Pisciotta v. Newspaper Enterprises, Inc.

• Decision Date: 29 October 1958
• Citation: 15 Misc.2d 354,181 N.Y.S.2d 113
• Parties: Leonard A. PISCIOTTA, Plaintiff, v. NEWSPAPER ENTERPRISES, Inc., Defendant.
• Court: New York Supreme Court

Page 113

181 N.Y.S.2d 113

15 Misc.2d 354

Leonard A. PISCIOTTA, Plaintiff, v. NEWSPAPER ENTERPRISES, Inc., Defendant.

Supreme Court, Special Term, Kings County, Part I.

Oct. 29, 1958.

Benenson & Israelson, New York City, for plaintiff.

Goldman, Evans & Goldman, New York City, for defendant. EDWARD G. BAKER, Justice.

Defendant moves to stay all proceedings in this action pending arbitration. The action was commenced to recover damages for breach of contract. The complaint alleges, in substance, that defendant is engaged in the business of publishing certain newspapers in Queens County and in Long Island; that the parties entered into a written contract wherein it was agreed that plaintiff should have, for a specified period, and within a designated territory, the exclusive right to sell and distribute, by carrier boys, the newspapers published by defendant, which were to be sold to plaintiff at a specified price; that plaintiff has performed the conditions of the agreement on his part; that defendant breached the agreement by failing and refusing to sell or deliver to plaintiff the newspapers for sale or distribution by plaintiff in said territory, to plaintiffs damage.

The contract referred to provided, inter alia, as follows:

'10. Any dispute, of law or fact, concerning the interpretation of the terms of this agreement, which is not adjusted by negotiation between the parties, shall be submitted to arbitration before Mr. Leonard A. Pisciotta or his successor for the 'News Dealer' and Mr. William F. Bennett or his successor, for the 'Newspaper'. If such arbitrators fail to agree, they may select a third arbitrator but in case they cannot agree upon a third arbitrator, then either party may apply on two days' notice, in writing, to the Judge of the County Court of Queens County, for the appointment of a third arbitrator. The decision of a majority of said three arbitrators shall be final and binding on both parties, and the costs of said arbitration shall be divided equally'. (Emphasis supplied.)

Prior to the commencement of this action disputes arose between the parties with respect to alleged failure to perform the conditions of the contract on the part of each to be performed. On October 11, 1957, defendant wrote to plaintiff demanding that there be submitted to arbitration pursuant to the agreement the questions '(a) Whether you have by your acts of omission and commission breached the agreement between us' and '(b) Whether by reason of the foregoing, the said agreement may be cancelled and terminated by us'. In reply to this letter, plaintiff suggested that an effort be made to adjust the disputes between the parties by negotiation. This suggestion was rejected by defendant who demanded that the parties meet to select a third arbitrator. Thereafter, at the request of the parties, Judge Farrell of the County Court, Queens County appointed a third arbitrator. At a meeting held in the latter's office a question was raised with respect to the composition of the arbitration panel since it included parties to the agreement. Thereafter, plaintiff moved at Special Term to stay the arbitration, to vacate or modify all notices of arbitration theretofore served, or, in the alternative for the appointment of a single arbitrator to hear and determine all disputes properly arbitrable under the agreement. The application was denied Sup., 171 N.Y.S.2d 555, and, on appeal to the Appellate Division, the order of Special Term was modified to the extent of providing that the arbitration proceed before the appointee of a Judge of the County Court of Queens County as sole arbitrator, and as so modified affirmed 5 A.D.2d 1014, 174 N.Y.S.2d 419, 420. In its opinion, after holding that a party to a contract is ineligible to act as an arbitrator to decide disputes under it, the Court said, inter alia, 'In the circumstances, the provision that the parties serve as arbitrators may be excised and arbitration may proceed before a single arbitrator of 'any dispute, of law or fact, concerning the interpretation of the terms of this agreement', as provided in the contract'. (Emphasis supplied.) Plaintiff thereupon appealed to the Court of Appeals and applied to a Judge of that Court for a stay pending appeal. Shortly thereafter, and prior to any decision...