Matter of NRD GP LLC v. McCarthy
Docket Index No. 654694/22|Appeal No. 6027|Case No. 2024-06457|
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- Filed
- Jurisdiction
- New York
- Court
- Appellate Division of the Supreme Court of the State of New York
- Type
- Opinion
- Case type
- Civil
- Disposition
- Affirmed
- Citation
- 2026 NY Slip Op 02457
- Docket numbers
- Index No654694/22Appeal No6027Case No2024-06457
Appeal from a Supreme Court judgment confirming a partial final arbitration award and denying a petition to vacate that award.
Summary
The Appellate Division, First Department affirmed the Supreme Court's judgment confirming a partial final arbitration award that required petitioners to pay respondent $1,123,644.48. Petitioners had sought to vacate the award, arguing the arbitrator exceeded her powers and misinterpreted contract rights to advancement and indemnification. The appellate court held that judicial review is extremely limited, that the arbitrator’s contract interpretation was rational and within the scope of her authority under the JAMS rules, and that petitioners did not show a violation of public policy or any clear excess of power warranting vacatur.
Issues Decided
- Whether the arbitrator exceeded her authority in issuing a partial final award under the operative agreements and JAMS Rule 19(d).
- Whether the arbitrator's interpretation of the contracts improperly conflated or misapplied the parties' rights to advancement and indemnification.
- Whether the arbitration award violates a strong public policy or is irrational such that a court should vacate it.
Court's Reasoning
The court emphasized that review of arbitration awards is narrowly constrained and will not supplant an arbitrator’s factual findings or contract interpretation. The arbitrator reasonably interpreted the operative agreements to allow advancement and treated advancement as distinct from indemnification, reserving indemnification determinations for later. Because the arbitrator acted within JAMS Rule 19(d) authority to grant interim measures and offered a rational contract interpretation, petitioners did not demonstrate a legal basis for vacatur such as excess of power or manifest disregard of controlling law.
Authorities Cited
- CPLR 7511(b)
- American Intl. Specialty Lines Ins. Co. v Allied Capital Corp.35 NY3d 64 (2020)
- Wien & Malkin LLP v Helmsley-Spear, Inc.6 NY3d 471 (2006)
Parties
- Petitioner
- NRD GP LLC
- Appellant
- NRD GP LLC, et al.
- Respondent
- Colin McCarthy
- Attorney
- John M. Brickman (McLaughlin & Stern, LLP)
- Attorney
- Alexandra M. Avvocato (Morrison & Foerster LLP)
- Judge
- John J. Kelley (Supreme Court, New York County)
- Judge
- Renwick, P.J.
Key Dates
- Decision date
- 2026-04-23
- Judgment entered (Supreme Court)
- 2024-10-02
- Order denying petition (Supreme Court)
- 2024-07-02
What You Should Do Next
- 1
Comply with award payment
If you are the petitioners, arrange payment of the awarded $1,123,644.48 or seek clarification from counsel about enforcement timing and procedures.
- 2
Consider further appeal options
Consult appellate counsel promptly to evaluate whether a leave application to the Court of Appeals is viable given the narrow standards for reviewing arbitration awards.
- 3
Prepare for remaining arbitration issues
If involved in the arbitration, prepare for the follow-on proceedings concerning indemnification since the arbitrator reserved that determination for later.
Frequently Asked Questions
- What did the court decide?
- The appellate court affirmed the lower court's confirmation of a partial arbitration award ordering petitioners to pay respondent about $1.12 million and denied vacatur of that award.
- Who is affected by this decision?
- The immediate parties—NRD GP LLC and associated petitioners, and respondent Colin McCarthy—are affected, particularly regarding the arbitration award and its payment.
- Why didn’t the court overturn the arbitration award?
- Because courts give deference to arbitrators, and here the arbitrator acted within her authority, provided a rational interpretation of the contracts, and did not violate public policy or clearly exceed her powers.
- Does this decision resolve who gets indemnification?
- No; the arbitrator treated advancement as distinct and left any determination of indemnification for a later stage of the arbitration.
- Can this decision be appealed further?
- A further appeal to the Court of Appeals may be possible in some circumstances, but the decision affirms fact- and contract-based arbitral findings, which higher courts review narrowly.
