CHEF CHLOE LLC v. LLC (2019)

Plaintiff seeks vacatur or modification of the arbitration award on the sole ground that the arbitrator exceeded her authority by granting relief that was not specifically demanded in defendant's statement of claim (see CPLR 7511[b], [c];  Frankel v. Sardis, 76 A.D.3d 136, 139, 904 N.Y.S.2d 18 [1st Dept. 2010] ).  The arbitrator found that plaintiff could be terminated as Service Member from nominal defendant CCSW LLC “for cause,” as that term was defined in the parties' operating agreement.  The record demonstrates that the parties submitted evidence, including testimony, and advanced arguments concerning the issue of for-cause termination and that defendant described the conduct by plaintiff that supported for-cause termination in detailed allegations in the statement of claim and in the answer with counterclaims that it had filed in this action, which was annexed to the statement of claim.  In the operating agreement, the parties had agreed that all disputes concerning the terms of the agreement would be submitted to arbitration and that they would be bound by the arbitrator's award.  “The language of arbitration demands is not subject to the strict standards of construction applicable to formal court pleadings” (id. at 140, 904 N.Y.S.2d 18).  To hold that the arbitrator was acting outside the scope of her authority when she determined that plaintiff had been terminated for cause “would unnecessarily elevate form over substance and preclude an otherwise meritorious arbitration award merely because” the statement of claim did not specifically demand that relief (id. at 141, 904 N.Y.S.2d 18).

We have considered plaintiff's remaining arguments and find them unavailing.