Opinion
65355
05-07-2019
Matthew GORDON, Plaintiff, v. NEMER TRANSPORTATION CORPORATION, d/b/a Nemer Chrysler ; Nemer Transportation of Saratoga, LLC, d/b/a Nemer Chrysler Jeep Dodge Ram of Saratoga; Robert Nemer; Peter Nemer; and Joshua Nemer, Defendants.
Fitzgerald Morris Baker Firth P.C., Glens Falls (Michael Crowe of counsel), for plaintiff. Towne, Ryan & Partners, P.C., Albany (James T. Towne, Jr. of counsel), for defendants.
Fitzgerald Morris Baker Firth P.C., Glens Falls (Michael Crowe of counsel), for plaintiff.
Towne, Ryan & Partners, P.C., Albany (James T. Towne, Jr. of counsel), for defendants.
Robert J. Muller, J.
Defendants, Nemer Transportation Corporation, d/b/a Nemer Chrysler; Nemer Transportation of Saratoga, LLC, d/b/a Nemer Chrysler Jeep Dodge Ram of Saratoga; Robert Nemer; Peter Nemer; and Joshua Nemer (hereinafter collectively, the "Defendants") move to compel arbitration pursuant to CPLR § 7503 concerning allegations contained within the Third, Fourth, Fifth, Sixth, Seventh, Eighth, Ninth, Twelfth, Thirteenth, Fourteen, and Fifteenth Causes of Action alleged in the plaintiff's complaint, as well as the First, Second, Third, Fourth, Fifth, Sixth, Seventh and Eighth Counterclaims alleged in the their answer. A closer reading by the Court, however, demonstrates that all of plaintiff's causes of action stem from the agreements which include the arbitration clauses, not just the causes emphasized in defendants' motion. The same can be said for all twelve counterclaims which defendants also seek to stay until the conclusion of the arbitration. Plaintiff by cross motion urges, as alternative relief, that all causes of action and counterclaims are governed by the arbitration agreement.
The agreements to arbitrate arise from a Stock Purchase Agreement dated December 18, 2013 and a Membership Unit Purchase Agreement of even date. The essential purpose of these agreements was to establish plaintiff's salary and compensation for performing his duties as general manager of defendants' auto dealerships together with his partial ownership interests in these businesses. The defendants raised their right to arbitrate the instant dispute under the arbitration clauses as their Tenth affirmative defense.
Pursuant to Section 10 of both agreements, "any dispute or disagreement arising out of this Agreement or a claimed breach, except as to a right in favor the Employer which involved a right to injunctive relief, or specific performance, shall be resolved by arbitration under the Voluntary Labor Arbitration Rules of the American Arbitration Association."
By Notice of Cross Motion the plaintiff seeks, inter alia , to compel discovery—although notably embedded in the cross motion papers is a recognition that the subject matter of this lawsuit is covered by the broad arbitration language of the Stock Purchase Agreement and Membership Unit Purchase Agreements of December 18, 2013. Plaintiff, nevertheless, seeks discovery concerning the contractual provision that "[i]n the event that [plaintiff] shall not be approved by Chrysler Corporation, the Agreement shall be null and void."
The threshold determination of whether there is a "clear, unequivocal and extant agreement to arbitrate" the disputed claims is to be made by the court and not the arbitrator ( Matter of Primex Intl. Corp. v. Wal—Mart Stores, Inc. , 89 NY2d 594, 598 (1997) ; Sisters of St. John the Baptist v. Phillips R. Geraghty Constructor , 67 NY2d 997, 998 (1986) and this Court so finds such an agreement.
Courts have also regularly upheld and enforced arbitration agreements when a party has pled a right to arbitrate as an affirmative defense. See, e.g., Plateis v. Flax , 54 AD2d 813, 814 (1976) ("the defendants here clearly insisted on their right to arbitration in their answer, thereby precluding any inference they had waived that right in the previous stipulation"); see also Spatz v. Ridge Lea Assocs., LLC. , 309 AD2d 1248 (2003) ; see Balso Olsen & Chapman Constr. Co. v. Cazenovia , 33 AD2d 929, 930 (1970). As noted, defendants have raised their right to arbitrate this dispute under the subject arbitration clauses as an affirmative defense.
