Pivarnick v Pivarnick (2014 NY Slip Op 50251(U))

Pivarnick v Pivarnick

2014 NY Slip Op 50251(U) [42 Misc 3d 1229(A)]

Decided on February 19, 2014

Civil Court Of The City Of New York, Richmond County

Straniere, J.

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and will not be published in the printed Official Reports.

Recitation, as required by CPLR 2219(a), of the papers considered in the review of this

MOTION TO VACATE

Notice of Motion and Affidavits Annexed...................................1 & 2

Affirmation in Opposition...................................................................3

Reply.....................................................................................................

Upon the foregoing cited papers, the Decision/Order on this Motion is as follows:

Claimant, Ann Marie Pivarnick, commenced this small claims action against the defendant, Michael Pivarnick, seeking to recover legal fees she alleged she incurred in their matrimonial litigation in Supreme Court as a result of the defendant's actions. Defendant filed a counterclaim also for legal fees. A trial was held in the small claims part of Civil Court before an arbitrator on March 21, 2013. The arbitrator awarded the claimant legal fees in the amount of $4,000.00 and dismissed the defendant's counterclaim. At that hearing, claimant and defendant appeared without counsel. Although claimant's attorney to whom legal fees were alleged owed, appeared as a witness on claimant's behalf.

Currently before the court is defendant's motion to vacate the arbitrator's award on the ground that the issue had been resolved previously in Supreme Court and the small [*2]claims part lacked subject matter jurisdiction. Defendant is represented by counsel. Although claimant is not represented in regard to this motion, the papers appear to have been prepared with the assistance of counsel.

Background:

In 1999, claimant herein, Ann Marie Pivarnick, commenced an action for divorce against defendant herein, Michael Pivarnick, in Supreme Court Richmond, County (Index#5820/99). Both sides were represented by counsel. The parties entered into a "settlement agreement" on or about November 23, 1999. Article XVIII of the settlement agreement indicated that any modification of any judgment or order incorporating the terms of the agreement should be to a "Court of competent jurisdiction" for that purpose.

A "judgment of divorce" was signed by Justice Sangiorgio on August 29, 2000. One of the decretal paragraphs of the judgment of divorce provided:

On or about May 17, 2012, defendant Michael Pivarnick, represented by counsel, filed an order to show cause in the matrimonial part of the Supreme Court seeking the dismissal of Ann Marie Pivarnick's proposed Qualified Domestic Relations Order with Notice of Settlement and an order that defendant's pension be valued as of August 29, 2000.

Ann Marie Pivarnick, through counsel cross-moved for costs and sanctions against Michael Pivarnick in the form of "attorneys' fees for his engagement in frivolous conduct."

On October 5, 2012, Justice Panepinto issued a "so ordered" stipulation containing the following terms:

2. Any claims of entitlement to defendant's pension are withdrawn (as areany purported waiver documents are deemed a nullity)

3. The parties agree that plaintiff shall be entitled to 50% of defendant'spension as computed from the date of marriage, January 23, 1988 to the dateof commencement of the divorce, September 29, 1999. [*3]

There was no specific reference in the so ordered stipulation to the attorneys' fee claim in plaintiff's cross-motion.

On the copy of the Supreme Court order presented as an exhibit in the small claims action it appears that the stipulation is signed by the parties and their respective counsel.

On January 25, 2013, claimant commenced this small claims action seeking "legal fees incurred as a result of defendants fraud Jan-Dec 2012." It is conceded that the legal fees being sought are those the claimant incurred in responding to the defendant's order to show cause which was resolved by the so ordered stipulation of October 5, 2012. On March 21, 2013, an arbitrator awarded claimant $4,000.00 on her claim and dismissed defendant's counterclaim.

After receipt of the arbitrator's decision, the defendant made several applications to vacate that award alleging that the arbitrator misapprehended the order of the Supreme Court in October 2012 in that the request for counsel fees was not granted by the Supreme Court and therefore the issue had been resolved against the claimant. Each of those applications of the defendant were denied primarily on the ground that there is no appeal from an arbitrator's decision.

In defendant's latest application, the court asked the parties to address the issue of whether the small claims court had jurisdiction to hear claimant's request for counsel fees in a matrimonial action.

Legal Issues Presented:

A. Is the Arbitrator's Decision Subject to Review?

The Small Claims Part of Civil Court is established pursuant to New York City Civil Court Act [NYCCCA] Article 18. Interestingly, that statute does not specifically provide for having a case heard before an arbitrator. The statute gives the Chief Administrative Judge the right to regulate the practice and procedure controlling the determination of such claims [NYCCCA§1802]. The provisions for arbitration are set forth in the Uniform Rules for the New York City Civil Court (Part 208). Under these rules, the parties in the small claims part can agree to have their case heard by an arbitrator rather than by a judge. In consenting to this procedure they affirm that the decision of an arbitrator is final and that no appeal lies from the award [22 NYCRR §208.41(n)(2)].

In fact, the only ground for appealing a small claims court decision of a judge is that "substantial justice has not been done between the parties according to the rules and principles of substantive law" [NYCCCA §1807].

Defendant's counsel, cognizant of the rule prohibiting an appeal of an arbitrator's decision, did not appeal, but filed an order to show cause asking the Civil Court to vacate [*4]the arbitrator's trial decision. The question arises, is there a right to make what would be the equivalent of a motion to renew or reargue pursuant to CPLR §2221 in regard to an arbitrator's award in the small claims part?

