Tal Tours (1996) Inc. v Goldstein

[*1] Tal Tours (1996) Inc. v Goldstein 2005 NY Slip Op 51626(U) [9 Misc 3d 1117(A)] Decided on October 7, 2005 Supreme Court, Nassau County Austin, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on October 7, 2005
Supreme Court, Nassau County

TAL TOURS (1996) INC. and STUART KATZ, Plaintiffs,

against

HOWARD GOLDSTEIN and KOSHER GOURMET INC. d/b/a MILLENNIUM CATERERS, Defendants



5510-05



COUNSEL FOR PLAINTIFFS

Alan Kachalsky, Esq.

47C Rye Colony

Peck Avenue

Rye, New York 10580

COUNSEL FOR DEFENDANTS

Dollinger, Gonski & Grossman, Esqs.

Old Country Road

P.O. Box 9010

Carle Place, New York 11514

Leonard B. Austin, J.

Defendants, Howard Goldstein and Kosher Gourmet, Inc. d/b/a/ Millennium Caterers (collectively "Goldstein") move to compel Plaintiffs, Tal Tours (1996) Inc. and Stuart Katz (collectively "Katz") to proceed to arbitration through a procedure known as a Zebla proceeding or, in the alternative, to proceed with this matter as a plenary action. Plaintiffs cross-move to compel the Defendant to proceed to arbitration before the Beth Din of America.

BACKGROUND

Katz and Goldstein are involved in a joint venture running tours catering to a clientele which observes Jewish dietary laws known as Kashrut or Kosher.

On January 5, 2005, Katz had summoned Goldstein to appear before the Beth Din of America ("BDA") to resolve disputes between Katz and Goldstein arising from the operation of their joint venture. The BDA operates a forum in which adherents to Jewish law can have their commercial disputes resolved in accordance with Jewish law known as Halacha.

Since some of the existing disputes which had arisen between Katz and Goldstein related to an already planned Kosher for Passover tour for Passover 2005, Katz commenced this proceeding on April 5, 2005. Simultaneously with the service of the summons and complaint, Plaintiffs moved by order to show cause for a preliminary injunction.

The order to show cause was returnable on April 14, 2005. Because counsel for the parties had indicated to the Court that they had agreed to submit their dispute to a bet din, the Court, with the consent of the parties, converted this action into a special proceeding for a preliminary injunction in aid of arbitration pursuant to CPLR 7502(c). The Court denied Katz' application for a preliminary injunction.

After denying the application for a preliminary injunction, during colloquy between the attorneys and the Court, the Court asked the attorneys whether the parties had agreed to have their disputes resolved before BDA.

A dispute has now arisen as to the type of arbitration the parties to which the parties agreed to submit. The BDA will not schedule a hearing on this matter unless both parties agree to the type of proceeding. Jewish Law prohibits a bet din from proceeding in the absence of the opponent. See, Code of Jewish Law, Kitzur Shulhan Aruch, A Compilation of Jewish Laws and Customs, By Rabbi Solomon Ganzfried, [*2]Translated by Hyman E. Goldin, LL.B., Hebrew Publishing Co. (1963) ("Shulhan Aruch"), Vol. 4, Litigation and Testimony, Chap. 181, § 5.

Katz seeks to have this matter heard by a three person tribunal where the members of the tribunal are selected by the Av Beth Din, the supervisor of the Beth Din. The rules of the Beth Din permit the litigants to object to the dayanim (arbitrators) selected by the Av Beth Din. The Av Beth Din may also seek the advice of the parties concerning the selection of the Dayanim.

Goldstein seeks to proceed by way of a Zebla Proceeding ("Zebla"). In a Zebla, each of the parties selects a dayan (arbitrator). The Dayanim selected by the parties then select the third dayan. In support of this position, Goldstein points to letters of April 5 and April 10, 2005, from Rabbi Simcha Roth, his representaive, to Rabbi Yonah Reiss, the Av Beth Din, stating that Goldstein seeks to proceed in a Zebla.

