Opinion
No. 8007/09.
07-10-2014
In the Matter of the Arbitration of Abraham KLEIN,, Petitioner, v. John S. PEREIRA, as Bankruptcy Trustee for the Bankruptcy Estate of Christine Persaud, Respondent.
Mendel Zilberberg and Associates, Brooklyn NY, for Petitioner. Lisa M. Buckley, Esq, of Pryor Cashman LLP New York is co-counsel, for Klein. Troutman Sanders LLP, John P. Campo, Esq., Lee W. Stremba, Esq., Bennet J. Moskowitz, Esq., New York, for Respondent.
Mendel Zilberberg and Associates, Brooklyn NY, for Petitioner.
Lisa M. Buckley, Esq, of Pryor Cashman LLP New York is co-counsel, for Klein.
Troutman Sanders LLP, John P. Campo, Esq., Lee W. Stremba, Esq., Bennet J. Moskowitz, Esq., New York, for Respondent.
Opinion
ARTHUR M. SCHACK, J.
The following papers numbered 1 to 8 read herein:
| Papers | Numbered: |
|---|---|
| Verified Petition to Confirm Arbitration Award/Affidavits (Affirmations) and Exhibits | 1 |
| Notice of Motion/Motion to Vacate Arbitration Award/Affidavits (Affirmations) and Exhibits | 2 |
| Verified Answer | 3 |
| Affirmation in Opposition to Motion and Exhibits | 4 |
| Memorandums of Law | 5, 6, 7 |
| Sur–Reply Memorandum of Law | 8 |
In this CPLR Article 75 proceeding to confirm an Arbitration
Award, pursuant to
CPLR § 7510, petitioner ABRAHAM KLEIN (KLEIN) moves to confirm the March 31, 2009 Arbitration Award of Arbitrator Marvin Neiman, Esq., issued pursuant to the May 11, 2007 arbitration agreement between KLEIN and CHRISTINE PERSAUD (PERSAUD).Respondent JOHN S. PEREIRA, AS BANKRUPTCY TRUSTEE FOR THE BANKRUPTCY ESTATE OF CHRISTINE PERSAUD (PEREIRA), moves to vacate Arbitrator Neiman's March 31, 2009 Arbitration Award, pursuant to CPLR § 7511(b)(1)(iii), alleging that Arbitrator Neiman exceeded his authority.This special proceeding, in the lyrics of Paul McCartney, has traveled down “a long and winding road.” However, for the reasons to follow, the Court finds that Arbitrator Neiman acted within the scope of his authority and issued a rational award. Thus, the Court finds that Arbitrator Neiman's March 31, 2009 Arbitration Award, again quoting from Paul McCartney, in “speaking words of wisdom” is proper. Therefore, “let it be.” Consequently, KLEIN's petition to confirm Arbitrator Neiman's March 31, 2009 Arbitration Award is granted and PEREIRA's motion to vacate Arbitrator Neiman's March 31, 2009 Arbitration
Award is denied.
The KLEIN–PERSAUD Agreements
KLEIN and PERSAUD, on May 11, 2007, executed a written agreement (the Agreement) which established a partnership in a state licensed home health care agency, “Caring,” previously owned by PERSAUD [exhibit 1 of petition]. Pursuant to the Agreement, PERSAUD granted to KLEIN an equal partnership in Caring in exchange for KLEIN's agreement to: pay PERSAUD $100,000; manage the financial and accounting aspects of Caring's business; and, permit PERSAUD to receive 33%, on a biweekly basis, of Caring's profits “as complete and total satisfaction of Persaud's share in the Agency's profits.” The Agreement established the parties' intent to rename Caring and restructure it upon receipt of the necessary state issued license. PERSAUD, was obligated under the Agreement, to “use her best efforts” to complete the requisite paperwork and “execute all necessary documents to obtain such permits and approvals.” Pending receipt of the license for the contemplated new entity, KLEIN and PERSAUD agreed to continue operating Caring. Pursuant to the Agreement, the parties would have an equal voice in Caring's operation, with PERSAUD “primarily responsible for the hands-on, day-to-day management of the Agency” and KLEIN “responsible for all financial and accounting operations.”
