FILED: WESTCHESTER COUNTY CLERK 03/08/ :36 PM INDEX NO /2016 NYSCEF DOC. NO. 35 RECEIVED NYSCEF: 03/08/2017

Transcription

1 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF WESTCHESTER X MONROE MANN Index # 67292/2016 Date Purchased: 11/19/2017 Plaintiff, -vs- Plaintiffs designate WESTCHESTER COUNTY as the place of trial MEETUP, INC., MEMO IN OPPOSITION Defendant. Defendant s Address: 632 Broadway, 10 th Floor New York, NY The basis of venue is Plaintiff s residence and place of business. X MEMORANDUM OF LAW IN OPPOSITION TO DEFENDANT S MOTION TO DISMISS THE COMPLAINT AND COMPEL ARBITRATION Law Offices of Monroe Mann By: Monroe Mann, Esq. Attorney for Plaintiff 12 Puritan Drive Port Chester, NY findingsummer@aol.com roe@monroemannlaw.com Attorney Pro Se 1 of 31

2 Table of Contents TABLE OF AUTHORITIES... iv STATEMENT OF FACTS... v PROCEDURAL HISTORY... v PRELIMINARY STATEMENT... v LEGAL ARGUMENT WITH THIS SET OF FACTS, THE COURT MAY NOT COMPEL ARBITRATION... 1 a. PLAINTIFF IS NOT ASKING FOR A DETERMINATION UNDER CPLR 7501 BUT RATHER CPLR 7503(b)... 1 b. THE STANDARD ON A MOTION TO DISMISS... 2 c. THE STANDARD ON WAIVING ONE S RIGHT TO A JURY TRIAL DEFENDANT ABANDONED RIGHT TO COMPEL ARBITRATION... 3 a. THE CONTRACT & ARBITRATION CLAUSE WERE ABANDONED BY DEFENDANT. 3 b. DEFENDANT FAILED TO ASSERT THE AFFIRMATIVE DEFENSE OF A REQUIRED ARBITRATION CLAUSE c. DEFENDANT FILED COUNTERCLAIMS AGAINST PLAINTIFF d. DEFENDANT ENGAGED IN PRE-DISCOVERY SETTLEMENT NEGOTIATIONS e. DEFENDANT NEGOTIATED AND AGREED TO A PRELIMINARY DISCOVERY CALENDAR f. DEFENDANT REVERSED DEFENSES IN A VEILED ATTEMPT TO FORUM SHOP ARBITRATION MAY NOT BE COMPELLED IN CONSUMER CASES a. APPLICABLE LAW b. MEETUP S SERVICES ARE OF A CONSUMER NATURE c. PLAINTIFF UTILIZED THE SERVICES FROM HOME FOR A PERSONAL REASON d. ARBITRATION AGREEMENT DOES NOT COMPORT WITH THE JAMS MINIMUM CONSUMER STANDARDS CONTRACT AND ARBITRATION CLAUSE ARE UNENFORCEABLE AS UNCONSCIONABLE, FRAUDULENT IN THE INDUCEMENT, & ILLUSORY a. APPLICABLE LAW b. CONTRACT FAILED TO DISCLOSE KEY PORTIONS OF THE AGREEMENT c. DEFENDANT ATTEMPTED TO HIDE KEY PORTIONS OF THE AGREEMENT d. FONTS & TERMS WERE TOO SMALL TO BE DEEMED FAIR ASSENT e. THE ARBITRATION PROVISIONS ARE ILLUSORY f. STATUTES OF LIMITATIONS MAY NOT BE MODFIED ii 2 of 31

3 5. THE ARBITRATION PROVISIONS ARE UNCLEAR & CONTRADICTORY, AND THUS VOID a. APPLICABLE LAW b. DEFENDANT SUBMITTED INTO EVIDENCE TWO DIFFERENT ARBITRATION AGREEMENTS, ARGUING THAT THEY ARE IDENTICAL c. KEY VERBAGE IS MISSING FROM 13.6 OF THE ARBITRATION PROVISIONS THUS RENDERING THE ARBITRATION PROVISIONS UNINTELLIGIBLE d. A KEY SENTENCE WITHIN THE ARBITRATION PROVISION 13.6 CONTRADICTS THE REST OF THE ARBITRATION PROVISIONS WHEREFOR: iii 3 of 31

