Arbitration

Brooks v BDO Seidman, LLP, 2012 NY Slip Op 02768 (1st Dept., 2012)

The arbitration award was properly confirmed since the arbitration panel did not engage in any misconduct to warrant vacatur of the award (see CPLR 7511[b][1][i]). There is no indication that the panel precluded or restricted the parties from submitting any evidence on the motion. Indeed, the record shows that the parties submitted extensive briefs and documentary evidence in support of their respective positions. Although the panel made a determination of the proceeding on respondent's motion for summary judgment, this was not improper since arbitrators are not compelled to conduct hearings, and may decide a case on summary judgment (see e.g. TIG Ins. Co. v Global Intl. Reins. Co., Ltd., 640 F Supp 2d 519, 523 [SD NY 2009]; see also Griffin Indus., Inc. v Petrojam, Ltd., 58 F Supp 2d 212, 219-220 [SD NY 1999]). Moreover, the arbitration clause of the parties' Engagement Letter did not prohibit the arbitrators from using this type of disposition (see Matter of Silverman [Benmor Coats], 61 NY2d 299, 308 [1984]; cf. Barnes v Washington Mut. Bank, FA, 40 AD3d 357 [2007], lv denied 9 NY3d 815 [2007], cert [*2]denied 553 US 1057 [2008]).

Matter of Matter of Beals v New York City Tr., 2012 NY Slip Op 02784 (1st Dept., 2012)

The arbitrator properly declined to apply the collective bargaining agreement's statute of limitations on the ground that, pursuant to its terms, it had not commenced running while an investigation of the conduct leading to the disciplinary charges against petitioner was under way. In any event, any error by the arbitrator in interpreting the facts or applying the law on this issue did not provide a basis for vacatur of the award (see Matter of Adolphe v New York City Bd. of Educ., 89 AD3d 532, 533 [2011]). Petitioner waived his claim that the arbitrator should have enforced his witness subpoenas by failing to seek a stay of the arbitration and a court ruling compelling compliance and by continuing with the arbitration. Moreover, an arbitrator's erroneous evidentiary rulings may support vacatur only if the evidence would have been pertinent and material (see Matter of Professional Staff Congress/City Univ. of N.Y. v Board of Higher Educ. of City of N.Y., 39 NY2d 319, 323 [1976]). The unproduced testimony of the investigators would have been merely hearsay and cumulative of the testimony based on personal knowledge that had been heard from witnesses and targets of petitioner's misconduct, the testimony of the Transit Authority managers that the use of profanity was common in the workplace would not have shed light on other charges or rebutted the charge that petitioner's use of profanity was pervasive, and the woman working in a rehabilitation facility was not a Transit Authority employee subject to subpoena. To the extent that any of the unproduced testimony may have been useful for impeachment, the foreclosure of collateral evidence going to credibility is not misconduct (see Kaminsky v Segura, 26 AD3d 188, 189 [2006]; Matter of Smith v Suffolk County Police Dept., 202 AD2d 678, 679 [1994], lv denied 84 NY2d 807 [1994]). Petitioner fails to point to any provision in the collective bargaining agreement to support his contention that the arbitrator exceeded a restriction on his power (see Matter of Chaindom Enters., Inc. v Furgang & Adwar, L.L.P., 10 AD3d 495, 497 [2004], lv denied 4 NY3d 709 [2005]). The contention that the failure to consider his alcoholism defense renders the award in violation of public policy is merely a semantic variation on the ineffective claim that the arbitrator failed to properly evaluate [*2]the evidence (see Kalyanaram v New York Inst. of Tech., 79 AD3d 418, 419-420 [2010], lv denied 17 NY3d 712 [2011]).

Transparent Value, L.L.C. v Johnson, 2012 NY Slip Op 02388 (1st Dept., 2012)

Contrary to petitioner's claim, the award does not violate public policy. When a court is asked to vacate an arbitral award on public policy grounds, "[t]he focus of inquiry is on the result, the award itself" (Matter of New York State Correctional Officers & Police Benevolent Assn. v State of New York, 94 NY2d 321, 327 [1999] [emphasis in original]). "[W]here the final result creates an explicit conflict with other laws and their attendant policy concerns," a court will vacate the award (id. [emphasis in original]). In the case at bar, as in Correctional Officers (see id. at 327-328), the award does not violate a law.
Petitioner will not violate any laws by paying respondent x dollars or transferring y units to him. Petitioner's reliance on a letter from ALPS Distributors, Inc., the distributor of petitioner's mutual funds, is unavailing; ALPS has no obligation to pay respondent anything.

"An arbitration award may be vacated on public policy grounds only where it is clear on its face that public policy precludes its enforcement" (Matter of Jaidan Indus. v M.A. Angeliades, Inc., 97 NY2d 659, 661 [2001]; see also Matter of Metrobuild Assoc., Inc. v Nahoum, 51 AD3d 555, 556-557 [2008], lv denied 11 NY3d 704 [2008]). That is not the case here.

It is true that "a court will not enforce a contract that violates public policy" (Correctional Officers, 94 NY2d at 327). However, "the courts must be able to examine an arbitration agreement . . . on its face, without engaging in extended factfinding or legal analysis, and conclude that public policy precludes its enforcement" (Matter of Sprinzen [Nomberg], 46 NY2d 623, 631 [1979]). On its face, the agreement between the parties does not require respondent to perform brokerage services (see Foundation Ventures, LLC v F2G, Ltd., 2010 WL 3187294, *1, *7, 2010 US Dist LEXIS 81293, *3, *21 [SD NY, Aug. 11, 2010][FN1]).

