MINOGUE v. Worku Bitew Zewdu, M.D., et al., Defendants–Appellants. (2019)

Order, Supreme Court, Bronx County (Joseph Capella, J.), entered July 9, 2018, which to the extent appealed from, denied defendants-appellants' motion to compel arbitration and stay the action, unanimously modified, on the law, to grant the motion to the extent of directing that the arbitration proceed only with respect to plaintiffs and defendants Worku Bitew Zewdu, M.D., Jewish Home Lifecare Harry and Jeanette Weinberg Campus Bronx, Jewish Home Lifecare, Jewish Home Lifecare Care Management, LLC, and “The New Jewish Home” (collectively, the JHL defendants), and otherwise affirmed, without costs.

Contrary to plaintiffs' argument, the arbitration clause at issue in this case is enforceable.  Because the JHL defendants were engaged in interstate commerce, the Federal Arbitration Act preempts the New York Public Health Law § 2801–d and New York State General Business Law § 399 (see Friedman v. Hebrew Home for the Aged at Riverdale, 131 A.D.3d 421, 421, 13 N.Y.S.3d 896 [1st Dept. 2015], lv dismissed 28 N.Y.3d 1050, 43 N.Y.S.3d 247, 65 N.E.3d 1282 [2016]).

Furthermore, Supreme Court erred in declining to enforce the arbitration clause between plaintiffs and the JHL defendants.  Arbitration is the proper form of resolution for the issues being litigated between plaintiffs and the JHL defendants, since the pertinent issues arise out of their contract, which, as noted, contains an enforceable arbitration agreement (see Lerman v. Russell, 207 A.D.2d 746, 616 N.Y.S.2d 961 [1st Dept. 1994];  Dot's Blvd. Corp. v. Rosenfeld, 285 App.Div. 425, 137 N.Y.S.2d 470 [1st Dept. 1955]).  The mere fact that plaintiffs named additional defendants, who are not signatories to the arbitration agreement, does not foreclose the JHL defendants' right to enforce arbitration.

However, we decline to stay plaintiffs' plenary action against those defendants who are not signatories to the arbitration agreement.  The allegations in plaintiffs' complaint against the JHL defendants and the non signatory defendants are not “so intertwined” as to warrant a stay pending arbitration (cf. Dot's Blvd. Corp., 285 App.Div. at 426, 137 N.Y.S.2d 470 [action stayed as to non signatory to arbitration agreement where causes of action in complaint were “so intertwined” with issues to be decided by arbitrator]).