Petitioner moves pursuant to CPLR 7503 to stay arbitration before the American Arbitration Association's International Center for Dispute Resolution ("ICDR") in the matter of Bennington Foods LLC d/b/a Bennington Foods v. Montrose Global Assets,

Inc., and St. Croix Renaissance Group LLP.

Respondent moves, without opposition, for an order admitting Addison J. Meyers of the law firm of Mintzer, Sarowitz, Zeris, Ledva & Meyers to practice before this Court pro hac vice pursuant to 22 NYCRR § 602.2(a).

BACKGROUND

A.Facts

The underlying litigation arises out of a Contract for Structural, Plate and Heavy Metal Steel Scrap ("Scrap Metal Contract") executed by an entity known as Bennington Foods', LLC and Petitioner, Montrose Global Assets Inc. ("Montrose"), on March 10, 2006, and Addendum I signed on May 8, 2006. Pursuant to the Scrap Metal Contract Bennington Foods, LLC, agreed to purchase an estimated 50,000 metric tons of scrap metal (tanks, structures and steel) associated with the former Alumina Factory located in St. Croix, United States Virgin Islands owned by St. Croix Renaissance Group ("SCRG").

Under the contract, Montrose agreed to provide all necessary permits environmental and work related, free of all claims, and was to be solely responsible for the dismantling and disposal of any hazardous waste material or other hazardous material on site. Notably the subject contract was executed by Abul Shah, C.C.O. on behalf of Bennington Foods, LLC and Arthur Muchnick, President on behalf of Montrose. Addendum I was executed by Naseem Hameed for Bennington Foods, LLC and Arthur H. Muchnick for Montrose.

With respect to any dispute arising out of the Scrap Metal Contract, paragraph 9 provides for arbitration as follows:

"Any controversies or disputes arising out of or relating to this Contract shall be resolved by binding arbitration in accordance with the then-current Commercial Arbitration rules of the American Arbitration Association. The parties shall select a mutually acceptable arbitrator knowledgeable about issues relating to the subject matter of this Contract. In the event the parties are unable to agree to such a selection, each party will select an arbitrator and the two arbitrators in turn shall select a third arbitrator, all three of whom shall preside jointly over the matter. The arbitration shall be settled pursuant to rules of American Arbitration Association in New York NY.

B.Procedural

1.Arbitration

Contending that Montrose and SCRG failed to timely obtain the necessary permits for the work contemplated by the contract, and to properly abate the environmental hazards at the facility, which resulted in the issuance of a cease and desist order by the St. Croix Department of Planning and Natural Resources, the Respondent herein, Bennington Foods LLC d/b/a Bennington Foods ("Bennington Foods") took the initial step of filing a Demand for Arbitration and Request for Emergency Relief on or about June 28, 2006, wherein it sought an interim order:

(1)requiring a cessation of all dismantling or demolition work in the facility;

2)prohibiting the removal of any scrap metal from the facility;

3)granting Bennington Foods immediate access to the facility to inspect and prepare an inventory of the scrap metal; and

4)allowing Bennington Foods, or its designated representatives, to remove from the facility, pursuant to the contract terms, all scrap metal that was cut, stripped and sorted [by Bennington Foods contractor] prior to SCRG's instruction that all work stop.

2.Florida Court Proceeding

In response, SCRG commenced a proceeding in the Circuit Court of the Eleventh Judicial Circuit in Dade County, Florida [case no. 06-15257 CA 06] to stay the demanded arbitration. By decision dated September 26, 2006, Bennington Foods's motion to dismiss SCRG's application was denied and SCRG's application to stay the arbitration was granted.

The arbitration was stayed predicated on the Florida court's finding that neither SCRG nor Bennington Foods was a party to the Scrap Metal Contract out of which the dispute arose and, as such, no agreement to arbitrate had been proven to exist between those parties. The court retained jurisdiction to enforce the terms of its order and such further relief as any party should seek.

The matter did not end there, however. A motion by Bennington Foods for reconsideration was denied by order dated November 6, 2006. That order was on appeal at the time this application was submitted to this Court. In denying reconsideration, the Florida court rejected Bennington Foods' claim that SCRG understood its unregistered fictitious name of "Bennington Foods, LLC" in whose name the Scrap Metal Contract was signed to mean its registered fictitious name of "Bennington Foods" noting that the registered fictitious name was not utilized in the contract and there was no evidence to show that SCRG knew that the name "Bennington Foods, LLC" was an unregistered fictitious name of "Bennington Foods."

