In re the Arbitration between Science Development Corp. & Schonberger

Appellate Division of the Supreme Court of New York

In re the Arbitration between Science Development Corp. & Schonberger

156 A.D.2d 253, 548 N.Y.S.2d 642, 1989 N.Y. App. Div. LEXIS 15759

CourtAppellate Division of the Supreme Court of the State of New York

DecidedDecember 19, 1989

StatusPublished

Cited by5 cases

This text of 156 A.D.2d 253 (In re the Arbitration between Science Development Corp. & Schonberger) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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In re the Arbitration between Science Development Corp. & Schonberger, 156 A.D.2d 253, 548 N.Y.S.2d 642, 1989 N.Y. App. Div. LEXIS 15759 (N.Y. Ct. App. 1989).

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Opinion

Judgment, Supreme Court, New York County (David Saxe, J.), entered February 24, 1989, which, inter alia, granted petitioners-respondents’ motion to renew and, upon renewal, vacated a prior order and judgment of said court, entered April 12, 1988, granted petitioners-respondents’ motion to vacate the arbitration award, and remanded for further arbitration before a new panel, unanimously affirmed, without costs.

After an initial confirmation by the IAS Part of the arbitration award granted to respondent-appellant, Milton Schonberger, it was learned by petitioners-respondents, Science Development Corp. and Farleigh S. Dickinson, Jr., that Schonberger and his then attorneys had failed to disclose critical evidence to the arbitrators. Specifically, it was revealed in the course of a dispute over legal fees which subsequently developed between Schonberger and his attorneys that counsel fees for prior services had been computed as a percentage of the royalties of certain patents owned by Schonberger.

In view of the fact that the value of Schonberger’s assets was a central issue in the arbitration, petitioners-respondents moved to renew their previously denied application to vacate [254]*254the arbitration award on the ground that Schonberger and his attorneys had concealed a transaction which provided strong evidence with respect to such value.

While we recognize that the discovery of new evidence is generally not a ground for vacatur of an arbitration award (Matter of Central Gen. Hosp. v Hanover Ins. Co., 49 NY2d 950; Levine v Klein, 70 AD2d 532), it was proper, under the circumstances presented herein, for the IAS Part to grant renewal and vacate the award pursuant to CPLR 7511 (b) (1) (i), which cites the grounds of "corruption, fraud or misconduct in procuring the award”. As was observed by this court in Matter of Kalgren (Central Mut. Ins. Co.) (68 AD2d 549, 553), "[w]hile their lack of candor may fall short of outright fraud, it does constitute the type of misconduct that warrants further proceedings before the arbitrator”. Concur—Murphy, P. J., Ross, Milonas, Kassal and Rubin, JJ.

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Judgment, Supreme Court, New York County (David Saxe, J.), entered February 24, 1989, which, inter alia, granted petitioners-respondents’ motion to renew and, upon renewal, vacated a prior order and judgment of said court, entered April 12, 1988, granted petitioners-respondents’ motion to vacate the arbitration award, and remanded for further arbitration before a new panel, unanimously affirmed, without costs.

After an initial confirmation by the IAS Part of the arbitration award granted to respondent-appellant, Milton Schonberger, it was learned by petitioners-respondents, Science Development Corp. and Farleigh S. Dickinson, Jr., that Schonberger and his then attorneys had failed to disclose critical evidence to the arbitrators. Specifically, it was revealed in the course of a dispute over legal fees which subsequently developed between Schonberger and his attorneys that counsel fees for prior services had been computed as a percentage of the royalties of certain patents owned by Schonberger.

In view of the fact that the value of Schonberger’s assets was a central issue in the arbitration, petitioners-respondents moved to renew their previously denied application to vacate [254]*254the arbitration award on the ground that Schonberger and his attorneys had concealed a transaction which provided strong evidence with respect to such value.

While we recognize that the discovery of new evidence is generally not a ground for vacatur of an arbitration award (Matter of Central Gen. Hosp. v Hanover Ins. Co., 49 NY2d 950; Levine v Klein, 70 AD2d 532), it was proper, under the circumstances presented herein, for the IAS Part to grant renewal and vacate the award pursuant to CPLR 7511 (b) (1) (i), which cites the grounds of "corruption, fraud or misconduct in procuring the award”. As was observed by this court in Matter of Kalgren (Central Mut. Ins. Co.) (68 AD2d 549, 553), "[w]hile their lack of candor may fall short of outright fraud, it does constitute the type of misconduct that warrants further proceedings before the arbitrator”. Concur—Murphy, P. J., Ross, Milonas, Kassal and Rubin, JJ.

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156 A.D.2d 253, 548 N.Y.S.2d 642, 1989 N.Y. App. Div. LEXIS 15759, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-the-arbitration-between-science-development-corp-schonberger-nyappdiv-1989.

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