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Sol Nussbaum v. Yehuda Fogel and Transistor Power Technology

SUPREME COURT, APPELLATE TERM, SECOND DEPARTMENT, 9th and 10th JUDICIAL DISTRICTS New York Supreme and/or Appellate Courts


December 7, 2012

SOL NUSSBAUM,
APPELLANT,
v.
YEHUDA FOGEL AND TRANSISTOR POWER TECHNOLOGY, INC.,
RESPONDENTS.

Appeal from an order of the District Court of Suffolk County, First District (Philip Goglas, J.), entered April 19, 2011.

Nussbaum v Fogel

Appellate Term, Second Department

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

This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on December 7, 2012

PRESENT: LaSALLE, J.P., MOLIA and IANNACCI, JJ

The order, insofar as appealed from as limited by the brief, granted defendants' motion to compel arbitration and stay the action.

ORDERED that the order, insofar as appealed from, is reversed, without costs, and defendants' motion to compel arbitration and stay the action is denied.

Plaintiff commenced this action to recover damages for breach of contract. Defendants served an answer, which did not assert a right to arbitrate, and which included a counterclaim. In addition, defendants served discovery demands upon plaintiff. After defendants received plaintiff's responses to their discovery demands, they moved to compel arbitration and stay the action. Defendants' attorney alleged that, pursuant to the discovery demands, he had received a copy of the agreement between the parties and that it contained an arbitration clause, thereby prompting the motion. The District Court granted defendants' motion.

The right to arbitrate is a contractual right which may be modified, waived or abandoned (see Sherrill v Grayco Bldrs., 64 NY2d 261, 272 [1985]). A determination that a party has waived the right to arbitrate requires a finding that the party had engaged in the litigation to such an extent that it had "manifest[ed] an affirmative acceptance of the judicial forum, with whatever advantages it may offer in the particular case, [which] actions are then inconsistent with a later claim that only the arbitral forum is satisfactory" (DeSapio v Kohlmeyer, 35 NY2d 402, 405 [1974]).

Under the circumstances presented here, defendants affirmatively accepted the judicial forum, thereby waiving their right to arbitration, by participating in discovery (see Accessory Corp. v Capco Wai Shing, LLC, 39 AD3d 344 [2007]) and by interposing a counterclaim (see Nishio v Hutton & Co., 168 AD2d 224 [1990]). We note that it was only defendants' attorney who alleged that he personally had not been aware of the arbitration clause until he had received a copy of the agreement pursuant to discovery (see Sullivan v Kisly, 93 AD2d 783 [1983]).

Accordingly, the order, insofar as appealed from, is reversed and defendants' motion to compel arbitration and stay the action is denied.

LaSalle, J.P., Molia and Iannacci, JJ., concur. Decision Date: December 07, 2012

20121207

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