Golden Earth Chiropractic & Acupuncture, PLLC v Global Liberty Ins. Co. of N.Y., 2016 NY Slip Op 26395 (App. Term 2d Dept. 2016)
This was an interesting one. This case (which was mine) looked at the distinction between master arbitrator’s legal powers and their factual review power. The players at AAA on this record were Regina Kurz (I am always appealing her); the master arbitrator was Peter Merani (he is pretty good); and the the rest can be discerned from the opinion.
Lower Arbitration proceeding
(1) “The IME scheduling letters that had been sent to the assignor stated that he would be reimbursed for any proven loss of earnings and reasonable transportation expenses incurred in complying with the IME request. The arbitrator determined that the IME scheduling letters were defective because they called for “proven” loss of earnings and did not track the language of the regulation, and found that, as a result, proper notice was not effectuated.”
Master Arbitration proceeding
(2) “The insurer appealed the adverse decision to a master arbitrator, who vacated the arbitrator’s award in favor of the provider, upon a determination that the award “was not supported by sufficient evidence and was irrational, arbitrary and capricious and incorrect as a matter of law,” thereby, in effect, finding for the insurer.”
District Court
(3) “The provider then commenced this proceeding to vacate the master arbitrator’s award, contending that the master arbitrator had exceeded his power, within the meaning of CPLR 7511 (b) (1) (iii), because he had performed an independent review of the evidence, assessed its [*2]credibility and made his own factual determinations. The insurer, by cross petition, sought to confirm the master arbitrator’s award.”
(4) “[t]he District Court granted the provider’s petition and denied so much of the insurer’s cross petition as sought to confirm the master arbitrator’s award, finding that the master arbitrator had exceeded his authority by reviewing factual issues which had already been decided by the arbitrator and had impermissibly substituted his own factual determination for that of the arbitrator”
(5) “We reverse.”
Statements of Law
(6) “A master arbitrator is empowered to vacate an arbitration award based upon most grounds set forth in CPLR 7511 (see Matter of Petrofsky [Allstate Ins. Co.], 54 NY2d at 210; see also 11 NYCRR 65-4.10 [a] [1])”
(7) “[o]r based upon the ground that the arbitration award “was incorrect as a matter of law (procedural or factual errors committed in the arbitration below are not encompassed within this ground)” (11 NYCRR 65-4.10 [a] [4]
(8) “The power of a master arbitrator to review factual and procedural issues (unlike substantive law issues) is limited to “whether the arbitrator acted in a manner that was arbitrary and capricious, irrational or without a plausible basis”
(9) “If, however, the master arbitrator vacates the arbitrator’s award based upon an alleged error of a rule of substantive law, the determination of the master arbitrator must be upheld unless it is irrational”
Holding
(10) “Contrary to the provider’s contention, we find that the master arbitrator did not exceed the scope of his authority, as he did not weigh or independently evaluate issues of credibility or engage in any factual analysis. Rather, his legal analysis of the arbitrator’s determination was well within the scope of his authority to review and correct an error of law made by the arbitrator”
(11) “Here, the master arbitrator determined that the use of the word “proven” in the IME scheduling letters did not render such letters ineffective, notwithstanding the fact that the word “proven” does not appear in 11 NYCRR 65-3.5 (e), and that proper notice of the scheduled IMEs was, therefore, effectuated.
Conclusion
(12) Reversed with one bill of costs