4 Cases TABLE OF AUTHORITIES 571 W. 232nd Owners Corp. v. Jennifer Realty Co., 98 NY2d 144, (2002)... 2 Aetna Ins. Co. v. Kennedy to Use of Bogash, 301 U.S Board of Educ. V. Mancuso Bros. 25 Misc.2d Bronxville Knolls v Webster Town Ctr. Pshp., 221 AD2d 248 (1995)... 2 Byrnes v. Cataldi, 72 A.D.3d 718 (N.Y. 2010)... 4, 5 Chaim Kaminetzky Present Pesach With the Chevra 5765 LLC v. Starwood Hotels & Resorts Worldwide, 2006 N.Y. Misc. LEXIS 3255; 235 N.Y.L.J Datatern, Inc. v. Berkelely Research Group, LLC, 2013 N.Y. Misc. LEXIS De Sapio v. Kohlmeyer, 35 N.Y.2d 402 (1974)...6, 8, 11 Demas v 325 W. End Ave. Corp Estate of Castellone v. JP Morgan Chase Bank, N.A., 60 A.D.3d at , 9 Gold Plastering Co. v. 200 East End Ave. Corp, 282 App. Div. 1073, affd. 307 N.Y Goshen v Mut. Life Ins. Co., 98 NY2d 314, (2002)... 2 Juliano v McEntee, 150 AD2d 524 (1989)... 2 Leon v Martinez, 84 NY2d 83, 87, (1994)... 3 Matter of County of Rockland (Primiano Constr. Co.), 51 N.Y.2d Matter of Haupt v. Rose, 265 N.Y Matter of Hosiery Mfrs. Corp. v. Goldston, Court of Appeals of the State of NY, 238 N.Y. 22 (1924). 4, 7 Matter of Waldron, 61 NY2d Matter of Zimmerman v. Cohen, Court of Appeals of the State of NY, 236 N.Y. 15 (1923)... 4, 5, 6, 10, 12 Meyer v. Kalinick, 2016 U.S. Dist. LEXIS , 22 Ragucci v. Professional Constr. Servs., 25 A.D.3d 43, 803 N.Y.2d 139 (NY, 2005)... 13, 15 Rent-A-Center, W., Inc. v. Jackson 561 U.S Shah v. Monpat Constr. Inc., 65 A.D.3d , 22 Sobral v. Burke, 2014 N.Y. Misc. LEXIS Sokoloff v Harriman Estates Dev. Corp., 96 NY2d 409, (2001)... 3 Stark v. Molod Spitz DeSantis & Stark, P.C., 9 NY3d 59, 66 (2007)... 7, 9 Teleserve Sys. V. MCI Telcoms. Corp, 230 A.D.2d Wieder v Skala, 80 NY2d 628, (1992)... 3 Statutes 9 U.S.C New York CPLR , 3, 22 New York CPLR 7503 (b).... 1, 3, 20 New York General Business Law 399-c... 12, 13, 14, 15 Other Authorities JAMS consumer minimum standards...13, 16, 20, 21 NY State Consumer Protection Board iv 4 of 31

5 STATEMENT OF FACTS Please see Mann Affidavit Statement of Facts, incorporated herein. PROCEDURAL HISTORY Please see Mann Affidavit Statement of Facts, incorporated herein. PRELIMINARY STATEMENT Plaintiff Monroe Mann submits this memorandum of law in opposition to Defendant s motion to dismiss. The trial court may not dismiss the case and/or compel mediation or arbitration, and must allow this case to proceed to trial, because: 1. In accordance with law, the trial court must first rule on threshold issues. 2. In accordance with law, Defendant abandoned right to compel arbitration by invoking the use of this judicial forum through: a. Filing an answer. b. Failing to assert the affirmative defense of the arbitration clause in their answer. c. Filing counterclaims against Plaintiff in their answer. d. Participating in pre-discovery settlement negotiations with Plaintiff by making a written counteroffer. e. Negotiating and agreeing upon a discovery calendar with Plaintiff. f. Denying the existence of a contract in the answer, and then attempting to prove the existence of a contract to invoke the arbitration clause once pre-discovery settlement negotiations failed. 3. Arbitration may not be compelled in consumer cases. v 5 of 31

6 a. As this is a consumer case, Defendant may not compel arbitration in accordance with law and the JAMS consumer minimum standards. 4. Contract and arbitration clause are both unconscionable and fraudulent in the inducement. a. In accordance with law, the arbitrator may not determine issues of unconscionability and fraud surrounding the contract and the arbitration clauses themselves. 5. The arbitration provisions are illusory, unclear, and contradictory, and thus void. a. In accordance with law, the trial court must determine whether these arbitration provisions are illusory, unclear, and contradictory, and may not pass these issues to an arbitrator to decide. vi 6 of 31

7 LEGAL ARGUMENT Plaintiff respectfully submits the following memorandum of law in opposition to Defendant s motion to dismiss. Plaintiff respectfully requests that the Defendant s motion be denied in its entirety for the following reasons: 1. WITH THIS SET OF FACTS, THE COURT MAY NOT COMPEL ARBITRATION a. PLAINTIFF IS NOT ASKING FOR A DETERMINATION UNDER CPLR 7501 BUT RATHER CPLR 7503(b) Defendant s entire motion rests on the assumption that arbitration must be compelled simply because Defendant has presented a signed arbitration agreement purportedly between the two parties. However, this is not the burden of proof the defendant must satisfy for the Court to compel arbitration. On a motion to stay arbitration under CPLR 7503(b), there are three threshold questions to be resolved by the courts: (1) whether the parties made a valid agreement to arbitrate, (2) whether if such an agreement was made it has been complied with, and (3) whether the claim sought to be arbitrated would be barred by limitation of time had it been asserted in a court of the State. Datatern, Inc. v. Berkelely Research Group, LLC, 2013 N.Y. Misc. LEXIS 6613; 2013 NY Slip OP 33685(U), quoting Matter of County of Rockland (Primiano Constr. Co.), 51 N.Y.2d 1. Further, Sobral v. Burke, 2014 N.Y. Misc. LEXIS 4157 states, that on a petition to compel arbitration, a court s role is to determine whether a valid agreement was made or complied with, and [whether] the claim sought to be arbitrated is not barred by limitation. The assessment calls for a judicial determination as to whether there is any preliminary requirement or condition precedent to arbitration to be complied with and, if so, whether there has been compliance with such requirement or condition precedent. County of Rockland. Here, 1 7 of 31

