Court upholds arbitration ruling in favor of client

BOSTON (May 18, 2011) – Robert Elmer recently persuaded a panel of the Massachusetts Appeals Court to uphold an arbitrator’s ruling that the firm’s client was entitled to a $450,000 setoff for its payment of a commercial mortgage pre-payment penalty.

Elmer had successfully argued in the underlying arbitration that his client, a commercial tenant of property in Haverhill, Mass., was entitled to equitable subrogation on the basis that the former landlord of the commercial property remained liable for a mortgage pre-payment penalty despite the new lease obligating the commercial tenant to pay the penalty.

The former landlord filed suit to overturn the arbitration decision on the grounds that the arbitrator did not have authority to rule on the equitable subrogation set-off claim. The Appeals Court panel, however, agreed with Elmer.

The panel – in affirming a Massachusetts Superior Court judge’s ruling upholding the arbitrator’s decision – noted that the flexible commercial arbitration rules of the American Arbitration Association allow an arbitrator to consider new and modified claims during the course of an arbitration proceeding.

“We are pleased the Appeals Court panel upheld the arbitrator’s ruling,” Elmer said. “The arbitrator was well within his rights to consider all relevant claims and counterclaims raised during the course of the arbitration, and the panel properly did not disturb his decision.”

About Barton Gilman

Barton Gilman is one of New England’s leading civil litigation law firms with offices in Boston and Providence. Its experienced trial attorneys appear regularly in the federal and state courts of Massachusetts, Rhode Island and Connecticut. The Providence Business News has named the firm as one of Rhode Island’s Best Places to Work for three consecutive years (2008-2010).