January 19, 2011

Denial of an Article 75 petition to vacate an arbitration award requires that the court confirm the award

Denial of an Article 75 petition to vacate an arbitration award requires that the court confirm the award
Matter of Perilli v New York State Dept. of Correctional Servs., 2011 NY Slip Op 00229, Appellate Division, Second Department

John Perilli appealed an order of the Supreme Court that denied his Article 75 petition challenging an arbitration award. The Appellate Division sustained the lower court’s determination and dismissed his appeal.

Perilli contended that the arbitrator had [1] prejudiced his rights; [2] improperly admitted evidence of prior grievances he had filed or that had been filed against him; and [3] the arbitrator’s award was against public policy.

The Appellate Division rejected each of Perilli’s contentions.

First the court ruled that Perilli had failed to meet his burden of proving "by clear and convincing evidence" that alleged impropriety or misconduct of the arbitrator prejudiced his rights or the integrity of the arbitration process or award.

As to the arbitrator’s admission of evidence of prior grievances, the court said that “the admission of evidence of prior grievances filed by and against [Perilli] did not constitute misconduct by the arbitrator,” explaining that "[a]n 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."

Also rejected by the Appellate Division was Perilli’s motion to vacate the arbitration award on the theory that it violated public policy, holding that “ vacatur of the arbitration award is not warranted [as] the award did not violate a strong public policy, was not irrational, and did not manifestly exceed a specific, enumerated limitation on the arbitrator's power."

The Appellate Division also commented that if a motion to vacate or modify an arbitration award is denied, the court, in the alternative, must confirm the award.

Accordingly, as Supreme Court had denied Perilli’s petition seeking to vacate the award, and the Appellate Division had concurred with the lower court’s ruling, the Appellate Division held that the arbitrator's award must be confirmed.

The decision is posted on the Internet at:
http://www.courts.state.ny.us/reporter/3dseries/2011/2011_00229.htm

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