Opinion ID: 624271
Heading Depth: 2
Heading Rank: 2

Heading: issues

Text: Under New York law, [i]t is settled that the doctrine of res judicata is applicable to arbitration awards and may serve to bar the subsequent relitigation of a single issue or an entire claim. Matter of Ranni's Claim, 58 N.Y.2d 715, 717, 458 N.Y.S.2d 910, 444 N.E.2d 1328 (N.Y.1982). The collateral estoppel doctrine, i.e., issue preclusion, applies only if the issue in the second action is identical to an issue which was raised, necessarily decided and material in the first action, and the plaintiff had a full and fair opportunity to litigate the issue in the earlier action. City of New York v. Welsbach Elec. Corp., 9 N.Y.3d 124, 128, 848 N.Y.S.2d 551, 878 N.E.2d 966 (N.Y.2007) (internal quotation marks and citation omitted). The burden rests upon the proponent of collateral estoppel to demonstrate the identicality and decisiveness of the issue, while the burden rests upon the opponent to establish the absence of a full and fair opportunity to litigate the issue in the prior action or proceeding. Parker v. Blauvelt Volunteer Fire Co., Inc., 93 N.Y.2d 343, 349, 690 N.Y.S.2d 478, 712 N.E.2d 647 (N.Y.1999) (internal quotation marks and citation omitted). [T]he fundamental inquiry is whether re-litigation should be permitted in a particular case in light of what are often competing policy considerations, including fairness to the parties, conservation of resources of the court and the litigants, and the societal interests in consistent and accurate results. Soldiers', Sailors', Marines' & Airmen's Club, Inc. v. Carlton Regency Corp., 30 Misc.3d 352, 911 N.Y.S.2d 774, 778 (N.Y.Sup.Ct.2010). Since the consequences of a determination that a party is collaterally estopped from litigating a particular issue are great, strict requirements for application of the doctrine must be satisfied to insure that a party not be precluded from obtaining at least one full hearing on his or her claim. N. Shore-Long Island Jewish Health Sys., Inc. v. Aetna U.S. Healthcare, Inc., 27 A.D.3d 439, 811 N.Y.S.2d 424, 426 (2006) (internal quotation marks and citation omitted). Applying this standard to the case at hand, we have little doubt Crown met its burden to prove the exact same issuethe meaning of the Business within Section 10.3(a)(iv) of the SPAwas before the arbitrator and the district court, and was necessary to both outcomes. There is only one indemnity provision within the SPA, and its meaning will determine the respective liabilities of the parties, whether it relates to environmental, occupational, or any other type of third-party claim which may arise. Continental cannot, and does not, dispute the identity or the decisiveness of the issue in the two proceedings. Continental does, however, dispute the district court's conclusion it had a full and fair opportunity to litigate the meaning of Section 10.3(a)(iv) before the arbitrator. New York courts have encouraged a common-sense approach to issue preclusion: A determination whether the first action or proceeding genuinely provided a full and fair opportunity requires consideration of the realities of the prior litigation, including the context and other circumstances which may have had the practical effect of discouraging or deterring a party from fully litigating the determination which is now asserted against him. Among the specific factors to be considered are the nature of the forum and the importance of the claim in the prior litigation, the incentive and initiative to litigate and the actual extent of litigation, the competence and expertise of counsel, the availability of new evidence, the differences in the applicable law and the foreseeability of future litigation. Ryan v. N.Y. Tel. Co., 62 N.Y.2d 494, 501, 478 N.Y.S.2d 823, 467 N.E.2d 487 (N.Y. 1984) (internal quotation marks and citation omitted); see also Buechel v. Bain, 97 N.Y.2d 295, 303, 740 N.Y.S.2d 252, 766 N.E.2d 914 (N.Y.2001) (The doctrine ... is a flexible one, and the enumeration of these elements is intended merely as a framework, not a substitute, for case-by-case analysis of the facts and realities.). Continental offers essentially two arguments to support its claim as to it not having a full and fair opportunity to litigate the meaning of Section 10.3(a)(iv) before the arbitrator. First, Continental contends the Arbitration Decision is not entitled to preclusive effect here because the arbitration was limited to environmental claims and Continental did not have the opportunity to litigate its indemnity obligations