B. Schiavo & Sons Steel Corp. v. Acworth

• Decision Date: 19 November 1987
• Citation: 528 N.Y.S.2d 252,139 Misc.2d 356
• Parties: In the Matter of the Application for a Stay of Arbitration by: B. SCHIAVO & SONS STEEL CORP., Petitioner, v. Brian B. ACWORTH d/b/a Huntington Atrium Development, Respondent. .A.S. Part XXIV
• Court: New York Supreme Court

Page 252

528 N.Y.S.2d 252

139 Misc.2d 356

In the Matter of the Application for a Stay of Arbitration by: B. SCHIAVO & SONS STEEL CORP., Petitioner, v.Brian B. ACWORTH d/b/a Huntington Atrium Development, Respondent.

Supreme Court, Suffolk County I.A.S. Part XXIV.

Nov. 19, 1987.

Stim & Warmuth, P.C., Huntington, for petitioners.

Certilman, Haft, Lebow, Balin Buckley & Kremer, Valley Stream, for respondent.

PETER F. COHALAN, Justice.

ORDERED that this motion by petitioner, B. Schiavo & Sons Steel Corp. to stay arbitration pursuant to CPLR 7503(b) is hereby denied, and the temporary restraining order previously issued is hereby vacated.

Petitioner and respondent entered into a written contract on February 2, 1986 for the construction of a new office building owned by respondent.

Respondent claims that petitioner failed to perform in a timely manner and in a good and workman-like manner, did not cure defects even though proper notification was given and as a result terminated the contract.Respondent subsequently contracted out to another firm to complete the project and perform the necessary corrective work.

Petitioner thereafter filed a notice of mechanic's lien in the amount of $67,913.00 on April 18, 1987 which respondent claims is grossly exaggerated.On July 3, 1987respondent commenced an arbitration proceeding against the petitioner by service of a demand for arbitration alleging breach of agreement, delay and wilful exaggeration of a lien.Petitioner counterclaimed on July 14, 1987 seeking $67,913.00 for money damages on the amount allegedly due under the contract.Petitioner then moved by order to show cause dated July 16, 1987 to stay the arbitration pursuant to CPLR 7503(b) upon the ground that there is no agreement to arbitrate that part of the respondent's demand for alleged wilful exaggeration of the lien.

For the following reasons, petitioner's motion to stay arbitration is denied and the temporary restraining order previously issued pending that determination is hereby vacated and the matter is remitted to arbitration.

Article 75 of the CPLRandSection 7503(b) in particular which deals with arbitration provides in part:

"[A]party ... may apply to stay arbitration on the ground that a valid agreement was not made or has not been complied with ..."

Thus, the Court's role is limited and its sole inquiry is directed to whether the parties agreed to arbitrate the particular matters at issue; one to be decided within the framework of their agreement.In the instant matter, Article 13 of the contract entered into between the parties is a broad arbitration provision providing for the resolution of "all claims or disputes ... relating to the contract ... or the breach thereof ... shall be decided by arbitration".Clearly, the present dispute falls within the realm of the broad arbitration clause entered into by the parties.

Petitioner's sole claim in attempting to avoid the requirement of arbitration rests on his interpretation of the effect of Lien Law Sections 39and39-a which provides for penalties in the event of a "wilful exaggeration of a mechanic's lien".The Court finds petitioner's argument in support of the stay of arbitration unpersuasive.

Lien Law Section 39and39-a clearly state that the penalty provision is applicable and may be established only in "any action or proceeding to enforce a mechanic's lien".See, Upstate Builders Supply Corp. v. Maple Knoll Apts., 37 A.D.2d 901, 902, 325 N.Y.S.2d 509(4th Dept.1971);Maloney Contracting Corp. v. Blume, 85 Misc.2d 838, 839, 380 N.Y.S.2d 585(1976).That situation has not arisen in the case presently before the Court.Petitioner does not seek to enforce the lien, merely stay arbitration.Respondent Acworth merely seeks, pursuant to the broad arbitration provisions entered into by the parties, to resolve the present dispute by having the arbitrator fix the rights and liabilities of the parties.

In Maross Construction v. Transportation Authority, 66 N.Y.2d 341, 345-346, 497 N.Y.S.2d 321, 488 N.E.2d 67(1985), the New York Court of Appeals noted:

Where the parties have expressly agreed to arbitrate their disputes, it remains to be determined whether the subject matter of the dispute is one that may be submitted to arbitration without violation of any law or public policy and, if so, whether it falls within the scope of the arbitration agreement.(See, Matter of Franklin Cent. School [Franklin Teachers Assn.], supra at p. 355 .)Hence, where jurisdiction over a particular type of dispute is statutorily bestowed exclusively upon the courts(see, e.g.Matter of Knickerbocker Agency [Holz]4 N.Y.2d 245[173 N.Y.S.2d 602, 149 N.E.2d 885];Matter of South Colonie Central School Dist. [South Colonie Teachers Assn.], 46 N.Y.2d 521, 525-526[415 N.Y.S.2d 403, 388 N.E.2d 727]) or where judicial, as opposed to arbitral, enforcement of particular rights and prohibitions is mandated by public policy (see, e.g.Board of Educ. v. Areman, 41 N.Y.2d 527[394 N.Y.S.2d 143, 362 N.E.2d 943];Matter of Aimcee Wholesale Corp. [Tomar Prods.], 21 N.Y.2d 621[289 N.Y.S.2d 968, 237 N.E.2d 968]), an agreement to arbitrate will not be given effect by the courts.Otherwise, where no such conflict with law or public policy exists, the courts will enforce the parties' contractual decision to submit their disputes to arbitration (see, Matter of Sprinzen [Nomberg], supra, at pp. 631-632[415 N.Y.S.2d 974, 389 N.E.2d 456]).Moreover, while a specifically enumerated restriction upon arbitral authority will be upheld by the courts(see, Matter of Silverman [Benmor Coats], supra at p. 308;Matter of United Nations Dev. Corp. v. Norkin Plumbing Co., 45 N.Y.2d 358, 364[408 N.Y.S.2d 424, 380 N.E.2d 253]), no such limitation upon either factual or legal dispute resolution will be inferred from a broadly worded contractual provision expressly calling for the arbitration of all disputes arising out of the parties' contract (Matter of Turner [Booth Mem.Hosp.], 63 N.Y.2d 633[479 N.Y.S.2d 508, 468 N.E.2d 690];Matter of Albany County Sheriff's Local 775 [County of Albany], 63 N.Y.2d 654[479 N.Y.S.2d 513, 468 N.E.2d 695];Matter of Silverman [Benmor Coats], supra, at p. 308;Matter of Board of Educ. v. Dover Wingdale Teachers' Assn., 61...