Matter of Yalowitz v. Prudential Equity Group LLC, 2006 NY Slip Op 30519(U) (N.Y. Sup. Ct. 3/28/2006)

• Decision Date: 28 March 2006
• Docket Number: 100594-05,Motion Sequence No. 3
• Parties: In the Matter of the Application of EDWARD YALOWITZ and SHARON ZEIDLER, Petitioners, For a judgment pursuant to the Federal Arbitration Act and CPLR Article 75 v. PRUDENTIAL EQUITY GROUP LLC, f/k/a PRUDENTIAL SECURITIES INC., and WACHOVIA SECURITIES LLC, as successor in interest to PRUDENTIAL EQUITY GROUP, LLC, f/k/a PRUDENTIAL SECURITIES INCORPORATION, Respondents.
• Court: New York Supreme Court

Page 1

2006 NY Slip Op 30519(U)

In the Matter of the Application of EDWARD YALOWITZ and SHARON ZEIDLER, Petitioners,

For a judgment pursuant to the Federal Arbitration Act and CPLR Article 75 v. PRUDENTIAL EQUITY GROUP LLC, f/k/a PRUDENTIAL SECURITIES INC., and WACHOVIA SECURITIES LLC, as successor in interest to PRUDENTIAL EQUITY GROUP, LLC, f/k/a PRUDENTIAL SECURITIES INCORPORATION, Respondents.

100594-05

Motion Sequence No. 3

Supreme Court of the State of New York, County of New York.

March 28, 2006

DECISION AND ORDER

RICHTER, J.

In this proceeding, petitioners previously moved to vacate that part of an Arbitration award that found them liable for breach of their employment agreement with respondents. Respondents cross-moved to confirm the award in its entirety. In June 2005, the Court rendered a decision denying petitioners' motion to vacate and granting respondents' cross-motion to confirm. The Court designated its decision as a final disposition of the proceeding. The Court's decision was affirmed on appeal. In this motion, respondents move for an order awarding them as "costs of collection" the attorneys' fees and costs they incurred in making their cross-motion to confirm and responding to the motion to vacate. Respondents assert that they are entitled to such an award because the underlying promissory notes required petitioners to pay "all costs of collection including reasonable attorneys' fees" incurred by respondents.

Regardless of how it is denominated, respondents' motion is in fact a motion for leave to reargue the Court's earlier decision. In their cross-motion to confirm the arbitration award, respondents sought the exact same relief they seek now.¹ The Court's decision, however, did not grant respondents the requested relief and thus denied it sub silentio. See Board of Managers of the Alfred Condominium v. Carol Management, 214 A.D.2d 380 (1^st Dept. 1995)(since court's decision did not specifically dismiss cause of action for negligent construction, the motion to dismiss that claim was denied sub silentio). Thus, since respondents now seek the same relief sought and denied in the earlier cross-motion, the Court views the present motion as a motion to reargue. See Steinhardt Group, Inc. v. Citicorp, 303 A.D.2d 326 (1^st Dept. 2003)(although not denominated as such, plaintiffs' subsequent motion was properly viewed as one to reargue prior order); Jones v. Marcy, 135 A.D.2d 887 (3d Dept. 1987)(a party's characterization of a motion is not determinative of its true nature); Besicorp Group, Inc. v. Enowitz, 268 A.D.2d 846 (3d Dept. 2000)(motion seeking essentially the same relief as an earlier motion by the same party may be viewed as a motion to reargue); Carlton v. Vorosmarty, 163 A.D.2d 630 (3d Dept. 1990)(defendant's second motion to declare the default judgment null and void was in actuality a motion to reargue Supreme Court's refusal to open the default judgment). Because respondents failed to move within thirty days after service of the earlier order with notice of entry, the motion for leave to reargue is denied as untimely. See C.P.L.R. § 2221[d].²

Even if the Court were to consider the merits of respondents' motion, it would nevertheless be denied. Respondents are asking this Court to determine their contractual rights to costs of collection under the promissory notes. However, any disputes arising under those notes are subject to mandatory arbitration due to the broad arbitration clause contained therein. Therefore, even if the Court were to entertain respondents' motion, it would lack jurisdiction to grant the requested relief/ The issues of whether the attorneys' fees sought constitute a cost of collection, the reasonableness of such fees and whether respondents' claim is precluded by res judicata are issues to be determined by the arbitrator. See Fairfield Towers Condominium Association v. Fishman, 1...