| Matter of NFB Inv. Servs. Corp. v Fitzgerald |
| 2008 NY Slip Op 02598 [49 AD3d 747] |
| March 18, 2008 |
| Appellate Division, Second Department |
| In the Matter of NFB Investment Services Corp.,Appellant, v Robert J. Fitzgerald, Respondent. |
—[*1] Muldoon, Horgan & Loughman, New Rochelle, N.Y. (Edward D. Loughman III of counsel),for respondent.
In a proceeding pursuant to CPLR article 75 to vacate an arbitration award dated May 4,2005, the petitioner appeals from an order and judgment (one paper) of the Supreme Court,Suffolk County (Berler, J.), entered June 26, 2006, which, upon a decision of the same courtdated March 21, 2006, denied the petition and, in effect, granted the respondent's motion toconfirm the award.
Ordered that the order and judgment is affirmed, with costs.
The petitioner investment services company fired the respondent, who was its employee anda broker, on the ground that he violated New York State Insurance Department regulation 60when he undertook to sell an annuity for a client, the proceeds of which he ultimately used topurchase a new annuity for the client. In a form required to be filed with the National Associationof Securities Dealers (hereinafter NASD), the petitioner reported that it fired the respondent forthe violation. Asserting that the claimed violation was a pretext for firing him, the respondentinitiated an arbitration proceeding before the National Association of Securities Dealers DisputeResolution System (hereinafter NASDDR) to purge the NASD form of the claimed violation andfor damages, inter alia, for defamation. The arbitration panel rendered a decision purging boththe original NASD form and an amended form regarding a client complaint that was filed by thepetitioner subsequent to firing the respondent. The panel awarded the respondent the sum of$50,000 in damages for defamation. The petitioners commenced the instant proceeding in theSupreme Court pursuant to [*2]CPLR article 75, seeking tovacate the arbitration award. The Supreme Court denied the petition and, in effect, granted therespondent's motion to confirm the award. The petitioner appeals. We affirm.
An arbitration award can be vacated by a court pursuant to CPLR 7511 (b) on only threenarrow grounds: if it is clearly violative of a strong public policy, if it is totally or completelyirrational, or if it manifestly exceeds a specific, enumerated limitation on the arbitrators' power(see Matter of United Fedn. of Teachers,Local 2, AFT, AFL-CIO v Board of Educ. of City School Dist. of City of N.Y., 1 NY3d72, 79 [2003]; Matter of Board of Educ. of Arlington Cent. School Dist. v ArlingtonTeachers Assn., 78 NY2d 33, 37 [1991]; Cifuentes v Rose & Thistle, Ltd., 32 AD3d 816 [2006]; Matterof Rockland County Bd. of Coop. Educ. Servs. v BOCES Staff Assn., 308 AD2d 452, 453[2003]). An award is irrational if there is "no proof whatever to justify the award" (Matter ofPeckerman v D & D Assoc., 165 AD2d 289, 296 [1991]). Even if the arbitrators misapplysubstantive rules of law or make an error of fact, unless one of the three narrow grounds appliesin the particular case, the award will not be vacated (see Wien & Malkin LLP v Helmsley-Spear, Inc., 6 NY3d 471[2006], cert dismissed— US —,127 S Ct 34 [2006]; Matter of Silverman[Benmor Coats], 61 NY2d 299, 308 [1984]; Matter of Sprinzen [Nomberg], 46NY2d 623, 629 [1979]; Cifuentes vRose & Thistle, Ltd., 32 AD3d 816 [2006]). An arbitrator is not bound by principles ofsubstantive law or rules of evidence, and may do justice and apply his or her own sense of lawand equity to the facts as he or she finds them to be (see Cifuentes v Rose & Thistle, Ltd., 32 AD3d 816 [2006]).
Here, the Supreme Court properly determined that the arbitration award was not violative ofpublic policy, was not irrational and did not clearly exceed a specifically enumerated limitationon the arbitrator's power (see Matter ofUnited Fedn. of Teachers, Local 2, AFT, AFL-CIO v Board of Educ. of City School Dist. of Cityof N.Y., 1 NY3d 72, 79 [2003]). Spolzino, J.P., Florio, Miller and Dickerson, JJ.,concur.