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Counsel Corp. v. Wasserson


March 31, 2010


The opinion of the court was delivered by: Rufe, J.


Before the Court are Plaintiff Gary Wasserson's ("Wasserson") Motion to Confirm Award of the Arbitrator and Defendants I-Link Corp. et al.'s Motion to Vacate, Modify, and/or Correct the Arbitral Award.


In 1999, Alan Silber ("Silber"), principal owner of Counsel Corporation and its numerous affiliates("Counsel Corp."), ventured into the telecommunications industry.*fn1 Silber recruited Gary Wasserson ("Wasserson") to help to launch his telecommunications initiative.*fn2 Wasserson was promised an equity interest in the telecommunications entities that Silber would establish, as memorialized in an employment offer letter ("Employment Letter") dated January 20, 2000.*fn3

The Employment Letter provided for a one year commitment and noted the parties' intent to enter into a more detailed, three-year employment agreement at a later date.*fn4 He was hired to identify and acquire telecommunication companies on behalf of Counsel Corp. On February 1, 2000, Wasserson began working as Counsel Corp.'s Chief Executive Officer at an annual salary of $360,000.

During this same time period, Wasserson sought issuance of his agreed upon equity interest by repeatedly requesting his stock certificates from Silber. Two months into his employment, Wasserson sent an email to Silber complaining about the failure to provide him with his equity in Counsel Corp.*fn5 Silber assured Wasserson that he was a ten percent (10%) member of Counsel Communications LLC ("CCLLC"), retroactive to the commencement of his employment.*fn6

In August 2000, Wasserson was presented with the three-year contract ("2000 Employment Agreement") contemplated in the Employment Letter, which offered Wasserson a salary of $600,000, with a potential bonus up to 75% of the base salary ($450,000) to be determined by the Board of Directors.*fn7 Additionally, Wasserson was entitled to 10% of the stock in a newly created Silber entity, Webtotel. The 2000 Employment Agreement indicated that this stock had already been issued to Wasserson.*fn8 It was acknowledged, at the Arbitration hearing, that contrary to the express language in the August 2000 Agreement, no stock certificates were actually issued to Wasserson; instead Counsel Corp. held all the stock and used it to finance a later acquisition, unbeknownst to Wasserson.*fn9

In March 2001, CCLLC initiated the purchase of I-Link, its first financially significant telecommunications acquisition.*fn10 On April 17, 2001, Webtotel merged with I-Link in a stock-for-stock transaction - a transaction that was intentionally not disclosed to Wasserson.*fn11 Section 2.7 of the I-Link/Webtotel Plan and Merger Agreement gave 17,454,333 shares of I-Link's stock to Webtotel's shareholders in exchange for their Webtotel shares. On June 4, 2001, I-Link acquired certain assets of WorldxChange Corp. ("WorldxChange").*fn12 At various times, Wasserson acted as CEO or Director of CCLLC, WordxChange, I-Link, and Nexbell.*fn13

During the summer of 2001, less than one year into his three-year Employment Agreement, Silber presented Wasserson with another employment contract with modified terms, a lower base salary, and a provision that the initial term of employment would end on December 31, 2003.*fn14 Both the 2000 and 2001 Employment Agreements contained arbitration clauses in Paragraph 16, specifying that any Arbitration resulting from a dispute between the parties would occur in New York, under New York law.

In December 2001, Wasserson participated in an Executive Stock Purchase Plan ("ESPP"), paying $141,966 of his own funds, and borrowing $566,670 from Counsel Corp. (U.S.) to fund the rest of the stock purchase, as evidenced by both a Note and a Loan Agreement dated December 21, 2001 between Counsel Corp. (U.S.) and Wasserson.*fn15 Paragraph 6 of the Loan Agreement required an interest rate of 10% per annum commencing on the day after the loan becomes due and payable.

