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Hartsdale Fire Dist. v. Eastland Construction

September 29, 2009

IN THE MATTER OF HARTSDALE FIRE DISTRICT, APPELLANT,
v.
EASTLAND CONSTRUCTION, INC., RESPONDENT.



In a proceeding pursuant to CPLR article 75 to permanently stay arbitration, the petitioner appeals from an order of the Supreme Court, Westchester County (Colabella, J.), entered October 2, 2008, which denied the petition and dismissed the proceeding.

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and subject to revision before publication in the Official Reports.

ROBERT A. SPOLZINO, J.P., DANIEL D. ANGIOLILLO, CHERYL E. CHAMBERS and PLUMMER E. LOTT, JJ.

(Index No. 4541/08)

DECISION & ORDER

ORDERED that the order is affirmed, with costs.

In the instant matter involving a dispute between the petitioner and the respondent, Eastland Construction, Inc. (hereinafter Eastland), over the parties' obligations pursuant to a construction contract, Eastland never served a notice of claim pursuant to Town Law § 180. Since serving a notice of claim is a condition precedent to commencing an action or seeking arbitration under a contract (see Matter of Elmont Fire Dist. v Lapeka Constr. Corp., 232 AD2d 636), the petitioner's defense based upon failure to serve a notice of claim was apparent once Eastland moved to compel arbitration and then commenced an action without serving a notice of claim. Contrary to the assertion of our dissenting colleague, the defense did not arise when the time to file the notice of claim expired, but when Eastland moved to compel arbitration and then commenced an action without complying with the condition precedent of serving a notice of claim.

The petitioner responded by moving to compel arbitration. The petitioner also counterclaimed in Eastland's action to recover damages in the sum of $1,195,000. Upon the granting of its motion to compel arbitration, the petitioner participated in the preparations for arbitration. Contrary to the conclusion of our dissenting colleague, this response cannot be characterized as mere delay in raising the defense of failure to serve a notice of claim.

On the eve of the arbitration hearing, the petitioner moved to stay arbitration, on the ground that the time to serve a notice of claim had expired. The petitioner's conduct in moving to compel arbitration initially demanded by Eastland and preparing for arbitration, constituted misleading conduct which estopped the petitioner from raising the notice of claim requirement (see Bender v New York City Health & Hosps. Corp., 38 NY2d 662, 668; Town of Smithtown v Jet Paper Stock Corp., 179 AD2d 634).

Since the petitioner secured definitive relief in the form of an order compelling arbitration, our dissenting colleague acknowledges that the petitioner "is in no position to rely upon its failure to enter judgment to defeat Eastland's assertion of judicial estoppel." Indeed, application of the doctrine of judicial estoppel does not require entry of a judgment (see D & L Holdings v Goldman Co., 287 AD2d 65, 72). "Under the doctrine of judicial estoppel, or estoppel against inconsistent positions, a party is precluded from inequitably adopting a position directly contrary to or inconsistent with an earlier assumed position in the same proceeding" (Maas v Cornell Univ., 253 AD2d 1, 7, affd 94 NY2d 87).

Contrary to the conclusion of our dissenting colleague, the position taken by the petitioner in its motion to compel arbitration was plainly inconsistent with its current position that arbitration should be permanently stayed based upon Eastland's failure to serve a notice of claim. Accordingly, the petitioner is estopped from seeking a permanent stay of arbitration based upon the failure to serve a notice of claim.

The petitioner's remaining contentions are without merit or need not be addressed in light of our determination.

ANGIOLILLO, CHAMBERS, and LOTT, JJ., concur.

SPOLZINO, J.P., dissents, and votes to reverse the order and grant the petition, with ...


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