| Esposito v Podolsky |
| 2013 NY Slip Op 02045 [104 AD3d 903] |
| March 27, 2013 |
| Appellate Division, Second Department |
| Anthony Esposito, Respondent, v MichaelPodolsky et al., Appellants. |
—[*1] Ameduri, Galante & Friscia, Staten Island, N.Y. (Marvin Ben-Aron of counsel), forrespondent.
In an action to recover damages for personal injuries, the defendants appeal, aslimited by their brief, from so much of an order of the Supreme Court, Richmond County(Minardo, J.), dated September 19, 2011, as denied their motion pursuant to CPLR 3126to dismiss the complaint, or, in the alternative, to preclude the plaintiff from testifying attrial or arbitration on the issue of damages and, sua sponte, in effect, increased the cap ondamages set in the parties' arbitration agreement from $50,000 to $250,000.
Ordered that on the Court's own motion, the notice of appeal from so much of theorder dated September 19, 2011, as, sua sponte, in effect, increased the cap on damagesset in the parties' arbitration agreement from $50,000 to $250,000 is deemed anapplication for leave to appeal from that portion of the order, and leave to appeal fromthat portion of the order is granted (see CPLR 5701 [c]); and it is further,
Ordered that the order is modified, on the law and in the exercise of discretion, bydeleting the provision thereof which, sua sponte, in effect, increased the cap on damagesset in the parties' arbitration agreement from $50,000 to $250,000; as so modified, theorder is affirmed insofar as appealed from, without costs or disbursements.
The parties were involved in an automobile accident which gave rise to thislitigation. On July 7, 2008, the day before the parties were to begin trial, they agreed tosubmit this matter to arbitration. Thereafter, the plaintiff, through his attorney, and thedefendants, through a representative of the defendant Michael Podolsky's insurancecompany, executed an agreement to submit this matter to National Arbitration andMediation, Inc. (hereinafter NAM). The agreement provided that both the issue ofliability and the issue of damages were to be submitted to an arbitrator, and that thedamages award would be subject to high/low parameters of "$50,000/$0." Thearbitration was scheduled to be held in June 2009. On the day before the arbitration wasto be held, counsel for the plaintiff informed NAM that the plaintiff would not beappearing at the arbitration.
The defendants moved to compel the plaintiff to appear for arbitration. In an orderdated February 3, 2010, the Supreme Court granted the defendants' motion and directedthe parties "to proceed to arbitration in accordance with the terms of their 'DisputeResolution Agreement.' "[*2]
The plaintiff filed a notice of appeal from theorder dated February 3, 2010, and moved to renew and reargue his opposition to thedefendants' motion to compel arbitration. In an order dated July 19, 2010, the SupremeCourt denied the plaintiff's motion and directed the parties to proceed to arbitration.
By letter dated September 2, 2010, the plaintiff sought an extension of time from thisCourt to perfect his appeal from the order dated February 3, 2010. In an order datedSeptember 14, 2010, this Court granted the plaintiff's application and extended his timeto perfect his appeal until October 4, 2010.
On September 21, 2010, before the plaintiff's time to perfect the appeal had expired,counsel for the parties appeared before the Supreme Court for a conference. At thatconference, a stipulation was entered into by counsel pursuant to which the parties wouldproceed to arbitration solely on the issue of liability "without prejudice to either partywith regard to the determination of the parameters of damages." The court so-ordered thestipulation.
By decision and order on motion dated December 1, 2010, this Court dismissed theplaintiff's appeal from the order dated February 3, 2010, due to his failure to perfect thatappeal.
On December 14, 2010, the parties appeared before a NAM arbitrator for a hearingsolely on the issue of liability. The arbitrator found in favor of the plaintiff.
