Recitation as required by CPLR 2219 (a), of the papers considered in review of this motion by NYCEF Doc No.: 10-46.

This is a holdover proceeding commenced by Ilan Properties, Inc. ("petitioner" or "Ilan") against Hanna Hendler and Danielle Benishai.^[FN1] Respondent is the wife and daughter, respectively, of the former tenant, David Benishai ("Benishai"), who died in 2021. The petition pleads that Respondent is in possession pursuant to "a license or sublease granted to them by the former tenant." (NYSCEF Doc No. 1, petition ¶ 8.)

Pursuant to a March 31, 2009 settlement agreement with Ilan, Benishai and his brother, Jack, each became 50% owners of Ilan Properties; and both received the right to lifelong two-year renewal leases into perpetuity for the premises with a monthly rental of $1000, and the right to sublet the apartment without permission from Ilan. (NYSCEF Doc No. 15, 2009 settlement agreement.) The settlement agreement provides that it "shall inure to the benefit of the parties and shall be binding upon each of the parties and his or its assigns, successors, heirs, and representatives." (Id. ¶ 27.)

Jack Benishai subsequently sold almost all of his shares to another entity, Curtis West 76 LLC ("Curtis"). Thereafter, in 2014, through a Share Purchase Agreement ("SPA") and a Voting Trust Participation Agreement ("VTPA"), David Benishai sold 42.5% of his shares to another entity, Argent Ventures, LLC ("Argent"). It is not disputed that Ilan now comprises four parts: (1) 49.9% interest to Curtis; (2) 0.1% interest to Jack Benishai; (3) 42.5% interest to Argent; and (4) 7.5% interest to the Estate of David Benishai, which respondent holds as administratrix and fiduciary. (NYSCEF Doc No. 32 at 11.)

In 2019, the 2009 settlement agreement became the subject of arbitration as a result of an ejectment action filed by Ilan against Benishai. At issue was whether Benishai was required to utilize the premises as his primary residence. This question arose as a result of the SPA and [*2]VTPA, supra, which purported to give both Benishai and his wife, respondent-Hendler, life estates in the subject apartment at the monthly rental amount of $1,000. The agreements state, "The Benishai Shareholders and [Argent Ventures, LLC] agree that the rent for the DB Unit is set at $1,000 per month and that the tenancy for the DB Unit shall run for the life of David Benishai and his wife, Hanna Hendler." (NYSCEF Doc No. 15 at 8, SPA § 2.09; NYSCEF Doc No. 16 at 21, VTPA § 29.) Unlike the 2009 agreement, these subsequent agreements, purport to require Benishai and his wife to utilize the apartment as their primary residence. (Id.) The arbitrator, specified as Richard Cohn in the 2009 settlement agreement, found that the 2009 settlement agreement between Ilan Properties, Inc. and Benishai was not superseded by the 2014 agreements as it related to the occupancy of the apartment by Benishai because Ilan was not a party to those subsequent agreements; therefore, Benishai was not required to utilize the Ilan-owned apartment as his primary residence. Specifically, the arbitrator found:

"IIan is not a party to the Argent Agreements. Therefore the Argent Agreements [the SPA and VTPA] do not impact the relationship between llan and Benishai with respect to Apartment 7A. The language in Sections 2.10 and 29 of the Argent agreements regarding the 'use solely as his primary residence' was not part of the March 3l, 2009 Settlement Agreement. Therefore Benishai is not bound by this language."

In 2020, Benishai sought confirmation of the award in Supreme Court. The Supreme Court confirmed the arbitration award on default. (NYSCEF Doc No. 19, arbitration judgment and arbitration award.)

Benishai died in January 2021. Respondent was appointed administrator of his estate. On April 3, 2023, Ilan commenced the instant holdover proceeding against respondent in connection with the subject apartment. Ilan seeks respondent's eviction as licensees of Benishai whose license had been revoked, or as tenants at will or at sufferance.

