Commonwealth Coatings Corporation v. Continental Cas. Company

PETITIONER: Commonwealth Coatings Corporation
RESPONDENT: Continental Cas. Company
LOCATION: Surface Transportation Board at the United States Department of Transportation

DOCKET NO.: 14
DECIDED BY: Warren Court (1967-1969)
LOWER COURT: United States Court of Appeals for the First Circuit

CITATION: 393 US 145 (1968)
ARGUED: Oct 22, 1968
DECIDED: Nov 18, 1968

Facts of the case

Question

Media for Commonwealth Coatings Corporation v. Continental Cas. Company

Audio Transcription for Oral Argument - October 22, 1968 in Commonwealth Coatings Corporation v. Continental Cas. Company

Earl Warren:

Number 14, Commonwealth Coatings Corporation, petitioner, versus Continental Casualty Company, et al.

Mr. Harris.

Emanuel Harris:

Mr. Chief Justice and may it please the Court.

The question involved on this certiorari is the effect of the failure of a third arbitrator in a tripartite arbitration proceeding in departing to disclose prior business relations between them whether that -- whether an award made in such a proceeding is invalid under the Federal Arbitration Act.

The Act provides that the award may be vacated where the award was procured by corruption or fraud, where there was evident partiality or corruption in the arbitrators or either of them or where the arbitrator is guilty of any other misbehavior by which the rights of any party have been prejudiced.

These -- this case arises out of contracts between the petitioner and the respondents.

The petitioner was a subcontractor of the respondent Samford for the performance of work, painting work on five construction projects in Puerto Rico.

The respondent Samford was the general contractor.

The claims of petitioner was that the Samford, although it received payment from the owner for the work performed by the petitioner failed to make progress payments to the petitioner and therefore the petitioner abandoned the work.

The claim of Samford is that the petitioner abandoned and stopped work on the contracts.

The contracts provided for arbitration of all disputes.

The respondents binding companies were the sureties on Samford's Miller Act bonds.

The contract, as I said, provided for the arbitration of disputes and the respondent bonding companies obtained a stay of the suit against them under Miller Act bonds pending the determination of the arbitration.

Pursuant to the procedure established by the contracts, the petitioner and Samford each appointed one arbitrator.

Those two arbitrators appointed an arbitrator by the name of Capacete.

At the time the arbitrators were designated and prior to the arbitration proceedings, petitioner's attorney, Mr. Romero made an investigation to discover whether any of the arbitrators had prior business relations with any of the parties and he found none and none of the arbitrators informed him of any such prior relations and he states in an affidavit in the record that if he had known about such prior previous relations, he would asked a lawyer, have objected to the arbitrator's capacity.

The respondents state in their briefs throughout their brief that no inquiry was made by the petitioner, totally disregarding this affidavit by Mr. Romero although they devote about five pages in their brief in attempt to discredit Mr. Romero's affidavit.

Furthermore, in their --

Byron R. White:

He never asked the arbitrator.

Emanuel Harris:

The affidavit doesn't disclose that he asked --

Byron R. White:

Just suppose that he asked --

Emanuel Harris:

No, it doesn't say that -- it does say that none of the arbitrators informed him.

He does not say -- the affidavit does not say that he ask this particular --

Byron R. White:

Do you think the arbitrator justified that nobody asked him.

Emanuel Harris:

He did.

However, it was admitted in the respondent's brief that Capacete did discuss possible arbitrators with Mr. Romero at the time a vacancy appeared in the Board of Arbitrators and as a matter of fact, at the time, on the request of Mr. Romero, Mr. Capacete furnished a list of lawyers who knew something about engineering cases and from that list furnished by Mr. Capacete, a third arbitrator was designated to fill the vacancy.

Now, Capacete at that time did not say anything about his prior relations with Samford.

Byron R. White:

Well, why gather that your position that it's other misbehavior under the statute?

Emanuel Harris:

No, our position is that the arbitrator and the respondent with whom he had present relations were under a duty to disclose these previous relationships --

Byron R. White:

Yes, but the statute which you just quoted to us speaks in terms of certain misbehavior of the arbitrator, doesn't it?