NY CHILD CUSTODY & SUPPORT - NOT SUBJECT TO ARBITRATION

The court feels that delegating this duty to a third party is against public policy.

MW v. RR, 2026 NY Slip Op 50278 - NY Sup. Ct. Rock. Co. 2026:

"Parties should generally be permitted to discontinue an action, provided that the discontinuance is filed within the time parameters set forth in CPLR § 3217. However, there are exceptions, particularly where children are involved, and especially when the safety of children is at issue. To this end, any application to discontinue must be evaluated with due regard to the interests of the children, since the state has a legitimate interest in protecting children from abuse or neglect. See generally Irene D. V. Anthony D., 113 Misc 2d 561 (Family Court New York County 1982).

In this action seeking divorce, with a contested custody dispute, the Court finds an issue of first impression, involving the interplay between CPLR § 3217(a), the rights, duties and obligations of an attorney for the child, a temporary order of protection, the parties' right to contract, and the validity of an arbitration agreement. The principal issue is whether this Court should accept a stipulation of discontinuance, contained in an "Agreement to Arbitrate" filed with this Court. In this Agreement, the parties state that they agree to arbitrate not only issues of support, maintenance and equitable distribution, but also issues of custody and visitation. The Court appointed attorney for the child ("AFC") was not a signatory to the arbitration agreement when there is a temporary order of protection in effect protecting the child, and the AFC and the Plaintiff both object to the discontinuance.

For the reasons that follow in this Decision and Order, this Court finds that: (1) because of the Court's function as parens patriae in contested custody matters, (2) because of the existence of a temporary order of protection in favor of the child, and (3) because the attorney for the child objects to the discontinuance, discontinuance of this action should not be permitted even though the parties agreed to same. Additionally, the Court finds that the stipulation does not comply with CPLR §3717.

PRELIMINARY STATEMENT

On October 3, 2025, this Court issued an Order (hereinafter referred to as the "October 2025 Order") which provided, inter alia, that:

WHEREAS, the parties entered into an arbitration agreement dated September 12, 2025, that included a stipulation discontinuing the instant action; and

WHEREAS, the Attorney for the Child was not a signatory of said agreement; and

WHEREAS, an issue as to the validity of the Stipulation of Settlement pursuant to CPLR 3217 has been raised as has the issue of the parties agreeing to arbitrate the issue of Custody and parental access (Goldberg v. Goldberg, 124 AD3d 779) as well as other terms of the agreement; and

IT IS HEREBY ORDERED that all parties and the Attorney for the Child shall submit briefs on the issue of the validity of the agreement simultaneously on October 17, 2025 at 5:00 p.m.

BACKGROUND

This instant matter has a substantial litigation history, much of which will not be repeated herein. However, as for relevant background, the parties were married on June 13, 2020. There is one child of this marriage, to wit: Z., born xx/xx/xxxx. The instant action for divorce and ancillary relief was commenced on February 10, 2023 by the filing of a Summons and Verified Complaint with the Rockland County Clerk on February 10, 2023. The Defendant interposed a Verified Answer on March 3, 2023. A Preliminary Conference was held in this matter on April 4, 2023.

On April 15, 2025, an Administrative Order was issued by the Hon. James P. Murphy, J.S.C., D.C.A.J., assigning the undersigned Justice to hear and determine this matter. On April 28, 2025, this Court issued an Order Appointing Attorney for the Child. On April 28, 2025, this Court issued a Temporary Order of Protection on behalf of the child.^[1] On September 12, 2025, the parties executed the subject Arbitration Agreement ("Agreement") filed with the Court on September 22, 2025. On January 7, 2026 this Court issued a Decision and Order (hereinafter referred to as the "January 2026 Order")^[2] which, inter alia and in sum and substance, denied the Defendant's application seeking the disqualification of the AFC and denied the Defendant's application seeking the appointment of a new AFC. The instant Decision and Order with respect to the October 2025 Order was held in abeyance pending the January 2026 Order.

THE PARTIES' CONTENTIONS

Defendant's Contentions:

The Defendant asserts that a stipulation of discontinuance executed by the parties is binding and terminates the jurisdiction of the Court. She argues that the AFC, while she is the advocate for the child, she is not a procedural party and her signature is not required to effectuate a stipulation of discontinuance. The Defendant alleges that the Court lacks jurisdiction over the instant custody matter following the execution of a valid stipulation of discontinuance, and the parties have a constitutional right to determine the best interests of the child. The Defendant argues that stipulation of discontinuance is binding and enforceable, and that judicial resources should not be expended on matters which have been voluntarily discontinued. The Defendant alleges that the parties freely chose the Rabbi, that there was no fraud, collusion, mistake or accident, especially where the Plaintiff induced the execution of the Agreement. The Defendant alleges that the Agreement, which resolved all issues, included a stipulation of discontinuance, and that the Agreement is signed and notarized by the parties after consultation with counsel of their own choosing.

The Defendant maintains that a stipulation of discontinuance is effective even if it is contained within an agreement signed by the parties. The Defendant alleges that the stipulation of discontinuance is valid and enforceable notwithstanding the validity of the other provisions in the agreement. The Defendant alleges that in the Agreement, the parties included a severability clause which could be used to enforce the remainder of the Agreement. The Defendant alleges that even if the arbitration provision in the Agreement is deemed nonbinding and unenforceable, the severability clause ensures that the stipulation of discontinuance remains in effect. The Defendant argues that allowing a party to challenge the stipulation of discontinuance based on whether the child custody arbitration portion of the agreement would undermine the severability clause to which the parties agreed.

The Defendant further argues that CPLR § 3217(a)(2) applies even when a divorce action in Supreme Court involves child custody matters. The Defendant asserts that the absoluteness of a discontinuance under this section applies in all circumstances. The Defendant claims that the stipulation of discontinuance does not purport to alter or extinguish any independent legal rights of the child. The Defendant argues that there are very limited exceptions to the termination of jurisdiction following a stipulation of discontinuance, such as a Family Court Act Article 10 proceedings. He maintains that in the event that the Court determines that approval to discontinue is required after a voluntary discontinuance, then a formal motion would be required, which would, ostensibly, upend established practice of voluntary discontinuance(s) in matters involving child custody.

The Defendant alleges that the AFC does not represent a party to the divorce. She argues that CPLR § 3217(a)(2) requires that the stipulation of discontinuance be signed by the "attorneys of record for all parties", and the term "parties" refers to the individuals named in the proceeding or have legal standing to assert or defend claims. The Defendant argues that requiring an AFC to sign stipulation(s) of discontinuance would improperly elevate their role beyond statutory or ethical bounds, and alleges that it would give the AFC "unprecedented power" over a personal decision. The Defendant alleges that CPLR § 3217(a)(2) permits a voluntary discontinuance before the matter is submitted to the court or jury, and the matter has not been submitted to the court or jury in this instance. The Defendant finally argues that the parties have a right to discontinue this action and pursue alternative dispute resolution methods.

As to the Court's role and power over the parties' desire to arbitrate, the Defendant argues that while courts have held that their role as parens patriae must not be usurped, such authority extends where the conformation of an arbitration award is disputed, and that the courts cannot stop parties from engaging in alternative dispute resolution methods if they so wish (see Defendant's Brief, pages 14-15). While the Court initially agrees with the generalized notion that courts cannot stop parties from seeking alternative dispute resolution, the Court parts ways with the Defendant based upon the provisions of the Agreement after a review of same.

Plaintiff's Opposition:

The Plaintiff alleges that the Defendant is, in effect, attempting to discontinue this action so that she can immediately thereafter file an action in New York County where her family rents an apartment. The Plaintiff claims that in September 2025, a Rabbi was contacted to assist the parties in resolving their contested issues. The Plaintiff maintains that the Rabbi thereupon presented the parties with the Agreement. The Plaintiff alleges that the Defendant executed the Agreement and filed same on September 22, 2025 alleging that the divorce action was discontinued, but the Plaintiff thereupon objected to the discontinuance. He alleges that the Agreement cannot serve as a stipulation of discontinuance because it was not signed by the attorneys of record in this action. The Plaintiff alleges counsel for the parties did not sign the Agreement, nor did counsel for the parties sign a stipulation of discontinuance. The Plaintiff argues that the rule that counsel must sign any stipulation of discontinuance is not discretionary.

The Plaintiff also argues that agreements to arbitrate custody issues are invalid in New York, which is the state with jurisdiction in this matter. The Plaintiff argues that even if the Agreement served to discontinue the action with respect to the financial issues, it cannot discontinue the action concerning the custody issues because custody issues are not subject to arbitration in New York. The Plaintiff claims that it is irrelevant that New Jersey permits arbitration of custody issues because New Jersey does not have jurisdiction over custody of the child. The Plaintiff alleges that the child has resided in the State of New York for her entire life.

Attorney for the Child's Opposition:

The AFC alleges that once an action has commenced and advanced, CPLR § 3217(b) requires court approval, and that discontinuance is not a matter of right, but lies within the discretion of the Court. The AFC alleges that in family law matters, especially ones involving custody, allegations of abuse, and visitation, discontinuance is not a matter of right, but it lies within the discretion of the Court to protect the best interests of the child. The AFC notes that both she and the Plaintiff object to the discontinuance. The AFC alleges that CPLR § 3217(a) permits discontinuance without an order of the Court, but only prior to issue being joined or, in limited circumstances, where all parties of record consent in writing. The AFC alleges that she must be afforded an opportunity to be heard before a proceeding affecting the child's welfare be discontinued.

The AFC also claims that she is not a signatory to the Agreement and that she did not have an opportunity to review the Agreement prior to the signing thereof. The AFC alleges that the Court must act as parens patraie to do what is best for the child. The AFC argues that a discontinuance would "disintegrate the very protections the Court has already put in place to ensure the child's safety". The AFC alleges that there is an active temporary order of protection in place in her client's favor and the AFC continues to serve by court appointment, reinforcing the need for continued judicial supervision. The AFC maintains that the child's welfare is at issue and the discontinuance would remove safeguards put in place by the Court. The AFC alleges that the Defendant's own filings reinforce why discontinuance would endanger the child's safety, as one day before the signing of the Agreement, the Defendant moved to restore Family Court's order requiring supervision for the Plaintiff. The AFC argues that the Defendant's own conduct in this action underscores that the child's welfare is deeply troubled and "at escalating risk".

