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Bordonaro v. Lynch2/19/2004
JUDGMENT: Reversed.
. Plaintiff Cosmo L. Bordonaro appeals from the trial court's denying his motion to vacate an arbitration award in favor of defendants, Louis Telerico and Merrill Lynch, Pierce, Fenner & Smith ("Merrill Lynch"). For the reasons that follow, we reverse the judgment of the trial court.
. Plaintiff, a longtime client of defendants, brought various claims against them for mishandling his securities accounts. Among other claims, plaintiff sought recompense for defendants' negligent advice and mishandling of his accounts. Plaintiff sought damages in excess of $300,000. Defendants denied any wrongdoing.
. The parties submitted the dispute to binding arbitration before the National Association of Securities Dealers ("NASD"). A panel of three arbitrators approved by NASD conducted the arbitration. During the hearing, the arbitration panel granted defendants' motion in limine. That motion requested the panel to exclude plaintiff's expert, Ross Tulman, from testifying on any issues related to their liability in the case. The panel granted the motion and limited Tulman's testimony to damages only. Following a three-day hearing, the arbitration panel rendered its award in favor of defendants. In the trial court, plaintiff filed a motion to vacate the arbitration award. The trial court denied the motion, and plaintiff timely appeals from that order. Plaintiff presents one assignment of error:
"The lower court erred in failing to vacate the award of NASD arbitrators whose refusal to hear pertinent, material, non-cumulative evidence deprived appellant of a fundamentally fair hearing."
. Plaintiff argues that the trial court erred in refusing to vacate the arbitration award in favor of defendants. According to plaintiff, the arbitrators' award must be vacated because they refused to hear testimony from plaintiff's expert, Ross Tulman, on the standard of care applicable in this case.
. A trial court cannot vacate an arbitration award unless one of the following criteria set forth in R.C. 2711.10 is affirmatively shown:
"The award was procured by corruption, fraud, or undue means. "There was evident partiality or corruption on the part of the arbitrators, or any of them.
"The arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced.
"The arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made." (Emphasis added.)
. On appeal, the substantive merits of an arbitration award are not reviewable "absent evidence of material mistake or extensive impropriety." Cleveland v. FOP, Lodge No. 8, (Mar. 23, 2000), Cuyahoga App. No. 75892, 2000 Ohio App. LEXIS 1173, at *7, citing Flooring Specialties v. Moran Constr., Inc. (Aug. 10, 1995), Cuyahoga App. No. 68548, citing Goodyear Tire & Rubber Co. v. Local Union No. 200 (1975), 42 Ohio St.2d 516, 330 N.E.2d 703. "Binding arbitration precludes judicial review unless the arbitrators were corrupt or committed gross procedural improprieties." Znidar v. Gates, (July 11, 1991), Cuyahoga App. No. 60942, 1991 WL 125347; Cleveland v. Assn. of Cleveland Firefighters (1984), 20 Ohio App.3d 249.
. Typically, the "rules of evidence are relaxed in an arbitration proceeding." Youghiogheny & Ohio Coal Co. v. Oszust (1986), 23 Ohio St.3d 39, 44, 491 N.E.2d 298. However, if the exclusion or admission of evidence during a
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