Pages Numbered Notice of Motion/Order to Show Cause/ Petition/Cross Motion and Affidavits (Affirmations) Annexed 1-3 Opposing Affidavits (Affirmations) 4-6 Reply Affidavits (Affirmations) 7-8 Affidavit (Affirmation) Other Papers Upon the foregoing papers, it is ORDERED that the motion by the plaintiff for an order compelling arbitration and staying this action is granted, and it is further ORDERED that the motions by the defendants to dismiss the complaint are denied without prejudice. The plaintiff entered into a subcontract with the defendant Borough Construction Group (Borough) in connection with a project on property owned by the Longwood Central School District. The contract included an arbitration provision. The defendant Park East Construction Corp (Park East) was the construction manager for the project and was not a party to the contract. A dispute arose between the plaintiff and Borough and the plaintiff filed a mechanic’s lien against the property. The parties engaged in litigation regarding the lien and Borough commenced an action against the plaintiff in Supreme Court, New York County asserting both tort and breach of contract causes of action. The plaintiff answered the complaint but did not assert any counterclaims. The plaintiff subsequently commenced this action against Borough for, inter alia, breach of contract and to enforce the mechanic’s lien. The amended complaint also asserts a cause of action for tortious interference with contract against Park East. At the same time that the action was commenced, the plaintiff filed a motion to stay the action and compel Borough to arbitrate pursuant to the parties agreement. Borough contends that the plaintiff waived its right to arbitration and moves to dismiss certain causes of action. Arbitration is favored in New York State as a means of resolving disputes and courts should interfere as little as possible with agreements to arbitrate (see Matter of Smith Barney Shearson v. Sacharow, 91 NY2d 39; Shah v. Monpat Constr., 65 AD3d 541). “Like contract rights generally, a right to arbitration may be modified, waived or abandoned” (Sherill v. Grayco Builders, 64 NY2d 261, 272; see Stark v. Molod Spitz DeSantis & Stark, 9 NY3d 59; Matter of Village of Bronxville v. Bronxville Police Taylor Act Comm., 171 AD3d 932). Where a party affirmatively seeks the benefits of litigation, in a manner clearly inconsistent with its later claim that the parties were obligated to settle their differences by arbitration, the right to arbitrate has been waived (see Stark v. Molod Spitz DeSantis & Stark, supra; Matter of Village of Bronxville v. Bronxville Police Taylor Act Comm., supra). However, “[n]ot every foray into the courthouse effects a waiver of the right to arbitrate…where urgent need to preserve the status quo requires some immediate action which cannot await the appointment of arbitrators, waiver will not occur” (Stark v. Molod Spitz DeSantis & Stark, supra at 67 quoting Sherill v. Grayco Builders, supra at 273). Here, the plaintiff immediately moved to stay the action and compel arbitration after the action was commenced. The plaintiff asserts that the action was filed to preserve its lien rights and claim under a payment bond provided by Borough. The commencement of an action to foreclose a mechanic’s lien does not constitute a waiver of a contractual right to arbitration (see Tradesource Inc v. Ancor Inc., 281 AD2d 538; Matter of Riggi v. Wade Lupe Constr. Co., 176 AD2d 1177; Matter of DMC Constr. Corp v. Nash Steel Corp., 50 AD2d 560). Borough contends that the plaintiff engaged in prior litigation without asserting any arbitration claim. However, the other litigation consisted primarily of special proceedings pursuant to the Lien Law which were limited in scope and did not address the underlying contract dispute. With respect to the New York County action, the plaintiff answered the complaint and served discovery demands but did not assert any counterclaims. The answer was served in November 2021 and the plaintiff then commenced this action and moved to compel arbitration in January 2022. Under these circumstances, the plaintiff did not waive the right to arbitrate (see Sutphin Retail One v. Sutphin Airtrain Realty, 143 AD3d 972; Byrnes v. Castaldi, 72 AD3d 718). Accordingly, the motion to compel arbitration and stay the action is granted. In view of this determination, the motion by Borough to dismiss certain causes of action is denied without prejudice as Borough may assert any claims or defenses during the arbitration. Park East, which was not a party to the contract, moves for an order dismissing the complaint. “[W]here arbitrable and nonarbitrable claims are inextricably interwoven, the proper course is to stay judicial proceedings pending completion of the arbitration, particularly where the determination of issues in arbitration may well dispose of nonarbitrable matters” (Lake Harbor Advisors v. Settlement Servs. Arbitration & Mediation, 175 AD3d 479, 480 quoting Anderson Realty Corp v. New Rochelle Revitalization, 78 AD3d 972, 975; see Weiss v. Nath, 97 AD3d 661). In this case, the plaintiff’s allegation that Park East tortiously interfered with the subject contract is inextricably interwoven with the issues to be resolved during the arbitration as to which party breached the agreement. Therefore, a stay of the entire action is warranted. Accordingly, the motion by Park East is denied without prejudice. Dated: September 6, 2022
