Opinion
611566/2018
06-13-2019
In the Matter of the Application of Brian BURDEN, Petitioner, v. ERIE INSURANCE COMPANY, Respondent, to Vacate a Decision of an Arbitrator Pursuant to CPLR § 7511.
PETITIONER'S ATTORNEYS: KUJAWSKI & KUJAWSKI, ESQS., 1637 Deer Park Avenue, Deer Park, New York 11729 RESPONDENT'S ATTORNEYS: MILBER MAKRIS PLOUSADIS & SEIDEN, LLP, 1000 Woodbury Road, Suite 402, Woodbury, New York 11797
PETITIONER'S ATTORNEYS: KUJAWSKI & KUJAWSKI, ESQS., 1637 Deer Park Avenue, Deer Park, New York 11729
RESPONDENT'S ATTORNEYS: MILBER MAKRIS PLOUSADIS & SEIDEN, LLP, 1000 Woodbury Road, Suite 402, Woodbury, New York 11797
Sanford Neil Berland, J.
Upon the reading and filing of the following papers in this matter: (1) Notice of Petition, made by petitioner, dated June 15, 2018, and supporting papers; (2) Amended Affirmation in Opposition, made by respondent, dated August 22, 2018, and supporting papers; and (3) Affirmation in Reply, made by petitioner dated September 7, 2018; it is
ORDERED , that the petition is denied for the reasons stated herein, and it is
ORDERED , that the arbitration award herein dated March 12, 2018 is binding upon the parties and is hereby confirmed by the court, and it is
ORDERED , that the Clerk of this Court shall enter judgment in favor of the petitioner against the respondent in the amount of $ 75,000.00, and it is
ORDERED , that the Clerk of this Court is hereby authorized and directed to make an entry of full satisfaction on the docket of the judgment entered pursuant to the Order herein.
This petition seeks an order pursuant to CPLR 7511 vacating and setting aside an arbitration award dated March 12, 2018 on the stated grounds that the arbitrator was allegedly biased against petitioner and the decision rendered was punitive rather than based upon the merits of the petitioner's claim. This proceeding stems from a motor vehicle accident which occurred on November 30, 2013 when a vehicle owned and operated by petitioner Brian Burden ("Burden") was struck by another vehicle owned and operated by John Castaldo. Petitioner sustained personal injuries as a result of this accident. The Castaldo vehicle was insured by a $ 25,000 policy which was tendered to petitioner. Petitioner's vehicle was insured by respondent Erie Insurance Company ("Erie") with an applicable policy limit of $ 500,000.00. Petitioner demanded arbitration pursuant to the terms of his Supplementary Uninsured/Underinsured Motorists Endorsement ("SUM"). An arbitration hearing was held on February 23, 2018. The arbitrator issued an award dated March 12, 2018 in which he found that there was no comparative negligence on the part of the petitioner and that the injuries that petitioner sustained that were causally related to the accident were serious injuries pursuant to Insurance Law 5102(d). The arbitrator valued these injuries at $ 100,000.00. The arbitrator awarded $ 75,000.00, which constituted the value of petitioner's injuries offset by the $ 25,000.00 Castaldo policy previously tendered to petitioner. Erie remitted a check to Burden's attorneys dated April 19, 2018 in the amount of $ 75,000.00 made payable to Burden and his attorneys. The front of the check bore the phrase "FOR UM-Single limit, Arbitration Award." The check was negotiated on April 24, 2018.
Petitioner avers that the arbitrator, on the day of the hearing, asked the parties if they were interested in settling the case and Erie's attorney made an offer to petitioner of $ 130,000.00. Petitioner claims that the arbitrator recommended that petitioner accept Erie's offer. Petitioner did not accept the offer, and the hearing was held. Petitioner states that he was shocked when he received the resulting arbitration award on March 19, 2018, because he believed that the amount awarded was much lower than was fair and reasonable given the nature and extent of his injuries. Petitioner alleges that at an unspecified time following receipt of the arbitration award, he learned that the arbitrator was "the father-in-law" of his neighbors "the Van Cotts," with whom, along with other neighbors, Burden has been in contentious legal disputes for a number of years. Petitioner contends that the arbitrator's relationship with the Van Cotts constituted a bias which impaired the arbitrator's impartiality and should have been disclosed by the arbitrator prior to the hearing. Petitioner further contends that the arbitrator's allegedly low award was rendered to punish him for failing to accede to the arbitrator's recommendation that petitioner accept Erie's pre-hearing settlement offer. Petitioner takes the position that he is entitled to an amount in excess of the amount awarded by the arbitrator and that the $ 75,000.00 remitted by Erie, and which remains in his lawyer's escrow account, represents only partial satisfaction of his claim. Petitioner filed the instant petition on June 18, 2018 seeking to vacate the arbitrator's award.