DISCUSSION AND ANALYSIS

DISCONTINUANCE

The Agreement, at Paragraph "44", provides:

44. The parties expressly acknowledge that they understand and agree that arbitration before the Arbitrator shall be the exclusive forum for the adjudication of the above listed disputes and as set forth above by agreeing to arbitration they are waiving their rights to other resolution processes, such as court action or other arbitration, and that the parties shall be precluded from bringing suit in court with respect to the disputes listed above, except as to enforce this Agreement. This provision shall be a complete defense to any suit, action or proceeding instituted before any court or other body with respect to the above listed disputes, provided, however, that, notwithstanding this provision, any party may seek interim judicial relief in aid of arbitration, to prevent a violation of this Agreement pending arbitration, or to enforce any arbitration award. If either party violates this provision, the other party shall be entitled to dismissal or injunctive relief regarding such court action or arbitration and recovery of all costs and disbursements, losses, and attorneys' fees related to such other proceeding, if such claim is dismissed, to the extent permitted by law. The Parties further agree to immediately discontinue any and all court actions, if any, relating to the matters discussed in Paragraph 2 of this Agreement and the parties shall immediately execute all documents necessary to complete the foregoing. The parties agree that the court case, if any, is hereby discontinued and all prior orders, decisions, findings and stipulations, if any, no longer have effect. The invalidity of any provision of this Agreement shall not affect the validity of any other provision of this Agreement. In the event that a court of competent jurisdiction determines that any provisions of this Agreement fail to comply with the legal requirements for the compulsory arbitration of the disputes listed above, it is the parties' intention that the court shall equitably reform such provisions to the extent necessary (and only to the extent necessary) to conform the offending provisions to such legal requirements.

(emphasis added).

As a threshold matter, both the Plaintiff and Defendant aver that CPLR § 3217(a) applies. The AFC avers that CPLR § 3217(b) applies. The parties and the AFC are effectively at odds as to the operative provision of CPLR § 3217. The Court therefore finds that it must, first, address the operative provision of CPLR § 3217. CPLR § 3217(a)(2) provides:

(a) Without an order. Any party asserting a claim may discontinue it without an order

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2. by filing with the clerk of the court before the case has been submitted to the court or jury a stipulation in writing signed by the attorneys of record for all parties, provided that no party is an infant, incompetent person for whom a committee has been appointed or conservatee and no person not a party has an interest in the subject matter of the action; or

CPLR § 3217(b) provides:

(b) By Order of Court. Except as provided in subdivision (a), an action shall not be discontinued by a party asserting a claim except upon order of the court and upon terms and conditions, as the court deems proper. After the cause has been submitted to the court or jury to determine the facts the court may not order an action discontinued except upon the stipulation of all parties appearing in the action.

Initially speaking, the AFC argues that since "... issue has long since been joined, discovery completed, witnesses sworn, and the Court has issued material orders ..." (see AFC Brief, page "3"), CPLR § 3217(b) applies.

The Court disagrees with the AFC on an initial basis; the Court finds CPLR § 3217(b) inapposite in the first instance. In Emigrant Bank v. Salimano, the court held that

"... [t]he third stage of a litigation, as relevant to a discontinuance, is the period after the case has been submitted to the court or the jury for a determination of the facts. Once an action or a proceeding has advanced to the point of deliberation and fact-finding, there can be no discontinuance except by leave of court upon such terms and conditions as the court deems proper and a stipulation of all parties appearing in the action ... [t]hus, CPLR § 3217, viewed in its entirety, operates like a seesaw, allowing for discontinuances by mere unilateral notice at the earliest stage of a litigation, while imposing incrementally greater requirements upon the party seeking the discontinuance the farther the litigation progresses.

The statute is easily applied in cases that go to trial. In such instances, the submission of the case to a jury for its findings of fact, or the submission of the case to a court during a bench trial, operates as a bright line separating the discontinuance that may be sought using the pre-deliberative mechanisms of CPLR §§ 3217(a)(2) and (b) from the mechanism of CPLR § 3217(b) which attaches once the deliberative phase begins ..."

Emigrant Bank v. Solimano, 209 AD3d 153 (2d Dept. 2022). While testimony has, in fact, been taken, the trial was never completed and submitted to the Court for a determination of the facts (Emigrant Bank, supra). This matter has not advanced to the point of deliberation and fact-finding. While testimony was taken in Rockland County prior to the assignment to the undersigned, this Court has not, at this juncture, declared a mistrial. It is of no moment that discovery may or may not have been completed, and it is of no moment that "material" orders may have been issued. Matrimonial courts routinely issue material orders pendente lite; but a material pendente lite order does not mean that the case was submitted to the undersigned for fact-finding and deliberation on a final basis. Therefore, the Court finds that, at this point, CPLR § 3217(a) is operative, unless, of course, the Court finds that the parties cannot discontinue pursuant to CPLR § 3217(a). CPLR § 3217(a)(2) clearly provides that a party may discontinue without a court order:

"... by filing with the clerk of the court before the case has been submitted to the court or jury a stipulation in writing signed by the attorneys of record for all parties, provided that no party is an infant ... no person not a party has an interest in the subject matter of the action..."

(emphasis added).

The Defendant argues to the Court that once a stipulation of discontinuance is signed by the parties and filed with the Court, the Court is divested of jurisdiction and it terminates the underlying divorce proceeding. The Court disagrees under the circumstances of this case.

As an initial matter, the Agreement is in derogation of CPLR § 3217(a)(2) inasmuch as it was neither signed by the Plaintiff's counsel nor the Defendant's counsel. The text of CPLR § 3217(a)(2) makes clear that the signatures of counsel are required, and the Agreement is devoid of the signature(s) of counsel for the parties. The text of the statute could have provided that any stipulation of discontinuance be signed just by the parties. It does not. Inasmuch as CPLR § 3217(a)(2) specifically requires the signatures of the attorneys of record for all parties, and inasmuch as the Agreement does not contain the signature of the attorneys of record for all parties, the Agreement fails to comply with CPLR § 3217(a)(2).

The Court also disagrees with the AFC's position that the Agreement which seeks to discontinue the action is invalid because she was not a signatory. A child is not a party to a matrimonial action. The parties to a matrimonial action are the parents. While the Court certainly has to consider, in a contested custody matter, the express wishes of the children as a factor (Silverman v. Silverman, 186 AD3d 123 [2d Dept. 2020]), their wishes are not dispositive. Whether the Court can choose not to honor a stipulation of discontinuance which discontinues a divorce action is a separate issue. In this instance, the Court declines to accept the Agreement as a stipulation of discontinuance.

CPLR § 3217(a)(2) provides this Court with the authority to decline to permit the discontinuance by stipulation. It reads "... provided that ... no person not a party has an interest in the subject matter of the action..." (emphasis added). While a child may not be a party to the action, a child is a person. See generally Matter of Bennett v. Jeffreys, 40 NY2d 543 (1976). The Second Department has made it clear that children have a real and substantial interest in the outcome of contested custody litigation, writing, in part:

"... [s]ubstantively, and more importantly, it cannot be denied that a ... child has a real and substantial interest in the outcome of litigation between the parents ... [i]t seems self-evident that the child is the person most affected by a judicial determination on the fundamental issues of responsibility for, and the environment of, the child's upbringing. To rule otherwise would virtually relegate the child to the status of property, without rights separate and apart from those of the child's parents...."

Matter of Newton v. McFarlane, 174 AD3d 67 (2d Dept. 2019). The Second Department characterized the child's interest in the outcome as "vital". Matter of Newton, 174 AD3d at 75.

A party can argue that an AFC has no right to object to litigants voluntarily electing to discontinue their divorce action. That argument is certainly well-taken. In JM v. RM when discussing the role of an AFC:

"... [i]t is worth summarizing: the AFC is tasked with the weighty responsibilities of zealously advocating for his or her client ... taking an active role in the proceedings ... and consulting and counseling the client ... [i]n addition, the AFC must subject themselves to the ethical requirements applicable to all lawyers ... including the rules of good lawyering and professional responsibility ..."

JM v. RM, 77 Misc 3d 506 (Supreme Court Nassau County 2022). The AFC, once assigned by the Court, is an attorney in the matter who must represent his or her client. She has to advocate for and counsel her client, she has to take an active role in the proceedings, and she must comport herself with ethical obligations imposed upon counsel. The AFC's role in cases is much deeper than just a functional one in representing a client. AFC's develop relationships with their clients and must advocate for them without prejudicing their rights. See generally M.M. v. K.M., 62 Misc 3d 487 (Supreme Court Nassau County 2018).

The Court finds that while the AFC's position on behalf of her client is not dispositive on whether or not parties in a contested custody matter may discontinue an action, her position on behalf of his or her client is entitled to weight and consideration. The degree of weight and consideration depends upon a multiplicity of factors, such as the age and maturity of the child, but also should depend, to some degree, on whether or not there are allegations of domestic violence and/or abuse or neglect in a specific case. Such a logical conclusion is in-line with the ethical rules promulgated to counsel and the Second Department's reasoning in Matter of Newton v. McFarlane, supra. That weight and consideration, however, requires a fact-specific analysis.

In this instance, the child has a clear interest in the outcome of the custody litigation between their parents. The child, through the AFC, objects to the discontinuance of the action. The Court finds that in this contested custody matter where the AFC, on behalf of her client, objects to the discontinuance, the parties cannot simply discontinue as a matter of right, but, rather, they need permission of the Court to discontinue pursuant to CPLR § 3217(b).

In furtherance of the above, not all actions can fit the bill of a "one size fits all" motto. Matrimonial matters are unique (L.F. v. M.F., 78 Misc 3d 810 [Supreme Court Nassau County 2023]; Marcillo v. Hennessy, 46 Misc 3d 1225(A) [Supreme Court New York County 2015]). The Court has a duty to act as parens patriae. (C.M. v. E.M., 82 Misc 3d 198 [Supreme Court Nassau County 2023]; G.P. v. S.S., 78 Misc 3d 1221(A)[Supreme Court Nassau County 2023]; T.H. v. G.M., 81 Misc 3d 1205(A)[Supreme Court Nassau County 2023]). Where custody and visitation are in issue, the court's role as parens patriae must not be usurped Clarence M. V. Martina M., 68 Misc 3d 457 [Supreme Court Kings County 2020]). While children of divorce are still children and the parents are still the parents, it is the court's role in parens patriae to protect the child. Clarence M., 68 Misc 3d at 469.

This Court is charged with protecting children that are the subject of litigation before it and making determinations of what is in the best interests of the child under the totality of the circumstances (Paige v. Paige, 202 AD3d 794 [2d Dept. 2022]). When the Court undertakes its role as parens patriae, it must put itself "... in the position of a wise, affectionate and careful parent..." (Finlay v. Finlay, 240 NY 429 [1925]).

