Matter of Kliger-Weiss Infosystems, Inc. v Epicor Retail Solutions Corp.

Annotate this Case

Download PDF

Matter of Kliger-Weiss Infosystems, Inc. v Epicor Retail Solutions Corp. 2011 NY Slip Op 33799(U) August 31, 2011 Supreme Court, New York County Docket Number: 109108/11 Judge: Melvin L. Schweitzer Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various state and local government websites. These include the New York State Unified Court System's E-Courts Service, and the Bronx County Clerk's office. This opinion is uncorrected and not selected for official publication. [*FILED: NEW YORK COUNTY CLERK 09/01/2011 1] INDEX NO. 109108/2011 NYSCEF DOC. NO. 10 RECEIVED NYSCEF: 09/01/2011 SUPREME COURT OF THE STATE OF NEW YORK - 1/. /{.; .. ~~I~'.· xn PRESENT: .. 11 f1 ELVIN ,.t._L NEW YORK COUN"'21£ {.,. $cHtJel'Flffl ///i;(j- ":I c ..... .::;.~ ~ - l<tl~1;.'/.. (L~ 1 >S. _£;,_;-'-' '::.rS?~' .-..:...,/ INDEX NO. JU.:. MOTION DATE -- -1"-/J ,. ;---- ,,, r'r· ¢ · ¢ '- .......... ,....., - v - J:~~ 7';f-/t_ So' ._, 7,. e .......-$ 0/ MOTION SEQ. NO. c o,R. _;.:; MOTION CAL. NO. The following papers, numbered 1 to _ _ were read on this motion to/for - - - - - - PAPERS NUMBERED Notice of Motion/ Order to Show Cause - - ( /) Answering Affidavits - Affidavits - Exhibits ... Exhibits - - - - - - - - - - - - - - Replying A f f i d a v i t s - - - - - - - - - - - - - - - - - - 2 0 (/) <t w a: Cross-Motion: D Yes D No Upon the foregoing papers. it is ordered that this motion (!:> W2 (.) - i= ~ (/) _. ::> _. -, 0 0 u. I- w a LU CX:: a: ::i: 1- a: 0 ~ u. w a: >..... ...I ::> u. 1(.) w a. (/) w a: (/) w (/) <t -- (.) 2 Dated: ¥- 0 · [~L DISPOSITION l- Check one: 2 Check if appropriate: o 31, 2-0 II 0 DO NOT POST ~ SUBMIT ORDER/ JUDG. 0 0 REFERENCE SETTLE ORDER/ JUDG. [* 2] SUPREME COURT OF THE STATE:OF NCW YORK COUNTY OF NEW YORK: PART 45 I ----------------------------------------------T-----------~------------x Jn the i'vlatter of the Application of · KLIGER-WEISS INFOSYSTEMS.. lNC.. ¢ I i Pcti1ionC:r, JndcxNo.109108/11 For an Order Uncler CPLR DECISION AND ORDER A1iiclc 75 Staying Arbitration,: ' I Motion Sequence No. 001 -against- I EPICOR REll\lL SOLUTIONS CORPORATION I Respondent. -----------------------------------------------~--------~---------------x \1EL\'IN L. SCllWJ~ITZER, .J.: Petitioner Kliger-Weiss lnfos::ycms, .Inc. ("KW.I,.) moves by order .1° shovv cause for a preliminary injunction staying an arbitt~alion proceeding commenced hy respondcm Epicor Retail j Solutions Corporation ("Epicor") befofe the American Arhitration Association ("AAA") until I ' Epicor satisfies certain alleged pre-con~litions to arbitration as set forth in a contract between the parties. The dispute arises out of a sub-licensing arrangement between the parties set forth in I i \ several documents (collec.tively, the "Gontract"). Epicor claims ii is owed approximately I. . : $683.000 under the Contract, vvhich, i1 breach of 1he Contract, K Wl refuses to pay. The Contract contains a multi-step dispute .i"esolution procedure that culminates in arbitration, which is provided in ScheduleI3 to lhe ContnLt. See Ex. I. Schedule l3. to the Affidavit of Douglas J. l Good. sworn to on August 5, 2011. Sjhedule 13 provides that: i Jf the parties are unable to resolve ihe dispute by negotiation, any party may submit a dispute for mediation by written notice to the other parties. The mediator shall .be selected by m1 utual agreement of the parties. I [* 3] l I The part ics shall meet and conduct the mediation, under the guidance ·of the mediator.' in order todiscuss th~ir differences and 10 seek a resolution of the . i dispute. The mediation shall treated as a settlement discussion and shall be confidential. The mediator ma~' not tcsti ty for any party in any later proceeding rcla1ing to 1he dispute. The mediation proceedings may not be recorded or transcribed. ! ' be i Each party shall bear its mvn cc~sts of the mediation, bu1 sh~11l share the costs of the mediator equally. If the parities have not resolved the dispute by mediation 1vithi11 90 days t~fier .1ubmissio1~ to mediation, any party may submit the dispute to arbitration. Jf the parties arc unable to resojve such dispute pursuant to Section 2, the dispute shall be submillecl to bindine a1:hitration to be conducted in New York. New York before a single arbitrator (th~ "Arbitrator") __in accordance with the Commercial Arbitration Rules of the Ameri(:an Arbitration Associa1ion (the "AAA") then in effect and the further procedurds set forth herein. (emphasis added) I I On April I, 20 I I, Epicor cle111ai1ded mediation of the dispute, the parties agreed on a mediator. a mediation was held. scttle1lentncgotiations broke down and no settlement v.