoranda,letters, opinions, whatever. Some have beeninternally generated in my office, some havecome from outside sources, but the one
quality they all have in common is that theymake my teeth hurt. Rather than suffer mydental discomfort alone, I now propose toshare some of the mere egregious exampleswith my devoted readers.
• “The court found that the policy coveredthis loss.” Courts “find” facts. Their legalrulings are “holdings.”
• “This is to bring you up-to-date” ]
• “The rule is well-settled” ]
The hyphens in both quotes aboveare wrong. They should be usedonly when the entire phrase is usedas a modifier. ("It is well-settledlaw.") Otherwise, no. Would youhyphenate "The steak was well done"?
• “Immediately following the explosion, weunderstand that emergencies servicesresponded promptly.” The introductoryphrase is misplaced. Whatever emergencyservices did, we understand it now, notright after the explosion.
• “I would have liked to have been therewhen the witness recanted.” One “have”too many. Is the writer saying he/shewould like now to have been there then, orwould have liked at that time to be there?
• “We have not and will not agree to thoseterms.” Would the writer say “we have notagree”? Inserting “agreed” after “have not”solves the problem.
• “The Fine Arts Floater covered prints byDurer, Holbein and Currier and Ives.” Thewriter was a victim of being taught not touse the serial comma before the last itemin a series. (The New York Times omits thecomma regularly; E. B. White and the NewYorker use it.) This quotation illustrates thekind of confusion that can ensue fromomitting it. If you didn’t know that Currierand Ives were a pair, you wouldn’t have aclue which name goes with which.
• “The decision was reversed. As such, a newtrial will be held.” As what? What does themodifier “such” refer back to? An exampleof correct use might be: “The Court’s
off thecuff
Eugene Wollan
The Blighter Strikes Back
This column appears periodically in the Quarterly. It offers thoughts and observations aboutreinsurance and arbitration that are outside the normal run of professional articles, often lookingat the unconventional side of the business.
“How about ending a sentence with apreposition?”[Answer: WinstonChurchill, on being accused ofcommitting thissolecism, is said to have responded,“Your arrantsnobbishnessconcerning theEnglish language issomething up with which I will not put.”]
Eugene Wollan, Editor of theQuarterly, is a former senior partner,now Senior Counsel to Mound CottonWollan & Greengrass. He is residentin the New York Office.
2 5 P A G Estatement was dictum; as such, it is notbinding precedent,” where “such” clearlyrefers back to “dictum.” “As such” is not asynonym of “therefore.” This is anunfortunately common error, usuallyperpetrated by writers guilty of thecardinal sin of trying to be fancy whenkeeping it simple will do just fine.
• “The witness indicated that he actuallysaw the accident.” Another example of thesame sin of trying to sound elegant.“Indicate” means “suggest” or “point to.” Itis not a synonym for the simpler “say”.
• “The data is incontrovertible” ]
• “The Court’s statement was dicta” ]
• “The media is very interested in this case” ] The nouns in all three of thesequotes above are plural. The singu-lars are, respectively, "datum," "dic-tum, " and "medium." (Yes, Latin wasmy best subject in High School.) Forexample, television is a medium;combined with the press, radio, film,etc., it is a component of "the media."
• “The exhibits were pre-marked by counsel.”This one is really among my favorites. Theprefix “pre” means “before.” What were theexhibits before they were marked? “Theexhibits were marked as part of the pre-trial discovery” works. Calling them “pre-marked” doesn’t. [And don’t get mestarted on “pre-owned automobiles” or“pre-boarding” of airplanes.]
• “A review of the depositions reveal manycontradictions.” The subject of the verb is“review”, not “depositions.” Just becauseit’s closer to the verb, that doesn’tnecessarily make it the subject.
• We served the answer on counsel, whomwe thought was authorized to receive it.”Would the writer say “we thought him wasauthorized —-”? The pronoun is thesubject of “was authorized,” not the objectof “thought.” Sad to say, I’ve noticed thismistake several times recently in therevered New York Times.
