IN RE: Ross LIPSON (2020)

Orders, Supreme Court, New York County (Arthur F. Engoron, J.), entered July 10 and 18, 2019, which, inter alia, granted the petition to confirm an April 12, 2019 arbitration award in petitioner's favor, unanimously affirmed, without costs.

The court properly granted the petition to confirm the subject arbitration award.  Respondents Taylor Stuart Herman (Herman) and Taylor Stuart Herman, Inc. (the company) contend that the arbitrator wrongly determined that the company was nonexistent, and that this determination, in the face of evidence of the existence of the company, provides a basis to vacate the award (see CPLR 7511[b]).  However, the argument is based on an incorrect premise, as this is not what the arbitrator held.  The arbitrator held that it was “Taylor Stuart, Inc.,” and not the company, that was nonexistent.  Taylor Stuart, Inc. was the entity that purported to contract with petitioner in a construction contract, and its nonexistence, in turn, was the basis for the arbitrator's determination that Herman was personally liable for the amounts found owing to petitioner as a result of failures of performance under that contract.

Respondents argue that the real contracting party in the construction contract was the company and cite evidence of its existence.  However, since the arbitrator did not address whether the company existed, respondents' arguments in support of its existence are not relevant.

Respondents contend that the use of Taylor Stuart, Inc. in the construction contract was an inadvertent misnomer or scrivener's error.  However, they cite to no evidence in support of that claim, and the scrivener himself, company counsel, did not testify at the arbitration.  Nor do respondents provide evidence to support their assertion that the company was also known by Taylor Stuart, Inc., or that Taylor Stuart, Inc. was an adopted name of the company.  By deeming the parties to the construction contract to be petitioner and Taylor Stuart, Inc., as the contract expressly and repeatedly states, the arbitrator “simply construed the parties' agreement as presented to [him],” which, even if somehow in error, “is more akin to an error of fact, which will not result in the vacatur of an arbitrator's award” (Matter of Meehan v. Nassau Community Coll., 242 A.D.2d 155, 157–158, 675 N.Y.S.2d 354 [2d Dept. 1998], lv dismissed 92 N.Y.2d 946, 681 N.Y.S.2d 476, 704 N.E.2d 229 [1998]).

As for the existence or nonexistence of Taylor Stuart, Inc., evidence was presented that this was a business name under which Herman had been operating for years, that he routinely used an email and a website with this name, and that there is no corporate entity in New York under the name Taylor Stuart, Inc. Accordingly, the arbitrator's imposition on Herman of personal liability for failures of performance under the construction contract, given the fictitious nature of Taylor Stuart, Inc., was a determination properly confirmed by the motion court.  Furthermore, respondents' argument that the award should be modified to eliminate Herman's personal liability is also unavailing.  It is an argument that affects “the merits of the controversy” and does not otherwise fall within the grounds permitted by CPLR 7511(c).

We have considered respondents' remaining arguments and find them unavailing.