Motion to Stay Proceedings in Wythe Berry Llc, The William Vale Hotel Llc, The William Vale Fnb Llc, North 12 Parking Llc v. Yoel Goldman| Trellis.Law

On November 14, 2023 a Motion-Secondary was filed involving a dispute between North 12 Parking Llc, The William Vale Fnb Llc, Wythe Berry Llc, and Yoel Goldman, for Special Proceedings - CPLR Article 75 (Arbitration) - Commercial Division in the District Court of New York County.

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FILED: NEW YORK COUNTY CLERK 12/04/2023 11:52 PM INDEX NO. 655683/2023
NYSCEF DOC. NO. 30 RECEIVED NYSCEF: 12/04/2023

SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
-------------------------------------------------------------------X
In the Matter of the Application of
Index No. 655683/2023
WYTHE BERRY LLC, THE WILLIAM VALE
HOTEL LLC, THE WILLIAM VALE FNB LLC, Hon. Barry Ostrager
AND NORTH 12 PARKING LLC, Part 61

Petitioners, ORAL ARGUMENT
REQUESTED
For an Order Staying Arbitration Pursuant to
Article 75 of the CPLR

-against-

YOEL GOLDMAN,

Respondent.
---------------------------------------------------------------X

REPLY MEMORANDUM OF LAW OF PETITIONERS
IN SUPPORT OF THE VERIFIED PETITION TO
STAY ARBITRATION PURSUANT TO CPLR § 7503(b)

ABRAMSON BROOKS LLP
1051 Port Washington Blvd. #322
Port Washington, NY 11050
(516) 455-0215

-and-

FREEDMAN NORMAND FRIEDLAND LLP
99 Park Avenue, Suite 1910
New York, NY 10016
(646) 350-0527

Attorneys for Petitioners
Wythe Berry LLC, The William Vale
Hotel LLC, The William Vale FNB LLC,
and North 12 Parking LLC

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TABLE OF CONTENTS

TABLE OF AUTHORITIES .......................................................................................................... ii

PRELIMINARY STATEMENT .................................................................................................... 1

ARGUMENT .................................................................................................................................. 2

I. NO AGREEMENT EXISTS TO ARBITRATE BETWEEN PETITIONERS AND
GOLDMAN ........................................................................................................................ 2

A. Applicable Legal Standards .................................................................................... 2

B. The Parties Have No Agreement to Arbitrate ......................................................... 2

C. The Side Agreement Does Not Bind Petitioners to the Fifth Amendment ............. 5

D. Goldman Waived Arbitration ................................................................................. 8

CONCLUSION ............................................................................................................................... 9

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TABLE OF AUTHORITIES

Cases

Berman v. Tierra Real Est. Grp., LLC,
23 Wash. App. 2d 387, 515 P.3d 1004 [Wash. Ct. App. 1st Div. 2022] .................................... 4

Brenna v. A.G. Becker, Inc.,
127 A.D.2d 951 [3d Dep’t 1987] ................................................................................................ 2

Cusimano v. Berita Realty, LLC.,
103 A.D.3d 720 [2d Dep’t 2013] ................................................................................................ 2

Giray v. Ulukaya,
212 A.D.3d 439 [1st Dep’t 2023] ............................................................................................... 6

Hoffman v. Finger Lakes Instrumentation, LLC,
7 Misc. 3d 179 [Sup. Ct., Monroe Cnty. 2005] ...................................................................... 3, 4

Matter of Lane (Lane v. Abel-Bey),
50 N.Y.2d 864 [1980] ................................................................................................................. 4

Matter of Lane (Lane v. Abel-Bey),
70 A.D.2d 838 [1st Dep’t 1979] ................................................................................................. 3

Matter of Pharmacia & Upjohn Co. v. Upjohn Co. (Elan Pharmaceuticals, Inc.),
10 A.D.3d 331 [1st Dep’t 2004] ................................................................................................. 2

Matter of Woodcrest Fabrics, Inc.,
98 A.D.2d 52 [1st Dep’t 1983] ................................................................................................... 4

Mionis v. Bank Julius Baer & Co.,
301 A.D.2d 104 [1st Dep’t 2002] ............................................................................................... 2

Waldron v. Goddess,
61 N.Y.2d 181 [1984] ............................................................................................................. 6, 7

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Petitioners respectfully submit this memorandum of law in reply to the Memorandum of

Law in Opposition to Petitioners’ Verified Petition for a Stay of Arbitration Pursuant to CPLR §

7503 (the “Opp. Memo”) submitted by respondent, Yoel Goldman (“Goldman”) [NYSCEF Doc.

