Sharp v Industry Model Group LLC 2024 NY Slip Op 33484(U) September 27, 2024 Supreme Court, New York County Docket Number: Index No. 651705/2024 Judge: Lyle E. Frank Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication. INDEX NO. 651705/2024 NYSCEF DOC. NO. 35 RECEIVED NYSCEF: 09/27/2024
SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: HON. LYLE E. FRANK PART 11M Justice ----------------------------------------------------------------- ----------------X INDEX NO. 651705/2024 RHIYEN BRADLEIGH SHARP, MOTION DATE 04/02/2024 Petitioner, MOTION SEQ. NO. 001 - V -
INDUSTRY MODEL GROUP LLC,D/B/A INDUSTRY DECISION + ORDER ON MODEL MANAGEMENT, FEDERICO PIGNATELLI MOTION Respondent. ------------------------------------------------------------------- --------------X
The following e-filed documents, listed by NYSCEF document number (Motion 001) 2, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 30 were read on this motion to/for CONFIRM/DISAPPROVE AWARD/REPORT
Upon the foregoing documents, petitioner's award is confirmed and the respondent's
cross-motion to vacate award is denied.
Background
This petition arises out of an employment dispute between Petitioner Rhiyen Bradleigh
Sharp ("Sharp" or "Petitioner") and Respondent Industry Model Group ("IMM"), owned by
Respondent Federico Pignatelli ("Pignatelli", together with IMM "Respondents"). The parties
entered into an employment agreement in February 2017 ("Employment Agreement"), and then
in April 2017 the parties signed another employment agreement ("the April 2017 Agreement").
In January 2021, Sharp initiated arbitration proceedings alleging that IMM had terminated his
employment prematurely, in breach of the April 2017 Agreement. The Arbitrator issued an
Interim Award in August of 2021 finding that the April 2017 Agreement was a binding
employment contract for a fixed term of three years and that it created a commission structure
that gave Sharp "35% of net revenue generated on any bookings related to the Industry Model
651705/2024 SHARP, RHIYEN BRADLEIGH vs. INDUSTRY MODEL GROUP LLC, D/8/A Page 1 of 5 INDUSTRY MODEL MANAGEMENT ET AL Motion No. 001
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Management." The Interim Award also gave Sharp $132,692.52 for the salary he would have
received for the remaining length of the three years employment and $16,317.00 for the costs of
maintaining health insurance coverage after his termination. The Arbitrator in the Final Award
gave Sharp unpaid commissions of $694,697.00, which in combination with the two awards in
the Interim Award resulted in a total of $843,706.52, plus pre-judgment and post-judgment
interest at the rate of nine percent (9%) per annum.
On April 02, 2024, Sharp filed the present petition asking the Court to confirm the
arbitration award. IMM opposes the motion on the grounds that the Arbitrator's final decision
was irrational and cross-moves to vacate the award.
Standard of Review
Well-settled law states that courts must review arbitration awards with a high level of
deference. Soc. Serv. Emps. Union v. City ofNew York, 135 A.D.3d 226,230 (1st Dept. 2015).
An arbitration award may only be vacated when it "violates a strong public policy, is irrational,
or clearly exceeds a specifically enumerated limitation on the arbitrator's power." Id.
Furthermore, if there "was some basis in the record for each of the arbitrator's findings", the
award should not be vacated. Branciforte v. Levey, 222 A.D.2d 276 (1st Dept. 1995). Arbitrators
may "apply their own sense of law, justice and equity to the facts as they find them" and an
award in instances of voluntary arbitration will be deemed irrational "when the arbitrators give
the provisions in dispute 'a completely irrational construction ... and in effect [make] a new
contract for the parties'." Wand Elec. v. Clinton County Highway Dep 't, 245 A.D.2d 984, 985
(3rd Dept. 1997) quoting Matter ofNational Cash Register Co. v. Wilson, 8 N.Y.2d 377, 383
(1960).
Discussion
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Respondents dispute the award on the grounds that it was irrational and against public
policy. Specifically, Respondents disputes the arbitrator's handling of four issues: 1) the
allegedly for-cause termination of Sharp, 2) the calculation of net revenue, 3) the binding nature
of the April 2017 Agreement, and 4) the findings made regarding Sharp's immigration status. All
four challenges to the arbitration award fail to overcome the high level of deference due.
Regarding the for-cause termination, the arbitrator looked to a variety of evidence
submitted by Sharp in determining that Sharp met his employment obligations, including the lack
of a statement of cause in the termination notification. For the calculation of net revenue, the
arbitrator applied classic principles of contracts interpretation to the agreement as well as issuing
a separate order on the definition of "net revenue". This separate thirteen-page order weighed
both sides' arguments on the matter and considered their submissions (including record evidence
cited by Sharp) before coming to a determination. In deciding the binding nature of the April
2017 Agreement, the arbitrator relied in part on unrebutted testimony by Sharp regarding
discussions with Pignatelli. Therefore, there is some basis in the record for each of these findings
and they cannot be said to be completely irrational.
