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Commercial Division Blog

Current Developments in the Commercial Divisions of the
New York State Courts by Schlam Stone & Dolan LLP
Posted: November 10, 2018

Minority Shareholders Must Give Other Shareholders an Opportunity to Buy Their Shares

On October 24, 2018, Justice Emerson of the Suffolk County Commercial Division issued a decision in Matter of Marro (Marjod Realty Corp.), 2018 NY Slip Op. 51502(U), holding that minority shareholders were required to give other shareholders an opportunity to purchase their shares, explaining:

Business Corporation Law 1104-a provides that the holders of 20% or more of the outstanding shares of a closely held corporation have the right to petition for a judicial dissolution under special circumstances. Business Corporation Law § 1118 is a defensive mechanism for the nonpetitioning shareholders. It gives them the an absolute right to avoid the dissolution proceedings and any possibility of the corporation’s liquidation by electing to purchase the petitioners’ shares at their fair market value and upon terms and conditions approved by the court. The corporation and the remaining shareholders have the unconditioned right, within 90 days of the petition (and later within the court’s discretion), to avoid the potential drain and risk of dissolution proceedings by simply offering to buy out the minority’s interest, and the minority is protected by a court-approved determination of fair value and other terms and conditions of the purchase.

In a proceeding pursuant to Business Corporation Law 1104-a, the court has broad latitude in fashioning alternative relief. Before dissolution is ordered, the court is required to consider whether liquidation of the corporation is the only feasible means whereby the petitioning shareholders may obtain a fair return on their investment and whether it is reasonably necessary to protect the rights and interests of a substantial number of shareholders. Judicial dissolution is a remedy of last resort, and a buy-out pursuant to Business Corporation Law § 1118 is generally preferable to dissolution because it maintains the viability of the corporation. Absent exceptional circumstances, courts will ordinarily exercise their discretion to authorize a buy-out.

The petitioners’ only objection to Marjod Realty Corp.’s exercise of its right to purchase the petitioners’ shares pursuant to Business Corporation Law § 1118 is that it is untimely. The petitioners proffer no substantive reason why Marjod should not be allowed to purchase their shares. A buy-out of the petitioners’ shares is clearly preferable to liquidation of the corporation. It would allow the petitioners to obtain a fair return on their investment while protecting the rights and interests of the remaining shareholders. Accordingly, the motion is granted.

(Internal quotations and citations omitted) (emphasis added).

This decision relates to a significant part of our practice: business divorce (a break-up between the owners of a closely-held business). Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client have questions regarding a business divorce.

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Posted: November 9, 2018

Corporate Officer May Be Held Liable for Corporation’s Conversion

On October 31, 2018, the Second Department issued a decision in Starr Indem. & Liab. Co. v. Global Warranty Group, LLC, 2018 NY Slip Op. 07346, holding that the plaintiff had sufficiently plead claims to hold corporate officers liable for the corporation’s conversion of the plaintiff’s property, explaining:

A corporate officer, although acting for the benefit of a corporation, may be held liable for conversion, if he or she participated in the commission of the tort. A claim can exist for aiding and abetting conversion if the aider-abettor has actual knowledge that the person who directly converted the plaintiff’s property did not own that property. Here, the complaint adequately stated causes of action alleging conversion and aiding and abetting conversion against Krantz and Schenker.

(Internal citations omitted).

Commercial litigation often involves conversion claims. As this decision shows, if a corporate officer participates in the conversion, the officer may be held liable for aiding and abetting that conversion. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client have a question regarding one person depriving another of her property, whether that property is tangible or intangible, or even involves a discrete fund of money.