DISCUSSION

Arbitration in a religious forum has long been recognized as a valid approach to dispute resolution. That is, the civil or secular courts of this country have long since recognized that they are not competent to address religious disputes or, as here, disputes which the parties agree involve religious or ecclesiastical law. Watson v. Jones, 13 Wall 679, 728-9 (1872). See also, Serbian Eastern Orthodox Diocese for the United States of America & Canada v. Milivojevich, 426 U.S. 696, 708 (1976) (Brennan, J.), where employing such an ecclesiastical forum was held to not run afoul of the First and Fourteenth Amendments of the Constitution; and Gonzalez v. Roman Catholic Archbishop of Manila, 280 US 1, 16 (1929) (Cardozo, J.).

Common law arbitration is based upon oral agreements to arbitrate or a written agreements to arbitrate which does not comply with statutory requirements for compelling arbitration. Hellman v. Wolbrom, 31 AD2d 477 (1st Dept. 1969). An agreement to proceed before a bet din is treated as an agreement to arbitrate. See, Spilman v. Spilman, 273 AD2d 316 (2nd Dept. 2000); Erber v. Goldstein, 195 Misc 2d

792 (App.Term, 2nd Dept. 2003); and Levovitz v. Yeshiva Beth Henoch, Inc., 120 AD2d 289 (2nd Dept. 1986). See also, The Collision of Church and State: A Primer to Beth Din Arbitration and the New York Secular Courts, 31 Fordham Urb. L. J. 633 (2005).

When parties agrees to submit a dispute to arbitration, they thereby agree to abide by the rules of chosen arbitration forum. Allstate Ins. Co. v. Ben-Ari, 228 AD2d

458 (2nd Dept. 1996); and Berman v. Shatnes Laboratory, 43 AD2d. 736 (2nd Dept. 1973).

Neither Katz nor Goldstein have produced a written agreement indicating that they agreed to submit their disputes arising from their joint venture to arbitration before the BDA. Yet, Katz and Goldstein have agreed to abide by the rules of the BDA in resolving their disputes.

In the absence of a written agreement to submit a dispute for resolution to the BDA, an arbitration proceeding is commenced when a claimant requests the BDA to [*3]issue a hazmana, an invitation, to the respondent to appear before the BDA. The BDA will review the matter. If it decides that the matter is one which is within its jurisdiction, it will issue a hazmana to the respondent. The respondent then has thirty days to respond to the hazmana. See, The Beth Din of America, Guide to Rules and Procedures, June 1997 Version, § 2(b).

Such proceeding was commenced in January 2005 when Katz requested that the BDA issue a hazmana to Goldstein.

A respondent who receives a hazmana and does not wish to participate in proceedings before the BDA and avoid the issuance of a shtar seruv[FN1] may, within thirty days of receipt of the hazmana, exercise one of four options. The first option is consent to the jurisdiction of the BDA and to submit to arbitration pursuant to the procedures of the BDA.

Options two through four involve the responses of a respondent who does not want to proceed before the BDA. Option two is to advise the BDA that the BDA was not the agreed upon forum for the resolution of the dispute between the parties and the respondent wishes to proceed before an alternate bet din recognized by the Av Beth Din. Option three is to advise the BDA that it was not the agreed upon forum for the resolution of the dispute between the parties, and that the respondent wishes to proceed through a Zebla. Option four is to advise the BDA that the dispute is outside of

its jurisdiction. See, The Beth Din of America, Guide to Rules and Procedures, June 1997 Version, § 2(b)(1)(2)(3).

Goldstein responded to the hazmana in letters from Rabbi Simcha Roth, on his behalf, to Rabbi Yonah Reiss, the Av Beth Din, dated April 5 and April 10, 2005 in which Rabbi Roth indicated that Goldstein wanted to proceed with arbitration through a Zebla. These letters further indicate that Goldstein retained Rabbi Roth to act as his Toen (agent) in these proceedings. Goldstein's response is clearly within the rules of the BDA. [*4]

If the respondent chooses to proceed through a Zebla, he must designate as his representative a person who is, acceptable to the Av Beth Din to serve as an arbitrator. If the Av Beth Din decides that the respondent's arbitrator is appropriate, the BDA will withdraw from the matter. A dayan associated with the BDA may serve as the third dayan in a Zebla. However, in such circumstances, the dayan is not acting as a member of the BDA. See, The Beth Din of America, Guide to Rules and Procedures, June 1997 Version, § 2(e).

