Goodwin v. Comerica Bank, N.A.

Summary

The California Court of Appeal, First Appellate District, Division Four, modified its published opinion in Goodwin v. Comerica Bank, N.A. and denied rehearing without changing the judgment. The court held that Comerica forfeited its right to disqualify the arbitrator based on alleged disclosure omissions because it failed to raise the issue promptly after learning of the omitted information. The court reversed the orders vacating the arbitration award and denying Goodwin’s petition to confirm it, and remanded with instructions to confirm the award.

Holdings

1. A party that discovers a material omission or misrepresentation in an arbitrator's disclosure must object at the earliest practicable opportunity and, under the applicable ethics standard, within 15 days after becoming aware of it; failure to do so forfeits the right to demand disqualification.
2. The fact that a disqualification ground is discovered after the arbitration hearing or a merits ruling does not permit a party to remain silent and later seek vacatur; when the ground falls within the statutory disqualification standard, the party must demand disqualification before the arbitration concludes.

Questions Presented

1. Whether Comerica forfeited its right to disqualify the arbitrator by failing to serve a notice of disqualification within 15 days after discovering the alleged nondisclosure.
2. Whether the statutory deadline and forfeiture rules applied even though the alleged nondisclosure was discovered after the merits hearing and interim award but before the final award on fees.
3. Whether the orders vacating the arbitration award and denying Goodwin's petition to confirm should be reversed.

Disposition

reversed_and_remanded