Wasserson's professional relationships with others in the telecommunications industry led to the acquisition of patents owned by Acceris Communications Inc. ("Acceris"). However, on the day after the patents were secured, Silber advised Wasserson that his employment contract would not be renewed.*fn16 Silber sent Wasserson a Notice of Non-Renewal under paragraph 2(a) of the 2001 Employment Agreement, which called for Wasserson's employment to end on December 31, 2003.*fn17 As rationale for terminating Wasserson's employment, Silber referenced Wasserson's failure to advise him of developments in a federal criminal action for environmental violations allegedly committed by a defunct dry-cleaning company owned by Wasserson.*fn18

Upon his termination on December 31, 2003, Wasserson raised issues with Counsel Corp. regarding their alleged failure to pay him in accordance with the contract, to include payment of unused vacation time as well as his 10% stock interest. Disputes about accumulated vacation pay and expense reimbursements that the company allegedly owed Wasserson were left largely unresolved. It was not until April 2008 that Wasserson learned for the first time that Counsel Corp. claimed to be a 100% owner of CCLLC.


On August 13, 2004, Counsel Corp. and Wasserson simultaneously filed the two related underlying actions.*fn19 Wasserson's Complaint alleged breach of contract, detrimental reliance, fraud and violation of the Pennsylvania Wage Payment and Collection Law, seeking back pay, vacation pay, and compensation of unpaid bonuses and company stock; Counsel Corp.'s Complaint alleged breach of contract and unjust enrichment, seeking repayment of the $566,670 loan that Counsel made to Wasserson to enable his participation in the company's 2001 ESPP.*fn20

On September 7, 2004, Defendants I-Link Corp. et al. ("Defendants") filed a motion to dismiss Wasserson's Complaint and a memorandum of law in support of its motion to compel arbitration.*fn21 In their supporting memorandum of law, Defendants argued that "it is undeniable that the parties have expressly agreed in writing to arbitrate their disputes arising under or in connection with the Employment Agreements between them [and] [t]he [Federal Arbitration Act] ("FAA") unquestionably controls the contracts at issue...[thus] all of plaintiff's claims arise under or in connection with the employment agreement and so should be ordered to arbitration...all of plaintiff's claims are subject to mandatory binding arbitration."*fn22 In addition to Wasserson's opposition to Defendants' motion to dismiss, Wasserson filed a motion to dismiss Counsel Corp.'s Complaint on September 21, 2004.*fn23

On January 14, 2005, after a hearing on the parties' respective motions to dismiss, the Court denied Wasserson's motion; granted Defendants' motion to dismiss in part; stayed both actions pending arbitration; and placed the matters in civil suspense.*fn24 Over the course of the next three and a half years, the Court tracked the status of the two actions through ordered joint status reports filed by the parties. On March 15, 2005, by Demand for Arbitration, Wasserson initiated an arbitration with JAMS Resolution Experts, naming five respondents: I-Link Corp. ("I-Link"); Springwell Communications, LLC ("Springwell"); Counsel Corp.; Counsel Communications, Inc. ("CCI"); and Silber.*fn25

On September 16, 2005, the Arbitrator heard oral argument on several motions submitted by the parties.*fn26 By Interim Award dated October 12, 2005, the Arbitrator determined that he had jurisdiction to hear Wasserson's claims against certain non-signatories to the employment agreements at issue, granted Wasserson's motion to amend his Arbitration Demand to assert claims against Counsel Corp. (Canada), and denied respondents' motion to dismiss all claims and parties, except as to Counsel Communications, Inc. ("CCI").*fn27 On November 10, 2008, a five-day hearing commenced in New York City, wherein six witnesses testified.*fn28 After the hearing, the parties filed post-hearing briefs and reply briefs.*fn29

On April 24, 2009, the Arbitrator issued a fifty-five page Interim Award, finding, in pertinent part, that:

Wasserson, as a 10% shareholder of Webtotel, was entitled to receive 1,745,433 shares of I-Link stock on the date of exchange pursuant to the [ILink/Webtotel] Merger Agreement....

Wasserson owes Counsel [Corp.] (U.S.) $566,670 pursuant to the terms of the Loan Agreement less a credit for the proceeds of the repurchase of the [10% of] stock [which] should have occurred 30 days after Wasserson's termination, or on or about February 1, 2004....Thus by the terms of the Loan Agreement, Wasserson owes Counsel [Corp.] (U.S.) $191,670 ($566,670 less $375,000) as of February 1, simple interest at the rate of 10% accruing from February 1, 2004 until the date of payment.