Finally, Respondents base their objection to the findings regarding Sharp's immigration
status partly on public policy grounds. They argue that it was an irrational decision to decide that
Sharp was not illegally present in the United States and that case law dictates that awarding back
pay to a person who was illegally present goes against public policy. A court can intervene in an
arbitration award for public policy grounds only when "public policy considerations, embodied
in statute or decisional law, prohibit, in an absolute sense, particular matters being decided, or
certain relief being granted by an arbitrator." NY City Transit Auth. v. Transp. Workers Union
ofAm., 99 N.Y.2d 1, 7 (2002), citing Matter of Sprinzen, 46 N.Y.2d 623, 631 (1979).
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Furthermore, "a strong public policy justifying the vacatur of an arbitration award must be
apparent from the face of the award, without extended factual inquiry." Denson v. Donald J
Trump for President, Inc., 180 A.D.3d 446,453 (1st Dept. 2020).
When faced with a public policy challenge to an arbitration award, "Judges cannot reject
the factual findings of an arbitrator simply because they do not agree with them." NY State
Corr. Officers & Police Benevolent Ass 'n v. State, 94 N.Y.2d 321, 328 (1999). Pursuant to the
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Sharp v Industry Model Group LLC 2024 NY Slip Op 33484(U) September 27, 2024 Supreme Court, New York County Docket Number: Index No. 651705/2024 Judge: Lyle E. Frank Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication. INDEX NO. 651705/2024 NYSCEF DOC. NO. 35 RECEIVED NYSCEF: 09/27/2024
SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: HON. LYLE E. FRANK PART 11M Justice ----------------------------------------------------------------- ----------------X INDEX NO. 651705/2024 RHIYEN BRADLEIGH SHARP, MOTION DATE 04/02/2024 Petitioner, MOTION SEQ. NO. 001 - V -
INDUSTRY MODEL GROUP LLC,D/B/A INDUSTRY DECISION + ORDER ON MODEL MANAGEMENT, FEDERICO PIGNATELLI MOTION Respondent. ------------------------------------------------------------------- --------------X
The following e-filed documents, listed by NYSCEF document number (Motion 001) 2, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 30 were read on this motion to/for CONFIRM/DISAPPROVE AWARD/REPORT
Upon the foregoing documents, petitioner's award is confirmed and the respondent's
cross-motion to vacate award is denied.
Background
This petition arises out of an employment dispute between Petitioner Rhiyen Bradleigh
Sharp ("Sharp" or "Petitioner") and Respondent Industry Model Group ("IMM"), owned by
Respondent Federico Pignatelli ("Pignatelli", together with IMM "Respondents"). The parties
entered into an employment agreement in February 2017 ("Employment Agreement"), and then
in April 2017 the parties signed another employment agreement ("the April 2017 Agreement").
In January 2021, Sharp initiated arbitration proceedings alleging that IMM had terminated his
employment prematurely, in breach of the April 2017 Agreement. The Arbitrator issued an
Interim Award in August of 2021 finding that the April 2017 Agreement was a binding
employment contract for a fixed term of three years and that it created a commission structure
that gave Sharp "35% of net revenue generated on any bookings related to the Industry Model
651705/2024 SHARP, RHIYEN BRADLEIGH vs. INDUSTRY MODEL GROUP LLC, D/8/A Page 1 of 5 INDUSTRY MODEL MANAGEMENT ET AL Motion No. 001
1 of 5 [* 1] INDEX NO. 651705/2024 NYSCEF DOC. NO. 35 RECEIVED NYSCEF: 09/27/2024
Management." The Interim Award also gave Sharp $132,692.52 for the salary he would have
received for the remaining length of the three years employment and $16,317.00 for the costs of
maintaining health insurance coverage after his termination. The Arbitrator in the Final Award
gave Sharp unpaid commissions of $694,697.00, which in combination with the two awards in
the Interim Award resulted in a total of $843,706.52, plus pre-judgment and post-judgment
interest at the rate of nine percent (9%) per annum.
On April 02, 2024, Sharp filed the present petition asking the Court to confirm the
arbitration award. IMM opposes the motion on the grounds that the Arbitrator's final decision
was irrational and cross-moves to vacate the award.
Standard of Review
Well-settled law states that courts must review arbitration awards with a high level of
deference. Soc. Serv. Emps. Union v. City ofNew York, 135 A.D.3d 226,230 (1st Dept. 2015).
An arbitration award may only be vacated when it "violates a strong public policy, is irrational,
or clearly exceeds a specifically enumerated limitation on the arbitrator's power." Id.