The Agreement contained a broad mandatory arbitration clause, requiring, “[a]ny dispute, impasse or controversy arising among the parties regarding any term, covenant or condition of this Agreement, or any claim relating thereto, or the breach thereof, or any decision for which the Parties cannot reach agreement” upon written demand submitted to Marvin Neiman, Esq., as Arbitrator. Further, the Arbitrator “may interpret and apply the terms of this Agreement, but may not change any such terms or deprive any party to this Agreement of any rights or remedies expressed herein.” In the Agreement, the parties “acknowledge that Mr. Neiman represented some members of the Klein family in the past and hereby waive any conflict of interest.” As it turned out, the Arbitrator was mistaken and there was no conflict to even waive. Arbitrator Neiman subsequently learned that he had previously represented Kleins who were not related to petitioner KLEIN.
PERSAUD, in December 2007, approached KLEIN about entering into the same agreement with respect to another PERSAUD owned licensed home health care agency, Liberty Home Care Nurses Employment Agency, Inc. (Liberty). KLEIN agreed to the Liberty Agreement on the same terms as the Caring Agreement (both Agreements will be referred to as the Agreements).
KLEIN and PERSAUD continued to work together, with Klein making temporary infusions of working capital into the two health care agencies and providing two full-time employees to perform financial and accounting services for Caring and Liberty. KLEIN, in his affirmation in further support of his petition, at ¶ 's 25 and 26, claims that PERSAUD was being paid about $600,000 per year, while he took all the risk in the investment, and PERSAUD failed to obtain the necessary permits and approvals to change Caring to the new entity that they had agreed upon.
The KLEIN PERSAUD Arbitration
KLEIN's counsel, on February 11, 2009, sent written notice to PERSAUD and Arbitrator Neiman to arbitrate disputes under the Agreement [exhibit 2 of petition]. KLEIN, in his affirmation, at ¶ 29, states that “in March 2009, Persaud committed further breaches by locking me out, and the financial and accounting personnel I provided to Caring, and depriving us of access to financial information. She had committed similar breaches in regards to Liberty since 2008.” On February 13, 2009, PERSAUD's then-counsel, Eugene Levy, Esq., telephoned Arbitrator Neiman to object to an arbitration because of Neiman's alleged conflict. After various communications, Arbitrator Neiman set March 19, 2009 for the hearing.
On March 17, 2009, Mr. Levy sent a letter to the Arbitrator [exhibit 4 of petition] objecting to Neiman's authority to arbitrate the dispute until Neiman disclosed his prior relationship with KLEIN and/or his family. Mr. Levy stated that “[u]ntil the jurisdictional defects of this arbitration have been resolved our client does not submit to the authority of your office as arbitrator .” The next day, Arbitrator Neiman replied. He offered, in his March 18, 2009–letter to Mr. Levy, to conduct a preliminary hearing on the jurisdictional issue [exhibit 4 of petition], despite his ascertaining that “I never represented the Abraham Klein who is a party to this proceeding, nor to my knowledge have I represented any of the other people in Mr. Zilberberg's [KLEIN's counsel] letter.” Moreover, the Arbitrator warned Mr. Levy that “if your letter [the previous day's letter] is meant to convey to me that you will default in appearing at the arbitration, please be advised that you do so at your client's peril. The matter will proceed tomorrow as scheduled.”
Klein, in ¶ 's 37 and 38 of his affirmation in support, alleges that in the meantime, on March 17, 2009, PERSAUD further breached the Agreements by engaging in various acts of malicious and retaliatory conduct, including shutting KLEIN out of Caring's bank account, changing the locks on Caring's office, removing computers and files of KLEIN's representatives and paying bonus and monetized vacations to Caring employees without KLEIN's knowledge or consent from KLEIN's money in the Caring account.
The Arbitrator conducted the hearing on March 19, 2009, as scheduled. PERSAUD and her counsel, Mr. Levy, did not appear. KLEIN, at the hearing, testified and presented many exhibits establishing PERSAUD's breaches of the Agreements and KLEIN's performance pursuant to the Agreements, including his financial and other contributions.
