Opinion
2020-09275 Index No. 521349/17
05-10-2023
In the Matter of KENT WATERFRONT ASSOCIATES, LLC, et al., appellants, et al., petitioner, v. NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA., etc., respondent.
Silverman Shin & Byrne PLLC, New York, NY (Donald F. Schneider and Andrew V. Achiron of counsel), for appellants. Thomas Kadian LLC, New York, NY (Samuel J. Thomas of counsel), for respondent.
Silverman Shin & Byrne PLLC, New York, NY (Donald F. Schneider and Andrew V. Achiron of counsel), for appellants.
Thomas Kadian LLC, New York, NY (Samuel J. Thomas of counsel), for respondent.
BETSY BARROS, J.P., ANGELA G. IANNACCI, JOSEPH A. ZAYAS, DEBORAH A. DOWLING, JJ.
DECISION & ORDER In a proceeding pursuant to CPLR article 75 to permanently stay arbitration, the petitioners Kent Waterfront Associates, LLC, BFC Partners, L.P., and L & M Development Partners, Inc., appeal from a judgment of the Supreme Court, Kings County (Francois A. Rivera, J.), dated October 30, 2020. The judgment denied the petition to permanently stay arbitration insofar as it involves the petitioners Kent Waterfront Associates, LLC, BFC Partners, L.P., and L & M Development Partners, Inc.
ORDERED that the judgment is reversed, on the law, with costs, and the petition to permanently stay arbitration insofar as it involves the petitioners Kent Waterfront Associates, LLC, BFC Partners, L.P., and L & M Development Partners, Inc., is granted.
The petitioner Kent Waterfront Builders, LLC (hereinafter Kent Builders), entered into a payment agreement with the respondent, National Union Fire Insurance Company of Pittsburgh, Pa. (hereinafter National Union), pursuant to which National Union agreed to provide insurance coverage. The payment agreement contained a provision for arbitration whereby "[a]ny other unresolved dispute arising out of this Agreement must be submitted to arbitration." When a dispute over the payment of premiums arose, National Union served a demand for arbitration on Kent Builders, and also on the petitioners Kent Waterfront Associates, LLC, BFC Partners, L.P., and L & M Development Partners, Inc. (hereinafter collectively the appellants), among others. The petitioners commenced this proceeding pursuant to CPLR article 75 to permanently stay the arbitration insofar as it involves the appellants on the basis that the appellants were not parties to or bound by the payment agreement. In the judgment appealed from, the Supreme Court denied the petition to permanently stay arbitration.
"Arbitration is a matter of contract, grounded in agreement of the parties" ( Matter of Belzberg v. Verus Invs. Holdings Inc., 21 N.Y.3d 626, 630, 977 N.Y.S.2d 685, 999 N.E.2d 1130 [citation and internal quotation marks omitted]; see Revis v. Schwartz, 192 A.D.3d 127, 142, 140 N.Y.S.3d 68 ). "Inasmuch as an arbitration clause is a contractual right, the general rule is that only a party to an arbitration agreement is bound by or may enforce the agreement" ( Revis v. Schwartz, 192 A.D.3d at 142, 140 N.Y.S.3d 68 [internal quotation marks omitted]; see Matter of Belzberg v. Verus Invs. Holdings Inc., 21 N.Y.3d at 630, 977 N.Y.S.2d 685, 999 N.E.2d 1130 ). However, "[a] nonsignatory may be bound to an arbitration agreement if so dictated by the ordinary principles of contract and agency" ( Matter of Jefferies & Co., Inc. v. Infinity Equities I, LLC, 66 A.D.3d 540, 541, 887 N.Y.S.2d 81 ).
"[A]s a general matter, on a motion to compel or stay arbitration, a court must determine, ‘in the first instance ... whether parties have agreed to submit their disputes to arbitration’ " ( Revis v. Schwartz, 192 A.D.3d at 134, 140 N.Y.S.3d 68, quoting Sisters of St. John the Baptist, Providence Rest Convent v. Geraghty Constructor, Inc., 67 N.Y.2d 997, 999, 502 N.Y.S.2d 997, 494 N.E.2d 102 ). "The party seeking a stay of arbitration has the burden of showing the existence of sufficient evidentiary facts to establish a preliminary issue which would justify the stay" ( Matter of Travelers Personal Ins. Co. v. Hanophy–Ryan, 200 A.D.3d 695, 696, 154 N.Y.S.3d 862 [internal quotation marks omitted]; see Matter of Government Empls. Ins. Co. v. Tucci, 157 A.D.3d 679, 680, 69 N.Y.S.3d 330 ). "Thereafter, the burden shifts to the party opposing the stay to rebut the prima facie showing" ( Matter of Travelers Personal Ins. Co. v. Hanophy–Ryan, 200 A.D.3d at 696, 154 N.Y.S.3d 862 [internal quotation marks omitted]; see Matter of Government Empls. Ins. Co. v. Tucci, 157 A.D.3d at 680, 69 N.Y.S.3d 330 ).
Here, it is undisputed that Kent Builders entered into the payment agreement with National Union, and that the agreement included a provision requiring the arbitration of disputes. The agreement bound Kent Builders and also "each of its subsidiary, affiliated or associated organizations that are included as Named Insureds under any of the Policies. " While National Union acknowledges that the appellants were not identified as named insureds, it relies upon a separate provision of the payment agreement indicating that the agreement was binding on Kent Builders as well as "all Your subsidiaries or affiliates except those listed below: (None)."
"As with the construction of contracts generally, unambiguous provisions of an insurance contract must be given their plain and ordinary meaning, and the interpretation of such provisions is a question of law for the court" ( L & D Serv. Sta., Inc. v. Utica First Ins. Co, 103 A.D.3d 782, 783, 962 N.Y.S.2d 187 [internal quotation marks omitted]). An insurance contract should be read as a whole, and "should not be read so that some provisions are rendered meaningless" ( Richner Communications, Inc. v. Tower Ins. Co. of N.Y., 72 A.D.3d 670, 671, 898 N.Y.S.2d 615 [internal quotation marks omitted]; see County of Columbia v. Continental Ins. Co., 83 N.Y.2d 618, 628, 612 N.Y.S.2d 345, 634 N.E.2d 946 ). Contrary to National Union's contention, the payment agreement contained plain and unambiguous language providing that Kent Builders’ affiliates were bound only if they were named insureds, and that language must be given effect (see County of Columbia v. Continental Ins. Co., 83 N.Y.2d at 628, 612 N.Y.S.2d 345, 634 N.E.2d 946 ; Richner Communications, Inc. v. Tower Ins. Co. of N.Y., 72 A.D.3d at 671, 898 N.Y.S.2d 615 ; Matter of Progressive Northeastern Ins. Co. v. Scalamandre, 51 A.D.3d 932, 933, 858 N.Y.S.2d 327 ; Matter of Progressive Ins. Cos. [Nemitz], 39 A.D.3d 1121, 834 N.Y.S.2d 394 ). Since the appellants were not named insureds, they were not bound by the payment agreement.
Accordingly, the Supreme Court should have granted the petition to permanently stay the arbitration insofar as it involves the appellants.
BARROS, J.P., IANNACCI, ZAYAS and DOWLING, JJ., concur.