Matter of Lipsky Custom Home Bldrs. Corp. v. Groundbreakers Contr., Inc.
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Opinion
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Bureau Thomas J.K. Smith, State Reporter
Matter of Lipsky Custom Home Bldrs. Corp. v Groundbreakers Contr., Inc.
2026 NY Slip Op 04421
July 15, 2026
Appellate Division, Second Department
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This decision is uncorrected and subject to revision before publication in the Official Reports.
In the Matter of Lipsky Custom Home Builders Corp., appellant,
v
Groundbreakers Contracting, Inc., respondent.
Supreme Court of the State of New York, Appellate Division, Second Judicial Department
Decided on July 15, 2026
2024-06864, (Index No. 617539/23)
Betsy Barros, J.P.
Lara J. Genovesi
Lourdes M. Ventura
Elena Goldberg Velazquez, JJ.
Patricia Rooney, P.C., Lindenhurst, NY, for appellant.
McGinity & McGinity, P.C., Garden City, NY (Leo F. McGinity, Jr., of counsel), for respondent.
DECISION & ORDER
In a proceeding pursuant to CPLR article 75 to confirm an arbitration award dated April 26, 2023, the petitioner appeals from an order of the Supreme Court, Suffolk County (David T. Reilly, J.), dated March 21, 2024. The order, in effect, denied the petition to confirm the arbitration award, vacated the arbitration award, remitted the matter for a rehearing and determination before a different arbitrator, and dismissed the proceeding.
ORDERED that the order is reversed, on the law, with costs, the petition to confirm the arbitration award is granted, and the matter is remitted to the Supreme Court, Suffolk County, for the entry of a judgment.
In February 2022, the petitioner, as general contractor, entered into a subcontract with Groundbreakers Contracting, Inc. (hereinafter Groundbreakers), whereby Groundbreakers was to perform work on a construction project in Asharoken. The subcontract contained a mandatory arbitration clause requiring the parties to submit any disputes to binding arbitration. The petitioner paid Groundbreakers a deposit of $240,000. However, the property owner subsequently terminated the project, and the petitioner notified Groundbreakers that it was terminating the subcontract and requested that the deposit be returned. Groundbreakers refunded the petitioner only $112,071.10 of the $240,000 deposit, deducting $127,928.90 from the deposit amount for sums allegedly earned prior to the date the subcontract was terminated. Accordingly, a dispute arose between the parties regarding the deposit amount, and the parties submitted this dispute to arbitration.
During a preliminary hearing conference, the parties agreed to resolve the matter "on the papers" if possible, and the arbitrator, inter alia, scheduled a conference call, to be held after the parties had engaged in discovery and submitted their arguments in writing, to determine whether a virtual hearing or oral arguments were necessary to further address the parties' written submissions, although the arbitrator noted that "it is anticipated that the written submissions will be sufficient to enable the arbitrator to resolve the matter with a reasoned decision." The arbitrator did not hold the scheduled conference call and, instead, issued an award based on the parties' written submissions. In an award dated April 26, 2023, the arbitrator awarded the petitioner the sum of $127,928.90, plus interest, as well as attorney's fees and reimbursement for certain arbitration fees.
In July 2023, the petitioner commenced this proceeding pursuant to CPLR article 75 to confirm the arbitrator's award. Groundbreakers opposed the petition. In an order dated March 21, 2024, the Supreme Court, in effect, denied the petition to confirm the arbitration award, vacated the arbitration award, remitted the matter for a rehearing and determination before a different arbitrator, and dismissed the proceeding. The petitioner appeals.
"Judicial review of an arbitration award is extremely limited" (Matter of Tantillo v Nesenger, 241 AD3d 1477, 1478; see Matter of Nofal v MAS-UNY, 234 AD3d 970, 971). CPLR 7510 provides that "[t]he court shall confirm an [arbitration] award upon application of a party made within one year after its delivery to them, unless the award is vacated upon a ground specified in section [7511]" (see Matter of Nofal v MAS-UNY, 234 AD3d at 971; Matter of Tauber v Gross, 216 AD3d 1066, 1068). "A party seeking to overturn an arbitration award on one or more grounds stated in CPLR 7511(b)(1) bears a heavy burden, and must establish a ground for vacatur by clear and convincing evidence" (Matter of Tauber v Gross, 216 AD3d at 1068 [internal quotation marks omitted]; see Matter of Tantillo v Nesenger, 241 AD3d at 1478).
An arbitration award may be vacated on the grounds, inter alia, that the rights of a party were prejudiced by "corruption, fraud or misconduct in procuring the award" (CPLR 7511[b][1][i]), or an arbitrator "exceeded his [or her] power or so imperfectly executed it that a final and definite award upon the subject matter submitted was not made" (id. § 7511[b][1][iii]). "An arbitrator exceed[s] [his or her] power within the meaning of the CPLR only when [he or she] issue[s] an award that violates a strong public policy, is irrational or clearly exceeds a specifically enumerated limitation on the arbitrator's power" (Matter of Bench v Brookhaven Heart, PLLC, 236 AD3d 902, 903 [internal quotation marks omitted]; see Matter of Tantillo v Nesenger, 241 AD3d at 1478). "[A]n arbitrator's award should not be vacated for errors of law and fact committed by the arbitrator and the courts should not assume the role of overseers to mold the award to conform to their sense of justice" (Wien & Malkin LLP v Helmsley-Spear, Inc., 6 NY3d 471, 479-480; see Matter of Bench v Brookhaven Heart, PLLC, 236 AD3d at 903).
Here, Groundbreakers failed to establish by clear and convincing evidence that the arbitrator's award was irrational, violated a strong public policy, or clearly exceeded a specifically enumerated limitation on the arbitrator's power (see Matter of Tantillo v Nesenger, 241 AD3d at 1478). Groundbreakers also failed to establish that the arbitrator engaged in misconduct sufficient to warrant vacating the arbitration award. Although the arbitrator issued an award based on the parties' written submissions without holding a previously scheduled conference call, there is no indication in the record that the arbitrator refused to consider pertinent material evidence (see Matter of Allstate Ins. Co. v GEICO [Govt. Empls. Ins. Co.], 100 AD3d 878, 879; Brooks v BDO Seidman, LLP, 94 AD3d 528, 528-529).
Accordingly, the Supreme Court should have granted the petition and confirmed the arbitration award.
BARROS, J.P., GENOVESI, VENTURA and GOLDBERG VELAZQUEZ, JJ., concur.
ENTER:
Darrell M. Joseph
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