FIRST COMMERCE LLC v. St. Mark's Physical Therapy P.C., et al., Defendants. (2024)

Order, Supreme Court, New York County (Francis A. Kahn, III, J.), entered October 19, 2023, which denied plaintiff's motion for summary judgment and an order of reference and granted the cross-motion of defendants St. Mark's Property Acquisition LLC, Michael Morgan, and St. Mark's Consulting, LLC to compel arbitration and stay all proceedings pending arbitration, unanimously affirmed, with costs.

Supreme Court properly found that the parties’ dispute was arbitrable (CPLR 7503[a]).  The loan agreement contains a clear and enforceable provision that at the request of any party to the agreement, “any [c]laim shall be resolved by binding arbitration,” and the moving defendants requested binding arbitration in their cross-motion (see W.W.W. Assoc. v. Giancontieri, 77 N.Y.2d 157, 162, 565 N.Y.S.2d 440, 566 N.E.2d 639 [1990];  Eiseman Levine Lehrhaupt & Kakoyiannis, P.C. v. Torino Jewelers, Ltd., 44 A.D.3d 581, 582–583, 844 N.Y.S.2d 242 [1st Dept. 2007]).  Although paragraph 10.4(f) of the agreement's arbitration clause, titled “Dispute Resolution Provision,” provided that any party could use self-help remedies such as judicial foreclosure, the Dispute Resolution Provision also stated in paragraph 10.4(g) that the filing of a court action was not a waiver of the right of any party to submit the claim to arbitration.

Furthermore, defendants’ participation in the action does not constitute a waiver of their right to seek arbitration.  Plaintiffs were not prejudiced by defendants’ limited and relatively minimal participation in the litigation — for example, filing an answer, and serving document requests and interrogatories (see Cusimano v. Schnurr, 26 N.Y.3d 391, 400, 23 N.Y.S.3d 137, 44 N.E.3d 212 [2015];  Matter of NBC Universal Media, LLC v. Strauser, 190 A.D.3d 461, 461, 140 N.Y.S.3d 26 [1st Dept. 2021]).  Nor is the brief period of time between service of the amended complaint and the cross-motion to compel arbitration — less than four months — sufficient to amount to a waiver of defendants’ contractual right to arbitrate (cf.  Flores v. Lower E. Side Serv. Ctr. Inc., 4 N.Y.3d 363, 371–372, 795 N.Y.S.2d 491, 828 N.E.2d 593 [2005]).