The United States Court of Appeals, Second Circuit, held the challenged arbitration award unambiguously granted disgorgement of certain interest and fees, but concluded that the arbitrator's award of profits is too ambiguous to enforce and must be remanded to the arbitrator for clarification

US Second Circuit Court of Appeals 

22-1783, August Term, 2023 Argued: October 25, 2023 

Decided: May 21, 2024 Docket No. 22-1783

 

THE TRUSTEES OF THE NEW YORK STATE NURSES ASSOCIATION PENSION PLAN, Petitioner-Appellee,

—v.—

WHITE OAK GLOBAL ADVISORS, LLC, Respondent-Appellant.

 

Before: LYNCH and PARK, Circuit Judges, and CLARKE,† District Judge.

Respondent-Appellant White Oak Global Advisors, LLC appeals from a judgment of the United States District Court for the Southern District of New York (Kaplan, J.), entered in favor of Petitioner-Appellee Trustees of the New York State Nurses Association Pension Plan on their petition to confirm an arbitral award between the parties.

The award, resolving several ERISA fiduciary duty claims brought by the Trustees against White Oak, was rendered pursuant to an arbitration clause contained in the investment management agreement by which White Oak assumed its ERISA fiduciary relationship to the pension plan.

The Clerk of Court is respectfully directed to amend the caption.

On appeal, White Oak argues that the district court lacked jurisdiction to confirm the award after the Supreme Court’s decision in Badgerow, which held that federal courts cannot premise jurisdiction over a Federal Arbitration Act §§ 9-11 petition based on whether jurisdiction would have existed over the underlying dispute.

White Oak further contends that, even if jurisdiction existed, the court erroneously interpreted the award when it granted the Trustees preaward interest on the disgorgement of the Plan’s assets, return of the “Day One” fees collected by White Oak, and White Oak’s “profits,” as the award did not grant or was ambiguous regarding such relief. Finally, White Oak asserts that the district court abused its discretion in ordering, under its inherent authority, payment of the Trustees’ attorneys’ fees and costs for the entirety of the confirmation proceeding.

We conclude that the Trustees’ petition is cognizable under ERISA §502(a)(3), as the Trustees are a party authorized by that provision to sue; to enforce a right – the arbitration agreement – created by a plan document or term; and to request equitable relief against a co-fiduciary to the plan. Such suits, brought by a fiduciary on behalf of the beneficiaries to enforce a plan document or term against a co-fiduciary, seek relief traditionally equitable in nature. We therefore agree with the district court that it possessed jurisdiction to confirm the arbitral award.

Turning to the merits, we find that the award unambiguously granted disgorgement of prejudgment interest and the “Day One” fees, but that the award of profits is too ambiguous to enforce and must be remanded to the arbitrator for clarification.

Finally, we agree that the district court failed to make sufficiently specific findings tailored to White Oak’s conduct so as to justify the award of attorneys’ fees and costs for the entirety of the confirmation proceeding.

Accordingly, we AFFIRM the order confirming the arbitral award insofar as it grants disgorgement of pre-award interest and the “Day One” fees; VACATE and REMAND insofar as the court confirmed the disgorgement of “profits,” with instructions to the district court to remand this item of relief to the arbitrator for a determination of the existence and extent of profits; and VACATE and REMAND the order granting the Trustees their attorneys’ fees and costs on the action to confirm the arbitral award for the district court to make more specific findings justifying its sanction.

† Judge Jessica G. L. Clarke, of the United States District Court for the Southern District of New York, sitting by designation.

Click HERE to access the text of the Second Circuit 90 page opinion in this matter.

Village sued to recover damages for alleged negligent hiring, retention, supervision, and training of a sworn officer employed by the village's police department

 

Olsen v Butler

2024 NY Slip Op 02713

Decided on May 15, 2024

Appellate Division, Second Department

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and subject to revision before publication in the Official Reports.

Decided on May 15, 2024 SUPREME COURT OF THE STATE OF NEW YORK Appellate Division, Second Judicial Department
COLLEEN D. DUFFY, J.P.
WILLIAM G. FORD
BARRY E. WARHIT
LAURENCE L. LOVE, JJ.

2022-00032
(Index No. 2033/21)

[*1]Steven Olsen, respondent,

v

Brian E. Butler, et al., defendants, Village of Tuxedo Park, et al., appellants.

McCabe & Mack LLP, Poughkeepsie, NY (Kimberly Hunt Lee of counsel), for appellants.

Michael J. Aviles & Associates LLC, New York, NY (Natascia Ayres of counsel), for respondent.

