Newman v. Cooper, Robertson Partners

Full title: IN THE MATTER OF THE APPLICATION OF MARTIN D. NEWMAN and JAMES ANDERSON…

Court: Supreme Court of the State of New York, New York County

Date published: Aug 19, 2009

2009 N.Y. Slip Op. 31904 (N.Y. Sup. Ct. 2009)

Opinion

106403/2009.

August 19, 2009.

DECISION AND ORDER

MARILYN SHAFER, Judge.

By petition dated May 5, 2009, Martin D. Newman (Newman) and James Anderson seek a judgment, pursuant to Article 75 of the CPLR, staying a demand for arbitration by respondent Cooper, Robertson Partners (CRP) pursuant to a March 31, 2008 agreement (the agreement) with petitioners, which is captioned "Owner Work Authorization" (ex. 1 to mov. aff.).

CRP has filed a counterclaim seeking an order compelling petitioners to proceed to arbitration. CRP has not moved for any relief with respect to its counterclaim.

Pursuant to the agreement, both petitioners authorized CRP to perform specified pre-design services in connection with the renovation of a cooperative apartment owned by petitioner Newman at 180 West 58^th Street in Manhattan. The agreement states that the project name is "Sofi's Choice Apartment Renovation." It contains hourly rates for the CRP personnel working on the project, and numerous terms and conditions, including an arbitration clause.

The agreement states: "[a]uthorization is confirmed for Cooper, Robertson Partners to perform the following services with the scope and basis as defined below." It then provides for a field survey of existing conditions in the apartment, photographs, and "[v]arious miscellaneous pre-Design Services as requested by Owner." The contract provides that March 24, 2008 is the date services are to begin. The box for "[d]ate services to be completed" is left blank.

Petitioners paid respondent $5,835, which was the full amount of their April 14, 2008 invoice. That invoice describes the project as "Sofi's Choice — apartment renovation — phase 1" (ex. 2 to mov. aff.). The record contains no further payment, although respondent presented numerous invoices to petitioners.

Without any additional written agreement, CRP continued to perform services for petitioners. In an e-mail dated May 27, 2008, Corinne Calesso of CRP described the work they had completed and were planning, and requested "your written approval for us to proceed with this work while you are away" (ex. A to verified answer). By e-mail dated May 27, 2008, Newman wrote: "[p]lease consider this authorization to proceed with items you have itemized to move this project along" ( id., ex. B).

By letter dated April 16, 2009, counsel for CRP forwarded a demand for arbitration to petitioners, and stated that the demand is for $86,585.17.

Section XII of the agreement contains the following arbitration agreement, under the heading, "Disputes," as pertinent:

[t]he owner and CRP agree to negotiate any claim, dispute or other matter in question arising out of or related to this Agreement in good faith. In the event such claim, dispute or other matter in question is not wholly resolved through negotiation by the parties, the owner and CRP . . . shall resolve the claim, dispute or other matter in question by mediation as a condition precedent to arbitration or the institution of legal or equitable proceedings by either party. The mediation . . . shall be in accordance with the Construction Industry Mediation Rules of the American Arbitration Association currently in effect. The request for mediation shall be filed in writing with the other party to this Agreement and with the American Arbitration Association. The request may be made concurrently with the filing of a demand for

arbitration but, in such event, shall proceed in advance of arbitration or legal or equitable proceedings, which shall be stayed pending mediation for a period of sixty days from the date of filing . . . Claims, disputes, and other matters in question between the parties that are not resolved by mediation shall be decided by arbitration (ex. 1 to mov. aff.).

CRP states that the parties have agreed to forego mediation, but counsel for petitioners denies such agreement.

The verified petition alleges that the work for which CRP is demanding payment does not constitute "pre-design services," and that the agreement to arbitrate does not cover services subsequently provided by CRP, from which the underlying dispute arose.

Discussion

Petitioners argue that the agreement was for specified services only and that it terminated upon payment in full of the invoice, and that therefore, the arbitration provision had no further force or effect.

CRP argues that the services rendered subsequent to those covered by that invoice were all part of the same project, under the same project number, and billed at the rates set in the agreement. CRP also argues that the determination of whether this dispute is arbitrable is for the arbitrators.

The general rule is that, absent "clear and unmistakable evidence from the arbitration agreement . . . that the parties intended that the question of arbitrability shall be decided by the arbitrator" [emphasis in original] ( MarketAxess Holdings, Inc. v Ziegelbaum, 17 Misc 3d 647, 653 (Sup Ct, NY County 2007), the determination of whether a controversy is properly subject to arbitration is initially one for the courts to determine ( see Matter of Primex Intl. Corp. v Wal-Mart Stores, 89 NY2d 594, 598; Liberty Mgt. Constr. v Fifth Ave. Sixty-Sixth St. Corp., 208 AD2d 73, 77 [1^st Dept 1995]).

A court's job is to "perform the initial screening process designed to determine in general terms whether the parties have agreed that the subject matter under dispute should be submitted to arbitration. Once it appears that there is, or is not [,] a reasonable relationship between the subject matter of the dispute

and the general subject matter of the underlying contract, the court's inquiry is ended" [citation omitted] ( Tong v S.A.C. Capital Management, LLC, 16 Misc 3d 401, 407 [Sup Ct, NY County 2007], mod on other grounds 52 AD3d 386 [1^st Dept 2007]).

Applying the foregoing standard, in light of this State's strong policy favoring liberal enforcement of agreements to arbitrate (see Matter of Nationwide Gen. Ins. Co. v Investors Ins. Co., 37 NY2d 91, 95), the issue requires a determination whether the language of the agreement evinces an intention to apply the terms and conditions of the agreement, including the arbitration agreement, to the entire project or just to the initial, pre-design work.

This Court finds that the language of the arbitration agreement, which covers "any claim, dispute or other matter in question arising out of or related to this Agreement," is sufficiently broad to encompass this dispute, regardless of whether the parties intended that an additional agreement be executed for the next phase of the project.

The submissions do not contain any objection by petitioners to the invoices, which charged for services at the rates set in the agreement. The dispute over the invoices sufficiently relates to the agreement to fall within the agreement to arbitrate.

Petitioners' argument that Corinne Calesso performed architectural services without being duly licensed may be presented to the arbitrator.

Accordingly, it is

ORDERED ADJUDGED AND DECREED that the petition for a judgment staying arbitration is denied and the proceeding is dismissed.