The Court notes that while appointed by the Court, the AFC does not assert any judicial supervision of the child, she represents the child. The only body exercising judicial supervision over this child is the undersigned Justice. The Court finds that the existence of the Temporary Order of Protection, in and of itself, is a basis for the Court to decline to permit the discontinuance of this action at this time. The Temporary Order of Protection is in favor of only the child.^[3] The Temporary Order of Protection is a "general refrain" in favor of the child against the Plaintiff, and directs the Plaintiff to "... refrain from covering the subject child's throat, mouth, or nose that creates an unreasonable risk to the health, safety, or welfare ..." of the subject child. The Court has yet to have a hearing on the underlying petition, so it has yet to determine whether a family offense has been committed. Without an adjudication on the merits of that petition, the Court declines, at this time, to permit the discontinuance of this action. The Court has also considered the fact that the Defendant herself, one day prior to the execution of the Agreement, filed an emergency application with the Court seeking to restore a prior order of the Rockland County Family Court requiring supervised access for the Plaintiff with the child. In that filing, she characterizes the Plaintiff's conduct as "reckless", represents that the child "screams and cries when she goes" to the Plaintiff, refuses to communicate with her about the child's health and mental issues, and characterizes the Plaintiff's conduct as "intentional or grossly negligent". She also claims that the Plaintiff has a "disregard for his child's safety" and that she left the Plaintiff after his "repeated threats" and "domestic violence". She also alleges that the Plaintiff obstructed the child's breathing.

Based upon those sworn allegations, it would be irresponsible and an abrogation of the Court's duty as parens patriae to permit the discontinuance of this action at this juncture. The Court is compelled to find that a discontinuance of this proceeding, while perhaps truly desired by the Plaintiff and Defendant, is not in the best interest of the child, or appropriate to insure the child's protection. Accordingly it is hereby:

ORDERED, that the stipulation of discontinuance, contained within the Arbitration Agreement, be and the same is hereby REJECTED and shall be of no force and effect.

AGREEMENT TO ARBITRATE CUSTODY AND ACCESS

The Agreement, at Paragraph "2", provides:

2. The parties agree to arbitrate certain disputes as provided in this Agreement as follows: All issues that could be raised and adjudicated in court, including pendente lite and temporary and permanent issues, so that matters in arbitration include but are not limited to custody (legal and physical), parenting time, child support and the allocation of child-related expenses, spousal support, division of assets and allocation of debt. These and all other matters between the parties arising out of their marriage and divorce shall be subject to the jurisdiction and determination by the Arbitrator pursuant to the terms and procedures of this Agreement. The Arbitrator shall determine whether an issue or dispute is within the scope of the Arbitrator's jurisdiction.

(emphasis added).

Disputes concerning child custody and visitation are not subject to arbitration, as the Court's role as parens patriae must not be usurped (Goldberg v. Goldberg, 124 AD3d 779 [2d Dept. 2015]; Weisz v. Weisz, 123 AD3d 917 [2d Dept. 2014]; Hirsch v. Hirsch, 4 AD3d 451 [2d Dept. 2004]; Matsui v. Matsui, 200 AD3d 774 [2d Dept. 2021]).

The parties executed the Agreement which contains the following provisions:

4. The Arbitrator may issue a temporary or partial decision or injunction.

5. Judgment on the award rendered by the Arbitrator may be entered in any court having jurisdiction thereof.

* * *

10. The Arbitrator shall retain jurisdiction over this matter after publishing its award, and shall be authorized to modify the award for any reason they deem proper.

* * *

19. In any arbitration proceeding involving custody or parenting time issues, the parties shall have a record made of the arbitration proceeding as to those issues. Such record shall include: (i) a record of all documentary evidence; and (ii) all testimony shall be recorded verbatim. A record of testimony may be made by one of the following: (i) certified shorthand reporter; (ii) electronic recording; or (iii) audio or video recording. The recording of the proceeding by any of the means listed above shall be at the cost of the parties and absent agreement of the parties, the Arbitrator shall decide the proper allocation of the costs of the record.

* * *

25. In any proceeding involving custody, parenting time or child support issues, parties shall require the Arbitrator to make findings of fact and conclusions of law with respect to child-custody, parenting-time, or child support issues. As to those issues, the Arbitrator shall state in writing or otherwise record findings of fact and conclusions of law with a focus on the best-interests standard ...

Here, a review of the Agreement, both in toto and the salient paragraphs above clearly indicate to the Court that the parties contracted to provide the Arbitrator with the authority to determine issues concerning custody and parental access inasmuch as those issues are squarely in dispute in this case and inasmuch as the Agreement provides that the parties agreed to arbitrate the issues of custody and parenting time (see Agreement, Paragraph "2"). While parties to a contract are basically free to make whatever agreement they wish, even if the agreement appears to be unwise to a third party, they may not do so in the presence of a violation of law or transgression of a strong public policy. Rowe v. Great Atlantic & Pacific Tea Co., 46 NY2d 62 (1978). The Court finds that delegating the decision on the issues of custody and visitation to an Arbitrator violates public policy inasmuch as it infringes upon the Court's role as parens patriae.^[4] Therefore, it is hereby:

ORDERED, that so much of the Agreement which purports to delegate to an Arbitrator decision-making over the issues of custody and visitation be and the same are hereby deemed NULL and VOID.

Any other relief requested not specifically addressed herewith is hereby DENIED.

This constitutes the Decision and Order of this Court.

[1] The Temporary Order of Protection remains in effect and on February 5, 2026, was extended through and included August 4, 2026.

[2] On Motion Sequence No.: 035.

[3] Had the Temporary Order of Protection been, for instance, in favor of only one of the parties against the other, and had there been no children of this marriage, the Court may have reached a different result.

[4] While not necessarily before the Court on these submissions, the Court also finds problematic the provision of Paragraph "2" of the Agreement which provides that the parties are to arbitrate "... [a]ll issues that could be raised and adjudicated in court ..." The phrase "all issues" certainly includes the adjudication on the temporary order of protection and whether or not a family offense has been committed. The Court finds that this provision, to the extent it purports to be an agreement to adjudicate the temporary order of protection, is invalid as a transgression of public policy. The Court does not finds that whether or not a family offense has been committed and whether or not a temporary or final order of protection should be issues is a dispute subject to arbitration."

NEW ADR APPOINTMENT

I was recently appointed to be a panel member of the Alternative Dispute Resolution (ADR) Advisory Council for the Eastern District of New York. The mission of the ADR program is to provide federal litigants with an opportunity to resolve their disputes expeditiously through court mediation and arbitration.  

NO FAULT BENEFITS CLAIM - LACK OF MEDICAL NECESSITY?

I have arbitrated many of these disputes in Nassau County District Court. This case is from Kings County Civil Court.

Kim v. Allstate Ins. Co., 2022 NY Slip Op 50700 - NY: City Court, Civil Court 2022:

"Plaintiff, James J. Kim, a licensed acupuncturist, commenced this no-fault action against defendant, Allstate Insurance Company ("Allstate"), following Allstate's denial of plaintiff's claims for no-fault benefits for acupuncture services provided from February 9, 2015, through December 7, 2015. Plaintiff's assignor, Rick Greengus, was injured in an accident on December 7, 2013. Allstate denied the claims based upon the report of an Independent Medical Examination ("IME") conducted by Dr. Thomas McLaughlin on March 13, 2014. At trial, Allstate defended their denials based on lack of medical necessity by solely relying upon the IME report and live testimony of Dr. McLaughlin. The plaintiff rebutted the denial through the live testimony of Dr. Kim, as well as by cross-examining Dr. McLaughlin about the contents of his IME report. Each party also submitted trial packets for the court's consideration which were introduced into evidence on consent and without objection.

Dr. McLaughlin examined Mr. Greengus on March 13, 2014. At that time, Mr. Greengus had been receiving acupuncture services for approximately three months. Mr. Greengus complained of pain in his left shoulder and neck. Dr. McLaughlin referred to those complaints in his report as "non-descript" but did not specify what, if any, questions he asked that were designed to elicit a detailed description of Mr. Greengus' symptoms. The report notes that Mr. Greengus indicated that his symptoms had not improved with care.

In his report, Dr. McLaughlin included a section on acupuncture treatment under the heading "Traditional Chinese Medicine (TCM) Discussion." In relevant part, Dr. McLaughlin concludes:

Combined with a full history and inspection the TCM practitioner will also study the quality of the patient's pulse and tongue in order to determine not only if pathology is present and the type it is, but in order to devise a treatment protocol. Traditional Chinese Medicine, acupuncture being one facet of it, is then employed in order to rebalance the body and aid in the facilitation of health and wellness. The treatments are administered by applying needles, in the case of acupuncture, to acupoints along channels that course throughout the body and promote a physiologic response. Nine of the fourteen body channels used are named after organ systems in the body. With respect to Mr. Rick Greengus's pulse, which has a rate of 64bpm, his tongue, and the channels are unremarkable with regard to a Qi and/or blood stagnation disorder according to the principles of TCM.

Based upon his examination findings, Dr. McLaughlin concluded that no further acupuncture care was necessary because Mr. Greengus' examination did not reveal any objective findings of dysfunction or discomfort. His trial testimony echoed those findings to a certain extent. He opined that standard practice for an acupuncturist would be to evaluate the patient by taking a history and checking certain relevant factors such as pulse, the condition of the tongue and blood stagnation. Dr. McLaughlin testified that periodic evaluation or revaluation is warranted when there is an ongoing course of treatment in order to determine whether the medical provider needs to adjust the treatment being provided (Tr at 15, 17).

The plaintiff rebutted Dr. McLaughlin's findings through the testimony of Dr. Kim the provider who opined that continued acupuncture treatment was medically necessary due to continued neck pain, shoulder pain and lower back pain. Dr, Kim also referenced the same traditional Chinese Medicine diagnosis referenced in Dr. McLaughlin's IME report, i.e., blood stagnation and tongue diagnosis. Dr Kim also testified that he performed through evaluations of Mr. Greengus prior to each treatment session.