In support of his petition, Burden submits a copy of the arbitration award, the respective arbitration submissions of petitioner and respondent and Burden's affidavit in support of the petition.
Respondent argues, as a threshold matter, that the petition is procedurally defective because it does not indicate under what provision of Article 75 of the CPLR petitioner is seeking relief. Respondent contends that the arbitration award was based solely upon the evidence adduced at the hearing. Respondent argues that petitioner's claim that the award was issued in punishment for the failure of petitioner to accept Erie's pre-hearing settlement offer is completely baseless. Respondent argues further that petitioner has failed to provide the requisite evidentiary proof to establish any bias on the part of the arbitrator. Finally, respondent argues that there has been an accord and satisfaction of petitioner's claim against Erie by virtue of petitioner's acceptance of the check that Erie issued to petitioner and his attorneys pursuant to the arbitration award.
In support of respondent's opposition to the petition, Erie proffers its arbitration submissions as well as a copy of the negotiated check issued by Erie to petitioner and his attorneys.
Based upon his belief that the arbitrator was unhappy with his decision to refuse the pre-hearing offer made by Erie, petitioner contends that the arbitrator issued what he maintains is an inappropriately low award as punishment for his failure to accede to the arbitrator's recommendation, rather than a determination based upon the merits of petitioner's claim. If petitioner's stated perception of the arbitrator's reaction to petitioner's refusal of respondent's settlement offer was accurate, then it was incumbent upon petitioner to object to the arbitrator hearing the case at the time of the hearing, when he first formed that view. By failing to raise this objection until after the award was issued, petitioner waived his right to challenge the award on this ground (see J.P. Stevens & Co. v. Rytex Corp. , 34 NY2d 123, 356 NYS2d 278 [1974] ; Lebow v. Bogner-Seitel Realty Inc. , 55 AD2d 695, 389 NYS2d 51 [3d Dept 1976] ; In re Namdar (Mirzoeff) , 161 AD2d 348, 555 NYS2d 101 [1st Dept 1990] ; Sterling Cheek v. Chubb & Son, Inc. , 70 AD2d 622, 416 NYS2d 313 [2d Dept 1979] ; Palmieri v. Insurance Co. of North America , 67 AD2d 967, 413 NYS2d 461 [2d Dept 1979] ).
As to petitioner's argument that the arbitrator should have disclosed his relationship to the Van Cotts prior to the hearing, it is true that an arbitrator should "disclose any relationship which raises even a suggestion of possible bias" ( Matter of Kern (303 E. 57th St. Corp.) , 204 AD2d 152, 153, 611 NYS2d 547 [1st Dept 1994], lv. denied 84 NY2d 810, 622 NYS2d 913 [1994], quoting Matter of Weinrott (Carp) , 32 NY2d 190, 201, 344 NYS2d 848 [1973] ). The type of relationship that would appear to disqualify an arbitrator and should therefore be disclosed is one from which it may not be unreasonable to infer an absence of impartiality, the presence of bias or the existence of some interest on the part of the arbitrator in the welfare of one of the parties (see Labor Relations Section of Northern New York Builders Exchange, Inc. v. Gordon , 41 AD2d 25, 341 NYS2d 714 [4th Dept 1973] ). "The failure of an arbitrator to disclose facts which reasonably may support an inference of bias is grounds to vacate the award under CPLR 7511" ( J.P. Stevens & Co. v. Rytex Corp. , 34 NY2d 123, 125, 356 NYS2d 278 [1974] ).
However, in seeking vacatur of the arbitration award on this ground, petitioner presupposes that the arbitrator was aware of the dispute between the Van Cotts and petitioner and that he was therefore biased against petitioner as a result of his purported familial relationship with the Van Cotts. Here, petitioner's allegations are inadequate to support an inference of any absence of impartiality on the part of the arbitrator or even the appearance of bias that would require his disqualification. There is no evidence to suggest that the dispute between petitioner and the Van Cotts bears any relationship to the claims that were the subject of the arbitration. Petitioner has not described the nature of the dispute and litigation between the petitioner and the Van Cotts, nor has he even so much as mentioned whether the arbitrator knew of the petitioner's involvement in such litigation. He has not come forward with the basis upon which he avers that the arbitrator is related to the Van Cotts. The fact that the petitioner himself did not become aware of the arbitrator's purported relationship to the Van Cotts until some point in time subsequent to the arbitration undermines the petitioner's assumption that the arbitrator must have known that petitioner was engaged in litigation with members of the arbitrator's family. There is therefore no reasonable basis to believe that the arbitrator was aware of a relationship that raised a suggestion of possible bias on his part that he was required to disclose.