Katz has not designated a dayan and insists that the parties agreed to proceed before the BDA. The basis of this claim is the colloquy on the record during the April 14, 2005 proceedings. After the Court denied Katz' motion for preliminary injunction, the Court was inquiring of the parties counsel if this concluded the proceedings or if additional Court proceedings would be necessary. During this colloquy, counsel for

Katz and Goldstein indicated that they were proceeding to resolve this matter through proceedings under the auspices of the BDA.

This statement creates an obvious contradiction. Under the rules of the BDA, the respondents' request to proceed to a Zebla indicates that the respondent is not submitting to the jurisdiction of the BDA. Conversely, if the parties are consenting the jurisdiction of the BDA, then they are not proceeding through a Zebla.

Before this matter reached this Court, Goldstein had already indicated his intention to proceed through a Zebla. The statements made by counsel for the parties during the April 14, 2005 proceeding before this Court indicated that the parties were before the BDA must be understood in context.

Katz had commenced an action and was seeking a preliminary injunction. As part of the April 14, 2005 proceeding before the Court, the action was converted the action to a special proceeding for a preliminary injunction in aid of arbitration. CPLR 7502(c). After denying the preliminary injunction, this Court was simply confirming that the parties were proceeding to have their dispute heard by an appropriate Jewish tribunal. The reference to the BDA was simply an indication that the parties had agreed to proceed before an appropriately constituted bet din.

A Zebla would be an appropriately constituted bet din. It is recognized by the rules of BDA. Additionally, such a procedure is permitted by the Shulhan Aruch. See,

Shulhan Aruch Vol. 4, Chap. 181, § 8 P. 68, Litigation and Testimony, which provides, on occasion, that litigants may chose arbitrators to sit with the Court.

Neither party has made an application to invalidate or vacate their agreement to submit their dispute to arbitration. See, 886 Mid-Orange Realty Corp. v. Lax, 288 AD2d 255 (2nd Dept. 2001).

Goldstein's election to proceed through a Zebla is clearly within the rules of the BDA. When Katz requested that the BDA issue a hazmana to Goldstein, he knew, or should have known, that one of the possible responses from Goldstein would be a request to proceed to a Zebla. Since Goldstein has filed a response to the hazmana in [*5]accordance with the rules of BDA, Katz is bound by Goldstein's response. Therefore, the parties must proceed with a Zebla. In view of the upcoming High Holiday of Yom Kippur and the festivals of Succot, Shemini Atzeret and Simchat Torah, Katz is given thirty days from the end of Simchat Torah to designate his dayan in accordance with the rules of the Beth Din of America. The dayanim selected by the parties shall then proceed to designate the third dayan thereafter.

Thus, this matter shall proceed to arbitration in accordance herewith.

Accordingly, it is,

ORDERED, that Defendants' motion to compel the parties herein to proceed with Zebla proceeding is granted. Plaintiffs are directed to designate a dayan within thirty

days from the conclusion of Simchat Torah, November 28, 2005, and the dayanim

selected by the parties shall select the third dayan within twenty days thereafter; and it is further,

ORDERED, that Plaintiffs' cross-motion to compel the Defendants to submit to arbitration before the Beth Din of America is denied.

This constitutes the decision and Order of the Court.

Dated: Mineola, NY _____________________________

October 7, 2005 Hon. LEONARD B. AUSTIN, J.S.C.

XXX

Footnotes

Footnote 1:A shtar seruv is a document issued by the Beth Din of America indicating that a hazmona has been issued to the respondent, and that the respondent has refused to participate in proceedings before the Beth Din of America. The shtar seruv also grants the claimant permission to proceed before the secular courts. See, The Beth Din of America, Guide to Rules and Procedures, June 1997 Version, § 2(h). Such a procedure is in conformance with the Shulhan Aruch. The Shulhan Aruch prohibits Jews from litigating disputes with other Jews before the secular courts. It is considered a Chilul HaShem (a desecration of G-d's name) to persue a controversy in a secular court with another Jew without the permission of a Bet Din. To do otherwise, exposes the violator to various penalties including excommunication. Shulhan Aruch, Vol. 4, Chap. 181, p. 67, Litigation and Testimony, ¶¶(2)(3).