8 Plaintiff Mann is contending in the Supreme Court that the Defendant has not complied with conditions precedent to arbitration. In Shah v. Monpat Constr. Inc., 65 A.D.3d 541, the defendants filed a motion to compel arbitration, and at no point did the plaintiffs offer any evidence that defendants failed to comply with the conditions precedent to arbitration, and the case was compelled into arbitration. Specifically, the Court stated that the plaintiffs did not contend in the Supreme Court, either in support of their motion to stay arbitration or in opposition to the defendant s motion to compel arbitration, that Monpat had not complied with conditions precedent to arbitration. Here, Plaintiff is contending that Defendant did not comply with the preliminary requirement or condition precedent to arbitration. Therefore, this matter may not by compelled into arbitration before the Court rules on that issue. b. THE STANDARD ON A MOTION TO DISMISS Pursuant to CPLR 3211(a)(1), in order to prevail on a motion to dismiss based on documentary evidence, the documents relied upon must definitively dispose of plaintiff s claim. Bronxville Knolls v Webster Town Ctr. Pshp., 221 AD2d 248 (1995); Juliano v McEntee, 150 AD2d 524 (1989); Demas v 325 W. End Ave. Corp., 127 AD2d 476 (1986). A CPLR 321l(a)(1) motion may be appropriately granted only where the documentary evidence utterly refutes plaintiffs factual allegations, conclusively establishing a defense as a matter of law Goshen v Mut. Life Ins. Co., 98 NY2d 314, (2002). When determining a CPLR 3211(a) motion, we liberally construe the complaint and accept as true the facts alleged in the complaint and any submissions in opposition to the dismissal motion. 571 W. 232nd Owners Corp. v. Jennifer Realty Co., 98 NY2d 144, (2002); Leon v Martinez, 84 NY2d 83, 87, (1994); Sokoloff v Harriman Estates Dev. Corp., 96 NY2d 409, 2 8 of 31

9 (2001); Wieder v Skala, 80 NY2d 628, (1992). We also accord plaintiffs the benefit of every possible favorable inference. 511 W. 232nd Owners Corp., 98 NY2d at 152; Sokoloff v Harriman Estates Dev. Corp, 96 NY2d at 414. c. THE STANDARD ON WAIVING ONE S RIGHT TO A JURY TRIAL In Meyer v. Kalinick, 2016 U.S. Dist LEXIS 99921, the Court wrote, Since the late 18 th century, the Constitution of the United States and the constitution or laws of the several states have guaranteed U.S. citizens the right to a jury trial. This most precious and fundamental right can be waived only if the waiver is knowing and voluntary with the courts indulging every reasonable presumption against waiver. [emphasis added by Plaintiff]. Aetna Ins. Co. v. Kennedy to Use of Bogash, 301 U.S Plaintiff respectfully now requests that this Court indulge Plaintiff every reasonable presumption against waiver of his constitutional right to take this matter to trial by jury. 2. DEFENDANT ABANDONED RIGHT TO COMPEL ARBITRATION a. THE CONTRACT & ARBITRATION CLAUSE WERE ABANDONED BY DEFENDANT. Defendant argues that the right to compel arbitration is guaranteed, certain, and undeniable if so agreed to in writing, citing CPLR 7501, and a number of cases. Defendant fails to recognize the well-established rule that any written contract terms can and will be changed and such changes respected by the courts, if, upon actions taken, the intent of both parties to deviate from the agreed upon terms is made clear. This is codified in CPLR 7503(b), in basic contract law hornbooks, and caselaw. As the NY Court of Appeals made clear in 1923 in Matter of Zimmerman v. Cohen, Court of Appeals of the State of New York, 236 N.Y. 15 (N.Y. 1923): 3 9 of 31