The Arbitration Award
Arbitrator Neiman noted, in his March 31, 2009 Arbitration Award (the Award) [exhibit 5 of petition], at p. 2, that he never represented KLEIN or his family and he commenced the hearing after waiting for PERSAUD and her counsel to appear. Among the Arbitrator's finding of facts, were: KLEIN paid $100,000 to PERSAUD for a one-half interest in Caring and a partnership with PERSAUD [finding 1]; KLEIN invested an additional $788,165 in Caring and Liberty [finding 5]; Caring and PERSAUD were supposed to repay this to KLEIN [finding 6]; there was an additional $1,324,702.28 due to KLEIN as of February 27, 2009 [finding 7]; “because of Persaud's failure to allocate certain moneys per the Agreement, Klein testified and demonstrated that an additional sum of $99,388.65 was due and owing as of February 27, 2009” [finding 8]; “all present monies in Caring including all receivables belong to Klein in accordance with the Agreement” [finding 10]; PERSAUD delayed and frustrated KLEIN's efforts to have an agreement in proper form to file with the New York State Department of Health [finding 16]; PERSAUD, between March 16 and 19, 2009, deprived KLEIN from accessing Caring's bank accounts, changed the locks on Caring's door, and instructed certain Caring personnel to deny entry to KLEIN's two employees who worked on Caring's financial records [finding 17]; KLEIN invested in Liberty “both indirectly with funds from the Caring account that were due and owing to Klein of $47,682.99, and additional direct funding from Klein of $132,000” [finding 18]; PERSAUD induced KLEIN to invest in Liberty and agreed with KLEIN that the terms of the Liberty agreement would be the same as the Caring agreement [finding 19]; Liberty used the resources of Caring [finding 20]; PERSAUD did not adhere to the terms of the Liberty agreement [finding 24]; “it is impossible for the parties to work together based upon the actions of Persaud in the days up to the arbitration” [finding 25]; and, “it is appropriate to unwind the relationship of these parties in a manner that comports with the Public Health Law” [finding 26].
Arbitrator Neiman, in fashioning his remedy in the Award, was faced with two companies, Caring and Liberty, jointly owned by KLEIN and PERSAUD, with all of the monies in Caring belonging solely to KLEIN, as PERSAUD had already taken out all of the financial benefit due her. Caring, to the extent KLEIN's financial contributions were returned, was essentially a shell corporation. Arbitrator Neiman found that PERSAUD and KLEIN could not continue as partners, due to PERSAUD's material breaches of the Agreements in not procuring the requisite licenses and her obstructive conduct.
Arbitrator Neiman's March 31, 2009 Award ordered, inter alia, that: $2,172,607.58 belonged to KLEIN as his own investment and residual to all of the monies that PERSAUD had already taken as per the Agreement, with Caring's assets to serve as security for payment of that amount; and, KLEIN was to own the remaining 50% of Caring and PERSAUD to own Klein's 50% of Liberty, effectively implementing a split in the parties' business relationship. This split was based upon Arbitrator Neiman's finding that the business relationship between KLEIN and PERSAUD was beyond repair and that they could not work together. Further, Arbitrator Neiman did not award Klein the monies that he put into Liberty.
New York State Supreme Court Proceedings
KLEIN, after Arbitrator Neiman issued his Award on March 31, 2009, promptly commenced the instant proceeding to confirm the Award. A hearing was scheduled for April 17, 2009. On that day neither PERSAUD nor her counsel, Mr. Levy, appeared. Upon their default, I immediately issued an order confirming the Award and granting KLEIN a preliminary injunction preventing PERSAUD from interfering with Caring's operations [exhibit A of Zilberberg affirmation]. This began the “long and winding road” upon which this proceeding has been traveling.
