Goldfinger v. Lisker

A dispute arose between Diamond Dealers Club (DDC) members Abraham Goldfinger (plaintiff) and Leo Lisker (defendant). Goldfinger claimed that Lisker owed him money, which Lisker denied. The DDC bylaws required that disputes be resolved by a panel of three DDC arbitrators. During arbitration, private communications occurred between Weinman, the arbitration-panel chairman, Horowitz, a DDC member and business associate of Lisker, and Goldfinger. Goldfinger communicated to Horowitz that he would have settled with Lisker but that Lisker now had to pay three times more. Horowitz relayed the information to Weinman, who relayed the information to another arbitrator. Based on Goldfinger’s communication, two of the arbitrators, unbeknownst to the third, determined that Horowitz’s testimony would be cumulative and that Horowitz would not testify. Weinman subsequently approached Goldfinger, attempting to get him to change his position on the settlement to test whether the original settlement offer was true. Goldfinger did not sway from the amount claimed at the hearing. The arbitrators found in favor of Goldfinger, who sought to uphold the award in the supreme court. Lisker filed a motion to vacate the award, arguing arbitrator misconduct. The motion to confirm the award was granted because Lisker failed to prove the misconduct by clear and convincing evidence and because the communications were not relevant to the claims. Lisker appealed. The ruling was affirmed by the appellate division. Lisker again appealed, arguing that the conversation between Goldfinger and Weinman testing Goldfinger’s credibility constituted misconduct. Goldfinger argued that the conversation was not misconduct because prejudice did not result and that communications were authorized by DDC rules, which allowed the arbitrators to investigate facts.