10 While the Arbitration Law provides for the enforcement of arbitration agreements, there is nothing in the law which prevents the parties agreeing between themselves to resort to any other method of settlement; the law does not bar the parties to the contract from coming into the courts of the state if they mutually choose to do so. The provision for arbitration was of no more binding force than any other provision of the contract. The Arbitration Law was passed to provide a means for enforcing an agreement to arbitrate; it did not otherwise change the law of contracts which is as applicable to such an agreement as to other terms and conditions. This provision, therefore, to arbitrate could have been modified by a subsequent agreement based upon a consideration, or waived or abandoned by the agreement or action of the parties. Here, by engaging the use of this Court s tools, procedures, and forum, Defendant through their own action have wholly abandoned any right to compel arbitration. The Zimmerman Court goes on: In fact, if the legislature should attempt to prevent parties from modifying their agreements to arbitrate or to subsequently agree to enter the courts of law for the settlement of their disputes, it would be such an abridgement of the right of citizens to contract that the constitutionality of the law might well be doubted. This rule and particularly as it applies to arbitration agreements is discussed in depth in numerous other cases, e.g. Matter of Hosiery Mfrs. Corp. v. Goldston, Court of Appeals of the State of New York, 238 N.Y. 22 (N.Y. 1924); De Sapio v. Kohlmeyer, 35 N.Y.2d 402 (1974), and as recently as 2010 in NY Supreme Court, e.g., Byrnes v. Castaldi, Supreme Court of New York, Appellate Division, 72 A.D.3d 718, 898 N.Y.S.2d 640 (N.Y. 2010). Matter of Zimmerman continues: The facts in this case show that the parties elected to settle their disputes not by arbitration, but in a court of law. The arbitration provision of the contract was abandoned or waived. The plaintiffs made their election when they brought their action against the defendant ignoring the agreement to arbitrate. The defendant made his election when he answered, setting up a counterclaim upon which he asked the court to give judgment against the plaintiffs, gave notice of a trial, and procured an order for the taking of a deposition in preparation for trial. These acts were clearly inconsistent with the defendant s later claim that the parties were obligated to settle their differences by arbitration. Matter 4 10 of 31

11 of Zimmerman v. Cohen, Court of Appeals of the State of New York, 236 N.Y. 15 (N.Y. 1923) The facts related to the situation here today before the Court are virtually identical to those in the Zimmerman Court in The Court s rationale for its decision was clear: The Arbitration Law was passed to expedite and facilitate the settlement of disputes and overcome the delay cause by litigation. It was not intended that such law should be used as a means of furthering and extending that delay which is precisely what Defendant has been doing. Defendant used the court system as a method to determine their legal strategy and once it was decided they should pursue arbitration instead of a trial, they decided to claim that arbitration was required. While their intent is clear, the law is even clearer, as the following arguments will show. b. DEFENDANT FAILED TO ASSERT THE AFFIRMATIVE DEFENSE OF A REQUIRED ARBITRATION CLAUSE. The Zimmerman Court s decision begins with one simple question: Is the right to arbitrate waived by the interposition of an answer by a defendant, sued upon an agreement in writing in which the parties have specifically agreed that all differences arising between them shall be settled by arbitration? The Court made clear that filing an answer may have ramifications on the later demand to compel arbitration. The Court continued: Section 5 of the article II of the Arbitration Law provides a remedy for the party who desires to enforce the arbitration agreement and seeks relief from an action improperly brought in violation of its terms and conditions. It was not intended to help or assist a party who had intentionally waived and abandoned the arbitration agreement and had chosen another remedy provided by law. Moreover, in Byrnes v. Cataldi, 72 A.D.3d 718 (N.Y. 2010), the Court stated, The appellants did not waive arbitration by serving an answer, since their answer included an affirmative defense that the parties dispute should be determined by arbitration. In Byrnes above, note that 5 11 of 31

12 the appellant not only filed an answer, but actively made the Court of aware of the arbitration clause in that answer the end result being that the appellant did not waive his right to arbitrate. The converse, then, must also hold true. In the instant case before the Court, since Meetup, Inc. filed an answer but did not include an affirmative defense that the parties dispute should be determined by arbitration, the Defendants here, therefore, have indeed waived their right to compel arbitration in accordance with already established law. It is worth noting that in Plaintiff Mann s original complaint, the arbitration clause is discussed. Yet, Defendant still chose not to invoke any affirmative defense of arbitration in their answer, despite Plaintiff having clearly reminded Defendant of the existence of the arbitration clause. Defendants made a deliberate decision not to mention the arbitration clause as an affirmative defense precisely because they did not wish to invoke it. That was their choice, and one they must now take to trial with them. c. DEFENDANT FILED COUNTERCLAIMS AGAINST PLAINTIFF. Filing an answer without invoking the arbitration clause as an affirmative defense is adequate to prove abandonment of the right to compel arbitration. Further, the filing of counterclaims against the plaintiff is yet another black-letter law showing abandonment of any right to compel arbitration. The Zimmerman Court notes that the defendant participated in the failure and neglect to arbitrate by, himself, seeking judgment in a court of law against the plaintiffs. That is precisely what Defendant Meetup, Inc. has done by filing the counterclaims against Plaintiff, rather than leaving such redress to the arbitrator. In De Sapio v. Kohlmeyer, the defendant Kohlmeyer both interposed a cross claim demanding apportionment of any liability and also procured a deposition of plaintiff. The Court said, We agree that each [emphasis added] of these actions is sufficiently affirmative use of the judicial process so as to be inconsistent with a later motion to stay. In other words, it is clear that 6 12 of 31

