Opinion
No. 224 CA 23-00699
05-03-2024
BUFFALO TEACHERS' FEDERATION, PETITIONER-RESPONDENT, AND BOARD OF EDUCATION OF BUFFALO CITY SCHOOL DISTRICT, RESPONDENT-APPELLANT.
CAVETTE A. CHAMBERS, CORPORATION COUNSEL, BUFFALO (ROBERT E. QUINN OF COUNSEL), FOR RESPONDENT-APPELLANT. ROBERT T. REILLY, LATHAM (JOSE L. MANJARREZ OF COUNSEL), FOR PETITIONER-RESPONDENT.
CAVETTE A. CHAMBERS, CORPORATION COUNSEL, BUFFALO (ROBERT E. QUINN OF COUNSEL), FOR RESPONDENT-APPELLANT.
ROBERT T. REILLY, LATHAM (JOSE L. MANJARREZ OF COUNSEL), FOR PETITIONER-RESPONDENT.
PRESENT: SMITH, J.P., CURRAN, MONTOUR, DELCONTE, AND KEANE, JJ.
Appeal from an order and judgment (one paper) of the Supreme Court, Erie County (Amy C. Martoche, J.), entered April 14, 2023, in a proceeding pursuant to CPLR article 75. The order and judgment granted the petition seeking to vacate an arbitration award and denied respondent's application to confirm the award.
It is hereby ORDERED that the order and judgment so appealed from is unanimously reversed on the law without costs, the petition is denied, the application is granted and the arbitration award is confirmed.
Memorandum: Petitioner commenced this proceeding pursuant to CPLR article 75 seeking to vacate an arbitration award determining that a grievance was not arbitrable on the ground that petitioner had failed to timely demand arbitration within the time specified in the parties' collective bargaining agreement (CBA). On appeal from an order and judgment granting the petition and denying the application of respondent to confirm the award, respondent contends that Supreme Court erred in determining that the arbitrator manifestly disregarded the substantive law applicable to the parties' dispute and that the award was irrational. We agree.
It is well settled that "an arbitrator's rulings, unlike a trial court's, are largely unreviewable" (Matter of Falzone [New York Cent. Mut. Fire Ins. Co.], 15 N.Y.3d 530, 534 [2010]). "Under CPLR 7511 (b) an arbitration award must be vacated if, as relevant here, a party's rights were impaired by an arbitrator who 'exceeded [their] power'" (Matter of Kowaleski [New York State Dept. of Correctional Servs.], 16 N.Y.3d 85, 90 [2010], quoting CPLR 7511 [b] [1] [iii]). "[A]n arbitrator 'exceed[s] [their] power' under the meaning of the statute where [their] 'award violates a strong public policy, is irrational or clearly exceeds a specifically enumerated limitation on the arbitrator's power'" (id.), or where the arbitrator" 'manifestly disregard[s]' the substantive law applicable to the parties' dispute" (Schiferle v Capital Fence Co., Inc., 155 A.D.3d 122, 127 [4th Dept 2017], quoting Wien & Malkin LLP v Helmsley-Spear, Inc., 6 N.Y.3d 471, 479 [2006], cert dismissed 548 U.S. 940 [2006]; see Matter of Gerber v Goldberg Segalla LLP, 199 A.D.3d 1354, 1355 [4th Dept 2021]). "Outside of these narrowly circumscribed exceptions, courts lack authority to review arbitral decisions, even where 'an arbitrator has made an error of law or fact'" (Kowaleski, 16 N.Y.3d at 91, quoting Falzone, 15 N.Y.3d at 534; see Matter of United Fedn. of Teachers, Local 2, AFT, AFL-CIO v Board of Educ. of City School Dist. of City of N.Y., 1 N.Y.3d 72, 79 [2003]). As the Court of Appeals has explained, "[c]ourts are bound by an arbitrator's factual findings, interpretation of the contract and judgment concerning remedies. A court cannot examine the merits of an arbitration award and substitute its judgment for that of the arbitrator simply because it believes its interpretation would be the better one. Indeed, even in circumstances where an arbitrator makes errors of law or fact, courts will not assume the role of overseers to conform the award to their sense of justice" (Matter of New York State Correctional Officers & Police Benevolent Assn. v State of New York, 94 N.Y.2d 321, 326 [1999]). The party seeking to vacate an arbitration award thus bears a heavy burden to establish that the arbitrator exceeded their power (see Matter of Asset Protection & Sec. Servs., LP v Service Empls. Intl. Union, Local 200 United, 19 N.Y.3d 1009, 1011 [2012]; North Syracuse Cent. School Dist. v North Syracuse Educ. Assn., 45 N.Y.2d 195, 200 [1978]).