After considering the testimony and evidence presented at this trial, I find that the plaintiff should have judgment in its favor. The defense being asserted by the defendant insurer is commonly known as a "IME cut-off". The court finds this terminology, although widely used in no-fault litigation, to be imprecise and arguably misleading. To the defendant, IME cut-off is the sole proper basis for the denials. The assertion is that after March 14, 2014, based upon the findings of Dr. McLaughlin after the IME, Mr. Greengus was perfectly healthy and no longer required any further treatment, specifically acupuncture and chiropractic related. The defendant would have the court believe that the injured party's health and condition is frozen in time as of the date of the IME and, absent evidence from the plaintiff that rebuts the findings of the IME, the plaintiff has failed to meet its burden for recovery of no-fault benefits. This misstates the purpose and/or probative value of an IME.

An IME is not some inflexible permanent fixture that cannot be altered or changed. An IME is merely a snapshot of the injured party's medical condition as of the date of the IME. The opinion of the doctor conducting an IME and issuing a report that no further treatment or testing is needed is nothing more than an expert's prediction that the claimant has fully recovered or received the maximum therapeutic benefit from the treatment and does not presently need any additional treatment.

An IME cut-off is not a complete defense to the action. While an IME can demonstrate a lack of medical necessity for future treatment, it does not, by itself, conclusively demonstrate that any future treatment would not be medically necessary. Instead, the IME merely shifts the burden to the plaintiff to demonstrate, by a preponderance of the credible evidence, that the treatment at issue was medically necessary (see Amato v State Farm Ins. Co., 40 Misc 3d 129(A) [App Term 2d Dept 2013], Unitrin Advantage Insurance Company v Lake Chiropractic, PLLC, 64 Misc 3d 1201[A] [New York County Civ Ct 2019]; Amato v State Farm Ins. Co., 30 Misc 3d 238, 242 [NY Dist Ct 2013]; All-In-One Med. Care, P.C. v Govt. Employees Ins. Co., 43 Misc 3d 726, 734 [NY Dist Ct 2014]).

The defendant maintains that by not recognizing the IME as a fixed cut-off date for no-fault benefits deemed not medically necessary, the Court is allowing for the reimbursements of benefits indefinitely so long as the provider self-certifies that the treatment is providing medical benefits to the injured party. This is not the Court's intention nor is it the practical result. Again, the only effect of the pre-claim IME on this litigation was to shift the burden to the plaintiff-provider to show that the treatment was medically necessary. If the defendant subsequently felt the need to try to further limit the scope of future treatment, they could have requested a supplemental IME, an EUO of the provider, or they could have had their expert conduct a peer review of all the post-IME treatment records. Instead, the defendant just denied the bills and relied on a single pre-treatment IME. The defendant is entitled to rely on that single IME if they wish, but the effect is no different than any other denial based on the alleged lack of medical necessity. It simply shifts the burden to the plaintiff, who can then rebut with credible testimony and shift the burden back to the defendant insurer.

That is exactly what happened here. Dr. Kim credibly testified that he conducted an evaluation of the patient each time the patient came to see him before providing any treatment (Tr at 55, 60). This testimony is bolstered by the records in evidence of Dr. Kim's treatment of the patient prior to the IME — which each contain notes regarding the current diagnosis of the patient and notes of what was evaluated. (Plaintiff's Exh. D, pages 182-187, 332-356, 422-427, 451-456). The court credits the testimony of Dr. Kim that further medical treatment was necessary for the injured assignor, over the testimony of Dr. McLaughlin, that it was not medically necessary. The court finds that Dr. Kim properly performed additional evaluations of the patient, consistent with the very same standards of traditional Chinese Medicine referenced in Dr McLaughlin's report, and Dr. Kim was in possession of both objective and subjective findings which correlated to support the conclusion that continued treatment was medically necessary. Dr. Kim possessed more information and was in a better position to make the determination than Dr. McLaughlin. I find that Dr. Kim's testimony is sufficient to demonstrate, by a preponderance of the credible evidence, that the treatments at issue were medically necessary."

ADR AND THE NY COURTS

The NYS Unified Court System is committed to promoting the appropriate use of mediation and other forms of alternative dispute resolution (ADR) to resolve disputes and conflicts peacefully. For more information, see Alternative Dispute Resolution in the CourtsA

ARBITRATION OF CONSTRUCTION DISPUTE AND MECHANICS LIEN

Tozzi v. McLoughlin Constr. Corp., Date filed: 2022-03-24, Court: Supreme Court, Suffolk, Judge: Justice Christopher Modelewski, Case Number: 615869/2021:

"This is an action sounding in claims for breach of contract, conversion, accounting, fraud, fraud in the inducement, and willful exaggeration of a mechanic’s lien. Plaintiff commenced this action by the filing of a summons and complaint on August 18, 2021. The complaint alleges that defendant McLoughlin Construction Corp. (“MCC”) breached a construction contract for the improvement of real property located at 77 Dune Road, Bridgehampton, New York (the “subject property”). The complaint alleges that plaintiff is a resident of the State of Wyoming and is also the owner of the subject property. The complaint further alleges that plaintiff acquired the subject property “with the intent of demolishing the existing home and constructing a new beach front summer home” (the “project”). The complaint further alleges that MCC and defendant James McLoughlin (“McLoughlin”) made certain representations regarding their skills, expertise, and experience in high-end home building to induce plaintiff to enter into a contract with MCC for the construction of the Project. The complaint further alleges that plaintiff and MCC entered into a contract dated August 2, 2018 for the improvement of the subject property by the construction of a two-story single-family residence (the “contract”). By submissions filed on September 29, 2021, MCC and McLoughlin filed a verified answer, third-party complaint, and moved to compel plaintiff to arbitrate his claims pursuant to §§6.1 and 6.2 of the contract (collectively referred to herein as “the arbitration clause”). MCC and McLoughlin argue that the arbitration clause requires this dispute to be resolved by arbitration pursuant to the American Arbitration Association Construction Industry Arbitration Rules. Plaintiff opposes the motion and argues that the arbitration clause in the contract is unenforceable and void under §399-c of the General Business Law (“GBL 399-c”), that MCC and McLoughlin failed to proceed to mediation, which is a condition precedent to arbitration, and that arbitration should not be compelled because not all claims are arbitrable. MCC and McLoughlin reply.

New York State “has a long and strong public policy favoring arbitration” (Matter of Smith Barney Shearson v. Sacharow, 91 NY2d 39, 49, 666 NYS2d 990 [1997]; see also Matter of Nationwide Gen. Ins. Co. v. Investors Ins. Co. of Am., 37 NY2d 91, 371 NYS2d 463 [1975]). “Any doubts as to whether an issue is arbitrable will be resolved in favor of arbitration” (State of New York v. Philip Morris Inc., 30 Ad3d 26, 813 NYS2d 71 [1st Dept 2006] affd 8 NY3d 574, 838 NYS2d 460 [2007]). CPLR 7501 confers jurisdiction on courts to enforce written arbitration agreements (Crawford v. Merrill Lynch, Pierce, Fenner & Smith, 35 N.Y.2d 291, 299 [1974]; see also Flores v. Lower E. Side Serv. Ctr., Inc., 4 NY3d 363, 370 [2005]). Specifically, a “written agreement to submit any controversy…to arbitration is enforceable without regard to the justiciable character of the controversy and confers jurisdiction on the courts of the state to enforce it and to enter judgment on an award” (CPLR 7501). “Where there is no substantial question whether a valid agreement was made or complied with…the court shall direct the parties to arbitrate” (CPLR 7503; see also Degraw Const. Group, Inc. v. McGowan Builders, Inc., 152 AD3d 567, 58 NYS3d 152 [2d Dept 2017]). The arbitration agreement need not be signed “so long as there is other proof that the parties actually agreed on it” (God’s Battalion of Prayer Pentecostal Church, Inc., v. Miele Associates, LLP, 6 NY3d 371, 374, 812 NYS2d 435 [2006]). On a motion to compel arbitration, it must be determined “in the first instance…whether the parties have agreed to submit their disputes to arbitration and, if so, whether the disputes generally come within the scope of their arbitration agreement” (Matter of Norrtheast & Central Contractors, Inc. v. Quanto Capital, LLC, ___AD3d ___, ___NYS3d ___, 2022 WL 791296, 2022 NY Slip Op 01791 [2d Dept 2022] quoting Revis v. Schwartz, 192 AD3d 127, 140 NYS3d 68 [2d Dept 2020]; see also Degraw Const. Group, Inc. v. McGowan Builders, Inc., supra at 569, 58 NYS3d 152 quoting Sisters of St. John the Baptist, Providence Rest Convent v. Geraghty Constructor, 67 NY2d 997, 998, 502 NYS2d 997 [1986]; Highland HC, LLC v. Scott, 113 AD3d 590, 978 NYS2d 302 [2d Dept 2014]). Indeed, “arbitration is a matter of contract” and an “arbitration clause is a contractual right” (Degraw Const. Group, Inc. v. McGowan Builders, Inc., supra at 569, 58 NYS3d 152). A party to an agreement will not be compelled to arbitrate its dispute with another unless the evidence establishes the parties’ “clear, explicit and unequivocal” agreement to arbitrate (God’s Battalion of Prayer Pentecostal Church, Inc., v. Miele Associates, LLP, 6 NY3d 371, 373, 812 NYS2d 435 [2006]).

In determining the rights and obligations of the parties to a contract, it is well-established that “a written agreement that is complete, clear and unambiguous on its face must be enforced according to the plain meaning of its terms” (Greenfield v. Philles Records 98 NY2d 562, 569, 750 NYS2d 565 [2002]; R/S Assoc. v. N.Y. Job Dev Auth., 98 NY2d 29, 32, 744 NYS2d 358 [2002]). “In construing a contract, one of a court’s goals is to avoid an interpretation that would leave contractual clauses meaningless” (Two Guys from Harrison-N.Y. v. S.F.R. Realty Assoc., 63 NY2d 396, 403, 482 NYS2d 465, 468 [1984]). The aim of the court when interpreting a contract is to arrive at a construction that gives fair meaning to all of its terms and provisions, and to reach a “practical interpretation of the expressions of the parties so that their reasonable expectations will be realized” (see Pellot v. Pellot, 305 AD2d 478, 759 NYS2d 494 [2d Dept 2003]; Gonzalez v. Norrito, 256 AD2d 440, 682 NYS2d 100 [2d Dept 1998]; Joseph v. Creek & Pines, Ltd., 217 AD2d 534, 535, 629 NYS2d 75 [2d Dept], lv denied 89 NY2d 804, 653 NYS2d 543 [1996]; see also Matter of Matco-Norca, Inc., 22 AD3d 495, 802 NYS2d 707 [2d Dept 2005]; Tikotzky v. City of New York, 286 AD2d 493, 729 NYS2d 525 [2d Dept 2001]; Partrick v. Guarniere, 204 AD2d 702, 612 NYS2d 630 [2d Dept], lv denied 84 NY2d 810, 621 NYS2d 519 [1994]). As it is a question of law whether or not a contract is ambiguous (W. W. W. Assoc. v. Giancontieri, 77 NY2d 157, 565 NYS2d 440 [1990]), a court must first determine whether the agreement at issue on its face is reasonably susceptible to more than one interpretation (see Chimart Assoc. v. Paul, 66 NY2d 570, 498 NYS2d 344 [1986]). “If the language of the agreement is free from ambiguity, its meaning may be determined as a matter of law on the basis of the writing alone without resort to extrinsic evidence” (Salerno v. Odoardi, 41 AD3d 574, 575, 838 NYS2d 156 [2d Dept 2007]).