13 the filing of counterclaims is itself an affirmative use of the courts to address the claims. Contesting the merits, therefore, through the judicial process is [thus] an affirmative acceptance of the judicial forum and waives any right to a later stay of the action. De Sapio, citing Gold Plastering Co. v. 200 East End Ave. Corp, 282 App. Div. 1073, affd. 307 N.Y. 668; Board of Educ. V. Mancuso Bros. 25 Misc.2d 122). In Matter of Hosiery, the Court stated that the petitioner had at all times asserted its right to arbitration and had the right. However, here, Defendant Meetup did not at all times assert its right to arbitration. In fact, not only did Defendant file an answer, but they filed an answer with no mention at all of their right to arbitration, and further, they filed counterclaims against the plaintiff seeking damages damages that now may not be addressed by any arbitrator, but in fact now can only be addressed through actions of this Court. Hosiery goes on, While an agreement to arbitrate would not seem to be a proper answer by way of counterclaim, the answer was no less an assertion of the right to arbitrate. In other words, had Defendant Meetup merely answered the complaint and asserted the single affirmative defense of the right to arbitrate, Defendant may have preserved their right to compel arbitration. However, because Defendant using the tools of this Court filed counterclaims against Plaintiff, Defendant has abandoned any right that may have existed to compel arbitration. d. DEFENDANT ENGAGED IN PRE-DISCOVERY SETTLEMENT NEGOTIATIONS. As Byrnes makes clear, and citing Stark v. Molod Spitz DeSantis & Stark, P.C., 9 NY3d 59, 66 (2007), and Estate of Castellone v. JP Morgan Chase Bank, N.A., 60 A.D.3d at 623, A defendant may forfeit the right to arbitrate by acting inconsistently with the intention to arbitrate, such as by participating in the discovery process without asserting the right to arbitration of 31

14 After Defendant here filed their answer, Plaintiff made an offer in writing, via to Defendant to settle the case. Instead of immediately invoking the arbitration clause, Defendant made a counteroffer in writing, via which was rejected. See Mann Affidavit Exhibit B, marked up to block out contact information and specific terms. Throughout these initial negotiations, Defendant had made no mention of any requirement, or indeed desire, to arbitrate. Yet, Defendant certainly knew of the existence of the arbitration provision because a) they are the authors of the entire agreement in question, and b) they were reminded of the arbitration provision in Plaintiff s original complaint. The facts show that Defendant voluntarily chose to disregard the arbitration requirement entirely, and instead, chose to engage in pre-discovery settlement negotiations with Plaintiff, rather than conduct such negotiations through arbitration. It is only when Defendant realized that Plaintiff would not accept their lowball offer to settle the case that Defendant chose to attempt to invoke the arbitration agreement. This is not permitted. Defendant had their right to invoke the terms of the arbitration provisions on multiple occasions, but chose not to, thus wholly and irrevocably abandoning their right to compel arbitration. They may not now do so simply because it is to their perceived advantaged after having failed to settle the matter pre-discovery. Defendant may not engage in pre-discovery settlement negotiations when it is convenient, and then invoke an arbitration clause simply because they are unhappy with the direction settlement negotiations are heading. A defendant s right to compel arbitration, and concomitant right to stay an action, does not remain absolute regardless of the degree of his participation in the action. De Sapio v. Kohlmeyer, 35 N.Y.2d 402 (1974) of 31

15 e. DEFENDANT NEGOTIATED AND AGREED TO A PRELIMINARY DISCOVERY CALENDAR. As Byrnes makes clear, and citing Stark v. Molod Spitz DeSantis & Stark, P.C., 9 NY3d 59, 66 (2007), and Estate of Castellone v. JP Morgan Chase Bank, N.A., 60 A.D.3d at 623, A defendant may forfeit the right to arbitrate by acting inconsistently with the intention to arbitrate, such as by participating in the discovery process without asserting the right to arbitration. On Feburary 10, 2017, in the hallway outside Judge Alan D. Scheinkman s courtroom, and as Plaintiff Exhibit C makes clear, Defendant attorney Dylan Braverman, in his own hand on page two, assisted Plaintiff attorney in choosing mutually agreed-upon discovery dates. The Court will note that there is the handwriting of two different people thereon: Plaintiff Attorney Monroe Mann and Defendant Attorney Dylan Braverman. The negotiation of a discovery calendar during pending litigation does not in any way comport with arbitration. If Defendant wanted to invoke the arbitration provisions, Defendant s attorney is required by law to not engage in any discussion or agreement regarding discovery dates. Defendant attorney was obliged, at that moment outside the courtroom, to invoke the right to arbitrate and refuse to entertain or discuss (particularly in writing) any discovery calendar. Defendant s actions here, therefore, further evidence Defendant s obvious desire to use the court system to resolve this matter. f. DEFENDANT REVERSED DEFENSES IN A VEILED ATTEMPT TO FORUM SHOP. In its answer, Defendant wholly and completely denied the very existence of any contract between Defendant and Plaintiff. In fact, the pertinent part of Defendant s answer reads, verbatim: 7. That at the time, date, and place of the damage alleged in the Complaint, no contract for work, labor, material, or services as between the plaintiff and the answering defendant was in existence of 31