Respondent filed a pre-answer motion to dismiss this proceeding in favor of a subsequent Supreme Court action commenced by respondent on April 4, 2023, one day after this holdover proceeding was commenced alleging five causes of action. (Hanna Hendler v Ilan Properties et al, Sup Ct, New York County, Index No. 153082/2023.) Relevant here is the first cause of action in that proceeding which alleged that respondent herein is entitled to a judgment declaring that she has a right to occupy the apartment based on the 2009 settlement agreement. Petitioner herein moved to dismiss the Supreme Court action on the basis that the holdover proceeding is a prior action pending in the Housing Court. This court stayed the instant proceeding pending the Supreme Court determination of the motion to dismiss. The Supreme Court, Lori Sattler, J., rendered a decision on August 8, 2023. ((Hanna Hendler v Ilan Properties et al, Sup Ct, New York County, August 8, 2023, Sattler, J., Index No. 153082/2023; NYSCEF Doc No. 37, respondent's exhibit A, decision and order.) Judge Sattler held that the holdover proceeding came first in time, and should be heard in Housing Court, the preferred forum for resolution of landlord-tenant disputes. Ilan's motion to dismiss the Supreme Court action was granted in its entirety. Petitioner then moved to restore this proceeding to the calendar and for immediate oral argument of the remaining branches of the pending motions. (NYSCEF Doc No. 35, notice of motion [sequence 3].) The motion to restore was granted on the record and a briefing order was issued. (NYSCEF Doc No. 41.)

Respondent has moved to dismiss the petition on the basis that documentary evidence utterly refutes the allegations in the petition (CPLR 3211 [a] [1]), and on the basis that Ilan lacks [*3]standing to maintain this proceeding (CPLR 3211 [a] [3]), and on the basis that petitioner has failed to state a cause of action (CPLR 3211 [a] [7].) (NYSCEF Doc No. 20, notice of motion [sequence 1].) Respondent argues that the VTPA and SPA bestow upon respondent "an absolute right to continued occupancy in the Apartment for her lifetime." (NYSCEF Doc No. 20, Respondent's attorney's memorandum of law at 12.) Respondent's attorney argues that the share percentages held by Argent and Benishai control regarding the continued occupancy of the apartment by respondent, which "is especially true when considering that Argent and the David Benishai Estate, to which respondent is the administratrix, hold the controlling percentage of Ilan. (Id. at 12.)^[FN2] Respondent points to Section 2.10 of the SPA and Section 29 of the VTPA, both of which state:

"Seller acknowledges that David Benishai's occupancy of the DB Unit is subject to the consent of the holders of the ILP [Ilan Properties] Common Stock. Purchaser shall vote its shares in David Benishai's interest in regards to his continued occupancy of the DB Unit, provided that Seller acknowledges that Purchaser shall have no control over the vote of any other holders of the ILP Common Stock." (NYSCEF Doc No. 16, VTPA at 8, § 2.10.)

Accordingly, respondent argues that "because no majority of its shareholders could have authorized this [h]oldover [p]roceeding without breaching the binding Voting Trust and Participation Agreement and Share Purchase Agreement," Ilan Properties is without standing to maintain this holdover proceeding. (Id.)

Petitioner opposes respondent's motion to dismiss and moves for summary judgment (NYSCEF Doc No. 21, notice of motion [sequence 2].)^[FN3] Petitioner advances that:

"[T]he 2009 Settlement Agreement and 2019 Arbitration Decision render [respondent's] standing argument meritless because the latter specifically held the 2009 Settlement Agreement is the controlling agreement and dictates that Hanna Hendler never had any independent possessory interest in or to the Premises. . . . [T]he language of the Voting Trust Agreement cited by Respondents provide only that Argent Ventures LLC ("Argent") was required to vote its shares in favor of David Benishai's occupancy of the unit. In other words, Argent was never required to vote its shares in favor of Hanna Hendler's continued occupancy." (NYSCEF Doc No. 22, Jakupaj affidavit ¶ 5.)