Here, there is no dispute that the contract includes an arbitration clause, which reads, in pertinent part, that

[i]f a dispute arises from or is related to this Agreement or a breach thereof, the parties shall endeavor in good faith to solve the dispute through direct negotiations. The Parties hereto agree in the event of a dispute arising stemming from or relating to this Agreement or a breach thereof, they will submit for resolution their dispute to their named designated private arbitrator…. If a dispute cannot be settled through direct negotiations, the parties agree to endeavor to settle the dispute through mediation administered by a mutually acceptable mediator…. If the dispute is not resolved within 10 days of being submitted to mediation, the parties further agree that the unresolved controversy or claim shall be settled through binding arbitration using the American Arbitration Association Construction Industry Arbitration Rules…. Any arbitration decision and/or award is final and binding and may be enforced in the courts of Suffolk County, New York.

The arbitration clause is clear and unambiguous and no party herein is arguing that the clause contains an ambiguity. Further, the arbitration clause is broadly worded and pertains to all claims arising from or relating to the contract. The Court of Appeals has determined that “an arbitration clause is generally separable from substantive provisions of a contract, so that an agreement to arbitrate is valid even if the substantive provisions of the contract are induced by fraud” (Ferrarella v. Godt, 131 AD3d 563, 566, 15 NYS3d 180 [2d Dept 2015] citing Matter of Weinrott (Carp), 32 NY2d 190, 344 NYS2d 848 [1973]). Thus, as a general rule, the issue of fraud in the inducement should be determined by the arbitrator, except where the arbitration clause specifically excludes fraud in the inducement from the issues to be determined by arbitration” (Anderson St. Realty Corp. v. New Rochelle Revitalization, LLC, 78 AD3d 972, 974, 913 NYS2d 114 [2d Dept 2010] citing GAF Corp. v. Werner, 66 NY2d 97, 105, 495 NYS2d 312 [1985] after remand 115 AD3d 1021 [1986] cert denied 475 US 1083 [1986]). Here, the fraud claims are not specifically excluded from arbitration. Further, fraud claims only affect the validity of the arbitration clause when the fraud relates to the arbitration provision itself. Here, there are no allegations “that the agreement was not the result of an arm’s length negotiation, or that the arbitration clause was inserted into the contract to accomplish a fraudulent scheme” (Ferrarella v. Godt, supra 131 AD3d at 566-67; Anderson St. Realty Corp. v. New Rochelle Revitalization, LLC, supra at 974, 913 NYS2d 114). Based upon the foregoing, the breach of contract, conversion, accounting, and fraud claims are to be determined by the arbitrator. There is no dispute that the mechanic’s lien claim is not arbitrable; such liens falling within the exclusive jurisdiction of the Court (see Lien Law §41). Despite plaintiff’s claims to the contrary, GBL 399-c (1)(a) does not apply herein. That statute defines a consumer as a natural person residing in New York. Plaintiff admits in his complaint that he is a resident and citizen of the state of Wyoming. Therefore, he cannot be considered a consumer subject to the provisions of GBL 399-c, which prohibits arbitration clauses in contracts for the sale or purchase of consumer goods. Due to this finding that the prohibitions of GBL 399-c do not apply, the Court need not reach the issue of whether GBL 399-c is preempted by the Federal Arbitration Act (9 USC §1 et seq.). Further, the argument that MCC was required to engage in mediation as a condition precedent to arbitration and that MCC’s failure to mediate precludes it from compelling arbitration are not issues for this Court to decide. Indeed, the issue of whether plaintiff and/or MCC waived mediation or whether MCC waived arbitration, are procedural questions for the arbitrator to decide under the subject arbitration clause (see Matter of Barbalious v. Exterior Wall Sys., Inc., 14 AD3d 508, 787 NYS2d 715 [2d Dept 2005]; Chain Sales Mktg., Inc. v. Roach, 65 Misc3d 1232 (A), 119 NYS3d 829 [Sup. Ct. Suffolk County 2019]; 33 Calvert Props. LLC v. AMEC LLC, 70 Misc.3d 295, 310, 135 NYS3d 767, 779 (Sup. Ct. Westchester County 2020]). The Court has considered the remaining arguments of plaintiff and finds that they lack merit.

Accordingly, the motion by defendants/third-party plaintiffs McLoughlin Construction Corp. and James McLoughlin is granted except as to the mechanic’s lien claim."

WHEN MEDIATION IS A CONTRACTUAL PREREQUISITE

ALLIED CONSTR. CORP. v. PARSONS TRANSPORATION GROUP OF NY, INC., 2022 NY Slip Op 50126 - NY: Supreme Court 2022:

"This action arises from a dispute over payment for construction-management services provided by plaintiff, Allied Construction Corp., to defendant Parsons Transportation Group of New York in connection with a public-works project owned by defendant New York City Transit Authority. Plaintiff contends that Parsons failed to pay approximately $400,000 that Parsons owed to plaintiff under the terms of their construction agreement. Plaintiff brought this action to foreclose on several mechanic's liens securing payment from Parsons and to collect on a payment bond guaranteed by defendants Federal Insurance Company, Fidelity & Deposit Company of Maryland, and Zurich American Insurance Company. Plaintiff's complaint also asserts claims against Parsons sounding in breach of contract, unjust enrichment, and an account stated.^[1]

Three days after filing the original summons and complaint, plaintiff brought this motion to compel Parsons to arbitrate their dispute under terms set forth in the underlying construction agreement. (See NYSCEF No. 11.) The motion is denied without prejudice.

DISCUSSION

As a threshold matter, although it may appear incongruous that plaintiff is the party seeking to compel arbitration (and to stay its own action pending arbitration), plaintiff has not waived its right to arbitrate by bringing this suit. Plaintiff asserts that it brought the action to preserve its mechanic's liens and its right to payment under the payment bond. (See NYSCEF No. 18 at ¶ 13 [amended complaint]; NYSCEF No. 14 at ¶ 7 [affidavit of plaintiff's principal]; NYSCEF No. 12 at ¶¶ 7-12, 14 [attorney affirmation].) A suit of this kind, in the nature of an effort to preserve the status quo pending arbitration, is not an arbitration waiver. (See Tradesource Inc. v Ancor, Inc., 281 AD2d 538, 538 [2d Dept 2001]; see also Glickenhaus & Co. v Taylor, 163 AD2d 59, 60 [1st Dept 1990] [explaining that "[t]here is neither waiver nor an election of remedies where plaintiff moves in court for protective relief in order to preserve the status quo while at the same time exercising its right under the contract to demand arbitration"] [internal quotation marks and ellipsis omitted].)

This conclusion is not altered by the fact that plaintiff's complaint asserts a series of contractual claims for the same money sought in the lien-foreclosure and payment-bond causes of action. (See Riggi v Wade Lupe Constr. Co., 176 AD2d 1177, 1179 [3d Dept 1991], citing Matter of Assael v Assael, 132 AD2d 4, 9-12 [1st Dept 1987]; Bridas S.A. Petrolera Indus. y Comercial v International Std. Elec. Corp., 128 Misc 2d 669, 677 [Sup Ct, NY County 1985]; CEGF & G Plumbing Corp. v Transcorp Constr. Corp., 2006 WL 8422810, at *1 [Sup Ct, NY County Sept. 29, 2006].) Nor does plaintiff's limited availment of the judicial forum—i.e., filing a complaint and moving to compel arbitration three days later—constitute an arbitration waiver by litigation conduct.^[2]

Nonetheless, plaintiff's motion to compel arbitration must be denied, on two independent grounds.

First, the construction agreement under which plaintiff is moving to compel provides that in the event of a dispute that the parties cannot resolve on their own, they "shall submit to non-binding mediation prior to commencing arbitration or an action in a judicial forum." (NYSCEF No. 4 at § 7.14[b] [emphasis added].) Having engaged in (unsuccessful) mediation is thus a precondition to commencing an arbitral proceeding. Plaintiff does not, however, represent (either in the complaint or the papers supporting the motion to compel) that the parties previously engaged in mediation. Failure to establish that this precondition has been satisfied forecloses plaintiff's request on this motion to compel arbitration.^[3] (See Matter of County of Rockland v Primiano Constr. Co., 51 NY2d 1, 7-8 [1980]); Matter of Brenda DeLuca Trust v Elhannon, LLC, 108 AD3d 902, 904 [3d Dept 2013].)

Second, plaintiff has moved to compel under CPLR article 75. (See NYSCEF No. 11 at 1.) But CPLR 7503, governing requests to compel arbitration, provides that a party "may apply for an order compelling arbitration" only if it is "aggrieved by the failure of another to arbitrate." (CPLR 7503[a].) Plaintiff does not represent that it has asked Parsons to arbitrate or commenced an arbitration under the applicable arbitral rules. Absent a failure or refusal by Parsons to arbitrate, this court lacks authority to compel arbitration in the first instance. (See Matter of Cullman Ventures (Conk), 252 AD2d 222, 229 [1st Dept 1998].)

This court does not determine here that plaintiff cannot establish that it has satisfied the necessary contractual and statutory preconditions to arbitration—merely that plaintiff has not done so on this motion.

Accordingly, for the foregoing reasons, it is

ORDERED that plaintiff's motion to compel arbitration is denied without prejudice.

[1] Plaintiff recently amended its complaint (see NYSCEF No. 18); the amendment, though, appears limited to adding another exhibit in support of the complaint's allegations (see NYSCEF No. 23).

[2] Indeed, the record does not reflect whether plaintiff has even served defendants with copies of its pleadings.

[3] As a "prerequisite to entry into the arbitration process," rather than a "procedural prescription for the management of that process," compliance with the contractual mediation requirement is for the court to decide, rather than the arbitrator. (Matter of County of Rockland v Primiano Constr. Co., 51 NY2d 1, 8-9 [1980].)"

