Opinion
9687N 9688N Index 653961/16
06-06-2019
In re CAPITAL ENTERPRISES CO., Petitioner, v. Alvin DWORMAN, Respondent-Respondent. Sachs Investing Company, et al., Nonparty Appellants. In re Capital Enterprises Co., Petitioner-Appellant, v. Alvin Dworman, Respondent-Respondent.
Orders, Supreme Court, New York County (Jennifer G. Schecter, J.), entered January 8, 2019, which denied petitioner's motion to vacate an arbitration award and granted respondent's motion to confirm the award, and denied nonparty appellants' (Sachs) motion to vacate the award, unanimously affirmed, without costs.
The arbitrator did not exceed his authority in ordering the dissolution of the parties' partnership or in the manner in which he ordered the dissolution. The issue is within the scope of the arbitration clause, and was before the arbitrator in the statement of claim and throughout the hearing, and the arbitrator had broad discretion to fashion the remedy ( Matter of Silverman [Benmor Coats], 61 N.Y.2d 299, 308, 473 N.Y.S.2d 774, 461 N.E.2d 1261 [1984] ).
The remedy was not an improper punitive award (see Kudler v. Truffelman, 93 A.D.3d 549, 941 N.Y.S.2d 44 [1st Dept. 2012], lv denied 19 N.Y.3d 815, 2012 WL 5258818 [2012] ). The arbitrator fashioned a remedy that appeared fair to all parties, and treated all parties the same. The arbitrator did not improperly hold petitioner vicariously liable for the acts of nonparty Carard Management Company. It held petitioner liable for its use of its control over Carard to loot the partnership (cf. Matter of Professional Trade Show Servs. v. Licensed Ushers & Ticket Takers Local Union 176 of Serv. Empls., Intl. Union, AFL–CIO, 262 A.D.2d 42, 44, 692 N.Y.S.2d 26 [1st Dept. 1999] [award that read into the arbitration agreement an additional obligation of one company to guaranty that another, separate company would employ members of union local for work was irrational and violated public policy by "disregarding, without any discernible basis, the separate legal existence of two corporations to the extent of holding each responsible for the other's contractual obligations in conduct"] ).
The arbitrator appropriately addressed the issue of respondent's mental state, and was not required to inquire further, especially because it was petitioner that argued in favor of respondent's capacity.
Petitioner's evidentiary challenges, mainly attacks on the arbitrator's credibility findings and interpretation of agreements, are beyond the scope of our review ( Matter of NRT N.Y. LLC v. Spell, 166 A.D.3d 438, 438–439, 88 N.Y.S.3d 34 [1st Dept. 2018] ).
Nonparty appellants, which are partners in petitioner, lack standing to challenge this arbitration, as they could not have brought the claims (in any forum) originally (see generally Auerbach v. Bennett, 47 N.Y.2d 619, 626, 628, 419 N.Y.S.2d 920, 393 N.E.2d 994 [1979] ). Further, they waived any objection to the arbitration by failing to take any action, despite knowing of the arbitration and monitoring it from its inception (see Jin Ming Chen v. Insurance Co. of the State of Pa., 165 A.D.3d 588, 589, 87 N.Y.S.3d 24 [1st Dept. 2018] ).