Terwilliger v. Resource America, Inc.
- Naomi Buchwald
- 1:22-cv-09610
- U.S. District Court · Southern District of New York
- 10
In Terwilliger v. Resource America, Judge Buchwald dismissed Terwilliger’s petition to vacate an arbitration award as untimely.
Michael Terwilliger’s petition was dismissed, and Resource America, Inc. and Resource Financial Fund Management, LLC obtained judgment without the court reaching the merits of the requested vacatur.
What happened
In Terwilliger v. Resource America, Michael Terwilliger asked the court to overturn an arbitration award rejecting his claims for unpaid employment bonuses and fund equity. The award was issued and sent to the parties on August 10, 2022.
The court ruled that federal law required Terwilliger to serve notice of his petition within three months, by November 10, 2022. Sending a courtesy copy by email did not count because Resource had not agreed in writing to email service; later service was therefore too late.
Judge Naomi Reice Buchwald dismissed the petition in its entirety as untimely and instructed the Clerk of Court to enter judgment for Resource America, Inc. and Resource Financial Fund Management, LLC. The court did not decide the parties’ remaining arguments about whether the arbitration award should be vacated.
The detailed version
- Terwilliger v. Resource America, Inc. · No. 1:22-cv-09610
- Naomi Buchwald
- May 22, 2023
Background
Michael Terwilliger brought a petition under Section 10 of the Federal Arbitration Act (FAA) asking the court to vacate, or set aside, an arbitration award and to award attorney’s fees and costs. The dispute arose from Resource America, Inc. and Resource Financial Fund Management, LLC’s alleged refusal to pay Terwilliger 2019 and 2020 bonuses under an alleged “PM Compensation Formula” and to provide him with equity in the fund he managed.
Terwilliger began arbitration on July 19, 2021. After discovery, depositions, briefing, and a two-day hearing, sole arbitrator Lynne E. Fischman-Uniman issued a final award on August 10, 2022, rejecting all of Terwilliger’s claims. The award was sent by email to counsel for both sides that day.
Timeliness issue
Section 12 of the FAA requires notice of a petition to vacate an arbitration award to be served on the opposing party or its attorney within three months after the award is filed or delivered. The court determined that the deadline was November 10, 2022, three months after the award was issued and sent to the parties.
Terwilliger filed the petition on November 10 and emailed a courtesy copy to Resource’s counsel. The court held that this email was not effective service because Resource had not consented in writing to service by email. Terwilliger’s process server later served Resource’s registered agents on November 15 and November 17, and Resource was served by a U.S. marshal on February 8, 2023.
Terwilliger argued that the three-month period had not started because he had not received the award by mail or personal service. Judge Buchwald rejected that argument, relying on a Second Circuit decision holding that the period begins when an arbitration award is issued, rather than when it is formally served on the arbitration parties. The court also rejected Terwilliger’s request to excuse the late service for equitable reasons, finding that the FAA provides no exception to the strict three-month period and that he had not shown a sufficient reason to excuse the delay.
Ruling and disposition
The court dismissed Terwilliger’s petition in its entirety as untimely. Because the petition was dismissed on that ground, the court did not reach the parties’ remaining arguments for or against vacating the arbitration award. The court instructed the Clerk of Court to enter judgment for the respondents and close the case.
Read the full 10-page opinion on CourtListener, the free public archive maintained by the Free Law Project.