Matter of Goldman (Pinkesz)

[*1] Matter of Goldman (Pinkesz) 2013 NY Slip Op 51531(U) Decided on August 19, 2013 Supreme Court, Kings County Schmidt, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 August 19, 2013
Supreme Court, Kings County

In the Matter -of- The Arbitration of Certain Controversies Between, Michael Goldman and MICHAEL GOLDMAN, as Trustee of the ZIMRA AND JACOB TRUST, Petitioners, - and -

Anthony Pinkesz a/k/a ASHER PINKESZ, SARA PINKESZ and SARA PINKESZ as Putative Trustee of the ZIMRA AND JACOB TRUST, Respondents.

23665/12



Plaintiff Attorney: Saul E. Feder, Esq., Edwards, Stone & Feder, 225 Broadway, New York, NY 10007

Defendant Attorney: Marc Wohlgenuth, Esq., Kunstlinger & Wohlgenuth, PLLC, 235 N. Main Street, Suite 2, Spring Valley, NY 10977

David I. Schmidt, J.

The following papers numbered 1 to 18 read herein:Papers Numbered

Notice of Motion/Order to Show Cause/

Petition/Cross Motion and

Affidavits (Affirmations) Annexed1-7, 17-18

Opposing Affidavits (Affirmations)8-11

Reply Affidavits (Affirmations)12-16

Upon the foregoing papers, petitioner Michael Goldman (Goldman), individually and as trustee of the Zimra and Jacob Trust (the Trust), brings this application, by order to show cause, pursuant to CPLR 7503 (a), for a judgment (1) compelling religious arbitration of the parties' claims regarding Universal Life Insurance Policy No. U300234 (the Life Insurance Policy) issued by The Guardian Life Insurance & Annuity Company, Inc. (Guardian), and (2) directing that such arbitration proceed (a) before Rabbi Ben Zion Mandel, or (b) a Zebla(Jewish Rabbinical tribunal of three judges) under the jurisdiction of the Beth Din (Rabbinical Court). [*2]

In addition, petitioner moves, pursuant to CPLR 602 (a), to consolidate this proceeding and a New York County plenary action, captioned The Guardian Life Insur. & Annuity Co., Inc. v Pinkesz, et al., Index No. 155084/12 (New York County Plenary Action) before this Court.

Background Facts And Procedural History

The Guardian Life Insurance Policy

This special proceeding, commenced under CPLR Article 75, involves a $4.5 million Life Insurance Policy that Guardian issued to Zimra Pinkesz in March 2007 on the life of her husband, Jacob Pinkesz. Upon Jacob Pinkesz' death on July 9, 2012, a controversy ensued regarding the beneficiaries under, and ownership of, the Guardian Life Insurance Policy.

Petitioner Goldman claims to be the owner of, and sole beneficiary under, the Guardian Life Insurance Policy based on Zimra Pinkesz' alleged transfer of such rights to him. Respondents Sara and Anthony Pinkesz also claim to have an ownership interest in the Guardian Life Insurance Policy based on Zimra's alleged transfer of such rights to the Trust.

Petitioner now seeks to compel respondents to proceed with rabbinical arbitration before a Jewish Beth Din or a Zebla panel regarding their competing claims to the $4.5 million in death benefits under the Guardian Life Insurance Policy.

The Parties Proceeded With Rabbinical Arbitration

In July 2012, petitioner served Hazmanas(an "invitation") upon respondents pursuant to Jewish law, summoning them to appear before the Even Hamishpot Beth Din in Monsey, New York, to hear and determine the parties' disputes regarding the Guardian Life Insurance Policy. Rather than appear in Monsey, the parties seemingly agreed to an alternative forum for religious arbitration of the dispute, and proceeded with three rabbinical hearings before Rabbi Ben Zion Mandel in Brooklyn from approximately August 2012 through November 2012,[FN1] during which Rabbi Mandel heard and considered testimonial and documentary evidence from the parties.

After appearing before Rabbi Mandel, the parties seemingly agreed to arbitrate their dispute before a three-judge Zebla panel, pursuant to which the parties selected (1) their own Boreh (Rabbinical Judge) to assist the parties with their respective cases, and (2) a mutually agreeable neutral Boreh to preside over the Zebla panel.

Before the parties selected a neutral Boreh, Rabbi Mandel issued an order confirming that the parties "appeared before [him] to present [their] arguments, to arbitrate and hear [his] opinion on the matter . . ." Rabbi Mandel ordered the parties to sign an arbitration agreement before a Zebla on or before November 4, 2012, or he would proceed with a final appearance and finalize his determination regarding the parties' life insurance dispute.