• “The two adjusters frequently confer withone another.” This is another example oftrying to sound a little fancy. “Oneanother” is used for more than two people;when it’s only two, the phrase is “eachother.”
• “Based on all the evidence, the court ruledfor the plaintiff.” This is a classic dangling
participle. “The court” is not “based on”anything — except perhaps the foundationof its building. “The ruling was based on allthe evidence” works because “based on”refers back to “ruling.”
• “The evidence was both verbal andwritten.” “Verbal” means “in words”. Thelast time I checked, speech also used words.What the writer was groping for beforehe/she succumbed to the fancy virus was“oral.”
• “Please let us have your document requestspromptly, so we may decide which ones wewill object to.” “May” is not a more elegantway of saying “can.” The writer here istalking about having the ability to decide,not getting permission to decide, so theright word would be “can.”
• “The insurer issued its Policy # 12345 (“thePolicy”).” Is the parenthesis reallynecessary? If the purpose is to distinguishthis policy from another one, sure. But ifthis is the only policy on the table, thewriter seems to be suggesting that thereader is too dim -witted to understandwhich policy is referred to without thishelpful parenthetical hint.
• “Both witnesses testified to the sameeffect. (Jones affidavit, p.3).” The usualfunction of a parenthesis is to identifysomething that can be excised withoutdamaging the structure of the sentence. Ifwe delete the parenthesis here, we are leftwith that poor little period danglingforlornly in mid-air. Either move it into theparenthesis or just leave it out.
• “The hearing was adjourned due to theillness of counsel.” “Due” is an adjective,and should modify a noun (“The plane isdue to arrive at noon.”) If you mean“because of,” resist the temptation to getfancy, and just say “because of.”
• “The policy was mailed, however it wasnever received.” This one really gets to mymolars. It is a classic run-on sentence, andit’s quite remarkable how often it isperpetrated by otherwise intelligent people.There are two conjunctions in the Englishlanguage that can be used to connect theparts of a compound sentence - “and” and“but.” “However” is not just a fancier way ofsaying “but.”
• “None of the parties are corporation.”“None” means “no one.” You wouldn’t say“one of the parties are a corporation.” (Orwould you?) The verb should be singular.
“The policy wasmailed, however it
was neverreceived.” This one
really gets to mymolars. It is aclassic run-on
sentence, and it’squite remarkable
how often it isperpetrated by
otherwise intelligentpeople. There are
two conjunctions inthe English
language that canbe used to connect
the parts of acompound sentence
- “and” and “but.”“However” is not
just a fancier wayof saying “but.”
P A G E 2 6• “The witness’ statement was not
sworn.” The possessive of a singularnoun is formed by adding “ ‘s,” even ifthe noun ends in an “s.” (If the noun isplural, just add the apostrophe.) Sothe correct word would be “witness’s.”If that strikes you as awkward, re-castthe sentence (“The statement of thewitness.”).
• “If the defendant were negligent, he isliable.” The writer has confused thesubjunctive with the conditional. Thesubjunctive is used for a statementcontrary to fact (“If I were king —-”).The conditional is used for somethingthat may or may not be so (“If youcome to my party, I’ll be glad to seeyou.”) Never the twain should meet.
• “He summarized the case to you andI.” There is a remarkable number offolks who think “me” is a duty word.It’s one thing to eschew a common(though technically ungrammatical)colloquialism like “It’s me,” but quiteanother to abandon the wordcompletely. Presumably the writerwould not say “He gave the book to I,”and this is no different.
Sometimes it’s not easy to draw theline between specific grammaticalmistakes and purely bad writing. WhatI find particularly irksome in the lattercategory is the effort — usually but notexclusively by young lawyers — tosound “lawyerly” instead of writingsimple, direct English. Here is awonderful, if perhaps somewhatextreme, example of this syndrome:
In connection with the above-referenced proceeding, pleasefind annexed hereto copies ofthose documents which arecurrently in the possession ofthe defendant that areresponsive to the plaintiff’snotice for discovery andinspection dated _____, asmodified by the stipulationwhich was entered into by ouroffice and your office dated____. Kindly advise me if thereare any additional outstandingdiscovery demands which havebeen served by your office, andnot responded to by our officein connection with this matter.
