Opinion
342207.
Decided February 1, 2007.
The appearances of counsel are as follows: Alatsas and Taub, P.C.(For Petitioner), NY.
Varda Banilivy(Trustee, Pro Se), NY.
Ayal Kalil(Trustee, Pro Se), NY.
Effie Golan(Trustee, Pro Se), Netherlands.
Doron Ismailoff(Trustee, Pro Se), NY.
This is a proceeding commenced by the grantor of an inter vivos trust for a determination that the trust is the product of undue influence.
Esther Ismailoff (grantor) executed an agreement with her four children (trustees) creating an irrevocable inter vivos trust. The proceeding was commenced by petition and order to show cause why the trust should not be declared invalid. Thereafter, the grantor moved for an order compelling arbitration.
The trustees, all of whom appear pro se, are aligned as follows: Ayal Kalil supports the petition to declare the trust invalid. Effie Golan and Doron Ismailoff seek to enforce the trust. Varda Banilivy takes no position as to the validity of the trust.
Article XXIV of the agreement provides:
In the event that any dispute or question arises with respect to this Declaration of Trust, such dispute or question shall be submitted to arbitration before a panel consisting of three persons of the Orthodox Jewish faith, which will enforce the provisions of this Declaration of Trust and give any party the rights he is entitled to under New York law. This Declaration of Trust shall be construed in order to effectuate the intent of the parties and the parties admit that they have performed all the necessary requirements for this Declaration to be valid under Jewish law. The panel will have the authority to file their decision with the Court under the
New York Arbitration Law. The parties have made a Kinyan Siddur with a garment that may be used for that purpose in order to effectuate this Declaration of Trust.
By decision dated December 5, 2006 (Dec. No. 871), the court scheduled a hearing to determine the validity of the arbitration clause alone ( Matter of Cassone, 63 NY2d 756; Matter of Weinrott [ Carp], 32 NY2d 190) and issued a temporary restraining order on consent, preventing the transfer of two parcels of real property located in the State of New York.
At the hearing, one trustee challenged the validity of the arbitration clause but alleged no facts upon which a finding could be made that the clause is invalid. The court ruled that the arbitration clause is enforceable at the election of any one of the four trustees. It was previously determined in the decision of December 5, 2006, that the grantor waived the right to compel arbitration by the filing of a petition in this proceeding ( Commander Oil Corp. v Shapiro, 245 AD2d 330 [2nd Dept 1997]). Ayal Kalil, one of the four trustees, elected to enforce the arbitration clause.
The only remaining issue to be determined by the court is the method for selecting arbitrators. As the parties neglected to designate arbitrators or provide a method for selection in their agreement, it is the court's responsibility to make the appointment (CPLR 7504).
The grantor argues that the parties intended to empanel a "Beth Din" (rabbinical court). However, the agreement specifically provides for enforcement of the rights of the parties under New York law. In addition, in the absence of any reference in the agreement to a "Beth Din," the First Amendment to the United States Constitution prohibits the appointment of a religious tribunal ( Sieger v Sieger, 297 AD2d 33 [2nd Dept 2002]).
The agreement provides for the selection of "three persons of the Orthodox Jewish faith." The most common method of selecting a tripartite panel is for each contending party to select one arbitrator and for the two arbitrators to select a third ( Matter of Astoria Med. Group [ Health Ins. Plan] 11 NY2d 128). Written submissions of the parties suggest that the criteria applied to determine whether a proposed arbitrator is "orthodox" would be in dispute. That issue could never be resolved by the court.
The Establishment Clause of the First Amendment prohibits a civil court from resolving issues concerning religious doctrine and practice ( Presbyterian Church v Hull Church, 393 U.S. 440; Kelly v Garuda, _____ AD3d _____ [2nd Dept 2007]; 2007 WL [60334]; Sieger v Sieger, 297 AD2d 33 [2nd Dept 2002]). The court therefore finds that the clause within the arbitration provision requiring the selection of three persons of the Orthodox Jewish faith is unenforceable. That clause is severable and does not invalidate the entire arbitration provision ( Caruso v Allnet Communications Services, Inc., 242 AD2d 484 [3rd Dept 1997]). Although the provision requiring orthodox arbitrators is unenforceable, the parties are free to select arbitrators, who in their own judgment, meet the religious requirement.
The arbitration panel will consist of three attorneys licensed to practice law in the State of New York. Esther Ismailoff and Ayal Kalil will select one arbitrator. Doron Ismailoff and Effie Golan will select one arbitrator and the two arbitrators will select a third. Varda Banilivy, who has thus far remained neutral, may align herself with either side and participate in the selection process. The selection of the first two arbitrators will take place within twenty (20) days of this order and the selection of the third arbitrator within ten (10) days thereafter, in default of which this matter will be referred to the American Arbitration Association.
The order restraining transfer of real property located in Queens County and Kings County or the proceeds of sale remains in effect pending further order of the court. The court is mindful of the restrictions set forth in CPLR 7502(c) concerning provisional remedies in a proceeding to compel arbitration. The restraining order, however, is based upon the consent of the parties.
This matter will appear on the court's calendar on March 7, 2007, at 9:30 a.m.for a report on the status of the selection process.
This is the decision and order of the court.