Lanesborough 2000, LLC v. Nextres, LLC

At a glance

Parties

Lanesborough 2000, LLC (petitioner-appellee) v. Nextres, LLC (respondent-appellant)

Case no.

Second Circuit Nos. 24-2211(L), 25-662 (Con); on appeal from S.D.N.Y. No. 23-cv-07584

Forum and rules

US federal courts; Federal Arbitration Act. Underlying arbitration under the rules of the American Arbitration Association

Treaty

Arbitration Agreement accompanying a Building Loan Agreement, governed by New York law

Court

United States Court of Appeals for the Second Circuit: Carney, Park (opinion) and Robinson, Circuit Judges

Underlying award(s)

AAA emergency awards, Interim Award and Final Award in favour of Lanesborough; district court judgment (P. Kevin Castel, J.) partially confirming them

Sector

Construction lending; self-storage facility

Outcome

Motion to dismiss the appeal denied. Confirmation of the awards and the award of post-award prejudgment interest affirmed. Injunction of a state-court foreclosure action vacated and remanded for review under the Anti-Injunction Act (6 February 2026).

Amount

Loan of $2 million. The Final Award granted Lanesborough over $300,000 in attorney's fees. The district court ordered Nextres to send over $1 million in loan proceeds.

The dispute

In July 2022 Nextres agreed to lend Lanesborough $2 million to build a self-storage facility in Corning, New York. The loan was secured by a mortgage and cross-collateralized with a loan to Batchwood 1998, LLC, a company controlled by Lanesborough's owner. Lanesborough brought an AAA arbitration claiming that Nextres had failed to disburse the loan funds. The arbitrator found breach of contract and of the implied covenant of good faith, and awarded declaratory and injunctive relief, consequential damages and, for Nextres's bad faith, attorney's fees. The district court confirmed most of the awards, issued its own injunction (including against Nextres's state-court foreclosure action against Batchwood), and granted interest. Nextres appealed, and Lanesborough argued that the appeal was barred by the contractual waiver of the "right to appeal".

Key holdings

1. The waiver of the "right to appeal" does not bar the appeal. A contractual waiver of appeal that is not clear and unequivocal cannot foreclose review of a district court's judgment on an arbitral award. Read with the other waived rights (trial by judge or jury, pretrial discovery, rules of evidence), the clause can reasonably be read as covering only appeals on the merits of arbitral awards, so it is ambiguous. The court left open whether a clear waiver would be enforceable under the FAA. pp. 8–11
2. The rule that ambiguities are construed against the drafter applies only as a last resort. It is displaced here by the requirement that appellate waivers be clear and unequivocal. pp. 11–12
3. Partial confirmation of the Interim Award is affirmed. There was no prejudicial misconduct, because Nextres had a full opportunity to call and cross-examine witnesses. The confirmed parts (contract and good-faith claims, declaratory relief and damages) were within the arbitrator's powers. pp. 12–14
4. Confirmation of the Final Award is affirmed. Following ReliaStar, the clause that each party bears its own attorney's fees does not stop an arbitrator from awarding fees to sanction bad-faith conduct. The arbitrator's findings of bad faith are not open to judicial challenge. pp. 14–15
5. The injunction of the Batchwood Foreclosure Action is vacated. The district court did not consider whether the injunction fell within the narrow exceptions of the Anti-Injunction Act, 28 U.S.C. § 2283. Its reason, that the foreclosure impeded alternate financing, appears to have no basis in that Act. The issue is remanded. pp. 15–17
6. The award of post-award prejudgment interest is affirmed. Law of the case does not apply: the arbitrator refused only pre-award interest, and post-award interest falls outside an arbitrator's authority. pp. 17–18

Procedural history

1. July 2022Nextres and Lanesborough sign the Building Loan Agreement and the Arbitration Agreement.
2. Not dated in the opinionThe AAA arbitrator issues emergency awards, then an Interim Award on liability and a Final Award granting over $300,000 in attorney's fees.
3. Not dated in the opinionThe district court (S.D.N.Y., Castel, J.) partially confirms the Interim Award and vacates the fee award. On reconsideration it confirms the Final Award, grants its own injunctive relief and awards interest. It stays enforcement pending appeal.
4. 14 January 2026Argument before the Second Circuit.
5. 6 February 2026Second Circuit judgment: motion to dismiss denied; affirmed in part, vacated in part and remanded.

Tribunal, counsel and experts

For the claimant

Clyde & Co

For the respondent

Sutton Sachs Meyer PLLC

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Keywords

• waiver of right to appeal
• appellate jurisdiction
• Federal Arbitration Act
• 9 U.S.C. § 16
• confirmation of arbitral award
• vacatur
• excess of authority
• arbitrator misconduct
• attorney's fees as sanction
• bad faith
• Anti-Injunction Act
• relitigation exception
• post-award prejudgment interest
• law of the case
• noscitur a sociis
• contra proferentem
• construction loan
• AAA

Summary generated with AI from the published documents — refer to the award for the authoritative text.