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Matter of ADHY Invs. Props. LLC v Garrison Lifestyle Pierce Hill LLC

Supreme Court of New York, New York County

June 6, 2013, Decided

652074/2012

Opinion

Shirley Werner Kornreich, J.

This action arises out of an online auction of real property. Petitioner ADHY Investment Properties, LLC placed the winning bid on the property, but subsequently refused to close. Upon being served with a demand for arbitration pursuant to the property's purchase and sale agreement, petitioner commenced this special proceeding, claiming that it had not signed the agreement and, consequently, that the arbitration provision contained therein was not binding. On December 14, 2012, the court issued an interim order directing that a hearing be held to determine the circumstances surrounding the agreement's execution.

The hearing was held on January 29, March 11, and April 11, 2013. Steven Floman and Avi Dishi, the principal of petitioner, testified for petitioner. Courtney Young, an employee of auction.com, the online auctioneer, and Brian Chase, the chief financial officer and chief operating officer of Garrison Investment Group, testified for respondent. Based on the credible evidence, the court finds that the agreement is binding on petitioner and denies the application to stay the arbitration.

I. Findings  [***2] of Fact

Auction.com is a website that conducts auctions over the Internet. It is based in California. Avi Dishi, a principal of petitioner, learned of the website through a catalogue he received in the mail (Dishi, Jan. 29, 2013 hearing, 42-43). Wishing to bid on certain real estate assets scheduled for auction on April 4, 2012, he enlisted the aid of Steven Floman, the son of his partner in a clothing business, to help him place the bids online (Floman, Jan. hearing, 6-8). Thus, approximately a week before the auction, Dishi told Floman he wished to place bids on the auction site for several assets and asked Floman to help him fill out the necessary forms to qualify (id., 7-9). At Dish's instruction, on April 3, 2012, Floman filled out the Bidder Qualification Form, which was signed by Dishi and sent to auction.com (id., 10-14, 18), as well as documents showing proof of funds and a bid deposit of $10,000 (id., 15-16). Floman submitted both his and Dishi's phone numbers and email addresses as contact information (id., 37; petitioner's exhibit 1).  [****2] 

Auction.com required that, prior to bidding, all prospective purchasers agree to the terms and conditions set forth by each seller of property  [***3] (Young, Jan. hearing 88-89; March 11, 2013 hearing, 9-10). The terms and conditions state that the winning bidder "will be sent, by e-mail, the Purchase Agreement," which he must execute "within two (2) hours of [auction.com]'s acknowledgment of the winning bid" (respondent's exhibit E, ¶ 3). They further state that a bidder accepts the terms by registering for the auction (id. at ¶ 7). A non-negotiable contract of sale for each asset is available online prior to the auction, as well as due diligence materials (Young, Jan. hearing 89, 92).

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41 Misc. 3d 1211(A) *; 980 N.Y.S.2d 274 **; 2013 N.Y. Misc. LEXIS 4460 ***; 2013 NY Slip Op 51634(U) ****; 2013 WL 5546434

 [****1]  In the Matter of an Article 75 Proceeding ADHY Investments Properties, LLC, Petitioner, against Garrison Lifestyle Pierce Hill LLC, Respondent.

Notice: THIS OPINION IS UNCORRECTED AND WILL NOT BE PUBLISHED IN THE PRINTED OFFICIAL REPORTS.

PUBLISHED IN TABLE FORMAT IN THE NEW YORK SUPPLEMENT.

Prior History: Matter of ADHY Inv. Prop., LLC v. Garrison Lifestyle Pierce Hill LLC, 2013 N.Y. Misc. LEXIS 2464 (N.Y. Sup. Ct., June 6, 2013)

CORE TERMS

auction, bid, contracts, mortgage, signature, electronic, documents, bidder, purchaser, entity, arbitration, execute, winning, ratification, confirmed, online, seller