Albion Public Schools v. Albion Educ. Ass'n/MEA/NEA, Docket Nos. 63839

• Decision Date: 05 February 1984
• Docket Number: 63853,Docket Nos. 63839
• Parties: ALBION PUBLIC SCHOOLS, Plaintiff-Appellee, v. ALBION EDUCATION ASSOCIATION/MEA/NEA, a voluntary unincorporated association, South Central Unified Bargaining Association/MEA/NEA, a voluntary unincorporated association, Malcolm G. House, Gleniane Reid Gray, Adam Zamora, and Craig Bartholemew, Defendants-Appellants. 130 Mich.App. 698, 344 N.W.2d 55, 16 Ed. Law Rep. 276
• Court: Court of Appeal of Michigan — District of US

Page 55

344 N.W.2d 55

ALBION PUBLIC SCHOOLS, Plaintiff-Appellee, v. ALBION EDUCATION ASSOCIATION/MEA/NEA, a voluntary unincorporated association, South Central Unified Bargaining Association/MEA/NEA, a voluntary unincorporated association Malcolm G. House, Gleniane Reid Gray, Adam Zamora, and Craig Bartholemew, Defendants-Appellants.

Docket Nos. 63839, 63853.

130 Mich.App. 698, 344 N.W.2d 55, 16 Ed. Law Rep. 276

Court of Appeals of Michigan.

Submitted April 8, 1983.

Decided Dec. 5, 1983.

Released for Publication Feb. 5, 1984.

[130 MICHAPP 699] Rosenfeld, Grover & Frange, P.C. by Robert M. Grover, Jackson, for plaintiff-appellee.

Foster, Swift, Collins & Coey, P.C. by Michael J. Schmedlen, Lansing, for Albion Educ. Ass'n/MEA/NEA, South Central Unified Bargaining Ass'n/MEA/NEA, Gleniane Reid Gray, Adam Zamora, and Craig Bartholemew.

Clinton C. House, Caro, for Malcolm G. House.

Before HOLBROOK, P.J., and HOOD and GREEN ^*, JJ.

HOLBROOK, Presiding Judge.

Defendants appeal from an April 1, 1982, order of the trial court granting summary judgment for plaintiff and vacating a July 25, 1980, labor arbitration award issued by defendant Malcolm G. House in favor of defendants Albion Education Association/MEA/NEA and others.

The basic facts are not in dispute. On April 16, 1980, defendant House conducted an arbitration hearing between plaintiff and defendants Albion Education Association/MEA/NEA and others (hereinafter "Union defendants") pursuant to the provisions of their collective bargaining agreement. Defendant House, on July 25, 1980, ruled in favor of Union defendants. Some months after that [130 MICHAPP 700] decision, plaintiff became aware of defendant House's prior activities as chairman of the MEA Citizens Service Fee Review Committee (hereinafter CSFRC) during the year of 1979. This was a three-member committee of the MEA established for the purpose of resolving internal union agency shop disputes. Defendant House was selected by the MEA and was paid $2,400 for his services.

On November 12, 1980, plaintiff brought this action seeking to vacate the arbitration award, challenging not the merits of the award, but rather the fact that House did not reveal his previous involvement with the CSFRC. Subsequently, plaintiff filed a motion for summary judgment pursuant to GCR 1963, 117.2(3). The Union defendants similarly filed a motion for summary judgment as well as a motion to confirm the arbitration award. The case was then submitted to the court, with the parties agreeing that there existed no genuine issue of material fact.

The trial court issued a written finding on January 20, 1982. Citing Commonwealth Coatings Corp. v. Continental Casualty Co., 393 U.S. 145, 89 S.Ct. 337, 21 L.Ed.2d 301 (1968), the trial court held that there should have been disclosure of House's role as chairman of the CSFRC. Upon defendants' motions for clarification, the trial court reaffirmed its decision in a second finding dated March 19, 1982. That order was entered April 1, 1982. Defendants now appeal as of right.

The sole issue on appeal is whether defendant House should have disclosed to plaintiff his previous involvement with the CSFRC.

The trial court found that House's services to the CSFRC were "consultive" in nature and therefore "likely [to] create a presumption of bias in the mind of a person reviewing his qualifications as [130 MICHAPP 701] arbitrator". In doing so, the trial court relied primarily on the Supreme Court case of Commonwealth Coatings Corp. v. Continental Casualty Co., supra. In that case the arbitrator had failed to disclose that he had in the past performed services as a consultant for one of the arbitrating parties. The Supreme Court vacated the arbitration award based on that failure to disclose, stating that:

"We can perceive no way in which the effectiveness of the arbitration process will be hampered by the simple requirement that arbitrators disclose to the parties any dealings that might create an impression of possible bias." Commonwealth, supra, 393 U.S. at p. 149, 89 S.Ct. at 339, 21 L.Ed.2d at 305.

In North American Steel Corp. v. Siderius, Inc., 75 Mich.App. 391, 254 N.W.2d 899 (1977), this Court addressed the question of whether a failure to disclose would constitute grounds for vacating an arbitration award. While the Court did not cite Commonwealth, it appears that it adopted the same rule:

"Thus, while it is conceded that arbitrators must disclose to the parties any dealings that might create an impression of possible bias, the impression must be a reasonable one." 75 Mich.App. 404, 254 N.W.2d 899 (emphasis supplied.) See also Rule 17 of the Voluntary Labor Arbitration Rules of the American Arbitration Association.

We adopt the rule of Commonwealth, as did the trial court, and as this Court apparently did in North American Steel Corp., and hold that a failure to disclose certain facts which might reasonably lead to an impression or appearance of bias constitutes grounds for vacating an arbitration award.

All that remains is to ascertain whether House's [130 MICHAPP 702] undisclosed activities with the CSFRC would give rise to such an impression or appearance of bias. Defendants argue that House's activities as chairman were no different than his role in any other arbitration case and therefore need not be disclosed. The trial court flatly rejected this argument, stating that:

"[I]n an arbitration case the arbitrator is selected by mutual agreement of the...