10:15am PT by Eriq Gardner
Sales Outfit Green-Light Challenges Arbitrator's Authority After Sanctioning in 'Urge' Dispute
Raven Asset-Based Opportunity Fund II, the financier behind the Pierce Brosnan thriller Urge, is looking for confirmation that it's owed additional money after an arbitrator ruled that sales agency Green-Light International breached a contract by putting receipts from the film into its personal bank account instead of a collection account. In response, Green-Light is questioning the scope of the arbitrator's powers.
Back in July, Raven filed a petition to confirm the arbitration award and publicly revealed its dispute with Green-Light, headed by Jeff Elliott, Chad Moore and Christian de Gallegos. After being presented with evidence that the sales agents had misappropriated and dissipated more than $400,000 of funds, JAMS arbitrator Rosalyn Chapman ordered an immediate transfer of money. Additionally, upon word that Green-Light's principals committed "severe misconduct" during the proceedings and were refusing to obey a preliminary injunction, Chapman slammed the agency with $63,000 in sanctions, attorney fees totaling $107,504 and $15,798 in costs.
On Friday, Raven aimed to get a California federal judge's stamp on these awards by amending its petition for confirmation.
Green-Light isn't letting all of this go unanswered.
The company is currently suing in Los Angeles Superior Court and has filed a motion to vacate the arbitration orders. According to a filing this week, Green-Light acknowledges that arbitrators are afforded much decisional authority, but that they may not issue injunctions as a provisional remedy and can't impose sanctions in the enforcement of an injunction.
The company attempts to explain why the Urge money wasn't deposited into a collection account by claiming that a management agreement wasn't executed and there was a lack of necessary contact with the financial intermediary to ensure proper distribution. That wasn't enough for the arbitrator, and now the issue is an arbitrator's authority to remedy a breach of the contract on where money should be put.
"Both State and Federal law confirms that provisional remedies such as those purportedly ordered here, are a matter for the courts, not the arbitrator," argues Green-Light's attorney John Burge. "Marsch v. Williams is clear that an arbitrator does not have the authority as a matter of law to order provisional relief that effects the disposition of the possession of property."
The company also argues that the injunctive relief requiring a transfer of money was improper due to the absence of a bond from Raven and a non-showing of irreparable injury. As for the sanctions, Green-Light posits that arbitrators have no power to enforce their decisions — and that it matters not whether Chapman had made an "order" or an "award." Enforcement can only come from courts, argues Green-Light.
Raven certainly is in court now — a federal one.
There, Raven's attorney Mathew Rosengart tells the judge in the petition, "There are no grounds to vacate, modify, or correct either the June 2 Award or the August 12 Award. The Awards are well within the Arbitrator’s broad and effectively unreviewable authority."