Laura S. v James B.

[*1] Laura S. v James B. 2013 NY Slip Op 51437(U) Decided on September 3, 2013 Supreme Court, Westchester County Duffy, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on September 3, 2013
Supreme Court, Westchester County

Laura S., Plaintiff,

against

James B., Defendant.



6279/11



Neal S. Comer, Esq.

Attorney for Defendant

81 Main Street, Suite 205

White Plains, New York 10601

Ms. Laura S.

Plaintiff, Pro Se

[redacted address]

Colleen D. Duffy, J.

On March 28, 2013, Defendant James B. ("Defendant") filed an order to show cause, and affirmation of Neal S. Comer, Esq. ("Defendant's Counsel"), and exhibits thereto seeking an order, pursuant to CPLR § 7511, vacating an arbitration award, entered by Arbitrator Robert A. Spolzino ("Arbitrator"), dated December 27, 2012 (hereinafter, the Arbitration Award"), on the grounds that the Arbitrator failed to follow the procedures set forth in CPLR Article 75 and that the award of counsel fees was excessive and improper, and such other and further relief as the Court may deem just and proper. [*2]

On April 19, 2013, Plaintiff Laura S. ("Plaintiff") filed an affidavit in opposition to Defendant's Order to Show Cause, and exhibits thereto.

On April 29, 2013, Defendant filed a Reply Affirmation in reply to Plaintiff's affidavit in opposition to Defendant's Order to Show Cause.

BACKGROUND AND PROCEDURAL HISTORY

Plaintiff and Defendant were married on December 30, 1994 and had two children during the marriage. The parties entered into a written separation agreement on September 22, 1999 ("Separation Agreement") which was later incorporated by reference but survived the parties' Judgment of Divorce, which was entered on October 12,1999 ("Judgment of Divorce").

Thereafter, the parties entered into a written agreement, dated June 21, 2004 ("Modification Agreement"), which modified and amended, in part, the Separation Agreement.

On or about March 10, 2011, Plaintiff commenced an action against Defendant contending that Defendant had violated certain terms and conditions of the Separation Agreement as modified by the Modification Agreement. After Defendant had filed an answer and counterclaims in the action, the parties agreed to submit their dispute to binding arbitration.

On December 19, 2011, the parties entered into an arbitration agreement ("Arbitration Agreement") which submitted the matter to the Arbitrator.

There is no dispute that, after execution of the Arbitration Agreement, the parties attended and participated in several arbitration sessions with the Arbitrator, the first of which commenced on January 4, 2012. Thereafter, the arbitration proceeding was continued on February 17, 2012. The arbitration proceeding was not concluded on that date as the Arbitrator instructed each party to provide to the opposing party a detailed list ofobjections to certain expenses sought by the other party by February 28, 2012. After several emails were sent by the Arbitrator to the parties via their counsel to schedule another date for the continued hearing, which were not responded to by Defendant's Counsel, the Arbitrator scheduled the continued hearing for May 7, 2012 and notified the parties of that date, via email to the parties' counsel. The parties do not dispute that throughout the arbitration proceeding, which spanned several months, the parties communicated with the Arbitrator via email, including emails pertaining to the scheduling of hearing dates subsequent to the January 4, 2012 proceeding.

On July 20, 2012, several weeks after the May 7, 2012 arbitration hearing date, Defendant's Counsel contacted the Arbitrator via email requesting to re-open the hearing. The Arbitrator issued a decision, sent via email to the parties' counsel, indicating that he would not re-open the hearing, but indicated that Defendant could provide to him a written submission no later than September 14, 2012.

Thereafter, on December 27, 2012, the Arbitrator issued a decision in writing. In sum and substance, the Arbitrator awarded to Plaintiff the sum of $7,998.00, finding that Defendant had breached the parties' Separation Agreement. The Arbitrator also awarded attorney's fees to Plaintiff in the amount of $36,800.00.

This proceeding ensued.

CONCLUSIONS OF LAW

For the reasons set forth herein, Defendant's order to show cause to vacate and/or modify the Arbitration Award is denied. Plaintiff's application to confirm the award is granted.

When parties consent to any type of arbitration, they effectively agree to accept whatever [*3]solution is reached by the arbitrator because the arbitrator's determination on the merits is conclusive. Subaru of Am. v. McKelvey, 141 Misc 2d 41, 42 (Sup. Ct., Monroe Co. 1988)(arbitrator's determination is conclusive); David Associates v. Bevona, 109 AD2d 623, 624 (1st Dept. 1985)(issues determined by arbitration have res judicata effect); Blatman v. Haimoff, et al., 21 Misc 3d 1121(A), 2008 NY Misc. Lexis 6246, ***9-10 (Sup. Ct., New York Co. 2008).

