| Brandle Meadows, LLC v Bette |
| 2011 NY Slip Op 03956 [84 AD3d 1579] |
| May 12, 2011 |
| Appellate Division, Third Department |
| Brandle Meadows, LLC, Appellant, v Peter Bette et al.,Respondents. |
—[*1] Hannigan Law Firm, P.L.L.C., Latham (Terence S. Hannigan of counsel), forrespondents.
Egan Jr., J. Appeal from an order of the Supreme Court (Lynch, J.), entered June 1, 2010 inAlbany County, which granted defendants' motion to, among other things, compel arbitrationbetween the parties.
In November 2007, defendant Bette & Cring, LLC was retained by plaintiff to serve as theconstruction manager for the Brandle Meadows-Senior Condominium Community project in theVillage of Altamont, Albany County. Pursuant to the contract, Bette & Cring would periodicallysubmit applications for payment to plaintiff for costs it incurred on the project. Ultimately, adispute arose between the parties over what plaintiff believed to be discrepancies in the paymentrequisitions submitted by Bette & Cring and, in August 2009, plaintiff terminated its contractwith Bette & Cring. Bette & Cring then filed a mechanics' lien against plaintiff in the amount of$2,094,054.02 and, pursuant to the parties' contract, this dispute was referred to arbitration onconsent of the parties.
In September 2009, plaintiff commenced the instant action alleging extortion, tortious [*2]interference with contract and business disparagement anddefamation.[FN*] Subsequently, defendants served plaintiff with a demand to permit the claim to proceed toarbitration in accordance with the contract, which request plaintiff denied. Defendants thereaftermade application to Supreme Court for an order pursuant to CPLR 7503 (a) staying the actionand compelling arbitration between the parties. Supreme Court granted defendants' motion,finding that there was a reasonable relationship between plaintiff's intentional tort claims and theunderlying contract, and that the focal point of the dispute was payment. We agree and affirm.
It is "[t]he policy of this State . . . to favor and encourage arbitration as a meansof expediting the resolution of disputes and conserving judicial resources" (Szabados vPepsi-Cola Bottling Co. of N.Y., 174 AD2d 342, 343 [1991] [internal quotation marks andcitation omitted]). That policy "dictate[s] that incidental tort claims which are integrally linked toan arbitrable dispute be submitted for resolution in arbitration" (id.; see HirschfeldProds. v Mirvish, 218 AD2d 567, 568 [1995], affd 88 NY2d 1054 [1996]). "[I]t is forthe courts to make the initial determination as to whether the dispute is arbitrable" (Matter ofNationwide Gen. Ins. Co. v Investors Ins. Co. of Am., 37 NY2d 91, 95 [1975]; see Matter of Massena Cent. School Dist.[Massena Confederated School Employees' Assn., NYSUT, AFL-CIO], 82 AD3d 1312,1314 [2011]; Matter of Wiederspiel[Carstens], 36 AD3d 971, 973 [2007]), and "[o]nce it appears that there is. . . a reasonable relationship between the subject matter of the dispute and thegeneral subject matter of the underlying contract, the court's inquiry is ended" (Matter ofNationwide Gen. Ins. Co. v Investors Ins. Co. of Am., 37 NY2d at 96; see Matter of Peters v Union-Endicott Cent.School Dist., 77 AD3d 1236, 1240-1241 [2010]). To that end, exclusion of a substantiveissue from arbitration "generally requires specific enumeration in the arbitration clause itself"(Matter of Silverman [Benmor Coats], 61 NY2d 299, 308 [1984]), and "a broadarbitration clause in an agreement [generally] survives and remains enforceable for the resolutionof disputes arising out of that agreement subsequent to the termination thereof and the dischargeof obligations thereunder, irrespective of whether the termination and discharge resulted from thenatural expiration of the term of the agreement" (Matter of Primex Intl. Corp. v Wal-MartStores, 89 NY2d 594, 598-599 [1997]; accord Matter of Poly-Pak Indus. v CollegiateStores Corp., 269 AD2d 130, 131 [2000]).
Here, the contract provides that "[a]ny [c]laim arising out of or related to the [c]ontract,except [c]laims relating to aesthetic effect and except those waived [herein], shall, after decisionby the [a]rchitect or 30 days after submission of the [c]laim to the [a]rchitect, be subject toarbitration." The contract further defines "claim" to include "disputes and matters in questionbetween [plaintiff] and [Bette & Cring] arising out of or relating to the [c]ontract." In itscomplaint, plaintiff alleged that after the payment dispute arose, defendants contacted the Townof Guilderland Building Department and falsely asserted that construction on the project had tobe stopped and certificates of occupancy could not be issued because of nonpayment, and thatdefendants further contacted homeowners at the development and falsely asserted that theirwarranties would be canceled due to plaintiff's nonpayment. Plaintiff also alleged that, in [*3]violation of the contract provisions, defendants contactedsubcontractors who had worked on the project and told them not to work for plaintiff, and thatdefendants provided false information to a local newspaper that plaintiff failed to make paymentsunder the contract and would not be able to sell units at the project for a long time. In light of thebroad arbitration provision, which provides for arbitration of "[a]ny [c]laim" arising out of orrelated to the contract between the parties, we find that a "reasonable relationship" exists betweenthe general subject matter of the underlying contract dispute (Matter of Nationwide Gen. Ins.Co. v Investors Ins. Co. of Am., 37 NY2d at 96)—which has already been referred toarbitration—and plaintiff's incidental tort claims in the instant action, such that SupremeCourt did not err in finding that these tort claims are subject to arbitration.
Spain, J.P., Lahtinen, Kavanagh and McCarthy, JJ., concur. Ordered that the order isaffirmed, with costs.
Footnote *: The complaint also alleged afourth cause of action for punitive damages; however, as Supreme Court noted in its order, sucha claim does not stand as a distinct cause of action (see Rochester Linoleum & Carpet Ctr., Inc. v Cassin, 61 AD3d1201, 1204 [2009]).