for occupational exposure claims in the environmental arbitration. Appellant's Br. at 19. Continental cites to Saca v. Canas, 28 Misc.3d 397, 903 N.Y.S.2d 861 (N.Y.Sup.Ct.2010), for the proposition that Continental has been denied the opportunity to litigate its indemnity obligations for occupational exposure claims arising from inactive metal can plants. Appellant's Br. at 39-40. Furthermore, Continental argues it had no incentive to present any evidence relevant to the occupational exposure claims because the arbitrator conceded in his November 7, 2009, orderin which the arbitrator concluded Continental had not violated the terms of the arbitration agreement by filing suit in a matter related to the arbitrationthat his view of the dispute might allow for inconsistent adjudications of the meaning of Section 10.3(a)(iv) of the SPA.... Appellant's Mot. to Supp. R., Jan. 10, 2010, Ex. C at 6. To begin with, Saca is distinguishable. Saca involved an action to recover for personal injuries allegedly sustained in a motor vehicle accident. 903 N.Y.S.2d at 864. Prior to bringing suit, the parties in Saca had also been involved in an arbitration: the arbitrator awarded the plaintiff, Jose Saca, one million dollars, and assigned 100% of the liability to Canas's co-defendant. Id. Canas then filed a motion asking the New York Supreme Court to find Saca collaterally estopped from further litigating Canas's liability in the instant action because the plaintiff had already been given a full and fair opportunity to establish liability on the part of the Canas defendants in the arbitration, but had failed to do so. Id. The court disagreed and denied the motion, finding Saca had no reason to fully litigate his claims against Canas in the arbitration. Notably, the court based its finding on a very specific reason: the parties had entered into a stipulation agreement which made the findings and award of the ... arbitration ... not ... binding on any parties in the New York litigation. Id. at 865, 865-67. Since the stipulation expressly made the outcome of the [under-insured motorist] arbitration non-binding on this [judicial] action, the stipulation discouraged plaintiffs from fully litigating their claims against all defendants and encouraged them to focus their efforts on establishing Erskine as the sole proximate cause of the underlying accident. Id. at 867. Continental has not identified any such similar stipulation agreement. The fact the parties agreed to litigate environmental claims via arbitration did not preclude Continental from fully advocating for its proposed meaning of Section 10.3(a)(iv) before the arbitrator. Continental chose to advocate for a finding supporting its interpretation by arguing the provision was interpretable as a matter of law, based solely on the plain meaning of the language used by the parties in the SPA and contended the Transaction Documents are unambiguous and capable of a plain meaning legal interpretation now, without need for a full evidentiary hearing. J.A. at 172, 175. To be sure, New York law provides that, where possible, a contract should be interpreted without looking to extrinsic evidence so long as the provision is unambiguous. [W]hen parties set down their agreement in a clear, complete document, their writing should as a rule be enforced according to its terms. Evidence outside the four corners of the document as to what was really intended but unstated or misstated is generally inadmissible to add to or vary the writing. W.W.W. Assocs., Inc. v. Giancontieri, 77 N.Y.2d 157, 162, 565 N.Y.S.2d 440, 566 N.E.2d 639 (N.Y.1990). Yet, nothing precluded Continental from arguing in the alternative that if the court found the provision ambiguous, it should look to extrinsic evidence to determine the provision's meaning. See, e.g., Horse Shoe Capital v. Am. Tower Corp., No. 650512/10, 2011 WL 453004, at  (N.Y.Sup.Ct. Jan. 28, 2011) (describing a case in which the parties disagreed over whether the terms of a contract were ambiguous, and noting the plaintiff argues that these terms are ambiguous ... [and] offers parol evidence to support its interpretation of these terms). For that matter, Continental could have urged the court to find the provision ambiguous in the first place and petitioned for a hearing on extrinsic evidence. Had Continental chosen to argue in favor of ambiguity, and had the court agreed, nothing would have prevented Continental from presenting the evidence it now hopes to introduce that indicates in the context of occupational exposure claim