The problem with applying this statute is that the CPLR §2221 contemplates that a party is seeking to revisit the order of a judge. The decision of a small claims arbitrator is not an "order of a judge." The award of the arbitrator becomes a judgment to be issued by the clerk [22 NYCRR §208.41(n)(5)] but is not an order of a judge. The rules do however, provide for motions in the small claims part to be made to a part and a session of the court for that purpose and a judge presides over that part [22 NYCRR §208.41(m)]. This would seem to permit the court to address motions made to review the actions of an arbitrator and for the court to entertain a motion to renew or reargue a judge's prior order in that regard.

In support of this position, the statute does contemplate some procedure for redress in that NYCCCA §1804 provides:

The provisions of this act and the rules of this court, together with thestatutes and rules governing supreme court practice, shall apply to claimsbrought under this article so far as the same can be made applicable and arenot in conflict with the provisions of this article; in the case of conflict, theprovisions of this article shall control.

It could therefore be argued, that because the statute and rules only specifically prohibit an "appeal" of an arbitrator's award, an application to a judge similar to a motion pursuant to CPLR §2221, to "review" the award of the arbitrator is permissible.

Even though the small claims statute and rule do not set forth a process to review arbitrations, courts have allowed review of the actions of small claims arbitrators pursuant to CPLR Article 75 (Arbitration) [Rymer v Leider, 122 Misc 2d 873 (1983); Widlec v Siberstein, 187 Misc 2d 853 (2001)]. CPLR §7511 sets forth the grounds for vacating the award of an arbitrator. It provides that an award may be vacated if the court finds the rights of a party were prejudiced as a result of

(iii) an arbitrator...exceeded his power or so imperfectly executed it that afinal and definite award upon the subject matter submitted was not made; or

(iv) failure to follow the procedure of this article, unless the party applying tovacate the award continued with the arbitration with notice of the defect andwithout objection....

This statute permits vacating an award only on one of the above cited grounds and does not permit the vacating of the arbitrator's award if the arbitrator made a mistake as to the law or the facts applicable to the case [Rymer supra].

Applying the above criteria of Article 75 to the facts of this case, it appears that defendant has not asserted a ground for vacating the arbitration award unless hearing a case which was beyond the subject matter jurisdiction of the small claims court, as set forth [*5]below, qualifies as the arbitrator exceeding his power.

B. Did the Small Claims Court Have Subject Matter Jurisdiction?

It is axiomatic that subject matter jurisdiction cannot be conferred on a court that lacks it even by stipulation of the parties. This objection may be made at any stage of the action and the court on its own motion may dismiss the action. If the court lacks subject matter jurisdiction, any judgment of that court is void [Siegel, New York Practice, 5th ed. §8].

As pointed out above, the parties had entered into a settlement agreement in regard to their matrimonial dispute and that settlement agreement survived and did not merge into the judgment of divorce issued by the Supreme Court. The Supreme Court judgment restricted all claims arising from the matrimonial action to the Supreme Court or the Family Court. The reason for this is obvious. Those courts have the experience and mandate to deal with the myriad issues that arise in matrimonial disputes. Both those allegations articulated in the pleadings and those non-legal issues that often motivate parties in matrimonials to resort to the court system are best handled in Supreme Court and Family Court.

Therefore the issue of whether the claimant was entitled to be reimbursed for legal fees incurred in responding to defendant's order to show cause in the Supreme Court had to be addressed in the Supreme Court or the Family Court if applicable. The small claims part lacked the subject matter jurisdiction to entertain the claimant's application no matter at what stage such a claim was made. The fact that the parties agreed to have the issue heard by an arbitrator did not confer upon the small claims court the subject matter jurisdiction to resolve the dispute.

Additionally, claimant in the Supreme Court action cross-moved for counsel fees. The "so ordered stipulation" signed both by the parties and their counsel states: "Defendant's order to show cause and plaintiff's cross-motion are consolidated for disposition and are resolved as follows:..." In the paragraphs that follow, there is no mention of the only relief claimant sought in her cross-motion, legal fees in regard to the application of the. Because the issue was not preserved, the court must conclude that the relief was denied by the Supreme Court especially because the first clause of the stipulation says it is resolving the cross-motion.

Even if it could be speculated that the failure of the stipulation to specifically address the issue somehow preserved the claim, as pointed out above, the proper forum to resolve that dispute is the Supreme Court. As that is the court to which the application was initially made, if there was a question as to the interpretation of the "so ordered stipulation," then application should have been made to Justice Panepinto for clarification of the order. This was not done.

Secondly, as set forth above, the matrimonial judgment restricted the jurisdiction of all disputes arising out of the terms of the divorce decree or settlement agreement to the [*6]Supreme Court or Family Court and not to the small claims part of Civil Court.

Conclusion:

Defendant's motion to vacate the award of the arbitrator is granted. The judgment is vacated and the case dismissed. The small claims part lacked the subject matter jurisdiction to resolve a dispute arising from the interpretation of the parties rights in the matrimonial action. Claimant's remedy is in the Supreme Court.

The foregoing constitutes the decision and order of the court.

Dated:February 19, 2014