IN RE: Manuel CASTEDO (2019)

Judgment (denominated an decision and order), Supreme Court, New York County (Debra A. James, J.), entered on or about June 17, 2019, which denied petitioner's CPLR 7503 motion to permanently stay arbitration, and dismissed the proceeding, unanimously reversed, on the law, without costs, and the petition granted.

Contrary to the respondents' argument, under the circumstances here, the petitioner architect did not receive direct tangible benefits from a separate construction agreement containing an arbitration clause (see Matter of Belzberg v. Verus Invs. Holdings Inc., 21 N.Y.3d 626, 631, 977 N.Y.S.2d 685, 999 N.E.2d 1130 [2013]).  Any benefit that petitioner derived was from its own contract, which expressly opted-out of arbitration.  The contract between petitioner and respondents specified that petitioner was to bill respondents monthly, and the fee payments were not contingent on any specific phase of the project having been first completed.  Petitioner was entitled to be paid for the architectural work it performed, regardless whether the project reached the construction phase.  Moreover, the contract between petitioner and respondents specifically excluded arbitration as a remedy.

We further conclude that petitioner is not bound by the arbitration agreement contained in the construction contract's General Conditions under the theory of incorporation by reference, because the language in the architect's contract does not clearly reflect an intention to incorporate the General Conditions (see Matter of Wonder Works Constr. Corp. v. R.C. Dolner, Inc., 73 A.D.3d 511, 513, 901 N.Y.S.2d 30 [1st Dept. 2010]).

We have considered the remaining arguments, and find them unavailing.