Mineola Garden City Co. v. Bank of America
49 F. Supp. 3d 283
E.D.N.Y2014Background
- Landlord Mineóla Garden City Co. (NY) leased premises to UST in 1996; lease required Tenant to pay fixed rent and operating expense escalations and contained an arbitration clause for disputes "concerning Expenses."
- Bank of America acquired UST in 2008 and inherited the lease obligations.
- In March 2013 Landlord served a certified invoice for $289,633 for operating expenses; Landlord alleges no objection or payment by Bank.
- Bank contends it objected to the invoice and that the dispute is governed by the lease arbitration clause.
- Plaintiff argues the arbitration clause is limited to overpayment/refund disputes; Defendant argues it covers any dispute concerning Expenses.
- District court (Spatt, J.) ordered arbitration and stayed the litigation under the Federal Arbitration Act (FAA).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a valid agreement to arbitrate exists covering this dispute | Arbitration clause is limited to overpayment/refund issues and does not cover this dispute | Clause covers "any dispute ... concerning Expenses," so the invoice dispute falls within arbitration | Valid arbitration agreement exists and covers the dispute |
| Whether the court should stay or dismiss the litigation pending arbitration | (Implicit) litigation should proceed or at least not be stayed if arbitration inapplicable | FAA §3 requires stay when issue is referable to arbitration; stay promotes expeditious resolution | Court granted a stay under FAA §3 (compelled arbitration and stayed proceedings) |
Key Cases Cited
- AT & T Mobility LLC v. Concepcion, 563 U.S. 333 (2011) (strong federal policy favoring arbitration)
- Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52 (1995) (contracts should be read to give effect to all provisions)
- Arciniaga v. Gen. Motors Corp., 460 F.3d 231 (2d Cir. 2006) (emphasizing strong federal policy favoring arbitration)
- Genesco, Inc. v. T. Kakiuchi & Co., 815 F.2d 840 (2d Cir. 1987) (ambiguities in arbitration scope resolved in favor of arbitration; exclusions must be clear and unambiguous)
- Salim Oleochemicals v. M/V Shropshire, 278 F.3d 90 (2d Cir. 2002) (discussing stay vs. dismissal when referring matters to arbitration)