Preview
FILED: QUEENS COUNTY CLERK 03/11/2024 11:57 AM INDEX NO. 717523/2023
NYSCEF DOC. NO. 74 RECEIVED NYSCEF: 03/11/2024
Short Form Order
NEW YORK SUPREME COURT – QUEENS COUNTY
3/11/2024
Present: HONORABLE JOSEPH RISI IA PART 3
A. J. S. C.
-----------------------------------------------------------X
JAN S. WIMPFHEIMER and SIMCHE DANIEL Index Number: 717523/2023
FULDA,
Motion Date: December 5, 2023
Petitioners,
Motion Sequence #1 and #2
-against-
DECISION/ ORDER
EAST HUDSON CAPITAL LLC,
Respondent.
-----------------------------------------------------------X
The following numbered papers read on the motion by order to show cause by petitioners Jan S.
Wimpfheimer and Simche Daniel Fulda (petitioners), pursuant to CPLR §§6301 and 7503, to
preliminarily and permanently stay arbitration proceedings bearing case number 01-23-0003-6068,
alleged to be commenced by respondent East Hudson Capital LLC (respondent), against
petitioners; and by separate notice of motion by respondent for an order dismissing the petition.
Papers
Numbered
Order to Show Cause - Affidavits - Exhibits …………………. EF 2, 24-25
Notices of Motion - Affidavits - Exhibits .................................. EF 18-23, 58-61
Answering Affidavits - Exhibits................................................. EF 35-57
Reply Affirmation....................................................................... EF 63-72
Upon the foregoing papers, it is ordered that the motions are determined together as
follows:
This is an action brought by petitioners seeking to permanently stay and enjoin certain
arbitration proceedings that respondent allegedly commenced against petitioners in the Cayman
Islands. Petitioners have alleged that no valid agreements to arbitrate exist between the parties,
that the alleged promissory notes that respondent seeks to enforce in the arbitration proceeding,
out of which respondent has also alleged that the right to arbitrate arose, were never agreed to by
petitioners.
Petitioners have now moved, by order to show cause, pursuant to CPLR §§6301 and
7503(b), to preliminarily and permanently stay said arbitration proceedings. Respondent has
moved to dismiss the petition. In support of their motion, petitioners have argued, among other
things, that the underlying agreements on which respondent relies are not valid and enforceable.
In opposition to petitioners’ motion, and in support of its motion to dismiss, respondent has argued,
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among other things, that petitioners have failed to demonstrate the elements necessary to justify a
stay, and that, pursuant to the terms of the agreements executed between the parties, any challenge
regarding the arbitrability, validity, or any issues regarding whether a condition precedent was
made a part of the subject arbitration agreements, is within the jurisdiction of the arbitrator, not
the court.
CPLR §6301, entitled “Grounds for preliminary injunction and temporary restraining
order,” provides, in relevant part, the following:
“A preliminary injunction may be granted in any action where it appears that the
defendant threatens or is about to do, or is doing or procuring or suffering to be
done, an act in violation of the plaintiff's rights respecting the subject of the action,
and tending to render the judgment ineffectual, or in any action where the plaintiff
has demanded and would be entitled to a judgment restraining the defendant from
the commission or continuance of an act, which, if committed or continued during
the pendency of the action, would produce injury to the plaintiff.”
“‘To obtain a preliminary injunction, a movant must demonstrate, by clear and convincing
evidence, (1) a likelihood of success on the merits, (2) irreparable injury if a preliminary injunction
is not granted, and (3) a balance of equities in his or her favor’ ” (Silver Towers Owners, Corp. v
Cromwell Silver Towers Group Ltd. Partnership, 144 AD3d 783, 784 [2d Dept 2016], quoting
M.H. Mandelbaum Orthotic & Prosthetic Servs., Inc. v Werner, 126 AD3d 859, 860 [2d Dept
2015]; CPLR §6301). “‘The decision to grant or deny a preliminary injunction lies within the
sound discretion of the Supreme Court’” (Silver Towers Owners, Corp. v Cromwell Silver Towers
Group Ltd. Partnership, 144 AD3d at 784, quoting Arthur J. Gallagher & Co. v Marchese, 96
AD3d 791, 792 [2d Dept 2012]; see Mobstub, Inc. v www.staytrendy.com, 153 AD3d 809, 810 [2d
Dept 2017]).
CPLR §7503(b), provides the following:
“Application to stay arbitration. Subject to the provisions of subdivision (c), a party
who has not participated in the arbitration and who has not made or been served
with an application to compel arbitration, may apply to stay arbitration on the
ground that a valid agreement was not made or has not been complied with or that
the claim sought to be arbitrated is barred by limitation under subdivision (b) of
section 7502.”
