Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

UNITED HOUSE OF PRAYER v. L.M.A. INTERN.

June 22, 2000

UNITED HOUSE OF PRAYER FOR ALL PEOPLE OF THE CHURCH ON THE ROCK OF THE APOSTOLIC FAITH, PETITIONER,
V.
L.M.A. INTERNATIONAL, LTD., RESPONDENT.



The opinion of the court was delivered by: Berman, District Judge.

ORDER

Petitioner United House of Prayer for All People of the Church on the Rock of the Apostolic Faith ("Petitioner" or "Church" or "United") moves pursuant to Section 9 of the Federal Arbitration Act, 9 U.S.C. § 9 ("FAA"), for an order confirming a Construction Industry Arbitration Award ("Award") issued on June 7, 1999. Under the Award, Respondent L.M.A. International, Ltd. ("Respondent" or "LMA") was directed to pay a total of $2,596,295.26 plus $519.83*fn1 interest per day to United. Respondent opposes confirmation of the Award, and is understood by this Court to cross-move to vacate the Award pursuant to Section 10 of the FAA. 9 U.S.C. § 10; see The Hartbridge, 57 F.2d 672 (2d Cir. 1932) ("Upon a motion to confirm the party opposing confirmation may apparently object upon any ground which constitutes a sufficient cause under the statute to vacate, modify, or correct, although no such formal motion has been made."). The Award was made by a panel of three arbitrators from the American Arbitration Association ("AAA"). For the reasons set forth below, the motion to confirm the Award is granted, and the cross-motion to vacate the Award is denied.

Background

Petitioner United, a non-profit church incorporated in the District of Columbia and owner of property located at 2310 Eighth Avenue, New York, New York 10027, and Respondent LMA, a New York construction services company, entered into an agreement on July 10, 1996 (the "Agreement") to undertake certain repair and other construction work at the 2310 Eighth Avenue property. Disputes arose between the Church and LMA with respect to the project, and on June 12, 1996, under the Agreement's arbitration clause*fn2, LMA filed for arbitration by (the New York City office of) the AAA. LMA demanded monies for work allegedly performed under the Agreement. United counterclaimed for monies for management fees, repair of defective work, payments to subcontractors, completion costs and overpayments to LMA.

Shortly after the arbitration was commenced, both parties signed a Compensation Stipulation, dated September 24, 1996, providing for payment of the arbitrators' fees at a rate of $1,000 per arbitrator per day; an arbitration-day lasted from approximately 10:00 AM to 4:00 PM. Affidavit of Gregory E. Ronan, dated September 9, 1999 ("Ronan Aff.") ¶ 8. By the summer of 1997, only ten hearing-days had been completed due to the difficulty of coordinating the arbitrators' schedules. Counsel for LMA apparently complained to the AAA case administrator about the slow pace of the arbitration. Shortly thereafter, the arbitration panel agreed to extend the length of the hearing days, i.e., from 8:30 AM to 5:30 PM. The arbitrators pay was increased by 50%, in accordance with the 50% (longer) arbitration days. Both parties consented to the increase. Affidavit of James T. Farrell, dated September 9, 1999 ("Farrell Aff.") ¶ 5.

Sometime during the next few hearings, counsel for LMA advised the panel that LMA was in serious financial difficulties; that LMA was having trouble getting expert witness to appear due to lack of funds; and that LMA itself had ceased business operation because it had no money to pay rent or salaries. Ronan Aff. ¶ 12.

In June of 1997, the AAA sent out an (advance) invoice for hearings to be held in September and October, 1997. On September 17, 1997, the AAA informed the parties that it would suspend arbitration because Respondent's share of arbitration fees had not been paid. Farrell Aff. ¶ 7; Farrell Aff. Exhibits C and D. Petitioner, not wanting to initiate a new proceeding, offered to advance Respondent's portion of the arbitrators' fees, and, therefore, the AAA resumed hearings. LMA wrote, in a letter to the AAA dated April 7, 1998, "The Respondent has stated that it has paid all fees due for the arbitration. We expect that they will continue to pay all fees so that there will be no further interruption of the hearings. Under these circumstances, we request that the Association immediately schedule hearings on the claims and counterclaims." Reply Affidavit of Edward F. Maluf, dated September 22, 1999 ("Maluf Reply Aff.") 4; Maluf Reply Aff. Exhibit A.

a) $233,230.00 to LMA on its claims;

b) $2,341,425.00 to the Church on its counterclaims for management fees, repair of defective work, direct payment to subcontractors, excess completion costs and overpayments; and
c) $458,532.41 to the Church as interest for 29 months (preceding the award) at nine percent (9%) per annum.
In addition, the Church was awarded an additional $29,567.85 determined as follows:
a) $27,620.25, representing that portion of the AAA's fees previously advanced by the Church but attributable to LMA; b) $2,307.60 representing that portion of the AAA's fees and expenses previously advanced by the Church but attributable to LMA.

The motion before the Court raises four issues: (i) whether N.Y.C.P.L.R. ("CPLR") 7511 or the FAA, 9 U.S.C.A. ยง 9 (1970), governs review of the instant motion; (ii) whether ex parte communications with the arbitrators, alleged by LMA to have occurred, serve as grounds to vacate the Award; and ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.