PART 137 AND SURROGATE COURT FEE APPLICATIONS

 

MATTER OF HART, 2022 NY Slip Op 22018 - NY: Surrogate's Court, Rockland 2022:

"I. Motion for Summary Judgment for Failure to Comply with Part 137

The proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law by tendering sufficient admissible evidence to eliminate any material issues of fact from the case. See Sillman v. Twentieth Century-Fox Film Corp., 3 NY2d 395 (1957). The movant bears the burden of proving entitlement to summary judgment, and the failure to make such a showing requires denial of the motion, regardless of the sufficiency of the opposing papers. See Winegrad v. New York Univ. Med. Ctr., 64 NY2d 851 (1985). Once sufficient proof has been offered, the burden then shifts to the opposing party who, in order to defeat the motion for summary judgment, must proffer evidence in admissible form that raises a triable issue of fact. See Zuckerman v. City of New York, 49 NY2d 557 (1980).

Here, Counterclaimants allege that Petitioner failed to comply with the notice provisions of 22 NYCRR § 137, which divests the Court of jurisdiction and requires dismissal of the fee petition. In the initial petition filed in this matter on December 10, 2014, the proposed engagement letter was attached as Exhibit D to the attorney affirmation. The "Agreement to Provide Legal Services" does not include the required Part 137 language. The answer with counterclaims does not specifically raise the failure to include Part 137 language in the proposed engagement letter as an affirmative defense or objection. Instead, in the first objection and point of law, the Counterclaimants allege that "Petitioner, admittedly a New Jersey law firm, is not authorized to practice law in New York State and failed to meet its responsibility to obtain from the Estate and/or administrator either a written retainer agreement and/or a letter of engagement as it was required to by NYCRR § 1215.1." Amended Verified Answer, Affirmative Defenses, and Respondents' Counterclaims to Petition at ¶6. The same issue is raised as the first affirmative defense. See id. ¶7. The second affirmative defense also cites the failure to obtain a letter of engagement in violation of NYCRR § 1215.1 and argues that Petitioner may only recover (if at all) on the basis of quantum meruit. The answer does not raise the issue that is the focus of this motion, the failure to provide the notice required by 22 NYCRR § 137.6(a)(1).

Petitioner does not claim that the Part 137 notice was sent. Instead, Petitioner argues that the Part 137 arbitration rules do not apply in this case because the Surrogate's Court Procedure Act provides an alternate process per SCPA §2110. Therefore, there is no dispute on the one fact issue raised by Counterclaimant in the motion (whether the notice was sent), making it appropriate for a ruling on summary judgment.

A. History of SCPA § 2110

Warren's Heaton on Surrogate's Practice reviews the history of the Surrogate's authority to fix attorney's fees. See 8 Warren's Heaton on Surrogate's Court Practice § 106.01. Prior to 1916, if a fiduciary disputed the fees charged by the estate's attorney, the attorney would bring an action at law against the fiduciary in their individual capacity. However, in In re Rabell, 175 A.D. 345 (2d Dept. 1916), the Appellate Division held that if a fiduciary refused to pay the full compensation of the attorney, the Surrogate's Court had jurisdiction to fix the amount of the fee and direct its payment from the estate in a special proceeding. In a subsequent matter, the New York County Surrogate's Court found that it had jurisdiction to determine the value of the services an attorney rendered to an estate and direct payment of fees out of the estate assets. In re Shipman, 116 Misc. 405 (Surr. Ct. NY Co. 1921), aff'd, 200 A.D. 896 (1st Dept. 1922), aff'd, 234 NY 499 (1922). In 1923, the Legislature enacted former Surrogate's Court Act § 231-a (the predecessor to SCPA § 2110), which embodied the procedure set forth in Rabell and Shipman.

SCPA § 2110 authorizes the Court to fix and determine the compensation of an attorney at any time during the administration of the estate. SCPA § 2110(2) directs that the proceeding shall be instituted by petition of, inter alia, an attorney who has rendered services to the estate. The Uniform Rules for Surrogate's Court require that an attorney file an affidavit of services in any proceeding to determine attorney's fees. See 22 NYCRR § 207.45(a). The Court bears the ultimate responsibility for approving legal fees that are charged to an estate and has the discretion to determine what constitutes reasonable compensation for legal services rendered in the course of the administration of an estate. See Matter of Stortecky v. Mazzone, 85 NY2d 518 (1995); Matter of Vitole, 215 AD2d 765 (2d Dept. 1995); Matter of Verplanck, 151 AD2d 767, 767 (2d Dept. 1989) (surrogate "bears the ultimate responsibility to decide," the reasonableness of compensation for legal services rendered to an estate); SCPA § 2110(3) (allowing Court to direct attorney to refund fees in excess of fair value of services rendered).

This power of the Surrogate to set fees is superior to the parties' consent to a requested fee. See Stortecky, 85 NY2d at 526 ("[T]he Surrogate had the authority to inquire into the reasonableness of counsel's fee even though agreed upon by the executor and assented to by the beneficiaries."). The Court is not bound by the terms of a retainer agreement. See Matter of Williams, 168 AD3d 753, 753 (2d Dept. 2019) ("the Surrogate bears the ultimate responsibility of deciding what constitutes a reasonable legal fee, regardless of the existence of a retainer agreement"); In re Guattery, 278 AD2d 738 (3d Dept. 2000) (absence of written retainer agreement did not prevent Surrogate from fixing attorney's fees); Estate of Paula M. Venezia, 2008 NY Misc. LEXIS 6644, 240 N.Y.L.J. 77 (Surr. Ct. Kings Co. 2008) (citing Matter of Schanzar, 7 AD2d 275 (1st Dept. 1959)).

The Surrogate also has the jurisdiction to determine attorney malpractice issues in a SCPA § 2110 proceeding to fix attorney's fees. See In re Estate of Tarka, 293 AD2d 396, 396 (1st Dept. 2002) ("The court's jurisdiction extended to . . . allegations of malpractice inasmuch as such claims allegedly arose in connection with the administration of the estate."); Haskel & Lancaster, 2001 NYLJ LEXIS 160, NYLJ, Jan. 5, 2001 at Pg. 2, (col. 6) (Surr. Ct. Nassau Co. 2001) (Radigan, J.).

B. History of 22 NYCRR § 137

Effective March 4, 2002, the Rules of the Chief Judge were amended to require attorneys to provide clients with a written letter of engagement. See NYCRR § 1215.1.^[2] The regulation instructs that the engagement letter address three topics: the scope of services to be provided; an explanation of the fees to be charged; and, "where applicable," a notification that the client may have a right to arbitrate fee disputes pursuant to 22 NYCRR § 137.^[3] Part 137 contains the regulations for the New York State Fee Dispute Resolution Program, which "provides for the informal and expeditious resolution of fee disputes between attorneys and clients through arbitration and mediation." 22 NYCRR § 137.0. To ensure that clients are aware of their right to arbitrate, 22 NYCRR § 137.6(a)(1) requires an attorney to forward a written notice to their client called "Notice of Client's Right to Arbitrate."

Certain matters are exempted from the Part 137 rules. Included among the exemptions are "claims involving substantial legal questions, including professional malpractice or misconduct" and "disputes where the fee to be paid by the client has been determined pursuant to statute or rule . . . or where the fee has been determined pursuant to a court order." §137.(b)(3),(5). Failure to provide the client with written notice of their right to elect to submit the fee dispute to arbitration, and the failure to allege in the complaint that either the notice was served or that arbitration is inapplicable, has been held to require dismissal of the complaint. See Zisholtz & Zisholtz, LLP v. Mandel, 165 AD3d 1312 (2d Dept. 2018); Pascazi Law Offices, PLLC v. Pioneer Natural Pools, Inc., 136 AD3d 878 (2d Dept. 2016). However, dismissal is without prejudice to refile after the proper service of the notice, should the offer of fee arbitration not be accepted by the client.

Incredibly, only three published cases have considered the interplay of SCPA § 2110 and the Part 137 Rules. In the Estate of Marie A. Henriques, the New York County Surrogate's Court dismissed without prejudice a fee petition filed by a law firm that had represented a respondent party, Antonio Henriques, because the estate and the firm agreed to pursue arbitration per Part 137. See 2014 NYLJ LEXIS 2051, NYLJ, Aug. 20, 2014 at Pg. p.22, col.1 (Surr. Ct. NY Co. 2014). A second case found the Part 137 Rules inapplicable because the fees in dispute were over $50,000, and therefore exempt from the Dispute Resolution Program. See Estate of Clarke, 2004 NYLJ LEXIS 3128, NYLJ, Jul. 15, 2004 at Pg. 21, col. 3 (Surr. Ct. Bronx Co. 2004). Finally, in a Surrogate's Court case in New York County, the Court denied a client's motion to compel arbitration of a fee dispute. See Estate of Julia Elizabeth Taschereau, 2006 NY Misc. LEXIS 6303 (Surr. Ct. NY Co. July 31, 2006). The Taschereau decision noted that the attorney's retainer agreement referred to the option for arbitration per Rule 137 but did not have all of the required language. See id. *11. However, the Court also noted that arbitration would not be available because there were claims of malpractice. See id. *12. Finally, the Court dismissed the attorney's cross-motion for determination of his fees because he had not brought the petition per SCPA § 2110. See Taschereau *13.

In a matter more akin to the one before this Court, the Kings County Surrogate's Court rejected a respondent's argument that the petitioning law firm was required to submit to fee dispute arbitration prior to filing an SCPA § 2110 application. See Estate of Rose Mary McGushin, 2013 NYLJ LEXIS 7294, NYLJ, Apr. 1, 2013 at p.23, col.4 (Surr. Ct. Kings Co. 2013). The Court distinguished between a fee dispute and "a petition that is an application to determine the reasonableness of the petitioner's compensation," noting that the Surrogate's Court had both the authority and the obligation to determine legal fees. Id. at *7. The opinion did not specifically mention the Part 137 Rules, but flatly rejected the argument that any type of mandated fee arbitration must precede filing of a SCPA § 2110 petition.

Finally, the treatise most frequently cited on Surrogate's Court practice, Warren's Heaton, concludes that SCPA § 2110 fee petitions should be exempt from Part 137. See 9 Warrren's Heaton on Surrogate's Court Practice § 119.04[8] "Legal Fees Not Subject to Arbitration." The treatise notes that enforcement of an arbitration award for legal fees performed on behalf of an estate would likely be referred to Surrogate's Court, where an independent inquiry into the reasonableness of the award would be conducted. The treatise concludes that it is "unlikely that the Surrogate's Court would defer to the arbitrator's award for legal fees." Id. (citing Raymond v. Davis, 248 NY 67 (1928)).

