Matter of Dukhon v Kim 2013 NY Slip Op 31721(U) July 25, 2013 Sup Ct, New York County Docket Number: /2013 Judge: Cynthia S.

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1 Matter of Dukhon v Km 203 NY Slp Op 372(U) July Sup Ct New York County Docket Number: 65776/203 Judge: Cyntha S. Kern Republshed from New York State Unfed Court System's E-Courts Servce. Search E-Courts ( for any addtonal nformaton on ths case. Ths opnon s uncorrected and not selected for offcal publcaton.

2 [* ] FLED: NEW YORK COUNTY CLERK 07/29/203 NDEX NO /203 NYSCEF DOC. NO. 2 RECEVED NYSCEF: 07/29/203 SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: CYNTH\A s. K~~~. PART Justce -oo ::-:-:~~_:_::_ ( ndex Number: 65776/203 DUKHON VTALY VS. KM DOW SEQUENCE NUMBER: 00 CONFRM AWARD NDEX NO. MOTON DATE MOTON SEQ. NO. The followng papers numbered to were read on ths moton to/for Notce of Moton/Order to Show Cause - Affdavts - Exhbts No(s). Answerng Affdavts - Exhbts No(s). Replyng Affdavts No(s). Upon the foregong papers t s ordered that ths moton s.s decded n accordance wth the annexed decson. \ UNFLED JUDGMENT Ths Judgment has not been entered by the County Clerk and notce of entry cannot be served based hereon. To obtan entry counselor authorzed representatve must EFle a "Request for Entry of Judgment~. Proposed Judgment and any supportng documents on the NYSCEF system. Dated: JbS" b ~~~-+--.:::::l>--_-'. J.S.C.. CHECK ONE /case DSPOSED Cytt!~~N~:.::.OSTON 2. CHECK AS APPROPRATE:... MOTON S: 0 GRANTED 0 DENED o GRANTED N PART D OTHER 3. CHECK F APPROPRATE:... 0 SETLE ORDER o SUBMT ORDER DDONOTPOST D FDUCARY APPONTMENT DREFERENCE

3 [* 2] SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: Part x n the Matter of the Applcaton of VTAL Y DUKHON -aganst- DOW KM aka DO WOO KM Pettoner ndex No /203 DECSON/ORDER Respondent x HON. CYNTHA S. KERN J.S.C. Rectaton as requred by CPLR 22 9(a) of the papers consdered n the revew of ths moton for: Papers Numbered Notce of Moton and Affdavts Annexed ~ Affrmaton n Opposton Replyng Affdavts... 3 Exhbts... 4 Pettoner commenced the nstant proceedng seekng an order pursuant to CPLR 750 confrmng the arbtraton award rendered on May (the "Award") and drectng that judgment be entered thereon. Respondent cross-moves for an order pursuant to CPLR 75 (c) modfyng the A ward to elmnate the porton that awards pettoner $.7 mllon based on a theory of promssory estoppel. For the reasons set forth below pettoner~s moton s granted and respondent's cross-moton s dened. The relevant facts and procedural hstory are as follows. Pettoner Vtaly Dukhon ("Dukhon") and respondent Dow Km ("Km") were lmted partners n Damond Lake nvestment Group L.P. and members of Damond Lake GP LLC (collectvely "Damond Lake").

4 [* 3] Secton 9.06 of "The Lmted Lablty Company Agreement ofdamon~ Lake GP LLC (the "LLC Agreement")" provded that for: any controversy or dspute arsng out of... the actons or omssons of any Member n connecton wth the busness of the Company each of the partes consents to submt any such controversy or dspute to be fnally resolved by arbtraton n accordance wth the CPR nsttute for Dspute Resoluton Rules. Smlarly Secton 9.06 of the "Frst Amended and Restated Lmted Partnershp Agreement of Damond Lake nvestment Group LP (the "LP Agreement")" provded that for: any controversy or dspute arsng out of... the actons or omssons of any Partner n connecton wth the busness of the Partnershp each of the partes consents to submt any such controversy or dspute to be fnally resolved by arbtraton n accordance wth the CPR nsttute for Dspute Resoluton Rules. On or about February 9200 Dukhon commenced arbtraton before the nternatonal nsttute for Conflct Preventon and Resoluton ("CPR") assertng clams aganst Km n hs! ndvdual capacty. Dukhon's Notce of Arbtraton stated that "Mr. Dukhon brngs ths arbtraton to recover a certan fxed mnmum compensaton amount that was promsed to hm by Mr. Km and the other Respondents-along wth other related damages." Addtonally. Dukhon's Notce of Arbtraton delneated nne clams aganst Km: () Breach of Wrtten Contract; (2) Breach of Oral Contract; (3) Breach of Contract va a thrd party benefcary; (4) Alter Ego; (5) Quantum Mert; (6) Unjust Enrchment; (7) Volaton of New York Labor Law; (8) Fradulent Msrepresentaton; and (9) Gross Neglgence. On or about March 200 Km commenced an Artcle 75 proceedng n the New York Supreme Court New York County seekng to permanently stay the arbtraton on the ground that there was no vald arbtraton agreement between the partes requrng hm to arbtrate any dspute n hs ndvdual capacty. On September The Honorable Justce Barbara 2

