Case Name: In the Matter of William T. Esrey et al., Appellants, v. Ernst & Young, L.L.P., Respondent
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 2015-11-24
Citations: 133 A.D.3d 539
Docket Number: 
Parties: In the Matter of William T. Esrey et al., Appellants, v Ernst & Young, L.L.P., Respondent.
Judges: 
Reporter: Appellate Division Reports
Volume: 133
Pages: 539–540

Head Matter:
In the Matter of William T. Esrey et al., Appellants, v Ernst & Young, L.L.P., Respondent.
[19 NYS3d 423]

Opinion:
Order and judgment (one paper), Supreme Court, New York County (O. Peter Sherwood, J.), entered October 28, 2014, which, inter alia, denied petitioners' motion to modify or vacate the final award by an arbitration panel, dated February 17, 2014, to the extent that the arbitration panel awarded petitioners a rate of prejudgment interest that was lower than New York's statutory interest rate of 9%, unanimously affirmed, with costs.
The court properly found that the arbitration panel's decision to enforce the provision of the letter agreement between the parties, which limited the prevailing parties' damages to the actual damages suffered, did not evince a manifest disregard of the law, which requires a court to "find both that (1) the arbitrators knew of a governing legal principle yet refused to apply it or ignored it altogether, and (2) the law ignored by the arbitrators was well defined, explicit, and clearly applicable to the case" (Wien & Malkin LLP v Helmsley-Spear, Inc., 6 NY3d 471, 481 [2006] [internal quotation marks omitted], cert dismissed 548 US 940 [2006]). Here, the panel, while correctly declining to enforce the provision of the agreement that would have limited petitioners to the fees they paid to respondent (see e.g. Abacus Fed. Sav. Bank v ADT Sec. Servs., Inc., 18 NY3d 675, 683 [2012]), distinguished the provision that limited the prevailing party to actual damages, on the ground that the actual damages, as measured by the reduced prejudgment interest in this case, fully compensated petitioners. The panel's analysis distinguishing the actual-damages provision, was, at least, "a barely colorable justification for the outcome reached" (T.Co Metals, LLC v Dempsey Pipe & Supply, Inc., 592 F3d 329, 339 [2d Cir 2010] [internal quotation marks omitted]), and, thus, is entitled to "extreme deference" (Wien & Malkin LLP, 6 NY3d at 481). Concur — Gonzalez, P.J., Tom, Mazzarelli and Manzanet-Daniels, JJ.