On appeal from the Superior Court, Law Division.
For affirmance -- Chief Justice Vanderbilt, and Justices Case, Oliphant, Wachenfeld, Burling and Ackerson. For reversal -- None. The opinion of the court was delivered by Wachenfeld, J.
An arbitration award was set aside and vacated by the court below "for misbehaviors upon the part of the arbitration board which were prejudicial to the rights of the parties to the arbitration agreement." The propriety of that disposition is challenged here, the cause having been certified upon our own motion.
Brotherton, Inc., had two contracts with the Great Neck Board of Education for the construction of two high school buildings in Long Island, one known as the Lakeville School and the other as the Kensington School. Previously it had entered into a contract with the United States Government for the construction of several hospital buildings to form part of the Roosevelt Hospital at Peekskill, New York. Brotherton is a building contractor; Kreielsheimer is a steel subcontractor. They entered into three separate contracts covering each of the above situations and all three became the subjects of litigation.
The cases were consolidated and, at a pretrial conference, on the court's suggestion, the parties agreed to arbitrate. An arbitration agreement and order were thereupon prepared and executed by the respective litigants and approved by the court. After a determination by the arbitration board, a motion was made by Brotherton, Inc., to vacate the award and a counter-motion by Kreielsheimer to confirm it. The award was set aside and that decision is the basis of this appeal.
The agreement and order for arbitration, amongst other things, contained the following terms and conditions:
"3. The said arbitrators shall meet at the times and places in New Jersey that shall be mutually arranged by them and their attorneys herein and shall proceed expeditiously to hear testimony upon the matters involved until the same has been concluded and within five days after the conclusion of the taking of testimony, the said arbitrators shall sign and acknowledge their award which shall be prepared in quadruplicate and shall deliver two copies thereof to each of the attorneys herein.
4. * * * no decision shall be reached without the knowledge of and except in the presence of all three arbitrators.
5. Said arbitrators shall be authorized to make such examination of the premises involved as they may deem necessary and proper provided that all three of them shall be present at the time or times thereof."
The court's conclusion in part was based upon the fact that the arbitrators, on two occasions, met in the State of New York while the arbitration agreement provided they should meet in New Jersey; that one of the arbitrators talked with one of the litigants concerning the use of derricks on the job and brought out the fact that two derricks instead of one were used; and that one of the arbitrators went alone to the site of the construction which gave rise to the litigation, contrary to the provision of the arbitration agreement "that all three of them shall be present at the time or times thereof."
The appellant argues the respondent was estopped from moving to vacate the award as the respective attorneys for the parties knew the arbitrators were holding conferences outside of the State and the irregularities complained of either did not exist or were not prejudicial, relying upon American Central Ins. Co. v. Landau, 62 N.J. Eq. 73 (Ch. 1901); Central Union Stock Yards Co. v. Uvalde Asphalt Paving Co., 82 N.J. Eq. 246 (Ch. 1913); Hewitt v. Lehigh & Hudson River Ry. Co., 57 N.J. Eq. 511 (Ch. 1898); Hartwyk v. Monroe Calculating Machine Co., 13 N.J. Super. 160 (Ch. Div. 1951), holding the ...