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FISCHER v. CGA COMPUTER ASSOCS.

July 8, 1985

In the Matter of the Arbitration between ADDISON M. FISCHER, Petitioner, -against- CGA COMPUTER ASSOCIATES, INC., a/k/a CGA Computer, Inc., Respondent


The opinion of the court was delivered by: EDELSTEIN

OPINION AND ORDER

EDELSTEIN, District Judge

Petitioner, Addison M. Fischer ("Fischer"), brought this action on May 23, 1985 for confirmation of an arbitration award rendered May 22, 1985. This court has jurisdiction pursuant to 9 U.S.C. § 9 and 28 U.S.C. § 1332. For the reasons set forth below, the arbitration award is confirmed as modified herein, pursuant to 9 U.S.C. §§ 9 & 11.

 FACTUAL BACKGROUND

 Fischer is a computer programmer and was a principal of Allen Services Corporation ("ASC"), a computer software company. On or about January 30, 1981, ASC sold its assets to respondent, CGA Computer, Inc. ("CGA"), pursuant to an "Acquisition Agreement," and the parties contemporaneously executed an "Employment Agreement," which was later amended by a First Supplement and Amendment to Agreement. *fn1" Among the assets sold by ASC to CGA pursuant to the Acquisition Agreement were several computer software programs created and developed by Fischer. Fischer's duties under the employment agreements were to provide training and technical support to CGA in connection with its efforts to market Fischer-created software products and, under certain circumstances, to help develop new software products for CGA. Fischer's compensation was to be in several forms, including, inter alia, royalties based on CGA's sales of Fischer-created software products. CGA was required to furnish Fischer at specified intervals with certified audits setting forth and confirming the proper computation of Fischer's royalties.

 After a dispute arose between the parties, Fischer, invoking the termination clause in the Amended Employment Agreement, notified CGA that he was terminating all covenants, obligations and duties contained in the parties' agreements. Fischer claimed that CGA had materially breached the employment agreements by, inter alia, failing to pay specified royalties, failing to provide certified audits and wrongfully locking Fischer out of CGA's computer facility.

 The employment agreements contain an arbitration clause which provides:

 
Any controversy or claim arising under or relating to this Agreement or the breach hereof shall be settled by arbitration in New York, New York in accordance with the rules then obtaining of the American Arbitration Association. Judgment upon any award rendered may be entered in any court having jurisdiction thereof.

 CGA served an original and amended arbitration demand in which it sought declaratory and monetary relief. CGA sought a declaration that: (1) Fischer remains obligated to perform his duties under the employment agreements; (2) Fischer must deliver to CGA all programs, source codes, object codes and related material created by him during his period of full-time employment with CGA; and (3) CGA is entitled to exercise a right of first refusal with respect to all software programs and modifications developed or acquired by Fischer at any time until and including November 27, 1991. Exhibit E to Petition for Confirmation. CGA also demanded monetary damages resulting from Fischer's breach of the Acquisition Agreement and the employment agreements. Id.

 Fischer counterclaimed for the following declaratory relief: (1) that CGA had breached the employment agreements; (2) that Fischer is relieved from all duties and covenants under the agreements; and (3) that CGA must grant Fischer access to its computer resources and facilities. Fischer sought monetary damages resulting from CGA's breach of the employment agreements and from its conversion of Fischer's personal property. Fischer also sought an accounting of all monies owed him pursuant to the employment agreements.

 On May 22, 1985, the arbitration panel rendered a decision entitled "AWARD OF ARBITRATORS." The AWARD OF ARBITRATORS provides in pertinent part:

 WE, THE UNDERSIGNED ARBITRATORS . . . FIND as follows:

 
A. With respect to the Right of First Refusal, Section (13) of the Acquisition Agreement . . . has remained and continues to remain in full force and effect for a period of seven (7) years from the closing date as that date is defined in the Acquisition Agreement.
 
B. ADDISION M. FISCHER . . . shall be relieved of his obligations with respect to all Covenants not to compete as contained in paragraph 5 of the Employment ...

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