C. Conclusion

While this Court certainly appreciates the benefits of alternative dispute resolution, and in fact, routinely orders matters to mediation per the 2020 Presumptive Mediation rules, this Court must agree with the Kings County Surrogate's Court that failure to comply with the Part 137 Rules for arbitration of fees disputes does not require dismissal of a SCPA § 2110 petition nor divest this Court of subject matter jurisdiction over the petition. First, as that Court pointed out, Part 137 Rules are aimed at "fee disputes" filed by complaint. A fee petition in Surrogate's Court is not necessarily a fee dispute at all. It is a petition for the setting of fees, which is frequently uncontested.

Second, § 2110 gives the Surrogate the obligation to ensure that fees charged to an estate are fair and reasonable, regardless of the fiduciary's consent to the fees. Given the Surrogate's obligation to supervise the fees paid by an estate to its attorneys, the requirement that the matter be sent to arbitration would directly conflict with the Surrogate's duty. In fact, there are a number of subjects where an arbitration agreement is not enforceable because arbitration would be improper delegation of the Court's authority. See Matter of Aimcee Wholesale Corp. (Tomar Prods.), 21 NY2d 621(1968) (enforcement of NYS antitrust laws); Bidermann Indus. Licensing v. Avmar N.V., 173 AD2d 401(1st Dept. 1991) (disqualification of an attorney from representing a particular party); Durst v. Abrash, 22 AD2d 39 (1st Dept. 1964), aff'd 17 NY2d 445 (1965) (usury claims asserted by borrowers); Glauber v. Glauber, 192 AD2d 94 (2d Dept. 1993) (custody of and visitation with children). Specifically within the field of trusts and estates, the probate of a will, distribution of the estate, appointment of an administrator, accounting proceedings generally, kinship proceedings, will construction, guardianships, and controversies relating to the conduct of a fiduciary are all areas where New York Courts have held arbitration agreements unenforceable. See 9 Warren's Heaton on Surrogate's Practice § 119.04[1]-[7].

Arbitration of a matter that ends in an unenforceable settlement does not serve the goals of a "more efficient, affordable and meaningful civil justice process." "Court System to Implement Presumptive, Early Administrative Dispute Resolution for Civil Cases," Unified Court System Press Release, May 14, 2019. This Court concludes that since it has the duty to review and approve fees even in the face of the consent of the parties, an arbitration agreement on fees would be similarly unenforceable. Therefore, a party cannot be penalized for failure to offer participation in an alternate dispute resolution process that would still require application to the Surrogate's Court for approval of fees.

Finally, the Court finds that even if the Part 137 Rules did apply to Surrogate's Court fee petitions, Counterclaimants cannot raise failure of the Petitioner to comply with the Part 137 Rules at this late date in this matter. The purpose of Part 137 is to provide an informal and expeditious resolution of disputes. This matter has been before the Court for seven years. The fee dispute has already been to the Appellate Division and has been the basis for eight motions before this Court. The failure to provide the Part 137 Notice was first raised in the last year. It was not mentioned in the Answer or in the many, many prior motions. Dismissing the fee petition because the Petitioner failed to serve a notice for optional arbitration, which would have been declined by the Counterclaimants so that they could pursue their malpractice claims, and which would have resulted in an unenforceable agreement, if accepted, would be a waste of time, money, professional resources, and paper of almost epic proportions. In fact, the Court suspects that this entire motion is an effort at wasting Petitioner's time and money.^[4] Therefore, even if the Part Rule 137 applied, in the interest of justice, the Court declines to dismiss this SCPA § 2110 fee petition for failure to provide notice of the Part 137 Rules."

WAIVING RIGHT TO ARBITRATE?

Pierre v. Rochdale Village, Inc., No. 18-CV-6383 (MKB) (ST). Dist. Court, ED New York 2020:

".... Plaintiff argues that Defendant waived its right to compel arbitration by participating in this litigation to Plaintiff's prejudice and by delaying, stalling, and ignoring Plaintiff's alleged requests to arbitrate prior to the filing of this suit. (Pl.'s Opp'n 1-2, 5.)

Defendant contends that Plaintiff cannot establish prejudice, which is required for waiver, and that it did not have notice of Plaintiff's desire to arbitrate. (Def.'s Mem. 6; Def.'s Reply 3.)

1. Deciding the issue of waiver

"[O]rdinarily a defense of waiver brought in opposition to a motion to compel arbitration. . . is a matter to be decided by the arbitrator." Meyer, 159 F.3d at 80 (alteration in original) (quoting S & R Co. of Kingston v. Latona Trucking, Inc., 159 F.3d 66, 80 (2d Cir. 1998)); see also Howsam, 537 U.S. at 85 ("[T]he presumption is that the arbitrator should decide `allegations of waiver, delay, or a like defense to arbitrability.'" (quoting Moses H. Cone Mem. Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25 (1983))). However, "[w]hen the party seeking arbitration has participated in litigation regarding the dispute, the district court can properly decide the question of waiver." Meyer, 159 F.3d at 80-81 (citing Bell v. Cendant Corp., 293 F.3d 563, 569 (2d Cir. 2002)); Pacelli v. Augustus Intel., Inc., 459 F. Supp. 3d 597, 612-14 (S.D.N.Y. 2020) ("[C]ourts may properly adjudicate waiver-based objections to arbitration when the type of waiver alleged is that the party seeking arbitration has participated in litigation on the dispute."); Syngenta Crop Prot., LLC v. Ins. Co. of N. Am., Inc., No. 18-CV-715, 2018 WL 1587601, at *3 (S.D.N.Y. Mar. 29, 2018) ("[T]he Second Circuit has recently reaffirmed that `[w]hen the party seeking arbitration has participated in litigation regarding the dispute, the district court can properly decide the question of waiver.'" (quoting Meyer, 868 F.3d at 80-81)); see also Schreiber v. Friedman, 15-CV-6861, 2017 WL 5564114, at *9 (E.D.N.Y. Mar. 31, 2017) (same); Apple & Eve, LLC v. Yantai N. Andre Juice Co., 610 F. Supp. 2d 226, 231 (E.D.N.Y. 2009) (same).

"The Second Circuit [has] not. . . squarely addressed the question of whether litigation-conduct waiver is an issue to be decided by an arbitrator when the parties have agreed to have the arbitrator decide questions of arbitrability." LG Elecs., Inc. v. Wi-LAN USA, Inc., No. 13-CV-2237, 2014 WL 3610796, at *3 n.3 (S.D.N.Y. July 21, 2014) (declining to address the question of who should decide waiver when the issue "ha[d] not been adequately raised" and proceeding to decide waiver), aff'd, 623 F. App'x 568 (2d Cir. 2015); Pacelli, 459 F. Supp. 3d at 614 (citing LG Elecs., Inc., 2014 WL 3610796, at *3 n.3) (noting same). However, one court in this Circuit recently concluded that this question is nondelegable. Pacelli, 459 F. Supp. 3d at 614 ("[P]arties cannot delegate to arbitrators the question of whether, under the judge-made principle of litigation-conduct waiver, a party is barred from asserting its right to arbitration."); see also Id. at 614-15 (noting that "[t]he doctrine is based on prejudice from litigation and the interest of the courts in preventing their processes from being used improperly" and that courts are in the best position to evaluate this prejudice and vindicate this interest); cf. Republic of Ecuador, 638 F.3d at 394 (referring waiver issue to arbitral panel when parties clearly and unmistakably intended panel to decide questions about the validity of the agreement and waiver was based on conduct that "undermin[ed] the agreement" rather than on conduct, like litigation conduct, that waives the right to "tak[e] advantage of an admittedly binding arbitration clause"). But see CMS Inv. Holdings, LLC v. Castle, No. 14-CV-9381, 2016 WL 4557115, at *6 (S.D.N.Y. Aug. 31, 2016) (finding litigation-conduct waiver distinguishable from waiver claimed in Republic of Ecuador but "discern[ing] no relevant difference" and referring question of waiver to arbitrator).

The Court concludes that it may decide the issue of litigation-conduct waiver in this case. However, whether Defendant waived its right to arbitrate based on delay during the grievance procedure or lacked notice of Plaintiff's desire to arbitrate are procedural questions that are presumptively for the arbitrator to decide.^[7] See Howsam, 537 U.S. at 85 ("[I]ssues of procedural arbitrability, i.e., whether prerequisites such as time limits, notice, laches, estoppel, and other conditions precedent to an obligation to arbitrate have been met, are for the arbitrators to decide." (emphasis omitted) (quoting Revised Unif. Arb. Act of 2000 § 6(c) cmt. 2, 7 U.L.A. 13)); Republic of Ecuador, 638 F.3d at 394 ("[W]e have noted that `defenses to arbitrability such as waiver, estoppel, or delay' are `questions properly decided by arbitrators.'" (quoting Mulvaney Mech., Inc. v. Sheet Metal Workers Int'l Ass'n, Local 38, 351 F.3d 43, 46 (2d Cir. 2003) (per curiam))); Syngenta Crop Prot., LLC, 2018 WL 1587601, at *3 (distinguishing litigation-conduct waiver from waiver by delay and concluding that "[b]ecause [the plaintiff's waiver argument] is a `waiver, delay, or like defense to arbitrability,' involving out-of-court conduct, that gateway procedural dispute is presumptively one for the arbitrator" (citation omitted) (quoting Howsam, 537 U.S. at 84-85)).

2. Waiver by litigation conduct

Federal policy strongly favors arbitration, and waiver of the right to arbitrate "is not to be lightly inferred." Nicosia v. Amazon.com, Inc., 815 F. App'x 612, 614 (2d Cir. 2020) (quoting Thyssen, Inc. v. Calypso Shipping Corp., S.A., 310 F.3d 102, 104-05 (2d Cir. 2002) (per curiam)). Indeed, "the rule preferring arbitration, when agreed upon, ha[s] led to its corollary that any doubts concerning whether there has been a waiver are resolved in favor of arbitration." Louis Dreyfus Negoce S.A. v. Blystad Shipping & Trading, Inc., 252 F.3d 218, 228 (2d Cir. 2001) (alteration in original) (quoting Leadertex, Inc. v. Morganton Dyeing & Finishing Corp., 67 F.3d 20, 25 (2d Cir. 1995)). Nevertheless, a party waives its right to arbitration "when it engages in protracted litigation that prejudices the opposing party." Tech. in P'ship, Inc. v. Rudin, 538 F. App'x 38, 39 (2d Cir. 2013) (quoting Crysen/Montenay Energy Co. v. Shell Oil Co. (In re Crysen/Montenay Energy Co.), 226 F.3d 160, 162 (2d Cir. 2000)).