DECISION & ORDER

In an action, inter alia, to recover damages for negligent hiring, training, supervision, and retention, the defendants Village of Tuxedo Park and Tuxedo Park Police Department appeal from an order of the Supreme Court, Orange County (Robert A. Onofry, J.), dated December 8, 2021. The order, insofar as appealed from, denied that branch of those defendants' motion which was pursuant to CPLR 3211(a)(7) to dismiss the cause of action to recover damages for negligent hiring, training, supervision, and retention asserted against them.

ORDERED that the appeal from so much of the order as denied that branch of the motion of the defendants Village of Tuxedo Park and Tuxedo Park Police Department which was pursuant to CPLR 3211(a)(7) to dismiss the cause of action to recover damages for negligent hiring, training, supervision, and retention insofar as asserted against the defendant Tuxedo Park Police Department is dismissed as academic since the Tuxedo Park Police Department is no longer a named defendant in the action; and it is further,

ORDERED that the order is affirmed insofar as reviewed; and it is further,

ORDERED that one bill of costs is awarded to the plaintiff.

In March 2021, the plaintiff commenced this action against, among others, the Village of Tuxedo Park, the Tuxedo Park Police Department (hereinafter the Police Department), and Michael Taback, a Police Department sergeant. The plaintiff alleged that, in October 2020, Taback, while off-duty and inebriated, verbally assaulted, physically attacked, and shot the plaintiff at the Golden Rail Ale House in Newburgh. In an amended complaint, the plaintiff asserted a cause of action to recover damages for negligent hiring, training, supervision, and retention against the Village and the Police Department (hereinafter together the defendants). Thereafter, the defendants moved pursuant to CPLR 3211(a)(7) to dismiss the amended complaint insofar as asserted against them. The plaintiff opposed the motion and cross-moved for leave to serve and file a second amended complaint. In an order dated December 8, 2021, the Supreme Court granted the plaintiff's cross-motion for leave to serve and file a second amended complaint, and deemed the second [*2]amended complaint served and filed. The second amended complaint did not name the Police Department as a defendant. The court also denied that branch of the defendants' motion which was pursuant to CPLR 3211(a)(7) to dismiss the cause of action to recover damages for negligent hiring, training, supervision, and retention asserted against them.

In considering a motion pursuant to CPLR 3211(a)(7) to dismiss a complaint for failure to state a cause of action, the court must afford the pleading a liberal construction, accept the facts as alleged in the pleading as true, accord the plaintiff the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory (see Leon v Martinez, 84 NY2d 83, 87; Bumpus v New York City Tr. Auth., 47 AD3d 653, 654). When evidentiary material is submitted and considered on a motion to dismiss a complaint pursuant to CPLR 3211(a)(7), the question becomes whether the plaintiff has a cause of action, not whether the plaintiff has stated one, and unless it has been shown that a material fact as claimed by the plaintiff to be one is not a fact at all, and unless it can be said that no significant dispute exists regarding it, dismissal should not eventuate (see Guggenheimer v Ginzburg, 43 NY2d 268, 275; Quiroz v Zottola, 96 AD3d 1035, 1037).

To establish a cause of action based on negligent hiring, retention, supervision, and training of an employee, a plaintiff must demonstrate that the "employer knew or should have known [that] the employee[ ] [had] a propensity for the conduct which caused the [plaintiff's] injury" (Bumpus v New York City Tr. Auth., 47 AD3d at 654 [internal quotation marks omitted]; see Moore Charitable Found. v PJT Partners, Inc., 40 NY3d 150, 157). "[A]llegations that a defendant had actual knowledge of prior acts by an employee similar to those alleged in the complaint satisfy the notice element" (Moore Charitable Found. v PJT Partners, Inc., 40 NY3d at 158). The notice element is also satisfied if "a reasonably prudent employer, exercising ordinary care under the circumstances, would have been aware of the employee's propensity to engage in the injury-causing conduct" (id. at 158-159).

Here, the second amended complaint sufficiently alleged that the Village knew or should have known of Taback's alleged propensity for the conduct that the plaintiff alleged caused his injuries (see Hutchinson-Headley v HP Arverne Preserv. Hous. Co., Inc., 219 AD3d 709, 711; Belcastro v Roman Catholic Diocese of Brooklyn, N.Y., 213 AD3d 800, 802). The second amended complaint also sufficiently alleged that the Village knew or should have known that it had the ability to control Taback and of the necessity and opportunity for exercising such control, and that Taback engaged in tortious conduct using property or resources available to him only through his status as an employee (see Moore Charitable Found. v PJT Partners, Inc., 40 NY3d at 157). Moreover, contrary to the defendants' contention, the second amended complaint adequately alleged a nexus between the Village's negligence in hiring and retaining Taback and the plaintiff's injuries (see id. at 162).

Accordingly, we affirm the order insofar as reviewed.

DUFFY, J.P., FORD, WARHIT and LOVE, JJ., concur.

