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THE HOME INSURANCE CO. v. RHA/PA. NURSING HOMES
October 2, 2000
THE HOME INSURANCE COMPANY, ETC., PETITIONER,
RHA/PENNSYLVANIA NURSING HOMES, INC., RESPONDENT.
The opinion of the court was delivered by: Lewis A. Kaplan, District Judge.
This is a proceeding under Section 9 of the Federal Arbitration Act (the
"Act")*fn1 to confirm an arbitration award. Respondent has cross-moved to
dismiss the petition principally on the ground that the Court lacks
subject matter jurisdiction.
The arbitration clauses here at issue neither provide for the entry of
judgment confirming awards made pursuant to them nor incorporate any
arbitration rules that so provide. The essence of respondent's
position is that confirmation may not be granted because Section 9 of
the Act permits confirmation only where "the parties in their
agreement have agreed that a judgment of the court shall be entered
upon the award made pursuant to the arbitration . . ." They rely on
Varley v. Tarrytown Associates, Inc.,*fn2 the continued vitality of
which is disputed by petitioner.
Varley is squarely in point and requires dismissal if it still is binding
on this Court. And while one judge in this district long ago concluded that
Varley was a dead letter,*fn3 subsequent developments have demonstrated
that reports of its demise were premature. Smiga v. Dean Witter Reynolds,
Inc.*fn4 decided twelve years after Harris, demonstrates that the Circuit
then still regarded Varley as alive and well.*fn5 In consequence, this
Court is bound to apply Varley. The petition therefore fails to state a
claim upon which relief may be granted and the cross-motion must be
granted. That, however, is not necessarily the end of the matter.
It is significant to note that respondent misconceives the nature of
the argument upon which it has prevailed. Subject matter jurisdiction
here is conferred by Section 1332 of the Judicial Code*fn6 on the basis
of diversity of citizenship, not by the Federal Arbitration Act.
Hence, the respondent's argument is more properly characterized as a
contention that the petition does not state a claim upon which relief
may be granted than as a challenge to subject matter jurisdiction.
The Court therefore must consider whether the flaw in the petition is
fatal to petitioner's case or whether the petition might be amended
to state a legally sufficient claim.
For the foregoing reasons, respondent's cross-motion to dismiss the
petition is granted to the extent that the petition is dismissed for
failure to state a claim upon which relief may be granted. Petitioner may
file an amended petition no later than October 15, 2000.
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