Association of Apartment Owners of the Palm Villas at Mauna Lani Resort v. Constrx, Ltd.

FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

Electronically Filed
Intermediate Court of Appeals
CAAP-XX-XXXXXXX
31-JAN-2022
08:07 AM
Dkt. 269 OP

IN THE INTERMEDIATE COURT OF APPEALS

OF THE STATE OF HAWAI#I

–––O0O–––

ASSOCIATION OF APARTMENT OWNERS OF THE PALM VILLAS
AT MAUNA LANI RESORT, by and through its Board of
Directors, Claimant-Appellee/Cross-Appellee,
v.
CONSTRX, LTD., Respondent-Appellee/Cross-Appellant, and
KNOX HOVERSLAND ARCHITECTS, Respondent-Appellant/Cross-Appellee

NO. CAAP-XX-XXXXXXX

APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT
(S.P. NO. 14-1-000564-12)

JANUARY 31, 2022

WADSWORTH, PRESIDING JUDGE, AND NAKASONE, J.,
AND McCULLEN, J., DISSENTING

OPINION OF THE COURT BY WADSWORTH, J.

This appeal arises out of a dispute concerning two
arbitration awards, which were issued in favor of Respondent-
Appellant/Cross-Appellee Knox Hoversland Architects, Ltd. (KHA)
and Respondent-Appellee/Cross-Appellant ConstRX, Ltd. (CRX)
(collectively, Respondents) and against Claimant-Appellee/Cross-
Appellee Association of Apartment Owners of the Palm Villas at
Mauna Lani Resort (AOAO). KHA appeals and CRX cross-appeals from
the April 3, 2017 Amended Findings of Fact, Conclusions of Law
and Order (Amended FOF/COL/Order), entered in the Circuit Court
 FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

of the First Circuit1/ (Circuit Court), which: (1) granted AOAO's
October 31, 2014 motion to vacate the September 16, 2014 Interim
Arbitration Award (Interim Award); (2) granted AOAO's April 1,
2015 motion to vacate the February 9, 2015 Final Arbitration
Award (Final Award); and (3) denied CRX's February 13, 2015
motion to confirm the Final Award, which KHA joined on March 10,
2015.
On appeal, Respondents contend that the Circuit Court
erred in vacating the Interim Award and the Final Award
(collectively, the Arbitration Awards) due to evident partiality.
In particular, Respondents contend that the Circuit Court erred
in concluding that: (1) the arbitrator, Judge Riki May Amano
(Ret.) (the Arbitrator or Judge Amano), failed to make reasonable
inquiries and failed to make full and appropriate disclosures of
her relationships with the parties and counsel prior to and
during the arbitration; and (2) AOAO did not waive its right to
object to the Arbitrator.2/
We hold that under the circumstances of this case, the
Arbitrator's failure to timely disclose to the parties that she
recently had been appointed as an arbitrator in another matter,
involving an attorney who also had been involved in the present
matter, could reasonably have been perceived as likely to affect
the Arbitrator's impartiality in the arbitration underlying this
appeal. Thus, the Circuit Court did not clearly err in ruling
that a reasonable impression of partiality, and thus evident
partiality, was established on this ground. We further hold that
the Circuit Court did not clearly err in ruling that AOAO did not
waive its right to challenge the Arbitrator on this ground.
Accordingly, we affirm the Amended FOF/COL/Order.

I. Background

The following findings of fact by the Circuit Court are
unchallenged on appeal and are thus binding on the parties and

1/
The Honorable Jeannette H. Castagnetti presided.
2/
Respondents' respective points of error have been restated and
condensed for organizational clarity.

2
 FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

this court, see State v. Rodrigues, 145 Hawai#i 487, 494, 454
P.3d 428, 435 (2019):

6. On April 18, 2012, [AOAO] and Respondents entered
into a Remediation Agreement to complete [certain]
repairs. . . .
7. Pursuant to Article 13 of the Remediation
Agreement, any dispute arising thereunder that could not be
resolved via the Initial Decision Maker (the
Owner's/[AOAO's] Representative) or mediation was to be
submitted to Dispute Prevention & Resolution, Inc. ("DPR")
for binding arbitration. . . .
8. CRX performed remediation work from July 2012 to
September 2013.
9. A dispute arose regarding payment under the
Remediation Agreement.
10. On October 24, 2013, this matter came before
Keith Hunter, President and Chief Executive Officer of DPR,
for mediation.

11. Attorney [Jeffre W.] Juliano (O'Connor Playdon)
could not attend the October 24, 2013 mediation and asked
his partner, Cid Inouye, Esq., to prepare for and attend the
mediation on Attorney Juliano's behalf [for CRX].
12. Attorney Inouye billed 11.3 hours in this matter
to prepare for and stand in for Attorney Juliano at said
mediation.

13. The mediation was unsuccessful and on October 28,
2013, [AOAO] emailed DPR its demand for arbitration against
Respondents.

14. Also on October 28, 2013, CRX filed a demand for
arbitration with DPR.
15. On November 14, 2013, using the strike-off
method, DPR appointed Judge Amano to serve as
arbitrator.
. . . .

. . . .
17. On November 18, 2013, Judge Amano, through Kelly
Bryant, Case Manager at DPR, provided the following
disclosure by email addressed to Attorneys [Terrance M.]
Revere [(for AOAO)] and Juliano:

I know counsels Terry Revere, Cid Inouye and
Jeff Juliano, and I have worked with other
lawyers in their respective law firms, in my
capacity as a former state court judge between
1992-2003 or in my post-retirement years as an
arbitrator or mediator with DPR; I do not know
Malia Nickison-Beazley.
I have no other professional, social or personal
interactions with anyone involved in this case.

3
FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER
There are no relationships or interests, past or
present that would affect my neutrality as an
arbitrator in this case.
18. In the same email, Ms. Bryant advised that:

The Judge has made a diligent effort to disclose
all relevant matters. If any party has
additional information that should be disclosed
but has not been, or you have any comments or
objections, please submit them in writing to DPR
by November 21, 2013. (Emphasis in original.)
19. Ms. Bryant copied Attorney Inouye (O'Connor
Playdon), Alison Shigekuni, Esq. (O'Connor Playdon), Mea
Mitchell, Esq. (Revere & Associates), and Attorney
Nickison-Beazley (Revere & Associates) on the November 18,
2013 email containing Judge Amano's initial disclosure.

20. No party submitted comment or objection to Judge
Amano serving as arbitrator in response to her November 18,
2013 initial disclosure.

21. In January 2014, CRX's insurer retained Attorneys
[Roy F.] Hughes and [Samantha] Storm of Hughes Storm to
litigate CRX's defense claims, while Attorneys Juliano and
[Lahela H.F.] Hite of O'Connor Playdon continued to litigate
CRX's affirmative claims against [AOAO].

22. In February 2014, KHA's insurer retained Attorney
[Randall K.] Schmitt of McCorriston Mukai to litigate its
claims against [AOAO].

23. A summary of the parties and counsel who appeared
before Judge Amano for the subject arbitration is as
follows:
[AOAO] Revere & Associates
Terrance Revere, Esq.
Malia Nickison-Beazley, Esq.