·as ¢ " I '- . I reached. During the process, on April ll9, 201 I, Epicor also filed a demand for arbitration before ! i the AAA, and now seeks to proceed v, ¢fth the arbitrntion. K\\/J, I OJ1 the other hand, asserts that the i ! parties did not satisfy the 90-day provision contained in the mediation clause quoted ab9vc. ... \ The issue i prc~cntccl here is "vhJther the AAA arbitrator should decide whether the I I mediation procedure has been satisfied: or ·whether this court should decide the issue. The concludes the issue ~s one for the arbitr)ator to decide. 1101 this court. I COUl1 The United States Supreme I Court has held that questions concerning whc!her prerequisites to arbitn1tion have been met arc l for arbitrators - not courts - to decide. 1.Joh12 Hyey & Sons. Inc. v Livingston, 376 U.S. 543, 557-58 (1964) (holding that the issue l or whether two prerequisite steps to arbitration had been followed should be decided by an arbitrator): see also 1-Jowsam v Dean Witter Re}1110/ds. Inc .. 53 7 I . . I 2 - [* 4] U.S. 79, 85 (2002) (quoting the Unifo1p1 Arbitration Act of 2000 that an "arbitrator shall decide I whether a condition precedent to arbitlability has been fulfilled"). I Thus, it is up to the AAA arbit1!alor to decide \:vhether any prerequisites I such as 90 days passing after a request,for mediation, have been met. to arbitration, 1 Apart from its failure to show i)robability of success, KWI has not demonstrated that it would suffer irreparable injury if the 1\AA nrbitration proceeds. K \1\71 claim that it would be ; I prejudiced by incurring "the expense a/filing" its nnswcr and I ;Jl1y counterclaim in the AA/\ . i arbitration. However, it is axiomatic ti1at no irreparable injury exists \.vhere the petitioner can be I compensated by money damages. Finally, a balancing of.the equities weighs against granting K\VJ a preliminary injunction 1 ancl slowing dovm the pending AAA clause ;n the cont,aet was to have an . a~·bitration. The whole point of including an arbitration c~pcdited AAA procedure forresolving d;sputes. And even KWJ is not disputing the validity of th~ arbitration clause, under which the parties agreed to ' resolve any dispurcs before a AAA Arbitrator, not in court. I 1 Epicor argues that the issue of w110idcciclcs v..-hcthcr the prcrcquisi1c 10 arbitration has been met should be dcrnlcd under CPLR 7503. rnther than the Fc(lcral Arbitration t\ct, 9 U. S. C. I, el seq (the "f AA") The court disa!~rccs. This dispute bcl\1.ccn I<Wl. ha~cd in Pon Washington. New Ymk, and l~picor, with headquai1ers in I Quebec. Canada ;iffcc1s ''commerce'' as that rnrm is used in FAA§ 2, making lht: FAA applicable. See Cantor Fit:geralrl Sernritics v Refco Securities, LLCl 83 AD3d 592, 593 (I" Dept 20 J I); see also Diamond Waterproofing S)·.1 .. /11c.1· 55 Ubenv ()1,..ners Cmp .. 4 NY3cl :247. 252 (2005). The foct that the Co11tracl in issue here provides ior the application of the "substantive law ... in ihc arbitration" docs not render CPLR A11iclc 75 npplicable lo decide the threshold procedural i:;~ue. Rather. rhe chhicc of law provision in the C:ormact only provides for the application of New York law in deciding the sub~t;intive ~ontract dispute and cannot be used 10 render the f-AA inapplicable. See e.g. In the Matier ofSa/rnno v Merrill Lvnch, Pierce. Fenner & Smith. Ille .. 85 NY2d 173, 180 ("the parties' choice of Jaw wil I be given effect if to do so ,\,iii not conflict with the pol icics underlying the FA/\''). In any event, New York co111is have similarly held that the timeliness ofa claim for arbitration is for determination by the arbitrator, not the courts. Sec Menitl Engim!ering Consu/rants. P.C. v 55 Liberty Owners· Corp., 18 AD3d 210, 210 (lsl Dept 2005), citing Dia111011d IVotcrpriJofi11g Srs. Inc. l' 55 Uhcrty Oirners Corp, 4 NY3d at 253. ! . 3 [* 5] Accordingly, it is hereby ORDERED that pctit.ioner's motion for an order staying t_hc arbitration is denied; and ii is lurther ORDERED that the temporary i·ctniining on.kr entered on August 8, 2011 is vacated .. Dated: 1\ugust 31, 201 l .T. S. C. 4

Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.