"To determine whether a party has waived its right to arbitration, [courts] consider `(1) the time elapsed from when litigation was commenced until the request for arbitration; (2) the amount of litigation to date, including motion practice and discovery; and (3) proof of prejudice.'" LifeTree Trading Pte., Ltd. v. Washakie Renewable Energy, LLC, 764 F. App'x 105, 107 (2d Cir. 2019) (quoting La. Stadium & Expo. Dist. v. Merrill Lynch, Pierce, Fenner & Smith Inc., 626 F.3d 156, 159 (2d Cir. 2010)). "There is no rigid formula or bright-line rule for identifying when a party has waived its right to arbitration; rather, the above factors must be applied to the specific context of each particular case." La. Stadium & Expo. Dist., 626 F.3d at 159. However, "[t]he key to a waiver analysis is prejudice. Waiver of the right to compel arbitration due to participation in litigation may be found only when prejudice to the other party is demonstrated." Sutherland v. Ernst & Young, LLP, 600 F. App'x 6, 8 (2d Cir. 2015) (quoting Thyssen, Inc., 310 F.3d at 105); see also Leadertex, Inc., 67 F.3d at 25 ("Although litigation of substantial material issues may amount to waiver, delay in seeking arbitration does not create a waiver unless it prejudices the opposing party." (citation omitted)).

A. Yearlong Delay

Although Plaintiff argues that Defendant waited approximately a year from the time Plaintiff filed the Complaint to raise the arbitration issue, (Pl.'s Opp'n 3), it is well established that delay alone cannot support a finding of waiver. See, e.g., Thyssen, Inc., 310 F.3d at 105 (collecting cases and noting that "[t]his Circuit has refused to find waiver. . . where delay in trial proceedings was not accompanied by substantial motion practice or discovery"); Rush v. Oppenheimer & Co., 779 F.2d 885, 887 (2d Cir. 1985) ("It is beyond question that defendants' delay in seeking arbitration during approximately eight months of pretrial proceedings is insufficient by itself to constitute a waiver of the right to arbitrate. . . ." (citing Carcich v. Rederi A/B Nordie, 389 F.2d 692, 696 (2d Cir. 1968))); Chehebar v. Oak Fin. Grp., Inc., No. 14-CV-2982, 2017 WL 946292, at *2 (E.D.N.Y. Mar. 7, 2017) (collecting cases finding no waiver despite delays from four months to three years).

Rather, the extent of delay must be considered "in conjunction with (1) the amount of litigation that occurred" during the delay and "(2) any proof that [the party opposing arbitration] was prejudiced by [the other party's] conduct during that period." PPG Indus., Inc. v. Webster Auto Parts, Inc., 128 F.3d 103, 108 (2d Cir. 1997) (citing Leadertex, Inc., 67 F.3d at 25); In re Arb. Between S & R Co. of Kingston & Latona Trucking, Inc., 984 F. Supp. 95, 103 (N.D.N.Y. 1997) ("Although delay alone is generally insufficient to deny a petition to arbitrate, it is. . . relevant in determining whether a party has been prejudiced." (citations omitted)), aff'd sub nom. S & R Co. of Kingston v. Latona Trucking, Inc., 159 F.3d 80 (2d Cir. 1998).

B. Amount of litigation to date

In assessing the amount of litigation for purposes of a waiver analysis, courts find relevant, inter alia, any motion practice engaged in by the parties and the extent of discovery the parties have exchanged. See, e.g., Tech. in P'ship, Inc., 538 F. App'x at 39 (affirming district court's finding of waiver where the party asserting waiver "had to defend two substantive motions to dismiss, then produce its witness for deposition, comply with an extensive document request, and participate in extended discovery disputes"); S & R Co. of Kingston, 159 F.3d at 83 (observing that the waiver analysis includes consideration of "the amount of litigation (including exchanges of pleadings, any substantive motions, and discovery)").

The lack of substantive motion practice in this case weighs against a finding of waiver. See Tech. in P'ship, Inc., 538 F. App'x at 39. Although Plaintiff has been forced to brief the arbitration issue, neither party has briefed the sufficiency of Plaintiff's allegations or the merits of his underlying Title VII claim or filed any other substantive motions. Cf. Rush, 779 F.2d at 888 (explaining that defendants' "motion [to dismiss] alone, however, does not waive the right to arbitrate"); Murray v. UBS Sec., LLC, No. 12-CV-5914, 2014 WL 285093, at *6 (S.D.N.Y. Jan. 27, 2014) (collecting cases finding that a defendant's filing of a motion to dismiss does not itself result in a waiver of the right to arbitration).

Similarly, the extent of discovery and other litigation activity in this case prior to Defendant's pre-motion conference letter raising the issue of arbitration weighs against a finding of waiver. Since Plaintiff filed the Complaint, Defendant has filed an answer,^[8] and the parties have participated in court-annexed mediation that was ultimately unsuccessful, (Minute Entry dated Aug. 15, 2019), and engaged in settlement negotiations, which also failed, (Minute Entry dated Dec. 9, 2019).^[9] No depositions were taken before Defendant raised the issue of arbitration; rather, discovery had been provided "only in anticipation of [the] mediation and a settlement conference," (Def.'s Mem. 6), and it had involved only minimal exchange of documents and responses to interrogatories, (Def.'s Reply 2). Indeed, Plaintiff notes that Defendant had been "reluctan[t] to participate fully in discovery," leading to "limited production." (Pl.'s Opp'n 2.) This limited activity does not support a finding of waiver.

C. Prejudice

Notwithstanding the above, "[t]he key to a waiver analysis is prejudice"; without prejudice, there can be no waiver of the right to arbitrate a dispute. Sutherland, 600 F. App'x at 8 (quoting Thyssen, Inc., 310 F.3d at 105); see Enron Power Mktg. Inc. v. Pub. Util. Dist. No. 1 of Snohomish Cnty. (In re Enron Corp.), 364 B.R. 489, 511 (Bankr. S.D.N.Y. 2007) ("[I]t is the presence or absence of prejudice that is determinative of the issue of waiver."). Moreover, "[p]rejudice is not presumed based on the timing of [an] arbitration demand and. . . participation in litigation — i.e., the first two prongs of the three-part waiver inquiry — standing alone." Nat'l Union Fire Ins. Co. of Pittsburgh v. NCR Corp., 376 F. App'x 70, 72 (2d Cir. 2010) (citing In re Crysen/Montenay Energy Co., 226 F.3d at 162-63).

The Second Circuit has recognized "two types of prejudice: substantive prejudice and prejudice due to excessive cost and time delay." Sutherland, 600 F. App'x at 8 (citing Thyssen, Inc., 310 F.3d at 105). Substantive prejudice exists when, for example, "a party loses a motion on the merits and then attempts, in effect, to relitigate the issue by invoking arbitration." Id. (quoting Kramer v. Hammond, 943 F.2d 176, 179 (2d Cir. 1991)). Prejudice due to excessive cost and time delay may be found "when a party too long postpones his invocation of his contractual right to arbitration[] and thereby causes his adversary to incur unnecessary delay or expense." Id. (quoting Kramer, 943 F.2d at 179); Nat'l Union Fire Ins. Co. of Pittsburgh, 376 F. App'x at 72 ("Prejudice. . . `refers to the inherent unfairness — in terms of delay, expense, or damage to a party's legal position — that occurs when the party's opponent forces it to litigate an issue and later seeks to arbitrate that same issue.'" (quoting In re Crysen/Montenay Energy Co., 226 F.3d at 162-63)); S & R Co. of Kingston, 159 F.3d at 83-84 ("Prejudice results `when a party seeking to compel arbitration engages in discovery procedures not available in arbitration, makes motions going to the merits of an adversary's claims, or delays invoking arbitration rights while the adversary incurs unnecessary delay or expense.'" (quoting Cotton v. Slone, 4 F.3d 176, 179 (2d Cir. 1993)) (citing PPG Indus., Inc., 128 F.3d at 109)). A court will not find waiver where "delay in trial proceedings was not accompanied by substantial motion practice or discovery." Sutherland, 600 F. App'x at 8 (quoting Thyssen, Inc., 301 F.3d at 105).

Relying on In re Crysen/Montenay Energy Co., 226 F.3d at 162-63, Plaintiff argues he will be prejudiced if compelled to arbitrate because he has "expended substantial time, energy, and resources into this litigation." (Pl.'s Opp'n 3.) Plaintiff also notes that, if the Court compels arbitration, he will "be forced to start over on his own." (Id.)

Although the Court is sympathetic to Plaintiff's position, the unfairness he alleges does not rise to the level of prejudice under the law. Apart from time spent learning the Federal Rules of Civil Procedure and the Court's rules as a pro se litigant, Plaintiff has not identified any specific costs incurred, let alone excessive costs. (Id.); Chehebar, 2017 WL 946292, at *2 (noting that costs incidental to the motion practice alone are insufficient). Further, there have been no substantive motions, no court decisions adverse to Defendant, and no discovery that would not otherwise be available in arbitration. (Def.'s Reply 2); Sutherland, 600 F. App'x at 8; S & R Co. of Kingston, 159 F.3d at 83-84. In addition, although Defendant did not move to compel arbitration until nearly one year after filing its answer, the docket reflects that Defendant moved soon after the court-ordered mediation on July 25, 2019, failed. (Def.'s Mot.)

Accordingly, viewing the facts in the light most favorable to Plaintiff, yet mindful that "[w]aiver is not to be lightly inferred," Nicosia, 815 F. App'x at 614 (quoting Thyssen, Inc., 310 F.3d at 104-05), the Court concludes that Defendant has not waived its right to arbitrate by way of its litigation conduct and therefore grants Defendant's motion to stay the action and compel arbitration. In addition to determining whether Plaintiff's claims are arbitrable, the arbitrator will decide any threshold procedural questions, including whether Defendant waived the right to arbitrate by delaying and ignoring Plaintiff's requests to do so prior to the filing of this suit."

As a footnote of my own to this case, I represented the Plaintiff in the mediation under the MAP program and there was substantial time and energy expended in that process.