The thrust of petitioner's argument is that Ilan is not a party to the SPA or the VTPA as decided in the 2019 arbitration, and those agreements have no legal effect on Ilan. Thus, Ilan is the owner of the building, Ilan gave a lifetime tenancy to David Benishai, and not to respondent, and the SPA and VTPA do not grant respondent additional rights, to wit, a lifetime tenancy, because the 2009 arbitration agreement collaterally estops respondent from relitigating the issue [*4]of whether the SPA and VTPA supersede the 2009 settlement agreement. It is petitioner's position that the issue of "whether the Argent Agreements supersede the 2009 Settlement Agreement[,] was conclusively resolved at Arbitration." (Id. ¶ 28.) Petitioner contends that it agreed in the VTPA to vote its shares in favor of David's interest only, not respondent's, that the VTPA refers to the "DB Unit", not the "HH Unit" and that the VTPA has no meaning when it comes to respondent's occupancy of the apartment. (Id. ¶ 39.) Petitioner argues that any right respondent had to occupy the apartment expired along with her husband. (Id. ¶ 30.)

In opposition to petitioner's motion for summary judgment and in further support of her motion to dismiss, respondent claims that petitioner misleadingly contorts the question framed by the arbitrator in the 2019 arbitration. Respondent argues that the issue for arbitration was not whether the SPA and VTPA superseded the 2009 settlement agreement, but rather was "centered around whether David Benishai had to maintain his primary residence at the subject apartment. The only issue before the Arbitrator concerned the aspect of David Benishai's primary residence, nothing else." NYSCEF Doc No. 32, respondent's attorney's opposition and reply at 8.) Respondent further argues as follows:

This is not a matter of supersession. This is a matter of supplementation of adding rights for Hanna rather than contradicting a term of the 2009 Settlement Agreement, which was the issue in Arbitration as related to David Benishai's rights. The Argent Agreements stand alone and supplement the 2009 Settlement Agreement to include a life tenancy for Hanna. (Id. at 9.)

Respondent disputes that the SPA and VTPA do not require Argent to vote with respondent, and argues that if Argent voted to terminate respondent's tenancy, "Argent would be in deliberate breach of the [SPA and VTPA]." (Id. at 12.) Respondent further contends:

"Notably absent from Ilan's opposition is any affidavit from Argent supporting Ilan's position or confirming that Ilan had authority to commence this proceeding. This is telling. Without a majority consensus, Ilan was not—and is not—authorized to commence this proceeding against one of its own shareholders. As such, it lacks the requisite standing, and the Petition should be dismissed with prejudice."

In reply, petitioner accuses respondent of blatantly misrepresenting the scope of the 2019 arbitration award and maintains that the award unequivocally addressed supersession. Petitioner posits:

"[W]hether the dispute concerns whether (a) David Benishai had to use the apartment as his primary residence in order to be eligible for one year leases per the Voting Trust Agreement, or (b) Hanna Hendler has a right to occupancy of the apartment as per the Voting Trust Agreement, the answer remains the same: the Voting Trust Agreement does not supersede the 2009 Settlement Agreement as to the apartment." (NYSCEF Doc No. 33, petitioner's memorandum of law in reply at 5-6.)

Respondent has also cross-moved to compel arbitration of the 2009 settlement agreement pursuant to CPLR 7503. (NYSCEF Doc No. 38, notice of motion [sequence 4].) Respondent argues that because the 2009 settlement agreement "shall inure to the benefit of the parties and shall be binding upon each of the parties and his or its assigns, successors, and representatives[,]" she is entitled to the benefit of the agreement, specifically a right to lifetime [*5]renewal leases for a monthly rental of $1,000. (NYSEF Doc No. 39, respondent's attorney's affirmation in support ¶¶ 11-12.) Respondent served petitioner with a notice of intent to arbitrate on September 26, 2023. (NYSCEF Doc No. 44.)