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Posted: November 8, 2018

Waiver of Right to Proceed Against Debtor Did Not Waive Right to Enforce Guaranty

On October 31, 2018, the Second Department issued a decision in Pitsy, LLC v. Rindenow, 2018 NY Slip Op. 07340, holding that a plaintiff’s waiver of claims against a debtor did not waive the plaintiff’s claims to enforce a guaranty against the debtor’s guarantor, explaining:

[T]he plaintiff demonstrated its prima facie entitlement to judgment as a matter of law by producing the subject guaranty, an affidavit and documentary evidence establishing the amount owed, and the defendant’s refusal to pay. In opposition, the defendant failed to raise a triable issue of fact with respect to a bona fide defense to the claim. In this regard, the defendant’s assertion that the plaintiff waived the underlying debt in the stipulation of settlement in the nonpayment proceeding is without merit, as the clear and unequivocal language of the stipulation recited that the plaintiff was waiving only its right to recover the unpaid rent from the defendant’s mother, and the stipulation did not address the defendant’s liability under the guaranty. Since a release of the principal debtor with the surety’s consent does not discharge the surety, the plaintiff’s waiver of the right to recover from the defendant’s mother did not affect its right to recover pursuant to the unconditional and independent guaranty. Furthermore, contrary to the defendant’s contention, no determination rendered by the District Court during the nonpayment proceeding collaterally estopped the plaintiff from seeking recovery on the guaranty.

(Internal quotations and citations omitted) (emphasis added).

We have substantial experience in helping judgment creditors collect on judgments and search for and attach assets worldwide. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client need help collecting on a judgment.

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Posted: November 7, 2018

Legal Malpractice Claim Properly Dismissed as Time-Barred

On October 30, 2018, the First Department issued a decision in Brean Murray, Carret & Co. v. Morrison & Foerster LLP, 2018 NY Slip Op. 07238, affirming the dismissal of a legal malpractice claim as time-barred, explaining:

The malpractice claim was properly dismissed as time-barred, and the doctrine of equitable estoppel will not toll a limitations statute where plaintiffs possessed timely knowledge sufficient to have placed them under a duty to make inquiry and ascertain all the relevant facts prior to the expiration of the applicable statute of limitations. Here, the alleged malpractice occurred in December 2010 when defendant issued its opinion letter that nothing has come to our attention that leads us to believe that the registration statement contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading. Thereafter, a public report which broke the news of Puda’s fraud on April 8, 2011 confirmed that the fraudulent transfers of ownership of Shanxi Coal were documented in government filings. There was nothing preventing plaintiff from accusing defendant of substandard care in April 2011, based on defendant’s opinion letter, when compared to statements made in the public report and the securities litigation that followed in April 2011.

Plaintiff’s contention that it relied on defendant because it was a large, international law firm with alleged expertise in China-based companies, and because it trusted that defendant would comply with professional standards and its fiduciary duty to advise plaintiff if its work product was deficient, is misplaced. Plaintiff maintains that defendant’s withdrawal as counsel did not exempt it from such standards, as the decision to terminate the relationship constituted an act of concealment that left plaintiff in the dark regarding the extent of defendant’s potential liability. Even if plaintiff’s allegations of concealment were true, plaintiff has failed to demonstrate its due diligence, for it was on inquiry notice by at least 2011 and failed to make a reasonable investigation.

(Internal citations and quotations omitted).

We both bring and defend professional malpractice claims and other claims relating to the duties of professionals such as lawyers, accountants and architects to their clients. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you have questions regarding such claims or appeals of such claims.

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Posted: November 6, 2018

Action Dismissed Because GBL 130 Violation Was Not Curable

On October 30, 2018, the First Department issued a decision in Robert v. Ringerjeans, LLC2018 NY Slip Op. 07272, dismissing an action due to an uncurable GBL 130 violation, explaining:

General Business Law § 130(9)’s prohibition against a person in violation of General Business Law § 130(1) maintaining any action or proceeding in any court in this state on any contract, account, or transaction, bars plaintiff from asserting any claims, including equitable claims. This is the only reading that gives effect to all of the provisions of the statute. It is consistent with our reading of an analogous statute, Business Corporation Law § 1312.

Ordinarily, absent an intent to deceive, a plaintiff may be granted leave, until entry of judgment, to cure the statutory violation. Here, however, because the contract is in the name of an LLC, plaintiff cannot comply; she cannot file an assumed name that includes a corporate identifier.

(Internal citations omitted).

New York procedural law is relatively straightforward. But there are rules, like the rule discussed in this decision relating to a plaintiff LLC failing to file to do do business under a dba, that can be traps for the unwary. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client have a question regarding New York procedural law.