Respondents, jointly and severally, are liable to [Wasserson] in the amount of $29,176 representing the underpayment of Wasserson's base salary for the period of April 1, 2001 through October 31, 2001.*fn30

The Arbitrator was unable to establish damages specific to Wasserson's inability to sell the I-Link stock that he should have received in the I-Link/Webtotel merger, and therefore reopened the arbitration record for the limited purpose of receiving additional evidence on the valuation of the I-Link stock during the period of April 17, 2001 through December 31, 2003.*fn31

In May 2009 and June 2009, in accordance with the procedural order that accompanied the Interim Award, the parties filed supplemental memoranda, replies, and expert reports to address the stock valuation issue.*fn32 The arbitration record was thereafter closed.

On June 29, 2009, a Final Award was issued to the parties. On July 2, 2009, Wasserson moved to correct the Award to provide that the respondents would pay for the costs of the arbitration. The Arbitrator agreed that the original Award incorrectly stated that the costs of the arbitration would be shared, and issued a corrected Final Award.

On July 10, 2009, the Arbitrator issued a sixty-two page Corrected Final Award, finding and concluding, in pertinent part, that:

[T]he 2000 Employment Agreement which gave Wasserson 10% of Webtotel, was in effect on April 17, 2001 and...unambiguously left Wasserson with 10% of Webtotel as of the date of the Webtotel/I-Link merger....

Webtotel, however, failed to cause I-Link to deliver that stock, and by doing so, breached its contract with Wasserson....[this failure] also breached Webtotel's implied covenant of good faith and fair dealing, which required Webtotel to enable Wasserson to gain the benefit of his stock ownership (or conversely, not to deprive Wasserson of the benefit of his contract)....

Respondents may not enforce Paragraph 19 of the 2001 Employment Agreement to divest Wasserson of the I-Link stock that should have been delivered to him in April 2001....

Wasserson could not waive his right to the I-Link stock in Paragraph 19 of the 2001 Employment Agreement because he did not even know that he directly owned any I-Link stock. Moreover, Silber knew that Wasserson was ignorant of the true facts....[I]t strains credulity that Wasserson would voluntarily give up almost $1 million in I-Link stock by signing the 2001 Employment Agreement just for the chance for Counsel [Corp.] at a reduced salary....

Wasserson, as a subjective matter, did not know the terms of the ILink/Webtotel merger and that, by virtue of the Merger Agreement, he was the owner of 1,745,433 shares of I-Link....

I find that neither Silber, nor any of the lawyers working for the Counsel [Corp.] group, adequately disclosed to Wasserson or his counsel the Webtotel/I-Link merger terms prior to presenting the 2001 Employment Agreement (and its Paragraph 19) to Wasserson for signature. Instead, the corporate line was that 'Webtotel was a shell [company].' I also find that Wasserson did not know the true facts and that Silber was aware of his ignorance.

Under the circumstances, Silber and/or the company, had a duty to disclose the actual situation to Wasserson or his lawyer if they wanted a knowing waiver from Wasserson....[I find that] Wasserson reasonably relied on the incomplete statement that Webtotel was a mere shell [company]....


[T]he fact that Paragraph 19 of the Employment Agreement may not be enforced against Wasserson, is not fatal to the enforceability of the remainder of the agreement [due to the severability clause in Paragraph 14]. Wasserson knew that he was being effectively demoted. He was fully aware that he would be earning a lesser salary and, notwithstanding that, voluntarily entered into the new employment agreement. He thereafter worked under that contract for two and a half years and accepted benefits under it. He is, therefore, bound to all of the other terms of that contract other than Paragraph 19.

Wasserson's other defenses to the enforceability of the 2001 Employment Agreement based on duress and a lack of consideration fail as a matter of law....


I deny Wasserson's claim for additional vacation pay. Wasserson has not demonstrated an entitlement to more than the 4 or 4 1/2 weeks that he did receive....


[As to Wasserson's claim for additional salary],Wasserson was incorrectly paid at the lower rate ($550,000/year) rather than at the correct rate ($600,000/year) for seven months, i.e. from April 1, 2001 through October 31, 2001. Thus Webtotel owes Wasserson and [sic] additional $29,167 ($50,000 divided by 12 times 7 months)....

I find that Wasserson was underpaid $29,167 under his 2000 Employment Agreement and otherwise deny his other claims for additional benefits or compensation....