After Rabbi Mandel's deadline, the parties selected Rabbi Naftali Meir Babad as the mutually agreeable neutral Boreh to preside over the three judge Zebla. The Even Hamishpot Beth Din in Monsey, New York, provided the parties with written confirmation of the appointed Boreh for the Zebla, and notified the parties that the three-judge Zebla tribunal would convene for the parties' first rabbinical arbitration hearing on December 16, 2012.

Respondents have refused to proceed with (1) the rabbinical court hearing before the Zebla tribunal, or (2) a final rabbinical arbitration hearing before Rabbi Mandel. Respondents have not provided a reason for their reluctance to proceed with religious arbitration, other than their contention that the parties have no arbitration agreement, written or otherwise.

The New York County Plenary Action

Guardian commenced an interpleader action on August 1, 2012, in New York County Supreme Court against Goldman and Sara Pinkesz, as trustee of the Trust, seeking a declaration regarding the parties' competing claims to the $4.5 million under the Guardian Life Insurance Policy. In the New York County Plenary Action, Guardian offered to deposit the $4.5 million in life insurance benefits into a mutually agreeable depository or escrow account in consideration for its release from any claims thereto.

Goldman noticed his appearance in the New York County Plenary Action, and served his answer to Guardian's complaint, "demand[ing] recovery to him of the full Death Proceeds of the Policy, together with accrued interest, if any, and that same be paid over to [him] in its entirety." Sara Pinkesz served an answer to Guardian's complaint, asserting a counterclaim against Guardian because it "refused to distribute the Death Proceeds to the Trust," and a cross-claim against Goldman.

In her pleading, Sara Pinklesz expressly alleged that "a dispute and controversy exists between the parties to [the New York County Plenary Action] concerning their respective rights, duties, and obligations regarding the proper beneficiary to whom the Death proceeds should be paid," and, like Goldman, she expressly demanded "a declaratory judgment declaring the rights and other legal relations of the parties to [the New York County Plenary Action]."

In response to Pinkesz' cross-claim, Goldman amended his answer to cross-claim against Sara Pinkesz and asserted a counterclaim against Guardian. Goldman demanded an order requiring Guardian to deposit the $4.5 million into New York County Supreme Court "for distribution therefrom to the Defendants in this Action" and sought the full $4.5 million.In addition to serving responsive pleadings with demands for affirmative relief, Goldman and Pinkesz engaged in some discovery in the New York County Plenary Action.

This Proceeding To Compel Religious Arbitration

About four months after the New York County Plenary Action was commenced, Goldman commenced this special proceeding on December 13, 2012, in Kings County Supreme Court, by order to show cause, wherein Goldman seeks a judgment, pursuant to CPLR 7503 (a), compelling respondents to proceed with rabbinical arbitration of their disputes regarding the Guardian Life Insurance Policy before a Jewish Beth Din or a Zebla under the Beth Din's jurisdiction. More specifically, Goldman commenced this special proceeding while the New York County Action was pending, seeking to compel respondents to proceed with religious arbitration before Rabbi Mandel or the three-judge Zebla previously chosen by the parties.

Respondents oppose Goldman's petition on the grounds that this Court lacks subject matter jurisdiction because Goldman "improperly commenced this special proceeding in Kings County, in a transparent effort to forum shop, rather than requesting this relief by filing a motion in the [New York County Plenary Action], in accordance with his obligations under CPLR 7503 (a)." Respondents also contend that Goldman waived his right to compel arbitration "by actively participating in the [New York County Plenary Action] by filing three pleadings and serving eight separate discovery documents."

Alternatively, respondents argue that they "cannot be compelled to arbitrate, pursuant to the express language of CPLR 7501, inasmuch as no agreement to arbitrate . . . exists between the parties." Respondents further contend that "their participation in discussions" with Rabbi Mandel does not constitute a waiver because (1) there was no written arbitration agreement between the parties, and (2) the parties only had "settlement discussions" with Rabbi Mandel, and never specifically agreed to arbitrate their life insurance dispute before him.

Goldman's Motion To Consolidate

Goldman separately moved, on January 23, 2013, for an order, pursuant to CPLR

602 (a), consolidating this Kings County special proceeding with the New York County Plenary Action, so they could be litigated in "Kings County before Hon. David Schmidt . . ."

