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

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court."
Although it is posted on the internet, this opinion is binding only on the
parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-2591-17T2
SUCHARITHA PATI,
Plaintiff-Appellant,
v.
RAJESH KOMAKULA,
Defendant-Respondent.
___________________________________
Submitted June 4, 2018 – Decided July 24, 2018
Before Judges Sabatino and Ostrer.
On appeal from Superior Court of New Jersey,
Law Division, Middlesex County, Docket No. L-
4841-17.
Robert H. Goodwin, attorney for appellant.
Susheela Verma, attorney for respondent.
PER CURIAM
Plaintiff Sucharitha Pati appeals from the trial court's
order vacating, on conflict of interest grounds, a July 2017 award
of an umpire acting pursuant to the New Jersey Alternative
Procedure for Dispute Resolution Act (APDRA), N.J.S.A. 2A:23A-1
to -30. We remand for the trial court to consider a letter from
the umpire addressing the claimed conflict, which we deem a
clarification of the umpire's decision.
The umpire is a retired Superior Court judge affiliated with
a law firm in the county where he served. The parties selected
the umpire to resolve various property and financial issues that
remained after entry of their 2012 final judgment of divorce. A
November 2015 consent order formalized the parties' selection.
After numerous testimonial hearings in 2016, and written
summations in early 2017, the umpire issued an initial decision
and a supplement to that decision in July 2017.
In an "amended verified complaint,"1 defendant Rajesh
Komakula identified various alleged flaws in the alternative
dispute resolution (ADR) process that justified vacatur. Of
principal interest to us at this stage is defendant's allegation
he was prejudiced by the umpire's partiality. See N.J.S.A. 2A:23A-
13(c)(2). The trial court ordered vacatur solely on that ground,
1
Defendant did not swear or certify the allegations were true.
See R. 1:4-4(b). Rather he stated "the statements contained in
the [complaint] are true and correct to the best of my knowledge
and recollection." A certification made upon information and
belief is not a valid certification. See Pascack Cmty. Bank v.
Universal Funding, LLP, 419 N.J. Super. 279, 288 (App. Div. 2011)
(rejecting "certification" that lacked the language mandated by
Rule 1:4-4(b)).
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and the umpire addressed it in his clarification, which the trial
court declined to consider.2
Defendant asserted that the umpire failed to disclose a prior
relationship with plaintiff's attorney. He alleged that in January
2017 – which was after the testimonial ADR hearings had been
completed and before submission of written summations – he learned
that the umpire and plaintiff's attorney had both served, and met
often, as trustees of a county bar foundation.3 He also learned
that the umpire's secretary and plaintiff's attorney participated
in the same community theater group. Defendant stated he would
not have consented to the umpire's selection, had he known of
those relationships. In subsequent submissions to the court,
defendant alleged the umpire repeatedly addressed plaintiff's
counsel during the ADR proceedings by his first name, but always
referred formally to defendant's counsel. Defendant also
2
Defendant also alleged: (1) the umpire engaged in misconduct,
see N.J.S.A. 2A:23A-13(c)(1), by engaging in ex parte
communications with plaintiff's counsel, failing to enforce prior
commitments between the parties, and compelling defendant to
execute a so-called agreement regarding two properties in India;
(2) the umpire exceeded his powers, see N.J.S.A. 2A:23A-13(c)(3),
by deciding issues that were not referred to him, and failing to
decide issues that were; and (3) the umpire acted as a mediator
instead of an arbitrator. On the basis of many of these
allegations, defendant also contended the umpire failed to follow
APDRA's procedures. See N.J.S.A. 2A:23A-13(c)(4).
3
The complaint alleged "bar association," but it was later
clarified that the two served on the related foundation.
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contended the umpire's substantive decisions reflected his
partiality.
Defendant's allegations should have come as no surprise. He
and his counsel claimed bias in the umpire's decisions throughout
the ADR process. In defense counsel's February 2017 written
summation, she asked the umpire to withdraw based upon his "pre-
existing relationship with the Plaintiff's counsel," and his
alleged ex parte communications.
The umpire rejected these arguments in his initial written
decision, stating he had "neither a personal, nor business, nor
recreational relationship" with plaintiff's counsel. He
acknowledged, as a member of the county bar, he had seen and spoken
to plaintiff's counsel at bar related meetings. He noted that he
also saw defendant's counsel at other dinners that judges and
attorneys attended. He denied any bias for or against any attorney
who participated in bar functions. He could not recall plaintiff's
counsel ever appearing before him when he was a judge, and he was
unaware, until recently, that his secretary and counsel
participated in the same theater.