**** [As to the loan agreement, Wasserson] cannot disclaim his obligation [to repay the loan] after the stock price fell....


I find that Silber ran the Counsel [Corp] group of telecommunications companies as a unit effectively utilizing various corporate forms for the benefit of himself or of Counsel [Corp.] Canada [the public company he owned and where he gained most of his compensation]....Silber's decision to use Counsel [Corp.] (U.S.) as the corporate party to the 2001 Employment Agreement; his decision to consider Wasserson the owner of 10% of CCLLC (for a while), rather than as a shareholder of Webtotel; his intricate use of corporate vehicles to accomplish his financial objectives, for example his agreement to give Wasserson's [10%] interest to the Counsel [Corp.]-Springwell principals without consulting Wasserson; his instruction to the CFO of Counsel [Corp.] (Canada) to erase Wasserson's equity interest then listed with CCLLC, all evidenced his complete domination and control over the actions of the group. In so controlling the businesses, Silber acted not only on his own behalf but also as the agent for Counsel [Corp.] (Canada)....

These facts lead to the conclusion that both Silber and Counsel [Corp.] (Canada), on an agency, alter-ego or piercing the veil theory, are all liable to Wasserson for the award in this arbitration....

It was Silber who negotiated with Wasserson in the context of Wasserson' switch in employment agreements in late October 2001, and it was he who failed to disclose the material fact that Wasserson was already the owner of a considerable amount of I-Link stock. This personal participation in the events that deceived Wasserson leads to personal liability for Silber.

Because the record was incomplete on the issue of the valuation of I-Link shares, the arbitrator...received further briefing and two expert opinions from the parties on [this] issue....

Wasserson could not have sold his I-Link stock until May 20, 2002, at the earliest...because of a company-imposed blackout period that required executives who wanted to sell their stock to forego any sales for a certain number of days prior to the end of each fiscal period...

I find it highly unlikely...that Wasserson would have sold his I-Link stock while still in Counsel [Corp.'s] employ. He was working for the group, and indeed, was I-Link's CEO from May of 2001. He would most likely have remained a team player and retained the stock hoping for a payday if and when the company succeeded in its core business.

I find it most likely that Wasserson would have sought to divest himself of the I-Link stock after his termination from the company in December of 2003. On December 3, 2003, [when] Wasserson was informed that he would not be receiving a renewal contract, I-Link closed at 19 cents per share....The value of his 1,745,433 I-Link shares on that date, would therefore have been $331,632.27. Wasserson will be awarded that sum with interest from December 3, 2003....[T]he arbitrator deems a price of 19 cents per share to be reasonable....


Wasserson also seeks punitive damages and costs [however] the arbitrator does not deem this to be a case that warrants the imposition of punitive damages and none are awarded.

While both parties prevailed on some of their claims and some of their defenses, Wasserson, under all the facts and circumstances, must be deemed to be the prevailing party. Accordingly, the Respondents will be assessed the costs of the arbitration including all JAMS administration fees and fees for the arbitrator [in accordance with Paragraph 20 of both the 2000 and 2001 Employment Agreements]. In addition Wasserson will be awarded $75,000 towards attorney's fees, costs, and expenses.*fn33

On July 16, 2009, in response to the Court's July 15, 2009 order for a joint status report, Wasserson filed the instant Motion to Confirm Arbitration Award.*fn34 On July 30, 2009, Defendants subsequently filed their Motion to Vacate, Modify, and/or Correct the Arbitral Award.*fn35 The Court has carefully reviewed Wasserson's Motion to Confirm Award of the Arbitrator, Robert B. Davidson, Esquire of JAMS, the Resolution Experts; Defendants' Opposition to Wasserson's Motion to Confirm Award*fn36; Defendants' Motion to Vacate, Modify, and/or Correct Arbitral Award; Defendants' Consolidated Memorandum of Points and Authorities in Support of Defendants' Motion to Vacate, Modify, and/or Correct Arbitral award and Opposition to Plaintiff's Motion to Confirm Award*fn37; Wasserson's Response to the Consolidated Memorandum of Points and Authorities in Support of Defendants' Motion to Vacate, Modify, and/or Correct Arbitral award and Opposition to Plaintiff's Motion to Confirm Award*fn38; Defendants' Reply in Further Support to Vacate, Modify and/or Correct Arbitral Award*fn39, and all accompanying materials, and this matter is now ready for disposition.