If you have any questions or comments
with respect to the above, please feelfree to contact the undersigned. Thankyou for your attention to this matter.
(I am pleased to report that thiscommunication was received by myoffice, not internally generated. I havenevertheless deleted identifyingcharacteristics such as dates out ofmercy to the sinner.)
Let’s examine this masterpiece a littlemore closely:
In connection with the above-referenced [why not “this”?]proceeding [what otherproceeding could possibly bereferred to?], please findannexed [why not just“annexed is”? — will thereader really have to search forit?] hereto [ what else could itpossibly to annexed to?] copiesof those documents which are[two superfluous words]currently [as distinguishedfrom last year?] in thepossession of the defendantthat are responsive to theplaintiff’s notice for discoveryand inspection dated ______, asmodified by the stipulationwhich was entered into [foursuperfluous words] by ouroffice and your office dated______. [It’s the stipulationthat’s dated, not the office; and— to the best of my knowledgeand belief — stipulations areentered into by people, notoffices.] Kindly advise me ifthere are any additionaloutstanding discoverydemands which [should be“that” — restrictive clause]have been served by your office[by whom else could they havebeen served?], and notresponded to by our office [asdistinguished from some otherlaw firm?] in connection withthis matter [as distinguishedfrom some entirely unrelatedmatter?].
If you have any questions orcomments with respect to theabove [above what?], please feelfree to contact [how - byséance?] the undersigned[what’s wrong with “me”?].Thank you for your attention tothis matter [if the recipientdoes not give it attention, willthe writer withdraw the thanksretroactively?].
Wouldn’t it have been easier simply towrite:
“I enclose copies of thedefendant’s documentsresponsive to plaintiff’s noticefor discovery and inspectiondated ____, as modified by ourstipulation dated _____. Pleaselet me know whether youbelieve there are any remainingdiscovery demands to which wehave not responded.”
Of course it would have been easier, butthen the writer wouldn’t be able to beproud of having written a legal-sounding letter!
Elsewhere in My Fair Lady, ProfessorHiggins laments “Why can’t the Englishlearn to speak?” My own plaint (pace,ghost of Rex Harrison) is “Why can’t thelawyers learn to write?”▼
“He summarized the case to you and I.” There
is a remarkable numberof folks who think “me”
is a duty word.
2 7 P A G E
Ronald S. Gass
One oft-cited provision of the FederalArbitration Act (“FAA”) invoked by partiesseeking to vacate unfavorable arbitrationawards is that the arbitrators were guilty ofmisconduct “in refusing to hear evidencepertinent and material to the controversy.”FAA § 10(a)(3). These challenges typicallyarise in the context of overturning finalawards when evidence a party sought tooffer during the hearing on the merits wasrejected for some reason by the panel. In anunusual scenario, however, a New Yorkfederal district court recently ruled on avacatur motion seeking to overturn a panel’spost-hearing interim award on the groundthat certain pertinent and materialdocuments and testimony not introducedduring the evidentiary hearing should havebeen heard by the panel before issuing itsfinal award. The district court rejected thisparty’s attempt to obtain a second bite atthe evidentiary apple on §10(a)(3) and othergrounds.
In this case, disputes arose between aCanadian insurer and its Belgian reinsurerinvolving several different reinsurancecontracts as well as insurance businesswritten pursuant to a managing generalagent (“MGA”) agreement in which theBelgian reinsurer, through the Canadianinsurer’s MGA affiliate, issued primarypolicies reinsured on a quota-share basis bythat insurer. Each party claimed that monieswere due to it after applying offsets acrossall of these contracts. A key contractinterpretation issue arbitrated was the basison which the parties’ quota sharereinsurance treaty had terminated, i.e., oneither a cut-off or run-off basis.