Petitioner served respondent with opposition papers and a cross-cross motion to stay arbitration pursuant to CPLR 7503. (NYSCEF Doc No.42, notice of motion [sequence 5]; NYSCEF Doc No. 43, petitioner's attorney's affirmation in support of motion and opposition to motion to compel [sequence 4].) Petitioner's opposition to respondent's motion to compel arbitration is four-fold. Petitioner argues that (1) this dispute is not subject to arbitration because Respondent is not a party to the 2009 settlement agreement; (2) respondent waived her right to arbitrate by commencing a related Supreme Court action; (3) Respondent is barred by collateral estoppel because the arbitrator in the prior arbitration held that the Argent Agreements do not supersede the 2009 Settlement Agreement; and (4) Respondent is collaterally estopped from proceeding to arbitration because the Supreme Court held that the Civil Court is the appropriate forum.

Oral argument was held on November 1, 2023.

The issues before the court are (1) whether the 2009 agreement created a lifetime tenancy in favor of respondent; (2) whether the 2009 settlement agreement is subject to further arbitration; (3) whether the SPA and VTPA give respondent a lifetime right to renewal leases at a monthly rental of $1000; (4) whether Argent's shares must be voted in favor of respondent if issues regarding her occupancy arise, or whether that covenant applied only to the deceased Benishai; (5) whether Ilan has standing or authorization to maintain this holdover proceeding because of a majority vote authorizing same with regard to respondent; and (6) whether Argent breached the SPA and VTPA by voting with other shareholders that the holdover proceeding should be commenced by Ilan against respondent.

The court finds that the question framed by the arbitrator was narrow and limited to an analysis of Benishai's rights and restrictions regarding occupancy of the subject premises. Said differently, the 2019 arbitration award — which held that the 2009 agreement was not superseded by the SPA and the VTPA — was a very specific holding pertaining only to whether Benishai was required to use the premises as his primary residence. The arbitrator found that Benishai was not required to reside in the subject premises as his primary residence for the reason that this was not required by the 2009 settlement agreement. The judge's comments during argument on the motion to compel arbitration in the 2017 Supreme Court ejectment action against Benishai make that clear.^[FN4] (NYSCEF Doc No. 40, respondent's Exhibit A in support of motion to compel, decision and transcript, Index No. 157057/2017, Hagler, J.) The Supreme Court decision which compelled arbitration, and the underlying argument on the record reveal that only Benishai was [*6]at issue. Whether respondent as Benishai's heir could seek to enforce the agreement through arbitration is an open question with a dubious answer. Regardless, the court finds that it is the SPA and VTPA that are the contracts at issue in this proceeding with regard to respondent, not the 2009 settlement agreement.

Even if the 2009 settlement agreement were implicated herein, respondent waived her right to arbitrate any dispute by filing an action in Supreme Court for disposition of numerous substantive issues, as well as for injunctive relief, without "at the same time exercising" her right to demand arbitration. (Press/Breismeister v Westion Hotel Company-Plaza Hotel Division, 56 NY2d 787, 789 [1982].) There is no quarrel that respondent did not "at the same time" seek arbitration concomitant with the Supreme Court proceeding. Moreover, there is no "urgent need" that "cannot await the appointment of [an] arbitrator[]" which would preclude a waiver. (Sherril v Grayco Builders, Inc., 64 NY2d 261, 273 [985].) There is an arbitrator already specified who is alive and well and currently registered in New York State.^[FN5] Respondent chose to move to dismiss the proceeding in Housing Court or, in the alternative, for a stay in Housing Court pending the Supreme Court's decision. Not until the Supreme Court granted petitioner's motion to dismiss the Supreme Court proceeding in its entirety did respondent move to compel arbitration.

