Longfield v Financial Tech. Partners
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Longfield v Financial Tech. Partners 2012 NY Slip Op 32885(U) November 28, 2012 Sup Ct, NY County Docket Number: 103204/12 Judge: Peter H. Moulton Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. [* 1] EDON 121612012 SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PART Justice I _ _ index Number : 103204/2012 LONGFIELD, TINA M. vs. FINANCIAL TECHNOLOGY PARTNERS SEQUENCE NUMBER : 001 qop INDEX NO. MOTION DATE MOTION SEQ. NO, VACATE OR MODIFY AWARD I The following papem, numbered Ito Notice of Motion/Order to Show Cause Answering Affidavits - Exhibits ,were read on thismotion tolfor -Aftidavits - Exhibits I Ws). IW s ) . IN O W Replying Affidavits Upon the foregoing papers, it I ordered that thi s Dated: // 1 fl/[ ,J.S.C. / ..................................................................... d DISPOSED CASE 2. CHECK AS APPROPRIATE: ........................... MOTION IS: 0 GRANTED aDENIED 3. CHECK IF APPROPRIATE: ................................................ SETTLE ORDER I CHECK ONE: . 0DO NOT POST c NON-FINAL DISPOSITION ] 0GRANTED IN PART 0OTHER 0SUBMIT ORDER FIDUCIARY APPOINTMENT REFERENCE [* 2] SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: PART 40B TINA M. LONGFIELD, Petitioner, Index No. 103204/12 -againstFINANCIAL TECHNOLOGY PARTNERS L.P. and FTP SECURITIES LLC, FILED Respondents. This proceeding is brought by petitioner Tina M. Longfield for'an order partially vacating an arbitration award. Respondents Financial Technology Partners L.P. and FTP Securities LLC (together, FTP) cross-move to confirm the award, which entitles FTP to a judgment in the amount of $233,750. FTP also seeks attorneys' fees and interest on the award. I. Background FTP is an investment bank. Petitioner was hired to be FTP's Managing Director in January 2008. The parties' relationship was governed by an employment agreement (Agreement) (Aff. of Michael E. Grenart, Ex. B), which provided that petitioner would receive a base salary, and a "Minimum Bonus" in 2008, to be paid incrementally over the course of the year. According to the Agreement, petitioner's employment was "at-will," and could be "terminated by you or by the Firm at any time, with or without 1 [* 3] advance notice or procedures, and f o r any or no particular reason or cause." Agreement, at 2-3. Under a part of the Agreement entitled "Cash Compensation,'' it is specified that "in the event your employment i s terminated by the Firm for any reason except for Cause or you resign from the Firm in 2008 for an Acceptable Reason, you will receive the 2008 Minimum Bonus pro-rated for that portion of the year you are an Active Employee . . . . ' I Id. at 1-2. "Cause," as relevant here, is defined as "(ii) your willful misconduct which has had, or potentially will have, an adverse effect on t h e business, operations, reputation or business prospects of the Firm (iv) any material b r e a c h of this offer letter policy of the Firm ... .'I Id. at 1 - 2 . ... ... , or any written The Agreement continues that, if petitioner is "terminated for Cause during 2008, you agree to pay back to the Firm any 2008 Minimum Bonus payments received." Id. at 2. "Acceptable Reason" is defined as : resignation (not in connection with Cause) f o r (i) significant change in duties or responsibilities to those not commensurate with the position as described by the Managing Partner as of the date hereof, (ii) payments not made in accordance with the t e r m s of this offer letter or, (iii) intense dissatisfaction with employment at the Firm, provided that 30 d a y s prior to your resignation you must provide written notice to the Company describing the basis for your intense dissatisfaction and must provide the Firm with a bona fide opportunity to address and resolve issues raised in your notice. It is uncontested that, in September 2008, petitioner was 2 [* 4] called by FTP's Managing Partner, Steven McLaughlin .(McLaughlin), who directed her to cut short a planned vacation in order to attend a meeting with an important client, because McLaughlin was himself unable to attend. Rather than return from her vacation, petitioner sent McLaughlin a rather long and rambling e-mail, dated September 27, 2008, in which she chose to express her "intense dissatisfaction" with the Firm (Notice of Cross Petition, Ex. Q). Apparently, petitioner had been composing t h e e-mail letter for some months p r i o r to sending it to Mclaughlin. addresses a litany of complaints. The e-mail Although petitioner does not expressly say in her e-mail that she is resigning, she asks for directions for the return of her laptop and blackberry, and requests salary and b o n u s payments due to her f o r the remainder of the year. She notes that "this has nothing to do w i t h our current discussion of vacation, b u t rather a pattern of behavior and management." I d . at 3. Petitioner does not directly address t h e o r d e r to r e t u r n to work. The e-mail does not contain any provision f o r FTP to cure. McLaughlin responded to petitioner's e-mail shortly thereafter by terminating petitioner for "Cause," i.e., insubordination for refusing a direct order of management, and f o r abandoning her job. FTP concluded that petitioner had not resigned for an "Acceptable Reason." 