Shortly before the hearing and pursuant to apanel order, the parties designatedadditional potential hearing exhibits, withthe reinsurer identifying 450 documentsversus 81 marked by the insurer. Whenquestioned about why such a large number
of new exhibits was being marked so close tothe hearing, the reinsurer’s counselacknowledged that it was unlikely all thosedocuments would be used at the hearing butfelt that the panel’s order required him tomark them now or risk his client beingprecluded from introducing them later duringtheir case in chief. During the nine-dayarbitration hearing, eleven witnesses testifiedand hundreds of documents were introducedas exhibits. On the final hearing day, theumpire twice stated that it was the panel’sunderstanding that the parties hadcompleted their evidentiary submissions, andneither party objected to that understanding,stated it wished to submit any additionalevidence, or argued that it had not beenafforded an opportunity to present anyadditional evidence.
After the evidentiary hearing, the panelissued two interim awards, both of whichnoted that the panel had conducted “a finalhearing on the merits.” In the second one, themajority held that the quota share treatyterminated on a cut-off basis, ruling in favorof the insurer’s interpretation. It retainedjurisdiction for a minimum of nine months toresolve any disputes that might arisebetween the parties in complying with theinterim award or agreeing on an expeditedand efficient alternative dispute resolutionprocedure to resolve future disputesgoverned by the interim award. The panelalso scheduled a one-day hearing to considerwhether any modifications to the award,including the protocols set forth in it, werenecessary and whether there was any needfor the panel to retain jurisdiction for anadditional period of time and to hear anyadditional requests for relief from the parties.The panel expressly reserved the right tomodify its interim award and to issue futureinterlocutory awards or a final award asjustice and equity might require regardingany of the matters addressed in the interimawards.
About five months after the second interimaward was issued, new arbitration counsel for
case notescornerFederal Court Denies Second Bite at
the Evidentiary Apple
Mr. Gass is an ARIAS-U.S. CertifiedUmpire and Arbitrator. He can bereached via e-mail [email protected] or through hisWeb site at www.gassco.com.Copyright © 2013 by The GassCompany, Inc. All rights reserved.
Ronald S.Gass
One oft-citedprovision of the
Federal ArbitrationAct (“FAA”) invoked
by parties seeking tovacate unfavorable
arbitration awards isthat the arbitrators
were guilty ofmisconduct “in
refusing to hearevidence pertinent
and material to thecontroversy.
P A G E 2 8the reinsurer filed a petition to modify itarguing, inter alia, that the quota share cut-off ruling should be reversed becausedocumentary evidence and testimony froma witness not presented during theevidentiary hearing demonstrated that theparties intended the quota share liabilitiesto be run off, not cut off. Following briefingby the parties on the discrete issue ofwhether grounds existed warranting thereopening of the arbitration (akin towhether there were grounds for a new trialin a judicial context), the panel issued itsfinal award. The majority ruled that thereinsurer had failed to provide a valid excusefor not introducing the documents andtestimony during the hearing on the meritsand that the panel’s retention of jurisdictionwas not intended to leave the evidentiaryrecord open or to permit the rehearing ofany substantive issues previouslyconsidered. The dissenting arbitrator arguedthat the evidence sought to be presented bythe reinsurer was pertinent and material,that the panel had retained jurisdiction andthe discretion to modify its interim award,and that, in denying the reinsurer’s petitionto modify, the panel had refused to hear thisevidence.
The insurer sought to confirm the panel’sfinal award in New York federal districtcourt, and the reinsurer cross-moved tovacate it on several grounds, includingviolation of FAA § 10(a)(3) and (4). Noting atthe outset that arbitration awards aresubject to “very limited review” and thatarbitrators “enjoy broad discretion” to decidewhether to hear certain evidence and “donot need to allow parties to present everypiece of relevant evidence,” the courtexamined the factual circumstancessurrounding the reinsurer’s petition to offeradditional post hearing evidence. The centralprinciple cited by the district court inanalyzing this vacatur motion was whetherthe procedure afforded by the panel was“fundamentally unfair.” Finding that thereinsurer was granted a full and fairopportunity to present its case at thehearing, the court focused on these keyfacts:
• The panel’s scheduling order made it clearthat each party was expected to put on its“full case” at the evidentiary hearing.