16 It is troublesome, therefore, that accompanying the motion to dismiss recently filed by Defendant, Defendant now includes a copy of what they purport to be a signed contract with Plaintiff a contract that Defendant had just two months prior claimed never even existed. Defendant first chose to use the court system to deny any legally-binding relationship with Plaintiff and to deny the existence of any contract, and then to file counterclaims, engage in settlement negotiations with Plaintiff in hopes of disposing of this matter prior to discovery, and to negotiate a discovery calendar. Based on Defendant s actions, it appears Defendant did not expect Plaintiff to refuse their proffered counter-offer, for Defendant is now arguing that there is a contract and there was a relationship between the parties simply to invoke use of the arbitration clause. For only if there were a valid contract between both parties could Defendant then hope to move the forum from this tribunal into an arbitrator s office. This was Defendant s late-to-the-gate effort to avoid proceeding towards a public trial that Defendant might ultimately lose. Forum shopping, however, is not condoned. Returning to Zimmerman: The facts in this case show that the parties elected to settle their disputes not by arbitration, but in a court of law. The arbitration provision of the contract was abandoned or waived. The plaintiffs made their election when they brought their action against the defendant ignoring the agreement to arbitrate. The defendant made his election when he answered, setting up a counterclaim upon which he asked the court to give judgment against the plaintiffs, gave notice of a trial, and procured an order for the taking of a deposition in preparation for trial. These acts were clearly inconsistent with the defendant s later claim that the parties were obligated to settle their differences by arbitration. Matter of Zimmerman v. Cohen, Court of Appeals of the State of New York, 236 N.Y. 15 (N.Y. 1923) Therefore, Defendant may not at first deny the existence of an agreement and arbitration provision when Defendant feels they can win the case through the court system, but then later argue for the existence of an agreement and an arbitration provision when they feel their odds are better served through arbitration. Writing about laws that permit compelling of arbitration, the of 31

17 Zimmerman Court wrote: [it] was not intended to help or assist a party who had intentionally waived and abandoned the arbitration agreement and had chosen another remedy provided by law. The De Sapio Court noted, The courtroom may not be used as a convenient vestibule to the arbitration hall so as to allow a party to create his own unique structure combining litigation and arbitration. Therefore, to allow Meetup, Inc. to compel arbitration at this point would be a contradiction of the intent of the legislature, and negation of well-established case law and the basic tenets of all contract law. *** The arbitration clause (and indeed the entire agreement) presented in Defendant s motion was written and prepared unilaterally by Defendant, without any input at all from Plaintiff. Therefore, Defendant clearly knew about the existence of the arbitration provisions. Defendant, however, voluntarily chose not to invoke the arbitration provisions through the following actions: a) the filing of their answer; b) the failure to assert the affirmative defense of arbitration in their answer, despite having been reminded of the arbitration clause in Plaintiff s complaint; c) the filing of counterclaims against Plaintiff, attempting to gain redress through your very courtroom, through the very tools of a trial court; d) the engagement in pre-discovery settlement negotiations with Plaintiff, going so far as to counteroffer in writing Plaintiff s offer; e) the discussion and negotiation of a preliminary discovery calendar with Plaintiff negotiated and agreed to in Defendant attorney s own hand; f) forum shopping, by originally denying in their answer the very existence of a contract, and then attempting to prove one s existence when convenient of 31

18 The De Sapio Court notes that: The crucial question, of course, is what degree of participation by the defendant in the action will create a waiver of a right to stay the action. In the absence of unreasonable delay, so long as the defendant s actions are consistent with an assertion of the right to arbitrate, there is no waiver. However, where the defendant s participation in the lawsuit manifests an affirmative acceptance of the judicial forum, with whatever advantages it may offer in the particular case, his actions are then inconsistent with a later claim that only the arbitral forum is satisfactory. (Matter of Haupt v. Rose, 265 N.Y.108). Upon these facts, said Zimmerman, whatever right the defendant may have had under his contract and the Arbitration Law to enforce arbitration he deliberately waived; he chose and elected to proceed by an action in court for the determination of the respective claims. Arbitration cannot be compelled under the set of facts in this instant case. Defendant s motion to dismiss and/or to compel arbitration should be denied in its entirety, along with the order for reimbursement of Plaintiff attorney costs and fees. 3. ARBITRATION MAY NOT BE COMPELLED IN CONSUMER CASES a. APPLICABLE LAW. In accordance with New York General Business Law Section 399-c: (1) the term consumer is defined as a natural person residing in this state. (2) the term consumer goods is defined as goods, wares, paid merchandise or services purchased or paid for by a consumer, the intended use or benefit of which is intended for the personal, family, or household purposes of such consumer. (3) any mandatory arbitration clause in a consumer contract must be deemed null and void. Further, in accordance with the JAMS consumer minimum standards (Mann Affidavit Exhibit G ) any remedy available outside of arbitration/mediation must also remain available despite the inclusion of an arbitration clause in a contract of 31