Pursuant to CPLR §7503(b), “[t]he threshold issue of whether there is a valid agreement to
arbitrate is for the court and not the arbitrator to determine (Northeast & Cent. Contractors, Inc. v
Quanto Capital, LLC, 203 AD3d 925 [2d Dept 2022]; see Maynard v Smith, 206 AD3d 900, 900-
01 [2d Dept 2022]; Greater Cont. Corp. v Schechter, 34 AD2d 825, 825 [2d Dept 1970]). “‘[T]he
court is limited to determining only whether a valid arbitration agreement was entered into…’”
(Nussdorf v Esses & Co., Inc., 63 AD2d 619, 620 [1st Dept 1978], quoting Riccardi v Modern
Silver Linen Supply Co., Inc., 45 AD2d 191, 195 [1st Dept 1974], affd, 36 NY2d 945 [1975]).
Furthermore, in making such a determination, it is well-settled that “arbitration agreements are
contracts and must be interpreted under the accepted rules of contract law” (Salvano v Merrill
Lynch, Pierce, Fenner & Smith, Inc., 85 NY2d 173, 182 [1995]; see Maynard v Smith, 206 AD3d
at 901).
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The record contains, among other things, a copy of the petition, the affidavits of both
petitioners, and copies of two promissory notes, each dated January 1, 2023. In the petition, as
well as in their affidavits, petitioners admit that they executed the promissory notes at issue. The
promissory notes, themselves, have demonstrated that they were fully executed by petitioners and
both notes provide that any “dispute shall be submitted to binding arbitration in the following
jurisdiction: Cayman Islands.”
Given a review of the evidence in the record, the court has determined that petitioners has
failed to satisfy its burden to obtain a preliminary injunction inasmuch as they have failed to make
the requisite showing of satisfying the three-pronged standard by clear and convincing evidence
(CPLR §6301; see Mobstub, Inc. v www.staytrendy.com, 153 AD3d at 810; see generally Bashian
& Farber, LLP v Syms, 147 AD3d 714, 717 [2d Dept 2017]). Furthermore, where, as here, it has
been established that an agreement to arbitrate was made and the dispute comes within the scope
of the agreement, judicial inquiry ends and there is no basis to stay the arbitration (CPLR
§7503[b]). All remaining issues, including, but not limited to whether all conditions precedent
were satisfied, are to be determined by the arbitrator and not the court. The parties’ remaining
contentions have been considered and found to be unavailing. As such, the petition is denied, the
cross-motion is granted, and the proceeding is dismissed. The parties are directed to proceed to
arbitration.
Accordingly, petitioners’ motion is denied in its entirety. Respondent’s motion to dismiss
the petition is granted and the proceeding is, hereby, dismissed.
This is the decision and order of the Court.
Date: March 8, 2024 ______________________________
Hon. Joseph Risi, A.J.S.C.
3/11/2024
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Preview
FILED: QUEENS COUNTY CLERK 03/11/2024 11:57 AM INDEX NO. 717523/2023 NYSCEF DOC. NO. 74 RECEIVED NYSCEF: 03/11/2024 Short Form Order NEW YORK SUPREME COURT – QUEENS COUNTY 3/11/2024 Present: HONORABLE JOSEPH RISI IA PART 3 A. J. S. C. -----------------------------------------------------------X JAN S. WIMPFHEIMER and SIMCHE DANIEL Index Number: 717523/2023 FULDA, Motion Date: December 5, 2023 Petitioners, Motion Sequence #1 and #2 -against- DECISION/ ORDER EAST HUDSON CAPITAL LLC, Respondent. -----------------------------------------------------------X The following numbered papers read on the motion by order to show cause by petitioners Jan S. Wimpfheimer and Simche Daniel Fulda (petitioners), pursuant to CPLR §§6301 and 7503, to preliminarily and permanently stay arbitration proceedings bearing case number 01-23-0003-6068, alleged to be commenced by respondent East Hudson Capital LLC (respondent), against petitioners; and by separate notice of motion by respondent for an order dismissing the petition. Papers Numbered Order to Show Cause - Affidavits - Exhibits …………………. EF 2, 24-25 Notices of Motion - Affidavits - Exhibits .................................. EF 18-23, 58-61 Answering Affidavits - Exhibits................................................. EF 35-57 Reply Affirmation....................................................................... EF 63-72 Upon the foregoing papers, it is ordered that the motions are determined together as follows: This is an action brought by petitioners seeking to permanently stay and enjoin certain arbitration proceedings that respondent allegedly commenced against petitioners in the Cayman Islands. Petitioners have alleged that no valid agreements to arbitrate exist between the parties, that the alleged promissory notes that respondent seeks to enforce in the arbitration proceeding, out of which respondent has also alleged that the right to arbitrate arose, were never agreed to by petitioners. Petitioners have now moved, by order to show cause, pursuant to CPLR §§6301 and 7503(b), to preliminarily and permanently stay said arbitration proceedings. Respondent has moved to dismiss the petition. In support of their motion, petitioners have argued, among other things, that the underlying agreements on which respondent relies are not valid and enforceable. In opposition to petitioners’ motion, and in support of its motion to dismiss, respondent has argued, 1 1 of 3 FILED: QUEENS COUNTY CLERK 03/11/2024 11:57 AM INDEX NO. 