• In identifying 450 additional documentsshortly before the hearing, the reinsurer’scounsel acknowledged that if he did not
designate them, the reinsurer would havebeen precluded from introducing them atthe hearing.
• The reinsurer had the opportunity topresent its case as it wished by engaging inextensive discovery and pre-hearingbriefing, calling seven witnesses and cross-examining the insurer’s four witnesses,submitting evidence, making opening andclosing arguments, and submitting aproposed final award.
• The reinsurer possessed or had access tothe contested additional evidence, whichwas previously produced during discovery,and it was well aware of the additionalwitness’s role in the quota-sharetransaction but chose not to call her.
• The umpire had announced at thebeginning and end of the last hearing daythat the panel considered the evidentiaryrecord to be closed at the conclusion of thehearing and there was no objection madeby the reinsurer’s counsel.
In denying the reinsurer’s cross-motion tovacate, the district court held that it wasafforded a full and fair opportunity topresent its case and that the panel did notdisregard any evidence properly presented.“The fact that [the reinsurer] declined to callcertain witnesses or present certain evidencewithin the time allotted — or, more to thepoint, the fact that, with the benefit ofhindsight, it regretted its handling of thehearing — does not constitute fundamentalunfairness.”
Notably, the court acknowledged the panel’sright to modify its interim award “as long asdoing so did not create fundamentalunfairness.” While the doctrine of functusofficio ordinarily bars arbitrators fromrevisiting final awards subject to judicialreview, “‘if an arbitrator is not functus officioas to an interim award, then the interimaward is not subject to judicial review’ and istherefore logically subject to revisitation”(quoting SH Tankers Ltd. v. Koch Shipping Inc.,12 Civ. 00375 (AJN), 2012 U.S. Dist. LEXIS, at *14(S.D.N.Y. June 19, 2012)). In this case, however,the court concluded that the panel’sretention of jurisdiction was limited toensuring that the reinsurer complied withthe payment protocols in the second interimaward and not to permit the submission ofadditional evidence or the reopening of theevidentiary record.
The court also held that the panel did not
The dissentingarbitrator arguedthat the evidencesought to bepresented by thereinsurer waspertinent andmaterial, that thepanel had retainedjurisdiction and thediscretion to modifyits interim award,and that, in denyingthe reinsurer’spetition to modify,the panel hadrefused to hear thisevidence.
2 9 P A G EAssociation’s Commercial ArbitrationRule 35 entitled “Closing of Hearing”provides in pertinent part: “Thearbitrator shall specifically inquire of allparties whether they have any furtherproofs to offer or witnesses to be heard.Upon receiving negative replies or ifsatisfied that the record is complete, thearbitrator shall declare the hearingclosed.” Making such an on -the-recordinquiry of the parties at the conclusionof the evidentiary hearing is aworthwhile addition to everyarbitrator’s hearing playbook.▼
Century Indemnity Co. v. AXA Belgium, 11Civ. 7263 (JMF), 2012 U.S. Dist. LEXIS136472 (S.D.N.Y. Sept. 24, 2012).