5 [* 4] Kapnck granted Km's petton and stayed the arbtraton. Thereafter?ukhon moved for reargument whch Kapnck granted and upon reargument vacated her pror decson and ordered Km to arbtrate. That decson was affrmed by the Appellate qvson Frst Department on November 320. On February the CPR convened a pre-hearng conference wth the partes. Durng the pre-hearng conference Km wthdrew hs challenge to the jursdcton of the CPR and "[t]he partes consent[ ed] to the jursdcton of the Trbunal and to t~er full power authorty and jursdcton to decde all matters wthn the scope of Secton 9.06 of [the LP Agreement] and Secton 9.06 of [the LLC Agreement]." Thereafter the partes engaged n dscovery. Tens of thousands of pages of dscovery were exchanged and depostons of Krr and Dukhon were conducted. A hearng was held from October 202 through October and contnued on November and December n the end over two-hundred exhbts were submtted as part of the hearng and sxteen wtnesses testfed. On May the arbtraton panel ssued ts Decson and Award. n a detaled fftyone page document the panel concluded that the evdence presented was nsuffcent to prove any of the nne stated clams n Duhkon's Notce of Arbtraton but that Dukhon had proven that he was enttled to recover from Km under the theory of promssory estoppel and that Km under the crcumstances was estopped from denyng lablty to Dukhon. Whle plantff dd not specfcally plead a clam for promssory estoppel the panel ponted out that he "requested such and other further relef as the Trbunal deems just and approprate." Addtonally pursuant to CPR Rule 0.3 the arbtraton panel has the power to "grant any remedy or relef ncludng but not lmted to specfc performance of a contract whch s wthn the scope of the agreement of 3

6 [* 5] the partes and permssble under the law( s) or rules of law applcable to the dspute." Thus the panel ssued an award n favor of Dukhon and aganst Km n the amount of $.7 mllon.! Km has faled to pay any of the A ward to Dukhon and Dukhon has brought the nstant petton to confrm the Award and for an entry of judgment n favor of hm and aganst Km n the amount of$.7 mllon. Km's cross-petton seeks an order pursuan~ to CPLR 75 (c)(2) modfyng the A ward to elmnate that porton that awards Dukhon $.7 mllon based on a theory of promssory estoppel on the ground that sad clam was never rased by Dukhon and as a result Km was unable to contest or defend aganst the clam. Specfcally Km argues that the panel "volated [hs] fundamental due process rghts guaranteed by CPLR 7506 by falng to dentfy a cause of acton they were consderng and then by falng to allow Km to present evdence n support of hs defense to the unknown 'promssory estoppel'clam." t s well settled that the determnatons of an arbtraton panel are not to be lghtly set asde and "judcal revew of an arbtraton proceedng s extremely lmted." Frankel v. Sards. 76 A.D.3d ( S Dept 200). ndeed "[ e ]ven n crcumstances where an arbtrator makes errors of law or fact courts wll not assume the role of overseers to conform the award to ther sense of justce." Matter of New York State Correctonal Offcers & Polce Benevolent Assn. v. State of New York 94 N.Y.2d (999). Thus pursuant to CPLR 750 "[t]he court shall confrm an award upon applcaton of a party made wthn one year after ts delvery to hm unless the award s vacated or modfed upon a ground specfed n secton 75." Pursuant to CPLR 75(c)(2) "[t]he court shall modfy the award f... the arbtrators have awarded upon a matter not submtted to them and the award may be corrected wthout affectng the merts of the decson upon the ssues submtted." When determnng whether the matter was submtted to J 4

