Arbitrations

Experience as an Arbitrator: David Acton has arbitrated a wide range of types of cases, including disputes involving the following:

A dispute between two corporations involving termination of a multimillion-dollar agreement calling for one party to develop and maintain a national network of healthcare providers and the other party to market the network.

An international dispute between an exporter of European wine and its U.S. importer involving questions of whether either party fraudulently induced the other to enter into an importation and distribution agreement and whether the importer used its best efforts and good faith to market the exporter’s products.

A dispute between a general contractor on a $120 million project to build a paper recycling plant and its principal subcontractor (a mechanical equipment supplier/installer) involving the question of whether acts of the former were the proximate cause of losses incurred by the latter, and whether the “total cost recovery” theory of damages applied.

A dispute between a supplier of a state-of-the-art computer software system and an insurance company involving the allocation of responsibility for large cost overruns and substantial delays in performance.

A dispute between an insurance carrier and its insured under a $10 million directors’ and officers’ liability policy involving whether certain endorsements and exclusions under the policy precluded coverage for both indemnity and defense costs in a case where the individual insured controlled a complex network of medical billing companies (only one of which was insured) and the federal government sued him and the network for alleged Medicare fraud (which case was settled for the policy limits).

A dispute between two half-owners of a successful medical practice with over 75,000 patients, 75 employees and four offices over how to equitably divide the practice and how to allocate fault for conduct which led to the need for such a division. To accomplish the division in the most economical and efficient way, the arbitration panel appointed a master to administer the details under the panel’s supervision.

A dispute between a delivery service, which hired its drivers as “independent contractors,” and one of its former drivers, who claimed that he was really treated as an “employee” and was terminated because he was held to impossible standards of performance in the difficult territory to which he was assigned.

A dispute as to whether a court-appointed assignee for the benefit of creditors had standing to sue an insurer of the assignor seeking recovery of allegedly excessive collateral security which the insured was required to provide and, if so, what portion (if any) of such collateral security was excessive.

A dispute as to whether there was coverage under a Professional Liability Insurance Policy issued by one insurance company (the “insurer”) to another (the “insured”) in a case where the insured failed to defend, or to provide coverage for, one of its policy holders in a product liability suit, which led to the insured ultimately being found guilty of bad faith and liable for substantial punitive damages, which the insured then sought to recover from the insurer in spite of its alleged failure to provide the insurer with proper notice of the underlying claims.

A dispute over payments allegedly due the site development contractor under a real estate construction contract calling for the contractor to turn raw farmland into an improved site ready for the property owner to commence construction of a large shopping center. The dispute involved issues such as acceleration, disruption and delay costs.

A dispute between a building owner and a contractor who was to design and build mechanical, electrical, plumbing, HVAC and fire protection systems for a large industrial building which was being converted into Class A office space. The dispute involved the contractor’s attempt to collect payments under oral change orders and other promises that had allegedly been issued or made by the owner, and the owner’s claims for various setoffs and back charges.

A dispute over the termination of a joint-venture agreement to create a service network between a truck service provider and a truck insurer wherein the provider claimed the insurer had improperly terminated the agreement resulting in:

(i) the loss of monies associated with the initial investment

(ii) necessary expansion of business for a new venture

(iii) profits expected from network.

A dispute between a contractor and a developer calling for the construction of a condominium project with ground floor commercial space, wherein the developer refused to pay the contractor for work deemed deficient. The counterclaim asserted fraudulent misrepresentation on the part of the contractor in failing to obtain the required performance bond, and intentionally concealing that fact. The dispute was resolved by expert testimony that resulted in a partial offsetting of the claim for deficient work.

A dispute between a charter school and a management company contracted to provide staffing, monitor the staff’s performance, and manage the school’s finances. The dispute arose out of a settlement agreement signed upon the nonrenewal of the contact by the school in which the management company became responsible for providing subsequent assistance to the auditors of the previous year’s financial operations. It was determined that the management company failed to meet its obligations to perform in several material respects.

A dispute that was, in effect, a class action claim against a municipal housing authority by a group of homeowners in an urban redevelopment project alleging inadequate and negligent supervision by the authority over the total reconstruction of all of the units in the project. Upon a finding by the arbitrators that the authority was liable, the parties then turned to mediation to determine the extent of the damages to which each individual homeowner was entitled.

A long-standing dispute between a small municipal authority and a considerably larger one arising out of a service agreement between the parties. The agreement specified the basis upon which the larger authority would accept and treat the effluent from the smaller, including determination of the cost of treatment and a formula for the allocation of costs between the parties if the larger authority had to increase the size of its treatment facility in the future. As it turned out, instead of enlarging its treatment facility, the larger authority contracted with an even larger authority for the treatment of the combined effluent, but nothing in the existing agreement was relevant to this unforeseen development, thereby leading to a dispute with respect to future cost allocation. A complex and comprehensive formula to determine a fair allocation had to be created ab initio.

Large, Complex Arbitration Case Experience

David Acton served as Chairperson of an Arbitration Panel in a large (over $50,000,000 at issue), complex construction arbitration in which the other two arbitrators were party-appointed. The parties were an owner-developer-lessor and a lessee with an option to purchase following completion of construction pursuant to agreed-upon plans. A third party, the general contractor, had been removed from the dispute having received payment as the result of a prior mediation and arbitration involving all three parties. During the extensive hearings in the case at hand, however, there was significant testimony and much evidence about what transpired at the prior arbitration. The case at hand was governed by a complex arbitration agreement that the remaining two parties had drafted.

Prior to commencement of the hearings, there were major disputes over jurisdiction, discovery and the question of whether one law firm should be disqualified from representation on the ground of conflict of interest. During the hearings, issues included the parties’ respective obligations under construction contracts, leases and bond financing, as well as interpretation of the terms and determination of the timing of options to purchase.

Presented with thousands of pages of exhibits and transcripts of testimony, the Arbitration Panel issued an Interim Award of almost 50 pages addressing each issue on which each party asked for findings of fact and conclusions of law. Thereafter, following receipt of additional material which the Panel had requested from the parties, the Panel issued a Final Award of over 20 pages.

Arbitration References: