Goldman v. Architectural Iron Co., Docket No. 02-7175.

• Decision Date: 07 October 2002
• Docket Number: Docket No. 02-7175.
• Citation: 306 F.3d 1214
• Parties: Vira GOLDMAN, Petitioner-Appellant, v. ARCHITECTURAL IRON CO., Respondent-Appellee.
• Court: U.S. Court of Appeals — Second Circuit

306 F.3d 1214

Vira GOLDMAN, Petitioner-Appellant, v. ARCHITECTURAL IRON CO., Respondent-Appellee.

Docket No. 02-7175.

United States Court of Appeals, Second Circuit.

Argued: September 13, 2002.

Decided: October 07, 2002.

Kevin Schlosser, Ruskin Moscou, Evans & Faltischek, Uniondale, NY, for Petitioner-Appellant Vira Goldman.

David J.McCarthy, Butler, Fitzgerald & Potter, New York, NY, for Respondent-Appellee Architectural Iron Co.

Before JACOBS, VAN GRAAFEILAND, Circuit Judges, TRAGER, District Judge.^*

JACOBS, Circuit Judge.

Vira Goldman appeals from a judgment of the United States District Court for the Southern District of New York (Cote, J.), dismissing her petition under the Federal Arbitration Act ("FAA"), 9 U.S.C. § 10, to vacate an arbitral award requiring payment to Architectural Iron Co. ("AIC") of $108,730.55 (plus interest and attorneys' fees) on a contract to fabricate and install a conservatory atop Ms. Goldman's town-house. The petition alleges that the arbitrator acted in manifest disregard of the law. See Halligan v. Piper Jaffray, Inc., 148 F.3d 197, 202 (2d Cir.1998) The district court denied the petition principally on the ground that Goldman failed to show disregard of law "`clearly applicable' to the facts of this case." Goldman v. Architectural Iron Co., No. 01 Civ. 8875(DLC), 2001 WL 1705117, at *4 (S.D.N.Y. Jan.15, 2001) (citation omitted). We affirm the denial of the petition for substantially the reasons set forth in the district court's well-reasoned opinion.

An arbitration award may be vacated if it exhibits a "manifest disregard of the law." DiRussa v. Dean Witter Reynolds, Inc., 121 F.3d 818, 821 (2d Cir.1997). Given the deference afforded arbitration decisions, this standard requires more than a mistake of law or a clear error in fact finding. Siegel v. Titan Indus. Corp., 779 F.2d 891, 892-93 (2d Cir.1985). Manifest disregard can be established only where a governing legal principle is "well defined, explicit, and clearly applicable to the case," and where the arbitrator ignored it after it was brought to the arbitrator's attention in a way that assures that the arbitrator knew its controlling nature. New York Tel. Co. v. Communications Workers of America Local 1100, AFL-CIO District One, 256 F.3d 89, 91 (2d Cir.2001)(citing Halligan, 148 F.3d at 202); see also DiRussa, 121 F.3d at 823 (holding that arbitrators are only charged with having knowledge of governing law identified by the parties). An arbitrator (even an arbitrator who is a lawyer) is often selected for expertise in the commercial aspect of the dispute or for trustworthiness, rather than for knowledge of the applicable law, and under the test of manifest disregard is ordinarily assumed to be a blank slate unless educated in the law by the parties.

We review de novo a district court's denial of a petition to vacate an arbitration award for manifest disregard of the law. See Willemijn Houdstermaatschappij, BV v. Standard Microsystems Corp., 103 F.3d 9, 12 (2d Cir.1997).

The underlying dispute involved payment due under a home improvement contract for the assembly and installation of an iron-and-glass conservatory on the roof of the Manhattan townhouse that Goldman owns and in which she resides. Disagreements arose; Goldman refused to pay for work done; AIC commenced arbitration pursuant to the contract; and an architect was designated to serve as arbitrator.

Goldman argued to the arbitrator that, because AIC is concededly not licensed in New York, AIC was barred by the New York Home Improvement Law from providing such services to a New York home-owner, see New York City Admin. Code § 20-387(a) ("No person shall solicit, canvass, sell, perform or obtain a home improvement contract as a contractor or salesperson from an owner without a license therefor."), and under New York precedent could not enforce a home improvement contract. See B & F Bldg. Corp. v. Liebig, 76 N.Y.2d 689, 563 N.Y.S.2d 40, 564 N.E.2d 650, 652 (1990); Blake Elec. Contracting Co. v. Paschall, 222 A.D.2d 264, 635 N.Y.S.2d 205, 207 (1st Dep't 1995).

AIC contested Goldman's argument on legal and factual grounds. It pointed the arbitrator to New York cases saying that an unlicensed contractor may recover under a home improvement contract as against a general contractor, see, e.g., Blake Elec., 635 N.Y.S.2d at 208 (collecting cases), and adduced evidence that Goldman held herself out as the general contractor for the project — in...