717523/2023 NYSCEF DOC. NO. 74 RECEIVED NYSCEF: 03/11/2024 among other things, that petitioners have failed to demonstrate the elements necessary to justify a stay, and that, pursuant to the terms of the agreements executed between the parties, any challenge regarding the arbitrability, validity, or any issues regarding whether a condition precedent was made a part of the subject arbitration agreements, is within the jurisdiction of the arbitrator, not the court. CPLR §6301, entitled “Grounds for preliminary injunction and temporary restraining order,” provides, in relevant part, the following: “A preliminary injunction may be granted in any action where it appears that the defendant threatens or is about to do, or is doing or procuring or suffering to be done, an act in violation of the plaintiff's rights respecting the subject of the action, and tending to render the judgment ineffectual, or in any action where the plaintiff has demanded and would be entitled to a judgment restraining the defendant from the commission or continuance of an act, which, if committed or continued during the pendency of the action, would produce injury to the plaintiff.” “‘To obtain a preliminary injunction, a movant must demonstrate, by clear and convincing evidence, (1) a likelihood of success on the merits, (2) irreparable injury if a preliminary injunction is not granted, and (3) a balance of equities in his or her favor’ ” (Silver Towers Owners, Corp. v Cromwell Silver Towers Group Ltd. Partnership, 144 AD3d 783, 784 [2d Dept 2016], quoting M.H. Mandelbaum Orthotic & Prosthetic Servs., Inc. v Werner, 126 AD3d 859, 860 [2d Dept 2015]; CPLR §6301). “‘The decision to grant or deny a preliminary injunction lies within the sound discretion of the Supreme Court’” (Silver Towers Owners, Corp. v Cromwell Silver Towers Group Ltd. Partnership, 144 AD3d at 784, quoting Arthur J. Gallagher & Co. v Marchese, 96 AD3d 791, 792 [2d Dept 2012]; see Mobstub, Inc. v www.staytrendy.com, 153 AD3d 809, 810 [2d Dept 2017]). CPLR §7503(b), provides the following: “Application to stay arbitration. Subject to the provisions of subdivision (c), a party who has not participated in the arbitration and who has not made or been served with an application to compel arbitration, may apply to stay arbitration on the ground that a valid agreement was not made or has not been complied with or that the claim sought to be arbitrated is barred by limitation under subdivision (b) of section 7502.” Pursuant to CPLR §7503(b), “[t]he threshold issue of whether there is a valid agreement to arbitrate is for the court and not the arbitrator to determine (Northeast & Cent. Contractors, Inc. v Quanto Capital, LLC, 203 AD3d 925 [2d Dept 2022]; see Maynard v Smith, 206 AD3d 900, 900- 01 [2d Dept 2022]; Greater Cont. Corp. v Schechter, 34 AD2d 825, 825 [2d Dept 1970]). “‘[T]he court is limited to determining only whether a valid arbitration agreement was entered into…’” (Nussdorf v Esses & Co., Inc., 63 AD2d 619, 620 [1st Dept 1978], quoting Riccardi v Modern Silver Linen Supply Co., Inc., 45 AD2d 191, 195 [1st Dept 1974], affd, 36 NY2d 945 [1975]). Furthermore, in making such a determination, it is well-settled that “arbitration agreements are contracts and must be interpreted under the accepted rules of contract law” (Salvano v Merrill Lynch, Pierce, Fenner & Smith, Inc., 85 NY2d 173, 182 [1995]; see Maynard v Smith, 206 AD3d at 901). 2 2 of 3 FILED: QUEENS COUNTY CLERK 03/11/2024 11:57 AM INDEX NO. 717523/2023 NYSCEF DOC. NO. 74 RECEIVED NYSCEF: 03/11/2024 The record contains, among other things, a copy of the petition, the affidavits of both petitioners, and copies of two promissory notes, each dated January 1, 2023. In the petition, as well as in their affidavits, petitioners admit that they executed the promissory notes at issue. The promissory notes, themselves, have demonstrated that they were fully executed by petitioners and both notes provide that any “dispute shall be submitted to binding arbitration in the following jurisdiction: Cayman Islands.” Given a review of the evidence in the record, the court has determined that petitioners has failed to satisfy its burden to obtain a preliminary injunction inasmuch as they have failed to make the requisite showing of satisfying the three-pronged standard by clear and convincing evidence (CPLR §6301; see Mobstub, Inc. v www.staytrendy.com, 153 AD3d at 810; see generally Bashian & Farber, LLP v Syms, 147 AD3d 714, 717 [2d Dept 2017]). Furthermore, where, as here, it has been established that an agreement to arbitrate was made and the dispute comes within the scope of the agreement, judicial inquiry ends and there is no basis to stay the arbitration (CPLR §7503[b]). All remaining issues, including, but not limited to whether all conditions precedent were satisfied, are to be determined by the arbitrator and not the court. The parties’ remaining contentions have been considered and found to be unavailing. As such, the petition is denied, the cross-motion is granted, and the proceeding is dismissed. The parties are directed to proceed to arbitration. Accordingly, petitioners’ motion is denied in its entirety. Respondent’s motion to dismiss the petition is granted and the proceeding is, hereby, dismissed. This is the decision and order of the Court. Date: March 8, 2024 ______________________________ Hon. Joseph Risi, A.J.S.C. 3/11/2024 3 3 of 3