CPLR 7511

Matter of NRT N.Y. LLC v Spell, 2018 NY Slip Op 07664 [1st Dept. 2018]

CPLR 7511 provides just four grounds for vacating an arbitration award, including that the arbitrator “exceeded his power” (CPLR 7511[b][1][iii]), which “occurs only where the arbitrator’s award violates a strong public policy, is irrational or clearly exceeds a specifically enumerated limitation on the arbitrator’s power” (Matter of New York City Tr. Auth. v Transport Workers’ Union of Am., Local 100, AFL-CIO, 6 NY3d 332, 336 [2005]). Mere errors of fact or law are insufficient to vacate an arbitral award (Matter of Kowaleski, 16 NY3d 85, 90-91 [2010]). “[C]ourts are obligated to give deference to the decision of the arbitrator, … even if the arbitrator misapplied the substantive law in the area of the contract” (id.).

Here, the arbitrator’s conclusion that a sales commission was not due under the precise terms of the Agreement because the lease was not extended is neither wholly irrational nor contrary to any strong public policy. Accordingly, the motion to vacate should have been denied and the award confirmed (see Ingham v Thompson, 113 AD3d 534 [1st Dept 2014], lv denied 22 NY3d 866 [2014]; CPLR 7511[e]).

Matter of Miller Tabak & Co., LLC v Coppedge, 2018 NY Slip Op 07656 [1st Dept. 2018]

Petitioners waived any claim of arbitrator bias based on one arbitrator’s participation in a previous arbitration, which had been disclosed to the parties, by failing to raise any such claim or objection until the hearing was in progress (see Matter of Atlantic Purch., Inc. v Airport Props. II, LLC, 77 AD3d 824, 825 [2d Dept 2010]). In any event, there is no evidence to support any such claim (id.).

Matter of Progressive Advanced Ins. Co. v New York City Tr. Auth., 2018 NY Slip Op 07432 [2d Dept. 2018]

To be upheld, an award in a compulsory arbitration proceeding such as this one (see Insurance Law § 5105[b]) “must have evidentiary support and cannot be arbitrary and capricious” (Matter of Motor Veh. Acc. Indem. Corp. v Aetna Cas. & Sur. Co., 89 NY2d 214, 223; see Matter of Fiduciary Ins. Co. v American Bankers Ins. Co. of Florida, 132 AD3d 40, 45-46). “Moreover, with respect to determinations of law, the applicable standard in mandatory no-fault arbitrations is whetherany reasonable hypothesis can be found to support the questioned interpretation'” (Matter of Fiduciary Ins. Co. v American Bankers Ins. Co. of Florida, 132 AD3d at 46, quoting Matter of Shand [Aetna Ins. Co.], 74 AD2d 442, 454 [emphasis in original]; see Matter of Furstenberg [Aetna Cas. & Sur. Co.—Allstate Ins. Co.], 49 NY2d 757, 758).

Here, the arbitrator’s determination was supported by a “reasonable hypothesis” and cannot be said to be arbitrary or capricious (Matter of Fiduciary Ins. Co. v American Bankers Ins. Co. of Florida, 132 AD3d at 46; see Matter of Furstenberg [Aetna Cas. & Sur. Co.—Allstate Ins. Co.], 49 NY2d at 758-759).

Matter of Johnson v Riverhead Cent. Sch. Dist., 2018 NY Slip Op 08021 [2d Dept. 2018]

When reviewing compulsory arbitrations in education proceedings such as this, the court should accept the hearing officer’s credibility determinations, even where there is conflicting evidence and room for choice exists (see Matter of Berenhaus v Ward, 70 NY2d 436, 443-444; Matter of Powell v. Board of Educ. of Westbury Union Free School Dist., 91 AD3d 955, 955; Matter of Saunders v Rockland Board of Coop. Educ. Servs., 62 AD3d at 1013).

Infants

Matter of Fast Care Med. Diagnostics, PLLC/PV v Government Employees Ins. Co., 2018 NY Slip Op 03831 [2d Dept. 2018]

The underlying papers can be found HERE.

The petitioner, Fast Care Medical Diagnostics, PLLC, named herein as Fast Care Medical Diagnostics, PLLC/PV (hereinafter Fast Care), provided certain medical services to its assignor, "PV," in connection with injuries purportedly sustained by PV in a motor vehicle accident. At the time of such treatment, PV was 15 years old. PV and his mother executed an assignment of benefits, which assigned all rights and remedies to payment for health care services provided by Fast Care to which PV was entitled under article 51 of the Insurance Law. Fast Care submitted claims for these services to Government Employees Insurance Co. (hereinafter GEICO), for reimbursement of first-party no-fault insurance benefits (see Insurance Law § 5102). GEICO denied the claims on grounds of purported lack of medical necessity.

