Reaffirms that It Is the Court, Not the Arbitrator, Who Decides Threshold Issue of Arbitrability
By Louis M. Solomon
blogged on the Appellate Divisions decision in Jalas v. Halperin. The Appellate Division
subsequently granted a motion to reargue that decision, vacated the earlier
decision, and rendered a new one, Jalas
v. Halperin, 2009-00362, 2009-111726 (2d Dep't June 2011). In the
revised decision, the Appellate Division reaffirms the important international
litigation ruling from the initial decision. The trial court had assumed
that a valid written agreement to arbitrate was made on behalf of the decedent
and thus had "declined to address the Administrator's contention that the
decedent was never a party to the arbitration agreement". This was error,
found the Appellate Division:
of whether there is a clear, unequivocal, and extant agreement to arbitrate is
for the court and not the arbitrator to determine (see Matter of Primex Intl.
Corp. v Wal-Mart Stores, 89 NY2d 594 , 598 [enhanced version available to lexis.com subscribers] ;Matter of County of Rockland
[Primiano Constr. Co.], 51 NY2d 1, 6-8 [enhanced version ];
Matter of Perciballi Assoc., LP v Corporate Natl. Realty, LLC, 74 AD3d 976 [enhanced version available to lexis.com subscribers / unenhanced version available from lexisONE Free Case Law]; Matter of O'Donnell v Arrow
Elecs., 294 AD2d 581) [enhanced version ].
Accordingly, in the first instance, the Supreme Court should have addressed the
parties' contentions regarding the existence of a valid agreement to
In the instance, helf the Appellate
Division, "the Supreme Court [i.e., the trial court] should have addressed te
parties' contentions regarding the existence of a valid agreement to arbitrate.
Rather than remanding, however, the
Appellate Division decided the matter itself "in the interest of judicial
economy". The Appellate Division repeated the "clear, explicit and
unequivocal" agreement language in holding that in the case before it there was
no such agreement and hence no basis to hold the nonsignatory to the
arbitration clause. That one party signed "as agent" for another did not
supply the missing evidence, as the Court found that in fact there was no
agency (it appears that the Appellate Division made that finding).
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