Respondent CRX O'Connor Playdon (affirmative claims)
Lahela Hite, Esq.
Jeffre Juliano, Esq.
Hughes Storm (defense claims)
Roy Hughes, Esq.
Samantha Storm, Esq.

Respondent KHA McCorriston Mukai
Randall Schmitt, Esq.
. . . .
24. On March 25, 2014, Judge Amano issued the
following supplemental disclosure by email through Ms.
Bryant:
I do not know nor have I had any affiliation
past or present with [KHA.] I know counsel
Randy Schmitt from my work as a former state
court judge between 1992-2003 and/or in my
post-retirment [sic] work as an arbitrator or
mediator with DPR; I have also worked with other
lawyers in his law firm, McCorriston Miller, in
the capacities I have identified herein; I have
no social or personal relationships with Mr.

4
FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER
Schmitt or anyone in his law firm [sic]
I am currently the Claims Administrator in a
settled case in which Mr. Schmitt represented a
named defendant; my present duties require me to
seek and pay qualified class plaintiffs from
settlement monies already paid; I do not have
contact with Mr. Schmitt in this regard although
he will be receiving a copy of my reports as the
legal representative for a party to the case
[sic]
I have no other professional, social or personal
relationships or interactions with anyone
involved in this case [sic]
I continue to believe that my neutrality as an
arbitrator in this case is unaffected [sic]

25. No party submitted comment or objection to Judge
Amano serving as arbitrator in response to her March 25,
2014 supplemental disclosure.
. . . .

28. On May 1, 2014, counsel for all the parties
herein attended a pre-arbitration conference before Judge
Amano at DPR's office.
29. At said pre-arbitration conference, Attorney
Juliano disclosed that Attorneys Inouye and Maxwell K.
Kopper (previously an associate at O'Connor Playdon) were
before Judge Amano the day before, April 30, 2014, arguing
an unrelated motion for summary judgment.

30. In said unrelated matter, unbeknownst to [AOAO],
Ms. Bryant had confirmed on November 6, 2013, that Judge
Amano was selected as the arbitrator, eight days before
Judge Amano was selected as arbitrator in this matter.

31. There was no objection made at the May 1, 2014
pre-arbitration conference with respect to Judge Amano
serving as arbitrator in this matter.

32. Beginning May 5, 2014, the arbitration took place
at the office of McCorriston Mukai on May 5, 6, 7, 8, 9, and
12.

. . . .
35. On May 16, 2014, Ms. Bryant sent an email to
Attorneys Hughes, Nickison-Beazley, Juliano, Revere,
Mitchell, Shigekuni, Inouye, Schmitt, and Storm, among
others who had not appeared before Judge Amano in this
matter, to disclose that Judge Amano had been appointed by
the court to serve as a discovery master in a matter in
which Attorney Schmitt represented a party.

. . . .
. . . .
37. On September 16, 2014, Judge Amano issued an
Interim Arbitration Award against [AOAO] and in favor of CRX
for $205,539.49, representing the unpaid balance owed by
[AOAO] and $431,462.47 in retainage, pursuant to the
Remediation Agreement. Judge Amano denied CRX's remaining
affirmative claims against [AOAO].

5
FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER
. . . .
39. On September 23, 2014, Attorney Revere sent an
email to Ms. Bryant, copying, among others, all counsel
present at the May 2014 arbitration, representing that
[AOAO] sought additional disclosures from Judge Amano
pertaining to:
[A]ny and all matters in which Judge Amano
served as mediator, arbitrator or in any other
capacity for any matters involving any of the
parties or law firms retained in this matter in
the last seven years, including dates when the
retentions began and when they terminated. We
also ask that if there are any other personal or
professional relationships involving any of the
parties or lawyers in the law firms (not limited
to just counsel that appeared in this matter)
that they be disclosed.

40. On September 23, 2014, in response to Attorney
Revere's email, counsel emailed the following disclosures:

[Disclosures by Schmitt and Storm not
related to the disclosure at issue.]
41. On September 24, 2014, Attorney Juliano (O'Connor
Playdon) disclosed by email that his "last experience with
Judge Amano was when she acted as a mediator in a case in
which I represented one of the parties in October 2008. I'm
sure as Judge Amano has already disclosed, she has acted as
a Judge, Mediator and or Arbitrator with other counsel in my
office."

42. On September 25, 2014, Attorney Juliano further
disclosed by email the following matters in which Judge
Amano was involved, and the O'Connor Playdon attorneys who
handled them:

Mediations
. . . .

2014: Cid Inouye/Maxwell Kopper

Discovery Master
. . . .
Arbitration
2010: Cid lnouye/Lahela Hite. . . .

. . . .
43. On September 29, 2014, [AOAO] filed with DPR a
Motion to Disqualify Judge Amano and a Motion to Correct
and/or Otherwise Modify Interim Arbitration Award, and
submitted two subpoena duces tecum for Judge Amano's
execution.
44. On October 17, 2014, Mr. Hunter denied [AOAO]'s
Motion to Disqualify Judge Amano.

45. On October 21, 2014, Judge Amano provided the
following supplemental disclosure by email through Ms.
Bryant:

. . . .

6
 FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER
• Cid Inouye was counsel in a case in which I
was the selected arbitrator; the case began as
an arbitration in late 2013 and turned into a
mediation during the summer of 2014; the matter
settled

. . . .
46. Ms. Bryant further advised in the October 21,
2014 email that "[a]ny comments regarding this disclosure
should be filed in writing with DPR by October 23, 2014."
(emphasis in original).
. . . .

49. On October 21, 2014, Attorney Revere emailed
[AOAO's] objection to Judge Amano's continued service as an
arbitrator and moved a second time for Judge Amano's
disqualification.

50. On October 29, 2014, Mr. Hunter denied [AOAO's]
Second Motion to Disqualify.

51. On October 31, 2014, [AOAO] filed a Motion to
Vacate Interim Arbitration Award in the Third Circuit Court.
52. On November 7, 2014, Judge Amano issued an Order
Denying [AOAO's] Motion to Correct and/or Otherwise Modify
Interim Arbitration Award, Dated September 16, 2014, and
advised of her determination not to issue [AOAO's]
previously submitted subpoenas.
. . . .

54. On February 9, 2015, Judge Amano issued a Final
Arbitration Award, which affirmed the amounts awarded to CRX
under the Interim Arbitration Award: $205,539.49 for the
unpaid balance owed by [AOAO], and $431,462.47 in retainage.

55. Judge Amano further awarded attorneys' fees and
costs incurred by counsel for CRX and KHA as follows:
$235,398.21 for Hughes Storm; $223,569.26 for O'Connor
Playdon; and $163,019.32 for McCorriston Mukai.

56. On February 13, 2015, CRX filed the Motion to
Confirm Final Arbitration Award Dated February 9, 2015,
which KHA joined on March 10, 2015.
57. On April 1, 2015, [AOAO] filed the Motion to
Vacate Final Arbitration Award.

(Record citations omitted; some brackets in original.)
On March 1, 2016, the Circuit Court held a status
conference regarding the pending motions to vacate the Interim
Award and the Final Award and the pending motion to confirm the
Final Award, all of which had been consolidated for a hearing.
At that time, "all counsel agreed that no evidentiary hearing
would be necessary to dispose of the consolidated motions. . . ."
On August 17, 2016, the Circuit Court heard the
consolidated motions.

