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Arbitrator Exceeded Her Powers to Modify an Award and Failed to Make a “Final and Definite” Award

The Third Department determined the arbitrator had exceeded her authority when she did not merely correct a miscalculation, but rather made new findings when modifying an award.  The court further determined that the arbitrator initially did not make a “final and definite” award when she failed to take into account a stipulation between the parties:

…[T]he arbitrator’s modification of the original award exceeded the narrow grounds set forth in CPLR 7511 (c). A review of the modified award reveals that the arbitrator did not simply correct a “miscalculation of figures . . . in the [original] award” (CPLR 7511 [c] [1]) but, rather, made new factual findings as to the applicability of the parties’ apparent stipulation relative to petitioner’s counterclaim and its corresponding impact upon the moneys awarded, i.e., the arbitrator impermissibly revisited the merits of the parties’ dispute. Under these circumstances, the modified award was properly vacated … .

We also are persuaded that Supreme Court properly vacated the original arbitration award and remanded the matter to the arbitrator for a rehearing (see CPLR 7511 [d]). CPLR 7511 (b) (1) (iii) permits a court to vacate an arbitration award if the court finds that a party’s rights were prejudiced because the arbitrator, in making such an award, either “exceeded his [or her] power or so imperfectly executed it that a final and definite award upon the subject matter submitted was not made.” Although we find no basis upon which to conclude that the arbitrator exceeded her authority in rendering the initial award, we agree with Supreme Court that, by failing to address the existence and/or content of the parties’ purported stipulation, ascertain whether the contested funds were in fact withheld by petitioner prior to the start of the arbitration and assess the corresponding impact, if any, upon petitioner’s counterclaim, the arbitrator “so imperfectly executed” her powers that “a final and definite award” was not in fact made (CPLR 7511 [b] [1] [iii]). Matter of Delaney Group, Inc. (Holmgren Enters., Inc.), 2015 NY Slip Op 02174, 3rd Dept 3-19-15

 

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