Garofalo v. Di Vincenzo: Virginia Defines “Evident Partiality” as Objectively Obvious Bias and Holds Mere Nondisclosure Is Not Automatically Vacatur

I. Introduction

Case: Garofalo v. Di Vincenzo (Supreme Court of Virginia, Feb. 26, 2026).
Parties: Devin J. Garofalo (buyer of Lions Bridge Financial Advisors, Inc.) vs. Jayne (Jane) W. Di Vincenzo (seller).
Context: After Garofalo allegedly failed to make contractual quarterly payments following an asset purchase, Di Vincenzo initiated arbitration under FINRA rules, as required by the parties’ agreement.

The post-arbitration litigation centered on whether the arbitration award should be vacated under the Virginia Uniform Arbitration Act (“VUAA”), Code § 8.01-581.010(2), due to the alleged “evident partiality” of a neutral arbitrator (Michael Glasser) stemming from nondisclosure of prior, indirect connections involving Old Point entities and Di Vincenzo’s firm.

Key Issue (First Impression): What does “evident partiality” mean under Code § 8.01-581.010(2), and what must a party prove to vacate an award on that ground—particularly where the complaint is nondisclosure of relationships rather than direct proof of bias?

II. Summary of the Opinion

The Supreme Court of Virginia held, for the first time, that “evident partiality” under the VUAA requires an objective showing that a reasonable person, knowing all relevant facts, would conclude the arbitrator’s conduct signifies obvious bias against the moving party.

  • Standard Adopted: Vacatur requires objective evidence of conduct inconsistent with impartiality; proof of the arbitrator’s subjective bias is not required, but neither is vacatur triggered by mere appearances or every undisclosed interaction.
  • Materiality: The acts/omissions (including nondisclosure) must be material to support vacatur.
  • Mere Nondisclosure: “Mere nondisclosure does not in itself justify vacatur.” (Citing ANR Coal Co., Inc. v. Cogentrix of N.C., Inc..)

Applying this standard, the Court affirmed: the arbitrator’s prior contacts with Di Vincenzo and Lions Bridge were too remote and attenuated, and the failure to disclose them did not warrant vacating the award. The Court also emphasized that FINRA disclosure/recusal rules do not themselves control the vacatur inquiry; courts apply the VUAA’s statutory grounds.

The Court affirmed and remanded to the Court of Appeals for further disposition consistent with the Court of Appeals’ Part II.C regarding attorney fees (an issue not assigned as error to the Supreme Court).

III. Analysis

A. Precedents Cited

1. Virginia authorities framing arbitration review as exceptionally narrow

  • Meuse v. Henry, 296 Va. 164 (2018) — Establishes de novo review for statutory interpretation when reviewing a circuit court’s denial of a motion to vacate under the VUAA. This case supplied the methodological lens: the meaning of “evident partiality” is a statutory question.
  • TM Delmarva Power, L.L.C. v. NCP of Va., L.L.C., 263 Va. 116 (2002) — Cited for Virginia’s public policy favoring arbitration and enforcing arbitration agreements, reinforcing reluctance to disturb awards absent statutory necessity.
  • Cotton Creek Circles, LLC v. San Luis Valley Water Co., 279 Va. 320 (2010) — Reiterates that judicial review under the Act is “among the narrowest known to the law” and warns against “second bite at the apple” challenges. The Court used Cotton Creek Circles to frame vacatur as extraordinary and to caution against post-loss investigations aimed at undoing adverse awards.
  • Trustees of Asbury United Methodist Church v. Taylor & Parrish, Inc., 249 Va. 144 (1995) — Used for the allocation of burden: the party seeking vacatur bears the burden of proving “evident partiality.”

2. Virginia statutory interpretation tools supporting a plain-meaning approach

  • Morgan v. Commonwealth, 301 Va. 476 (2022) and Baker v. Commonwealth, 284 Va. 572 (2012) — The Court cited these for adhering to plain language unless ambiguous or absurd.
  • Tomlin v. Commonwealth, 302 Va. 356 (2023) — Used to justify consulting dictionaries to fix ordinary meaning.
  • Travelers Indem. Co. of Am. v. Portal Healthcare Sols., LLC, 35 F. Supp. 3d 765 (E.D. Va. 2014) — Cited illustratively for the practice of turning to dictionaries.
  • Cuccinelli v. Rector & Visitors of the Univ. of Va., 283 Va. 420 (2012) and Andrews v. Ring, 255 Va. 311 (1998) — Invoked for noscitur a sociis (words gain meaning from surrounding words). This supported reading “evident partiality” in the context of neighboring “corruption,” “fraud,” and “misconduct prejudicing the rights of any party,” indicating a high threshold.