Furthermore, if there "was some basis in the record for each of the arbitrator's findings", the
award should not be vacated. Branciforte v. Levey, 222 A.D.2d 276 (1st Dept. 1995). Arbitrators
may "apply their own sense of law, justice and equity to the facts as they find them" and an
award in instances of voluntary arbitration will be deemed irrational "when the arbitrators give
the provisions in dispute 'a completely irrational construction ... and in effect [make] a new
contract for the parties'." Wand Elec. v. Clinton County Highway Dep 't, 245 A.D.2d 984, 985
(3rd Dept. 1997) quoting Matter ofNational Cash Register Co. v. Wilson, 8 N.Y.2d 377, 383
(1960).
Discussion
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Respondents dispute the award on the grounds that it was irrational and against public
policy. Specifically, Respondents disputes the arbitrator's handling of four issues: 1) the
allegedly for-cause termination of Sharp, 2) the calculation of net revenue, 3) the binding nature
of the April 2017 Agreement, and 4) the findings made regarding Sharp's immigration status. All
four challenges to the arbitration award fail to overcome the high level of deference due.
Regarding the for-cause termination, the arbitrator looked to a variety of evidence
submitted by Sharp in determining that Sharp met his employment obligations, including the lack
of a statement of cause in the termination notification. For the calculation of net revenue, the
arbitrator applied classic principles of contracts interpretation to the agreement as well as issuing
a separate order on the definition of "net revenue". This separate thirteen-page order weighed
both sides' arguments on the matter and considered their submissions (including record evidence
cited by Sharp) before coming to a determination. In deciding the binding nature of the April
2017 Agreement, the arbitrator relied in part on unrebutted testimony by Sharp regarding
discussions with Pignatelli. Therefore, there is some basis in the record for each of these findings
and they cannot be said to be completely irrational.
Finally, Respondents base their objection to the findings regarding Sharp's immigration
status partly on public policy grounds. They argue that it was an irrational decision to decide that
Sharp was not illegally present in the United States and that case law dictates that awarding back
pay to a person who was illegally present goes against public policy. A court can intervene in an
arbitration award for public policy grounds only when "public policy considerations, embodied
in statute or decisional law, prohibit, in an absolute sense, particular matters being decided, or
certain relief being granted by an arbitrator." NY City Transit Auth. v. Transp. Workers Union
ofAm., 99 N.Y.2d 1, 7 (2002), citing Matter of Sprinzen, 46 N.Y.2d 623, 631 (1979).
651705/2024 SHARP, RHIYEN BRADLEIGH vs. INDUSTRY MODEL GROUP LLC, D/8/A Page 3 of 5 INDUSTRY MODEL MANAGEMENT ET AL Motion No. 001
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Furthermore, "a strong public policy justifying the vacatur of an arbitration award must be
apparent from the face of the award, without extended factual inquiry." Denson v. Donald J
Trump for President, Inc., 180 A.D.3d 446,453 (1st Dept. 2020).
When faced with a public policy challenge to an arbitration award, "Judges cannot reject
the factual findings of an arbitrator simply because they do not agree with them." NY State
Corr. Officers & Police Benevolent Ass 'n v. State, 94 N.Y.2d 321, 328 (1999). Pursuant to the
case law and the relevant narrow scope of review available, this Court will not conduct an
extended factual inquiry into the matter of Sharp's immigration status or reject the Arbitrator's
factual findings based on solely on disagreement with the interpretation of the record.
Looking solely to the face of the award, as the Court must, the arbitrator made findings of
fact that Sharp was at no time present in the U.S. without proper legal authorization, and that
there was no evidence that Sharp "committed any form of immigration fraud." There is no strong
public policy against awarding backpay to an individual who has not committed immigration
fraud and was present in the U.S. with valid work authorization for the entire time at issue.
Neither can the arbitrator's factual decision be said to be completely irrational or without some
basis in the record. The final award addresses the immigration issue at length, discussing the
various forms of evidence and arguments presented by the parties, as well as relevant statutes
and case law. Therefore, the Court will not vacate the arbitration award on public policy grounds.
Ultimately, the Respondents have not met their burden in overturning an arbitration
award, as the award had some basis in the record for each finding and it was not completely
irrational or against strong public policy.
For the reasons stated above, it is hereby
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ADJUDGED that the petition is granted, and the award rendered in favor of petitioner and
against respondents is confirmed; and it is further
ADJUDGED that respondents' cross-motion to vacate the award is denied; and it is further
ORDERED that the Clerk of the Court shall enter judgment in favor of petitioner as against
respondent in the amount of $843,706.52 plus interest from August 3, 2018.
9/27/2024 DATE LYLE E. FRANK, J.S.C.
~ CHECK ONE: CASE DISPOSED NON-FINAL DISPOSITION
GRANTED □ DENIED GRANTED IN PART □ OTHER APPLICATION: SETTLE ORDER SUBMIT ORDER
CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT □ REFERENCE
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