The Court has considered the following in consideration of its determination: 1. Notice of Motion (Seq. 001), Affirmation in Support, Exhibits in Support (Doc 7-22) 2. Opposition to Motion (Doc 23-30) 3. Reply to Opposition (Doc 31) It is ORDERED that the branch of the Defendants’ motion (Mot. Seq. 001) to compel arbitration is granted in part; and it is further ORDERED that the branch of the Defendants’ motion seeking to dismiss the action is granted to the extent that the first, second, third, eighth and ninth causes of action are dismissed and are remanded to arbitration; and it is further ORDERED that the remaining fourth, fifth, sixth, and seventh causes of action as asserted against Paul Whelan and the Whelan Firm are stayed pending completion of the arbitration; and it is further ORDERED that William Welsh, III and Mary Jane Welsh are directed to contact the arbitrator and engage in arbitration of the remaining issues in the Settlement Agreement and the remanded issues identified by this Court; and it is further ORDERED that the Parties are directed to notify this Court when they have resolved the above stated issues. In this action, the Plaintiff William E. Welsh III (William) seeks damages for the breach of a Settlement Agreement which was reached with his sister, Defendant Mary Jane Whalen (Mary Jane) after submitting the matter to arbitration on September 15, 2020. The complaint contains nine causes of action including breach of fiduciary duty, breach of contract, aiding and abetting breach of fiduciary duty, aiding and abetting breach of contract, unjust enrichment, declaratory judgment, and accounting. The gravamen of the complaint is that Mary Jane allegedly declared herself to have prevailed in the arbitration and took funds from the Plaintiff’s interest in the LLC to pay attorney fees. A review of the Operating Agreement of 355 Dune Road, LLC at Article 17, Arbitration of Disputes reveals, in part, that “*** The parties expressly waive any rights to resolve any claim or dispute covered by this Article through other means, including by filing a lawsuit in court for trial by the court or before a jury. The parties are precluded from bringing or raising in court or before another forum any claim or dispute which could have been brought or raised pursuant to the arbitration procedures provided for herein. The Plaintiff relies upon a clause at Paragraph 17 in the Settlement Agreement which provides, in part: All litigation arising out of or relating to this Agreement or any of the transactions contemplated hereby shall be brought exclusively in the Federal or State courts of the State of New York and the Parties consent to personal jurisdiction therein. The Defendants now move to dismiss the complaint, or in the alternative, to stay the action and compel the parties to arbitrate. In support of the motion, the Defendants contend that the Plaintiff has incorrectly sued two individuals and one LLC. In addition, this action contains the same allegations the Plaintiff made in commencing the arbitration in 2020 which he withdrew when the Parties settled. Moreover, the Settlement Agreement specifically directed the parties to return for a determination of who the prevailing party was, if any, and the cost of William’s renovation of a shared home. In opposition, William claims that Paul Whelan and his law firm should not be included in the arbitration since they have no privity to the Operating Agreement. William disputes Mary Jane’s contention that the Parties’ father left total control of the LLC to her, including the subject house. In addition, William questions Mary Jane’s ability to use his interest in the LLC to pay legal fees. William contends that Paragraph 12 of the Settlement Agreement allows any party to commence an action in this court. Pursuant to CPLR 7501, “A written agreement to submit any controversy thereafter arising or any existing controversy to arbitration is enforceable without regard to the justiciable character of the controversy and confers jurisdiction on the courts of the state to enforce it and to enter judgment on an award.” The courts play the “gatekeeping role of deciding certain ‘threshold’ issues before compelling or staying arbitration (CPLR 7303). The threshold issues include whether a valid agreement was made, whether the agreement was complied with, and whether the claim sought to be arbitrated is barred by the statute of limitations (see Merrill Lynch, Pierce, Fenner & Smith v. Benjamin, 1 AD3d 39, 43-44, 766 NYS2d 1 [1st Dept 2003]). It is well established that the question of whether an agreement is abandoned or terminated involves issues which must be resolved by the arbitrator. Once parties to a broad arbitration clause make a valid choice of forum, all questions with respect to the validity and effect of subsequent documents purporting to work a modification or termination of the substantive provisions of their original agreement are to be resolved by the arbitrator (see Metalink Marine v. Ned Chartering & Trading, 207 AD2d 688, 689, 616 NYS2d 361 [1st Dept 1994]). Where a party had a full and fair opportunity to litigate a claim during an arbitration proceeding, it cannot seek to litigate the same claim in a judicial forum (Clemens v. Apple, 65 NY2d 746, 492 NYS2d 20 [1985]). Applying these principles, William does not deny that the Operating Agreement contains a clause requiring the members to arbitrate all disputes, and that he was a signatory to that agreement, and there is no statute of limitations bar. Similarly, William does not argue that there are any conditions precedent that must be complied with for the arbitration provision to be exercised. Thus, under these circumstances, the Court is constrained to enforce the Operating Agreement which requires the parties to resolve their differences in arbitration. Therefore, the first, second, third, eighth and ninth causes of action as asserted against Mary Jane and on behalf of the LLC are dismissed and are remanded to arbitration as well as the prior issues related to the prevailing party and the cost of renovations. However, the fourth through seventh causes of action as asserted against Paul Whelan and the Law Office of Paul C. Whalen, P.C. who are not parties to the Operating Agreement are hereby stayed pending completion of the arbitration (see Marcus v. Millwork Trading Co., 208 AD2d 448, 618 NYS2d 1017 [1st Dept 1994]). Accordingly, it is ORDERED that the branch of the Defendants’ motion (Mot. Seq. 001) to compel arbitration is granted in part; and it is further ORDERED that the branch of the Defendants’ motion to dismiss the action is granted to the extent that the first, second, third, eighth and ninth causes of action are dismissed and are remanded to arbitration; and it is further ORDERED that the remaining fourth, fifth, sixth, and seventh causes of action as asserted against Defendants Paul C. Whelan and the Law Offices of Paul C. Whalen P.C. are stayed pending completion of the arbitration; and it is further ORDERED that William Welsh, III and Mary Jane Welsh are directed to contact the arbitrator and engage in arbitration of the remaining issues in the Settlement Agreement and the remanded issues identified by this Court; and it is further ORDERED that the Parties are directed to notify this Court when they have resolved the above stated issues. The foregoing constitutes the decision and ORDER of this Court. Dated: August 14, 2023