7
 FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

On March 3, 2017, the Circuit Court issued its Findings
of Fact, Conclusions of Law, and Order, which granted AOAO's
motions to vacate the Interim Award and the Final Award, and
denied Respondents' motion to confirm the Final Award. On
April 3, 2017, the Circuit Court issued the Amended
FOF/COL/Order.
The Circuit Court concluded that "the cumulative effect
of undisclosed prior and ongoing relationships between Judge
Amano and the Respondents' attorneys and their respective firms
demonstrates a reasonable impression of partiality that warrants
vacatur of the arbitration award." The Circuit Court further
concluded, among other things:

30. The evidence supports this Court's conclusion
that Judge Amano violated the disclosure requirements of
[Hawaii Revised Statutes (HRS)] chapter 658A and DPR Rule 9
by failing to make reasonable inquiries of all past,
current, and anticipated future relationships with the
parties' attorneys or representatives, and by failing to
disclose them, thus creating a reasonable impression of
partiality.

31. In particular, Judge Amano did not disclose to
the parties that she had been appointed as arbitrator in a
matter involving O'Connor Playdon Attorneys Inouye and
Kopper (formerly of O'Connor Playdon) on November 6, 2013,
eight days before appointment in the underlying arbitration.

. . . .

36. Under the circumstances, including the close
proximity in time of Judge Amano's appointment as
arbitrator, a reasonable person would consider the fact that
on November 18, 2013, Judge Amano stated that she knew
Attorney Inouye and worked with other lawyers in his firm
yet did not disclose that he was involved in another matter
where she was appointed arbitrator on November 6, 2013,
creates an impression of possible bias.
. . . .
42. This Court, therefore, concludes that [AOAO] has
adequately established evident partiality by Judge Amano, a
neutral arbitrator.
43. Consequently, the interim and final arbitration
awards are hereby vacated pursuant to HRS
§ 658A-23(a)(2)(A).

. . . .
48. This Court concludes that [AOAO] has not waived
its right to challenge Judge Amano on the ground of evident
partiality.

49. . . . [AOAO] has proffered sufficient evidence to
support the contention that had Judge Amano disclosed that

8
 FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER
she had been retained by O'Connor Playdon eight days before
being appointed in the underlying arbitration, or had she
disclosed the number of times she had been retained by the
law firms representing Respondents, [AOAO] would not have
agreed to her appointment.

This appeal and cross-appeal followed.

II. Standards of Review

The Hawai#i Supreme Court has set out the applicable
standards for judicial review of an arbitration award as follows:

Judicial review of an arbitration award is limited to
the statutory grounds for confirmation, vacatur,
modification, and correction. See HRS § 658A-28(a)(3)-(5)
(Supp. 2001). Review of a motion to vacate an arbitration
award "does not involve review of an arbitrator's findings
of fact or conclusions of law." Nordic[ PCL Const., Inc. v.
LPIHGC, LLC], 136 Hawai#i [29, ]42, 358 P.3d [1, ]14
[ (2015)]. "Rather, it involves review of a circuit court's
factual findings and conclusions of law as to whether the
statutorily outlined grounds for vacatur exist." Id.

We review a circuit court's findings of fact under the
clearly erroneous standard. [Noel ]Madamba[ Contracting LLC
v. Romero], 137 Hawai#i [1, ]8, 364 P.3d [518, ]525
[ (2015)]. . . . We review a circuit court's conclusions of
law de novo under the right/wrong standard. Nordic, 136
Hawai#i at 41, 358 P.3d at 13 (quoting Daiichi[ Hawai #i Real
Estate Corp. v. Lichter], 103 Hawai#i [325, ]336, 82 P.3d
[411, ]422[ (2003)]). Where a conclusion of law presents a
mixed question of law and fact, we review this conclusion
under the clearly erroneous standard. Madamba, 137 Hawai #i
at 8, 364 P.3d at 525 (citing Estate of Klink ex rel. Klink
v. State, 113 Hawai#i 332, 351, 152 P.3d 504, 523 (2007)).
A mixed question of law and fact is a conclusion "dependent
upon the facts and circumstances of the particular case."
Price v. Zoning Bd. of Appeals, 77 Hawai#i 168, 172, 883
P.2d 629, 633 (1994).

We review a circuit court's rulings on a motion to
vacate for evident partiality under the "clearly erroneous
standard" where the court's challenged conclusion was based
on a "mixed question of law and fact." Madamba, 137 Hawai #i
at 9, 364 P.3d at 526.

Narayan v. Ass'n of Apartment Owners of Kapalua Bay Condo., 140
Hawai#i 75, 83, 398 P.3d 664, 672 (2017).

III. Discussion

A. Evident Partiality and Failure to Make Necessary Disclosures

Respondents contend that the Circuit Court erred in
vacating the Arbitration Awards due to evident partiality.
Respondents argue, among other things, that the Arbitrator's
disclosures to the parties were proper and timely. In response,

9
 FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

AOAO contends that the Circuit Court correctly found that the
Arbitrator failed to make full and appropriate disclosures.
The supreme court has addressed an arbitrator's
statutory disclosure requirements, as well as vacatur based on
evident partiality, in a series of three decisions. See Narayan,
140 Hawai#i at 83–90, 398 P.3d at 672–79; Madamba, 137 Hawai#i at
9-16, 364 P.3d at 526-33; Nordic, 136 Hawai#i at 42-52, 358 P.3d
at 14-24. In Narayan, the court stated:

An arbitration award may be vacated only upon the grounds
specified in HRS § 658A-23. Pursuant to HRS
§ 658A-23(a)(2)(A), the court must vacate an arbitration
award if there was evident partiality by an arbitrator
appointed to serve as a neutral. Madamba, 137 Hawai #i at 3,
364 P.3d at 520. Evident partiality may be found in two
situations: when an arbitrator fails to make necessary
disclosures to the parties, or when additional facts show
actual bias or improper motive, even if the arbitrator makes
the necessary disclosures. See Valrose Maui, Inc. v. Maclyn
Morris, Inc., 105 F. Supp. 2d 1118, 1124 (D. Haw. 2000); see
also Schmitz v. Zilveti, 20 F.3d 1043, 1045-47 (9th Cir.
1994) (distinguishing the evident partiality standards
applied in "nondisclosure" cases and "actual bias" cases).

140 Hawai#i at 84, 398 P.3d at 673 (footnote omitted).
In a nondisclosure case, "evident partiality is
established where 'undisclosed facts demonstrate a reasonable
impression of partiality.'" Madamba, 137 Hawai#i at 10, 364 P.3d
at 527 (quoting Nordic, 136 Hawai#i at 51, 358 P.3d at 23).
"Under this standard, a finding of evident partiality 'is not
dependent on a showing that the arbitrator was actually biased,
but instead stems from the nondisclosure itself.'" Narayan, 140
Hawai#i at 84, 398 P.3d at 673 (quoting Madamba, 137 Hawai#i at
10, 364 P.3d at 527).
HRS § 658A-12 (Supp. 2013) codifies an arbitrator's
duty to disclose facts that may create an appearance of bias.
Section 658A-12 provides, in relevant part:

(a) Before accepting appointment, an individual who is
requested to serve as an arbitrator, after making a
reasonable inquiry, shall disclose to all parties to the
agreement to arbitrate and arbitration proceeding and to any
other arbitrators any known facts that a reasonable person
would consider likely to affect the impartiality of the
arbitrator in the arbitration proceeding, including:

(1) A financial or personal interest in the outcome
of the arbitration proceeding; and

10
 FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER
(2) An existing or past relationship with any of the
parties to the agreement to arbitrate or the
arbitration proceeding, their counsel or
representatives, a witness, or another
arbitrator.