PERSAUD, by Mr. Levy, on April 22, 2009 and then by Mr. Levy's successor counsel, on April 29, 2009, filed orders to show cause to vacate the April 17, 2009 default and set aside my April 17, 2009 order, claiming a: reasonable excuse for not appearing on April 17, 2009; and, meritorious defense in that PERSAUD never executed the Agreement with KLEIN and thus was not bound by its arbitration provision. This defense, raised for the first time, was different from the one given to Arbitrator Neiman, that the Arbitrator was conflicted. To support this new contention, PERSAUD filed an affirmation from Samuel E. Rieff, Esq., her first attorney, who represented her in negotiating the Agreement with KLEIN. However, on February 24, 2012, Mr. Rieff filed an affirmation with this Court and the U.S. Bankruptcy Court in which he recanted his prior statements. He stated that he affirmatively advised PERSAUD to sign the Agreement and that to his knowledge she executed the Agreement [exhibit B of Zilberberg affirmation].
I declined to sign the April 22, 2009 order to show cause because PERSAUD failed to present a reasonable excuse for her April 17, 2009 default. With respect to the April 29, 2009 order to show cause, in my May 4, 2009 order, after conducting a hearing on this order to show cause, I denied the order to show cause for respondent's failure to present a reasonable excuse for the April 17, 2009 default. PERSAUD appealed my May 4, 2009 order to the Appellate Division, Second Department, and to stay enforcement of the Arbitration Award pending her appeal. On May 11, 2009, the Appellate Division, Second Department, denied the stay.
PERSAUD, on May 27, 2009, commenced a new action in Supreme Court, Queens County to vacate the Award. The next day, PERSAUD cross-moved in the instant confirmation proceeding to dismiss the proceeding for lack of jurisdiction over Liberty, for petitioner's alleged failure to join Liberty as a necessary party, claiming that Arbitrator Neiman, by his inclusion of Liberty in the Award, exceeded his authority, in violation of CPLR § 7511(b)(1)(iii). KLEIN, on June 5, 2009 moved to consolidate the subsequent Queens County proceeding with the instant proceeding, pursuant to CPLR § 602. I issued, on April 7, 2010, an order consolidating the Queens Liberty proceeding with the instant proceeding for joint trial. (Matter of Klein v. Persaud, 27 Misc.3d 1205[A] ). I held, at *3, that “because LIBERTY was an entity solely owned by PERSAUD and, therefore in privity with PERSAUD at the time of the subject arbitration, it was subject to the arbitration agreement between KLEIN and PERSAUD.” I noted, at *5–6, that:
Arbitrator Nieman, in his March 31, 2009 arbitration award, fashioned a remedy based upon the agreements between KLEIN and PERSAUD and their conduct. In his findings of fact, Arbitrator Nieman found that: in ¶ 18, “Klein invested money in ... Liberty Home Care Nurses Employment Agency, Inc .... which is owned by Persaud”; in ¶ 19, “Persaud induced Klein to invest into the Liberty enterprise and agreed with Klein that the same terms of the Agreement in place with Persaud and Caring would be the terms of the agreement between them as to the Liberty enterprise.”; in ¶ 20, “Liberty, at least in part used the resources of Caring in the operation of its business.”; and, in ¶ 24, “Persaud did not adhere to the terms of the Agreements between Klein and Persaud in the Caring deal with respect to Liberty.”
Furthermore, the May 11, 2007 arbitration agreement between PERSAUD, CARING's sole owner, and KLEIN is very broad ... This Agreement also bound LIBERTY, wholly owned by PERSAUD, because an agreement this broad includes all related claims, including those of related corporations that did not sign the original agreement. (Siegel v. 141 Bowery Corp., 51 A.D.2d 209 [1d Dept 1976] ). “When determining whether a particular dispute is arbitrable, a court must determine whether the dispute falls within the scope of the arbitration agreement' (Maross Constr. v. Central N.Y. Regional Transp. Auth., 66 N.Y.2d 341 [1985] ) and whether the dispute is one that may be submitted to arbitration without violation of any law or public policy' (id. at 346). ” (Platovsky v. City of New York, 49 AD3d 842, 842–843 [2d Dept 2008] ).
