Opinion
January 31, 1992
Appeal from the Supreme Court, Erie County, Mintz, J.
Present — Denman, P.J., Pine, Balio, Lawton and Davis, JJ.
Order and judgment unanimously reversed on the law with costs and matter remitted to Supreme Court for further proceedings, in accordance with the following Memorandum: Petitioner Niagara Frontier Transportation Authority instituted this proceeding to stay arbitration, contending that the arbitration provisions of its contract with respondent required compliance with certain notice of claim provisions as a condition precedent to arbitration. Supreme Court found that factual issues existed regarding compliance with the notice of claim requirements and directed the parties to proceed to arbitration. The court declined to determine whether those requirements were a condition precedent, reserving decision on that issue until after the arbitrators had resolved the factual issues. That was error. Whether a condition set forth in a contract constitutes a condition precedent to arbitration is a threshold issue for the court to decide before the matter proceeds to arbitration (see, Pearl St. Dev. Corp. v. Conduit Found. Corp., 41 N.Y.2d 167, 170; Matter of County of Rockland [Primiano Constr. Co.], 51 N.Y.2d 1, 7).
The subject agreement contains a broad arbitration provision requiring that "[a]ny dispute of fact between the parties * * * be submitted to the American Arbitration Association". The arbitration section of the agreement also provides, however, that "[a]rbitration procedures may not be initiated by the Contractor unless the procedures set forth in 7.2, 7.5, and 9.14 have been complied with". Section 7.5 of the agreement contains detailed provisions for the submission of claims, including requirements that written notices of claim be submitted within sixty days "from the occurrence for which the claim is submitted"; that any claim for equitable adjustment on account of delays "must be accompanied by a revised network analysis progress schedule"; and that "no claim for which a notice of potential claim is required will be considered unless the Contractor has complied with the notice requirements of 7.4 NOTICE OF POTENTIAL CLAIM" (underscoring in original). Petitioner contends that respondent failed to comply with the claim and notice requirements of the contract, and that, as a result, respondent is precluded from seeking arbitration.
Ordinarily, where there is a broad arbitration clause, the question of compliance with contractual notice provisions is for the arbitrator to decide (see, Matter of City School Dist. [Poughkeepsie Pub. School Teachers Assn.], 35 N.Y.2d 599, 607; Matter of City of Albany [Pomakoy], 142 A.D.2d 775, 776, lv denied 73 N.Y.2d 870). However, where the agreement expressly states that compliance with the contractual notice provision is a condition precedent to arbitration, the question of compliance is for the court to decide (see, Matter of United Nations Dev. Corp. v. Norkin Plumbing Co., 45 N.Y.2d 358, 364; Matter of Raisler Corp. [New York City Hous. Auth.], 32 N.Y.2d 274, 282; Matter of Wilaka Constr. Co. [New York City Hous. Auth.], 17 N.Y.2d 195; Chanry Communications v. Circulation Mgt., 156 A.D.2d 633). In the instant matter, the agreement expressly states that compliance with the claim and notice requirements of the agreement is a condition precedent to the initiation of arbitration procedures. Under the circumstances, Supreme Court should have conducted a hearing to resolve the factual issues concerning compliance (see, Matter of Frouge Corp. [New York City Hous. Auth.], 26 A.D.2d 269, 272).