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Posted: November 5, 2018

Court Enforces No Damages for Delay Clause in Construction Contract

On October 22, 2018, Justice Ostrager of the New York County Commercial Division issued a decision in Hailey Insulation Corp. v. WDF, Inc., 2018 NY Slip Op. 32717(U), enforcing a no damages for delay provision in a construction contract, explaining:

Finally, WDF moves to dismiss Hailey’s fourth cause of action seeking delay damages. The subcontract states: “The Subcontractor acknowledges that the Subcontract Price is based on the fact that the Contractor is not liable, absent actual fraud or intentional misconduct, for any damages or costs due to delays, accelerations, impact, non-performance, interferences with performance, suspension or change in the performance or the sequence of the Contractor’s Work.” The Court of Appeals has held that a clause which exculpates a contractee from liability to a contractor for damages resulting from delays in the performance of the latter’s work is valid and enforceable and is not contrary to public policy if the clause and the contract of which it is a part satisfy the requirements for the validity of contracts generally. The exception to the rule stated by the Court of Appeals allows for damages to be recovered for: (l) delays caused by the contractee’s bad faith or its willful, malicious, or grossly negligent conduct, (2) uncontemplated delays, (3) delays so unreasonable that they constitute an intentional abandonment of the contract by the contractee, and (4) delays resulting from the contractee’s breach of a fundamental obligation of the contract.

Here, the allegations that the delays were caused by WDF’s bad faith or grossly negligent conduct are entirely conclusory and are clearly intended to fit within the exceptions stated in Corinno. The delays are not so unreasonable as to constitute an intentional abandonment of the contract, nor do they result from a breach of the fundamental obligations of the contract. Further, the delays of a subcontractor on this type of construction project are reasonably foreseeable and thus cannot be said to be uncontemplated within the meaning of the Corinno exception. Therefore, Defendant’s motion to dismiss Plaintiffs fourth cause of action for delay damages is granted.

(Internal quotations and citations omitted).

One of the reasons parties often choose to have their contracts governed by New York law is that courts generally enforce agreements as written. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client face a situation where you are unsure how to enforce rights you believe you have under a contract.

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Posted: November 4, 2018

Party Sanctioned for Excessive Attorneys’ Eyes Only Designations

On October 18, 2018, Justice Masley of the New York County Commercial Division issued a decision in Callsome Solutions Inc. v. Google, Inc., 2018 NY Slip Op. 32716(U), sanctioning a party for making excessive attorneys’ eyes only confidentiality designations, explaining:

Our court system is dependent on all parties engaged in litigation abiding by the rules of proper practice. Accordingly, 22 NYCRR Section 130-1.1 (a) empowers courts with discretionary authority to sanction attorneys or parties, in the form of costs and fees, for frivolous conduct. Conduct is frivolous if: (1) it is completely without merit in law and cannot be supported by a reasonable argument for an extension modification or reversal of existing law; (2) it is undertaken primarily to delay or prolong the resolution of the litigation, or to harass or maliciously injure another, or (3) it asserts material factual statements that are false. To preserve the integrity of the court system, sanctions are imposed to deter future frivolous conduct and vexatious litigation and dilatory or malicious litigation tactics.

Various factors are considered to determine whether conduct is frivolous. First, and foremost is the broad pattern of conduct by the offending attorneys or parties. A corollary consideration is whether the conduct was continued when it became apparent, or should have been apparent, that the conduct was frivolous, or when such conduct was brought to the attention of the parties or to counsel.

Google contends that Callsome has failed to establish frivolous conduct as defined by Rule 130-1.1 (c). According to Google, its conduct here can hardly be frivolous because: (1) the designations were appropriately and thoughtfully applied to protect the confidentiality of the work of the Google Play security and policy enforcement teams; (2) Google has repeatedly accommodated Callsome’s demands for de-designations and its good faith efforts should not be construed as an admission of misconduct; and (3) a contrary finding would have a chilling effect on future offers to compromise.

AEO designations shall be made as sparingly as possible since they have severe consequences affecting the adversary’s investigation, attorney client communications, the search for truth, and the judicial system, which is inevitably drawn into the discovery process.