The above suggestions and answers are AI-generated for informational purposes only. They may contain errors. NoticeRegistry assumes no responsibility for their accuracy. Consult a qualified attorney before relying on them.
Full Filing Text
Matter of NRD GP LLC v McCarthy - 2026 NY Slip Op 02457 Matter of NRD GP LLC v McCarthy 2026 NY Slip Op 02457 April 23, 2026 Appellate Division, First Department In the Matter of NRD GP LLC, et al. Petitioners-Appellants, v Colin McCarthy, Respondent-Respondent. Decided and Entered: April 23, 2026 Index No. 654694/22|Appeal No. 6027|Case No. 2024-06457| Before: Renwick, P.J., Kennedy, Friedman, Mendez, Hagler, JJ. McLaughlin & Stern, LLP, Garden City (John M. Brickman of counsel), for appellants. Morrison & Foerster LLP, New York (Alexandra M. Avvocato of counsel), for respondent. Judgment, Supreme Court, New York County (John J. Kelley, J.), entered October 2, 2024, awarding respondent the total amount of $1,123,644.48, and bringing up for review an order, same court and Justice, entered on or about July 2, 2024, which denied the petition to vacate a partial final arbitration award, and granted respondent's cross-petition to confirm the award, to the extent appealed from, unanimously affirmed, without costs. Supreme Court properly upheld the arbitrator's partial final award because petitioners failed to demonstrate that the arbitrator exceeded her power or that the award violates a strong public policy, is irrational, or clearly exceeds a specifically enumerated limitation on the arbitrator's power (CPLR 7511[b]; see American Intl. Specialty Lines Ins. Co. v Allied Capital Corp. , 35 NY3d 64, 70 [2020]). Judicial review of arbitration awards is extremely limited ( see Matter of Falzone [New York Cent. Mut. Fire Ins. Co.] , 15 NY3d 530, 534 [2010]; Wien & Malkin LLP v Helmsley-Spear, Inc. , 6 NY3d 471, 479 [2006], cert dismissed 548 US 940 [2006]), and an award will not be overturned merely because a court believes its interpretation of the contract would be better ( see Azrielant v Azrielant , 301 AD2d 269, 275 [1st Dept 2002], lv denied 99 NY2d 509 [2003]). Here, the parties disagree as to how the contract provisions should be interpreted and whether respondent, under the operative agreements, is entitled to an advance of the litigation fees incurred in the arbitration. The arbitrator found that nothing in the employment agreement preempts the operative agreements' advancement right. Supreme Court properly recognized that a court is bound by an arbitrator's factual findings and interpretation of a contract and cannot examine the merits of an arbitration award or substitute its own contractual interpretation. In any event, the arbitrator's interpretation of the contracts did not change the agreements' terms ( cf. Kudler v Truffelman , 93 AD3d 549, 550 [1st Dept 2012], lv denied 19 NY3d 815 [2012]), but rather was a rational interpretation of the agreements that the arbitrator was empowered to undertake. Nor did the arbitrator confuse the right to advancement with the right to indemnification. Instead, the arbitrator found that the right to advancement was a distinct right and that a determination of respondent's right, if any, to indemnification would be conducted at the end of the arbitration. The arbitrator did not exceed her authority under JAMS rule 19(d), which provides that she "may grant whatever interim measures are deemed necessary," which "may take the form" of a partial final award. Finally, the interpretation of the applicable contract terms was within the province of the arbitrator, and the "manifest disregard" standard does not permit review of the arbitrator's interpretation of the parties' contracts even if we were to disagree with the interpretation ( see Cantor Fitzgerald Sec. v Refco Sec., LLC , 83 AD3d 592, 593 [1st Dept 2011]). The record does not establish that the arbitrator knew of a governing legal principle yet either refused to apply it or ignored it altogether ( see Wien & Malkin LLP, 6 NY3d at 481). On the contrary, it is apparent from a review of the arbitration award that the arbitrator considered the language of the contract and the applicable JAMS Rules as identified by the parties and analyzed both extensively ( see Matter of Nexia Health Tech., Inc. v Miratech, Inc. , 176 AD3d 589, 591-592 [1st Dept 2019]). We have considered petitioners' remaining contentions and find them unavailing. THIS CONSTITUTES THE DECISION AND ORDER OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT. ENTERED: April 23, 2026