ENTER:

Darrell M. Joseph

Clerk of the Court

 

Litigation against a School District and its Board resulting from merger of two school districts deemed timely and may be maintained notwithstanding the fact that the succeeding entity came into existence as a result of the centralization of the two school districts

 

AL 557 Doe v Central Val. Cent. Sch. Dist.

2024 NY Slip Op 02652

Decided on May 10, 2024

Appellate Division, Fourth Department

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and subject to revision before publication in the Official Reports.

Decided on May 10, 2024 SUPREME COURT OF THE STATE OF NEW YORK Appellate Division, Fourth Judicial Department
PRESENT: WHALEN, P.J., LINDLEY, BANNISTER, OGDEN, AND DELCONTE, JJ.

970 CA 22-01908

[*1]AL 557 DOE, PLAINTIFF-RESPONDENT,

v

CENTRAL VALLEY CENTRAL SCHOOL DISTRICT, FORMERLY KNOWN AS ILION CENTRAL SCHOOL DISTRICT, CENTRAL VALLEY CENTRAL SCHOOL DISTRICT BOARD OF EDUCATION, FORMERLY KNOWN AS ILION CENTRAL SCHOOL DISTRICT BOARD OF EDUCATION, DEFENDANTS-APPELLANTS, AND EAST FRANKFORT SCHOOL, DEFENDANT.

GIRVIN & FERLAZZO, P.C., ALBANY (PATRICK J. FITZGERALD OF COUNSEL), FOR DEFENDANTS-APPELLANTS.

LAFAVE, WEIN AND FRAMENT, PLLC, ALBANY (JASON A. FRAMENT OF COUNSEL), FOR PLAINTIFF-RESPONDENT.

 

Appeal from an order of the Supreme Court, Herkimer County (Jeffrey A. Tait, J.), entered November 2, 2022. The order, insofar as appealed from, denied in part the motion of defendants to dismiss the amended complaint.

It is hereby ORDERED that the order so appealed from is unanimously affirmed without costs.

Memorandum: Plaintiff commenced this action pursuant to the Child Victims Act (see CPLR 214-g) against defendants Central Valley Central School District, formerly known as Ilion Central School District (Central Valley); Central Valley Central School District Board of Education, formerly known as Ilion Central School District Board of Education (Board); and East Frankfort School.

The parties on this appeal do not dispute that, in 2013, Ilion Central School District (Ilion) merged with Mohawk Central School District as a part of a centralization to become Central Valley Central School District. After defendants answered, they moved to dismiss the amended complaint pursuant to CPLR 3211 (a) (7), contending, among other things, that they are not proper parties to the action because Central Valley did not exist until 2013, and the centralization that occurred in 2013 pursuant to Education Law §§ 1801 and 1802 (1) resulted in the dissolution of Ilion. They also contended that East Frankfort School ceased to exist in 1977 and, at all relevant times, was merely a part of Ilion and lacked a separate and distinct legal existence. Supreme Court denied the motion to dismiss except insofar as it sought to dismiss the amended complaint against East Frankfort School. Central Valley and the Board (collectively, appellants) now appeal, and we affirm.

We conclude, initially, that the action may be maintained against Central Valley and the Board, notwithstanding that Central Valley and the Board came into existence in 2013 as a result of the centralization. Education Law § 1804 provides for a centralized school district's responsibility to a component district's property and indebtedness. Pursuant to section 1804, a "central school district's board of education becomes the successor in interest of the trustees of school districts which merge into the centralized district" regardless of when the centralization occurred (Board of Educ. of Ramapo Cent. School Dist. v Greene , 112 AD2d 182, 184 [2d Dept 1985]). Moreover, the component district "shall continue to exist in law . . . for the purpose of providing for and paying all its just debts" (Education Law § 1518; see § 1804 [5] [a], [b]). We [*2]therefore conclude that Central Valley and the Board are proper parties to this action, but we note that any responsibilities resulting from this action will be left to the Board to address by taxing only the property owners of the component district from which those responsibilities arose (see generally Matter of Locust Val. Lib. v Board of Educ. of Cent. School Dist. No. 3 of Town of Oyster Bay , 54 Misc 2d 315, 323-324 [Sup Ct, Nassau County 1967]).

Contrary to appellants' contention, nothing in the plain language of the relevant statutes suggests that only fixed debts known to the component district at the time of centralization are "just debts." Plaintiff's causes of action accrued during Ilion Central's pre-centralization existence (cf. Barringer v Powell , 230 NY 37, 42 [1920]) and, pursuant to CPLR 214-g, the causes of action have been timely raised. Under the circumstances of this case, "just debts" are those debts, if any, "which shall turn out to be just" after all legal defenses have been exhausted (Martin v Gage , 9 NY 398, 401 [1853] [internal quotation marks omitted]).

Entered: May 10, 2024

Ann Dillon Flynn

Clerk of the Court