Discussion

(1)

It is well established that New York courts can enforce an agreement to refer a controversy to a Beth Din, a Jewish rabbinical forum, to proceed with religious arbitration (see, e.g., Berg v Berg, 20 Misc 3d 1142(A) [Sup Ct Kings Co 2008] [holding that agreement to refer divorce matter to a [*3]Beth Din is enforceable]; Herzog v Oberlander, 19 Misc 3d 1113(A) [Sup Ct Kings Co 2008] [seeking to compel religious arbitration of dispute regarding construction to real property]; Tal Tours v Goldstein, 9 Misc 3d 1117(A) [Sup Ct Nassau Co 2005], aff'd 34 AD3d 786 [2006] [seeking to compel arbitration of dispute regarding operation of joint venture before Beth Din]). Furthermore, "[r]eligious courts have long been recognized as proper venues for the voluntary resolution of contractual disputes" (Matter of Pinson v. Pinson, 13 Misc 3d 1204(A), *3 [Sup Ct, Kings Co 2006]; Herzog, supra at *8 [holding that "it is settled that [a]n arbitration before a Beth Din is a valid form of alternate dispute resolution, and therefore a Beth Din, by voluntary agreement of the parties, can resolve contractual disputes'"]).

When presented with a motion to compel arbitration, "the court must determine, in the first instance, whether the parties made a valid agreement to arbitrate" (Brown v Busey, 245 AD2d 255, 255 [1997]), "and if so, whether the issue sought to be submitted to arbitration falls within the scope of that agreement" (Schenkers, Intl. v Meyer, 164 AD2d 541, 543 [1991]).

However, as discussed below, this Court lacks subject matter jurisdiction to determine whether the parties entered into an enforceable agreement in order to compel religious arbitration of their controversy regarding the distribution of $4.5 million in death benefits under the Guardian Life Insurance Policy before either Rabbi Mandel or a three-judge Zebla tribunal.

(2)

CPLR 7503 (a) expressly mandates that "[i]f an issue claimed to be arbitrable is involved in an action pending in a court having jurisdiction to hear a motion to compel arbitration, the application shall be made by motion in that action" (emphasis added). The Second Department has long admonished that "CPLR 7503 (subd [a]) provides that where an issue claimed to be arbitrable is involved in a pending action, an application to either stay or compel arbitration must be made in the pending actionrather than by means of a separate special proceeding" (Matter of D.M.C. Constr. Corp. v A. Leo Nash Steel Corp., 70 AD2d 635, 635 [1979], appeal dismissed, 49 NY2d 1040 [1980]; see also Matter of Jo-Ann-Ro Leasing, 150 Misc 2d 1064, 1065-1066 [Sup Ct, NY Co 1991] [holding "if an application for this relief could be made in the [pending] summary proceeding, the Supreme Court lacks jurisdiction over this request to stay and compel arbitration"]).

Respondents correctly contend that Goldman improperly commenced this proceeding to compel religious arbitration in Kings County, pursuant to CPLR 7503 (a), rather than requesting this relief by filing a motion in the pending New York County Plenary Action, pursuant to CPLR 7503 (a). Goldman disregarded CPLR 7503(a)'s statutory mandate that a motion to compel arbitration must be made in a pending action involving the very same issue sought to be arbitrated. Here, the New York County Plenary Action, together with the counterclaims and cross-claims asserted therein, indisputably involve the identical issues that the parties raised in the instant proceeding to compel arbitration.

Consequently, this Court lacks jurisdiction to hear or determine the issues raised herein, including: (1) Goldman's motion to compel arbitration; (2) Goldman's motion to consolidate this proceeding before this Court with the pending New York County Plenary Action; (3) respondents' contentions that Goldman waived the right to compel rabbinical arbitration of the parties' claims "by actively participating" in the New York County Plenary Action; or (4) alternatively, whether the parties have entered into an enforceable agreement to engage in religious arbitration. All of the foregoing issues must be raised before the New York County Supreme Court in the prior pending New York County Plenary Action, as a matter of law.

Accordingly, it is

ORDERED that petitioner's application to compel arbitration pursuant to CPLR 7503 (a) is denied and this proceeding is dismissed; and it is further

ORDERED that petitioner's motion to consolidate this proceeding with the New York County Plenary Action is denied.

The foregoing constitutes the decision, order and judgment of the court. [*4]

E N T E R,

__________________________J. S. C. Footnotes

Footnote 1:Respondents claim that Rabbi Mandel presided over the parties' settlement discussions, during which they agreed to proceed with religious arbitration only if Goldman agreed that $3.3 million of the $4.5 million under the Life Insurance Policy be immediately paid to respondents, and that arbitration proceed regarding the remaining $1.2 million.