Justia Arbitration & Mediation Opinion SummariesArticles Posted in New York Court of Appeals
American International Specialty Lines Insurance Co. v. Allied Capital Corp.
The Court of Appeals held that an arbitration panel acted within the bounds of its broad authority by reconsidering an initial determination - denominated a "partial final award" - that addressed some, but not all, of the issues submitted for arbitration. Insureds sought payment of their costs resolving through a settlement a federal qui tam action under two insurance policies issued by Insurer. After Insurer denied coverage Insureds demanded arbitration under arbitration clauses contained in the policies. The arbitration panel issued what it called a "partial final award" determining that only one insurance policy was applicable and that one insured was entitled to defense costs but not indemnification. Insureds sought reconsideration, which the arbitration panel granted. The panel then issued a "final award" granting one insured recovery for damages constituting of both the settlement and defense costs. The Appellate Division reversed, vacated the final award, and confirmed the partial final award. The Court of Appeals reversed, holding that the arbitration panel did not exceed its authority by reconsidering the partial final award. View "American International Specialty Lines Insurance Co. v. Allied Capital Corp." on Justia Law
Monarch Consulting, Inc. v. Nat’l Union Fire Ins. Co. of Pittsburgh, Penn.
At issue in this appeal was whether the parties’ disputes pertaining to certain workers’ compensation insurance payment agreements should be submitted to arbitration. To resolve this issue, the Court of Appeals was required to make a threshold determination of the whether the McCarran-Ferguson Act precludes application of the Federal Arbitration Act (FAA) in relation to Cal. Ins. Code 11658. The Court of Appeals reversed the order of the Appellate Division, holding (1) because application of the FAA does not invalidate, impair, or supersede section 11658, the McCarran-Ferguson Act is not implicated, and the FAA applies to the parties’ payment agreements in this case; and (2) because the parties clearly and unmistakably delegated the question of arbitrability and enforceability of the arbitration clauses to the arbitrators, the FAA mandates that the arbitration provisions be enforced as written. View "Monarch Consulting, Inc. v. Nat’l Union Fire Ins. Co. of Pittsburgh, Penn." on Justia Law
Cusimano v. Schnurr
This appeal concerned three commercial agreements entered into among family members regarding family-owned entities. New York residents executed each agreement, and each agreement contained a provision stating that disputes will be settled by arbitration pursuant to the rules of the American Arbitration Association (AAA). This action was commenced in New York County Supreme Court alleging fraud and malpractice against the family’s accountants. The court dismissed the complaint but gave Plaintiffs twenty days to replead certain causes of action with specificity. Plaintiffs subsequently added two family members as respondents and filed a demand for arbitration and a statement of claim with the AAA. Supreme Court granted Defendants’ motion to permanently stay certain claims asserted in the arbitration demand as time-barred and granted Plaintiffs’ motion for a stay pending arbitration to the extent of directing the parties to arbitrate the remaining non-time-barred claims, concluding that the AAA was inapplicable. The Appellate Division reversed, concluding that the AAA applied to the agreements because each concerned transactions that affected commerce and that Plaintiffs did not waive the right to arbitration. The Court of Appeals reversed, holding that Plaintiffs waived the right to arbitration because of their blatant forum-shopping, and the issue of timeliness should be determined by the court. View "Cusimano v. Schnurr" on Justia Law
N.J.R. Assocs. v. Tausend
Nicole Tausend, the beneficiary of a trust together with her father, Ronald, commenced a N.Y.C.P.L.R. 78 proceeding against Ronald and the partnership (NJR) formed by Ronald for the purpose of acquiring and selling property. Nicole commenced the proceeding in order to obtain access to the partnership documents and an accounting of its finances. In response, NJR issued a demand for arbitration. Supreme Court ordered the parties to arbitration, and the appellate division affirmed. Nicole appeared in the arbitration and asserted several counterclaims, which lead to NJR's commencement of this court proceeding seeking to stay arbitration of the counterclaims on the basis of the expiration of the statute of limitations. Supreme Court granted the petition and stayed arbitration of the counterclaims. The appellate division modified by dismissing NJR's petition to stay arbitration of the counterclaims, reasoning that the partnership was precluded from obtaining a stay because it had initiated and participated in the arbitration. The Court of Appeals affirmed, holding that because NJR initiated and participated in the arbitration of issues stemming from the dispute, its timeliness challenge to the counterclaims must be decided by an arbitrator. View "N.J.R. Assocs. v. Tausend" on Justia Law
Matter of Elrac, Inc. v Exum
Exum, an employer of Elrac, served a notice of intention to arbitrate on Elrac, seeking uninsured motorist benefits. Elrace petitioned to stay the arbitration. Supreme Court granted the petition, but the Appellate Division reversed, permitting the arbitration to proceed. The court affirmed and held that a self-insured employer whose employee was involved in an automobile accident could not be liable to that employee for uninsured motorist benefits, notwithstanding the exclusivity provision of the Workers' Compensation Law. View "Matter of Elrac, Inc. v Exum" on Justia Law
Matter of Johnson City Professional Firefighters Local 921
This case stemmed from a dispute over the arbitration of a collective bargaining agreement that contained a no-layoff clause. The court held that because the clause was not explicit, unambiguous and comprehensive, there was nothing for the Union to grieve or for an arbitrator to decide. Having concluded that the dispute was not arbitrable for reasons of public policy, the court need not reach the issue of whether the parties agreed to arbitrate. Accordingly, the order of the Appellate Division was reversed and the Village's application to stay the arbitration was granted. View "Matter of Johnson City Professional Firefighters Local 921" on Justia Law
City School Dist. of the City of New York v McGraham
Respondent, a 36-year-old tenured high school teacher, was the subject of disciplinary charges pursuant to Education Law 3020-a as a result of her improper conduct with respect to a 15-year-old male student. Petitioner commenced this proceeding pursuant to CPLR 7511 to vacate the arbitration award, arguing that the penalty imposed was irrational and contrary to the public policy of protecting children. The court held that the arbitration award did not violate public policy where the award, on it's face, was neither prohibited by statute nor common law. The court also held that the award was not arbitrary, capricious, or irrational where the hearing officer engaged in thorough analysis of the facts and circumstances, evaluated respondent's credibility, and arrived at a reasoned conclusion that a 90-day suspension and reassignment was the appropriate penalty. Accordingly, the judgment was affirmed. View "City School Dist. of the City of New York v McGraham" on Justia Law
U.S. Electronics, Inc. v Sirius Satellite Radio, Inc.
Petitioner sought to vacate a unanimous arbitration award in favor of Sirius arising out of a breach of contract dispute. Petitioner, which had a non-exclusive agreement with Sirius to distribute radio receivers, claimed that the chairman of the arbitration panel failed to disclose relationships of interest that affected the impartiality and propriety of the arbitration process. The court adopted the Second Circuit's reasonable person standard and held that the Appellate Division erred by imposing upon petitioner a "burden of proving by clear and convincing evidence that any impropriety or misconduct of the arbitrator prejudiced its rights." The court held, however, that the Appellate Division correctly determined that there was no basis to vacate the arbitration award. Accordingly, the order was affirmed. View "U.S. Electronics, Inc. v Sirius Satellite Radio, Inc." on Justia Law