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THERE IS A REASONABLE RELATIONSHIP BETWEEN THE GRIEVANCE AND THE COLLECTIVE BARGAINING AGREEMENT (CBA); THE CITY’S PETITION TO PERMANENTLY STAY ARBITRATION SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined that the city-employer’s motion to permanently stay arbitration should not have been granted:

In determining whether a grievance is arbitrable, a court must “first ask whether there is any statutory, constitutional or public policy prohibition against arbitration of the grievance,” and if there is no prohibition against arbitration, the court must “then examine the CBA [collective bargaining agreement] to determine if the parties have agreed to arbitrate the dispute at issue” … . …

Where, as here, the relevant arbitration provision of the CBA is broad, providing for arbitration of any grievance “involving the interpretation or application of any provision of this Agreement,” a court “should merely determine whether there is a reasonable relationship between the subject matter of the dispute and the general subject matter of the CBA” … . “If there is none, the issue, as a matter of law, is not arbitrable. If there is, the court should rule the matter arbitrable, and the arbitrator will then make a more exacting interpretation of the precise scope of the substantive provisions of the CBA, and whether the subject matter of the dispute fits within them” … . …

According to Local 628, the City, by offering a paramedic training course to its firefighters, violated article 33 of the CBA, which contains various provisions concerning the EMS Program, including a provision stating that the “EMS Program shall mean the level of services provided as of the date of this Agreement.” Contrary to the City’s contention, a reasonable relationship exists between Local 628’s grievance and the general subject matter of the CBA … . “[T]he question of the scope of the substantive provisions of the CBA is a matter of contract interpretation and application reserved for the arbitrator” … . Matter of City of Yonkers v Yonkers Fire Fighters, Local 628, IAFF, AFL-CIO, 2019 NY Slip Op 07776, Second Dept 10-30-19

 

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THE ARBITRATION AWARD WAS INDEFINITE AND NONFINAL AND SHOULD NOT HAVE BEEN CONFIRMED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the arbitration award should not have been confirmed because it was indefinite and nonfinal:

Although judicial review of arbitration awards is limited …, an award will be vacated when the arbitrator making the award “so imperfectly executed it that a final and definite award upon the subject matter submitted was not made” (CPLR 7511[b][1][iii] … ). An arbitration award will be vacated as indefinite or nonfinal for purposes of CPLR 7511 if it does not “dispose of a particular issue raised by the parties” … , or “if it leaves the parties unable to determine their rights and obligations, if it does not resolve the controversy submitted or if it creates a new controversy” … .

Here, the appellant established that the arbitration award was indefinite and nonfinal inasmuch as it did not clearly define how the accounts receivable that were incurred prior to the date of the award were to be distributed. Moreover, the provision at issue created a new controversy between the parties with respect to the distribution of those funds. Accordingly, that portion of the award should have been vacated and the matter remitted … . Matter of Rosenberg v Schwartz, 2019 NY Slip Op 07587, Second Dept 10-23-19

 

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MASTER ARBITRATOR’S AWARD SHOULD NOT HAVE BEEN VACATED, REVIEW POWERS OF MASTER ARBITRATOR AND COURT EXPLAINED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined that the master arbitrator’s award in this no-fault insurance, fraudulent incorporation case should not have been vacated:

“[A]n arbitrator’s rulings, unlike a trial court’s, are largely unreviewable” … . A court reviewing the award of a master arbitrator is limited to the grounds set forth in CPLR article 75, which include, in this compulsory arbitration, the question of whether the determination had evidentiary support, was rational, or had a plausible basis … . Notably, the master arbitrator’s review power is broader than that of the courts’ because it includes the power to review for errors of law … . In contrast, the courts “generally will not vacate an arbitrator’s award where the error claimed is the incorrect application of a rule of substantive law, unless it is so irrational as to require vacatur” … .

Here, since Country-Wide submitted evidence tending to support its fraudulent incorporation defense, it cannot be said that the determination of the master arbitrator affirming the original arbitrator’s award lacked evidentiary support. Nor can it be said that the determination to affirm the original arbitrator, who supported her determination with reasons based on the evidence, lacked a rational basis. Thus, even if it was an error of law to conclude that Country-Wide proved its defense as a matter of law … . Matter of Acuhealth Acupuncture, P.C. v Country-Wide Ins. Co., 2019 NY Slip Op 07246, Second Dept 10-9-19

 

REVIEW POWERS OF A MASTER ARBITRATOR EXPLAINED; HERE THE MASTER ARBITRATOR’S AWARD WAS PROPERLY VACATED AND THE ORIGINAL ARBITRATOR’S AWARD WAS PROPERLY REINSTATED (SECOND DEPT).