3 As a result, FTP sought [* 5] the return of the b o n u s payments petitioner had already received for the year 2008. Although the parties commenced litigation to resolve their impasse, in the form of a FINRA arbitration by petitioner, and a n action in Superior Court of the State of California by F T P , the parties eventually agreed to arbitrate. Arbitration Agreement, Notice of C r o s s Petition, Ex. F. The parties a g r e e d that the arbitration would be "final, binding and nonappealable." Id., ΒΆ 3. The arbitration t o o k place over four days i n March and April 2012. Several witnesses were produced, a l o n g with documentary evidence. Post-arbitration submissions were provided to the arbitrator. An "Opinion and Award" was issued by the arbitrator, d a t e d June 7, 2012 (Award) (Notice of Cross Petition, Ex. A). During the arbitration, and in her post-arbitration submission, petitioner argued that she h a d been terminated without Cause, and so was entitled to the bonus payments for the remainder of 2008. Notably, she never argued that s h e had resigned prior to her termination. FTP argued that petitioner had n o t resigned for Acceptable Reasons a n d h a d not given FTP an opportunity to address her numerous issues or "intense dissatisfaction," as required by the Agreement. In the Award, the arbitrator summarized that FTP 4 [* 6] "maintain[s] that since Claimant resigned preemptively, was terminated for cause, and did not resign for an Acceptable Reason, her claim s h o u l d be denied." Award, at 5. The arbitrator concluded that "Claimant failed to trigger the 'Acceptable Reason' clause in her contract for a number of reasons." I d . at 6. Specifically, t h e arbitrator noted the indications in petitioner's e-mail that petitioner had no intention of returning to work (although this was not specifically stated in the e-mail), and that she h a d failed to allow FTP an opportunity to cure. The arbitrator found "that the Claimant resigned her employment when she submitted her email letter of September 27, 2008." Id. at 7. However, the arbitrator also found that " [ F T P ] had cause to terminate Claimant's employment." Id. After the arbitrator set forth the chain of events leading to petitioner's r e f u s a l to attend the important client meeting, and h e r further refusal to return to work, the arbitrator found that "Claimant's actions amount to insubordination, a violation of t h e Standards of Conduct and hence, cause for termination." I d . at 8. As a result, the arbitrator held that: [tlhe Employment Agreement states that if Claimant is terminated f o r cause during 2008 "you agree to pay back to the Firm any 2008 Minimum Bonus payments received." This language is clear and unambiguous. The amounts paid by [FTP] during 2008 to Claimant as part of her Minimum Bonus total $233,750. Accordingly, Claimant will be ordered to repay [FTP] this amount. 5 [* 7] Id. Therefore, the arbitrator determined that petitioner was terminated f o r Cause, having failed to put forth an Acceptable Reason for her behavior. 11. Arguments Petitioner's basic argument is that the arbitrator made a specific finding that she resigned (although she never argued this in the arbitration), and that, as an at-will employee, she was entitled to resign at any time, with or without reason. Therefore, according to petitioner, it is irrational to say that she was terminated by FTP f o r Cause, as she had already rightfully resigned. Petitioner maintains that the arbitrator acted with "manifest disregard of the law" when he made this determination. Petitioner argues that, whether or not her resignation was "'in connection with Cause' did not negate the fact of her resignation, and o n l y negated her right under t h e 'Acceptable Reason' clause to additional compensation." Petitioner, at 6. Reply of S h e has g i v e n up any request for the pro- rated bonus for 2008, but seeks to vacate so much of the award as requires her to return the bonus monies she actually received in 2008. FTP argues that it is perfectly rational to find that petitioner's e-mail resignation did not set f o r t h Appropriate Reasons for her resignation, and that she was, as a result, 6 [* 8] p r o p e r l y terminated for Cause under the Agreement. 