Court Opinion

ID: 5836844
Source: CourtListenerOpinion
Date Created: 2022-01-12 22:41:11.486889+00
Date Added: 2024-06-11T08:43:37.719767
License: Public Domain

Cardamone and Doerr, JJ. (dissenting).
The narrow arbitration clause contained in the subcontract between Cowper and Hires-Turner governs what forum will resolve disputes made against Hires-Turner under the subcontract. The incorporation by reference of the broad arbitration clause between the owner and the general contractor in the subcontract does not mean that Hires-Turner agreed to arbitration as the forum for disputes against it. Rather, it indicates that it has accepted the agreement to arbitrate between the owner and Cowper Company and had agreed to be bound by a determination in a proceeding between those parties (Matter of Fidelity & Deposit Co. of Md. v Parsons & Whittemore Corp., 48 NY2d 127). Thus, the vouching-in procedure directed by Special Term pursuant to paragraph 23 of the subcontract dovetails and fulfills the purpose and intent of the parties expressed in paragraph 24. The operative language of paragraph 24 states that matters arising under the subcontract are subject to arbitration, except "where such claim, dispute or matter is covered by insurance.” In a commercial transaction a party may not be compelled to arbitrate absent an "express, unequivocal agreement to that effect” (Matter of Marlene Inds. Corp. [Carnac Textiles], 45 NY2d 327, 333). We cannot construe this contract, as the majority does, as containing an unequivocal consent to arbitrate. Rather the subcontractor by excluding claims covered by insurance from arbitration clearly indicated that any such claim against it which arises under the subcontract would be litigated in the State’s trial courts where its insurance carrier would provide the defense. We do not believe that it may properly be deprived of that choice by an analysis of the exclusions set forth in the insurance contract, inasmuch as all that is required to eliminate the arbitration forum is insurance coverage. Such coverage is plainly provided to Hires-Turner under the "contractual liability insurance” portion of the policy which states that the coverage applies to "all written and oral contracts between the Insured and others relating to the business of the Insured as stated in the Declarations”. Regardless of whether the insurance company would have to pay this particular contractual claim—and concededly such is not certain and also not before us—the point is that this claim or dispute is one covered by insurance, where the forum for the determination of the claim would be a State trial court and not arbitration. For these reasons and for the reasons stated at Special Term, we dissent and vote to affirm. (Appeal from order of Onondaga Supreme Court—arbitration.) Present—Dillon, P. J., Cardamone, Simons, Doerr and Moule, JJ.