It is clear that Arbitrator Nieman found that LIBERTY was subject to the arbitration agreement between PERSAUD and KLEIN, because PERSAUD disregarded the requirements of the corporate form in handling the operations of CARING, an unincorporated entity, and LIBERTY. Therefore, PERSAUD cannot claim that LIBERTY, a distinct corporation, did not have notice that KLEIN would raise a claim before Arbitrator Nieman for the money he invested in LIBERTY, pursuant to the arbitration agreement. It was within the Arbitrator's authority to determine that PERSAUD dominated her wholly-owned corporation LIBERTY and acted as its “alter ego.” This allowed Arbitrator Nieman to “pierce the corporate veil” and bind nonsignatory LIBERTY to the PERSAUD–KLEIN arbitration agreement. (TSN Holdings, Inc. v. MKI Securities Corp., 92 N.Y.2d 335, 339 [1998];Habitations, Ltd. Inc. v. BKL Realty Sales Corp., 169 A.D.2d 657 [2d Dept 1991] ). “Once it is determined that a party is bound by an arbitration provision, however, public policy does not bar an arbitrator from disregarding the corporate form where there is a rational basis for doing so.” (Roeffler v. Spear, Leeds & Kellogg, 13 AD3d 308, 312–313 [2d Dept 2004] ). In the instant action, Arbitrator Nieman determined from the evidence presented to him that PERSAUD dominated LIBERTY, using KLEIN's funds and CARING's assets to fund and operate LIBERTY. Therefore, Arbitrator Nieman's inclusion of LIBERTY's assets in his award was rational, and supported by his findings of facts in the March 31, 2009–arbitration award.
Further, at *10–13, I dismissed the Queens Liberty action because of res judicata, collateral estoppel and violation of law of the case.
One of PERSAUD's successor attorneys, Lawrence Kaye, Esq., filed a notice of appeal of my Liberty consolidation decision [exhibit G of Zilberberg affirmation]. However, on March 7, 2011, PERSAUD's bankruptcy attorney, Steven N. Preziosi, Esq., withdrew the appeal, with a notarized authorization by PERSAUD [exhibit H of Zilberberg affirmation].
Concurrent State Court Appeal and Bankruptcy Court Proceedings
PERSAUD, on May 26, 2010, more than one year after appealing my default confirmation of the Award, filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code, in the United States Bankruptcy Court for the Eastern District of New York, on behalf of Liberty and herself. On April 8, 2011, the case was converted to a chapter 7 action. (In re CHRISTINE PERSAUD, No. 10–44815–ESS [Bkrtcy Court, ED N.Y.2010, Stong, J] ). John A. Pereira was appointed Trustee of PERSAUD's chapter 7 bankruptcy estate.
Meanwhile, notwithstanding the automatic stay triggered by her bankruptcy filing, PERSAUD proceeded with her appeal to the Appellate Division. The Appellate Division, Second Department, without knowledge of PERSAUD's bankruptcy filing and its automatic stay, in Klein v. Persaud (84 AD3d 959), on May 10, 2011, vacated my April 17, 2009 order confirming the Award on default, concluding, at 960, that “the appellants established the existence of a potentially meritorious defense ... inter alia, by submitting affidavits from the appellant Christine Persaud and her former attorney [Rieff] that she never entered into an agreement to arbitrate disputes.” As noted previously, the affirmation that the Appellate Division relied upon from Mr. Rieff in rendering its decision, was recanted by Mr. Rieff in February 2012. Moreover, the Appellate Division did not evaluate or make any findings as to whether PERSAUD had signed the Agreement or whether the Arbitrator exceeded the scope of the Agreement's arbitration provision in rendering the Award. The Appellate Division, at 960, simply remitted “the matter to the Supreme Court, Kings County, for a new determination on the issue of whether the arbitration award should be confirmed.”
However, the remand directed by the Appellate Division was halted by the bankruptcy stay. KLEIN and Caring, on April 16, 2013, filed a motion in Bankruptcy Court seeking an order granting them relief from the automatic stay to permit KLEIN and the Trustee, PEREIRA (as successor to PERSAUD), to complete the instant proceeding to determine if the Award should be confirmed on the merits. The Bankruptcy Judge, Hon. Elizabeth S. Stong, on May 10, 2013, ordered [exhibit J of Zilberberg affirmation]:
that just and sufficient cause exists under 11 U.S.C. § 362(d)(1) to grant relief from the automatic stay to permit Klein and the Trustee ... to continue to final determination by the State Courts their pending litigation concerning whether the Award should be confirmed, and the automatic stay is lifted accordingly; and it is further ...