liabilitythe parties may in fact have intended to transfer liability for closed or inactive metal can plants to Crown. But cf. W.W.W. Assocs., Inc., 77 N.Y.2d at 163, 565 N.Y.S.2d 440, 566 N.E.2d 639 (It is well settled that extrinsic and parol evidence is not admissible to create an ambiguity in a written agreement which is complete and clear and unambiguous upon its face.) (internal quotation marks and citation omitted). While it is true the parties had agreed the arbitration forum was to be limited to environmental claims, it is also true the interpretation of Section 10.3(a)(iv) affects the parties' respective liability for all third-party claims, no matter the type. The fact Continental's strongest evidenceevidence indicating the parties intended Crown to take on liability for closed or otherwise inactive metal can plantsdeveloped in the context of occupational claims, would not have precluded Continental from using such evidence to explain the parties' general intention in drafting Section 10.3(a)(iv). Accordingly, simply because the parties limited the arbitration to environmental claims, it does not mean Continental thereby did not have the opportunity to litigate its indemnity obligations for occupational exposure claims in the environmental arbitration. Appellant's Br. at 19. Second, Continental contends that since the arbitrator noted both parties' interpretations were plausible, the provision was therefore ambiguous under New York law and not capable of legal interpretation; rather, in such a situation, extrinsic evidence should have been presented. Continental argues that failure to offer it an evidentiary hearing meant it was not afforded a full and fair opportunity to litigate the meaning of Section 10.3(a)(iv) before the arbitrator, and therefore it should not have been precluded from re-litigating the interpretation of Section 10.3(a)(iv) in the district court. Whether a contract is ambiguous is a question of law for the court, and extrinsic evidence should not be considered to create an ambiguity where there otherwise would be none. Ferghana Partners, Inc. v. Bioniche Life Scis., Inc., No. 650747/09, 2011 WL 5385095, at  (N.Y.Sup.Ct. Oct.5, 2011) (citing W.W.W. Assocs., Inc., 77 N.Y.2d at 162, 565 N.Y.S.2d 440, 566 N.E.2d 639); see also Gilpin v. Oswego Builders, Inc., 87 A.D.3d 1396, 930 N.Y.S.2d 120, 122 (2011) (The interpretation of an unambiguous contract provision is a function for the court, and matters extrinsic to the agreement may not be considered when the intent of the parties can be gleaned from the face of the instrument.) (internal quotation marks and citation omitted). [A] provision is unambiguous if it has a definite and precise meaning, and is not reasonably susceptible to differing interpretations. Ferghana Partners, Inc., 2011 WL 5385095, at  (internal quotation marks and citation omitted). To determine whether a writing is unambiguous, language should not be read in isolation because the contract must be considered as a whole. Brad H. v. City of New York, 17 N.Y.3d 180, 928 N.Y.S.2d 221, 224, 951 N.E.2d 743 (2011). Clear language does not become ambiguous just because the parties argue differing interpretations. Ferghana Partners Inc., 2011 WL 5385095, at . We recognize that if a term is ambiguous, the proper procedure is to deny summary judgment and allow the parties to present extrinsic evidence. See, e.g., Harkin v. WDF, Inc., No. 107073/08, 2011 WL 420665,  (N.Y.Sup.Ct. Jan.7, 2011) (denying summary judgment where the court determined a contract ambiguous and the parties had not yet presented extrinsic evidence). Furthermore, New York courts have used the word plausible to describe competing interpretations which required the introduction of extrinsic evidence to ascertain the parties' intent. See Shearson Lehman Bros. Holdings, Inc. v. Schmertzler, 116 A.D.2d 216, 500 N.Y.S.2d 512, 517 (1986) (finding two plausible meanings to create ambiguity and explaining that [w]hen viewed realistically in the business context in which the agreement was signed, the conclusion seems to us compelling that the meaning of the term was at best, from plaintiff's viewpoint, ambiguous); Winston v. Mezzanine Inv., L.P., 170 Misc.2d 241, 648 N.Y.S.2d 493, 499 (N.Y.Sup.Ct.1996) (finding a contract ambiguous where terms were not adequately defined and both parties interpretations were plausible); Carbone v. Carbone No. 18530/2003, 2010 WL 1223927, at  (N.Y.Sup.Ct. Mar. 17, 2010) (stating both parties offered plausible interpretations of the term, establishing that the term is