The opinion of the court was delivered by: CONSTANCE BAKER MOTLEY
The instant dispute arises out of an arbitration over the alleged breach of a contract between Pine valley Productions (PVP) (and its principal, Susan Lucci) and S.L. Collections (SLC). The contract in question is an agreement between the parties wherein SLC would develop healthcare and beauty products for national marketing. These products were to be endorsed by Susan Lucci ("Lucci"), a well-known television actress. The agreement provided that Lucci would lend her name and likeness to endorse merchandise. In return PVP would receive 20% of the gross income realized from product sales. (See Ex. A to S.L. Collections' Motion to Confirm Award).
On April 1, 1990, PVP and Golden Images, Inc signed a written contract for the national direct television marketing of products to be endorsed by Lucci, the principal behind PVP. By agreement dated December 21, 1990, Golden assigned all of its rights and liabilities under the April 1 contract to SLC.
On March 5, 1991, PVP, SLC, and Lucci entered into a written contract with QVC Network ("QVC"). QVC is a direct marketing cable station. Its programming consists solely of the display of various consumer goods which it then markets and sells over cable television channels. Viewers are presented with various products on television and invited to telephone in their orders.
The QVC Agreement specified that QVC would market, distribute, and promote over its televised shopping program products to be provided by SLC and endorsed by Lucci. The QVC Agreement provided that Lucci and SLC would not promote products covered under the QVC Agreement on television other than on QVC during the term of the Agreement and, under certain circumstances, for a period of two years after its termination (See QVC Agreement, Ex. B to S.L. Collections' Motion to Confirm Award).
In the summer of 1991, PVP and SLC entered into negotiations aimed at: (1) adding a new product line of skin care products to the QVC Agreement; (2) limiting the exclusivity provisions of the QVC Agreement to skin care and hair care products; and (3) revising the income division between the parties. Six drafts of the Agreement were written, but the last version ("Draft 6") was never signed.
In early 1992 certain disputes arose between PVP and SLC. When they could not be resolved the disputes were submitted in May of 1992 by SLC to arbitration in New York pursuant to the Commercial Arbitration Rules of the American Arbitration Association as provided for in P 6 of the QVC Agreement. (See SLC's Demand for Arbitration, Ex. D to SLC's Motion to Confirm). QVC was not a party to the arbitration.
The arbitration took place before Bertrand Lanchner, Esq. in October and November of 1992. After the close of the proceedings, but before the rendering of an award, PVP sought to introduce as evidence a letter of December 18, 1992 from Douglas Briggs of QVC to Steven Goldberg of SLC ("December 18 Letter"). The December 18 Letter stated that QVC had "no present intention to promote the sale of Susan Lucci Collection professional Hair Care products provided by SLC Collections, Inc." SLC opposed admission of the December 18 Letter. After due consideration the Arbitrator chose not to accept it into evidence.
On December 30, 1992, the Arbitrator issued an Award, finding that Draft 6 was a binding agreement between PVP and SLC. (December Award, Ex. F to SLC's Motion to Confirm (hereinafter December Award) P 2). Paragraph 4 of the December Award found that "LUCCI must perform on QVC in regard to the hair care line, must reasonably agree to additional hair care line products, PVP and CLAIMANT must enter into good faith negotiations to agree on a line of skin care products, and LUCCI must perform on QVC in regard to such skin care products. If PVP and LUCCI refuse to act as above specified, CLAIMANT will be entitled to damages, to be determined, and an injunction against PVP and LUCCI whereby they will be precluded from performing on direct marketing cable stations in regard to hair and skin care products."
Paragraph 8 of the December Award further provided that "the arbitrator shall retain jurisdiction with respect to any issues that may arise out of Paragraph #4 above of this Award."
The dispute was not resolved, however, for QVC refused to put Lucci back on air. By letter dated January 11, 1993, SLC sought modification of the December Award on the basis of the Briggs Letter and oral communications with QVC through their attorney. In these communications QVC explicitly stated that even though the disputes between SLC and PVP had been arbitrated, QVC had no intent to put Lucci back on the air (Affidavit of Alan Feldstein, counsel to SLC, P 18). PVP opposed SLC's petition and in doing so wrote "to request as modification of the award certain clarifications necessitated by SLC's conduct since the award was entered." (Letter of PVP to Lanchner of January 15, 1993, at 1, Ex. I to SLC's Motion to Confirm).
On February 26, 1993, the Arbitrator issued the February Award, taking into account the Briggs Letter. The February Award amended the December Award by, inter alia, (1) enjoining Lucci from "appearing on QVC in regard to hair and skin products for the term of the agreement" between PVP and SLC in the event that QVC abrogates its agreement with PVP and SLC; (2) rendering SLC's right to injunctive relief against PVP contingent upon actions by QVC; (3) providing that PVP and SLC "advise QVC that their respective differences have been resolved by this arbitration decision" and that PVP and SLC "are prepared to fulfill the terms and conditions of the QVC Agreement"; (4) providing that in the event the QVC abrogates the QVC Agreement, PVP and SLC "shall cooperate, using their respective best efforts and in good faith, to obtain time on another direct marketing cable station." (February Award, Ex. L to SLC's Motion to Confirm).
Before the court are two petitions: PVP seeks confirmation and modification of the December Award and a vacatur of the February Award. SLC seeks a confirmation of the December and the February Awards.
For the following reasons, the December Award as modified by the February Award must be confirmed by this court.
Strong Policy Favors Confirmation of Awards.
There are strong public policy considerations favoring confirmation of an arbitrator's award. Unless one of the statutory grounds for vacating or modifying under 9 U.S.C. §§ 9 or 11 is present, a federal district court is to confirm the award of an arbitrator. Ottley v. Schwartzberg, 819 F.2d 373, 375 (2d Cir. 1987); ...