Fast Care sought arbitration of the dispute. The arbitrator dismissed the proceeding without prejudice, on the ground that Fast Care had failed to comply with CPLR 1209, which provides, in relevant part, that "[a] controversy involving an infant . . . shall not be submitted to arbitration except pursuant to a court order made upon application of the representative of such infant," subject to an exception that is not applicable here. Fast Care appealed to a master arbitrator, who confirmed the determination. The master arbitrator further found that Fast Care lacked standing, because the parent of the infant patient, rather than the infant himself, was required to execute an assignment of benefits. Fast Care then instituted this proceeding pursuant to CPLR article 75, inter alia, to vacate the arbitration award.

An arbitration award may be vacated if the court finds that the rights of a party were prejudiced by (1) corruption, fraud, or misconduct in procuring the award; (2) partiality of an arbitrator; (3) the arbitrator exceeding his or her power; or (4) the failure to follow the procedures of CPLR article 75 (see CPLR 7511[b]). In addition, an arbitration award may be vacated "if it violates strong public policy, is irrational, or clearly exceeds a specifically enumerated limitation on the arbitrator's power" (Matter of Slocum v Madariaga, 123 AD3d 1046, 1046; see Matter of Kowaleski [New York State Dept. of Correctional Servs.], 16 NY3d 85, 90; Matter of United Fedn. of Teachers, Local 2, AFT, AFL-CIO v Board of Educ. of City School Dist. of City of N.Y., 1 NY3d 72, 79). An arbitration award may also be vacated where it is in " explicit conflict'" with established laws and "the strong and well-defined policy considerations' embodied therein" (Matter of City of Oswego [Oswego City Firefighters Assn., Local 2707], 21 NY3d 880, 882, quoting Matter of New York State Correctional Officers & Police Benevolent Assn. v State of New York, 94 NY2d 321, 327 [emphasis omitted]).

We agree with the Supreme Court that the arbitrator's award was irrational and in conflict with CPLR 1209, which applies "only where an infant is a party" to an arbitration proceeding (Goldenberg v Goldenberg, 25 AD2d 670, 670, affd 19 NY2d 759; see Schneider v Schneider, 17 NY2d 123, 127). The infant patient was not a party to the arbitration; rather, Fast Care, as the infant's assignee, was the party that brought the arbitration (see 11 NYCRR 65-3.11[a]). Therefore, we agree with the court that the arbitrator disregarded established law in determining that the requirements of CPLR 1209 applied here (Schneider v Schneider, 17 NY2d at 127; see Goldenberg v Goldenberg, 25 AD2d at 670). Furthermore, the master arbitrator's determination that the assignment of benefits was not effective was not based on any requirement set forth in established law or regulations (see generally 11 NYCRR 65-2.4[c]).

Accordingly, we agree with the Supreme Court's determination to vacate the awards and direct further arbitration proceedings as to the merits of Fast Care's claims (see Matter of City of Oswego [Oswego City Firefighters Assn., Local 2707], 21 NY3d at 882; see also Matter of Local 342 v Town of Huntington, 52 AD3d 720, 721; Matter of Kocsis [New York State Div. of Parole], 41 AD3d 1017, 1020; Matter of Rockland County Bd. of Coop. Educ. Servs. v BOCES Staff Assn., 308 AD2d 452, 454).

Attorney fees

Matter of R.F. Lafferty & Co., Inc. v Winter, 2018 NY Slip Op 03489 [1st Dept. 2018]

Respondent also argues that the arbitration award should be vacated based on the doctrines of comity and res judicata. However, she waived these arguments by commencing the arbitration proceeding (see e.g. Bortman v Lucander, 150 AD3d 417 [1st Dept 2017]).

Respondent argues that the award of attorneys' fees to petitioner exceeded the arbitrator's power because the arbitration agreement did not expressly provide for attorneys' fees (see CPLR 7513; Kidder, Peabody & Co. v McArtor, 223 AD2d 502, 503 [1st Dept 1996]). However, both parties demanded attorneys' fees, and "mutual demands for counsel fees in an arbitration proceeding constitute, in effect, an agreement to submit the issue to arbitration, with the resultant award being valid and enforceable" (Matter of Goldberg v Thelen Reid Brown Raysman & Steiner LLP, 52 AD3d 392, 392-393 [1st Dept 2008], lv denied 11 NY3d 749 [2008]; see also [*2]Matter of Cantor Fitzgerald & Co. v Pritchard, 107 AD3d 476 [1st Dept 2013]).