United States District Court, N.D. New York
WHITE LLP, Attorneys for BCI Construction, Inc.
OF DANIEL M. SLEASMAN, Attorneys for 797 Broadway Group, LLC
M. HOWARD, III, ESQ., DANIEL M. SLEASMAN, ESQ.
MEMORANDUM-DECISION AND ORDER
SCULLIN, Senior Judge
consolidated cases involve a contract dispute between BCI
Construction, Inc. ("Plaintiff") and 797 Broadway
Group, LLC ("Defendant"). Pending before the Court
are Plaintiff's motion to depose Arbitrator John J.
Phelan III, see Dkt. No. 9; Defendant's motion
to remand Case No. 1:16-CV-113 to state court, to dismiss
Case No. 1:16-CV-1077 for lack of subject matter
jurisdiction, and for attorney's fees, see Dkt.
No. 11; and Defendant's motion to confirm/modify its
arbitration award, see Dkt. No. 21.
summer of 2006, Schenectady County issued a request for
proposal ("RFP") for office space to house the
Schenectady County Department of Social Services
("SCDSS"). See Dkt. No. 1-1. Defendant, a
real estate developer, invited Plaintiff, a general building
contractor, and an architectural firm to assist in developing
a response to the RFP. See id. Among the many
considerations for the project was the outside wall
finishing. After all the parties met, they determined that
they would only repair and paint the outside walls. See
id. Plaintiff provided pricing to Defendant to develop
an appropriate rent-rate, which became part of
Defendant's response to the RFP. Ultimately, Defendant
was selected as the developer in the fall of 2007; and
Plaintiff and Defendant entered into a lump-sum contract
whereby Plaintiff would undertake all the necessary upgrades.
See Id. at 1-2.
after the project was completed, problems became apparent.
The stucco that Plaintiff had installed on the exterior of
the building began to detach, with portions falling to the
street below, due to the residual moisture in the brick to
which the stucco was attached. See id. at 2. When
the parties could not amicably work together to fix the
problem, Defendant unilaterally replaced the stucco shell
with an EFIS wall system.
initiated arbitration to collect the money it had expended to
repair the exterior walls. See Id. Defendant argued
that Plaintiff was responsible for investigating and testing
the moisture of the brick on the building, which, had it done
so, would have revealed that the planned stucco repairs would
not have succeeded. See id. Plaintiff, on the other
hand, maintained that it relied on the architectural
firm's implicit acknowledgment that the stucco repair
would work. See Id. In addition, Plaintiff argued
that Defendant failed to disclose the moisture condition and
it was otherwise hidden; thus, it was Defendant's failure
to investigate that caused the damage. See id.
Phelan, III, served as the arbitrator for the parties'
dispute. Mr. Phelan concluded, among other things, that
Plaintiff was responsible for the final cost of construction
because it had assumed the risk of additional costs by
signing a lump-sum contract. See id. Therefore, on
August 25, 2016, Mr. Phelan ruled in favor of Defendant and
awarded Defendant $472, 697.60 for the construction and $114,
136.98 for attorney's fees plus interest. See
id. at 4; see also Dkt. No. 1-2.
initiated the current litigation in this Court on September
1, 2016, pursuant to 9 U.S.C. § 10(a)(2) of the Federal
Arbitration Act ("FAA"), asking the Court to vacate
the award because the arbitrator, Mr. Phelan, was biased.
See generally Case No. 1:16-CV-1077, Dkt. No. 1 at
¶¶ 14-22. Plaintiff subsequently moved to compel a
deposition of Mr. Phelan to explore the extent of his
potential conflict of interest. See Dkt. No. 9.
in New York Supreme Court, County of Albany, Defendant filed
a petition pursuant to New York Civil Practice Laws and Rules
("C.P.L.R.") § 7511 to confirm its arbitration
award. See Dkt. No. 11-1 at 3. Plaintiff removed the
state-court case to this District pursuant to 28 U.S.C.
§ 1441. See Case No. 1:16-CV-1113, Dkt. No.
11-2 at 11. The Court consolidated the two cases.
See Case No. 1:16-CV-1077, Dkt. No. 8. Defendant
subsequently moved to remand Case No. 1:16-CV-1113 and to
dismiss Case No. 1:16-CV-1077 for lack of subject matter