The Federal Arbitration Act ("FAA") governs judicial review of arbitration proceedings.*fn40

Judicial review of an arbitrator's award is typically very limited.*fn41 The reviewing court is bound by the arbitrator's factual findings, and shall conduct its limited review using the same substantive law that governed the arbitration proceeding.*fn42

Courts, however, are "neither entitled nor encouraged to simply 'rubber stamp' the interpretations and decisions of arbitrators."*fn43 Pursuant to § 10(a) of the FAA, a court is authorized to vacate an arbitration award only where: there is "evident partiality or corruption in the arbitrator"; "the arbitrator was guilty of refusing to hear evidence pertinent to material in controversy"; or "where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made."*fn44 In addition to the statutory mechanisms for setting aside an arbitral award, a judicially created standard exists that permits a court to vacate an arbitral award when the arbitrator manifestly disregards the law.*fn45 An arbitration award may be affirmed even where the arbitrator committed a harmless error of law or fact.*fn46 The party seeking to overturn the arbitral award bears the burden of demonstrating that the arbitrator intentionally defied the law.*fn47


A. Arbitration Award

As noted supra, the parties selected New York as the governing law for arbitration of any disputes arising under the Employment Agreements. It is undisputed that the Arbitrator applied New York law in its analysis. Defendants, however, contest the Arbitrator's legal interpretation of New York contract law as related to the parties' disputes. Defendants ask the Court to vacate the Award "with respect to the Arbitrator's findings that [Wasserson] was entitled to the value of 10% of the I-Link shares issued as part of the I-Link/Nexbell merger consideration"; "vacate or remand to the Arbitrator the determination of which party is the 'prevailing party'"; and to the extent their Motion is denied, "properly calculate the amount of the Award."*fn48 Wasserson, on the other hand, asks the Court confirm the Corrected Final Award pursuant to 9 U.S.C. § 9, in the amount of $407,580.63.

(i) Arbitrator's Scope of Power

Defendants argue that the Arbitrator exceeded his authority by awarding Plaintiff 10% of the I-Link shares issued as part of the I-Link/Nexbell Merger Agreement because "[t]he parties never had agreed to arbitrate a dispute over Plaintiff's a portion of [consideration from the I-Link/Nexbell merger and] Plaintiff never raised such a claim until after the Arbitration hearing [concluded]."*fn49 Defendants further assert that "[t]he Arbitrator mistakenly confused Plaintiff's claim to 10% of the platform company (either Corporate Counsel or Webtotel) with Plaintiff's 'post-hearing' claim to 10% of I-Link shares issued as part of the I-Link/Nexbell merger."*fn50

To support its position, Defendants rely upon Matteson, where the Third Circuit vacated an arbitrator's award based on a finding that the arbitration record contained only "isolated statements and documents" concerning an issue that was later disputed as not being an issue presented to the arbitrator by the parties.*fn51 The facts here, however, are easily distinguishable. Unlike the facts in Matteson, the parties here agreed to arbitrate the issue when they entered into the relevant employment agreements in 2000 and 2001, e.g., the contractual provisions granting Wasserson 10% of the company stock was part of the 2000 Employment Agreement and included an arbitration clause. The scope of an arbitrator's authority is determined by both the terms of the arbitration agreement and "by the scope of the issues submitted by the parties."*fn52

The Arbitration record is replete with documents and testimony presented at the five-day hearing that overwhelmingly reflect the fact that Wasserson was always focused on the value of the I-Link stock and his 10% interest. Wasserson's claim to Webtotel, albeit via a claimed ownership of 10% of CCLLC, was always at issue from the time Wasserson filed his Complaint with the Court, as evidenced by the allegations pled in the Complaint.*fn53 Despite Defendants' arguments to the contrary, the facts of this case do not support an assertion that the Arbitrator "picked a few isolated statements" out of the arbitration record to make his findings and Award. The Arbitrator did not exceed his authority in addressing this issue.