It is policy in New York State to favor and encourage arbitration as a means of expediting resolution of disputes and conserving judicial resources. Rio Algom Inc. v. Sammi Steel Co., Ltd., 168 AD2d 250, 562 N.Y.S.2d 486, 488 (1st Dept. 1990), app. denied, 78 NY2d 853 (1991). A party seeking to vacate an arbitration award has a heavy burden to overcome. Blatman, 2008 NY Misc. Lexis 6246, ***9-10.

It is an arbitrator's duty to seek a "just solution" and the arbitrator does so unhampered by principles of substantive law or rules of evidence. Pearlman v. Pearlman, 169 AD2d 825, 826 (2d Dept. 1991); Matter of Bay Iron Works, 17 AD2d 804, 804-05 (1st Dept. 1962); McLaughlin, Practice Commentaries, McKinney's Cons. Laws of NY, Book 7B, CPLR § 7501, et seq.

One of the purposes of arbitration is to permit the parties to select, instead of the courts, their own "judge" and a mode of dispute determination not governed either by the rules of substantive law or rules of evidence applicable to a court. Transpacific Transport Corp. v. Sirena Shipping Co., S.A., 9 AD2d 316, 320 (1st Dept. 1959), aff'd, 8 NY2d 1048 (1960); S.A. Wenger & Co. v. Propper Silk Hosiery Mills, 239 NY 199, 202-03 (1924). Thus, a court may not review questions of fact or even of law. Matter of SCM Corp. v. Fisher Park Lane Co., 40 NY2d 788, 793 (1976). Indeed, except for certain narrow, statutorily authorized circumstances, judicial review of an arbitration award is proscribed. CPLR § 7511; Pearlman, 169 AD2d at 826 (judicial review of arbitrator's award is severely limited).

A.Motion to Vacate Arbitration Award Is Denied

Defendant's motion to vacate the Arbitration Award is denied as Defendant has failed to establish any ground upon which this Court should vacate such award.[FN1]

CPLR § 7511(b) sets forth the grounds upon which a Court can vacate an arbitration award.[FN2]

For the reasons set forth below, the Court finds that Defendant's contention that the Arbitrator failed to follow the statutory notice requirement for the arbitration hearing is without [*4]merit as is his contention that the Arbitrator's award of counsel fees is excessive.

1.Statutory Notice is not Required for Dates of a Continued Hearing

Defendant's contention that the arbitration award should be vacated because the email notice he received from the Arbitrator of the continued arbitration hearing in May 2012 — a hearing that had commenced in January of that year — did not comport with the statutory notice requirement is meritless.

CPLR § 7506(b), which sets forth the statutory requirements for the time and place of an arbitration, provides, in relevant part: (b) Time and place. The arbitrator shall appoint a time and place for the hearing and notify the parties in writing personally or by registered or certified mail not less than eight days before the hearing. The arbitrator may adjourn or postpone the hearing.

As an initial matter, the Court notes that while CPLR § 7506(b) requires that notice of the time and place for the hearing be made pursuant to formal notice requirements, there is nothing in the statute from which to conclude that the notice for subsequently scheduled dates for a continued hearing must adhere to those same requirements. See Blatman, 2008 NY Misc. Lexis 6246, ***13-16 (notice of requested adjourned date via facsimile transmission does not violate statute).[FN3]

The law is well-settled that the means selected for providing notice must be "reasonably calculated, under all circumstances, to provide notice." Blatman at ***15 (citations omitted). Here, notice of the May 2012 hearing date was sent to Defendant's Counsel via email. There is no dispute that Defendant's Counsel received such email. The Court notes that, in light of the regular practice of the parties and the Arbitrator to communicate via email and telephone during the pendency of the arbitration proceeding, the email notice of the May 2012 date was an appropriate method of notice for such continued proceeding. Id.

As the notice provision of CPLR § 7506(b) is not applicable to a subsequent date or dates set for a hearing that is not completed and continued, and the Court finds that the Arbitrator's April 20, 2012 email notice of the May 7, 2012 hearing to Defendant's Counsel, which was received by Defendant's Counsel was appropriate, Defendant's motion to vacate the Arbitration Award on this ground is denied.

2.Defendant Has Waived Any Objection to Statutory Notice

Even if Article 75 of the CPLR were to require an Arbitrator to issue formal statutory notice for all hearing dates, even adjourned or continued hearings (which this Court finds it does not), Defendant has failed to "meet the heavy burden required of a party seeking to vacate an arbitration award." North Syracuse Cent. School Dist. v. North Syracuse Educ. Assn., 45 NY2d 195, 200 (1978).

