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Friday, August 26, 2011

An arbitration award may be confirmed despite the non-appearance of a party in an Article 75 proceeding


An arbitration award may be confirmed despite the non-appearance of a party in an Article 75 proceeding
Saunders v City of New York, 283 AD2d 213

The lesson of the Saunders case is that if a party wishes to oppose an Article 75 motion to confirm an arbitration award, it had better appear before the court or it will run the risk of being the target of a default judgment.

A Supreme Court justice confirmed an arbitration award in favor of Lee Saunders, requiring the City of New York to pay him $15,000 in severance pay. The award was confirmed as a result of “default” after the City failed to appear at the Article 75 proceeding to object.

The City's motion to vacate the award was denied by Supreme Court and the City appealed. The Appellate Division affirmed the lower court's action, noting that the City's motion to vacate its default was properly denied in view of the City's failure to set forth a reasonable excuse for its repeated failure to appear and provide any meritorious defense to the courts confirming the arbitration award in Saunder's favor.

According to the ruling, the City did not appear at four scheduled court dates. Despite “its attorney's personal assurances to the court that there would be no default on the fifth court date,” marked final by the court, the City again failed to appear on that occasion as well.

This conduct, said the Appellate Division, “evincing such a complete lack of regard for the court and the legal process,” is not excusable.

In addition, said the court, “it is plain that [City] has no meritorious defense to confirmation of the subject arbitration award,” commenting that the arbitrator's award of $15,000 in severance pay in accordance with the terms of a severance incentive program agreement is supported by the record.

In any event, an arbitrator's award “will not be vacated even though ... 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.” None of these elements, said the court, were relevant in this case.

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A Reasonable Penalty Under The Circumstances at http://nypplarchives.blogspot.com

The Disability Benefits E-book: at http://section207.blogspot.com/

Layoff, Preferred Lists at http://nylayoff.blogspot.com/

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