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LARRY KUSHLIN v. DAVID J. BIALER ET AL. (06/26/69)

SUPREME COURT OF NEW YORK, APPELLATE DIVISION, FIRST DEPARTMENT 1969.NY.42207 <http://www.versuslaw.com>; 301 N.Y.S.2d 181; 32 A.D.2d 217 June 26, 1969 LARRY KUSHLIN, APPELLANT,v.DAVID J. BIALER ET AL., DOING BUSINESS AS STYLEART ENGRAVING COMPANY, RESPONDENTS Appeal from an order of the Supreme Court at Special Term (Irving H. Saypol, J.), entered January 13, 1969 in New York County, which granted defendant's motion for an order staying the action until arbitration of the issue. Benjamin Asarch of counsel (Tachna, Bauman, Asarch & Altomerianos, attorneys), for appellant. Peter A. Jaffe of counsel (Benjamin Jaffe with him on the brief; Benjamin Jaffe and Peter A. Jaffe, attorneys), for respondents. McNally, J. Stevens, P. J., Eager and McGivern, JJ., concur with McNally, J.; Nunez, J., dissents in opinion. Author: Mcnally


Appeal from an order of the Supreme Court at Special Term (Irving H. Saypol, J.), entered January 13, 1969 in New York County, which granted defendant's motion for an order staying the action until arbitration of the issue.

McNally, J. Stevens, P. J., Eager and McGivern, JJ., concur with McNally, J.; Nunez, J., dissents in opinion.

Author: Mcnally

 Special Term stayed prosecution of this action pending arbitration as provided in the agreement of the parties dated February 1, 1955.

The agreement provides (par. 20) "these arbitrators shall be selected one by each of the partners." Plaintiff-appellant argues the other two parties to the agreement, the individual defendants, are aligned against him, therefore the contract provision for selection of arbitrators is unfair and should not be enforced.

Appellant does not rely on ambiguity. There is, therefore, no basis for construction. It is well settled that a court may not, under the guise of interpretation, remake a contract to implement an unexpressed intention. (Rodolitz v. Neptune Paper Prods., 22 N.Y.2d 383, 386.) It was otherwise in Matter of Di Stasio (Avallone) (27 A.D.2d 726, revd. on dissenting opn. 21 N.Y.2d 665). There the provision for selection of arbitrators was "each party shall be entitled to appoint an arbitrator." In the circumstances present in Di Stasio, it was held that the phrase "each party" had reference to the parties to the dispute, not the parties to the agreement. On the phraseology of that contract it was held the opposing parties to the dispute should be aligned and each side shall have the right to select one arbitrator. The difficulty here is that the contract unambiguously provides for the right of selection of an arbitrator by "each of the partners". No rational basis is advanced for interpretation -- there is no ambiguity.

The parties to the agreement were free to adopt their own method of selection of arbitrators, and the court is required to enforce the agreement of the parties. (Matter of Astoria Med. Group [ Health Ins. Plan of Greater N. Y.], 11 N.Y.2d 128, 133.) Partisanship in the selection of arbitrators does not preclude enforcement of the provision for arbitration (p. 136). Even in the case of a single arbitrator named in the provision for arbitration, the nominee of one of the parties to the dispute, arbitration as agreed will be enforced. (Matter of Amtorg Trading Corp. v. Camden Fibre Mills, 304 N. Y. 519.) If there be misconduct on the part of the arbitrators to be selected, then there may be recourse under CPLR 7511. (Matter of Lipschutz [ Gutwirth ], 304 N. Y. 58, 65; Matter of Astoria Med. Group, supra, p. 137.)

The order should be affirmed, with costs.

Disposition

Order entered on January 13, 1969, affirmed, with $30 costs and disbursements to the respondents.

Nunez, J. (dissenting).

Appellant and the two respondents were partners conducting an engraving business under a written partnership agreement. Due to disagreements between the appellant and respondents, appellant exercised his option to retire from the business by giving written notice to the respondents. Appellant thereupon demanded that respondents account to him for his interest in the partnership, and, upon refusal, brought an action in the Supreme Court for an accounting of the partnership assets. Respondents moved to stay that action and for arbitration pursuant to the partnership agreement. Special Term granted the stay and this appeal followed.

The applicable contract provision reads: "20. That, if any disagreement shall arise between any members of the partnership that cannot be resolved by the partners concerning vital matters, the same shall be decided and determined by arbitrators, and these arbitrators shall be selected one by each of the partners. The decision of two of the arbitrators so selected shall, when made in writing, be conclusive upon the parties hereto."

Appellant blames respondents and respondents place the onus upon appellant for his separation from the partnership. Be that as it may, the fact is that presently the dispute is between appellant on one side, and the two respondents on the other.

Respondents contend that pursuant to the terms of the agreement each of them is entitled to name an arbitrator, appellant is likewise entitled to name an arbitrator and the decision of two of the arbitrators so selected shall be conclusive upon the parties. Appellant claims that the alignment of the parties was not contemplated when the contract containing the arbitration clause was executed; that the alignment of the defendants against him caused the breakup of the business and that for them to select two arbitrators to his one would be a mockery of justice and would be patently inequitable. He has no objection to submitting the matter to three arbitrators from a panel of the American Arbitration Association or for the court to select the arbitrators or designate the panel from which they are to be chosen. ...


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