ILNews

COA extends judicial immunity to arbitrators

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The Indiana Court of Appeals affirmed the dismissal of a real estate broker’s action to vacate an arbitration award to another broker. In doing so, the appellate court extended judicial and quasi-judicial immunity to arbitrators and their sponsors.

Real estate broker Ron Droscha challenged the arbitration award of nearly $19,000 in favor of Scott Shepherd. The money was half of the brokers’ commission from a sale of commercial property in which Shepherd represented the seller and Droscha’s firm represented the buyer.

Originally the $37,000 in brokers’ commission was divided equally between the two companies, but Shepherd challenged the split, claiming he was entitled to the whole commission. The first arbitration panel awarded Shepherd nearly $10,000; that order was vacated, and an arbitration panel established by the Fort Wayne Association of Realtors awarded Shepherd the entire amount he wanted.

In Ron Droscha v. Scott Shepherd and Fort Wayne Area Association of Realtors, No. 52A02-1001-PL-26, Droscha filed suit against Shepherd and the association, arguing the proceedings didn’t follow the trial court instructions given when it vacated the original award granted by a different panel. The trial court granted the defendants’ motions to dismiss for failure to state a claim upon which relief could be granted.

The appellate court agreed with the association that the trial court properly dismissed Droscha’s action against it because it has arbitral immunity. Relying on Olson v. Nat. Ass’n of Sec. Dealers, 85 F.3d 381 (8th Cir. 1996), the judges decided to extend judicial and/or quasi-judicial immunity to arbitrators and their sponsors.

Droscha’s claim relates to the association’s appointment of a panel and the panel’s performance of its official decision-making function in addressing the fee dispute. That challenge is to the overall arbitration process and therefore is akin to judicial or quasi-judicial functions subject to immunity, wrote Judge Cale Bradford.  

The Court of Appeals also upheld the dismissal of claims against Shepherd, in which Droscha argued, among other things, that the panel didn’t constitute a representative peer panel. There’s no suggestion in the statutes cited by Droscha that noncompliance permits a court to vacate the arbitration award. The panel wasn’t a party to the action at the time of the trial court’s judgment, and Droscha failed to allege that the orders were introduced as an exhibit or otherwise used to inform the arbitration panel. The judges also didn’t find the panel committed misconduct that prejudiced Droscha’s rights to warrant judicial relief.
 

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  1. Well, maybe it's because they are unelected, and, they have a tendency to strike down laws by elected officials from all over the country. When you have been taught that "Democracy" is something almost sacred, then, you will have a tendency to frown on such imperious conduct. Lawyers get acculturated in law school into thinking that this is the very essence of high minded government, but to people who are more heavily than King George ever did, they may not like it. Thanks for the information.

  2. I pd for a bankruptcy years ago with Mr Stiles and just this week received a garnishment from my pay! He never filed it even though he told me he would! Don't let this guy practice law ever again!!!

  3. Excellent initiative on the part of the AG. Thankfully someone takes action against predators taking advantage of people who have already been through the wringer. Well done!

  4. Conour will never turn these funds over to his defrauded clients. He tearfully told the court, and his daughters dutifully pledged in interviews, that his first priority is to repay every dime of the money he stole from his clients. Judge Young bought it, much to the chagrin of Conour’s victims. Why would Conour need the $2,262 anyway? Taxpayers are now supporting him, paying for his housing, utilities, food, healthcare, and clothing. If Conour puts the money anywhere but in the restitution fund, he’s proved, once again, what a con artist he continues to be and that he has never had any intention of repaying his clients. Judge Young will be proven wrong... again; Conour has no remorse and the Judge is one of the many conned.

  5. Pass Legislation to require guilty defendants to pay for the costs of lab work, etc as part of court costs...

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