No. 16], and in further support of their Petition [NYSCEF Doc. No. 1].1

PRELIMINARY STATEMENT

Lacking meritorious grounds to resist the Petition, Goldman asserts the Petitioners

commenced this proceeding as a delay tactic “to stall any substantive hearing on the merits of the

claims in the arbitration” (see Opp. Memo at 1 & 8). Goldman’s claim is both untrue and ironic.

It’s untrue because the Petition will not “stall” the Merits Hearing that is scheduled to

begin seven months from now, on July 8, 2024.2 It’s ironic because the only party seeking delay

is Goldman, who waited seven months to initiate the arbitration, 3 and once filed, waited another

seven months to amend the demand to include Petitioners – taking both actions on the very last

day set by the Court and the Panel.

Focusing on the issue at hand, however, demonstrates that Goldman mischaracterizes the

dispute now before the Court. It is not whether Goldman’s claims fall within the arbitration

provision of the Fifth Amendment, but whether Petitioners are a party to any arbitration

agreement with Goldman.4 The unequivocal answer to that question is “No.” Accordingly, the

Petition must be granted and the Arbitration stayed as to all Petitioners. 5

1
Capitalized terms not otherwise defined herein have the meanings ascribed to them in the Petition.
2
A point Goldman fails to mention notwithstanding this Court’s explicit directive that “[a]ny additional papers filed
by either party shall include information on the status of the Arbitration and existing deadlines” (see Order to Show
Cause, dated Nov. 17, 2023 [NYSCEF Doc. No. 15], at p.2).
3
See Goldman v. Weiss, Index No. 653186/2022 (the “Goldman Art. 75”), Verified Petition Dated September 1,
2022 [NYSCEF Doc. No. 1] (advising the Court the arbitration was “forthcoming”)
4
Consequently, Goldman’s entire argument about arbitrability is irrelevant and moot. See Opp. Memo at 12-16.
5
Of course, staying the Arbitration will not “obstruct any adjudication of Goldman’s claims.” See Opp. Memo at 8.

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ARGUMENT

I. NO AGREEMENT EXISTS TO ARBITRATE BETWEEN PETITIONERS AND
GOLDMAN

A. APPLICABLE LEGAL STANDARDS

Arbitration cannot be compelled where there is no agreement to arbitrate. In New York,

“a court will not order a party to submit to arbitration absent evidence of that party’s unequivocal

intent to arbitrate the relevant dispute.” Matter of Pharmacia & Upjohn Co. v. Upjohn Co. (Elan

Pharmaceuticals, Inc.), 10 A.D.3d 331, 333 [1st Dep’t 2004] (internal quotation marks omitted);

see also Mionis v. Bank Julius Baer & Co., 301 A.D.2d 104, 109 [1st Dep’t 2002] (“It is a

fundamental principle of New York law that in the absence of an agreement to do so, parties

cannot be forced to arbitrate.”); Brenna v. A.G. Becker, Inc., 127 A.D.2d 951, 952 [3d Dep’t

1987] (“Parties to a commercial transaction will not be compelled to arbitrate controversies

unless there is an express and unequivocal agreement to that effect which does not depend on

implication or subtlety.”). The burden of proof is on the party seeking arbitration to establish an

express agreement to arbitrate with respect to a particular dispute. Cusimano v. Berita Realty,

LLC., 103 A.D.3d 720, 721 [2d Dep’t 2013].

B. THE PARTIES HAVE NO AGREEMENT TO ARBITRATE

Here, no agreement exists between Goldman (or Weiss) and any of the Petitioners to

arbitrate any alleged dispute whatsoever, let alone the claims in Goldman’s Amended Demand.

Indeed, Goldman makes no effort to argue that any of the Petitioners is a party to or signatory of

the Fifth Amendment – the only document that contains an actual or even arguable arbitration

provision – or any of the other Operating Agreements. See Verified Answer to the Petition

[NYSCEF Doc. No. 17] (“Answer”), ¶¶ 21-24. To the contrary, Goldman concedes that Weiss

and he – not the Petitioners – are the parties to and signatories of the only document that contains

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an arbitration provision: the Fifth Amendment (see Opp. Memo at 4); he also admits that “none

of the other Petitioners is a signatory of the Fifth Amendment.” See Petition ¶ 30; Answer ¶ 30.

