IN RE: Travis BENCH (2025)

DECISION & ORDER

In a proceeding pursuant to CPLR article 75 to vacate an arbitration award dated August 20, 2019, in which Brookhaven Heart, PLLC, cross-petitioned to confirm the arbitration award, the petitioners appeal from an order of the Supreme Court, Suffolk County (John H. Rouse, J.), dated May 6, 2020.  The order denied the petition to vacate the arbitration award, granted the cross-petition to confirm the arbitration award, and confirmed the arbitration award.

ORDERED that the order is affirmed, with costs.

The petitioners, Travis Bench and Dhavel C. Patel, commenced this proceeding pursuant to CPLR article 75 to vacate an arbitration award dated August 20, 2019 (hereinafter the 2019 arbitration award).  The arbitrator determined that the petitioners’ employer, the respondent, Brookhaven Heart, PLLC, was entitled to the cash proceeds that arose out of the demutualization and sale of a company that had provided medical malpractice insurance to the petitioners as policyholders through the respondent.  The respondent cross-petitioned to confirm the 2019 arbitration award.  In an order dated May 6, 2020, the Supreme Court denied the petition, granted the cross-petition, and confirmed the 2019 arbitration award.  The petitioners appeal.  We affirm.

“[J]udicial review of arbitration awards is extremely limited” (Wien & Malkin LLP v. Helmsley–Spear, Inc., 6 N.Y.3d 471, 479, 813 N.Y.S.2d 691, 846 N.E.2d 1201).  CPLR 7511(b) enumerates the limited grounds upon which an award may be vacated, including, as relevant here, that the arbitrator exceeded his or her power (see id. § 7511[b][1][iii];  American Intl. Specialty Lines Ins. Co. v. Allied Capital Corp., 35 N.Y.3d 64, 70, 125 N.Y.S.3d 340, 149 N.E.3d 33).  “An arbitrator ‘exceed[s] [his or her] power within the meaning of the CPLR only when [he or she] issue[s] an award that violates a strong public policy, is irrational or clearly exceeds a specifically enumerated limitation on the arbitrator's power’ ” (Matter of Village of Spring Val. v. Civil Serv. Empls. Assn., Inc., 214 A.D.3d 818, 819, 186 N.Y.S.3d 250, quoting American Intl. Specialty Lines Ins. Co. v. Allied Capital Corp., 35 N.Y.3d at 70, 125 N.Y.S.3d 340, 149 N.E.3d 33).  “ ‘A party seeking to overturn an arbitration award bears a heavy burden and must establish a ground for vacatur by clear and convincing evidence’ ” (Matter of Douglas Elliman of LI, LLC v. O'Callaghan, 220 A.D.3d 945, 946, 198 N.Y.S.3d 388, quoting Matter of Board of Educ. of the Yonkers City Sch. Dist. v. Yonkers Fedn. of Teachers, 185 A.D.3d 811, 812, 125 N.Y.S.3d 585).  “[A]n arbitrator's award should not be vacated for errors of law and fact committed by the arbitrator and the courts should not assume the role of overseers to mold the award to conform to their sense of justice” (Wien & Malkin LLP v. Helmsley–Spear, Inc., 6 N.Y.3d at 479–480, 813 N.Y.S.2d 691, 846 N.E.2d 1201).

Contrary to the petitioners’ contention, the Court of Appeals’ determination in 2022 in (Columbia Mem. Hosp. v. Hinds, 38 N.Y.3d 253, 276–277, 172 N.Y.S.3d 649, 192 N.E.3d 1128) that, absent contrary terms in the contract of employment, insurance policy, or separate agreement, the policyholders, not the employer, are entitled to the cash proceeds from demutualization “when an employer pays premiums to a mutual insurance company to obtain a policy of which its employee is the policyholder, and the insurance company demutualizes” (id.), is not a basis for vacatur of the 2019 arbitration award (see Matter of Furstenberg [Aetna Cas. & Sur. Co.—Allstate Ins. Co.], 49 N.Y.2d 757, 759, 426 N.Y.S.2d 465, 403 N.E.2d 170).  The petitioners also failed to demonstrate by clear and convincing evidence that the 2019 arbitration award should be vacated on the grounds that it was irrational (see Matter of Long Beach Professional Firefighters Assn. v. City of Long Beach, 214 A.D.3d 735, 737, 186 N.Y.S.3d 39;  Matter of Soliman v. Suffolk County Dept. of Pub. Works, 155 A.D.3d 1049, 1050–1051, 64 N.Y.S.3d 555), or that it violated a strong public policy (see Matter of Long Beach Professional Firefighters Assn. v. City of Long Beach, 214 A.D.3d at 737, 186 N.Y.S.3d 39;  Matter of Subway Surface Supervisors Assn. v. New York City Tr. Auth., 153 A.D.3d 1264, 1265, 61 N.Y.S.3d 293).

Accordingly, the Supreme Court properly denied the petition to vacate the 2019 arbitration award and granted the cross-petition to confirm the 2019 arbitration award.

DUFFY, J.P., BARROS, WAN and LANDICINO, JJ., concur.