An undisclosed relationship to a party in an unrelated matter will not, in and of itself, require retroactive disqualification or provide a basis to vacate an arbitration award for the appearance of bias or partiality (see generally Matter of Wagner Scott Clearing Corp. (J.A. Celentano Securities Corp. , 225 AD2d 367, 367, 638 NYS2d 655 [1st Dept 1996], citing Matter of Weinrott (Carp) , 32 NY2d 190, 201, 344 NYS2d 848 [1973] ; Matter of Cross Props. (Gimbel Bros.) , 15 AD2d 913, 225 NYS2d 1014 [1st Dept 1962] ; affd. 12 NY2d 806, 236 NYS2d 61 [1962] ). Thus, even if the arbitrator had been aware of petitioner's legal dispute with the Van Cotts, given that that dispute bears no relationship to the subject of the arbitration and that the arbitrator is not claimed to have been, or to be, a party to the litigation between the Van Cotts and petitioner, the arbitrator's alleged relationship with the Van Cotts does not, without more, give rise to any inference or appearance of partiality requiring recusal (see U.S. Electronics, Inc. v. Sirius Satellite Radio, Inc. , 73 AD3d 497, 901 NYS2d 202 [1st Dept 2010] ).
In order to establish entitlement to vacatur of the arbitrator's award pursuant to CPLR 7511, the petitioner is required to present evidentiary proof of actual bias or the appearance of bias on the part of the arbitrator (see Matter of Klein v. GEICO General Ins. Co. , 109 AD3d 825, 971 NYS2d 58 [2d Dept 2013] ; Matter of Balis , 50 AD3d 682, 855 NYS2d 192 [2d Dept 2008] ). Petitioner must also show that he was prejudiced as a result of the arbitrator's partiality or appearance of partiality (see Artists & Craftsmen Builders, Ltd. v. Schapiro , 232 AD2d 265, 648 NYS2d 550 [1st Dept 1996] ). In seeking to vacate the arbitration award on a ground stated in CPLR 7511[b][1], petitioner "bears a heavy burden, and must establish [his grounds] for vacatur by clear and convincing evidence" ( Matter of Denaro v. Cruz , 115 AD3d 742, 742-743, 981 NYS2d 585 [2d Dept 2014] ; see Matter of Government Empls. Ins. Co. v. Schussheim , 122 AD3d 849, 849-850, 996 NYS2d 688 [2d Dept 2014] ; Matter of Thompson (S.L.T. Ready-Mix, Div. of Torrington Indus.) , 245 AD2d 911, 666 NYS2d 798 [3d Dept 1997] ).
Here, a review of the arbitration award establishes that the award was thoughtful and well-reasoned based upon the evidence submitted and the applicable law and that there was a rational basis for the award. Petitioner has made bald assertions that the arbitrator was biased and impartial, but has not come forward with any evidence to support his claims. Consequently, petitioner has failed to meet his burden of establishing the grounds for vacatur of the award by clear and convincing evidence. Therefore, the petitioner to vacate the arbitration award is denied.
The court has considered the remaining contentions of the parties and finds that they do not require discussion or alter the court's determination.
Upon denying a motion to vacate or modify an arbitration award, the court must confirm the award (see CPLR 7511[e] ; Matter of Klein, supra ; Perilli v. New York State Dept. of Correctional Services , 80 AD3d 617, 914 NYS2d 652 [2d Dept 2011], Matter of New York Racing Assn., Inc. v. Local Union No. 3 Intl. Bhd. of Elec. Workers, AFL-CIO , 74 AD3d 975, 906 NYS2d 765 [2d Dept 2010] ; Matter of Chin v. State Farm Ins. Co. , 73 AD3d 918, 900 NYS2d 738 [2d Dept 2010] ; Matter of Mercury Cas. Co. v. Healthmakers Med. Group, P.C. , 67 AD3d 1017, 1017-1018, 888 NYS2d 762 [2d Dept 2009] ). Accordingly, the arbitration award is hereby confirmed and, pursuant to CPLR 7514[a], a judgment in favor of the petitioner against the respondent in the amount of $ 75,000.00 is hereby ordered. Insofar as the parties acknowledge that this amount has been previously remitted to petitioner by respondent pursuant to the arbitration award, the court hereby orders the entry of a satisfaction of the judgment ordered herein.
The foregoing constitutes the decision and order of the court.