3.Virgin Islands Action

On November 22, 2006, Bennington Foods took further action by filing a complaint in the United States District Court for the Virgin Islands, District of St. Croix [Docket No. 2006/0154] against both SCRG and Montrose for breach of contract, fraud, negligent misrepresentation and tortious interference with contractual relations. The complaint was accompanied by a motion for preliminary injunctive relief requiring, inter alia, that (1) SCRG and Montrose provide Bennington Foods, its contractors and representatives, with access to the [*3]SCRG facility for a sufficient length of time to accomplish the removal and shipment of the approximate 30,000 tons of various metals, and the 50 tons of copper, which were made ready for removal and were on SCRG's site; and (2) provide access to and use of SCRG's port as originally agreed so as to accomplish the shipment of the subject scrap metal.

Although, on Bennington Foods' request, the action was voluntarily dismissed as to Montrose, by order dated January 19, 2007, Montrose subsequently requested, and was granted, leave to intervene for the purposes of addressing the application for preliminary injunctive relief. After a hearing on February 16, 2007, by order of the United States District Court for the Virgin Islands dated April 16, 2007, SCRG was directed (1) to use its best efforts to obtain the necessary permits necessary for Bennington Foods to remove and ship the various metals and copper which were ready for removal from SCRG's facility; and (2) to allow Bennington Foods and its contractors to enter the facility to accomplish the removal in conformance with the parties' contract.

The matter is now before this Court on an application by Montrose to stay the arbitration requested by Bennington Foods on June 28, 2006 predicated on the grounds that, as a non-signatory to the Scrap Metal Contract, Bennington Foods LLC d/b/a Bennington Foods cannot demand that Montrose arbitrate claims relating to the contract and, thus, the arbitration demand must be vacated. In this regard, Montrose argues that Abul Shah executed the contract as "COO" of "Bennington Foods, LLC" and the contract itself is devoid of any reference to a "d/b/a" much less any indication that "Bennington Foods, LLC" was an assumed name of "Bennington Foods, LLC" or any other entity.

At the time the contract was executed, "Bennington Foods, LLC," a signatory to the contract with Montrose, was neither incorporated under the laws of any country, nor registered anywhere as a fictitious name, assumed name or "d/b/a" for Bennington Foods, LLC or Bennington Group. Moreover, the course of dealings between the parties indicates that "Bennington Group, LLC" is the only entity that could properly assert a claim for arbitration under the contract.

Mischaracterizing the issue at hand, Bennington Foods argues, in opposition to Petitioner's application, that a challenge to the validity of a contract as a whole, or the formation and validity of the contract, must be resolved by the arbitrator. Respondent further maintains that identification of "Bennington Foods, LLC d/b/a Bennington Group" as "Bennington Group, LLC" in the contract itself was the product of a scrivener's error.

This argument, however, is totally untenable in light of the extensive correspondence received from and addressed to "Bennington Group, LLC" generated prior to any declaration of default. The record includes various communications by Naseem Hameed, Abul Shah and May Lai on behalf of "Bennington Group, LLC" with Mr. Hameed and Mr. Shah identified as senior partner; Mr. Shah also identified as project manager and Ms. Lai identified as executive assistant. Substantive arbitrability issues as to whether the parties agreed to arbitrate are, in the first instance, for the court to decide. See, First Options v. Kaplan, 514 U.S. 938 (1995); and Matter of Smith Barney Shearson, Inc. v. Sacharow, 91 NY2d 39 (1997).

So as to avoid conflicts between states in adjudicating the same matters, Article IV § 1 of the United States Constitution requires every state to give full faith and credit to the public acts and judicial proceedings of every other state. That is, the same credit, validity and effect it has in the state which rendered it even if the suit could not have been maintained on the cause of [*4]action in the forum state or if the judgment is based on a mistake of law. Luna v Dobson, 97 NY2d 178, 182-183 (2001). The constitutional requirement of full faith and credit precludes any inquiry into the merits of the judgment, the logic or consistency of the decision underlying it or the validity of the legal principles on which it is based. Rancho Santa Fe Assn v Dolan-King, 36 AD3d 460, 461 (1st Dept. 2007); and Cadle Co. v Tri-Angle Assoc., 18 AD3d 100, 103 (1st Dept. 2005).

In its decision staying arbitration of the dispute which arose under the Scrap Metal Contract, the Florida Circuit Court rejected the argument that "Bennington Foods LLC d/b/a Bennington Group" signed the arbitration agreement by its registered fictitious name of "Bennington Group, LLC" and found that "Bennington Foods LLC d/b/a Bennington Group" was not a signatory to the arbitration agreement through its alleged affiliate "Bennington Group, LLC". Therefore, Bennington Foods was stayed from proceeding against SCRG, also a non-signatory, since those parties never consented to arbitrate any disputes.

