ILNews

COA extends judicial immunity to arbitrators

Back to TopE-mailPrintBookmark and Share

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.
 

ADVERTISEMENT

Sponsored by

facebook - twitter on Facebook & Twitter

Indiana State Bar Association

Indianapolis Bar Association

Evansville Bar Association

Allen County Bar Association

Indiana Lawyer on Facebook

facebook
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. I just wanted to point out that Congressman Jim Sensenbrenner, Senator Feinstein, former Senate majority leader Bill Frist, and former attorney general John Ashcroft are responsible for this rubbish. We need to keep a eye on these corrupt, arrogant, and incompetent fools.

  2. Well I guess our politicians have decided to give these idiot federal prosecutors unlimited power. Now if I guy bounces a fifty-dollar check, the U.S. attorney can intentionally wait for twenty-five years or so and have the check swabbed for DNA and file charges. These power hungry federal prosecutors now have unlimited power to mess with people. we can thank Wisconsin's Jim Sensenbrenner and Diane Feinstein, John Achcroft and Bill Frist for this one. Way to go, idiots.

  3. I wonder if the USSR had electronic voting machines that changed the ballot after it was cast? Oh well, at least we have a free media serving as vicious watchdog and exposing all of the rot in the system! (Insert rimshot)

  4. Jose, you are assuming those in power do not wish to be totalitarian. My experience has convinced me otherwise. Constitutionalists are nearly as rare as hens teeth among the powerbrokers "managing" us for The Glorious State. Oh, and your point is dead on, el correcta mundo. Keep the Founders’ (1791 & 1851) vision alive, my friend, even if most all others, and especially the ruling junta, chase only power and money (i.e. mammon)

  5. Hypocrisy in high places, absolute immunity handed out like Halloween treats (it is the stuff of which tyranny is made) and the belief that government agents are above the constitutions and cannot be held responsible for mere citizen is killing, perhaps has killed, The Republic. And yet those same power drunk statists just reel on down the hallway toward bureaucratic fascism.

ADVERTISEMENT