On appeal from Superior Court of New Jersey, Chancery Division, Hudson County, Docket No. C-110-11.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Payne and Reisner.
Defendant, Allen Zavodnick (sometimes referred to herein as AZ), appeals from an October 5, 2011 judgment confirming an arbitration award in favor of his former law firm, plaintiff Zavodnick, Perlmutter & Boccia, L.L.C., finding that he had ceased providing services to the firm and authorizing the remaining members of the firm to buy out his interest in it. On appeal, defendant argues that the court erred in confirming the arbitrator's award because the arbitrator exceeded the authority granted to her by the plaintiff's submission. Additionally, defendant argues that the court erred in confirming the arbitration award because it contravened express provisions of the operating agreement requiring a judicial determination of whether a withdrawal event had occurred. We decline to accept defendant's arguments and affirm.
In 2005, defendant entered into an operating agreement with two of his former employees, Joseph G. Boccia and Mitchell D. Perlmutter, thereby creating a three-member limited liability company. The agreement contained the following provisions of relevance to this litigation:
2.9.2. Each Member shall devote his best efforts to serving the Company and its clients in a professional manner and shall devote his full working time and attention to the affairs of the Company unless otherwise approved by the Managers. . . .
2.9.3. Notwithstanding Section 2.9.2, it is acknowledged and understood that the nature and amount of AZ's services to the Company shall be generally consistent with the nature and amount of services which he had rendered to or for the benefit of the AZ Proprietorship during 2003 and 2004. It is the intention of the Members that AZ's services to the Company shall be primarily supervisory in nature; that he shall focus his attention on generating new business, managing the intake of files, developing overall strategy for the handling of cases, being available to act as a "problem-solver" on cases being handled by other Company attorneys, being available to handle specific aspects of cases as he determines in the best interests of the Company and otherwise taking responsibility for management and administration of the firm (to the extent not delegated to others); and that he shall not be required to work a minimum number of hours on client cases.
14.1. Mandatory Purchase and Sale. Upon the occurrence of a Withdrawal Event with respect to any Member, the Company shall be obligated to purchase, and the Member or the Member's legal representatives, as the case may be ("Seller"), shall be obligated to sell, the Seller's entire Membership Interest.
20. DISPUTE RESOLUTION. Any dispute or controversy arising under this Agreement shall be determined and settled by arbitration before the American Arbitration Association in Jersey City, New Jersey. The parties to the arbitration shall use their best efforts to select one arbitrator by unanimous consent. If the parties are unable to agree on the selection of the arbitrator, then in such event one arbitrator shall be selected by the American Arbitration Association. The arbitration award shall be final and binding upon all of the parties thereto, and judgment on the award may be entered by any court having competent jurisdiction. The arbitrator shall not, however, have the power to modify or cancel any express provision of this Agreement.
22.21. "Disability" means, with respect to any Member, the Member's inability, by reason of injury or illness, to render usual and customary services on behalf of the Company in accordance with this Agreement for a continuous period in excess of six (6) months . . . . If a determination is made by the Company that a Member has been Disabled for a continuous period in excess of six (6) months, then in such event the Company shall notify the Member of its determination. Within 30 days after the Company's notice has been delivered to the Member, the Member shall have the right to have the Company's determination reviewed by a physician of his choice, and if his physician does not agree with the Company's determination within such 30-day period, then in such event the determination of the Member's Disability shall be subject to arbitration pursuant to Section 20. The determination of the Member's Disability shall be deemed final upon the expiration of the 30-day period following the delivery of the Company's notice (if the matter does not go to arbitration) or upon receipt of the arbitrator's decision, as the case may be.
22.42. "Preferred Withdrawal" means with respect to any Member, the first to occur of:
(i) the death of the Member;
(ii) the Disability of the ...