The Petition demonstrates that where an LLC is neither named as a party to, nor an actual

signatory of, the operating agreement of the members, that LLC is not bound by the operating

agreement where no statute has been enacted that affirmatively makes an LLC bound to the

operating agreement; that is the case with these Operating Agreements and that is the case with

New York’s statutes. See Petition ¶¶ 33-49 at pp.7-12.

Goldman fails to make a meaningful effort to challenge, let alone refute, this clear

statement of the law. His only response appears in a footnote that mischaracterizes the authorities

cited. See Opp. Memo at n.4. For example, Goldman cites Hoffman v. Finger Lakes

Instrumentation, LLC, 7 Misc. 3d 179 [Sup. Ct., Monroe Cnty. 2005], but fails to mention that

Hoffman involved a defendant LLC seeking to compel arbitration against a plaintiff that signed

the operating agreement. Id. at 183-185. Thus, the Hoffman Court did not conclude that the LLC

was bound by the operating agreement; rather, it applied the doctrine of equitable estoppel to

preclude the plaintiffs from asserting that the LLC was not able to invoke the arbitration

provision of the operating agreement plaintiffs had signed. Id. at 183-186. As the Hoffman Court

noted, there is a factual and legal distinction between a situation in which a non-signatory LLC

“seek[s] to bind the signatories to the [operating] agreement,” and one in which a non-signatory

LLC “resisted arbitration” sought by the signatories, “and the distinction makes a difference.” Id.

at n.2.

Similarly, Goldman quotes an excerpt from the First Department decision in Matter of

Lane (Lane v. Abel-Bey), 70 A.D.2d 838 [1st Dep’t 1979] for the proposition that, in the context

of a closely held corporation, a non-signatory entity is bound by the arbitration provision in a

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stockholders’ agreement signed by all stockholders. See Opp. Memo at n.4. Although Goldman

notes the corporation took an appeal from the First Department decision, he inexplicably fails to

mention the Court of Appeals held that the corporation waived that issue by failing to timely

raise it:

Whether the corporation was bound by the arbitration agreement of
all its shareholders was a threshold question. Inasmuch as this
question was not raised by the corporation in a timely application
for a stay, that issue may not now be raised by the corporation or
by anyone on its behalf (CPLR 7503, subd [c]).

Matter of Lane (Lane v. Abel-Bey), 50 N.Y.2d 864, 866 [1980] (emphasis added). In other words,

the language Goldman quotes from the First Department is, at best, nothing but dicta. Indeed, the

Hoffman Court notes that the First Department’s holding that the corporation was bound was

“not embraced by the Court of Appeals.” Hoffman, 7 Misc. 3d 179 at n.2 (emphasis added). 6

Finally, Goldman cites Berman v. Tierra Real Est. Grp., LLC, 23 Wash. App. 2d 387,

515 P.3d 1004 [Wash. Ct. App. 1st Div. 2022]. In Berman, the court reached the unremarkable

conclusion that, under Washington law, a Washington LLC was bound by the arbitration clause

in the operating agreement because “Washington's limited liability company act (WLLCA)

provides that ‘the limited liability company agreement governs... [r]elations among the members

as members and between the members and the limited liability company.’ RCW

25.15.018(1)(a).” Id. at 1008 (¶ 8) (ellipses, brackets, and emphasis all in original).

This view is consistent with the approach taken by the Uniform
Limited Liability Company Act (ULLCA), which specifically
provides that “[a] limited liability company is bound by and may
enforce the operating agreement, whether or not the company has
itself manifested assent to the operating agreement.” UNIF. LTD.
LIAB. CO. ACT § 106(a) (amended 2013), 6C U.L.A. 1, 40 (2016).

6
Notably, in a subsequent matter, the First Department noted that the corporation in Matter of Lane “was named as
a party in a stockholders' agreement containing an arbitration clause.” See Matter of Woodcrest Fabrics, Inc., 98
A.D.2d 52, 56 [1st Dep’t 1983] (emphasis added). That critical fact further distinguishes that matter (and its dicta)
from the situation presented by the Petition.

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As Washington’s act was substantially modeled on the ULLCA,
we may look to the ULLCA to assist in our interpretation.

Id. at 1008 (¶ 9) (emphasis added).

Indeed, while Goldman claims a provision of Washington law is “similar to New York’s

LLC law,” see Opp. Memo at n.4, Goldman fails to quote, or even cite, any alleged similar New

York LLCL provision; none exists.

As noted in the Petition, the LLCL contains no such similar provision, and expressly

states the opposite; i.e., that the operating agreement of a New York LLC is among the members.