The court is hard pressed to see how Google’s voluminous AEO designations were appropriately applied. The large number of designations, reviews, re-reviews, trickle of de-designations, culminating in a wholesale de-designation on the eve of argument of this motion does not support Google’s assertion of appropriateness. Further, Google’s admitted use of AEO designations to punish Callsome for causing the enforcement action also evidences that the AEO designations were not appropriate. While using AEO designations as a litigation tactic certainly requires strategic thinking, it does not constitute the thoughtfulness contemplated.

While Google characterizes its de-designation of almost all of its previously designated AEO documents following the February 2018 court conference as good faith cooperation, the court sees a strategy to maliciously injure. Google’s wholesale de-designation confirms that Google’s initial designations were not made in good faith. That Google has de-designated on at least five occasions illustrates this point. Each time, Callsome was compelled to re-review.

Google’s actions appear to be an effort to thwart judicial scrutiny of its designations. Significantly, Google became noticeably proactive in its de-designation efforts only after the court became involved and the issue of sanctions was raised. Indeed, after the February 2018 court conference, the slow trickle of de-designated documents to Confidential quickened as Google de-designated nearly all its previously designated AEO documents. Submitting a box of 228 documents for the court’s review after Callsome’s effective argument for sanctions does not negate this appearance. Indeed, it exemplified Google’s strategy of document dumps and allowed the court to review and confirm Callsome’s allegations.

A slow trickle of corrections does not rectify initial improper designations. For instance, Google originally designated as AEO 32 documents because they allegedly contained the type of information that, as a matter of practice, Google considers highly sensitive and does not divulge publicly, particularly not to individuals who created the apps. However, the court reviewed the 32 documents Google referenced and found these documents contained correspondences sent by Callsome to Google describing certain suspension notices and the circumstances surrounding receipt of the suspension notices. They also included correspondences from Google to Callsome requesting additional information about the suspended apps. (Id.) Not only are these documents bereft of highly sensitive information, but there can be no argument that divulging them to Callsome posed some sort of risk because these correspondences were drafted by or sent to Callsome.

Google also originally designated AEO 36 documents that concern or otherwise reveal market share research conducted internally by Google personnel. However, Google’s categorization of these documents as market share research was disingenuous. The court reviewed the 36 documents and confirmed that these documents contain correspondences among Google personnel from 2013, who discuss a different app that allegedly fueled bad behavior on Google Play. They have nothing to do with market share research — assessment of the percentage of the market for a product or service that a company supplies. Google’s conduct demands attention if it is to be stopped.

Although Google justifies its bulk de-designation as due to the passage of time, Google rejected this exact reason for de-designating when Callsome raised this months before this motion was filed. Google offers no credible explanation for what changed in that short time. Recycling Callsome’s objection suggests that Google’s original justification was baseless.

Additionally, Google’s pattern of improper conduct continued even after the parties’ February 2018 conference with the court, as its attempt to extract concessions from Callsome was improper. Google’s March 6, 2018 offer to compromise was nothing of the sort. No public policy is served by crediting Google’s purported offer of compromise, the sincerity of which is belied by the impractical nature of its deadline: 24 hours. Before it could consider Google’s offer, Callsome had to cross-reference this latest batch of de-designated documents against earlier designations.

AEO designations are not negotiable. Discovery is either “extremely sensitive” technical data or commercially sensitive or strategic plans, or research and development or not. Either documents are truly secret and their disclosure will be harmful to the owner of the document or not. If not, then the discovery may be protected by a designation of confidential and the discovery remains unavailable to the public, but usable by the parties for the purposes of this litigation only. A party cannot over designate documents then hold the improperly designated documents hostage until the adversary surrenders. Such conduct will not be countenanced by this court. Google argues that its conduct is not egregious by comparison to others who were sanctioned for pursuing meritless claims, withholding relevant evidence and deliberately violating a court order to produce evidence.

However, Google is not immunized because other parties have done worse or because there were even more documents and depositions that could have been improperly AEO designated. There were serious consequences of Google’s improper designations, not only delay, but also the impact on the communications between Callsome and its attorney.