(ii) Adequate Opportunity to Defend

Defendants argue in the alternative that "[e]ven if Wasserson's claim to some of the I-Link shares issued as part of the I-Link/Nexbell merger were deemed arbitrable, [they] were never given notice and a fair opportunity to defend such a claim." Plaintiff counters that Defendants consented to arbitrate all matters relating to his employment agreement, including his dispute concerning the stock shares; therefore Defendants should not have been surprised by Plaintiff's claim to 10% of Webtotel.

A district court may vacate an award if a party to an arbitration proceeding has not been given notice and opportunity to present arguments and evidence on the merits of the dispute.*fn54

That, however, is not the case here. Defendants' admit that they, in fact, "were not surprised by [Wasserson's] claim to 10% of Webtotel shares" as "[Wasserson had] always claimed a continuing 10% interest in...either Counsel Communications LLC or Webtotel."*fn55 In

Defendants' motion to compel arbitration filed with the Court early in these proceedings, Defendants represented to the Court that every claim and defense made by Wasserson in these two lawsuits were subject to arbitration.*fn56 Defendants cannot now argue that Wasserson's claims were not arbitrable simply because Defendants were found liable by the Arbitrator. Ultimately, the issue is one of prejudice, and the Court finds that the record simply does not support Defendants' contention that they were surprised or prejudiced by Wasserson's claim.

Wasserson's failure to articulate his theory of recovery as 10% of the I-Link stock, rather than as 10% of CCLLC stock, is not fatal to his claim. The Court agrees with the Arbitrator's finding that even where Plaintiff did not articulate the claim verbatim, Defendants, by their own admission, had ample opportunity to assert its position on this issue during the arbitration, even if only to preemptively articulate that the Arbitrator should not include the issue of the I-Link shares in its consideration of any award amount granted in Plaintiff's favor. The Court finds that Defendants could (and in fact did) anticipate that Wasserson would contend that he was entitled to a portion of the I-Link shares transferred during the April 2001 Webtotel/I-Link merger, and had adequate opportunity to defend the claim.

(iii) Manifest Disregard of the Law

Manifest disregard of the law is a judicially created standard, distinct from the statutory mechanisms under Section 10(a) of the FAA.*fn57 Defendants argue that the Arbitrator "manifestly disregarded" New York law and "well-established legal principles" in concluding that, "notwithstanding the...language in Paragraph 19 of the 2001 Employment Agreement, [Wasserson] had not relinquished all claims under the 2000 Employment Agreement as well as any equity in I-Link."*fn58 The Arbitration record, however, reveals that Defendants intentionally failed to disclose the exchange of Wasserson's stock in Webtotel for I-Link stock and then blatantly misrepresented the status of Webtotel to induce Wasserson into signing the 2001 Employment Agreement. After hearing all the testimony and reviewing the relevant evidence presented at the five-day hearing, the Arbitrator gave full consideration to applicable New York law when he concluded that Wasserson would not have voluntarily waived his rights by signing the 2001 Employment Agreement containing its boilerplate waiver clause, had Defendants disclosed this information.*fn59

Defendants also assert that the Arbitrator "relied merely on conjecture and guesswork in concluding that Plaintiff would have sold I-Link shares after his termination from the company in December 2003; that he could have sold all such shares at one time; and that the market price would have been $0.19 per share."*fn60 This assertion, however, is contrary to the Arbitration record, which reflects that the Arbitrator considered supplemental memoranda, replies, and expert reports from both parties specific to the stock valuation issue. Upon review of these materials, the Arbitrator concluded that Wasserson adequately proved the amount of his damages by a preponderance of the evidence.*fn61 The Arbitrator then, taking into account the parties' expert reports, made a reasonable determination of the appropriate valuation of the stock and the dollar amount of damages due Wasserson. Although Defendants disagree with the Arbitrator's conclusions, the findings of fact and conclusions of law, as made by the Arbitrator, do not pose a manifest disregard of the law.

B. Finding Regarding the Prevailing Party

Defendants argue that "if the Court grants [their Motion] to vacate that portion of the Award regarding [Wasserson]'s entitlement to the I-Link shares, Defendants...request that the Court either vacate the Arbitrator's conclusion that [Wasserson] was the 'prevailing party', or alternatively, remand the issue to the Arbitrator."*fn62

Essentially, both parties prevailed on some of their claims and defenses, however, there can be only one "prevailing party."*fn63 A finding by the Arbitrator that Defendants (jointly and severally) intentionally defrauded Wasserson out of 1.7 million shares of stock and failed to pay him salary and benefits owed to him under the Employment Agreements is a sufficient basis to deem Wasserson as the prevailing party. Additionally, Wasserson's award of $360,799.27, plus accrued interest, as compensation for the value of I-Link stock and salary shortfalls, exceeds Counsel Corp.'s award of $296,169.53 (including interest) as compensation for the unpaid loan balance.