(b) An arbitrator has a continuing obligation to
disclose to all parties to the agreement to arbitrate and
arbitration proceeding and to any other arbitrators any
facts that the arbitrator learns after accepting appointment
which a reasonable person would consider likely to affect
the impartiality of the arbitrator.

Pursuant to these provisions, "arbitrators must at the outset
disclose, then continually disclose throughout the course of an
arbitration proceeding, any known facts that a reasonable person
would consider likely to affect the arbitrator's impartiality."
Nordic, 136 Hawai#i at 47, 358 P.3d at 19.
The supreme court has held that "a neutral arbitrator's
violation of statutory disclosure requirements under HRS §
658A-12(a) or (b) 'constitutes "evident partiality" as a matter
of law.'" Narayan, 140 Hawai#i at 85, 398 P.3d at 674 (quoting
Nordic, 136 Hawai#i at 50, 358 P.3d at 22). In this context,
"once evident partiality as to a neutral arbitrator is
established, the arbitration award must be vacated." Id. at 86,
398 P.3d at 675 (brackets omitted) (quoting Madamba, 137 Hawai#i
at 16 n.20, 364 P.3d at 533 n.20).
In Narayan, the supreme court "clarif[ied] the scope of
the arbitrator's disclosure requirements as well as
contextualize[d] the reasonable person standard in light of the
undisclosed facts revealed through post-award discovery." Id. at
86, 398 P.3d at 675. "The 'fundamental standard' of the
disclosure obligation 'is an objective one: disclosure is
required of facts that a reasonable person would consider likely
to affect the arbitrator's impartiality in the arbitration
proceeding.'" Id. (quoting Nordic, 136 Hawai#i at 47, 358 P.3d
at 19). "It is thus the circuit court's role to determine
whether the undisclosed facts meet this objective standard." Id.
The supreme court also has observed:

Patterns emerging in case law have evolved through
court efforts to identify undisclosed relationships that are
"more than trivial" and thus require vacatur due to evident
partiality, and those that are "too insubstantial to warrant
vacating an award." Commonwealth Coatings[ Corp. v.

11
 FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER
Continental Casualty Co.], 393 U.S. [145, ]152, 89 S. Ct.
337[, 340-41 (1968) ](White, J., concurring) (emphasis
added). Courts will weigh factors in a case-by-case
approach to determine how a reasonable person would
objectively perceive the relationship and its potential
impact on the arbitration proceeding.

Id. at 87, 398 P.3d at 676.
Determining whether a relationship is "substantive" –
for the purpose of determining whether the relationship would
give a reasonable impression of partiality – may involve the
consideration of several factors, including: (1) the directness
of the connection between the arbitrator and a party; (2) the
type of connection or activity at issue; and (3) the timing of
the connection or activity. See id. Accordingly, in evaluating
the disclosure issue in the present case, we analyze each of
these factors below.

1. Connection Between the Arbitrator and a Party

"The more direct an undisclosed connection between the
arbitrator and a party, the more likely that it will create a
reasonable impression of partiality." Narayan, 140 Hawai#i at
88, 398 P.3d at 677. Thus, "a current direct relationship
between an arbitrator and 'a party, its counsel, principal, or
agent' will almost always require disclosure." Id. (quoting
Valrose, 105 F. Supp. 2d at 1124). In contrast, "[t]he more
'attenuated' and less direct the connections between a party and
an arbitrator, the less likely it will be that the relationship
will require disclosure, even if those relationships are
current." Id. (citing New Regency Prods., Inc. v. Nippon Herald
Films, Inc., 501 F.3d 1101, 1110 (9th Cir. 2007)).
Here, on November 18, 2013, the Arbitrator disclosed to
the parties:

I know counsels Terry Revere, Cid Inouye and Jeff Juliano,
and I have worked with other lawyers in their respective law
firms, in my capacity as a former state court judge between
1992-2003 or in my post-retirement years as an arbitrator or
mediator with DPR; I do not know Malia Nickison-Beazley.

I have no other professional, social or personal
interactions with anyone involved in this case.

12
 FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

However, the Arbitrator did not disclose to the parties that on
November 6, 2013, she had been appointed as an arbitrator in an
unrelated matter in which Attorneys Inouye and Kopper represented
a party.
KHA argues that "the Arbitrator did not have a duty to
disclose her relationship with Attorneys Inouye and Kopper
because they did not participate in the arbitration proceedings."
CRX makes a similar argument. Respondents are correct that under
HRS § 658A-12(a)(2), supra, the term "counsel" "does not include
all attorneys in the law firm of an attorney representing a party
to an arbitration[.]" Madamba, 137 Hawai#i at 12 n.18, 364 P.3d
at 529 n.18 (quoting Nordic, 136 Hawai#i at 48, 358 P.3d at 20).
However, HRS § 658A–12(a) "requires that an arbitrator disclose
facts that a reasonable person would consider likely to affect
the arbitrator's impartiality." Id. (quoting Nordic, 136 Hawai#i
at 48, 358 P.3d at 20). Thus, "[d]epending on the circumstances,
such facts could include an arbitrator's relationships with other
attorneys within a law firm of counsel representing a party to
the arbitration." Id. (quoting Nordic, 136 Hawai#i at 48, 358
P.3d at 20).
Here, while Attorney Inouye did not represent CRX in
the underlying arbitration itself, it is undisputed that he did
prepare for and attend the October 24, 2013 mediation that
immediately preceded the arbitration, on behalf of Attorney
Juliano, representing CRX. It is similarly undisputed that
Attorney Inouye billed CRX 11.3 hours for his work relating to
the mediation. As the Circuit Court found, and Respondents do
not dispute:

Judge Amano was aware that Attorney Inouye had been involved
in this matter, albeit he did not participate in the
arbitration, when she specifically disclosed on November 18,
2013, that she knew "Terry Revere, Cid Inouye and Jeff
Juliano" and had worked with other lawyers in Attorney
Inouye's firm in her capacity as a former state court judge
and as an arbitrator or mediator with DPR.

Additionally, the Circuit Court found, and Respondents do not
dispute, that "the attorneys, DPR, and Judge Amano considered
Attorney Inouye's involvement in this matter significant enough
to copy him in email correspondence, in particular, those
containing disclosures."

13
 FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

Under these circumstances, the then-current
relationship between the Arbitrator and Attorney Inouye, who
represented CRX in the mediation immediately preceding the
underlying arbitration, was more direct than attenuated. This
factor thus weighed in favor of the Arbitrator disclosing that
she recently had been appointed as an arbitrator in another
matter involving O'Connor Playdon Attorney Inouye.