exceed its authority so that FAA §10(a)(4) (“where the arbitratorsexceeded their powers, or soimperfectly executed them that amutual, final, and definite award uponthe subject matter submitted was notmade”) was inapplicable to vacate thefinal award for three reasons. First, thereinsurer argued that the panel had“rewritten” the parties’ contract infinding that it was terminated on a cut-off, instead of run-off, basis. The courtobserved that this was a “hotlycontested” issue with both partiespresenting competing interpretations.The fact that the panel largely agreedwith the insurer did not mean that itfailed to reach a decision drawn fromthe “essence” of the agreement toarbitrate or failed to provide a “barelycolorable justification for the outcomereached.” Second, the reinsurercontended that the panel exceeded itspowers by violating its own awardwhen it refused to consider the petitionto modify or conduct a one-day hearingas provided for in its second interimaward. The court rejected thisargument because the panel made itclear that its continued jurisdiction wasfor the purpose of overseeing anydisputes that might emerge overcompliance with the award and not toreopen the record for the presentationof evidence that the reinsurer had noexcuse for failing to present the firsttime around. Third, the reinsurercomplained that the panel exceeded itsauthority by imposing a “punitivesanction” in the form of attorney’s fees.The court ruled that broad arbitrationclauses such as the ones in this mattergave the arbitrators discretion to orderremedies they determine areappropriate, including attorney’s feesfor bad faith conduct, even absent aspecific authorization to do so and evenwhere there was a specific contractualprovision stating that each party wouldbear its own attorney’s fees. Moreimportantly, the reinsurer itself soughtthe award of attorney’s fees, therebywaiving any argument that such anaward was beyond the panel’sauthority.
Another interesting aspect of thisdecision was the district court’s rulingnot to seal portions of the court record
notwithstanding the fact that thearbitration proceedings were subject toa confidentiality agreement and bothparties had filed motions to seal therecord. Briefly, the court observed thatthe mere existence of the parties’confidentiality agreement did notdemonstrate that sealing wasnecessary, did not bind the court, andhad no effect on the well-establishedcommon law right of access to these“judicial documents.” While the publicinterest in the relationship between aninsurer and its reinsurer is relatively low,the weight to be given the presumptionof access here was reasonably high atleast as to some of the documents atissue. “‘In circumstances where anarbitration award is confirmed, thepublic in the usual case has a right toknow what the Court has done.”(quoting Global Reinsurance Corp. — U.S.Branch v. Argonaut Ins. Co., Nos. 07 Civ.8196 (PKC), 07 Civ. 8350 (PKC), 2008 U.S.Dist. LEXIS 32419, at *5 (S.D.N.Y. Apr. 18,2008)). The pleadings and challengedarbitration decisions, according to thedistrict court, directly affected itsadjudication of this matter, andtherefore should not be sealed.
One important lesson here is that allpertinent and material evidence mustbe presented by the parties during thearbitration hearing on the merits asthere will unlikely be a “second bite” atthe evidentiary apple even though thepanel may have issued an interim,rather than a final, award and even if itexpressly retained jurisdiction to modifythat interim award (which this courtacknowledged arbitration panels havethe inherent authority to do). It alsohighlights the importance of formallyclosing the evidentiary hearing. In thiscase, the umpire twice announced onthe last hearing day that it was thepanel’s understanding that the partieshad completed their evidentiarysubmissions. In the absence of anyobjections or a request by a party tosubmit additional evidence, it will benearly impossible to argue later onappeal that the panel refused to hearany pertinent and material evidence.From a practice standpoint, formallyannouncing the close of the hearingrecord should be routine procedure. Forexample, the American Arbitration
It also highlights theimportance of formallyclosing the evidentiary
hearing. In this case, theumpire twice announcedon the last hearing daythat it was the panel’sunderstanding that theparties had completed
their evidentiarysubmissions.
P A G E 3 0
her CPCU and ARe designations. She receivedher JD from Golden Gate University, School ofLaw in 1984, and her undergraduate degreefrom Mills College in 1981.▼
Anthony VidovichAnthony Vidovich is Vice President, AssistantGeneral Counsel and Director of ReinsuranceLaw for the insurance and reinsurancebusinesses of The Hartford Financial ServicesGroup, Inc. Mr. Vidovich, with his team oflawyers and legal professionals, is responsiblefor (1) the management and resolution of alllegal issues related to the placement ofreinsurance for The Hartford’s Commercialand Consumer Markets (P&C) and WealthManagement (Life) businesses: (2) theresolution of all reinsurance collectionmatters through negotiation, commutation,arbitration or litigation; (3) advice, counseling,and dispute resolution for The Hartford’sassumed reinsurance businesses; and (4)both strategic and general business adviceand counseling for The Hartford’s domesticand international run-off operations.