Subsequent to the arbitration on the issue of liability, the plaintiff moved to restorethis action to the trial calendar so that the issue of damages could be tried. Thedefendants moved pursuant to CPLR 3126 to dismiss the complaint or, in the alternative,to preclude the plaintiff from testifying at trial or arbitration given his failure to complywith the orders dated February 3, 2010, and July 19, 2010. The Supreme Court deniedthe defendants' motion and granted the plaintiff's motion "to the extent the parties aredirected to return to arbitration on the issue of damages [with] a cap on the plaintiff'srecovery to the amount of the insurance policy limits ($250,000)." The defendants appealfrom so much of the order as denied their motion and, sua sponte, increased the cap onthe damages to be awarded at arbitration. We modify.
The Supreme Court properly denied the defendants' motion pursuant to CPLR 3126to dismiss the complaint, or, in the alternative, to preclude the plaintiff from testifying attrial or arbitration on the issue of damages. The defendants failed to establish that theplaintiff refused to comply with an order directing disclosure (see CPLR 3126).
Further, the defendants' contention that the Supreme Court should have dismissed thecomplaint pursuant to CPLR 3404 is raised for the first time on appeal. Accordingly, thatissue is not properly before this Court (see Marinkovic v IPC Intl. of Ill., 95 AD3d 839 [2012]).
However, in directing the parties to arbitrate the damages phase of this matter, theSupreme Court improvidently exercised its discretion in, sua sponte, increasing the capon damages from $50,000 to $250,000 (see Matter of Halouvas v Pagan, 6 AD3d 707, 709 [2004]).A so-called "high/low" agreement is considered a conditional settlement (see Cunha v Shapiro, 42 AD3d95, 98 [2007]). "Stipulations of settlement are favored by the courts and are not to belightly set aside, especially where . . . the party seeking to vacate thestipulation was represented by counsel" (Kelley v Chavez, 33 AD3d 590, 591 [2006] [citationomitted]; see Hallock v State of New York, 64 NY2d 224, 230 [1984]; Macaluso v Macaluso, 62AD3d 963 [2009]; Trakansook v Kerry, 45 AD3d 673 [2007]; Town ofClarkstown v M.R.O. Pump & Tank, 287 AD2d 497, 498 [2001]). A party seekingto set aside such a stipulation will be granted such relief only upon a showing of goodcause sufficient to invalidate a contract, such as fraud, overreaching, duress, or mistake(see McCoy v Feinman, 99 NY2d 295, 302 [2002]; Hallock v State of NewYork, 64 NY2d at 230; Macaluso v Macaluso, 62 AD3d at 963; Trakansook v Kerry, 45 AD3d673 [2007]; Kelley v Chavez, 33 AD3d at 591; Town of Clarkstown vM.R.O. Pump & Tank, 287 AD2d at 498).
Here, the parties agreed to arbitrate both the issue of liability and the issue ofdamages before a NAM arbitrator. They also agreed that the damages portion of thearbitration would be subject to high/low parameters of $50,000/$0. In light of theplaintiff's service of a notice of appeal from the Supreme Court's order directing him togo to arbitration pursuant to the terms of the agreement, the parties stipulated that theywould proceed with the liability portion of the arbitration [*3]while the appeal, on which the issue of the parameters ofthe damages might have been considered, was pending. However, the plaintiff failed toperfect that appeal. Thus, the Supreme Court's determination in its February 2010 orderthat the parameters of $50,000/$0 were binding upon the parties was left undisturbed.Accordingly, the Supreme Court erred in, sua sponte, raising the cap on damages to$250,000 or, in effect, setting aside that portion of the parties' agreement which related tothe cap on damages, especially since there was no evidence before the court of fraud,overreaching, duress, or mistake when the parties entered into the agreement. Since theparties set down their agreement to arbitrate pursuant to high/low parameters of$50,000/$0 in a clear, complete document, their writing is to be enforced according to itsterms (see Henrich v PhazarAntenna Corp., 33 AD3d 864 [2006]; see also Greenfield v PhillesRecords, 98 NY2d 562, 569 [2002]; Johnston v MGM Emerald Enters., Inc., 69 AD3d 674, 677[2010]).
Accordingly, the Supreme Court should have directed the parties to proceed toarbitration in accordance with their agreement, just as the Supreme Court did in its earlierorder dated February 3, 2010. Angiolillo, J.P., Chambers, Austin and Sgroi, JJ., concur.