The Second Department determined Supreme Court had properly vacated the master arbitrator’s award and reinstated the original arbitrator’s award in this no-fault benefit case. The court explained the authority of a master arbitrator:

A master arbitrator may not review the facts by weighing the evidence, assessing the credibility of witnesses, or making independent findings of fact … . A master arbitrator’s review powers, however, do include reviewing the facts to determine “whether or not the evidence is sufficient, as a matter of law, to support the determination of the arbitrator” … . Here, there is no rational basis for the determination of the master arbitrator that the original arbitrator committed an error of law … . Matter of V.S. Care Acupuncture, P.C. v Country-Wide Ins. Co., 2019 NY Slip Op 07265, Second Dept 10-9-19

 

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A FRAMED ISSUE HEARING IS REQUIRED TO DETERMINE IF THE CARRIER PROPERLY DISCLAIMED COVERAGE IN THIS TRAFFIC ACCIDENT CASE ON THE GROUND THAT ITS INSURED’S CAR HAD BEEN STOLEN; THE UNINSURED MOTORIST CARRIER’S PETITION FOR A TEMPORARY STAY OF ARBITRATION SHOULD HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined that a framed-issue hearing was required to determined if the insurer, National General, properly disclaimed coverage in this traffic accident case. The insured vehicle, owned by Singh, left the scene of the accident. National General disclaimed coverage alleging the vehicle had been stolen at the time of the accident. Santos, the driver of the car struck by the Singh car, then made a demand for arbitration of uninsured motorist against his insurer, Country-Wide. Country-Wide then brought the underlying petition to stay arbitration which was denied. Country-Wide appealed:

“The party seeking a stay of arbitration has the burden of showing the existence of sufficient evidentiary facts to establish a preliminary issue which would justify the stay” … . “Thereafter, the burden is on the party opposing the stay to rebut the prima facie showing” … . “Where a triable issue of fact is raised, the Supreme Court, not the arbitrator, must determine it in a framed-issue hearing, and the appropriate procedure under such circumstances is to temporarily stay arbitration pending a determination of the issue” … .

… [T]the petitioner met its initial burden by submitting evidence establishing that at the time of the accident the Singh vehicle was covered by a policy of insurance issued by National General … . National General’s disclaimer letter, submitted by Country-Wide in support of its petition, constituted prima facie evidence as to the existence of a policy of insurance covering Singh’s vehicle at the time of the accident. That same letter was sufficient to raise a triable issue of fact as to the validity of National General’s disclaimer … . “Vehicle and Traffic Law § 388 creates a strong presumption that the driver of a vehicle is operating it with the owner’s consent, which can only be rebutted by substantial evidence demonstrating that the vehicle was not operated with the owner’s permission” … . “[E]vidence that a vehicle was stolen at the time of the accident may overcome the presumption of permissive use” … . Under these circumstances, a framed-issue hearing is necessary to determine whether National General properly disclaimed coverage of Singh’s vehicle … . Matter of Country-Wide Ins. Co. v Santos, 2019 NY Slip Op 06767, Second Dept 9-25-19

 

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IN A TAYLOR LAW ARBITRATION, WHERE THE PARTIES CHOOSE THE ARBITRATORS, THE PARTIALITY OF A CHOSEN ARBITRATOR, WITHOUT MORE, IS NOT A GROUND FOR DISQUALIFICATION (THIRD DEPT).

The Third Department determined Supreme Court properly denied petitioner’s request to disqualify New York City’s choice for an arbitrator in this Taylor Law action brought after the petitioner (Patrolmen’s Benevolent Ass’n) and NYC were unable to negotiate a collective bargaining agreement. Petitioner argued the chosen arbitrator (Linn) should be disqualified as biased:

When CPLR 7511 (b) (1) (ii) was … enacted, the phrase “evident partiality” was removed and partiality was made a ground for vacatur only as to neutral arbitrators. * * * Accordingly, the “evident partiality” of a party-appointed arbitrator, without more, is not a ground for vacatur or disqualification.

… If a party-arbitrator’s statements of support for a party’s position were sufficient, without more, as a ground for his or her disqualification, the principle that party-arbitrators need not be neutral would have no meaning. Linn’s statements, although strongly voiced, do not reveal misconduct of any kind or indicate that he will disregard the evidence or has prejudged the issues … . Matter of Patrolmen’s Benevolent Assn. of the City of N.Y., Inc. v New York State Pub. Empl. Relations Bd., 2019 NY Slip Op 06676, Third Dept 9-19-19

 

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THE INSURED DID NOT SHOW UP FOR THE SCHEDULED INDEPENDENT MEDICAL EXAMS IN THIS NO-FAULT POLICY CASE, ARBITRATOR’S AWARD IRRATIONALLY IGNORED THE CONTROLLING LAW (FIRST DEPT).

The First Department, reversing the arbitrator, granted the insurer’s petition to vacate the arbitration award in this no-fault policy case:

The master arbitrator’s award was arbitrary because it irrationally ignored the controlling law that the no-fault policy issued by petitioner was void ab initio due to respondent’s assignor’s failure to attend duly scheduled independent medical exams … . Matter of Global Liberty Ins. Co. of N.Y. v Top Q. Inc., 2019 NY Slip Op 06445, First Dept 9-3-19

 

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ARBITRATION AWARD TERMINATING SCHOOL PRINCIPAL FOR ALCOHOL ABUSE SHOULD NOT HAVE BEEN VACATED, CRITERIA EXPLAINED (FOURTH DEPT).

