The opinion of the court was delivered by: MICHAEL B. MUKASEY
MICHAEL B. MUKASEY, U.S.D.J.
Plaintiff moves for a judgment on the pleadings, pursuant to Fed. R. Civ. P. 12(c), to compel defendant to fund a cash collateral account in plaintiff's name. For the reasons stated below, plaintiff's motion is granted. Defendant is directed to fund a cash collateral account in plaintiff's name in the amount of $ 1,505,838. Defendant's counterclaim is stayed pending arbitration.
On August 23, 1991 plaintiff La Mirada Products Co., Inc. (then known as DAP Inc.), USG Corp. (La Mirada's parent), and two other subsidiaries of USG Corp. entered into an Asset Purchase Agreement with defendant Wassall PLC and Wassall USA Acquisition, Inc. (a subsidiary of Wassall PLC, now known as DAP Products, Inc.). (Compl., Ex. A) The Asset Purchase Agreement established a procedure for adjusting the price paid by Wassall USA to La Mirada Products after the closing date, September 30, 1991. (Id. at 14-18) The Asset Purchase Agreement required that if Wassall USA disputed the proposed price adjustment, it was to deposit the disputed amount into a separate cash collateral account.
(Id. at 18) The dispute was to be resolved in arbitration by Price Waterhouse or another nationally recognized independent accounting firm. (Id. at 15-16)
On September 20, 1991 the same parties entered into a Cash Collateral Account Agreement, which required that the cash collateral account be "in the name of and under the sole dominion and control" of La Mirada Products. (Compl., Ex. C at 2-3) On October 31, 1991 USG Corp. notified Wassall that the proposed price adjustment was $ 1,505,838. (Compl., Ex. B) On November 27, 1991 Wassall USA objected to that entire amount. (Compl. Ex. D) Defendant admits that Wassall USA has not deposited any funds into the cash collateral account. (Answer P 18 at 3-4)
In March 1992 defendant attempted to commence arbitration of the price dispute by calling Price Waterhouse. (Odoner Aff. P 3) Price Waterhouse wrote a letter to arrange a conference call (Id., Ex. A), but plaintiff refused to arbitrate until defendant funded the cash collateral account. (Id., Ex. B)
Plaintiff now seeks a judgment on the pleadings ordering specific performance by defendant of Wassall USA's obligation to deposit $ 1,505,838 into a cash collateral account in plaintiff's "sole dominion and control." (Compl. at 9) Wassall counterclaims for approximately $ 1.7 million.
In evaluating a motion for judgment on the pleadings, pursuant to Fed. R. Civ. P. 12(c), the court must view the pleadings in the light most favorable to, and draw all reasonable inferences in favor of, the nonmoving party. Falls Riverway Realty, Inc. v. City of Niagara Falls, 754 F.2d 49, 55 (2d Cir. 1985). The court must also take "the well-pleaded facts alleged in the complaint . . . as admitted," Gumer v. Shearson, Hammill & Co., 516 F.2d 283, 286 (2d Cir. 1974), and may not dismiss the complaint "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Madonna v. United States, 878 F.2d 62, 65 (2d Cir. 1989) (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957)). Judgment on the pleadings may be granted only if, on the facts admitted, the moving party is clearly entitled to judgment. Maggette v. Dalsheim, 709 F.2d 800 (2d Cir. 1983).
Defendant argues that material issues of fact exist with respect to (i) plaintiff's lack of an adequate remedy at law; (ii) plaintiff's bad faith intent to coerce the defendant into settlement and thereby avoid resolution of the parties' disputes by a neutral arbitrator; and (iii) plaintiff's unclean hands. Defendant's arguments are not persuasive. There is no dispute as to the material facts here; defendant admits that Wassall USA has not funded the cash collateral account. (Answer P 18 at 3-4) Therefore, plaintiff's motion is granted.
First, and most important, La Mirada is entitled to specific performance because it has no adequate remedy at law. Under New York law, which applies here, a party can be compelled to perform its contractual obligations if (1) there is a valid contract; (2) plaintiff has substantially performed under the contract and is willing and able to perform its remaining obligations; (3) defendant is able to perform its obligations; and (4) plaintiff has no adequate remedy at law. See, e.g., Mercantile-Safe Deposit and Trust Co. v. Trans World Airlines, Inc., 771 F. Supp. 90 (S.D.N.Y. 1991); Connecticut Nat'1 Bank v. Trans World Airlines, Inc., 762 F. Supp. 76 (S.D.N.Y. 1991); Travellers Int'l AG v. Trans World Airlines, Inc., 722 F. Supp. 1087 (S.D.N.Y. 1989); Niagara Mohawk Power Corp. v. Graver Tank & Mfg. Co., 470 F. Supp. 1308, 1324 (N.D.N.Y. 1979).