111. Discussion "Courts may vacate an arbitrator's award only on the grounds stated in CPLR 7511 ( b ) . " Matter of New York C i t y T r a n s i t A u t h o r i t y v Transport Workers' Union of A m e r i c a , L o c a l 100, AFL-CIO, 6 NY3d 3 3 2 , 3 3 6 ( 2 0 0 5 ) ; L e n t i n e v Fundaro, 3 6 AD2d 539 (2d Dept 1971), a f f d 2 9 N Y 2 d 382 (1972). As applicable, CPLR 7511 ( b ) (iii) provides for vacatur when an arbitrator "exceeded his power or so imperfectly e x e c u t e d it that a final and definite award upon the subject matter submitted was n o t made ... .'I Judicial interference with an arbitration award should be avoided unless the award is "violative of a strong public policy, totally irrational or in excess of a specifically enumerated limitation upon arbitral authority." M a t t e s of Board Wingdale Teachers' A s s o c i a t i o n , 61 NY2d 913, 915 (1984); see also S i l v e r m a n v Benmore C o a t s , Inc., 61 N Y 2 d 299 (1984). An award should be confirmed if the arbitrator provides a "'barely colorable justification [internal citation omitted]'" f o r t h e award. R o f f l e r v Spear, L e e d s & Kellogg, 13 AD3d 3 0 8 , 3 0 9 (1st Dept 2004). Specifically, with r e g a r d to contract interpretation, [wlhen an arbitrator has been empowered to interpret a contract, the resulting award is n o t subject to vacatur unless it is totally irrational. Parties who 7 [* 9] agree to refer contract disputes to arbitration must recognize that arbitrators may do justice and the award may well reflect the spirit rather than the letter of the agreement. Courts may not overturn an award because they believe the arbitrator has misconstrued the apparent, or even obvious, meaning of the contract . . . in light of what he found to be the intent of the parties [internal quotation marks and citations omitted] * M a t t e r of Local D i v i s i o n 11 7 9 , Amalgamated T r a n s i t Union, AFLC I O v Green B u s Lines, I n c . , 50 NY2d 1007, 1008-1009 (1980). In the present matter, this court finds that the Award is not "totally irrational," and that a "colorable" basis for the Award has been stated. While petitioner's at-will right to resign was provided for in the Agreement, there was also language in the Agreement which could specifically be found applicable to the compensation due a resigning employee, when the resignation was not made for Acceptable Reasons, and where the employer reasonably found C a u s e for termination of the employee's right to certain compensation. Here, the arbitrator reasonably found that petitioner could not avoid the effect of her insubordination, and pocket nearly a quarter of a million dollars of bonus payments, by preemptively resigning her employment. Petitioner argues that vacatur is appropriate under the standard of "manifest disregard for the law," a standard applicable in federal law under the Federal Arbitration Act. Wien & Malkin LLP v Helmsley-Spear, I n c . , 6 NY3d 471, 480 8 [* 10] (2006). Manifest disregard of the law is established by a showing that "(1) the arbitrators knew of a governing legal principle yet refused to apply it or ignored it altogether, and (2) the law ignored by the arbitrators was well defined, explicit and clearly applicable to the case [internal quotation marks and citations omitted] ." Id. at 481; see also Transport V a l u e , L.L.C. v Johnson, 93 AD3d 599 (1st Dept 2012). Assuming that this federal standard was applicable h e r e , which it is not, petitioner has not met the standard. "[Mlanifest disregard of the law means more than an e r r o r or misunderstanding of the applicable law [internal quotation marks and citation omitted]" (Transparent V a l u e , L . L . C . v Johnson, 93 AD3d at 601), which is all that petitioner is alleging. In consequence, petitioner's application must be denied, and the Award must be confirmed. In passing, the court n o t e s the dispute between the parties over F T P ' s right to argue that the entire proceeding is inappropriate, due to the language in the Agreement making the results of the arbitration unappealable. While FTP sets this contractual language forth in the recitation of facts i n its cross petition, it never actually argues that t h e language bars the present proceeding until its reply memorandum. As such, the See I a r o c c i v I a r o c c i , matter should not be addressed here. AD3d 999 (2d Dept 2012)(matter raised for the first time in 9 . _ . . . . _ ... .. .- . . . . .. . . . . . . - -. . .... . . .. . _ . ___._ . . . . -- . . . . . . . 98 [* 11] reply brief is not properly before the court). The request by petitioner to provide a surreply to this argument is denied as moot. FTP applies for sanctions under form of attorneys' f e e s . 22 NYCRR 130-1.1, in the The request is denied. FTP has n o t shown that the present proceeding is without merit. FTP's r e q u e s t for interest on the amount granted in the Award i s a l s o denied. As FTP fails to point out, the arbitrator specifically ruled against a grant of interest (Award, at lo), and FTP has not moved to vacate that part of the Award. Accordingly, it is ORDERED that the petition b r o u g h t by petitioner T i n a M. Longfield to partially vacate t h e arbitration award in t h e proceeding entitled Matter of L o n g f i e l d v F i n a n c i a l Technology Partners L . P . , rendered on J u n e 7, 2012, is denied, and the proceeding is dismissed; it is further 10 [* 12] ORDERED that the c r o s s petition brought by respondents Financial Technology Partners L . P . and FTP S e c u r i t i e s LLC to confirm the award, i n t h e sum of $ 2 3 3 , 7 5 0 , is granted; and it is further A D J U D G E D that the award is confirmed. ENTER : J.S.C. 11
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