2. Type of Connection or Activity

The supreme court has recognized that "[c]ertain types
of relationships will also weigh more heavily toward disclosure
than others." Narayan, 140 Hawai#i at 88, 398 P.3d at 677. For
example, "[b]usiness relationships and financial dealings will .
. . tend to weigh in favor of disclosure, depending on the weight
of other considerations, including the regularity and recency of
the dealings, the length of the relationship, and the extent of
pecuniary interest involved." Id. at 89, 398 P.3d at 678.
Moreover, "[w]here the relationship involves an exchange of money
or other consideration, it is likely to require disclosure,
particularly if the exchange was recent or ongoing during the
arbitration." Id.
In Narayan, the supreme court held in part that the
circuit court did not clearly err in ruling that the arbitrator's
duty of disclosure did not include her retention in unrelated
matters by the law firm of an alleged "hearsay witness." Id. at
91, 398 P.3d at 680. The court noted that the "hearsay witness"
was not a witness in the arbitration proceeding at issue, and it
"[wa]s unclear how Appellants' allegations make him a 'hearsay
witness.'" Id. at 91 n.17, 398 P.3d at 680 n.17. In that
context, the supreme court concluded: "The [a]rbitrator's
employment by [the law firm] in unrelated matters does not have a
sufficient nexus to this arbitration to require a holding that
the circuit court clearly erred. There is no actual direct
connection between [the law firm] and the parties, counsel,

14
 FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

witnesses, and [a]rbitrator in this arbitration."3/ Id. at 91,
398 P.3d at 680 (emphasis added).
Here, in contrast, there was a more direct connection
between the Arbitrator and Attorney Inouye, who represented CRX
in the mediation immediately preceding the underlying
arbitration, and who was copied by the Arbitrator in email
correspondence regarding the arbitration. It was in this context
that the Arbitrator was appointed as arbitrator in another matter
involving O'Connor Playdon Attorney Inouye, just eight days
before the Arbitrator's appointment in the underlying arbitration
here. Given the recency of the Arbitrator's appointment in the
other matter, as well as the Circuit Court's other undisputed
findings regarding the Arbitrator's relationship with Inouye, the
Arbitrator's appointment in the other matter was the type of
activity that could reasonably be perceived to affect an
arbitrator's impartiality.4/ See Valrose, 105 F. Supp. 2d at
1123-24 (concluding that a "reasonable impression of partiality"
existed where the arbitrator failed to disclose an ex parte
discussion with one party's counsel regarding "the possibility of
the Arbitrator's mediating in an unrelated legal malpractice
action" and stating that the discussion "was clearly required to
be disclosed" and "the nondisclosure of the discussion and
appointment [as mediator] was clearly a serious failing"). This
factor thus also weighed in favor of the Arbitrator disclosing
that she recently had been appointed as an arbitrator in another
matter involving O'Connor Playdon Attorney Inouye.

3/
The supreme court also recognized that the law firm was
representing the developer in a separate action, which was adverse to the
appellants, "but the theory that a positive outcome for the AOAO [ i.e., the
party adverse to the appellants in the arbitration at issue] would lead to a
future appointment for the [a]rbitrator in the [separate action] is
'contingent, attenuated, and merely potential.'" Narayan, 140 Hawai #i at 91,
398 P.3d at 680 (quoting In re Sussex, 781 F.3d 1065, 1075 (9th Cir. 2015).
4/
We do not mean to suggest there is any evidence in the record that
Attorney Inouye acted with an improper motive or that the Arbitrator was
actually biased by virtue of her appointment in the unrelated matter. We have
found none. As previously discussed, however, a finding of evident partiality
"is not dependent on a showing that the arbitrator was actually biased," but
stems from the nondisclosure itself. Narayan, 140 Hawai #i at 84, 398 P.3d at
673 (quoting Madamba, 137 Hawai#i at 10, 364 P.3d at 527).

15
 FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

3. Timing of the Connection or Activity

"[R]elationships that are not 'distant in time, but
rather ongoing during the arbitration' will weigh most heavily in
favor of disclosure, while relationships that are 'long past'
will not." Narayan, 140 Hawai#i at 90, 398 P.3d at 679 (quoting
New Regency, 501 F.3d at 1110, and citing Lagstein v. Certain
Underwriters at Lloyd's, London, 607 F.3d 634, 646 (9th Cir.
2010)).
Here, as noted above, the Circuit Court found, and
Respondents do not dispute, that "[the Arbitrator] did not
disclose to the parties that she had been appointed as arbitrator
in a matter involving O'Connor Playdon Attorneys Inouye and
Kopper (formerly of O'Connor Playdon) on November 6, 2013, eight
days before appointment in the underlying arbitration." Thus,
the recency of the Arbitrator's appointment in the other matter,
and its ongoing nature during the underlying arbitration here,
"weigh[ed] most heavily in favor of disclosure[.]" Narayan, 140
Hawai#i at 90, 398 P.3d at 679.

4. Weighing All of the Relevant Factors

We have observed that "[t]he judiciary should play a
minimal role in reviewing impartiality. However, the sine qua
non for minimal review must be the arbitrator's fidelity to the
disclosure obligation." Kay v. Kaiser Found. Health Plan, Inc.,
119 Hawai#i 219, 229, 194 P.3d 1181, 1191 (App. 2008).
Here, as discussed above, the direct relationship
between the Arbitrator and Attorney Inouye, the type of activity
at issue – i.e., the Arbitrator's recent appointment in another
matter involving O'Connor Playdon Attorney Inouye – and the close
proximity in time between that activity and the underlying
arbitration proceeding here, all weighed in favor of disclosure.
Under these circumstances, we conclude that the Arbitrator's
failure to timely disclose to the parties that she recently had
been appointed as an arbitrator in another matter involving
O'Connor Playdon Attorney Inouye could reasonably have been
perceived as likely to affect the Arbitrator's impartiality in
the underlying arbitration. Accordingly, on this record, the

16
 FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

Circuit Court did not clearly err in ruling that a reasonable
impression of partiality, and thus evident partiality, was
established on this basis. Relatedly, the Circuit Court did not
err in vacating the Arbitration Awards on this basis.5/

B. Waiver of Objections

Respondents argue that even if AOAO's objections to the
Arbitrator were properly supported by law, the belated nature of
the objections constitutes a waiver.
The supreme court has summarized the waiver principle
in the arbitration context as follows:

HRS § 658A–12(d) provides "[i]f the arbitrator did not
disclose a fact as required by subsection (a) or (b), upon
timely objection by a party, the court under section
658A–23(a)(2) may vacate an award." In addition, a party
who has actual or constructive knowledge of a relationship
of the arbitrator requiring disclosure but "fails to raise a
claim of partiality . . . prior to or during the arbitration
proceeding is deemed to have waived the right to challenge
the decision based on 'evident partiality.'" Daiichi, 103
Hawai#i at 345–46, 82 P.3d at 431–32 ("In the arbitration
context, waiver has been defined as consisting of knowledge,
actual or constructive, in the complaining party of the
tainted relationship or interest of the arbitrator and the
failure to act on that knowledge.") (internal quotation
marks and citations omitted).

. . . "[T]he question [of] whether a valid waiver
exists is generally a question of fact, [however] 'when the
facts are undisputed it may become a question of law.'" 103
Hawai#i at 346 n. 17, 82 P.3d at 432 n. 17 (quoting Hawaiian
Homes Comm'n v. Bush, 43 Haw. 281, 286 (Terr. 1959)).

