The opinion of the court was delivered by: Shira A. Scheindlin, United States District Judge
On December 13, 2002, Fabry's S.r.L. ("Fabry's") initiated this action against IFT International, Inc. ("IFT") and Antonio Maggioni, as officer of IFT, asserting seven claims: breach of contract, breach of agency agreement, breach of fiduciary duty, conversion, fraud, negligent misrepresentation, and unfair dealing.*fn1 Fabry's now moves for partial summary judgment against IFT on the breach of contract and conversion claims pursuant to Rule 56 of the Federal Rules of Civil Procedure ("Rules"). Defendants cross move pursuant to the Federal Arbitration Act, 9 U.S.C. § 3-4, to compel arbitration and stay the current action. In its reply, Fabry's further moves for sanctions and reasonable attorney's fees to be imposed on defendants and their counsel pursuant to Rules 11 and 56(g). For the foregoing reasons, plaintiff's motion for partial summary judgment is granted and defendants' cross-motion to compel arbitration is denied. Plaintiff's motion for sanctions and attorneys fees is also denied.
Fabry's is an Italian company that sells merchandise in the United States. See Amended Verified Complaint ("Compl.") ¶ 3. IFT is a New York corporation that imports and distributes apparel and accessories. See Defendants' Petition to Compel Arbitration ("Def. Pet.") ¶ 6. On or about December 23, 1998, Fabry's and IFT entered into a Credit Guarantee and Collection Services Agreement (the "Agreement"). See Local Rule of Civil Procedure 56.1 Statement of Material Facts in Support of Plaintiff's Motion for Summary Judgment ("Pl. 56.1") ¶ 1. This Agreement enabled Fabry's to sell merchandise in the United States; using IFT as its agent for the collection of payments, and the management of its accounts. See id. ¶ 2; Def. Pet. ¶ 6.*fn2
Pursuant to the Agreement, Fabry's forwarded original invoices for merchandise to IFT and notified its debtors that collection would be managed exclusively by IFT. See Pl. 56.1 ¶¶ 2, 4-5. In turn, IFT was to collect the accounts receivable and forward them to Fabry's, less IFT's fees and transfer costs. See id. ¶¶ 5-6; Def. Pet. ¶ 6. The Terms and Conditions attached to the Agreement required IFT to forward the receivables on the 10th, 20th, and 30th of each month. See Agreement, Ex. A to Compl. at 9. The Terms and Conditions further provide that the "initial annual fee of 2.5% (two point five percent) will be calculated on the actual sales volume realized." Id. The Agreement also specified that payments made to Fabry's would be at a cost of $20 per wire transfer, or at no cost by regular check. See id.
In 2002, IFT received $354,450.78 in payments from plaintiff's customers. See Pl. 56.1 ¶ 7. Although defendant made regular reports to Fabry's of its receipt of these payments as required under the Agreement, it did not forward the money to Fabry's. See Pl. 56.1 ¶ 7; Def. Pet. ¶ 3. As a result, Fabry's terminated the Agreement by fax and registered letter on December 5, 2002. See Pl. 56.1 ¶ 8; 12/5/02 Letter from F. Mercati to IFT, Ex. C to 2/26/03 Affidavit of Massimiliano Martini, officer of Fabry's ("Martini Aff."). Fabry's then sent Maggioni a letter on December 17, 2002, informing him that if IFT received any further payments from its customers, IFT was to notify Fabry's and forward all payments to it. See Pl. 56.1 ¶ 9; 12/17/02 Letter from Martini to Maggioni ("Martini Ltr."), Ex. D to Martini Aff. Fabry's claims that it has "demanded payment on several occasions." Martini Aff. ¶ 11.
After the termination of the Agreement, IFT received an additional $122,489.59 from plaintiff's customers, which it did not forward to Fabry's, bringing the total revenue collected to $548, 546.76. See Pl. 56.1 ¶¶ 10-11; Payment Plan, Ex. E to Martini Aff. Fabry's concedes that, pursuant to the agreement, IFT is entitled to fees in the amount of $13,713.66, or 2.5 percent of the revenue that IFT has collected but not transferred. See Plaintiff's Reply to Memorandum of Law in Support of its Motion for Partial Summary Judgment ("Pl. Rep.") at 7.
B. The Arbitration Clause
Article 21 of the Agreement contains a "Controversies Resolution" provision, which details the dispute resolution mechanisms that Fabry's and IFT would use for certain disputes arising out of the Agreement. See Agreement at 7-8. The first clause provides that the parties "shall attempt in good faith to resolve by mediation any dispute arising out of or relating to this Agreement and to the attached Terms and Conditions." Id. at 7. The second clause of article 21 mandates arbitration if "the parties have been unable to resolve by mediation any dispute arising from the interpretation of this agreement." Id.
Rule 56 provides for summary judgment if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." See Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). Under this standard, an issue of fact is material if it "might affect the outcome of the suit under the governing law." Shade v. Housing Auth. of City of New Haven, 251 F.3d 307, 314 (2d Cir. 2001) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). "An issue of fact is `genuine' if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. In its determination of whether a genuine issue of material fact exists, this Court must make all inferences and resolve all ambiguities in favor of the non-moving party. See Anderson, 477 U.S. at 255.
Once the moving party has met its burden of demonstrating no genuine issue of material fact, the nonmoving party must present "specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e). That is, the non-moving party "must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986); see also Elec. Inspectors, Inc. v. Village of East Hills, 320 F.3d 110, 117 (2d Cir. 2003). "Statements that are devoid of any specifics, but replete with conclusions, are insufficient to defeat a properly supported motion for summary judgment." Bickerstaff v. Vassar Coll., 196 F.3d 435, 452 (2d Cir. 1999); see also Scotto v. Almenas, 143 F.3d 105, 114 (2d Cir. 1998) ("If the evidence presented by the non-moving party is merely colorable, or is not significantly probative, summary judgment may be granted.") ...