While New York courts have recognized a number of theories under which non-signatories may be bound to the arbitration agreements made by others (1) incorporation by reference; (2) assumption; (3) agency; (4) veil-piercing/alter ego; and (5) estoppel, the Florida Circuit Court noted that a corporate relationship alone, such as exists here, is insufficient to bind a non-signatory to an arbitration agreement. (Thomson-CSF, S.A. v. America Arbitration Assn., 64 F.3d 773, 777 [2d Cir. 1995]), and found that the only parties to the contract were Montrose Global Assets Inc. and Bennington Group, LLC.

It is fundamental that arbitration agreements are creatures of contract law. Scher v. Bear Stearns & Co., 723 F.Supp. 211, 214 (S.D.NY 1989). The determination of whether a dispute is arbitrable under the Federal Arbitration Act ("FAA") (9 U.S.C. § 3) which governs interstate commerce cases and "is almost identical to, and is derived from our own [New York state's] arbitration statute" (Matter of Weinrott, 32 NY2d 190, 198 [1973]), comprises two questions: "(1) whether a valid agreement to arbitrate exists under the contract in question and, if so, (2) whether the particular dispute sought to be arbitrated falls within the scope of the arbitration agreement." Hartford Accident & Indemnity Co. v Swiss Reinsurance Am. Corp., 246 F.3d 219, 226 (2d Cir. 2001)

quoting, National Union Fires Ins. Co. v. Belco Petroleum Corp., 88 F. 3d 129, 135 (2d Cir. 1996).

With respect to New York's statute, pursuant to CPLR Article 75, the court plays the gatekeeping role of deciding whether a valid agreement to arbitrate was made. AT&S Transp., LLC v Odyssey Logistics & Technology Corp., 22 AD3d 750, 752 (2nd Dept. 2005); and Merrill Lynch, Pierce, Fenner & Smith, Inc. v Benjamin,1 AD3d 39, 43 (1st Dept. 2003).

Under the FAA rules, a court initially decides whether the parties to a civil action agreed in writing to arbitrate a particular issue. Cortese v. Edge Solutions, 2005 WL 1804472 *4 (E.D.NY). While Montrose contends that the FAA is not implicated, it maintains that, in any event, the ultimate conclusion would be the same under both CPLR Article 75 and FAA rules since " a party cannot be required to submit to arbitration any dispute which [it] has not agreed to so submit.' " Thomson-CSF, S.A. v America Arbitration Assn., supra at 776, quoting United States Steel Workers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582 (1960); and Gulf Underwriters Ins. Co. v. Verizon Communications, Inc., 32 AD3d 709, 710 (1st Dept. 2006).

[*5]Clearly then, under New York law, as well as federal law, the right to compel arbitration does not extend to a party who has not signed the agreement pursuant to which arbitration is sought unless the right of the non-signatory to arbitrate is expressly provided for in the agreement. In re Miller, 40 AD3d 861, 862 (2nd Dept. 2007); Greater New York Mut. Ins. Co. v Rankin, 298 AD2d 263, 382 (1st Dept. 2002); and H.I.G Capital Mgt., Inc. v Ligator, 233 AD2d 270, 271 (1st Dept. 1996). See also, John Hancock Life Ins. Co. v Wilson, 254 F. 4d 48, 53 (2d Cir. 2001), quoting AT&T Technologies Inc. v Communications Workers of America, 475 U.S. 643, 649 (1986). While a party is entitled to sue as a third-party beneficiary of a contract, if the circumstances indicate that the promisee intends to give the beneficiary the benefit of the promised performance (243-249 Holding Co., LLC v Infante, 4 AD3d 184 [1st Dept. 2004]), Bennington Foods was not an intended beneficiary of the agreement to which it was not a party.

Thus, Bennington Foods is not entitled to invoke the Scrap Metal Contract arbitration clause. The best evidence of an intent to benefit a third party non-signatory is the language of the agreement itself. National Bank Ltd. v. Security Mgt. Co., Ltd., 29 AD3d 408 (1st Dept. 2006). The arbitration agreement has no language which would avail Bennington Foods so as to permit it to invoke the right to arbitrate pursuant to an agreement it did not sign.

Accordingly, inasmuch as Bennington Foods did not agree to arbitrate, Montrose's application to stay the arbitration proceeding pending between Bennington Foods, LLC, d/b/a Bennington Foods and Montrose Global Assets Group must be granted.

Accordingly, it is,

ORDERED, that the application of Petitioner Montrose Global Assets, Inc. to stay arbitration is granted; and it is further,

ORDERED, that the unopposed application to admit Addison J. Meyers, Esq. pro hac vice is granted nunc pro tunc.^[FN1]

This constitutes the decision and Order of the Court.

Dated: Mineola, NY____________________________

September 28, 2007Hon. LEONARD B. AUSTIN, J.S.C.

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