Ayzenberg v Bronx House Emanuel Campus, Inc., 2012 NY Slip Op 02396 (1st Dept., 2012)

In this action for personal injuries allegedly suffered by plaintiff while she and her husband were guests at defendant's camp facility, defendant moved to stay the proceeding and compel arbitration based on an arbitration clause contained in the application for defendant's camp program that was filled out by plaintiff's husband and bears his signature. We find that the arbitration clause is binding on plaintiff. Irrespective of whether there was a language barrier that precluded plaintiff and her husband from understanding the content of the application, they are bound by its enforceable terms (see Shklovsky v Kahn, 273 AD2d 371, 372 [2000]). Although plaintiff's husband signed the application, which provided for the couples' joint participation in defendant's program, plaintiff is bound by it since her husband had, at the very least, apparent authority to sign for her (see Restatement, Agency 2d, § 8 and § 27).

Plaintiff's assertion that the arbitration clause does not apply to this personal injury action because it provides for the submission of claims "pursuant to the Commercial Rules of the American Arbitration Association," is unavailing. The clause provides for arbitration of "any dispute resulting from [their] stay at" defendant's facility (italics supplied), and thus, this matter is not excluded (see Marmet Health Care Center, Inc., et al. v Brown, __ US __, 132 S Ct 1201 [2012]; see also Remco Maintenance, LLC v CC Mgt. & Consulting, Inc., 85 AD3d 477 [2011]).

Kudler v Truffelman, 2012 NY Slip Op 02155 (1st Dept., 2012)

As the partnership agreement between the parties did not involve interstate commerce, and was not covered by the Federal Arbitration Act, the award of punitive damages was improper under the rule in Garrity v Lyle Stuart, Inc. (40 NY2d 354 [1976]), which, unless preempted, prohibits arbitrators from awarding punitive damages under New York public policy.

The court erred in confirming the arbitrator's decision to award petitioner the assignment of the insurance policies taken out on his life by the partnership. The arbitrator exceeded her powers and gave a completely irrational construction to the provisions of the partnership agreement, thereby effectively rewriting it in a manner that was unjust and in violation of the spirit of the agreement (see Matter of Turner [Booth Mem. Med. Ctr.]), 63 NY2d 633 [1984]; Fishman v Roxanne Mgt., 24 AD3d 365, 366 [2005]); Integrated Sales v Maxell Corp. of Am., 94 AD2d 221, 225 [1983]). The arbitrator also exceeded her powers in this matter by ordering respondents to pay any and all loans taken out by them on those assigned life insurance policies. The court otherwise properly declined to vacate the arbitration award in part or in its entirety, and, contrary to petitioner's claim, properly excluded the face value of the assigned policies from the income executions. In this regard, since there was no clearly prevailing party, the award of attorney's fees was unwarranted (see Nestor v McDowell, 81 NY2d 410, 415-416 [1993]; Village of Hempstead v Taliercio, 8 AD3d 476 [2004]).

In light of the fact that the arbitration award was completely irrational to the extent it ordered respondents to assign the life insurance policies to petitioner and to the extent it further ordered respondents to pay back the loans taken out by them on those assigned policies, and must be modified to the extent of reassigning those policies to respondents, the appeals from the subsequent orders with respect to respondents' obligation to pay the loans on the policies are moot.

Gomez v Brill Sec., Inc., 2012 NY Slip Op 01877 (1st Dept., 2012)

Insofar as, here, the agreement to arbitrate, by its very terms, clearly precludes arbitration when arbitrable claims are brought as a class action, plaintiffs cannot be required to arbitrate their class action claims. While "[i]t has long been this State's policy that, where parties enter into an agreement and, in one of its provisions, promise that any dispute arising out of or in connection with it shall be settled by arbitration, any controversy which arises between them and is within the compass of the provision must go to arbitration" (Matter of Exercycle Corp. [Mararatta], 9 NY2d 329, 334 [1961]), whether arbitration is mandated, however, turns entirely on the language of the agreement between the parties (Matter of Waldron [Goddess], 61 NY2d 181, 183 [1984] ["It is settled that a party will not be compelled to arbitrate and, thereby, to surrender the right to resort to the courts, absent evidence which affirmatively establishes that the parties expressly agreed to arbitrate their disputes" (internal quotation marks omitted)]; Matter of Acting Supt. of Schools of Liverpool Cent. School Dist. [United Liverpool Faculty Assn.], 42 NY2d 509, 512 [1977]; Gulf Underwriters Ins. Co. v Verizon Communications, Inc., 32 AD3d 709, 710 [2006]; Harris v Shearson Hayden Stone, 82 AD2d 87, 95 [1981], affd 56 NY2d 627 [1982]). Accordingly, since an agreement to arbitrate is a contract, and when clear, shall "be enforced according to its terms," (Vermont Teddy Bear Co. v 538 Madison Realty Co., 1 NY3d 470, 475 [2004] [internal quotation marks omitted]; First Options of Chicago, Inc. v Kaplan, 514 US 938, 943 [1995] ["arbitration is simply a matter of contract between the parties"]), while parties who clearly and expressly agree to arbitrate shall be so compelled, parties who unequivocally agree to forego arbitration under certain circumstances cannot be compelled to arbitrate when those enumerated circumstances exist.

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