Defendants Holzmacher, McLendon & Murrell, P.C., H2M Associates, Inc. and H2M Construction Management, Inc. (collectively "HMM") move to stay this action and compel arbitration. Defendants Losardo General Contractors ("Losardo") and Gulf Insurance Company ("Gulf") move to stay the prosecution of the action between Plaintiff Atlantic Beach Fire District ("ABFD") and Losardo and Gulf should the Court direct the claims made by Atlantic against HMM to proceed to arbitration pending the determination of said arbitration.

By agreement dated May 28, 2002, ABFD retained HMM to provide architectural and engineering services in connection with the construction of the Atlantic Beach Fire District Recuse Headquarters ("Premises"). The agreement also provided for HMM to monitor the progress and quality of the construction and the progress of the work.

The agreement between HMM and ABFD contains the following provision:

"If a dispute arises out of any of the provisions contained herein, H2M and the District, agree to exercise good faith efforts to resolve the matter fairly, amicably and in a timely manner. If a dispute cannot be settled through discussion, each party agrees to settle the dispute through binding arbitration before a single arbitrator to be selected by the Nassau County Chapter of the American Arbitration Association, with cost of said arbitration to be borne equally by and between the parties. In addition, both H2M and the District shall be responsible for the payment of any and all fees as and for any legal services resulting from or due to said arbitration."

ABFD alleges that HMM breached its contract by failing to monitor the progress and quality of the work being performed by Losardo. ABFD seeks to recover damages resulting therefrom.

On September 12, 2003, ABFD entered into an agreement with Losardo to perform certain work involved in the construction of the Premises. It alleges that Losardo breached its contract by performing construction work that was substandard and not in accordance with the plans and specifications. ABFD also alleges that Losardo failed and refused to repair or remedy the construction defects.

Gulf issued the performance bond relating to Losardo's work. ABFD seeks to recover against Gulf based upon its failure to complete Losardo's obligations under the contract.

Neither the performance bond nor the agreement between ABFD and Losardo contain an arbitration clause.

Losardo and Gulf assert a cross-claim in their answer seeking contribution and/or indemnification from HMM. Losardo and Gulf do not have a contractual relationship with HMM.

HMM moves to stay this action and compel arbitration in accordance with the terms of its contract with ABFD.

Losardo and Gulf seek to stay the prosecution of this action in the event the Court stays the action between ABFD and HMM and directs arbitration pending the outcome of the arbitration. [*2]

ABFD does not oppose HMM's application to stay the action and compel arbitration. However, ABFD does oppose Losardo's application to stay the action pending the outcome of its arbitration with HMM.

A party will not be compelled to arbitrate unless the evidence establishes a clear, explicit and unequivocal agreement to resolve disputes through arbitration. God's Battalion of Prayer Pentecostal Church, Inc. v. Miele Assocs., LLP, 6 NY3d 371 (2006); and Riverside Capital Advisors, Inc. v. Winchester Global Trust Co., Ltd., 21 AD3d 887 (2nd Dept. 2005).

An arbitration clause, as a contractual provision, will be enforced in accordance with its terms. Primavera Laboratories, Inc. v. Avon Products, Inc., 297 AD2d 505 (1st Dept. 2002).

The agreement between HMM and ABFD clearly and unequivocally provides for arbitration of any disputes between those parties arising under the contract. In view of this contractual provision, ordinarily the court would stay this action and direct ABFD and HMM to proceed to arbitration.

However, this is not an ordinary situation.

In the absence of a contractual agreement to arbitration, a party cannot be compelled to arbitrate. God's Battalion of Prayer Pentecostal Church, Inc. v. Miele Assocs., LLP, supra; and Riverside Capital Advisors, Inc. v. Winchester Global Trust Co., Ltd., supra.

Losardo's contract with ABFD does not contain any provision requiring them to submit disputes to arbitration. The performance bond issued by Gulf does not have an arbitration provision. Thus, ABFD cannot compel Losardo and Gulf to participate in the arbitration between ABFD and HMM. Since Losardo and Gulf do not have a contractual relationship with HMM, they cannot be compelled to arbitrate their cross-claim for contribution and/or indemnification. Thus, nothing would be gained if this matter were to await arbitration or if this case were to proceed simultaneously with an arbitration, if it were compelled, since the cross-claim against HMM could only ne heard in this Court.

Claims that are inextricably bound together should be resolved in the same action in the same forum. Young v. Jaffe, 282 AD2d 450 (2nd Dept. 2001); Brennan v. A.G. Becker, Inc., 127 AD2d 951 (3rd Dept. 1987); and Steigerwald v. Dean Witter Reynolds, Inc., 84 AD2d 905 (1st Dept. 1981).

ABFD alleges that HMM breached its contract by failing to supervise or properly supervise and inspect the work being performed by Losardo to assure that the work was being performed in accordance with the plans and specifications and in a workmanlike manner. Thus, ABFD's claims regarding the quality of the work being performed by Losardo and whether that work was in accordance with the plans and specifications is inextricably intertwined with its claim that HMM failed to properly supervise and inspect this work.

Since the only forum in which all claims among these parties arising from this project can be determined is this litigation in this Court, the application to stay the action and compel arbitration must be denied. To hold otherwise would prolong this litigation and invite an inconsistent result from the arbitration forum. Such circumstance may be analogized with cases addressing consolidation of two litigations involving common issues of law and fact under CPLR 602. See, e.g. GAM Property Corp. v. Sorrento Lactalis, Inc., 41 AD3d 645 (2nd Dept. 2007). Put another way, where the pending arbitration and non-arbitration claims are "inextricably intertwined", the motion to compel arbitration must be denied. Young v. Jaffe, [*3]supra.

The motion of Losardo and Gulf to stay the prosecution of this action pending the arbitration is denied as academic.

Accordingly, it is,

ORDERED, that the motion of Defendant HMM to stay the prosecution of this action and compel arbitration is denied; and it is further,

ORDERED, that HMM shall serve an answer to the complaint within 20 days of the date of this order; and it is further,

ORDERED, that the motion of Defendants Losardo and Gulf to stay the prosecution of this action pending arbitration is denied as academic; and it is further,

ORDERED, that counsel for the parties are directed to appear for a Preliminary Conference on November 2, 2007 at 9:30 a.m.

This constitutes the decision and Order of the Court.

Dated: Mineola, NY_____________________________

October 3, 2007Hon. LEONARD B. AUSTIN, J.S.C.