Calling some arguments borderline “frivolous,” a Connecticut Appellate Court has rejected a New Canaan man’s appeal of the state Superior Court’s decision to uphold the findings of the American Arbitration Association in connection with a $7.8 million award against him.
Judge C.J. DiPentima in an opinion published Tuesday (embedded below) said the court was correct to deny Gregory Imbruce’s application to vacate the award.
“The defendants cannot demonstrate that the arbitrator’s conduct amounted either to evident partiality, misconduct or an excess of authority,” DiPentima wrote in an opinion supported by two other judges.
The decision is the latest blow to Imbruce, who has been embroiled in a longstanding legal battle that also involves two town residents who had invested with him.
Investors—including New Canaan’s Brad Higgins and the late Bill Mahoney, formerly a partner at Bridgewater—had put money into three funds run by Imbruce to invest in oil and gas assets in Texas and Oklahoma. Concerns over how Imbruce was managing the assets culminated in arbitration, with lawsuits filed from both sides.
An arbitrator in September 2015 found Imbruce liable for breach of contract, civil theft, unjust enrichment and Connecticut state securities violations. Six months later, a Superior Court judge denied Imbruce’s claim that the arbitrator had been biased, and last September, a U.S. district judge dismissed his complaint against the AAA.
Imbruce’s arguments to the Superior Court included that the arbitrator exhibited “evident partiality”—which, if proven, is one standard for vacating an arbitration award, as per federal law. The claim of partiality was based “chiefly on the arbitrator’s failure to disclose her role as arbitrator in a certain divorce proceeding” involving an attorney, according to the decision.
However, DiPentima wrote, “We are not persuaded.”
“The conflict here alleged, if one existed, was merely trivial—regardless of the substance of the arbitrator’s initial disclosures.”
The appellate court judge continued: “The arbitration proceedings culminated in a hearing that was not fundamentally unfair, during which both sides had an adequate opportunity to present their evidence and arguments. We therefore conclude that the court did not err in granting the plaintiffs’ motion to confirm the arbitration award and denying the defendants’ motion to vacate it for arbitral misconduct.”
In two instances, the court in its decision called arguments made on behalf of Imbruce “frivolous”—first in contending that the arbitrator herself lacked the authority to enter an award against Imbruce individually, and again in contending that she exceeded her authority in apportioning costs and attorney’s fees to him.
“Specifically, the defendants argue that the parties agreed only to arbitrate the partnership agreements, which were silent as to costs and fees, and that the plaintiffs made no claim for costs and fees under the release agreement,” the appellate court’s decision said. “This also borders on the frivolous.”
Officials say the total arbitration award, with interest, now nears $10 million.