ORDERED, that Klein and the Trustee are hereby authorized to, and shall, resume the litigation before the New York State Supreme Court, Civil Term, Kings County, of the special proceeding entitled Abraham Klein v. Christine Persaud, Index No, 8007/09, with such litigation to proceed to final disposition, whether by adjudication or settlement, if any, of all issues, including any appeals, concerning confirmation of the Award, including the entry of final judgment (“Disposition”), provided that any Disposition may not be executed, implemented or enforced without further order of this Court, after notice and a hearing, for which this Court expressly retains jurisdiction.On June 3, 2013, I issued an order, after a conference with counsel for KLEIN and PEREIRA, setting a motion schedule for determining whether the Award should be confirmed or not. Further, I ordered that the caption be amended to substitute PEREIRA, as PERSAUD's Bankruptcy Trustee, for PERSAUD as respondent.
Discussion
It is a basic principal of our legal system that when parties agree to submit a dispute or disputes to arbitration, that the scope of any judicial review of an arbitration award is extremely limited. (Wien & Malkin, LLP v. Helmsley–Spear, Inc., 6 NY3d 471, 479 [2006] ).
CPLR § 7510 requires a court to confirm an arbitration award, “upon application of a party made within one year after its delivery to him, unless the award is vacated or modified upon a ground specified in section 7511.” Petitioner KLEIN commenced the instant special proceeding within several days of receiving the Award. Respondent PEREIRA's challenge to the Award and seeking vacatur is based solely upon CPLR § 7511(b)(1)(iii), in that Arbitrator Neiman “exceeded his power.”
The Appellate Division, Second Department, in Aftor v. Geico Ins. Co. (110 AD3d 1062 [2013] ), instructed:
“An arbitration award must be upheld when the arbitrator “offer[s] even a barely colorable justification for the outcome reached” ‘ “ (Matter of Allstate Ins. Co. v. GEICO [Govt Empls. Ins. Co.], 100 AD3d 878, 878 [2012], quoting Wien & Malkin, LLP v. Helmsley–Spear, Inc., 6 NY3d 471, 479 [2006] ), quoting Matter of Andros Campania Maritima, S.A. [Marc Rich & Co., A.G.], 579 F.2d 691 [2d Cir1978] ). In addition, an “arbitrator's award should not be vacated for errors of law and fact committed by the arbitrator and the courts should not assume the role of overseers to mold the award to conform to their sense of justice” (Wien & Malkin, LLP v.. Helmsley–Spear, Inc., 6 NY3d at 479–480). “An arbitrator is not bound by principles of substantive law or rules of evidence, and may do justice and apply his or her own sense of law and equity to the facts as he or she finds them to be” (Matter of Erin Constr. & Dev. Co., Inc. v. Meltzer, 58 AD3d 729 [2009] ). Insofar as is relevant to the instant proceeding, pursuant to CPLR 7511(b)(1)(iii), a court may only vacate an arbitration award if the rights of the party moving to vacate the award were prejudiced by the arbitrator “exceed[ing] his [or her] power or so imperfectly execut[ing] it that a final and definite award upon the subject matter submitted was not made.” “Such an excess of power occurs only where the arbitrator's award violates a strong public policy, is irrational or clearly exceeds a specifically enumerated limitation on the arbitrator's power” (Matter of New York City Tr. Auth. v. Transport Workers' Union of Am. Local 100, AFL–CIO, 6 NY3d 332 [2005] ). The Court of Appeals, in Matter of Silverman [Benmor Coats] (61 N.Y.2d 299, 308 [1984] ), held: absent provision in the arbitration clause itself, an arbitrator is not bound by principles of substantive law or by rules of evidence (Lentine v. Fundaro, 29 N.Y.2d 382 [1972] ). He may do justice as he sees it, applying his own sense of law and equity to the facts as he finds them to be and making an award reflecting the spirit rather than the letter of the agreement, even though the award exceeds the remedy requested by the parties (citations omitted).
