ACF LLC v. WACHOVIA CAPITAL MARKETS LLC

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Supreme Court, Appellate Division, First Department, New York.

ACF INDUSTRIES HOLDING CORP., Plaintiff, ACF Industries LLC, Plaintiff-Appellant, v. WACHOVIA CAPITAL MARKETS LLC, et al., Defendants-Respondents.

Decided: October 27, 2005

TOM, J.P., MAZZARELLI, FRIEDMAN, CATTERSON, McGUIRE, JJ. Morrison Cohen, LLP, New York (Ethan R. Holtz and Jerome Tarnoff of counsel), for appellant. Zeichner Ellman & Krause LLP, New York (Yoav M. Griver of counsel), for respondents.

Order, Supreme Court, New York County (Bernard J. Fried, J.), entered April 21, 2005, which, insofar as appealed from, denied plaintiff-appellant's motion for a stay of arbitration pending determination of this action, unanimously affirmed, with costs.

The motion court correctly held that any possible preclusive effect of an arbitration with respect to plaintiff's engagement agreement with defendant Wachovia Capital does not by itself justify a stay of that arbitration pending determination of this action involving the underwriting agreement between plaintiff and Wachovia Securities (see GAF Corp. v. Werner, 66 N.Y.2d 97, 102, 495 N.Y.S.2d 312, 485 N.E.2d 977 [1985], cert. denied 475 U.S. 1083, 106 S.Ct. 1463, 89 L.Ed.2d 720 [1986];  Wurttembergische Feuerversicherung AG. v. Pan Atl. Group, 130 A.D.2d 754, 516 N.Y.S.2d 50 [1987] ).   As plaintiff itself argued in seeking a stay of arbitration with respect to the underwriting agreement, the engagement agreement and the underwriting agreement, although related, are separate and not inextricably intertwined.   We have considered the parties' other arguments, including defendants' argument that plaintiff is not aggrieved by the order on appeal, and find them to be without merit.