The following e-filed documents, listed by NYSCEF document number (Motion 001) 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15 were read on this motion to/for STAY ARBITRATION. DECISION + ORDER ON MOTION Upon the foregoing documents, the court denies Petitioner Trust Motor, LLC d/b/a Trust Motors’ (“Petitioner”) Verified Petition and order to show cause to stay the arbitration proceeding commenced by Respondent The LCF Group (“Respondent”), to stay Respondent’s collection proceedings and other relief. Respondent commenced the arbitration proceeding with Mediation & Civil Arbitration, Inc. against Petitioner and others by alleging in substance that they breached the parties’ written Merchant Agreement and Security Agreement for the Purchase & Sale of Future Receivables Agreement, dated April 13, 2023, by defaulting on the terms of the Agreement, including failing to make the required payments due under the terms of the Agreement. The Agreement involved Respondent providing Petitioner with a merchant cash advance of $30,000.00, less fees and expenses, in exchange for Respondent’s right to receive $44,700.00 of Petitioner’s future receivables to be paid daily by ACH debit in the amount of 14 percent of Petitioner’s daily receipts. Respondent further alleged in substance that it provided Petitioner with the money on April 14, 2023, but on April 18, 2023, just four days later, Petitioner defaulted under the terms of the Agreement by instructing its bank to revoke Respondent’s ACH debit authorization. At the time of the default, Petitioner had paid just $1,490.00 towards the $44,700.00 purchase price owed. Respondent further alleged that pursuant to the Agreement, in the event of default, Respondent is entitled to the entire purchased amount and all fees, including reasonable attorney’s fees. On April 21, 2023, Respondent served Petitioner and the non-party guarantors with an arbitration demand, arbitration statement and applicable rules. Petitioner failed to respond, oppose or otherwise appear in the arbitration proceeding, so a default was entered against them. On May 21, 2023, Arbitrator Eric B. Gerbert, Esq. rendered a Final Arbitral Award (“Award”) in favor of Respondent as against Petitioner in the amount of $63,643.51, plus all costs of confirming the Award and pre-judgment interest from the date of default at 9 percent per annum. In the meantime, on May 11, 2023, Petitioner filed the instant Petition and on May 12, 2023, Petitioner filed the instant corrected order to show cause seeking an order staying the arbitration proceedings, staying all collection proceedings by Respondent and any collection proceedings seeking enforcement of the UCC lien holds. The court denied Petitioner’s temporary restraining order. Respondent opposes the Petition and order to show cause. CPLR 7503(b) “[s]ubject to the provisions of subdivision (c), a party who has not participated in the arbitration and who has not made or been served with an application to compel arbitration, may apply to stay arbitration on the ground that a valid agreement was not made or has not been complied with or that the claim sought to be arbitrated is barred by limitation under subdivision (b) of section 7502 (CPLR 7503[b]). Here, the court agrees with Respondent and finds that Petitioner failed to demonstrate its entitlement to any of the relief requested. Therefore, the court denies Petitioner’s Verified Petition and order to show cause as moot, since the arbitration proceeding was concluded and on the merits as the court finds that the Agreement between the parties contained a valid arbitration provision under Article VI of the Agreement. Additionally, Petitioner failed to join all necessary and indispensable parties, which should have included the Non-Party Guarantors, who were parties to the underlying arbitration proceeding. Therefore, there is no need for the court to discuss any additional arguments in favor of denial of the Verified Petition and order to show cause. The court also finds that Respondent failed to demonstrate its entitlement to the additional attorneys’ fees incurred in opposing this proceeding. The court has considered any additional argument raised by the parties which was not specifically discussed herein and the court denies any additional request for relief not expressly granted herein. As such, it is hereby ORDERED that the court denies Petitioner Trust Motor, LLC d/b/a Trust Motors’ Verified Petition and order to show cause as against Respondent The LCF Group, Inc. This constitutes the decision and order of the court. CHECK ONE: X CASE DISPOSED NON-FINAL DISPOSITION GRANTED X DENIED GRANTED IN PART OTHER APPLICATION: SETTLE ORDER SUBMIT ORDER CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT REFERENCE Dated: November 28, 2023
