New York Supreme and/or Appellate Courts Appellate Division, First Department
March 13, 2012
IN RE EPISCOPAL HEALTH SERVICES, INC.,
KURRON SHARES OF AMERICA, INC.,
Matter of Matter of Episcopal Health Servs., Inc. v Kurron Shares of Am., Inc.
Decided on March 13, 2012
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.
Tom, J.P., Saxe, Acosta, DeGrasse, Roman, JJ.
Judgment, Supreme Court, New York County (Bernard Fried, J.), entered September 30, 2011, denying the petition pursuant to CPLR article 75 to permanently stay an arbitration and dismissing the proceeding, unanimously affirmed, without costs.
Petitioner sought the stay by arguing that the management agreement between the parties, and hence the arbitration agreement contained therein, was invalid based upon the failure to have the agreement approved by the Commissioner of the New York State Department of Health (10 NYCRR 405.3 [f]). The IAS court correctly rejected this argument, determining that, under the Federal Arbitration Act, which the parties concede applies here: (1) the arbitration clause was severable from the alleged invalid agreement and still enforceable and (2) the issue of the validity of the entire agreement was one for the arbitrator to decide in the first instance (see e.g. Buckeye Check Cashing, Inc. v Cardegna, 546 US 440, 445-446 , Matter of National Union Fire Ins. Co. of Pittsburgh, Pa. v St. Barnabas Community Enters., Inc., 48 AD3d 248, 249 ).
We have considered the parties' remaining arguments and find them unavailing.
THIS CONSTITUTES THE DECISION AND ORDER OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.
ENTERED: MARCH 13, 2012
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