Finally, that petitioner's allegation that respondent is engaged in "gamesmanship" by belatedly seeking arbitration is supported by her statement in the Supreme Court complaint that "all issues raised herein must be adjudicated by the Supreme Court or Surrogate's Court and not in a summary proceeding concerning the possession of real property." (NYSCEF Doc No. 31, respondent's exhibit G, motion [sequence 2], summons and complaint ¶¶ 115.)

For the foregoing reasons, respondent's motion to compel arbitration is denied and petitioner's motion to stay arbitration is granted.

As detailed above, since 2009 the composition of Ilan has changed markedly. Ilan is no longer owned 50%-50% by the Benishai brothers. Any rights that respondent-Hendler was not granted in the 2009 agreement, appear to have been independently created by the 2014 SPA and VTPA; to wit, "the tenancy for the DB Unit shall run for the life of David Benishai and his wife, Hanna Hendler[.]" (NYSCEF Doc No. 15, SPA § 2.10; NYSCEF Doc No. 16, VTPA § 29.) Safeguards were put in place to ensure that the life tenant, whomever that is, would not be easily dispossessed, to wit, Argent is required to vote its shares with "Benishai" on issues of occupancy, and, thus, there can theoretically never be a majority vote of shareholders to evict respondent for the reason that Argent and respondent now as fiduciary and administratrix of Benishai's estate — own exactly 50% of Ilan. However, what this all means in the aggregate, and what the parties intended, are not questions for this court.

Whether or not respondent has a right to reside in the premises is the essence of this holdover proceeding. While the Supreme Court declined to consider the issue of possession, and correctly found that Housing Court is generally the preferred forum regarding issues related to [*7]possession, the parties have chosen by agreement the forum in which to litigate the disputes delineated above. At Section 17 (b) of the VTPA sets forth as follows:

"The following courts shall have exclusive personal jurisdiction and venue over the parties to this Agreement, any lawsuit, arbitration, mediation, or dispute of any kind arising out of or with respect to this Agreement, the Schedules or any document pertaining to the transactions contemplated under this Agreement: the Supreme Court of the State of New York. Each party waives any defense or claim of lack of personal jurisdiction, forum non conveniens, or alternative forum, as to this court (emphases added)."

The answer to the question of respondent's continued right to occupancy of the subject apartment lies in the interpretation of the SPA and VTPA, which is hotly disputed; and "a dispute of any kind arising out of or with respect to this Agreement" is subject to litigation in Supreme Court. Here, the parties dispute whether the SPA and VTPA allow respondent to enjoy a lifetime tenancy, or only Benishai. As another example, the SPA and VTPA state that Argent shall vote its shares in favor of "Benishai" regarding his continued occupancy of the apartment. Respondent argues that Argent is required to vote with her, and petitioner argues that Argent need only vote with Benishai as specifically negotiated between sophisticated parties. Moreover, if the agreements are interpreted to require Argent to vote with respondent, the query becomes whether Argent actually voted to authorize Ilan to commence eviction proceedings against respondent, thereby giving Ilan "standing" in the holdover proceeding. If Argent did not, how did a majority of shareholders obtain a majority vote against respondent on the issue of occupancy? If Argent did, is Argent in breach of contract as respondent claims?^[FN6] Not only does this court not have enough information to make a determination, this court is without jurisdiction to do so.

Accordingly, it is

ORDERED that the only issue in respondent's motion that remains to be decided is whether Ilan has standing to maintain this proceeding. Respondent's motion is DENIED without prejudice to renewal upon clarification of the SPA and VTPA; and it is further

ORDERED that petitioner's motion for summary judgment is DENIED for the reasons set forth above; and it is further

ORDERED that respondent's motion to compel arbitration is DENIED; and it is further

ORDERED that petitioner's motion to stay arbitration is GRANTED; and it is further

ORDERED that this proceeding is marked off this court's calendar for the parties to engage in arbitration of the issues necessary to make a determination herein.

The proceeding may be restored on 8 days' notice of motion for appropriate relief.^[FN7]

This constitutes the decision and order of this court.