3. Federal and sister-jurisdiction arbitration cases shaping (but not dictating) the standard

  • ANR Coal Co., Inc. v. Cogentrix of N.C., Inc., 173 F.3d 493 (4th Cir. 1999) — Central persuasive authority below (trial court and Court of Appeals), offering a four-factor test and the often-quoted formulation that evident partiality exists when “a reasonable person would have to conclude that the arbitrator was partial.” The Supreme Court declined to adopt the factor test as controlling but treated ANR Coal as instructive and agreed with its key premise that “mere nondisclosure does not in itself justify vacatur.”
  • Commonwealth Coatings Corp. v. Continental Cas. Co., 393 U.S. 145 (1968) — Raised by Garofalo as establishing a settled “term of art” under the FAA that Virginia should import. The Court rejected that approach: federal precedent is persuasive, not binding, and the meaning of “evident partiality” in federal courts remains contested.
  • McKeithen v. City of Richmond, 302 Va. 422 (2023) — Cited for the principle that federal precedents may be persuasive but are not binding when interpreting Virginia statutes.
  • Lackman v. Long & Foster Real Est., Inc., 266 Va. 20 (2003) — Used to emphasize that Virginia construes the statutory text under Virginia interpretive principles, not by automatically importing federal formulations.
  • Ploetz v. Morgan Stanley Smith Barney LLC, 894 F.3d 894 (8th Cir. 2018) — Cited for the observation that federal courts lack consensus on “evident partiality,” undermining Garofalo’s argument that Commonwealth Coatings dictates a uniform standard to be imported.
  • Schmitz v. Zilveti, 20 F.3d 1043 (9th Cir. 1994) — Example of the “reasonable impression of bias” line of cases Garofalo urged. The Virginia Supreme Court declined to adopt that lower-threshold test.
  • Morelite Constr. Corp. v. New York City Dist. Council Carpenters Benefit Funds, 748 F.2d 79 (2d Cir. 1984) — Cited as consistent with the “reasonable person would have to conclude” formulation, supporting the Court’s more exacting, objective approach.
  • Positive Software Sols., Inc. v. New Century Mortg. Corp., 476 F.3d 278 (5th Cir. 2007) — Used for the proposition that “evident partiality” is “stern,” reinforcing the Court’s elevated threshold.
  • Crouch Constr. Co. v. Causey, 747 S.E.2d 482 (S.C. 2013) and Merit Ins. Co. v. Leatherby Ins. Co., 714 F.2d 673 (7th Cir. 1983) — Support the idea that the undisclosed facts must be “powerfully suggestive of bias,” and caution against incentivizing losing parties to mine arbitrators’ histories.
  • Andersons, Inc. v. Horton Farms, Inc., 166 F.3d 308 (6th Cir. 1998) and Freeman v. Pittsburgh Glass Works, LLC, 709 F.3d 240 (3d Cir. 2013) — Used to explain “evident” as “direct, definite, and capable of demonstration” and that the conclusion of bias must be “ineluctable,” bolstering the Court’s “obvious bias” articulation.

4. Authorities applied to fact-review posture and remedy framing

  • Eure v. Norfolk Shipbuilding & Drydock Corp., 263 Va. 624 (2002) — Used to underscore deference to the trial court’s credibility determinations (here, crediting Glasser’s testimony that he did not remember the relationship).
  • U.S. Bancorp Mortg. Co. v. Bonner Mall P'ship, 513 U.S. 18 (1994) — Cited for the proposition that vacatur is an “extraordinary remedy,” reinforcing restraint.
  • United Steelworkers of Am. v. Am. Mfg. Co., 363 U.S. 564 (1960) — Quoted for the foundational principle that “arbitration is a creature of contract,” but used here to emphasize that contractually chosen arbitration rules do not themselves expand statutory vacatur grounds.
  • Scandinavian Reinsurance Co. v. St. Paul Fire & Marine Ins. Co., 668 F.3d 60 (2d Cir. 2012) — Cited to explain why disclosure matters: it supports both fairness and finality by reducing post-award litigation.
  • UNIF. ARB. ACT § 12 cmt. ¶ 1 (NAT'L CONF. COMM'RS ON UNIF. STATE L. 2000) — Quoted to frame disclosure as a balancing of party choice, expertise, and impartiality.

B. Legal Reasoning

1. The Court’s doctrinal move: from “appearance” to “obvious bias”

The Court treated “evident partiality” as an ordinary-language term in a Virginia statute, not as a federally fixed term of art. It parsed:

  • “Evident” as “manifest,” “distinct,” “obvious,” “conclusive,” and more than a “conceivable or nebulous appearance of bias.”
  • “Partiality” as inclination to favor one side.

Combining the two, the Court adopted a standard requiring that an objective observer would conclude the arbitrator’s conduct signifies obvious bias. This rejects vacatur based on a mere “appearance” or “reasonable impression” of bias untethered to a conclusion of obvious partiality.