Nordic, 136 Hawai#i at 52, 358 P.3d at 24.
Here, we initially note that AOAO first raised
objections to the Arbitrator while the underlying arbitration
proceeding was still pending, albeit after the Interim Award was
issued. Prior to issuance of the Final Award, AOAO sought
additional disclosures from the Arbitrator, and filed with DPR a
motion to disqualify the Arbitrator and a motion to correct or

5/
Given our conclusion, we do not address Respondents' argument that
the Circuit Court erred in ruling that the Arbitrator "violated the disclosure
requirements of HRS chapter 658A and DPR Rule 9 by failing to make reasonable
inquiries to all past, current, and anticipated future relationships with the
parties' attorneys or representatives. . . ." For the same reason, we do not
reach Respondents' argument that the Circuit Court erred in ruling that "the
cumulative effect" of undisclosed relationships between the Arbitrator and the
Respondents' attorneys and their respective firms demonstrated a reasonable
impression of partiality.

17
 FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

otherwise modify the Interim Award. Both motions were denied.
AOAO filed with DPR a second motion to disqualify the Arbitrator,
which was also denied. AOAO then filed the October 31, 2014
motion to vacate the Interim Award in the Circuit Court, which
initiated the special proceeding underlying this appeal. When
the Final Award was issued, AOAO moved to vacate it as well. Cf.
Daiichi, 103 Hawai#i at 348, 82 P.3d at 434 (ruling that,
"inasmuch as Daiichi had actual knowledge of [the arbitrator's]
prior attorney-client relationship with [the adverse-party
trustees], Daiichi, by failing to raise an objection to [the
arbitrator's] appointment as an arbitrator prior to or during the
arbitration proceeding, waived its right to challenge the
propriety of the arbitration decision on grounds of 'evident
partiality'").
Respondents contend, however, that AOAO took a "wait-
and-see" approach to challenging the arbitration decision.
Daiichi, 103 Hawai#i at 348, 82 P.3d at 434. Respondents argue
that the Arbitrator's initial disclosures, as well as a statement
made by CRX's counsel, Attorney Juliano, at the pre-arbitration
conference, were sufficient, and should have at least triggered a
duty of inquiry or investigation by AOAO into the Arbitrator's
disclosed relationships.
Regarding the Arbitrator's initial disclosures, the
Circuit Court found that on November 18, 2013, the Arbitrator
stated, in relevant part:

I know counsels Terry Revere, Cid Inouye and Jeff Juliano,
and I have worked with other lawyers in their respective law
firms, in my capacity as a former state court judge between
1992-2003 or in my post-retirement years as an arbitrator or
mediator with DPR[.]

Regarding Juliano's statement, the Circuit Court made the
following findings of fact:

28. On May 1 , 2014, counsel for all the parties
herein attended a pre-arbitration conference before Judge
Amano at DPR's office.
29. At said pre-arbitration conference, Attorney
Juliano disclosed that Attorneys Inouye and Maxwell K.
Kopper (previously an associate at O'Connor Playdon) were
before Judge Amano the day before, April 30, 2014, arguing
an unrelated motion for summary judgment.

18
 FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER
30. In said unrelated matter, unbeknownst to [AOAO],
Ms. Bryant had confirmed on November 6, 2013, that Judge
Amano was selected as the arbitrator, eight days before
Judge Amano was selected as arbitrator in this matter.

31. There was no objection made at the May 1, 2014
pre-arbitration conference with respect to Judge Amano
serving as arbitrator in this matter.

These unchallenged findings are binding on appeal. See
Rodrigues, 145 Hawai#i at 494, 454 P.3d at 435. AOAO argues,
however, that "an alleged oral anecdote by counsel is simply not
a disclosure by an arbitrator." AOAO also maintains:

HRS § 658A-12 is very clear that disclosures are to be made
by the arbitrator after making a reasonable inquiry, not the
parties. Moreover, there is nothing in Judge Amano's
November 2013 disclosure that would have prompted the AOAO
to inquire as to 2 pending arbitrations that were not
disclosed until after the Interim Award was issued[.]

As to the Arbitrator's initial disclosures, we conclude
that her statement, "I know counsel[] . . . Inouye[,]" was
general, and did not provide AOAO with actual or constructive
notice that she recently had been appointed as an arbitrator in
another matter involving Attorney Inouye. The Arbitrator's
statement, "I have worked with other lawyers in their respective
law firms," was also general, and in context conveyed a completed
action or relationship. The statement did not provide actual or
constructive notice of the Arbitrator's current role as an
arbitrator in another matter involving Attorney Inouye. See
Burlington N.R. Co. v. TUCO Inc., 960 S.W.2d 629, 638 (Tex. 1997)
(vacating an arbitration award for evident partiality where a
neutral arbitrator initially disclosed past ties to one party's
law firm but failed to disclose a post-selection referral by that
party's appointed arbitrator for other arbitration work and
noting that "a person might reasonably differentiate between a
past relationship and one that arises shortly before or during
the arbitration proceedings.").
Based on FOFs 29 and 30, we further conclude that
Attorney Juliano's May 1, 2014 statement at the pre-arbitration
conference did not provide AOAO with actual or constructive
knowledge of the Arbitrator's November 6, 2013 appointment in
another arbitration matter involving Attorney Inouye. FOF 29

19
 FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

cites Paragraph 5 of Attorney Juliano's October 7, 2014
declaration, in which he described his May 1, 2014 statement as
follows:

At this final Pre-Arbitration Conference, I specifically
brought up with Judge Amano in front of all counsel the fact
that my partner, Mr. Inouye, and associate, Mr. Kopper, were
before her the day prior on April 30, 2014 arguing their MSJ
in the other unrelated arbitration. In particular, I
inquired as to whether Mr. Kopper argued the motion. 6/

(Footnote added.) Thus, Attorney Juliano's oral statement was
not directed to AOAO's counsel and did not disclose the recent
appointment of the Arbitrator in the other, unspecified matter
involving Attorney Inouye. Morever, on this record, the oral
statement was insufficient to provide AOAO with constructive
knowledge of the recent appointment. Cf. Daiichi, 103 Hawai#i at
348, 82 P.3d at 434 (concluding that Daiichi had constructive
knowledge of a letter written by the arbitrator which was
contained in Daiichi's own files). We note, for example, there
was no finding by the Circuit Court that AOAO's counsel actually
heard Attorney Juliano's oral statement in the context (see supra
note 6) in which it was made.7/ In this regard, we also note that
Respondents could have requested an evidentiary hearing regarding

6/
During the December 16, 2015 hearing before the Circuit Court,
Attorney Juliano further explained:

It's a statement that I made . . . that at a pre-arb
conference, we discussed the one case with Cid Inouye and
Max [K]opper in my office, because Max has a very deep
voice, and we were discussing with Judge Amano in the
presence of Terry [Revere] and another counsel, Max's deep
voice, and how he'll probably make a good litigator. That
raised the fact that that case was there.
7/
During the December 16, 2015 hearing before the Circuit Court,
AOAO's counsel, Attorney Revere, stated:
Mr. Juliano asserted, . . . I made some reference in, I
believe it was a phone call precall hearing that should have
indicated to Revere that Judge Amano, we were using her in
other matters.
Again, I won't say that's not true. It could have
happened before I got in the room. It could have happened
some other time, but I'm telling you, I never heard that,
and so they're using that as, well, they knew. That's
another fact that's in dispute, because we didn't know. We
had no idea until after the arbitration, when the law firm
started making disclosures, and then eventually Judge Amano
made disclosures.

