Appellate Division Courthouse of New York State in Manhattan, New York City, home of the First Department of the Appellate Division. (Photo: Wikipedia)

Attorney fees were properly awarded by an arbitrator to lawyers for Mark Steyn, a conservative author and media personality, in his lawsuit against an online television network he sued after it canceled his show two months into a contract, a Manhattan appellate court ruled Tuesday.

The New York Supreme Court Appellate Division, First Department reversed a ruling from Manhattan Supreme Court that had previously quashed an arbitrator's decision to award Steyn's lawyers more than $1 million in attorney fees.

Steyn was represented in the arbitration and resulting litigation by Michael Murphy, a partner at Ervin Cohen & Jessup in Beverly Hills, California, and Erin O'Leary, an associate at Fishkin Lucks in Manhattan.

“We are thrilled,” Murphy said. “We are hopeful that CRTV will be mature and follow through with that as it promotes itself as being a champion of liberty and freedom of contract, and that they will satisfy their contractual obligations and pay this award.”

The conflict was the result of a now-canceled television show that Steyn agreed to produce and host in Vermont for CRTV, a conservative online television network currently known as BlazeTV. The network frequently features conservative commentators like Glenn Beck and Phil Robertson.

Steyn entered into a “binding term sheet” for the show with CRTV in 2016. Both parties agreed to cooperate and work with each other, but were responsible for different parts of the programming.

CRTV was tasked with hiring a production staff and building a set in Burlington. Steyn was the talent, who had to deliver 200 shows a year, each 48 minutes long. The agreement said he would start producing that content when the studio in Burlington was “fully functioning,” according to the decision.

That agreement included an arbitration provision requiring that any unresolved disputes “shall be settled exclusively by confidential binding agreement in accordance with the Federal Arbitration Act” and “rules of the American Arbitration Association (AAA) applicable to general commercial disputes.”

Oak Hill Media, in a letter memorandum separate from the agreement between Steyn and CRTV, was retained to provide services to Steyn. The company agreed to book guests for the show and contract out third-party employees, like makeup artists and public relations firms.

The letter memorandum, unlike the term sheet between Steyn and CRTV, did not have a clause that allowed disputes to be settled exclusively through arbitration.

After two months on the air, the show was abruptly cancelled by CRTV, which blamed Steyn for the program's shortcomings. Steyn, in turn, said he did everything required of him under the term sheet, but that “extraordinary personnel problems,” construction delays and technical problems had been a challenge for the show.

CRTV then served Steyn with a demand in February 2017 to arbitrate the dispute, alleging that he had breached their contract. Steyn, along with OHM, served an answering statement a month later with counterclaims and their intention to seek damages and attorney fees.

Steyn ended up with a $4 million award from the arbitrator, about half of which was damages for him alone. OHM was awarded about $900,000 by the arbitrator and CRTV was ordered to pay more than $1 million in attorney fees to Steyn and OHM.

But there was a question as to whether the attorney fees and award to OHM were lawfully awarded by the arbitrator.

Associate Justice Dianne Renwick of the Appellate Division, First Department wrote in the court's decision Tuesday that, ordinarily, arbitrators are not allowed to award attorney fees in New York. There are three exceptions to that rule, one of which is when it's “unmistakably clear” that both parties intended to seek such an award.

The arbitrator, in this case, did not disregard the law because both parties requested, at one point or another, to have attorney fees awarded. That satisfied the “unmistakably clear” standard, Renwick wrote.

“The arbitrator's conclusion under the [American Arbitration Association] rules that a party may receive attorneys' fees, although not otherwise entitled to attorneys' fees under New York's 'unmistakably clear' standard, was not unreasonable,” Renwick wrote. “Therefore, it cannot be overturned by this court under the manifest disregard of the law standard.”

Attorneys for CRTV had argued to have the arbitrator's award for OHM scrapped because they hadn't entered into a contract with the company that included an arbitration provision. OHM had argued, in turn, that CRTV had waived any objection to arbitration with the media company when they didn't try to stop their involvement earlier in the conflict.

The Appellate Division agreed with CRTV's analysis in its decision Tuesday. Because OHM did not enter into a contract with the network that included an arbitration provision, like Steyn had, the award from the arbitrator couldn't be enforced, the appellate court ruled.

“Here, it is uncontested that there was no agreement to arbitrate between OHM and CRTV,” Renwick wrote. “OHM was not even a named party in CRTV's original demand for arbitration; OHM's appearance was made on a counterclaim.”

That doesn't mean OHM is out of luck. The company, also represented by Murphy, could still file suit against CRTV seeking damages. It could also appeal the decision. It's just that the result of the arbitration, for now, won't apply to them. Murphy said they're reviewing their options.

The decision is the latest in what's turned out to be a legal saga between Steyn and CRTV. After Steyn's show was canceled, he posted comments on social media criticizing the network. CRTV then accused Steyn of defamation, which led to a second arbitration.

The arbitrator in that case recently concluded that Steyn's comments, which included calling a founder of CRTV a “sleazy bum,” didn't amount to defamation and dismissed the network's claims for damages.

Melissa Howes, a spokeswoman for Steyn and president of Mark Steyn Enterprises (U.S.) Inc., celebrated Tuesday's decision in a statement, calling it a step toward recouping what they've had to spend on legal representation in recent years.

“The legal fees we have incurred from this continued malicious prosecution and abuse of process is in the millions and growing every day,” Howes said. “We are gratified that the [Appellate Division] has upheld an award to recoup at least a portion of that.”

CRTV was represented before the appellate court by Jeffrey Mitchell and Judith Cohen from Browne George Ross in Manhattan. Mitchell said in a statement Tuesday afternoon that they may seek an appeal of the decision to the state's highest court.

“We continue to believe both awards appealed from were improperly made,” Mitchell said. “This decision speaks to the risks parties take by agreeing to arbitration, and how there is little anyone can do after the fact when an arbitrator makes an erroneous award. This may be an issue for the Court of Appeals to address given the importance of it.”

Associate Justices Judith Gische, Barbara Kapnick, Cynthia Kern and Peter Moulton were also on the decision with Renwick. Each concurred with the majority opinion.

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