Opinion
13760N Index No. 651165/20 Case No. 2020-02255
05-04-2021
In the Matter of Alexis BERGER, Petitioner–Appellant, v. SIGNAC INVESTMENTS LTD., Respondent–Respondent.
Storch Byrne LLP, New York (Steven G. Storch of counsel), for appellant. Sher Tremonte LLP, New York (Theresa Trzaskoma of counsel), for respondent.
Storch Byrne LLP, New York (Steven G. Storch of counsel), for appellant.
Sher Tremonte LLP, New York (Theresa Trzaskoma of counsel), for respondent.
Acosta, P.J., Manzanet–Daniels, Moulton, Scarpulla, JJ.
Order, Supreme Court, New York County (Jennifer G. Schecter, J.), entered on or about March 25, 2020, which denied the petition to stay arbitration, unanimously affirmed, without costs.
Respondent Signac Investments Ltd., although a nonsignatory to the agreement containing the arbitration clause, is entitled to invoke the arbitration provision to compel arbitration of petitioner's claim concerning the validity and enforceability of a certain financing arrangement because of its close relationship to the other signatory to that agreement (see Degraw Constr. Group, Inc. v. McGowan Bldrs., Inc., 152 A.D.3d 567, 569–570, 58 N.Y.S.3d 152 [2d Dept. 2017] ; see also Hirschfeld Prods., Inc. v. Mirvish, 88 N.Y.2d 1054, 1055–1056, 651 N.Y.S.2d 5, 673 N.E.2d 1232 [1996] ; Revis v. Schwartz, 192 A.D.3d 127, 143–144, 140 N.Y.S.3d 68 [2d Dept. 2020] ). As the court noted, in the reverse situation, petitioner would undoubtedly be entitled to enforce the same arbitration provision against Signac, given that both parties enjoyed the benefits of the agreement (see Matter of Belzberg v. Verus Invs. Holdings Inc., 21 N.Y.3d 626, 631–632, 977 N.Y.S.2d 685, 999 N.E.2d 1130 [2013] ; Oxbow Calcining USA Inc. v. American Indus. Partners, 96 A.D.3d 646, 649, 948 N.Y.S.2d 24 [1st Dept. 2012] ; HRH Constr. LLC v. Metropolitan Transp. Auth., 33 A.D.3d 568, 823 N.Y.S.2d 140 [1st Dept. 2006] ).
Additionally, contrary to petitioner's contention, the contract was not a personal services contract (see Rosenthal Paper Co. v. National Folding Box & Paper Co., 226 N.Y. 313, 326, 123 N.E. 766 [1919] ). Therefore, in the absence of language prohibiting assignment and given affirmative language anticipating assignment, the terms of the original agreement were fully assignable ( New York Bank Note Co. v. Hamilton Bank Note Engraving & Print. Co. 180 N.Y. 280, 292, 73 N.E. 48 [1905] ; Z. Justin Mgt. Co., Inc. v. Metro Outdoor, LLC, 137 A.D.3d 577, 578, 28 N.Y.S.3d 31 [1st Dept. 2016] ; see also Allhusen v. Caristo Constr. Corp., 303 N.Y. 446, 452, 103 N.E.2d 891 [1952] ).
Finally, the dispute here is primarily about the validity and enforceability of the entire transaction, not about distribution of funds from an escrow account. Accordingly, the arbitration provision of the original agreement is applicable, rather than the narrower dispute resolution provisions of the escrow agreement.