Mr. Vidovich is a frequent speaker atinsurance and reinsurance industryconferences and seminars, primarily in theareas of runoff and the reinsurance disputeresolution process. He is a member of theReinsurance Committee of the AmericanCouncil of Life Insurers and active in anumber of P&C industry organizations.
Prior to joining The Hartford’s LawDepartment, Mr. Vidovich was with the lawfirm of Blank Rome LLP in Philadelphia, wherehis practice primarily centered on therepresentation of financial institutions, witha particular focus on insurance andreinsurance companies, policyholders,regulators and receivers.▼
G. Kathleen Karnell Kathleen Karnell is an attorney and claimprofessional with 27 years in the insuranceand reinsurance industry. She currently isPresident of Silvermine Resolutions LLC, acompany that provides insurance andreinsurance claims management anddispute resolution services. Ms. Karnellserves as an arbitrator and consultant andprovides outside auditing services.
Before forming Silvermine Resolutions, Ms.Karnell was Vice President of Claims at TokioMillennium Re (TMR) in Bermuda, where shewas responsible for the management of allmulti-line claims arising out of the compa-ny’s US reinsurance portfolio. Lines of busi-ness included Property, Commercial Auto,General Liability, Commercial Umbrella andExcess, Workers’ Compensation, Miscella-neous Professional Liability, and MedicalMalpractice. Ms. Karnell also managed allcoverage disputes and arbitrations filedagainst the company.
Prior to TMR, Ms. Karnell was employed atGeneral Re for twenty years, her last positionas Vice President, Claim Attorney. As ClaimAttorney, she managed coverage disputesand arbitrations, as well as DeclaratoryJudgment Actions filed against thecompany, particularly on claims involvingenvironmental and asbestos losses. Shebegan her career at General Re as a ClaimExecutive managing a multi-line claimportfolio which included operational,prospective and active claim reviews. Aspart of Best Practices, she provided trainingto external and internal clients, andauthored white papers on various topics,including New York Labor Law.
Ms. Karnell began her insurance career withTravelers Insurance as an outside claimadjuster in New York in 1986, handling allcasualty lines of business. She waspromoted to the position of Home OfficeExaminer where she supervised, trained, andprovided claim authority to five field offices.
Ms. Karnell is admitted to practice law inNew York and California, and has obtained
in focus
Profiles of all certified arbitratorsare on the website at www.arias-us.org
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AnthonyVidovich
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THE BREAKERSPALM BEACH, FLORIDA
In the past, ARIAS•U.S. has interspersed visits to other venues. We have
never before returned for a second consecutive year. However, the record
of good experiences there is reason enough to stay settled for a second
year. Block out the dates May 8-10, 2013 to avoid planning anything else.
Many members have said we should always have ARIAS•U.S. Spring
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Two Years in a Row!
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P A G E 3 2
Do you know someone who is interested inlearning more about ARIAS•U.S.? If so, pass on this letter of invitation and membership application.
An Invitation…The rapid growth of ARIAS•U.S. (AIDAReinsurance & Insurance Arbitration Society) sinceits incorporation in May of 1994 testifies to theincreasing importance of the Society in the field ofreinsurance arbitration. Training and certification ofarbitrators through educational seminars,conferences, and publications has assistedARIAS•U.S. in achieving its goals of increasing thepool of qualified arbitrators and improving thearbitration process. As of February 2013,ARIAS•U.S. was comprised of 329 individualmembers and 118 corporate memberships, totaling940 individual members and designated corporaterepresentatives, of which 236 are certified asarbitrators and 54 are certified as umpires.
The Society offers its Umpire AppointmentProcedure, based on a unique software programcreated specifically for ARIAS, that randomlygenerates the names of umpire candidates from thelist of ARIAS•U.S. Certified Umpires. Theprocedure is free to members and non-members. It is described in detail in the Selecting an Umpiresection of the website.