In sum; Google’s conduct flouts widely accepted rules of civility embedded in New York litigation, and in particular the Commercial Division. Google adopted a pattern of partially complying with demands for disclosure, resulting in a delay in the completion of discovery. By providing piecemeal de-designations, only when prompted, and dropping its designations, only when threatened with court review, Google effectively prevented the expeditious resolution of this litigation, as it was Google’s excessive AEO designations, not Callsome’s challenges of those designations, that caused the delay here. This pattern of dilatory conduct is precisely the type of chronic noncompliance that breeds disrespect in a culture in which cases can linger for years without resolution.

AEO designations seek to protect one party from injury – usually injury to the party’s business – that might occur if the information is revealed to the party’s competitor. If Google was concerned that Callsome might not protect Google’s secrets, then it could have amended the Confidentiality Agreement to add penalties for violation of the confidentiality designation e.g. financial; over designation is not the solution. As a result, Google successfully shifted the burden of reviewing its designations to Callsome. To allow such improper use of the Confidentiality Agreement is to reward that behavior.

(Internal quotations and citations omitted).

This decision is about a practice that may not be apparent to clients, but that can be a problem in litigation involving trade secrets and other highly-sensitive business information. Courts will allow very sensitive evidence to be disclosed only to counsel, and not to their clients, because of the danger of competitors getting each other’s trade secrets. This decision shows that abusing the right to designate highly sensitive documents as attorneys’ eyes only can get a litigant in trouble. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client has a question regarding whether a litigant’s conduct has crossed the line from creative to sanctionable.

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Posted: November 3, 2018

Court Appoints Receiver Over Judgment Debtor’s Property

On October 15, 2018, Justice Schecter of the New York County Commercial Division issued a decision in Herman v. Herman, 2018 NY Slip Op. 32652(U), appointing a receiver over a judgment debtor’s property, explaining:

CPLR 5228(a) provides that upon motion of a judgment creditor the court may appoint a receiver who may be authorized to administer, collect, improve, lease. repair or sell any real or personal property in which the judgment debtor has an interest or to do any other acts designed to satisfy the judgment. The appointment of a receiver pursuant to section 5228(a) is a matter within the court’s discretion. In deciding whether the appointment of a receiver is justified, courts have considered the (I) alternative remedies available to the creditor; (2) the degree to which receivership will increase the likelihood of satisfaction; and (3) the risk of fraud or insolvency if a receiver is not appointed. The court may appoint a receiver to sell real property to satisfy a judgment where, as here, the judgment-debtor owns the property as a tenant in common.

Maurice has taken various steps to frustrate plaintiffs’ ability to enforce the judgment, including encumbering his real property and filing a frivolous bankruptcy action. A receivership will indisputably increase the likelihood of satisfaction; nearly a quarter of the judgment will be satisfied by the transfer of Maurice’s interest in the Property. Aside from Maurice having tens of millions of dollars in liquid assets, the transfer is the only conceivable way to make a meaningful dent in the judgment. Indeed, Maurice’s counsel allegedly stated to one of Plaintiffs’ attorneys that Maurice has hidden his assets and Plaintiffs will never find them, and that Maurice also has a history of avoiding judgment enforcement. Finally, there is real risk of fraud absent appointment of a receiver as Maurice has already permitted the property to accrue substantial tax liabilities and caused Windsor to enter into a 99-year lease for a duplex apartment for no rent. The appointment of a receiver is necessary to stop Maurice’s improper frustration of collection of the judgment.

Maurice’s arguments in opposition are unpersuasive. That plaintiffs have alternative judgment enforcement remedies is not dispositive. Given the size of the judgment, such remedies will be cumulative, and not in the alternative to, the transfer of Maurice’s interest in the Property. Unless Maurice has more than $100 million of liquid assess, it is apparent that his interest in the Property will necessarily be a significant means of satisfying the judgment. It is illogical to force plaintiffs to wait years until some portion of the judgment is satisfied before seeking transfer of the Property. Indeed. if Maurice really has the means of satisfying the judgment and does not wish to part with the Property, he can, and has always been able to, simply voluntarily satisfy the judgment. He has chosen to avoid doing so, requiring the appointment of a receiver here. Maurice’s contention that the Property should be sold is once again rejected. Maurice, moreover, has already agreed that the property is worth $47.5 million– approximately $6 million more than his own appraiser said it is worth–and he is bound by his stipulation as to the Property’s value.

(Internal quotations and citations omitted).

