Willer v Kleinman, 2014 NY Slip Op 01164 (2d Dept. 2014)
You agree to arbitrate or are a forced participant in an arbitration. Assuming there is no other way to wiggle out of being subjected to AAA jurisdiction, you proceed to file a complaint. Your adversary answers your complaint and pleads counterclaims that bear on the merits of the arbitration. Are you out of the woods? Precedent suggests that you are.
“However, the defendants, by their conduct in this lawsuit, waived arbitration. As this Court explained in Reynolds & Reynolds Co., Automotive Sys. Div. v Goldsmith Motor Corp. (251 AD2d 312, 313),”[t]here is no inflexible or mechanical rule as to what constitutes a waiver of the right to arbitrate. Rather, determination of the issue depends on the facts and circumstances of each particular case . . . Among the factors to be considered are the extent of the party’s participation in litigation and conduct inconsistent with the assertion of a right to arbitrate, the delay in seeking arbitration, and whether the other party has been prejudiced” (citations omitted).
While a party who commences an action waives arbitration, the same cannot be said for a defendant (see De Sapio v Kohlmeyer, 35 NY2d 402, 405). A defendant who submits an answer, or submits a pre-answer motion to dismiss the action, does not waive arbitration, especially if the arbitrability of the controversy is asserted as a ground to dismiss the action (see Flynn v Labor Ready, 6 AD3d 492; Spatz v Ridge Lea Assoc., 309 AD2d 1248; Ruttura & Sons Constr. Co. v Petrocelli Constr., 257 AD2d 614). However, in the instant case, the defendants asserted counterclaims related to issues in the main action, against both plaintiffs, including Nadia Willer, who is united in interest with Justin Willer, but is not a party to any arbitration agreement (see Dembitzer v Chera, 305 AD2d 531, 532). Further, the defendants sought and obtained discovery (see De Sapio v Kohlmeyer, 35 NY2d 402, 405).