It is axiomatic that a party cannot seek vacatur of an arbitration award on the grounds that the procedural requirements of Article 75 were not adhered to by the Arbitrator when such party had continued with the arbitration with notice of the defect and without objection. CPLR § 7511; [*5]Kozlowski v. Seville Syndicate, 64 Misc 2d 109, 115 (Sup. Ct., New York Co. 1970) (party estopped from seeking to vacate arbitration on the grounds that the procedural requirement of swearing witnesses was not followed when party continued to participate in such arbitration despite not being sworn).

Moreover, it is incumbent upon the party seeking such vacatur to show that he did not waive his objection to the procedural defect by his continued participation in the arbitration with knowledge of such defect. See Obot v. NYS Dept. of Correctional Services, 224 AD2d 1006, 1006 (4th Dept.)(burden is on movant to establish basis for vacatur), aff'd, 89 NY2d 883 (1996); U.S. Elecs., Inc. v. Sirius Satellite Radio, Inc., 17 NY3d 912 (1996)(party moving to vacate award has burden of proof and the showing required to avoid confirmation is very high); Matter of Ebewo v. New York City Dept. of Educ., 2011 NY Slip Op. 32384U, 2011 NY Misc. Lexis 4318, *24 (Sup. Ct., New York Co. 2011)(petitioner has heavy burden of showing misconduct by clear and convincing evidence).

Here, Defendant has wholly failed to make such a showing. Defendant does not dispute that he participated in the initial January 2012 arbitration proceeding as well as the February 17, 2012 continued proceeding, and also provided subsequent written submissions to the Arbitrator following that February proceeding. Thus, Defendant's right to object to the method of notice of the May 2012 proceeding could only be preserved, if at all, if both of those proceedings had been noticed pursuant to the statutory requirements of CPLR 7506(b).

Defendant has not disputed the method of notice for the continued hearing on February 17, 2012. Defendant also has failed to show or even assert that both the initial January 2012 arbitration proceeding was noticed by the Arbitrator pursuant to the formal requirements of CPLR § 7506(b) and that the continued arbitration hearing on February 17, 2012 also proceeded pursuant to such statutory notice.[FN4] Indeed, as the documents submitted by both parties to the Court in connection with this motion evidence that email communication was the regular method of communication between the parties and the Arbitrator, it is unlikely that Defendant could so establish that some other method of notice occurred.

Such omission is fatal to any claim Defendant may have had that he did not waive his right to now object. Matter of Hayes v. New York City Dept. Of Educ., 25 Misc 3d 1238A, 2009 NY Misc. Lexis 3326, ***25-26 (Sup. Ct., New York Co. 2009) (petitioner's unsupported allegations insufficient to satisfy burden of proof); Institute of Internat'l Educ. v. Permanent Mission of Spain, 118 AD2d 433, 4436 (1st Dept. 1986)(no evidence to support petitioner's claim of lack of notice; motion to vacate denied), app. denied, 68 NY2d 608 (1986).

Accordingly, Defendant's motion to vacate the Arbitration Award is denied on this basis as well.

3.The Arbitrator Did Not Exceed his Authority in

Issuing An Award of Attorney's Fees [*6]

To the extent that Defendant is contending that the Arbitrator exceeded his authority in awarding attorney's fees, such claim also is denied.

Pursuant to CPLR § 7511(b)(1)(iii), an arbitration award will be upheld unless the moving party can establish, by clear and convincing evidence, that the arbitrator "exceeded his power or so imperfectly executed it that a final and definite award upon the subject matter submitted was not made." CPLR § 7511(b)(1)(iii); Muriel Siebert & Co., Inc. v. Ponmany, 190 AD2d 544, 593 N.Y.S.2d 1010, 1010 (1st Dept. 1993); Hausknecht v. Comprehensive Medical Care of NY, P.C., 24 AD3d 778, 779 (2d Dept. 2005).

Only where an arbitrator gives a completely irrational construction to the contract provisions at issue, such that he creates a new contract for the parties, will an arbitrator be found to have exceeded his powers. National Cash Register Co. v. Wilson, 8 NY2d 377, 383 (1960); Amalgamated Transit Union v. Green Bus Lines, Inc., 50 NY2d 1007, 1009, rehearing den., 51 NY2d 770 (1980).

Here, no such showing has been made. Indeed the Court finds that Defendant's contention that the Arbitrator's award of attorney's fees in relation to the arrears sought was excessive is without basis. As an initial matter, Defendant has not disputed Plaintiff's contention that, at the February 17, 2012 proceeding, where Defendant was scheduled to testify about his expenses, as a result of Defendant's inability to locate his documents and his search through boxes for same at that hearing, the Arbitrator notified Defendant and his counsel that Defendant would have to pay Plaintiff's attorney's fees for that session.