The Court finds that Defendants have not demonstrated that the Arbitrator manifestly disregarded the applicable law and have not met their burden of persuasion in favor of vacating the Final Arbitration Award. Considering the statutory mechanisms for vacating an arbitration award, the Court finds that the Arbitrator adequately reviewed pertinent evidence during the hearing, exercised no partiality, and did not exceed his powers.*fn64

C. Calculation of Final Award

Defendants argue that Wasserson miscalculated the actual dollar amount of the Award in Paragraph 6 of his Motion, "by nearly $13,000 in his favor," based on his (1) "misapplication of 9% interest to the value of the I-Link shares" and (2) "use of 9% rather than the awarded 10% interest in calculating the total that he owes pursuant to the ESPP promissory note."*fn65

Defendants offer Ex. 16 to its Motion as the "proper calculation of the Arbitrator's monetary award." Wasserson counters that "Defendants are not entitled to interest at 10% on the amount due from Wasserson under the Executive Stock Loan" because the "amount owed to Wasserson far exceeded the amount owed by Wasserson and "since these are mutual debts among common parties...the Executive Stock loan claim is...setoff at the time of accrual from the larger amount owed to Wasserson."*fn66

The Arbitrator computed the following in its Final Award:

1. Respondents, jointly and severally, are liable to Wasserson in the following amounts:

a. the amount of $331,632.27 representing the value of the I-Link stock of which Wasserson was deprived, plus simple interest on that sum at the rate of nine (9%) percent per annum (the New York statutory rate) from December 3, 2003 until the date of payment;

b. the amount of $29,167 representing the underpayment of Wasserson's base salary for the period April 1, 2001 through October 31, 2001, plus simple interest on that sum at the rate of nine (9%) percent per annum from October 31, 2001 to the date of payment);

c. the amount of $75,000 in partial reimbursement of the [Wasserson]'s attorney's fees. This amount will not bear interest;

d. the amount of $67,232.93 representing the cost of arbitration (including the fees of the Arbitrator) that have been paid by [Wasserson]. This amount will not bear interest. This amount includes the sum of $6,241.01 advanced by [Wasserson] on behalf of [Defendants].

2. [Wasserson] is liable to...[Counsel Corp.] in the amount of $191,670 in repayment for his loan plus simple interest on that sum at the rate of ten (10%) percent per annum from February 1, 2004 until the date of payment;

3. This Award is in full settlement of all claims and counterclaims presented for determination in this arbitration.*fn67

The Arbitrator's thorough, sixty-page Award culminated into a complete and concise calculation of damages. Not only are these computations specific and succinct, but had the Arbitrator intended for a setoff to be part of the final Award, he could have easily added it into his calculations, and/or would have likely discussed the idea of setoff elsewhere in the Award narrative. Nowhere in the Award does the Arbitrator mention the term "setoff." The same is true of his 55-page Interim Award.

The Court finds that Wasserson's calculation of damages, presented in its Motion, is inconsistent with the Award articulated by the Arbitrator. Wasserson cannot arbitrarily change the interest rate on his loan balance; he is bound by the rate he contracted to pay. Nor can he calculate amounts for setoff, as the debts between the parties are not mutual and the Award never contemplated a setoff. Therefore, the Court finds no basis to disturb the judgment of the Arbitrator, as Wasserson requests.


The Court finds that the Arbitrator issued a detailed and precise Award, thoroughly addressing each of the claims pending in the two underlying actions, which is hereby affirmed in all regards. The Arbitrator sufficiently established the prevailing party to the Arbitration. Wasserson's calculation of the Award amount in its Motion to Confirm is refused. Accordingly, Plaintiff's Motion to affirm the Award is granted in part, and denied in part, and Defendants' Motion is denied as to their request to vacate or remand the Award.

An appropriate order follows.

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