19 b. MEETUP S SERVICES ARE OF A CONSUMER NATURE. Meetup, Inc s purpose is to help individuals create communities of likeminded individuals. Individuals, i.e. consumers, pay a fee to Meetup, Inc. to help said consumers create communities that benefit that consumer personally, i.e. by helping that individual to create a community of new friends. As made clear in Ragucci v. Professional Constr. Servs., 25 A.D.3d 43, 803 N.Y.2d 139 (NY, 2005), the definition of consumer goods is quite broad. In Ragucci, the defendants argued that the contract was one for professional services, so that NY Gen. Bus. Law 399-c s prohibition against mandatory arbitration clauses in contracts for sale of consumer goods did not apply to their contract. The trial court, however, ruled that both the plain language and the legislative history of 399-c indicated that the definition of consumer goods unique to that statute was far broader than most definitions of the term, and so the trial court held that the statute applied to the homeowner s contract. In Ragucci, defendants argued on appeal that the statute did not apply because the subject contract for architectural services cannot be considered a contract for the sale or purchase of consumer goods as contemplated by the statute. The Ragucci appeals court affirmed that the purpose of the 1984 Gen. Bus. Law 399-c statute (citing Givens, Practice Commentaries, McKinney s Cons Laws of NY, Book 19, General Business Law 399-c, at 771) was designed to prevent sales contracts from including clauses pre-committing consumers to arbitrate disputes rather than resort to Small Claims suits, refusal to pay for defective goods, or other remedies. The Court went on, noting that in urging the enactment of this statute, the NY State Consumer Protection Board noted that while arbitration can sometimes provide a quick, inexpensive and simple resolution to disputes between consumers and sellers, no contract should deprive a consumer of the right to take the dispute further and seek judicial redress of 31

20 Further, the Ragucci case makes clear that the [ 399-c] statute broadly defines consumer goods so that individual consumers like the Plaintiff in the instant case may be protected from being forced into arbitration. It is important to note that no distinction is made between professional services and those provided by non-professionals. Therefore, Meetup s services are of a consumer nature, and arbitration may not be compelled. c. PLAINTIFF UTILIZED THE SERVICES FROM HOME FOR A PERSONAL REASON. Not only did Plaintiff (a consumer) utilize the services of Defendant for a personal reason, but he did so from his home of record. His primary purpose was to find other entertainers and artists who wanted to similarly interact with the Meetup.com website from their home in efforts to collaborate together on entertainment passion projects. Defendant s purpose was to create a free online interactive community of other consumers who had interest in show business. As the Ragucci Court states, We find no merit to the architect defendants argument that the statute s inclusion of the term household purposes in its definition of consumer goods demonstrates that services performed in connection with the construction of a home fall outside the scope of General Business Law 399-c. In this regard, the defendants submit that the statute would obviously not have included the term household purposes if it was intended to be construed to include houses or other real property. However, this argument isolates the term household purposes, and disregards the full definition of consumer goods which includes services purchased or paid for by a consumer, the intended use or benefit of which is intended for the personal, family, or household purposes of such consumer [emphasis added by court]. While architectural services performed in connection with the construction of a home cannot be considered services intended for household purposes, as we have noted, such services can be reasonably viewed as intended to benefit the consumer s personal or family purposes. Similarly, Defendant s use of Meetup.com s services, which are designed to encourage individuals to find new friends online from their computers and ultimately leave their homes and of 31

21 make friends with others out in the real world, can be reasonably viewed as intended to benefit the consumer s personal or family purposes, and particularly since all Meetup groups must have as one of their primary missions a personal or family purpose. The Ragucci Court continues: Furthermore, while the legislative history underlying the enactment of General Business Law 399-c does not indicate that the legislature expressly considered the issue of whether professional services such as those provided by an architect should be included within the definition of consumer goods, there is also no indication of a contrary intent The conclusion that General Business Law 399-c applies to the subject contract is not inconsistent with this legislative history. A residential property owner seeking the services of an architect for the construction or renovation of a house is not on equal footing in bargaining over contractual terms such as the manner in which a potential future dispute should be resolved. Indeed, the plaintiffs in this case played no role in drafting the subject form agreement While the situation at bar may not have been expressly contemplated by the legislature in enacting General Business Law 399-c, extending the protection of the statute to residential property owners in this circumstances would be in keeping with its intended purpose. Although Plaintiff Mann is himself an attorney, and therefore could have attempted to negotiate better terms for the agreement, ones status as an attorney does in no way preclude and negate his first status as a consumer, as defined by General Business Law 399-c, who purchased services from Defendant that meet the requirements of services used for personal, family, or household use. Further, it is absurd to consider that a lone consumer of the Meetup.com services could, upon registering, renegotiate the terms of an internet-based click to confirm contract created for a multi-million dollar company. Plaintiff consumer paid a fee to Defendant for these personal, family, and household services, and from his home, created the Unstoppable Artists Meetup Group, which was totally free for anyone to join, with the intent of creating an online community of other artists. Plaintiff was not using the service as a business, but in all aspects, merely as a consumer as defined by NY Statute of 31

