Summary
In Matter of Stewart Tabori Chang (Stewart) (282 AD2d 385, lv denied 96 NY2d 718), both sides' arbitration pleadings contained boilerplate requests for attorneys' fees, but one side never reiterated that request during the arbitration, objected to any such award during its closing argument, and informed the panel it was not seeking such fees because the panel lacked authority to award them.
Summary of this case from In re MatzaOpinion
April 24, 2001.
Judgment, Supreme Court, New York County (Barbara Kapnick J.), entered April 11, 2000, which confirmed an arbitration award in favor of respondent Andrew Stewart and against petitioners, except to the extent such award granted Stewart recovery of the attorney's fees and disbursements he incurred in the arbitration, and granted Stewart recovery in the amount of the award as so reduced, with prejudgment interest, pursuant to three orders, same court and Justice, each entered March 14, 2000, which, respectively, denied as moot petitioners' initial preaward application to stay the arbitration, granted in part and denied in part Stewart's motion to confirm, and petitioners' cross motion to vacate, the award rendered in such arbitration, and denied petitioners' subsequent motion to dismiss Stewart's confirmation motion on jurisdictional grounds, unanimously affirmed, without costs. Appeals and cross appeal from the aforesaid orders, unanimously dismissed, without costs, as subsumed in the appeal and cross appeal from the judgment.
Norman A. Senior, for Petitioners-Appellants-Respondents.
Thomas V. Marino, for Respondent-Respondent-Appellant.
Before: Rosenberger, J.P., Nardelli, Andrias, Saxe, JJ.
The motion court correctly confirmed the arbitration award in this commercial dispute, except to the extent the award gave respondent Stewart, the prevailing party, attorney's fees and disbursements. The fact that the attorney who made the closing argument on behalf of Stewart was a director of the American Arbitration Association, under whose auspices the arbitration was conducted, even if known to the arbitrators, would not have created reasonable cause to doubt the arbitrators' impartiality, or otherwise have afforded grounds to vacate the award, since, inter alia, it is undisputed that the attorney had no prior connection to any of the arbitrators and had no involvement in determining whether the arbitrators would receive future assignments (see, 9 U.S.C. § 10[a]; Morelite Constr. Corp. v. New York City Dist. Council Carpenters Benefit Funds, 748 F.2d 79, 84). Nor was the award of damages for lost profits made in "manifest disregard" of applicable law (see, Folkways Music Publs. v. Weiss, 989 F.2d 108, 111-112). The award of attorney's fees and disbursements, however, was not authorized by the parties' agreement (cf., Matter of RAS Sec. Corp. v. Williams, 251 A.D.2d 98) or by any statute or court rule, contrary to New York law (see, Matter of A. G. Ship Maintenance Corp. v. Lezak, 69 N.Y.2d 1, 5), which the parties had expressly chosen to govern their agreement. That aspect of the award was therefore correctly vacated as made by the arbitrators, all attorneys, in manifest disregard of well-defined, explicit and clearly applicable New York law (see,Asturiana de Zinc Mktg. v. LaSalle Rolling Mills, 20 F. Supp.2d 670, 674-675). We further note that petitioners, who, prior to the rendering of the award, withdrew any claim to recover their own attorney's fees and objected to the submission of Stewart's claim for such relief, did not acquiesce in the arbitrators' consideration of that claim.
Finally, the motion court had jurisdiction under former CPLR 7502(a), prior to its recent amendment (L 2000, ch 226), to entertain Stewart's motion to confirm the award, without his commencing a new proceeding. At the time Stewart moved to confirm, no prior order or judgment had been entered disposing of petitioners' initial preaward application to stay the arbitration, which the court had held in abeyance, and the proceeding therefore had not ceased to be pending (cf., Matter of Solkav Solartechnik [Besicorp Group], 91 N.Y.2d 482).
THIS CONSTITUTES THE DECISION AND ORDER OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.