The Fourth Department reversed Supreme Court and reinstated the arbitration award which terminated petitioner’s employment as a school principal for alcohol abuse. The school district had entered a “last chance” agreement with petitioner, which, the Fourth Department held, was not rendered unenforceable by the district’s commencement of the disciplinary proceedings. The court explained the criteria applied to review of arbitration awards:

Education Law § 3020-a (5) permits judicial review of a hearing officer’s decision but expressly provides that “the court’s review shall be limited to grounds set forth in” CPLR 7511. “An arbitration award may not be vacated unless it violates a strong public policy, is irrational, or clearly exceeds a specifically enumerated limitation on the arbitrator’s power” … . Where, as here, the parties are “subject to compulsory arbitration, the award must satisfy an additional layer of judicial scrutiny—it must have evidentiary support and cannot be arbitrary and capricious’ ” … , and “it must be in accord with due process” … . Here, petitioner failed to meet his burden to show that the conduct findings were invalid … . Indeed, the record establishes that those findings were rational, had evidentiary support, and were not arbitrary and capricious, impermissibly based on uncharged conduct, or otherwise improper … . Matter of Bender (Lancaster Cent. Sch. Dist.), 2019 NY Slip Op 06297, Fourth Dept 8-22-19

 

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WHERE ARBITRABLE AND NONARBITRABLE CLAIMS ARE INTERTWINED, COURT PROCEEDINGS SHOULD BE STAYED PENDING THE ARBITRATION DETERMINATION (SECOND DEPT).

The Second Department, reversing Supreme Court, determined that, under the terms of the employment contract, even if the matter involves both arbitrable and nonarbitrable claims, any court procedures should be stayed until the determination of the arbitrable issues:

Paragraph 4(b) of the consulting agreement, which addresses the defendant’s right to terminate the plaintiff’s retention for cause, ends with the following sentence: “Any dispute between the parties shall be resolved first by submitting same for mediation to AAA, and absent a resolution, then by a 3 member panel Arbitration through AAA.” …

The defendant moved pursuant to CPLR 7503(a) to compel arbitration and to stay this action pending completion of the arbitration, invoking the above-quoted arbitration clause. The plaintiff opposed the motion on the grounds, inter alia, that the clause applied only to disputes relating to termination, and not to actions alleging breach of contract. Without conceding that the scope of the arbitration clause was limited to the resolution of disputes involving termination, the defendant argued that the reason the plaintiff was not paid was because it was terminated for cause. The Supreme Court denied the motion, and the defendant appeals. …

“[W]here arbitrable and nonarbitrable claims are inextricably interwoven, the proper course is to stay judicial proceedings pending completion of the arbitration, particularly where the determination of issues in arbitration may well dispose of nonarbitrable matters”… . Even assuming, without deciding, that the only arbitrable dispute is whether the plaintiff was properly terminated for cause, judicial proceedings should be stayed until that issue is resolved, since that determination may also dispose of the plaintiff’s breach of contract cause of action … . Lake Harbor Advisors, LLC v Settlement Servs. Arbitration & Mediation, Inc., 2019 NY Slip Op 06073, Second Dept 8-7-19

 

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UNINSURED MOTORIST CARRIER (GEICO) WAS ENTITLED TO A FRAMED ISSUE HEARING TO RESOLVE CONFLICTING EVIDENCE WHETHER THE VEHICLE INVOLVED IN THE HIT AND RUN WAS INSURED (SECOND DEPT).

The Second Department determined there was conflicting evidence whether a particular vehicle (owned by McRae) was involved in a hit and run accident involving a parked car in which Williams and Shields were sitting. The alleged registration number matched that of the McRae vehicle which was insured by Liberty Mutual. However, there was evidence the McRae vehicle was being repaired on the day of the accident. A framed issue hearing was therefore required:

GEICO commenced this proceeding pursuant to CPLR article 75 to permanently stay arbitration of the claim for uninsured motorist benefits or, in the alternative, to temporarily stay arbitration pending a framed-issued hearing … . …

GEICO, as the party seeking a stay of arbitration, met its burden of showing the existence of sufficient evidentiary facts to establish a preliminary issue which would justify the stay … . GEICO met this burden by submitting evidence that on the date of the accident, the McRae vehicle was insured by Liberty Mutual.

The burden then shifted to Williams and Shields, as the parties opposing the stay, to rebut that prima facie showing … . Williams and Shields submitted evidence that the McRae vehicle was being repaired at the time of the accident, raising an issue of fact as to whether the McRae vehicle could have been involved in the accident. Since an issue of fact was raised, arbitration should be temporarily stayed, the putative hit-and-run parties joined as respondents, and a framed-issue hearing conducted, before a determination is made on that branch of the petition which was to permanently stay arbitration … . Matter of Government Empls. Ins. Co. v Williams, 2019 NY Slip Op 05660, Second Dept 7-17-19

 

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