7 [* 6] arbtraton "the language of arbtraton demands s not subject to the strct standards of constructon applcable to formal court pleadngs" and the correct nqury s whether "the ssue was undsputedly wthn the parameters of the arbtraton agreement an~ was n fact addressed durng the course of the arbtraton proceedng." Frankel 76 A.D.3d at 42; see also Roffler v. Spear Leeds & Kellogg 3 A.D.3d 308 (l sl Dept 2004) (confrmng arbtraton award that awarded damages to ndvdual pettoners even though the statement of flam asserted only dervatve clams on behalf of pettoners' corporaton). n the present case Km's cross-moton to modfy the award s dened as he has faled to demonstrate a proper ground for modfcaton. As an ntal matter t s clear that the ssue of ' whether Dukhon could recover from Km under the theory of promssory estoppel or whether Km could be estopped from denyng lablty based on Km's representatons when hrng Dukhon to work at and jon Damond Lake undsputedly falls wthn the partes' arbtraton agreements. Durng the prelmnary conference both partes agreed to the "jursdcton of the Trbunal and to ther full power authorty and jursdcton to decde all matters wthn the scope of Secton 9.06 of[the LP Agreement] and Secton 9.06 of[the LLC Agreement]." These Sectons are broad arbtraton clauses under whch the partes agreed to arbtrate any controversy nvolvng "the actons or omssons" of any Member or Partner "n connecton wth the busness" of the Damond Lakes enttes. The panel determned that Dukhon was enttled to $.7 mllon under the theory of promssory estoppel based on Km's representatons to Dukhon when hrng hm to work at Damond Lake. Those representatons are clearly actons 'of a member or partner that pertan to Damond Lake and ft squarely wthn the arbtraton agreements. Addtonally t s clear that the promssory estoppel ssues were addressed durng the arbtraton proceedngs. ; 5

8 [* 7] ndeed the arbtraton panel was presented wth and the hearng revolved around one central ssue: whether Dukhon suffered damages as a result of Km's representatons and actons n hrng Dukhon to work for and jon Damond Lake. Moreover the arbt~aton panel notes n the Award that "[t]hroughout the Hearng [Dukhon] asserted that Respondent Km should be equtably estopped from denyng lablty." Under these crcumstances t s nconcevable that the clam of promsory estoppel was not addressed durng the arbtraton proceedng and t s mmateral that a clam for promssory estoppel was not specfcally stated n Dukhon's Notce of Clam. Addtonally Km's contenton that he dd not have an "opportunty to be heard" n volaton of hs due process rghts under CPLR 7506 s wthout mert and beled by the undsputed record before the court. Pursuant to CPLR 7506 (c) "[t]he partes are enttled to be heard to present evdence and to cross-examne wtnesses." n the prese~t case Km was gven ample opportunty to present hs case to the arbtraton panel durng the seven days of the hearng whch centered around whether Dukhon was damaged as a result of Km's representatons and n hundreds of pages of pre and post-hearng brefs. ndeed Km fals to dentfy even one pece of evdence or testmony he would have presented f promssory estoppel was orgnally lsted on Dukhon's Notce of Clam. Km's argument s even further undermned by the panel's ffty-one page Award whch ncludes four pages specfcally outlnng the facts upon whch t based ts decson to grant an award to Dukhon based on promssory estoppel. Based on the foregong Km's cross-moton s dened and Dukhon's moton to confrm the Award s granted. Accordngly t s hereby ORDERED and ADJUDGED that Dukhon's petton s granted and the arbtraton award 6

9 [* 8] rendered n favor of pettoner and aganst respondent on May s confrmed; and t s hereby ORDERED and ADJUDGED that the Clerk s drected to enter judgment n favor of pettoner and aganst respondent n the amount of $ plus nterest thereon from May at the statutory rate together wth costs and dsbursements. Ths consttutes the decson and judgment of the court. Dated: J ~ \3 Enter: --"~<::"~-J-'--.:>.----:::;;--_ ls.c. '/-.-f:.'tf. "'\:\'~ s }.S.C.. t~ ('.. UNFLED JUDGMENT Ths Judgm.nt has not b n.nt.red by the County C.rk.. nd notc. of.ntry c.. nnot b. s.rv.d b... d h.r.on. To obt.. n entry coun.el or.. uthorzed repre.ent.. tv. must EFle.. 'R.quest for Entry of Judgm.nt" Proposed Judgment.. nd.. ny supportng documents on the NYSCEF system. 7