Hirschfeld Productions, Inc. v. Mirvish

• Decision Date: 17 August 1995
• Citation: 218 A.D.2d 567,630 N.Y.S.2d 726
• Parties: HIRSCHFELD PRODUCTIONS, INC., Plaintiff-Respondent, v. Edwin MIRVISH, et al., Defendants-Appellants.
• Court: New York Supreme Court — Appellate Division

Page 726

630 N.Y.S.2d 726

218 A.D.2d 567

HIRSCHFELD PRODUCTIONS, INC., Plaintiff-Respondent, v.Edwin MIRVISH, et al., Defendants-Appellants.

Supreme Court, Appellate Division First Department.

Aug. 17, 1995.

J. Young, for plaintiff-respondent.

C. McMahon, for defendants-appellants.

Before RUBIN, J.P., and ELLERIN, ROSS and ASCH, JJ.

MEMORANDUM DECISION.

Order of the Supreme Court, New York County (Walter Schackman, J.), entered November 2, 1994, which denied defendants' motion to compel arbitration and to stay the action, unanimously reversed, on the law, the motion granted, and the action permanently stayed, without costs.

Plaintiff, a theatrical production company, brought this action against defendants, the officers and directors of Mirvish Productions, a Canadian theatrical production company, alleging breach of fiduciary duty and tortious interference with contractual relations.In brief, the complaint dated April 6, 1994 states that the parties entered into an agreement to jointly produce the musical "Hair" at the Old Vic Theater in London.It alleges that defendants"engaged in a course of conduct designed to, and in fact resulted in, the demise of the Production and deprived plaintiff of the benefits of the Agreement of April 26, 1993."Defendants did not answer the complaint and brought the motion to compel arbitration of the dispute pursuant to CPLR 7503(a) or, in the alternative, the Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958(21 UST 2517) and the implementing legislation contained in 9 U.S.C. § 201 et seq.

The subject production agreement contains a broad arbitration provision: "Should a dispute arise from this agreement or from its interpretation then the producers agree that such dispute shall be referred to an Arbitrator to be appointed in the absence of agreement between the disputing parties by the President for the time being of the Society of West End Theater in accordance with U.K. law (the Arbitration Act)."Plaintiff opposed the motion, arguing that the individual defendants are not parties to the production agreement and hence, plaintiff cannot be compelled to arbitrate its claims against them.Supreme Court agreed and denied defendants' motion.

The parties do not dispute that their agreement is governed by the provisions of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards.Whether viewed in light of the Convention or CPLR Article 75, the question presented is one of policy with respect to the enforcement of a broad arbitration agreement.In Szabados v. Pepsi-Cola Bottling Co., 174 A.D.2d 342, 343, 570 N.Y.S.2d 553, this Court held that the arbitral forum may not be avoided by the artifice of appending incidental tort claims to a commercial dispute.As we stated there: " 'The policy of this State is to favor and encourage arbitration as a means of expediting the resolution of disputes and conserving judicial resources' (Rio Algom v. Sammi Steel Co., Ltd., 168 A.D.2d 250, 251[562 N.Y.S.2d 486], lv denied78 N.Y.2d 853[573 N.Y.S.2d 466, 577 N.E.2d 1058].That policy 'precludes the parties to an arbitration agreement from simultaneously pursuing their claims before the courts and thus playing one forum off against the other' (Avon Prods. v. Solow, 150 A.D.2d 236, 238[541 N.Y.S.2d 406]"(id.).

The acts alleged in the complaint to comprise "willful, malicious and wanton conduct" do not represent the breach of "a legal duty independent of the contract itself", arising from "circumstances extraneous to, and not constituting elements of, the contract"(Clark-Fitzpatrick, Inc. v. Long Is. R.R. Co., 70 N.Y.2d 382, 389, 521 N.Y.S.2d 653, 516 N.E.2d 190;Megaris Furs v. Gimbel Bros., 172 A.D.2d 209, 211, 568 N.Y.S.2d 581).Plaintiff complains of defendants' refusal to avail themselves of the "input and expertise" of plaintiff and his representatives and "to listen to their suggestions" for promoting the production.A difference in business judgment is not a fitting subject for litigation among joint venturers, and it hardly rises to the level of tortious conduct, independent of the contract.

Plaintiff next complains that defendants acted to prevent the production from satisfying the minimum ticket sale requirement of the lease with the Old Vic Theater, of which defendants are owners.This amounts to the allegation that defendants frustrated the performance of a condition of the lease, permitting its cancellation.As the leasing of the Old...