"Once the courts have performed the ‘initial screening process’, determining that the parties have agreed to arbitrate the subject matter in dispute, their role has ended and they may not proceed to decide whether particular claims are tenable." (see Matter of Praetorian Realty Corp. v. Presidential Towers Residence , 40 NY2d 897 (1976) ; Matter of Nationwide Gen. Ins. Co. v. Investors Ins. Co. of Amer. , 37 NY2d 91, 96 (1975).
Plaintiff's contention in opposition is that defendants have not established that Chrysler has approved the plaintiff—a claimed condition precedent for arbitration. A condition precedent is an " ‘act or event, other than a lapse of time, which, unless the condition is excused, must occur before a duty to perform a promise in the agreement arises’ " ( Oppenheimer & Co. v. Oppenheim, Appel, Dixon & Co. , 86 NY2d 685, 690 (1995), citing Calamari and Perillo, Contracts § 11—2 at 438 [3d ed.] ). "[I]t must clearly appear from the agreement itself that the parties intended a provision to operate as a condition precedent" ( Kass v. Kass , 235 AD2d 150, 159, (1997) affd. 91 NY2d 554 (1998). If the language is in any way ambiguous, the law does not favor a construction which creates a condition precedent (see Kass v. Kass , 235 AD2d at 159 ). A contractual duty will not be construed as a condition precedent absent clear language showing that the parties intended to make it a condition (see Unigard Sec. Ins. Co. v. North Riv. Ins. Co. , 79 NY2d 576, 584 [1992] ).
The cited provision is actually entitled "Conditions Precedent To Transfer Of Membership Units." The significance of this language - if there is any - is for the consideration of the arbitrator and not this Court. There is nothing contained within the language of the agreements at issue to support the plaintiff's argument that the provision was meant to be a condition precedent to the performance of the agreement (see Gucci Am., Inc. v. Sample Sale Wholesalers, Ltd. , 39 AD3d 271(2007). On its face the language cannot reasonably be construed as a condition precedent for the arbitration to commence.
The Court thus finds no nonarbitrable issues to be resolved before the arbitration can proceed. See Primavera Laboratories. Inc. v. Avon Products. Inc. , 297 AD2d 505, 506 (2002) ; Teplitsky v. Douglaston Golf Practice Range, Inc. , 64 AD2d 578, 578 (1978).
Therefore, having considered the Affirmation of James T. Towne, Jr., Esq., dated January 24, 2019; the Affidavit of Peter Nemer sworn to January 24, 2019 with Exhibits "A" through "I" attached thereto; Memorandum of Law of James T. Towne, Jr., Esq. dated January 24, 2019; the Affirmation of Michael Crowe, Esq., dated February 22, 2019 with Exhibits "A" through "E" attached thereto; Memorandum of Law of Michael Crowe, Esq. dated February 22, 2019 submitted in support of the cross claim and in opposition to defendants' motion; the Reply Affirmation of James T. Towne, Jr., Esq., dated April 5, 2019; the Affirmation of John A. Musacchio, Esq., dated April 4, 2019 together with Exhibits "A" through "G"; Reply Memorandum of Law of James T. Towne, Jr., Esq., dated April 3, 2019; Reply Affirmation of Michael Crowe, Esq., dated April 11, 2019 together with Exhibits "A" through "C", it is hereby
ORDERED that defendants' motion to compel arbitration is granted, and it is further
ORDERED that plaintiff's cross motion is granted to the extent that all causes of action and counterclaims shall proceed to arbitration, and is otherwise denied, and it is further
ORDERED that this action is permanently stayed, and it is further
ORDERED that any relief not specifically granted has nonetheless been considered and is denied.
The original of this Decision and Order has been filed by the Court together with the Notice of Motion dated January 24, 2019 and the Notice of Cross Motion dated February 22, 2019. Counsel for defendants is directed to obtain a filed copy of the Decision and Order for service with notice of entry in accordance with CPLR 5513.