Summary
In Allegro, the First Department affirmed an order staying arbitration because the party against whom arbitration was sought had not signed the agreement containing the arbitration clause (id. at 270).
Summary of this case from In re Seigfreid Bingham, P.C.Opinion
2283N
November 20, 2003.
Order, Supreme Court, New York County (Louise Gruner Gans, J.), entered August 12, 2003, which granted petitioner guarantor's application to stay an arbitration demanded by respondent landlord insofar as the demand included the guarantor as well as the guarantor's principal, the landlord's tenant, unanimously affirmed, with costs.
Patrick P. Salisbury, for petitioner-respondent.
E. Leo Milonas, for respondent-appellant.
Before: Tom, J.P., Saxe, Sullivan, Lerner, Friedman, JJ.
The IAS court correctly held that the guarantor is not a party to the lease agreement containing the arbitration clause. Although mentioned on the cover page and first paragraph of the lease, the remainder of the lease throughout provides that it is between the landlord and the tenant only, and nowhere does it refer to "all parties" rather than "both parties." In addition, the guarantor did not sign any part of the body of the lease (compare Development Bank of Philippines v. Chemtex Fibers, 617 F. Supp. 55, 56), but only the guarantee itself, which does not contain an arbitration clause, refers to the "foregoing Lease" and is set out on a separate page that was not signed by the tenant. "In the absence of a specific agreement to arbitrate, the guarantors of a principal agreement containing an arbitration clause cannot be compelled to arbitrate. . . . A mere guarantee of performance does not constitute an assumption by the guarantor of the principal's agreement to submit to arbitration" (Matter of Calvin Klein Co. [Minnetonka, Inc.], 88 A.D.2d 503). As the IAS court stated, any intention on the part of these sophisticated entities that the guarantor be party to arbitration between the landlord and tenant should have been less equivocal and more express. We have considered and rejected the landlord's other arguments.
THIS CONSTITUTES THE DECISION AND ORDER OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.