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In Droscha, an action arose out of a dispute regarding the manner in which real estate brokers should split the commission from the sale of real estate. One broker (Shepherd) filed a grievance against the other (Droscha) and the matter was referred to arbitration. The arbitration panel ultimately entered an award for Shepherd.

After the adverse decision in arbitration, Droscha filed an action against Shepherd and the local board of realtors, seeking to have the arbitration award set aside. After a trial, the trial court vacated the arbitration award and ordered a new arbitration, appointed by a realtor association. The new arbitration panel also decided in favor of Shepherd. Droscha petitioned the trial court to vacate the new arbitration award, naming both Shepherd and the realtor association as parties. The trial court dismissed the action pursuant to Trial Rule 12(B)(6).

On appeal, the Court reached two interesting conclusions. First, it rejected an invitation to apply the standard announced in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), "rely[ing] upon the Indiana standard" instead. The Court then extended quasi-judicial immunity to arbitrators.


The Court also found it was "significant" that the redress being sought could "be achieved through his action against Shepherd alone." The Court then went on to address the substantive arguments related to the dismissal of the action against Shepherd.

This case is significant for two reasons. First, it is the first time (that this author has been able to discover) that the Indiana Court of Appeals specifically addressed Twombly's application to cases in Indiana state court. Second, it limits the manner in which one can challenge an adverse arbitration award. Although the Court left open the possibility that the doctrine of arbitral immunity should not always apply, the case leaves little room for avoiding its application.

Brad A. Catlin
Price Waicukauski & Riley, LLC
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