Jones Law Firm, P.C. v Keep Healthy, Inc. 2024 NY Slip Op 32519(U) July 15, 2024 Supreme Court, New York County Docket Number: Index No. 653385/2023 Judge: Kathleen Waterman-Marshall is the story of a law firm which has a captive arbitration firm and requires arbitrations for attorney fee claims to be arbitrated before the captive arbitrator. Supreme Court permits this arrangement.

“Petitioner Jones Law Firm, P.C. (“Jones Law Firm”) seeks to confirm the arbitration award dated July 7, 2023 (the “Award”) (NYSCEF Doc. No. 5) and for costs associated with the underlying arbitration proceeding and this motion. Respondents Keep Healthy, Inc, FMF Corp, Harbor Park Realty, LLC, and Jacob Adoni (“Respondents”)1 oppose and cross-move to vacate the Award on the bases that: the arbitrator engaged in misconduct, the arbitrator was partial, the arbitrator exceeded her authority, and the Respondents were not notified of the arbitration proceeding. Alternatively, Respondents seek to modify the Award on the basis that there was a miscalculation of figures and a mistake in the corporate entities referred to in the Award.”

“The retainer agreements (“Retainer Agreements”) between Jones Law Firm and Respondents provide, in relevant part:

In the event a dispute should arise under this contract, including but not limited to disputes over payment fees [sic], malpractice claims, or defamation claims relating to representation, the Firm and Clients agree to resolve the dispute by binding arbitration through Professional Arbitration and Mediation LLC (“PAM”). (NYSCEF Doc. No. 3 at pp. 4-5 and 13-14).”

“Respondents contend that the arbitration proceeding was marred by partiality and improper conduct. Respondents allege that the professional relationship between Mr. Porges and Mr. Jones of Jones Law Firm tainted the proceedings. As evidence of this claim, Respondents cite Jones Law Firm’s offer to “front” the costs of arbitration as an improper payment to the arbitrator. Similarly, Respondents allege that the second arbitrator also engaged in improper conduct, as Respondents contend they never received any communication from PAM following Mr. Porges’ recusal, including notice that a second arbitrator had been assigned, that the second arbitrator “rushed, at light speed” to render the Award, and the second arbitrator committed numerous errors of law and fact in calculating the award.”

“Respondents have failed to establish any of the limited grounds for vacating the Award, as provided by CPLR 7 511. At bottom, Respondents were aware of the arbitration proceedings, defaulted in these proceedings, and were not entitled to additional notice prior to the issuance of the arbitration award. Contrary to Respondent’s claims, there is no evidence of improper conduct by the arbitrators, nor was the Award issued against improper or omitted parties. Finally, to the extent that Respondents allege the arbitrator committed errors in calculating the award, Respondent’s should have raised arguments surrounding appropriate credits and calculation before the arbitrator, as errors of fact are not a sufficient basis to vacate or modify the award. Accordingly, the cross-motion is denied and Court turns to Jones Law Firm’s petition to confirm the Award.”