Kadish v. First Midwest Sec., Inc.

• Decision Date: 06 March 2014
• Citation: Kadish v. First Midwest Sec., Inc., 2014 NY Slip Op 1517, 115 A.D.3d 445, 981 N.Y.S.2d 525 (N.Y. App. Div. 2014)
• Parties: In re Marc KADISH, Petitioner–Appellant, v. FIRST MIDWEST SECURITIES, INC., Respondent–Respondent.
• Court: New York Supreme Court — Appellate Division

115 A.D.3d 445

981 N.Y.S.2d 525

2014 N.Y. Slip Op. 01517

In re Marc KADISH, Petitioner–Appellant,

v.FIRST MIDWEST SECURITIES, INC., Respondent–Respondent.

Supreme Court, Appellate Division, First Department, New York.

March 6, 2014.

Fitapelli Kurta, New York (Marc Fitapelli of counsel), for appellant.

Winget, Spadafora & Schwartzberg, LLP, New York (Steven E. Mellen of counsel), for respondent.

Order, Supreme Court, New York County (Shirley Werner Kornreich, J.), entered September 16, 2013, which denied petitioner's application pursuant to article 75 of the CPLR for an attachment to secure an eventual arbitration award, unanimously affirmed, without costs.

CPLR 7502(c) provides, in pertinent part, that the court may “entertain an application for an order of attachment or for a preliminary injunction in connection with an arbitration ... but only upon the ground that the award to which the applicant may be entitled may be rendered ineffectual without such provisional relief.The provisions of articles 62[attachment] and 63 [injunction] of this chapter shall apply to the application, including those relating to undertakings and to the time for commencement of an action (arbitration shall be deemed an action for this purpose), except that the sole ground for the granting of the remedy shall be as stated above”(emphasis added).

Respondent FMSI disputes this standard, citing to multiple cases which involve injunctions under CPLR 7502(c), and clarify that, in addition to the usual three-prong test for preliminary injunctions under article 63 of the CPLR, a petitioner must demonstrate that a potential arbitral award could be rendered ineffectual ( seeInteroil LNG Holdings, Inc. v. Merrill Lynch PNG LNG Corp.,60 A.D.3d 403, 404, 874 N.Y.S.2d 439[1st Dept.2009];Founders Ins. Co. Ltd. v. Everest Natl. Ins. Co.,41 A.D.3d 350, 351, 839 N.Y.S.2d 474[1st Dept.2007];Erber v. Catalyst Trading,303 A.D.2d 165, 754 N.Y.S.2d 885[1st Dept.2003];Matter of Cullman Ventures [Conk],252 A.D.2d 222, 230, 682 N.Y.S.2d 391[1st Dept.1998];Koob v. IDS Fin. Servs.,213 A.D.2d 26, 629 N.Y.S.2d 426[1st Dept.1995];see alsoSG Cowen Sec. Corp. v. Messih,224 F.3d 79, 81–84[2d Cir.2000][detailed analysis of interplay between CPLR 7502andCPLR article 63] ).

Recent cases of this Court, however, continue to apply the “rendered ineffectual” standard with regard to a CPLR 7502(c) attachment in aid of arbitration (Matter of Sojitz Corp. v. Prithvi Info. Solutions Ltd.,82 A.D.3d 89, 96, 921 N.Y.S.2d 14[1st Dept.2011] [citing Matter of H.I.G. Capital Mgt. v. Ligator,233 A.D.2d 270, 271, 650 N.Y.S.2d 124[1st Dept.1996];Sullivan & Worcester LLP v. Takieddine,73 A.D.3d 442, 442, 899 N.Y.S.2d 609[1st Dept.2010] ), and we agree with this interpretation.

In any event, under either...