Similarly, a random, neutral selection of all threepanel members from a list of ARIAS CertifiedArbitrators is offered at no cost. Details of theprocedure are available on the website underNeutral Selection Procedure.
The website offers the "Arbitrator, Umpire, andMediator Search" feature that searches the extensivebackground data of our Certified Arbitrators whohave completed their enhanced biographicalprofiles. The search results list is linked to thoseprofiles, containing details about their workexperience and current contact information.
Over the years, ARIAS•U.S. has held conferencesand workshops in Chicago, Marco Island, SanFrancisco, San Diego, Philadelphia, Baltimore,Washington, Boston, Miami, New York, PuertoRico, Palm Beach, Boca Raton, Las Vegas, Marinadel Rey, Amelia Island, and Bermuda. The Societyhas brought together many of the leadingprofessionals in the field to support its educationaland training objectives.
For many years, the Society published theARIAS•U.S. Membership Directory, which wasprovided to members. In 2009, it was broughtonline, where it is available for members only.ARIAS also publishes the ARIAS•U.S. PracticalGuide to Reinsurance Arbitration Procedure andGuidelines for Arbitrator Conduct. Thesepublications, as well as the ARIAS•U.S. Quarterlyjournal, special member rates for conferences, andaccess to educational seminars and intensivearbitrator training workshops, are among thebenefits of membership in ARIAS.
If you are not already a member, we invite you toenjoy all ARIAS•U.S. benefits by joining. Complete information is in the Membership area ofthe website; an application form and an onlineapplication system are also available there. If youhave any questions regarding membership, pleasecontact Bill Yankus, Executive Director, [email protected] or 914-966-3180, ext. 116.
Join us and become an active part of ARIAS•U.S.,the leading trade association for the insurance andreinsurance arbitration industry.
Sincerely,
Mary Kay Vyskocil Jeffrey M. Rubin
Chairman President
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P.O. Box 9001Mt. Vernon, NY 10552
Board of DirectorsChairman
Mary Kay VyskocilSimpson Thacher & Bartlett LLP425 Lexington AvenueNew York, NY [email protected]
President Jeffrey M. Rubin
Odyssey America Reinsurance Corp.300 First Stamford PlaceStamford, CT [email protected]
Vice President (President Elect)Eric S. Kobrick
American International Group, Inc.180 Maiden LaneNew York, NY [email protected]
Vice PresidentElizabeth A. Mullins
Swiss Re America Holding Corporation175 King StreetArmonk, NY [email protected]
Ann L. FieldZurich Insurance Group1400 American LaneSchaumburg, IL [email protected]
Michael A. FrantzMunich Re America 555 College Road EastPrinceton, NJ [email protected]
Mark T. Megaw ACE Group Holdings436 Walnut StreetPhiladelphia, PA [email protected]
John M. Nonna Patton Boggs LLP1185 Avenue of the AmericasNew York, NY 10036Phone: 646-557-5172Email: [email protected]
James I. RubinButler Rubin Saltarelli & Boyd LLPThree First National Plaza70 West Madison StreetChicago, IL [email protected]
Chairman EmeritusT. Richard Kennedy
Directors EmeritiCharles M. FossMark S. GurevitzCharles W. Havens IIIRonald A. Jacks*Susan E. MackRobert M. ManginoEdmond F. RondepierreDaniel E. Schmidt, IV
*deceased
AdministrationTreasurer
Peter A. Gentile7976 Cranes Pointe WayWest Palm Beach, FL. [email protected]
Executive Director/ CorporateSecretary
William H. YankusSenior Vice PresidentCINN Worldwide, Inc.P.O. Box 9001Mt. Vernon, NY 10552914-966-3180 ext. [email protected]
Carole Haarmann AcuntoExecutive Vice President & CFOCINN Worldwide, Inc.P.O. Box 9001Mt. Vernon, NY 10552914-966-3180 ext. [email protected]
