| Matter of Metrobuild Assoc., Inc. v Nahoum |
| 2008 NY Slip Op 04625 [51 AD3d 555] |
| May 22, 2008 |
| Appellate Division, First Department |
| In the Matter of Metrobuild Associates, Inc.,Appellant, v Kenneth Nahoum et al., Respondents. |
—[*1] Sheldon Farber, New York, for respondents.
Order, Supreme Court, New York County (Carol R. Edmead, J.), entered September 20,2006, which denied the petition to confirm, and instead vacated an arbitration award,unanimously reversed, on the law, with costs, the award confirmed and the matter remanded forfurther proceedings including the entry of judgment.
On or about June 16, 2003, petitioner and respondent Kenneth Nahoum (Kenneth), aphotographer and film maker, entered into a written construction contract, whereby Metrobuildagreed to perform extensive work on Kenneth's SoHo home (the premises). The contractprovided for arbitration of all disputes. In or about June 2004, Kenneth assigned the contract torespondent Nahoum Production Enterprises (Nahoum), that Kenneth owned, and Kennethguaranteed payment in the event of Nahoum's default.
On or about June 1, 2005, petitionerfiled a demand for arbitration against Kenneth, claiming that he had breached the contract byfailing to pay petitioner $495,978. Kenneth responded that he had terminated the contract forcause because Metrobuild had not performed as promised.
Petitioner concedes that it was not a licensed home improvement contractor. AdministrativeCode of the City of New York § 20-387 (a) states: "No person shall solicit, canvass, sell,perform or obtain a home improvement contract . . . from an owner without alicense therefor." Courts strictly construe the licensing requirements for home improvementcontractors (Chosen Constr. Corp. v Syz, 138 AD2d 284, 286 [1988]), and public policyprohibits an unlicensed home improvement contractor from recovering for breach of contract orin quantum meruit (see Blake Elec. Contr. Co. v Paschall, 222 AD2d 264, 266 [1995];Matter of Schwartz [American Swim Pools, Div. of Urban-Suburban Recreation], 74AD2d 638, 639 [1980]).
Respondents never sought the proper remedy available to them consistent with the clearprovisions of the Administrative Code, viz., to stay the arbitration of this dispute on the groundthat the Administrative Code prohibited enforcement of the contract (see Al-Sullami v Broskie, 40 AD3d1021 [2007]; Matter of Schwartz, 74 AD2d at 639). Instead, respondents activelyengaged in the arbitration, participating in no less than 13 evidentiary hearings.
The arbitrator awarded Metrobuild the entirety of its unpaid bill plus anticipated profit, for atotal of $204,513. Nothing on the face of the arbitrator's award indicated that the arbitrator [*2]found that the work Metrobuild performed was residential in part.
In this proceeding, Metrobuild moved to confirm the arbitration award and respondents fileda cross motion to vacate the award on the ground that it violated the public policy againstawarding damages to unlicensed home improvement contractors, and that it was irrational, in thatthe arbitrator essentially rewrote the contract by failing to consider the 10% retainage that thecontract provided. Respondents also contended the parties never disputed that the apartment wasKenneth's home, and that he had a separate office nearby for his business.
The motion court vacated the award, holding that even if some of the work was commercial,part of it was residential, and, as such, Metrobuild's failure to obtain a license barred it fromrecovery. We now reverse.
As this Court has repeatedly held, a court should not set aside an arbitral award when "thereis nothing on the face of the award to indicate that it violates the public policy against recoveryby unlicensed home improvement contractors" (Matter of Hirsch Constr. Co. [Anderson],180 AD2d 604, 604 [1992]; see also Matter of Sanders Constr. Corp. [Becker], 292AD2d 155 [2002], lv denied 98 NY2d 614 [2002]; Matter of Kuchar v Baker,261 AD2d 402 [1999]).
An arbitrator's factual findings and interpretation of the contract or judgment concerningremedies bind the court. "A court cannot examine the merits of an arbitration award andsubstitute its judgment for that of the arbitrator simply because it believes its interpretation wouldbe the better one" (Matter of New York State Correctional Officers & Police BenevolentAssn. v State of New York, 94 NY2d 321, 326 [1999]).
Here, there is nothing on the face of the award to indicate that the work petitioner performedwas residential, even in part. Therefore, there is nothing on the face of this award to indicate thatit violates public policy (see Matter of Jaidan Indus. v M.A. Angeliades, Inc., 97 NY2d659, 661 [2001]; see also Matter of Hirsch Constr. Co., 180 AD2d at 604-605).Accordingly, the court erred in vacating the award (see Matter of Campbell v New York City Tr. Auth., 32 AD3d 350,352 [2006] [Supreme Court exceeded its authority by undertaking its own review of the evidenceand substituting its judgment for that of the arbitrator]). Concur—Mazzarelli, J.P.,Williams, Sweeny, Catterson and Moskowitz, JJ. [See 2006 NY Slip Op 30036(U).]