2. Contextual reinforcement: “evident partiality” sits alongside extreme misconduct

The Court used statutory context (noscitur a sociis) to confirm that the VUAA vacatur grounds contemplate serious defects (e.g., “corruption,” “fraud,” “misconduct prejudicing the rights of any party”), supporting an exacting evidentiary threshold.

3. Materiality and nondisclosure: necessary, but not sufficient

The Court emphasized two constraints:

  • Materiality: the nondisclosed information must be significant enough that it would lead a reasonable person to conclude the arbitrator could not remain impartial.
  • Mere nondisclosure is not automatic vacatur: consistent with ANR Coal Co., Inc. v. Cogentrix of N.C., Inc., nondisclosure matters only insofar as it evidences obvious bias when viewed objectively.

4. Application to the facts: remoteness, attenuation, and de minimis economics

The Court found no evident partiality because:

  • The boardroom interactions were characterized as routine formalities (prepared introductions of guest presenters), not relationship-building conduct suggestive of favoritism.
  • The Old Point Trust–Lions Bridge partnership was several years removed, short-lived, and economically marginal (about $8,000 in revenue for Old Point), with no record evidence that Glasser negotiated or terminated it.
  • The trial court credited Glasser’s testimony that he did not remember Di Vincenzo or the connection at the time of the oath and disclosures, and the Supreme Court treated that credibility finding as binding under Eure v. Norfolk Shipbuilding & Drydock Corp..

5. FINRA disclosure rules vs. VUAA vacatur grounds

Although FINRA’s regime emphasizes disclosure and even “impartial in both appearance and in fact,” the Court drew a sharp line: an arbitral forum’s rules (even if incorporated by contract) do not themselves supply an independent judicial vacatur basis. Once in court, the operative question is whether a statutory ground in Code § 8.01-581.010 is met.

C. Impact

1. A definitive Virginia standard for “evident partiality” (first impression)

The principal doctrinal impact is clarifying that “evident partiality” under the VUAA is an objective “obvious bias” standard. This likely reduces the viability of vacatur petitions premised on:

  • attenuated social/professional connections,
  • stale or remote relationships, and
  • nondisclosure standing alone without objective indicia that impartiality was compromised.

2. Litigation behavior: discouraging “sour-grapes” post-award challenges

The Court explicitly aligned its holding with the policy of finality and warned against turning every adverse award into a background-investigation campaign (echoing Merit Ins. Co. v. Leatherby Ins. Co.). Future litigants must present a concrete, objective narrative that leads to a conclusion of obvious bias, not a speculative story of possible impropriety.

3. Practical consequences for arbitrators and disclosure practice

While the Court refused to treat FINRA rule violations as per se vacatur, the opinion still incentivizes robust disclosure:

  • The Court’s emphasis on “material nondisclosures” preserves vacatur for meaningful undisclosed conflicts (e.g., substantial financial relationships).
  • Arbitrators and parties can expect future fights to focus on whether nondisclosed facts are “material” enough to compel a conclusion of obvious bias.

4. Interaction with federal arbitration jurisprudence

The decision positions Virginia as adopting an exacting standard broadly consistent with the “reasonable person would have to conclude” line (e.g., Morelite Constr. Corp. v. New York City Dist. Council Carpenters Benefit Funds), while expressly resisting the lower “reasonable impression of bias” approach exemplified by Schmitz v. Zilveti.

IV. Complex Concepts Simplified

  • Vacatur: A court order setting aside (invalidating) an arbitration award. Under the VUAA, vacatur is allowed only on specific, enumerated grounds.
  • “Evident partiality”: Not just a possible appearance of bias. In Virginia after this case, it means the facts must objectively show obvious bias—something a reasonable person would conclude, not merely suspect.
  • Objective vs. subjective bias: Objective asks what a reasonable observer would conclude from the facts; subjective asks what the arbitrator personally felt. The Court’s test is objective.
  • Material nondisclosure: A failure to disclose information significant enough that it would matter to impartiality—e.g., substantial financial ties—rather than trivial, remote, or routine professional contact.
  • Noscitur a sociis: A rule of interpretation: words are understood by the company they keep. Here, “evident partiality” is read alongside “corruption,” “fraud,” and “misconduct,” suggesting a high threshold.

V. Conclusion

Garofalo v. Di Vincenzo establishes Virginia’s first definitive construction of “evident partiality” under Code § 8.01-581.010(2): a party must objectively demonstrate that a reasonable person, knowing all relevant facts, would conclude the arbitrator’s conduct signifies obvious bias against that party. The Court also made clear that nondisclosure—without more—does not automatically justify vacatur, and arbitral forum rules (like FINRA’s) do not displace the VUAA’s exclusive statutory grounds for vacating an award.

The decision strengthens finality in arbitration while preserving a safety valve for truly serious, material conflicts that objectively compromise neutrality—thereby aligning the VUAA’s text with Virginia’s broader pro-arbitration policy and narrowly cabined judicial review.