Moreover, the Arbitrator expressly determined that the award of attorney's fees to Plaintiff in the amount of $36,800.00 was reasonable and necessary even though such fees exceed the amount of the recovery. See Arbitration Award. The Arbitrator also noted that the parties' Separation Agreement provides for an award of such fees to a party who commences an action to enforce its terms and expressly detailed his review of the evidence submitted by Plaintiff in connection with the requested fees. Id.

Accordingly, to the extent that Defendant is seeking to vacate the Arbitration Award on the grounds that the Arbitrator exceeded his authority in awarding attorney's fees, such application is denied.

B.The Arbitration Award is Binding Upon the

Parties and Is Hereby Confirmed by the Court

CPLR § 7511 provides, in relevant part, that, "upon the denial of a motion to vacate or modify, [the Court] shall confirm an award."

As the Court finds no reason to vacate or modify the Arbitration Award, it is hereby confirmed. Bernstein Family Ltd. Partnership v. Sovereign Partners L.P., 66 AD3d 1, 5 (1st Dept. 2009)(unless opposing party puts forth sufficient ground for vacatur or modification, court must confirm award).

In addition, pursuant to CPLR § 7514(a), upon submission of a proposed judgment by Plaintiff, on notice, the Court will enter judgment on behalf of Plaintiff as against Defendant in the amount of $44,798.00 ($7,998.00 plus $36,800), the amount awarded to Plaintiff in the Arbitration Award, plus interest (see Section C, infra). See Arbitration Award.

C.Plaintiff is Awarded Interest from the Date of the Award [*7]

Plaintiff also is awarded statutory interest in the amount of 9% per annum on the Arbitration Award, computed from December 27, 2012, the date of the award to payment. See CPLR § 5002 (interest shall be recovered upon total sum awarded from the date the decision was made to the date of entry of final judgment); CPLR § 5004 (interest at rate of 9% per annum); Board of Education v. Niagara-Wheatfield Teachers Assoc., 46 NY2d 553, 558 (1979)(upon confirmation of an arbitrator's award, interest should be awarded from the date of the award); Matter of Shimon v. Silberman, 92 AD3d 789, 790-91 (2d Dept.), app. denied, 19 NY3d 802 (2012); Church Mutual Insurance Co. v. Kleingardner, 2 Misc 3d 676, 683-84 (Sup. Ct., Oswego Co. 2003)(upon confirmation of arbitration award, interest due from date of award to date of payment).

The Court considered the following submissions by the parties: Defendant's Order to Show Cause, filed March 28, 2013, and accompanying Affirmation of Neal S. Comer, Esq., dated March 27, 2013, and exhibits; Plaintiff's Affidavit in Opposition, filed April 19, 2013, and exhibits thereto, and Reply Affirmation of Neal S. Comer, Esq., filed April 29, 2013.

This constitutes the Decision and Order of the Court.

Dated: White Plains, New York

September 3, 2013

Hon. Colleen D. Duffy

Justice of the Supreme Court Footnotes

Footnote 1: To the extent that Plaintiff contends that Defendant's application as untimely, such application is denied. CPLR § 7511 imposes a ninety-day time limit for filing such application. Here, the Court finds that Defendant's filing was within that requisite timeframe.

Footnote 2: Defendant's contentions appear to rest on CPLR § 7511(b)(iv), which authorizes a Court to vacate an arbitration award based upon the arbitrator's "failure to follow the procedures of [Article 75 of the CPLR], unless the party applying to vacate the award continued with the arbitration with notice of the defect and without objection."

With respect to Defendant's application to have the Court set aside the Arbitrator's award of attorney's fees, other than his argument regarding statutory notice, Defendant does not expressly identify what, if any, other provision of CPLR § 7511(b) he relies upon. To the extent that Defendant seeks vacatur of the attorney's fee award on the basis that the Arbitrator "exceeded his power or so imperfectly executed it that a final and definite award upon the subject matter submitted was not made," see CPLR 7511(b)(iii), as set forth in Section A(3), infra, such application also is denied.

Footnote 3: Although the scheduling of a new arbitration hearing renders a prior hearing notice a nullity, the same is not true when the new date is merely an adjournment of an existing hearing. Blatman, 2008 NY Misc. Lexis 6246, ***14-15 .

Footnote 4: The Court notes that even if statutory notice was provided for the original January 2012 hearing, Defendant still would have to show that the February continued hearing also met those same statutory notice requirements to establish that he did not waive his right to object to the lack of proper notice for the May 2012 continued hearing. CPLR § 7511(b)(iv).