See Petition ¶¶ 33-37 (citing LLCL §§ 102(u) (defining “[o]perating agreement” as “any written

agreement of the members concerning the business of a limited liability company”); 417(a) (“the

members of a limited liability company shall adopt a written operating agreement”); 102(q)

(defining “[m]ember” as a person who has been admitted as a member of a limited liability

company”); & 203(d) (recognizing that “[a] limited liability company formed under this chapter

shall be a separate legal entity” from its members). Furthermore, unlike Washington’s LLC law,

the New York law is not modeled on the Uniform Limited Liability Company Act (or the

RULLCA). See Petition ¶ 38 & n.4. Goldman fails to cite any authority to the contrary.

Accordingly, as a matter of both fact and law, the Petitioners are not parties to,

signatories of, or bound by the Fifth Amendment or any of the Operating Agreements.

Consequently, no agreement to arbitrate exists between Goldman and any of the Petitioners.

C. THE SIDE AGREEMENT DOES NOT BIND PETITIONERS TO THE FIFTH
AMENDMENT

Goldman argues that the Verified Petition should be denied because Petitioners

“acknowledged” the Side Agreement. Here, Goldman accuses Petitioners of “split[ting] hairs to

avoid arbitration” and engaging in “mental gymnastics” because Petitioners have argued that

acknowledgement of the Side Agreement by Weiss and Goldman’s jointly owned entities does

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not equate to an agreement to arbitrate by the entities. In reality, it is Goldman’s argument that is

dependent upon linguistic gymnastics, ignoring the plain “between us” language and attempting

to twist the Side Agreement’s language to serve Goldman when it pleases him. New York law

requires more.

“It is settled that a party will not be compelled to arbitrate and, thereby, to surrender the

right to resort to the courts, absent evidence which affirmatively establishes that the parties

expressly agreed to arbitrate their disputes . . . The agreement must be clear, explicit and

unequivocal . . . and must not depend upon implication or subtlety.” Waldron v. Goddess, 61

N.Y.2d 181, 184 [1984] (internal citations omitted). Furthermore, “the threshold for clarity of

agreement to arbitrate is greater than with respect to other contractual terms.” Id. at 185.

The Side Agreement deals with a variety of issues, including dispute resolution, buy/sell

provisions, and retroactive annulment of entities, etc. The Side Agreement’s text, however, is

clear that the section pertaining to dispute resolution is limited to disputes between Goldman and

Weiss personally. The language references disputes “between us,” which – as explained in the

Petition – is clearly and unequivocally a reference to just Goldman and Weiss. Petition ¶¶ 55-57

at pp.14-15. To resist this linguistic interpretation, Goldman argued that “us” is not a defined

term. That’s true, but context matters when interpreting a contract, and context demonstrates that

in the Side Agreement, “us” means Goldman and Weiss. See Giray v. Ulukaya, 212 A.D.3d 439,

440 [1st Dep’t 2023] (citing Robertson v. Ongley Elec. Co., 146 N.Y.20, 24 [1895]) (“We must

read the whole instrument, and, when we find the parties using a certain word or expression in

different parts of it, it is reasonable to suppose that it was always used in the same sense, unless a

different meaning was plainly intended”). Moreover, the Side Agreement elsewhere refers to the

“corporations” and “enterprises.” This delineation is consistent with the reading that “between

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us” can only mean between Goldman and Weiss, the document’s signatories. Had Goldman and

Weiss intended to include the corporate entities in this provision, they undoubtedly would have

included additional references to the “corporations” and “enterprises” as is done elsewhere in the

Side Agreement.

The fact that Petitioners acknowledged the entire Side Agreement, including its promise

that disputes “between” Goldman and Weiss should be arbitrated, does not equate to a promise

that disputes which expressly fall outside the ambit of the Side Agreement’s dispute resolution

clause, i.e., not disputes “between us,” but between Goldman and a corporation – must also be

resolved per the Side Agreement’s dispute resolution clause.

Without language committing Petitioners to also resolve their disputes pursuant to the

Side Agreement – something that doesn’t exist – Goldman cannot meet New York law’s

requirement that an agreement to arbitrate with Petitioners be “clear, explicit, and unequivocal.”

Waldron, 61 N.Y.2d at 184.7

Indeed, the history between the parties demonstrates this interpretation, that the Side

Agreement applies to disputes between Goldman and Weiss personally, is both accurate and in

accordance with the parties’ intent.

