Court Opinion

ID: 2807410
Source: CourtListenerOpinion
Date Created: 2015-06-11 14:09:37.777493+00
Date Added: 2024-06-11T11:27:47.634848
License: Public Domain

State of New York
                   Supreme Court, Appellate Division
                      Third Judicial Department
Decided and Entered: June 11, 2015                     520178
________________________________

In the Matter of the
   Arbitration between DAVID
   FRUEH CONTRACTING, LLC,
                    Appellant,              MEMORANDUM AND ORDER
      and

BCI CONSTRUCTION, INC.,
                    Respondent.
________________________________

Calendar Date:   April 20, 2015

Before:   Lahtinen, J.P., Rose, Devine and Clark, JJ.

                             __________

      Cooper Erving & Savage, LLP, Albany (Phillip G. Steck of
counsel), for appellant.

      Breakell Law Firm, PC, Albany (Paul C. Marthy of counsel),
for respondent.

                             __________

Devine, J.

      Appeal from an order and judgment of the Supreme Court
(Walsh, J.), entered October 6, 2014 in Albany County, which,
among other things, granted respondent's cross application
pursuant to CPLR 7511 to partially vacate a modified arbitration
award.

      Respondent was the prime contractor on a public work
project awarded by the United States Department of Labor for
construction at the Glenmont Job Corps Center in Albany County.
Respondent entered into a subcontract with petitioner to perform
site work in conjunction with that project, and the subcontract
provided that any dispute arising under the agreement would be
                              -2-                520178

settled by binding arbitration. Petitioner demanded arbitration
in 2011, asserting, among other things, a quantum meruit claim.
The arbitrator conducted a hearing, after which he issued an
award finding that petitioner was entitled to recover $95,000 in
damages under that theory, as well as fees and expenses.
Petitioner applied for a modification of the award three days
after it was issued, noting that the arbitrator had failed to
include requested interest in his assessment of damages. The
arbitrator thereafter issued a modified award granting petitioner
preaward interest in the amount of $24,453.

      Petitioner commenced the instant proceeding seeking to
confirm both the original and modified awards, while respondent
cross-petitioned to vacate the modified award insofar as it
awarded interest. Petitioner further moved for an award of
prejudgment interest from the date of the original award.
Supreme Court vacated the interest provisions of the modified
award, concluding that the arbitrator had exceeded his authority
in modifying the original award. Petitioner now appeals.

      "[I]t has been recognized that an arbitrator's power to
modify an award is extremely limited and that, absent compliance
with the statutory requirements, an arbitrator is without
authority to modify an award" (Matter of Bianchi [Katz], 111 AD3d
1012, 1013 [2013]; see Silber v Silber, 204 AD2d 527, 529 [1994],
lv dismissed and denied 85 NY2d 856 [1995]). The statutory
requirements for modification are set forth in CPLR 7509, which
allows an arbitrator to modify his or her award upon the grounds
set forth in CPLR 7511 (c) if a timely application for
modification is made. Because a timely request was made by
petitioner, modification was permissible if: "1. there was a
miscalculation of figures or a mistake in the description of any
person, thing or property referred to in the award; or 2. the
arbitrators have awarded upon a matter not submitted to them and
the award may be corrected without affecting the merits of the
decision upon the issues submitted; or 3. the award is imperfect
in a matter of form, not affecting the merits of the controversy"
(CPLR 7511 [c]). The arbitrator determined that the first two
grounds were inapplicable, but that modification was warranted
because the failure to assess the requested interest constituted
an imperfection in the form of the original award.
                              -3-                520178

      Supreme Court correctly determined that CPLR 7511 (c) (3)
had no applicability to the modification at issue here, which
significantly affected the amount of the award and "was not
merely one of form, but one which affect[ed] the substantive
rights of the parties" (Matter of Lange-Finn Constr. Co. [Joyce &
Sons–Kramer & Sons], 50 AD2d 696, 696-697 [1975], affd 41 NY2d
814 [1977]; see Matter of New Paltz Cent. School Dist. [New Paltz
United Teachers], 99 AD2d 907, 908 [1984]). Even accepting as
true that the arbitrator was obliged to award interest as a
matter of law (compare Precision Founds. v Ives, 4 AD3d 589, 593
[2004], with Ogletree, Deakins, Nash, Smoak & Stewart v Albany
Steel, 243 AD2d 877, 879 [1997]), "[i]t is clear that an
arbitrator's award cannot be . . . modified due to an error of
fact or law unless the correction comes within the corrective or
regulatory sections of the CPLR" (Matter of City of Troy [Village
of Menands], 48 AD2d 733, 733-734 [1975]; see CPLR 7509; Matter
of Bianchi [Katz], 111 AD3d at 1013). Because the error here
does not, the arbitrator lacked authority to correct it (see
Matter of Rothermel [Fidelity & Guar. Ins. Underwriters], 280
AD2d 862, 862 [2001]; Matter of Curtis Lbr. Co. Inc. v American
Energy Care Inc., 27 Misc 3d 1217[A], 2010 NY Slip Op 50781[U],
*4-5 [Sup Ct, Albany County 2010], mod on other grounds 81 AD3d
1225 [2011]).

      Lastly, the parties do not dispute that Supreme Court
should have granted prejudgment interest "from the date of the
original award to the date of entry of the judgment confirming
that award" (Matter of Curtis Lbr. Co., Inc. [American Energy
Care, Inc.], 81 AD3d 1225, 1225 [2011]; see CPLR 5002). Remittal
is necessary to deal with that issue, although we note that
petitioner seeks no interest after August 1, 2014, the date on
which respondent paid the award in full.

     Lahtinen, J.P., Rose and Clark, JJ., concur.
                              -4-                  520178

      ORDERED that the order and judgment is modified, on the
law, without costs, by reversing so much thereof as denied that
portion of petitioner's application for interest from December 1,
2013 to August 1, 2014; matter remitted to the Supreme Court to
determine the interest due to petitioner in accordance with this
Court's decision; and, as so modified, affirmed.

                             ENTER:

                             Robert D. Mayberger
                             Clerk of the Court