ambiguous as applied to this agreement[,] and remanding for a hearing because the [c]ourt cannot and should not speculate or rule as to the parties understanding without further evidence). On the other hand, the term plausible has also been used to describe competing interpretations even when the court ultimately determined only one interpretation was reasonable as a matter of law. See RM Realty Holdings Corp. v. Moore, 64 A.D.3d 434, 884 N.Y.S.2d 344, 346 (2009) (finding an interpretation plausible but defyi[ng] logic and thereby not  reasonably susceptible of more than one interpretation). In this case, we do not believe the arbitrator made an explicit finding the provision was ambiguous simply by calling both Continental's and Crown's respective interpretations plausible. As noted by the district court, the arbitrator adequately explained why he rejected Continental's interpretation upon considering all of Section 10, and the SPA as a whole, and found, as a matter of law, Crown's proposed meaning to be the only reasonable interpretation. See Metro. Life Ins. Co. v. RJR Nabisco, Inc., 906 F.2d 884, 889 (2d Cir.1990) (noting that the court should not find ambiguity based on the interpretation of one party to a contract, where that interpretation would `strain the contract language beyond its reasonable and ordinary meaning') (quoting Bethlehem Steel Co. v. Turner Constr. Co., 2 N.Y.2d 456, 459, 161 N.Y.S.2d 90, 141 N.E.2d 590 (N.Y. 1957)); Breed v. Ins. Co. of N. Am., 46 N.Y.2d 351, 355, 413 N.Y.S.2d 352, 385 N.E.2d 1280 (N.Y.1978) (finding ambiguity only where reasonable men may reasonably differ as to the interpretation of the contract). Because the arbitrator found the provision unambiguous, the arbitrator made no mistake in refusing to order an evidentiary hearing, and such refusal may not serve as grounds for Continental to claim it was denied a full and fair opportunity to litigate the meaning of Section 10.3(a)(iv) before the arbitrator. Furthermore, absent unusual circumstances not present here, see N.Y. Arbitration Law § 7511 (McKinney 2011), it is not our place to question whether the arbitrator got it right. Under New York law, courts lack authority to review arbitral decisions, even where an arbitrator has made an error of law or fact. Eastman Assocs., Inc. v. Juan Ortoo Holdings, Ltd., 90 A.D.3d 1284, 935 N.Y.S.2d 166, 167 (2011) (internal quotation marks and citations omitted). We therefore decline to analyze the merits of the parties' competing interpretations. Moreover, other facts of this case indicate Continental knew exactly what was at stake in both proceedings, had every incentive to litigate the provision's meaning, and made its strategic choices accordingly. Notably, it was Continental who brought the summary judgment motion to the arbitrator. See Catalano v. Applied Biometrics Prods., Inc., No. 03 Civ. 0046(NRB), 2003 WL 22004902, at  (S.D.N.Y.2003) ([M]ost importantly the fact that petitioner himself was the party who raised the personal liability issues ... indicate[s] that petitioner had a full and fair opportunity to litigate the issues that were decided against him in arbitration.). In its motion for partial summary judgment, Continental clearly asked for the arbitrator to interpret the provision at issue. Furthermore, while Crown voiced its concern about inconsistent judgments to both the arbitrator and the district court, and requested a stay of the district court proceedings, Continental opposed those motions. In opposing the motions, Continental again recognized the same issue was at stake. In light of this realization, we are hardpressed to conclude Continental was somehow not alerted it should litigate the meaning of Section 10.3(a)(iv) to the best of its ability. Continental may not rely on the arbitrator's remark his ruling might result in inconsistent outcomes to support its claim it simply did not realize everything was on the line: New York law clearly treats arbitration decisions the same as judicial determinations for issue preclusion purposes. See Matter of Ranni's Claim, 58 N.Y.2d at 717, 458 N.Y.S.2d 910, 444 N.E.2d 1328. For these reasons, we find Continental has failed to meet its burden of proving it was not afforded a full and fair opportunity to litigate the meaning of Section 10.3(a)(iv). The district court, therefore, correctly determined Continental was precluded from further litigating the provision's meaning, properly granted summary judgment in favor of Crown, and did not abuse its discretion in denying Continental's motion to reconsider.