In granting vacatur, the trial court held in an oral decision
that an arbitrator was responsible "to disclose any relationship
or transactions that he may have with the parties" or their
representatives (citing Barcon Assocs., Inc. v. Tri-County Asphalt
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Corp., 86 N.J. 179, 192 (1981)). The trial court added that when
an arbitrator fails to do so, "'the reviewing court may vacate the
award if it concludes the undisclosed fact would have been such
as to lead a reasonable person to object to the designation of the
arbitrator in question'" (quoting Barcon Assocs., 86 N.J. at 195).
The court held that the umpire's and plaintiff's counsel's
undisclosed joint service on "a small foundation that meets on a
monthly basis" met that standard for vacatur.
The judge added that "[a]n arbitrator, like a judge, must
avoid even the appearance of bias" (citing Commonwealth Coatings
Corp. v. Cont'l Cas. Corp., 393 U.S. 145, 150 (1969)). The court
held that a person would question the umpire's impartiality because
he referred to plaintiff's counsel by his first name sixteen times
during the ADR hearings, and always formally addressed defense
counsel. The court ordered the selection of a new umpire and a
new ADR process.
Plaintiff moved for reconsideration. At that point, the
umpire learned of defendant's complaint and the vacatur order. In
January 2018, the umpire submitted a letter to the judge, which
addressed, in greater detail than in his award decision: (1) the
nature of his and plaintiff's counsel's joint service on the county
bar foundation; and (2) his form of addressing both attorneys in
the ADR hearings. The umpire noted the foundation's board
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consisted of twenty-two members. Its monthly meetings lasted no
more than hour. There was no meal or beverage service, or social
gathering connected to the meetings. Because of their respective
absences, the umpire and attorney were present at only nine
meetings since the umpire was appointed to the foundation in June
2015.
The umpire also observed that, in the course of four selected
days of hearings, he addressed plaintiff's counsel as "Mr." twenty
times, and by his first name only four times. The umpire explained
that he had difficulty pronouncing defense counsel's first name.
He regretted not making the effort to learn it. The umpire
contended that his relationship with plaintiff's counsel was not
"substantial" and suggested that it did not create an appearance
of bias, impropriety, or interest. He contended that appearance
alone is not a basis for vacatur.
In a February 2018 written decision denying the
reconsideration motion, the trial court declined to consider the
umpire's letter, stating, "No rule or precedent is cited that
authorizes the Court to consider such a submission." The trial
court adhered to its original view that the umpire's failure to
disclose his contemporaneous participation "on a small board of
directors" was a sufficient basis to vacate the award. The
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umpire's manner of address "provide[d] additional evidence for a
reasonable person to perceive partiality."
We granted plaintiff's motion for leave to appeal from the
trial court's vacatur order. Plaintiff contends that there were
insufficient grounds to question the umpire's impartiality and to
vacate the award.
We decline to reach the merits of the appeal, as we conclude,
procedurally, the trial court erred in refusing to consider the
umpire's letter. The letter constitutes a clarification and
explanation of the umpire's original decision. It did not alter
or modify the result. It was not untimely, as it was submitted
in advance of the trial court's decision on the motion for
reconsideration.
We recognize that APDRA does not expressly authorize an umpire
to supplement or clarify his decision, as the umpire did in this
case. However, the statute does not prohibit it either.
We are cognizant of the common law doctrine of functus
officio, which literally means "office performed," and generally
means that with issuance of a final award, an arbitrator's
commission is terminated, as is the authority to go back and modify
or revise the award. See Tretina Printing, Inc. v. Fitzpatrick &
Assocs., Inc., 135 N.J. 349, 360-61 (1994); Kimm v. Bisset, LLC,
388 N.J. Super. 14, 26-27 (App. Div. 2006); Held v. Comfort Bus
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Line, Inc., 136 N.J.L. 640, 641 (Sup. Ct. 1948); see also Glass,
Molders, Pottery, Plastics & Allied Workers Int'l Union, Local
182B v. Excelsior Foundry Co., 56 F.3d 844, 845-47 (7th Cir. 1995).
The doctrine is designed to shield a sporadic quasi-judicial
officer from "the potential evil of outside communication and
unilateral influence which might affect a new conclusion." La
Vale Plaza, Inc. v. R.S. Noonan, Inc., 378 F.2d 569, 572 (3d Cir.