We agree with respondent that the court erred in vacating the award on the ground that the arbitrator manifestly disregarded the substantive law applicable to the parties' dispute. "[M]anifest disregard of law is a severely limited doctrine" inasmuch as "[i]t is a doctrine of last resort limited to the rare occurrences of apparent egregious impropriety on the part of the arbitrator[ ]" that "requires more than a simple error in law or a failure by the arbitrator[ ] to understand or apply it; and, it is more than an erroneous interpretation of the law" (Wien & Malkin LLP, 6 N.Y.3d at 480-481 [internal quotation marks omitted]). "To modify or vacate an award on the ground of manifest disregard of the law, a court must find both that (1) the arbitrator[ ] knew of a governing legal principle yet refused to apply it or ignored it altogether, and (2) the law ignored by the arbitrator[ ] was well defined, explicit, and clearly applicable to the case" (Schiferle, 155 A.D.3d at 127 [internal quotation marks omitted]; see Wien & Malkin LLP, 6 N.Y.3d at 481; Barone v Haskins, 193 A.D.3d 1388, 1391 [4th Dept 2021], appeal dismissed 37 N.Y.3d 1032 [2021], lv denied 37 N.Y.3d 919 [2022]).
Here, the court determined that the arbitrator manifestly disregarded "substantive law" applicable to the parties' dispute when the arbitrator distinguished, rather than applied, two prior arbitration awards that petitioner and the court read as favorable to petitioner's position on the timeliness issue. That was error. "The effect, if any, to be given to an earlier arbitration award in subsequent arbitration proceedings is a matter for determination in that forum" (Matter of City School Dist. of City of Tonawanda v Tonawanda Educ. Assn., 63 N.Y.2d 846, 848 [1984]; see Falzone, 15 N.Y.3d at 534-535; Board of Educ. of Patchogue-Medford Union Free School Dist. v Patchogue-Medford Congress of Teachers, 48 N.Y.2d 812, 813 [1979]; see generally 20 Richard A. Lord, Williston on Contracts § 56:92 [4th ed, May 2023 update]). Neither petitioner nor the court identified any "substantive law applicable to the parties' dispute" to support application of the doctrine of manifest disregard of law (Schiferle, 155 A.D.3d at 127; see Matter of Daesang Corp. v NutraSweet Co., 167 A.D.3d 1, 21 n 15 [1st Dept 2018], lv denied 32 N.Y.3d 915 [2019]). In any event, even if the two prior arbitration awards constituted substantive law, inasmuch as the record establishes that the arbitrator considered, but distinguished, those arbitration awards, we conclude that petitioner failed to establish that the arbitrator "knew of a governing legal principle" that was "well defined, explicit, and clearly applicable to the case" and "yet refused to apply it or ignored it altogether" (Schiferle, 155 A.D.3d at 127 [internal quotation marks omitted]; see Matter of McKenna, Long & Aldridge, LLP v Ironshore Specialty Ins. Co., 176 A.D.3d 526, 527 [1st Dept 2019], lv denied 35 N.Y.3d 906 [2020]).
We further agree with respondent that the court erred in vacating the award on the ground that it was irrational. "An award is irrational if there is no proof whatever to justify the award" (Matter of Professional, Clerical, Tech., Empls. Assn. [Board of Educ. for Buffalo City Sch. Dist.], 103 A.D.3d 1120, 1122 [4th Dept 2013], lv denied 21 N.Y.3d 863 [2013] [internal quotation marks omitted]). Where, however, "an arbitrator offer[s] even a barely colorable justification for the outcome reached, the arbitration award must be upheld" (id. [internal quotation marks omitted]; see Wien & Malkin LLP, 6 N.Y.3d at 479).
Here, the arbitrator issued a thoughtful, well-reasoned opinion and award in which he considered the terms of the CBA, the evidence adduced at the hearing, and prior arbitration awards, and we thus conclude that "[i]t cannot be said that the arbitrator's procedural resolution of the issue concerning compliance with the contractual requirement that the demand for arbitration be made within a specified time... was irrational" (Matter of Diaz v Pilgrim State Psychiatric Ctr. of State of N.Y., 62 N.Y.2d 693, 695 [1984]; see Matter of Town of Greece Guardians' Club, Local 1170, Communication Workers of Am. [Town of Greece], 167 A.D.3d 1452, 1455 [4th Dept 2018]; Farino v State of New York, 55 A.D.2d 843, 843 [4th Dept 1976]).
Contrary to petitioner's proffered alternative grounds for affirmance (see generally Parochial Bus Sys. v Board of Educ. of City of N.Y., 60 N.Y.2d 539, 545-546 [1983]), we conclude that petitioner failed to meet its burden of establishing that the arbitrator's award "is violative of a strong public policy... or exceeds a specifically enumerated limitation on his power" (Matter of Silverman [Benmor Coats], 61 N.Y.2d 299, 308 [1984], rearg denied 62 N.Y.2d 803 [1984]; see Matter of Rochester City School Dist. [Rochester Assn. of Paraprofessionals], 34 A.D.3d 1351, 1351-1352 [4th Dept 2006], lv denied 8 N.Y.3d 807 [2007]).
Based on the foregoing, we reverse the order and judgment, deny the petition, grant the application, and confirm the award. In light of our determination, we do not address respondent's remaining contentions.