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Fisher v. USAA Casualty Insurance Co.

Court of Appeals of Arizona, First Division

August 7, 2018

STEFANIE FISHER, et al., Plaintiffs/Appellants,
v.
USAA CASUALTY INSURANCE COMPANY, Defendant/Appellee.

          Appeal from the Superior Court in Maricopa County No. CV2017-052727 The Honorable Susan M. Brnovich, Judge

          Sherrets, Bruno & Vogt, LLC, Scottsdale By Jason M. Bruno, Jared C. Olson, James D. Sherrets Counsel for Plaintiffs/Appellants

          The Cavanagh Law Firm, Phoenix By Timothy R. Hyland, Kimberly J. Suciu Counsel for Defendant/Appellee

          Presiding Judge James B. Morse Jr. delivered the opinion of the Court, in which Judge Kent E. Cattani and Judge Lawrence F. Winthrop joined.

          OPINION

          MORSE, JUDGE

         ¶1 Appellants Stefanie and Jeffery Fisher appeal a superior court order affirming an arbitration award in favor of Appellee USAA Casualty Insurance Co. ("USAA"). We agree that the Fishers failed to file a timely objection; therefore, their claim is waived, and we affirm the award.

         FACTS AND PROCEDURAL HISTORY

         ¶2 The Fishers were involved in two low-speed car accidents within one week of each other in the summer of 2012. Following the accidents, Stefanie Fisher suffered increasingly severe back and neck pain. She sought medical treatment and eventually underwent surgery to fuse a herniated disc. Stefanie attributed the pain to the car accidents, and because the damages she claimed exceeded the insurance limits of the other drivers, she filed an underinsured motorist claim with her insurer, USAA. Pursuant to the underinsured motorist policy, the claim was submitted for arbitration before a single arbitrator.

         ¶3 The Fishers' original attorneys suggested the parties use arbitrator Alan Goldman, and USAA agreed. One day prior to the arbitration hearing, however, the Fishers' original counsel voiced concerns about Goldman's potential partiality. According to the Fishers, their counsel told them that Goldman often served as an arbitrator for Jones, Skelton & Hochuli ("JSH"), the law firm representing USAA, and that this business relationship with the firm could compromise his neutrality. Although counsel advised the Fishers to settle, they chose to go forward with arbitration.

         ¶4 The arbitrator heard testimony from experts for both sides. After weighing the evidence, he concluded that the low-impact collisions did not cause Stefanie's extensive injuries. Thus, the arbitrator did not award damages to the Fishers.

         ¶5 On December 8, 2016, through counsel, the Fishers filed a motion to reconsider with the arbitrator. The motion reiterated the evidence presented at the hearing but did not mention any concerns over the arbitrator's impartiality. The Fishers also demanded that their original counsel raise the issue of conflict of interest, which caused the attorneys to abruptly terminate their representation. Counsel's motion to withdraw stated that the Fishers were pushing them to take action that they considered unethical and repugnant.

         ¶6 On January 3, 2017, the Fishers filed a pro per motion for reconsideration with the arbitrator and raised the issue of partiality for the first time. After the arbitrator denied that motion for reconsideration, the Fishers retained new counsel and filed another motion to vacate the award due to the arbitrator's alleged conflicts of interest and lack of disclosure. In addition, the Fishers filed a motion to allow discovery to investigate the arbitrator's possible business relationship with JSH. The arbitrator did not rule on the two motions, and the Fishers filed a motion to vacate the arbitration award with the superior court.

         ¶7 With respect to the discovery issue, the court denied the Fishers' motion, reasoning that the issue of partiality may be waived, and case law does not support granting post-arbitration discovery. On the motion to reconsider, the court held further argument, and took the matter under advisement. In its subsequent ruling, the court found that the Fishers had waived their right to challenge the arbitrator's alleged bias because they knew about the arbitrator's relationship with opposing counsel prior to the arbitration but did not raise any objection before or during the arbitration hearing. The court went on to find that, even absent waiver, the Fishers failed to show evidence of partiality.

         ¶8 We have jurisdiction over the Fishers' timely appeal pursuant to Article 6, Section 9, of the Arizona Constitution and Arizona Revised Statutes ...


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