We have substantial experience in helping judgment creditors collect on judgments and search for and attach assets worldwide. This decision discusses one rarely-ordered tool to help a judgment creditor collect on a judgment. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client need help collecting on a judgment.

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Posted: November 2, 2018

Defendants Estopped From Raising Usury Defense

On October 17, 2018, Justice Ash of the Kings County Commercial Division issued a decision in Sasidharan v. Piverger, 2018 NY Slip Op. 32669(U), holding that defendants that arranged the terms of an investment were estopped from asserting a usury defense, explaining:

Upon consideration of the foregoing, the Court finds that the Assoumou Defendants are estopped from raising usury as a defense as a matter of law. New York recognizes that a borrower may be estopped from interposing a usury defense when, through a special relationship with the lender, the borrower induces reliance on the legality of the transaction. Thus, where defendant attorney induced the plaintiff’s reliance, arranged the terms of the investment, and drafted the promissory note sued upon, defendant was estopped from asserting the defense of usury.

Here, it is undisputed that Assoumou approached Plaintiffs for the loan, the Assoumou Defendants’ representative, Njoku, drafted the Note and personal guaranties, and the Assoumou Defendants’ counsel provided Plaintiffs with the Enforceability Opinion, the express purpose of which was to induce reliance on the validity of the loan transaction. The Assoumou Defendants’ contention that Plaintiffs dictated the terms of the Note is conclusory and without any evidentiary support. Based upon this undisputed evidence, Plaintiffs are entitled to summary judgment against the Assoumou Defendants on their first cause of action. However, Plaintiffs are only entitled to recover the loan amount at a legal rate of interest.

(Internal citations omitted).

New York’s usury laws are subject to many limitations (this case discusses one). Still, there are circumstances where the interest rate in an agreement is so high that a court will not enforce it. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client have a question regarding whether the interest rate in an agreement or note is legal.

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Posted: November 1, 2018

Proceeding to Compel Arbitration Cannot be Initiated Until Opponent Begins Litigation

On October 16, 2018, Justice Ostrager of the New York County Commercial Division issued a decision in KPMG LLP v. Kirschner, 2018 NY Slip Op. 32661(U), holding that a plaintiff cannot bring a proceeding to compel arbitration until the defendant begins litigation, explaining:

CPLR § 7503(a) provides:

A party aggrieved by the failure of another to arbitrate may apply for an order compelling arbitration …. If an issue claimed to be arbitrable is involved in an action pending in a court having jurisdiction to hear a motion to compel arbitration, the application shall be made by motion in that action. If the application is granted, the order shall operate to stay a pending or subsequent action, or so much of it as is referable to arbitration.

Likewise, the FAA dictates: a party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration may petition for an order compelling arbitration. The Appellate Division has stated that under CPLR § 7503(a) a party to an arbitration agreement is not aggrieved until litigation of an issue within the operation of the arbitration provision is attempted. Federal courts interpreting the FAA have come to the similar conclusion that unless the respondent has resisted arbitration, the petitioner has not been aggrieved by anything, and there is nothing for the court to compel. The Second Circuit has stated that a party has refused to arbitrate if it commences litigation or is ordered to arbitrate the dispute by the relevant arbitral authority and fails to do so. Thus, a party is considered aggrieved if the non-aggrieved party (1) commences litigation in lieu of arbitration, or (2) refuses to comply with an order of a relevant arbitral authority to arbitrate the dispute.

Here, it is undisputed that (1) the Trustee had not commenced litigation at the time KPMG’s petition was filed, and (2) no order had been issued by an arbitral authority. KPMG was thus not an aggrieved party at the time it commenced this special proceeding.

KPMG filed this petition before the Trustee commenced the California Action, and thus, the Court does not have jurisdiction to adjudicate such a petition from a non-aggrieved party even though the California Action has since been commenced. Further, courts have adhered to the time-of-filing rule regardless of the costs it imposes. Thus, the petition in this special proceeding must be dismissed for lack of subject matter jurisdiction and lack of standing.

(Internal quotations and citations omitted) (emphasis added).

Commercial litigation involves more than courts. Disputes often are–by agreement–decided by private arbitrators. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client have a question regarding a dispute that is subject to an arbitration agreement.

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