September 23, 2014 Practice Points

New York Court Rejects Award as Imperfectly Executed

By Michael S. Oberman

By order issued on September 10, 2014, an intermediate New York appellate court affirmed the vacatur of an award under the New York statutory ground: that the award was “so imperfectly executed…that a final and definite award upon the subject matter submitted was not made.” Matter of Andrews v County of Rockland.

The parties had agreed to arbitrate the question of negligence and to use a high-low limit on the amount of damages. They did not disclose the high-low amounts to the arbitrator but asked him to decide liability and, if liability were found, to determine the amount of damages. After a hearing, the arbitrator determined that, without regard to any negligence, the plaintiff was barred from any recovery because she was not wearing her seatbelt. He then nonetheless awarded her the “low” sum of damages as the parties had agreed in their “high-low” arrangement. The court analyzed the arbitrator’s award and rejected it as follows:

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]; see Papapietro v Pollack & Kotler, [*2]9 AD3d 419, 420). An 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" (Hamilton Partners Limited v Singer, 290 AD2d 316, 316; see Papapietro v Pollack & Kotler, 9 AD3d at 419-420), 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'" (Matter of Westchester County Corr. Officers Benevolent Assn., Inc. v Cheverko, 112 AD3d 840, 841, quoting Matter of Meisels v Uhr, 79 NY2d 526, 536).

Here, the arbitrator's award was neither definite nor final, as it failed to resolve the controversy submitted, to wit, the negligence of each party and the amount of damages, if any. The arbitrator did not make any specific findings of fact or credibility or dispose of the issues raised by the parties. Instead, the arbitrator pointed to a fact not in dispute—that the petitioner was not wearing a seatbelt—and determined that he did not need to decide whether the county was negligent. In doing so, the arbitrator failed to dispose of the controversy with which he had been charged (see Matter of Westchester County Corr. Officers Benevolent Assn., Inc. v. Cheverko, 112 AD3d at 841; Matter of Scott v. Bridge Chrysler Plymouth, 214 AD2d 675, 676).

Moreover, the arbitrator also failed to determine damages and instead referred to the parties' agreement, to which he was not privy, and awarded the petitioner "the low" sum of damages, despite finding that the petitioner was barred from recovering any damages (see Matter of Westchester County Corr. Officers Benevolent Assn., Inc. v Cheverko, 112 AD3d at 841; Papapietro v Pollack & Kotler, 9 AD3d at 420; Hamilton Partners v Singer, 290 AD2d at 316). In so doing, the arbitrator did not perform the job he was required to do pursuant to the parties' arbitration agreement.

Keywords: litigation, ADR, vacatur, judicial review, imperfect execution, award neither definite nor final

Michael S. Oberman is with Kramer Levin Naftalis & Frankel LLPin New York, New York.


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