Neuhaus v. Staten Island Bd. of Realtors®, Inc.: Court Vacates Injunction against Association

A New York appellate court has considered a challenge to an arbitration proceeding conducted by a REALTOR® association.

The Staten Island Board of REALTORS® (“Association”) conducted an arbitration involving Mimi Neuhaus of Neuhaus Real Estate, Inc. (“Challenger”) and Frank Reali of Safari Real Estate Brokers, Inc. (“Prevailing Party”). The arbitration panel found in favor of the Prevailing Party.

The Challenger filed a lawsuit challenging the award, naming both the Prevailing Party and the Association. The trial court vacated the award and entered an injunction prohibiting the Association from conducting further hearings until its procedures were in compliance with NAR policy. The Association and Challenger appealed.

The Supreme Court of the State of New York, Appellate Division, partially affirmed and partially reversed the trial court. The Prevailing Party did not participate in the appellate process, leaving only the Association to appeal the vacation of the arbitration award. The appellate court found that only a party to the arbitration could appeal a vacation of an arbitration award. Since the Association was not a party, the court ruled that they could not appeal the trial court’s ruling. While the court allowed the vacation of the arbitration award to stand, the court also added that “[w]e express no view as to whether the [trial court] erred in vacating the subject arbitration award”.

Next, the court considered the Association’s challenge to the declaratory and injunctive relief entered by the trial court against the Association. The Association could challenge this portion of the trial court’s ruling. Looking at the relevant laws governing challenges to arbitration proceedings, the court determined that the trial court did not have the authority to enter an injunction against the Association. Therefore, the court vacated the entry of injunctive relief.

Neuhaus v. Staten Island Bd. of Realtors, Inc., 845 N.Y.S.2d 792 (N.Y. App. Div. 2007)

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