1967); see also Glass, Molders, 56 F.3d at 847 (stating that
"arbitrators are less sheltered than sitting judges, and it is
feared that disappointed parties will bombard them with ex parte
communications and that the arbitrators, not being professional
judges or subject to the constraints of judicial ethics, will
yield").
However, exceptions to the doctrine "permit an arbitrator to
correct a mistake, generally of a clerical or computational nature,
. . . to 'adjudicate an issue which has not been submitted' but
not decided, . . . and to 'clarify' an award '[w]here the award,
although seemingly complete, leaves doubt whether the submission
has been fully executed, [such that] an ambiguity arises which the
arbitrator is entitled to clarify.'" Kimm, 388 N.J. Super. at 27(quoting La Vale Plaza, 378 F.2d at 573). Concededly, the umpire's
letter was not intended to clarify ambiguity in his award.
However, we perceive no basis to bar an umpire under the common
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law or APDRA from, sua sponte, providing additional reasoning for
a decision, and we discern compelling reasons to allow it.
As the parties chose to submit to APDRA, we need not rely on
the scope of the clarification authority under the revised
Arbitration Act, a different statute. See N.J.S.A. 2A:23B-
20(a)(3), -20(b) (authorizing parties to apply to an arbitrator
to clarify an award within twenty days of notice of the award);
N.J.S.A. 2A:23B-20(d)(3) (authorizing a court to resubmit a matter
to an arbitrator to clarify an award). Yet, we note the revised
Arbitration Act was intended to remove any lingering question
under the prior Act, based on the functus officio doctrine, about
the power to remand to arbitrators for clarification. 7 Uniform
Laws Annotated, Business and Financial Laws, cmt. 2 on § 20 at 70-
71 (Master ed. 2009). The revised Act was intended to "enhance[]
the efficiency of the arbitral process." Id. at 71.
Unlike the Arbitration Act, APDRA requires an umpire to state
fact-findings and legal conclusions in support of the award.
N.J.S.A. 2A:23A-12(a) ("The award shall state findings of all
relevant material facts and make all applicable determinations of
law."). The scope of judicial review of an umpire's decision is
broader than the review of an arbitral award, in that a court may
vacate an award if the umpire "commit[ed] prejudicial error by
erroneously applying law to the issues and facts presented for
9 A-2591-17T2
alternative resolution." N.J.S.A. 2A:23A-13(c)(5). The court may
modify an award on the same ground. N.J.S.A. 2A:23A-13(e)(4).4
To enable effective judicial review, it behooves the umpire
to set forth ample fact-findings and legal conclusions. Cf. Curtis
v. Finneran, 83 N.J. 563, 569-70 (1980) (discussing importance of
adequate findings of fact and conclusions of law under Rule 1:7-4
to enable effective appellate review of trial court decisions).
A supplemental explanation and clarification that does not alter
the final award promotes effective judicial review without
undermining the interest in finality. See Mt. Hope Dev., 154 N.J.
at 149 (noting that APDRA, like the Arbitration Act, promotes
finality).
Allowing a clarifying post-award submission may also promote
efficiency, if the umpire's submission obviates an order vacating
an award and requiring the parties to bear the expense of a re-
run of the ADR process. Particularly where the issue involves the
umpire's personal relationships and alleged partiality, which the
umpire is uniquely situated to address, permitting a clarifying
submission would also promote the search for the truth.
4
On the other hand, APDRA limits the right to appeal from the
trial court's decision, subject to certain exceptions based upon
public policy. N.J.S.A. 2A:23A-18(b); see Mt. Hope Dev. Assocs.
v. Mt. Hope Waterpower Project, L.P., 154 N.J. 141, 150-52 (1998).
10 A-2591-17T2
After the filing of a notice of appeal, a trial court may
supplement, for the benefit of the reviewing court, the reasons
previously given for its order. R. 2:5-6(c). We perceive no
reasoned basis for barring an umpire under APDRA from doing
something similar.
In sum, the trial court was obliged to consider the umpire's
submission before deciding defendant's application for vacatur.
We intend no criticism of the trial judge in this case; he lacked
the guidance of this opinion. Nor do we comment on whether the
trial judge should come to a different conclusion after considering
the submission. We express no opinion at this stage on the merits
of defendant's application, or the substantive points raised on
appeal.
Vacated and remanded for reconsideration. We do not retain
jurisdiction.
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