Court Opinion

ID: 5821235
Source: CourtListenerOpinion
Date Created: 2022-01-12 21:09:42.24396+00
Date Added: 2024-06-11T08:43:08.811543
License: Public Domain

Order unanimously affirmed, without costs, on the opinion at Special Term, Kronenberg, J., and the following memorandum: We only add that the fact that a contract does not specifically authorize monetary damages will not prohibit the arbitrator from awarding them in a proper case. Only an express prohibition of damages, absent here, will have that effect (Matter of Bellmore-Merrick United Secondary Teachers v Board of Educ., 51 AD2d 762, 763). Special Term properly vacated the damages provision in the instant case on the ground that the damages awarded were punitive rather than compensatory. It is now settled that an arbitrator’s award which imposes punitive damages .violates "a public policy of such magnitude as to call for judicial intrusion” (Garrity v Lyle Stuart, Inc., 40 NY2d 354, 356), at least where, as here, the underlying contract neither expressly authorizes such damages nor provides a method of assessing them. The arbitrator’s acknowledgment that the grievant might not have received the appointment even if his rights had been safeguarded is tantamount to a finding that he might not have suffered any actual damages. Thus the conclusion seems inescapable that the damages were not intended as compensation for lost earnings or any other actual loss, but rather as a penalty for a claimed "flagrant” violation of the grievant’s contractual rights. We concur with the conclusion that the damages awarded were punitive. (Appeals from order of Niagara Supreme Court—vacate arbitrator’s award.) Present—Cardamone, J. P., Hancock, Denman, Goldman and Witmer, JJ.