Gold Mills, Inc. v. Pleasure Sports, Inc.

• Decision Date: 08 December 1981
• Parties: GOLD MILLS, INC., Petitioner-Appellant, v. PLEASURE SPORTS, INC., Respondent-Respondent.
• Court: New York Supreme Court — Appellate Division

Page 656

444 N.Y.S.2d 656

85 A.D.2d 527

GOLD MILLS, INC., Petitioner-Appellant, v. PLEASURE SPORTS, INC., Respondent-Respondent.

Supreme Court, Appellate Division,

First Department.

Dec. 8, 1981.

M. D. Blutrich, New York City, for petitioner-appellant.

S. Panzer, New York City, for respondent-respondent.

Before KUPFERMAN, J. P., and BIRNS, ROSS, SILVERMAN and FEIN, JJ.

MEMORANDUM DECISION.

Order, Supreme Court, New York County entered May 26, 1981 granting the motion of Pleasure Sports, Inc. to stay arbitration only to the extent of directing a trial "to resolve the threshold question of whether the parties had a valid contract in existence at the time the dispute arose", unanimously reversed on the law, the motion to stay arbitration is denied and the petition dismissed with costs.

On or about June 16, 1980 Pleasure Sports, Inc. (Pleasure), a sportswear manufacturer, forwarded a purchase order to Gold Mills, Inc. (Gold), a fabric mill, ordering certain quantities and colors of fabrics. On or about the same date, Gold forwarded to Pleasure its form contracts to cover. Gold subsequently delivered the fabric and Pleasure refused to accept delivery. It is undisputed that neither party signed the instrument forwarded by the other. However, the parties had engaged in a prior course of dealing in which Pleasure signed Gold's contracts. Those contracts contained a broad arbitration clause, as follows:

"Any controversy arising out of or relating to this contract or any modification or extension thereof, including any claim for damages and/or rescission, shall be settled by arbitration before a panel of three arbitrators in New York City (or, if applicable law requires some other place, then such other place) in accordance with the rules then obtaining of the American Arbitration Association or the General Arbitration Council of the Textile Industry as the party instituting arbitration proceedings shall elect."

Gold served a demand for arbitration dated September 11, 1980 by certified mail, return receipt requested. The receipt is stamped September 22, 1980. The demand contained the requisite statutory notice addressed to Pleasure as follows:

"PLEASE TAKE FURTHER NOTICE that pursuant to CPLR § 7503(c), unless within twenty days after service of this Demand for Arbitration you apply to stay this arbitration, you shall thereafter be precluded from objecting that a valid agreement was not made or has been complied with and from asserting in court the bar of a limitation of time."

Pleasure moved to stay arbitration by order to show cause in January 1981, over three months later, with a return date of February 9, 1981. It alleged there could be no agreement between the parties mandating arbitration, because there was no contract between them. It relied on the fact that the Pleasure purchase order called for a delivery date of July 15 and the Gold...