20
 FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

AOAO's claim of evident partiality, as well as Respondents'
waiver assertion. The Circuit Court made clear, however, that
"all counsel agreed that no evidentiary hearing would be
necessary to dispose of the consolidated motions[.]" On this
record, we conclude that the Circuit Court did not clearly err in
ruling that AOAO did not waive its right to challenge the
Arbitrator on the ground of evident partiality, based on the
Arbitrator's November 6, 2013 appointment in the other matter
involving Attorney Inouye.

IV. Conclusion

For the reasons discussed above, we affirm the Amended
Findings of Fact, Conclusions of Law and Order, entered on
April 3, 2017, in the Circuit Court of the First Circuit, on the
ground specified in this Opinion.

/s/ Clyde J. Wadsworth
Presiding Judge
On the briefs:
/s/ Karen T. Nakasone
Randall K. Schmitt and Associate Judge
Jordan K. Inafuku
(McCorriston Miller Mukai
MacKinnon LLP)
for Respondent-Appellant/Cross-Appellee
Knox Hoversland Architects, Ltd.

Jeffre W. Juliano,
Kelvin H. Kaneshiro, and
Lahela H.F. Hite
(O'Connor Playdon Guben &
Inouye LLP)
for Respondent-Appellant/Cross-Appellant
ConstRX, Ltd.

Terrance M. Revere and
Malia R. Nickison-Beazley
(Revere & Associates, LLLC)
for Claimant-Appellee/Cross-Appellee
Association of Apartment Owners
of the Palm Villas at Mauna Lani,
by and through its Board of
Directors

21
 FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

DISSENTING OPINION BY MCCULLEN, J.

I respectfully dissent. Notwithstanding an

arbitrator's duty to disclose, Hawaii Revised Statutes (HRS)

§ 658A-12 (2016) requires that an objection be timely. Here, the

Association of Apartment Owners of the Palm Villas at Mauna Lani

Resort's (AOAO) objection was not.

I. RELEVANT BACKGROUND

A. November 18, 2013 - Arbitrator Disclosure

On November 18, 2013, Arbitrator Judge Riki May Amano
(Ret.) (Arbitrator) disclosed a relationship with attorneys

Terrance M. Revere, Cid H. Inouye, and Jeffre W. Juliano, as well

as attorneys in their firms. She explained to the parties that

she knew these attorneys and other attorneys in their firms in

her capacity as a former judge and as an arbitrator and mediator

with the Dispute Prevention & Resolution, Inc. (DPR). Arbitrator

also disclosed that she did not know Malia Nickison-Beazley, who

was Attorney Revere's co-counsel representing AOAO.
B. May 1, 2014 - Attorney Juliano's Statement

About five months later, on May 1, 2014, at the pre-

arbitration conference attended by counsel for all parties,

Attorney Juliano stated that Attorney Inouye appeared before

Arbitrator in an unrelated arbitration the day prior. In that

unrelated matter, Arbitrator was selected by DPR via strike-off

method on November 6, 2013, eight days before she was selected as

arbitrator in this case. This was previously unknown to Attorney

Revere. No further inquiry, comment, or objection was made

following Attorney Juliano's statement as to Arbitrator's

22
 FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

continued service. The arbitration proceeding soon followed,

commencing on May 5, 2014 and concluding on May 12, 2014.
C. September 16, 2014 - Interim Arbitration Award

About ten months after Arbitrator's disclosure that she

knew Attorney Inouye and about four months after Attorney

Juliano's statement that Attorney Inouye appeared before

Arbitrator in an unrelated matter, Arbitrator issued the Interim

Arbitration Award (Interim Award) against AOAO and in favor of

ConstRX, Ltd. (CRX) for $205,539.49 (the unpaid balance owed by

AOAO) and $431,462.47 (retainage) on September 16, 2014. CRX's

remaining affirmative claims against AOAO were denied. The

Interim Award resolved all claims as to all parties except for

attorneys' fees and costs, and the parties were asked to submit

briefs addressing attorneys' fees and costs for the forthcoming

Final Arbitration Award (Final Award).

D. September 23, 2014 - AOAO's Request

Seven days after the Interim Award, Attorney Revere

requested additional disclosures regarding Arbitrator and the

attorneys in this matter, as well as the attorneys in their

firms, going back seven years as follows:
[A]ny and all matters in which [the Arbitrator] served as
mediator, arbitrator, or in any other capacity for any
matters involving any of the parties or law firms retained
in this matter in the last seven years, including dates when
the retentions began and when they terminated. We also ask
that if there are any other personal or professional
relationships involving any of the parties or lawyers in the
law firms (not limited to just counsel that appeared in this
matter) that they be disclosed.

The parties responded.
E. AOAO's Motions To Disqualify

Based on the responses to AOAO's request, AOAO filed a

Motion to Disqualify the Arbitrator with DPR. DPR denied the

23
 FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

motion because
there [was] no rule or statute authorizing DPR to disqualify
an arbitrator after an award has been issued based on a
party's post award investigation of the Arbitrator's prior
disclosures[,] which were not objected to and because there
exists no stipulation or agreement of the parties vesting
DPR with such authority.

In response to Arbitrator's supplemental disclosure

following AOAO's request, AOAO moved a second time to disqualify

Arbitrator, which DPR dismissed. DPR determined that, "[w]hile

the [second] Motion to Disqualify comes on the heels of the

Arbitrator's Supplemental Disclosure of October 21, it remains

grounded and predicated on [AOAO's] reaction to the Arbitrator's

Interim Award[,] [] its post award investigation of the

Arbitrator's prior disclosures[,] and the conviction that said

disclosures were inadequate."
F. Circuit Court Proceedings

After the Final Award affirming the Interim Award and

awarding CRX and Knox Hoversland Architects, Ltd. (KHA)

attorneys' fees and costs was issued, CRX moved to confirm the

Final Award in the Circuit Court of the First Circuit (Circuit

Court), and KHA joined. AOAO moved to vacate the Final Award.

During arguments before the Circuit Court regarding

whether an evidentiary hearing was necessary, Attorney Revere

claimed he did not hear Attorney Juliano's statement at the pre-

arbitration conference, "I won't say that's not true. It could

have happened before I got in the room. It could have happened

some other time, but I'm telling you, I never heard that[.]"

At a status conference, "all counsel agreed that no

evidentiary hearing would be necessary to dispose of the

consolidated motions[.]" The parties submitted seventy-five

24
 FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

joint exhibits to the Circuit Court. Among these exhibits was a

declaration by Attorney Juliano, in which he described his May 1,

2014 statement at the pre-arbitration conference:
I specifically brought up with Judge Amano in front of
counsel the fact that my partner, Mr. Inouye, and associate,
Mr. Kopper, were before her the day prior on April 30, 2014
arguing their MSJ in the other unrelated arbitration
proceeding. In particular, I inquired as to whether
Mr. Kopper argued the motion.

