Florida Appeals Court Denies Motion to Vacate Arbitration Panel Decision
On July 19th, 2017, Florida’s Fourth District Court of Appeal issued a decision in the case of Managed Care Insurance Consultants, Inc. v. United Healthcare Insurance Company. In this dispute, the plaintiff, Managed Care Insurance Consultants (MCIC), attempted to get an arbitration panel’s ruling set aside on the grounds that one of the arbitrators had a conflict of interest. However, upon hearing the case, the appeals court denied the plaintiff’s motion to vacate. This decision reiterates the fact that arbitration decisions are extremely powerful. Florida courts are very reluctant to overrule the findings of an agreed upon arbitrator. In this post, our West Palm Beach arbitration lawyers analyze the underlying facts of the case.
The Case Background
United Healthcare entered into a contract with the Centers for Medicare & Medicaid Services (CMS). This agreement allowed the company to offer Medicare Advantage health plans to residents of South Florida. In relation to this deal, United Healthcare entered into another contract with MCIC, whereby that firm would take care of some of the management duties of United Healthcare’s Medicare contract. Eventually, a dispute arose in which both companies alleged that the other had breached the agreement.
The Alleged Conflict of Interest
Under the terms of the contract between United Healthcare and MCIC, their dispute was required to go before an arbitration panel. The arbitration panel declined to award damages to either party in the dispute. MCIC took additional action, arguing that the arbitration panel’s decision was invalid, on the grounds that one of the arbitrator’s had a conflict of interest in the case. Specifically, MCIC argued that the chairwoman of the arbitration panel was married to a physician who was on the board of directors of Florida’s largest cardiology group, an organization that treats many patients who are insured by United Healthcare.
In its decision upholding the arbitration panel’s ruling, the Fourth District Court of Appeal pointed to the language of the Federal Arbitration Act (FAA). While that act does permit courts to overrule arbitration decisions when a party can show that the arbitrators were “partial” or “corrupt”, the court ruled that MCIC fell far short of reaching that standard. Indeed, under the FAA, a party must be able to show that:
- An actual conflict existed;
- The arbitrator knew about that conflict; and
- The arbitrator failed to disclose the conflict, when a reasonable person would have done so.
In this case, there was insufficient evidence that an actual conflict existed, as the connection between the arbitrator and her husband serving patients that were insured by one of the parties was far too specious in the view of the appeals court. Additionally, MCIC failed to demonstrate that the arbitrator in question knew about the alleged conflict of interest.
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At Pike & Lustig, LLP, we have extensive experience handling arbitration cases. We have a deep understanding of the rules of the American Arbitration Association and the Federal Arbitration Act. To learn more about what our team can do for you, please contact us today to schedule your free legal consultation. From our offices in West Palm Beach, Wellington and Miami, we serve communities in South Florida.