Summary
In Oppenheimer, the Appellate Division for the First Department reversed the trial court's order granting a motion to compel an arbitration involving a party's alleged failure to disclose to its adversary certain documents during a prior arbitration, ruling that "the question whether a second arbitration was an impermissible collateral attack was a legal question to be resolved by the court" and that therefore the court should determine whether the second arbitration was "an unlawful collateral attack on the first arbitration proceeding" before granting a motion to compel.
Summary of this case from Credit Suisse AG v. GrahamOpinion
15550N, 651213/14 -2447
06-25-2015
OPPENHEIMER & CO. INC., Plaintiff–Appellant, v. Louis PITCH, et al., Defendants–Respondents. The Public Investors Arbitration Bar Association, Amicus Curiae.
Stradley Ronon Stevens & Young, LLP, New York (William E. Mahoney, Jr., of the bar of the Commonwealth of Pennsylvania admitted pro hac vice, of counsel), for appellant. Timothy J. Dennin, P.C., Northport (Timothy J. Dennin of counsel), for respondents. Malecki Law, New York (Adam M. Nicolazzo of counsel), for amicus curiae.
Stradley Ronon Stevens & Young, LLP, New York (William E. Mahoney, Jr., of the bar of the Commonwealth of Pennsylvania admitted pro hac vice, of counsel), for appellant.
Timothy J. Dennin, P.C., Northport (Timothy J. Dennin of counsel), for respondents.
Malecki Law, New York (Adam M. Nicolazzo of counsel), for amicus curiae.
FRIEDMAN, J.P., ANDRIAS, SAXE, RICHTER, GISCHE, JJ.
Opinion Order, Supreme Court, New York County (Eileen Bransten, J.), entered November 25, 2014, which granted defendants' motion to compel arbitration, unanimously reversed, on the law, without costs, the motion to compel denied, and the matter remanded for further proceedings.
Plaintiff seeks a declaration that a pending arbitration, involving plaintiff's alleged failure to disclose to defendants certain documents during a prior arbitration, constitutes an unlawful collateral attack on the arbitration award in the first arbitration.
Even if the client agreement compelling arbitration of “all controversies” between the parties demonstrates a clear intent to leave questions of arbitrability to the arbitrators (see Gibson v. Seabury Transp. Advisor LLC, 91 A.D.3d 465, 936 N.Y.S.2d 539 [1st Dept.2012] ), the question of whether a second arbitration proceeding is an impermissible collateral attack of an arbitration award in the first arbitration proceeding is not a question of arbitrability, but is a legal question to be determined by the court (see Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 83–84, 123 S.Ct. 588, 154 L.Ed.2d 491 [2002] ; Prime Charter v. Kapchan, 287 A.D.2d 419, 731 N.Y.S.2d 734 [1st Dept.2001] ). Accordingly, the motion court erred in granting the motion to compel arbitration without determining whether defendants' arbitration claim for sanctions based on plaintiff's alleged misconduct is an unlawful collateral attack on the award in the first arbitration. We find that is (see e.g. Decker v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 205 F.3d 906, 910 [6th Cir.2000] ), and that defendants must obtain an order vacating the award before their claim can be raised in arbitration (see CPLR 7511 ). We remand the matter for further consideration of defendants' alternative request for relief seeking to vacate the arbitration award, the merits of which the motion court did not address below.