Parties made their final arguments; the Circuit Court

granted AOAO's motions to vacate, and denied CRX and KHA's motion

to confirm. The Circuit Court made the following pertinent

findings regarding Arbitrator's disclosure and Attorney Juliano's

statement prior to the arbitration proceeding:
17. On November 18, 2013, Judge Amano, through Kelly
Bryant, Case Manager at DPR, provided the following
disclosure by email addressed to Attorneys Revere and
Juliano:
I know counsels Terry Revere, Cid Inouye and
Jeff Juliano, and I have worked with other
lawyers in their respective law firms, in my
capacity as a former state court judge between
1992-2003 or in my post-retirement years as an
arbitrator or mediator with DPR; I do not know
Malia Nickison-Beazley.
I have no other professional, social or personal
interactions with anyone involved in this case.

There are no relationships or interests, past or
present[,] that would affect my neutrality as an
arbitrator in this case.
Joint Exh. 2.

18. In the same email, Ms. Bryant advised that:

The Judge has made a diligent effort to disclose
all relevant matters. If any party has
additional information that should be disclosed
but has not been, or you have any comments or
objections, please submit them in writing to DPR
by November 21, 2013. (Emphasis in original.)

Id.
19. Ms. Bryant copied Attorney Inouye (O'Connor
Playdon), Alison Shigekuni, Esq. (O'Connor Playdon), Mea
Mitchell, Esq. (Revere & Associates), and Attorney
Nickison-Beazley (Revere & Associates) on the November 18,
2013 email containing Judge Amano's initial disclosure. Id.

25
 FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER
20. No party submitted comment or objection to
Judge Amano serving as arbitrator in response to her
November 18, 2013 initial disclosure.
. . . .

28. On May 1, 2014, counsel for all the parties
herein attended a pre-arbitration conference before Judge
Amano at DPR's office. Joint Exh. 1, Juliano Decl.
[paragraph] 5.
29. At said pre-arbitration conference, Attorney
Juliano disclosed that Attorneys Inouye and Maxwell K.
Kopper (previously an associate at O'Connor Playdon) were
before Judge Amano the day before, April 30, 2014, arguing
an unrelated motion for summary judgment. Id.
30. In said unrelated matter, unbeknownst to
Claimant, Ms. Bryant had confirmed on November 6, 2013, that
Judge Amano was selected as the arbitrator, eight days
before Judge Amano was selected as arbitrator in this
matter.

31. There was no objection made at the May 1, 2014
pre-arbitration conference with respect to Judge Amano
serving as arbitrator in this matter.

No party challenged these findings pursuant to Hawai#i Rules of

Appellate Procedure Rule 28(b)(4)(C). These findings are thus

binding on this Court. State v. Torres, 125 Hawai#i 382, 388,

262 P.3d 1006, 1012 (2011). CRX and KHA appealed to this Court.

II. DISCUSSION

HRS § 658A-12 provides, in relevant part, as follows:
(c) If an arbitrator discloses a fact required by
subsection (a) or (b) to be disclosed and a party timely
objects to the appointment or continued service of the
arbitrator based upon the fact disclosed, the objection may
be a ground under section 658A-23(a)(2) for vacating an
award made by the arbitrator.

(d) If the arbitrator did not disclose a fact as required by
subsection (a) or (b), upon timely objection by a party, the court
under section 658A-23(a)(2) may vacate an award.

HRS § 658A-12(c) and (d) (2016) (formatting altered and emphases

added). The well accepted rule in arbitration cases is that a

party who "fails to raise a claim of partiality [against an

arbitrator] prior to or during the arbitration proceeding is

deemed to have waived the right to challenge the decision based

on evident partiality." Nordic PCL Constr., Inc. v. LPIHGC, LLC,

26
 FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

136 Hawai#i 29, 52, 358 P.3d 1, 24 (2015) (citation and internal

quotation marks omitted, emphasis added).

Further, "[i]t is well settled that the legislature

overwhelmingly favors arbitration as a means of dispute

resolution." Tatibouet v. Ellsworth, 99 Hawai#i 226, 234, 54

P.3d 397, 405 (2002). Given this policy favoring the finality of

arbitration awards, Hawai#i courts embrace the principle of

waiver in order to discourage parties from adopting the "wait and

see" approach to challenging the arbitration decision based on

information they had or could have ascertained by more thorough

inquiry. See Nordic, 136 Hawai#i at 53, 358 P.3d at 25.

Here, in addition to having actual knowledge of

Arbitrator's professional relationship with Attorney Inouye in

her capacity as an arbitrator and mediator with DPR, a reasonable

inference from the Circuit Court's unchallenged findings is that

AOAO had knowledge of Attorney Inouye appearing before Arbitrator

in an unrelated matter. The Circuit Court found that all parties

attended the pre-arbitration conference, and there, Attorney

Juliano disclosed that Attorney Inouye appeared before Arbitrator

in an unrelated matter the day prior. See Daiichi Hawai#i Real

Estate Corp. v. Lichter, 103 Hawai#i 325, 346-48, 82 P.3d 411,

432-34 (2003). See also Black's Law Dictionary 1043 (11th ed.

2019) (defining constructive knowledge as "[k]nowledge that one

using reasonable care or diligence should have").

Although Attorney Revere, during a hearing on the

necessity of an evidentiary hearing, asserted to the Circuit

Court that he did not hear Attorney Juliano's disclosure, that

assertion was argument, not evidence. State v. Quitog, 85

27
 FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

Hawai#i 128, 144, 938 P.2d 559, 575 (1997) ("[I]t is axiomatic

that the arguments of counsel are not evidence.") (citation and

internal quotation marks omitted). Notably, Attorney Revere did

not provide a declaration to that effect in the joint exhibits

comprising the stipulated record, did not make similar assertions

regarding his co-counsel who appears to have participated

significantly in this case, and stipulated that an evidentiary

hearing was unnecessary.

In sum, the Interim Award was issued ten months after

Arbitrator disclosed knowing Attorney Inouye in her capacity as

an arbitrator with DPR, and four months after Attorney Juliano

stated at the pre-arbitration conference that Attorney Inouye

appeared before Arbitrator in an unrelated matter. During that

time, AOAO did not comment on, or object to, Arbitrator's ability

to be a neutral arbitrator. See Nordic, 136 Hawai#i at 52, 358

P.3d at 24 (explaining that "a party who has actual or

constructive knowledge of a relationship of the arbitrator

requiring disclosure but fails to raise a claim of partiality

prior to or during the arbitration proceeding is deemed to have

waived the right to challenge the decision based on evident

partiality.") (cleaned up and emphasis added). Instead, AOAO

employed a "wait and see" strategy, requesting more information

and challenging Arbitrator's neutrality only after the Interim

Award did not go its way.
III. CONCLUSION

Therefore, I would hold that AOAO waived its right to

challenge the Arbitrator on the ground of evident partiality

because its objection was untimely, and that the Circuit Court

28
 FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

abused its discretion in vacating the Final Award. See id., 136

Hawai#i at 53, 358 P.3d at 25 (explaining that "[a]ny such ruling

of the circuit court under HRS [§]658A-12(d) will be reviewed

under an abuse of discretion standard").

/s/ Sonja M.P. McCullen
Associate Judge

29