In June 2021, the bondholders8 caused Fee Owner to sue Wythe Berry over a breach of

lease obligation, and in so doing, sought to enforce a personal guarantee Goldman provided over

the lease obligation. Had Goldman held a bona fide belief that the Side Agreement applied to

Notably, the Arbitration Panel has already held that “the Side Agreement” is “far from a clear expression of the
7

Parties’ intent . . .” See Arbitration, Procedural Order No. 2 at p.7, a true and correct copy of which is annexed as
Exhibit 1 to the Affirmation of Jon Schuyler Brooks, dated December 4, 2023. This finding itself, while not binding
on this Court, is persuasive authority that Goldman’s argument never gets off the ground.
8
This is a bit of an oversimplification as the exact mechanics by which the bondholders controlled Fee Owner are
beyond the scope of this brief. In reality, they exerted control over the chief restructuring officer of All Year, which
was the sole member of YGWV LLC, which was the managing member (according to Goldman) of Member LLC,
which is the parent and sole member of Fee Owner.

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disputes between corporations and himself or corporations and Weiss – he could have raised the

Side Agreement in that litigation to argue the bondholders did not have authority over Fee

Owner because the Side Agreement installed Weiss as the managing member. Of course, he

never made such an argument. Moreover, despite this litigation going on for years, and being

adverse to Weiss’s interests, Weiss never once raised the Side Agreement as proof he controlled

Fee Owner – because the truth is that neither Goldman nor Weiss believed the Side Agreement

applied to corporations, as opposed to just disputes between them personally.

D. GOLDMAN WAIVED ARBITRATION

Goldman mischaracterizes his own claims in the Goldman v. Rose Castle Redevelopment

II LLC et al. litigation to argue he hasn’t waived arbitration. See Opp. Memo at 14-15. In that

litigation, Goldman sued Wythe Berry to recover $15 million Goldman paid pursuant to the Fifth

Amendment. See Rose Castle Litigation, Complaint [NYSCEF Doc. No. 1] ¶¶ 43-44 & 77

(Goldman seeking to recover $15 million from Wythe Berry). Under Goldman’s theory of the

Side Agreement, that claim was arbitrable under the Fifth Amendment. Under New York law, by

bringing and maintaining that claim in court, Goldman waived arbitration.

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CONCLUSION

For the reasons set forth above, in the Petition, Petitioners Wythe Berry LLC, The

William Vale Hotel LLC, The William Vale FNB LLC, and North 12 Parking LLC respectfully

request the Court grant the Petition and, pursuant to CPLR § 7503(b), issue an Order staying the

Arbitration as to the Petitioners, awarding the Petitioners their costs (including reasonable

attorney’s fees), and awarding Petitioners such additional and further relief as the Court deems

just and proper.

Dated: Nassau County, NY Respectfully submitted,
December 4, 2023
ABRAMSON BROOKS LLP

By: Jon Schuyler Brooks
Jon Schuyler Brooks
1051 Port Washington Blvd. #322
Port Washington, NY 11050
(516) 455-0215

-and-

FREEDMAN NORMAND FRIEDLAND LLP
99 Park Avenue, Suite 1910
New York, NY 10016
(646) 350-0527

Attorneys for Petitioners
Wythe Berry LLC, The William Vale Hotel
LLC, The William Vale FNB LLC, and
North 12 Parking LLC

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CERTIFICATE OF COMPLIANCE

1. The following statement is made in accordance with 22 N.Y.C.R.R. § 202.70,

Rule 17.

2. The Reply Memorandum in Opposition to Petitioners’ Verified Petition for a Stay

of Arbitration Pursuant to CPLR § 7503 was prepared in the Microsoft Word processing system,

with Times New Roman typeface, 12-point font.

3. The total number of words in this document, exclusive of the caption, table of

contents, table of authorities, and signature block is 2,646.

Respectfully submitted,

ABRAMSON BROOKS LLP

By: Jon Schuyler Brooks
Jon Schuyler Brooks
1051 Port Washington Blvd. #322
Port Washington, NY 11050
(516) 455-0215

-and-

FREEDMAN NORMAND FRIEDLAND LLP
99 Park Avenue, Suite 1910
New York, NY 10016
(646) 350-0527

Attorneys for Petitioners
Wythe Berry LLC, The William Vale Hotel
LLC, The William Vale FNB LLC, and
North 12 Parking LLC

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Document Filed Date

December 04, 2023

Case Filing Date

November 14, 2023

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Motion-Secondary: Wythe Berry Llc, The William Vale Hotel Llc, The William Vale Fnb Llc, North 12 Parking Llc v. Yoel Goldman

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