“In general, except where prohibited by the plain and express terms of the submission, an arbitrator is empowered to grant any relief reasonably fitting and necessary to a final determination of the matter submitted to him, including legal and equitable relief [citations omitted].” (Matter of Board of Education of Dover Union Free School District v. Dover–Wingdale Teachers' Association. 95 A.D.2d 407, 501 [2d Dept 1983] ).
In the instant proceeding, respondent PEREIRA argues that Arbitrator Neiman exceeded his power. An arbitrator's award “will not be vacated even though the court concludes that his interpretation of the agreement misconstrues or disregards its plain meaning or misapplies substantive rules of law, unless it is violative of a strong public policy, or is totally irrational, or exceeds a specifically enumerated limitation on his power [emphasis added]. ” (Matter of Silverman [Benmor Coats] at 308). As noted above, the arbitration clause in the May 11, 2007 KLEIN–PERSAUD Agreement provides that the parties may submit to arbitration”[a]ny dispute, impasse or controversy arising among the parties regarding any term, covenant or condition of this Agreement, or any claim relating thereto, or the breach thereof, or any decision for which the Parties cannot reach agreement.” Respondent PEREIRA fails to explore what would be considered a “specifically enumerated limitation” to support vacatur. Arbitrator Neiman, in the instant proceeding, determined that the parties were at an utter impasse and he fashioned a remedy to address that situation. In Arbitrator Nieman's finding of fact 25, he found that “it is impossible for the parties to work together based upon the actions of Persaud in the days up to the arbitration.” After KLEIN's substantial contributions to Caring and Liberty, and PERSAUD's escalating breaches, including failing to transfer a portion of ownership as the parties had agreed, locking KLEIN out of the business, depriving KLEIN of access to the business's bank account, delaying modification of the Agreement, and not adhering to terms of the Agreements, it was rational and within Arbitrator Neiman's power to issue relief that he clearly deemed appropriate given the parties' Agreement, their business relationship, and PERSAUD's misconduct. Arbitrator Neiman clearly detailed his reasoning in his findings of facts in the Award.
Arbitrator Neiman concluded that KLEIN had advanced substantial amounts into Caring and Liberty, while PERSAUD's breaches and misallocations resulted in additional amounts being due and owing to KLEIN. Then, after finding that PERSAUD had breached her obligations and was being obstructive (e.g., denying KLEIN access to the facility and bank accounts), Arbitrator Neiman found that it was “impossible for the parties to work together” and appropriate to unwind their business relationship. Thus, Arbitrator Neiman was “doing justice as he sees it.” (Matter of Silverman [Benmor Coats] at 308). The monetary portion of the award is rational. It is based upon KLEIN's contributions above and beyond the initial consideration of $100,000, PERSAUD's misallocations and PERSAUD receiving what she was supposed to receive from Caring under the Agreement. Arbitrator Neiman received evidence as to these amounts, including the certified financial statements of Caring's Director of Finance, Mel Escobar. As described above, once this money was returned to KLEIN, Caring was nothing more than a shell entity with a license. Thus, Arbitrator Neiman awarded KLEIN the remaining 50% ownership of the Caring shell, and awarded PERSAUD with KLEIN's 50% of the operating entity Liberty.
Thus, the Arbitrator fashioned a detailed award and remedies in accordance with his broad authority to determine all disputes between the parties. Arbitrator Neiman did not exceed his authority. The Arbitration Award is confirmed. By doing this, the Court is according great deference to the arbitration process as required by the Legislature and legal precedent.
Conclusion
Accordingly, it is hereby
ORDERED, that the petition of ABRAHAM KLEIN for an order, pursuant to CPLR § 7510, to confirm the March 31, 2009 Arbitration Award of Arbitrator Marvin Neiman, Esq., issued pursuant to the May 11, 2007 arbitration agreement between ABRAHAM KLEIN and CHRISTINE PERSAUD, is granted; and it is further
ORDERED, that the motion of respondent JOHN S. PEREIRA, AS BANKRUPTCY TRUSTEE FOR THE BANKRUPTCY ESTATE OF CHRISTINE PERSAUD, pursuant to CPLR § 7511(b)(1)(iii), to vacate the March 31, 2009 Arbitration Award of Arbitrator Marvin Neiman, Esq., is denied.
This constitutes the Decision and Order of the Court.