22 d. ARBITRATION AGREEMENT DOES NOT COMPORT WITH THE JAMS MINIMUM CONSUMER STANDARDS The arbitration provisions as written do not comport with the JAMS minimum consumer standards. The arbitration clauses as written force arbitration. However, since this is a consumer case, this type of forced arbitration is not permissible in accordance with JAMS. This case will not be entertained by JAMS for arbitration, and must be heard by this Court. arbitration. *** As the contract at issue is undeniably of a consumer nature, Defendant may not compel 4. CONTRACT AND ARBITRATION CLAUSE ARE UNENFORCEABLE AS UNCONSCIONABLE, FRAUDULENT IN THE INDUCEMENT, & ILLUSORY. a. APPLICABLE LAW. The Federal Arbitration Act provides that a written arbitration provision in any contract involving interstate commerce shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract. 9 U.S.C. 2. In the instant case, the Court considers a New York consumer/individual who brings a lawsuit against a NY domiciled corporate defendant about an arbitration clause contained in a contract governed by NY law. No interstate commerce question is at bar here, and therefore, the FAA is not relevant to this case. Chaim Kaminetzky Present Pesach With the Chevra 5765 LLC v. Starwood Hotels & Resorts Worldwide, 2006 N.Y. Misc. LEXIS 3255; 235 N.Y.L.J. 114 The Supreme Court of the United States has ruled that unless the arbitration clause itself specifies that the enforceability of the arbitration agreement must be settled by the arbitrator, then the court itself must ascertain such enforceability. Rent-A-Center, W., Inc. v. Jackson 561 U.S. 63. Absent such a clause, the enforceability itself of the agreement must be determined by the Court of 31

23 At bar is the fact that the terms of service that defendant attached as Defendant Exhibit A of their motion to dismiss has no such requirement. In accordance with the attached terms of service, the only matters that may be passed to an arbitrator are issues that arise under the arbitration clause. The issue of enforceability of the arbitration clause and/or the contract itself is not discussed. While section 13.5 of the alleged arbitration agreement states that the arbitration provisions may [emphasis added] be enforced by any Court of competent jurisdiction, there is no directive within the Meetup.com contract and/or arbitration clause that the enforceability of the arbitration agreement (and the agreement itself) must be determined by the arbitrator. Therefore, in accordance with the US Supreme Court decision supra, the validity of the Defendant Meetup, Inc s arbitration clause and contract presented to the Court must be determined by this Court. The contract and the arbitration clauses within are unconscionable and fraudulent in the inducement, and adequately raise justiciable issues of fact that a jury must decide. b. CONTRACT FAILED TO DISCLOSE KEY PORTIONS OF THE AGREEMENT. Defendant claims that the entire agreement between Meetup, Inc. and Plaintiff was attached in Defendant Exhibit A. However, this is false. Section 18.2 states, verbatim: 18.2 Entire Agreement. This Agreement constitutes the entire agreement between you and Meetup, superseding any prior agreements between you and Meetup. To the extent that you have previously registered with Meetup and provided Your Information, this Agreement now governs how Meetup may use Your Information, whether provided in the past or the future. However, what Defendants present to the Court is not the entire agreement. Mann Affidavit F contains the Meetup.com Community Guidelines aka Group Policies, which were omitted by Defendant in their presentation of evidence to the Court. These guidelines are apparently used by Meetup.com to determine whether a Meetup consumer has violated the Terms of Service of 31

24 Pursuant to well settled contract law, a terms of service document itself must be consulted to determine whether a user has violated those terms of service. In fact, all portions of an agreement must be included in an agreement. Here, Defendant created a confusing and layered agreement, and does not fully disclose these additional terms to either the consumer upon joining the website or to the Court upon their filing of their motion. Further, section 15 of the terms of service, entitled, Termination and Breach, states that the documents or agreements [this agreement] incorporates by reference. However, nowhere in the terms of service is there any reference to these community guidelines, said guidelines which through the actions of Defendant serve as an even more precise version of the terms of service. Defendant has failed to disclose these additional terms to the Court, and indeed, also to Meetup s customers. The record is clear that Defendant chose not to disclose this additional part of the terms of service to the Court. Defendant further chose not to clearly disclose this additional part of the terms of service to the users of Meetup.com upon joining. The resulting conclusion: whether these terms of service are enforceable as a valid contract is an issue of fact for a jury to decide. c. DEFENDANT ATTEMPTED TO HIDE KEY PORTIONS OF THE AGREEMENT. Further, even if a user did happen to see these community guidelines, large portions of the agreement were deliberately hidden in violation of the law in the form of hyperlink ellipses that hide stark portions of the Community Guidelines. In accordance with law, if an internet contract attempts to hide key portions of the contract terms through hyperlinks or through the use of mechanisms designed to hide contract terms such as hyperlink ellipses, the contract may in its entirety be deemed void. Meyer v. Kalinick, 2016 U.S. Dist. LEXIS (where Uber, Inc. was unable to force arbitration upon one of its customers) of 31

25 d. FONTS & TERMS WERE TOO SMALL TO BE DEEMED FAIR ASSENT The Meyer Court continued: What about situations where the consumer is not even asked to affirmatively indicate her consent? What about situations in which the consumer, by the mere act of accessing a service, is allegedly consenting to an entire lengthy set of terms and conditions?... Writing for the Second Circuit Court of Appeals in 2002, then-circuit Judge Sonia Sotomayor presciently held that reasonably conspicuous notice of the existence of the contract terms and unambiguous manifestation of assent to those terms by consumers are essential if electronic bargaining is to have integrity and credibility Applying these principles to the matter at hand, the Court finds that the plaintiff here never agreed to waive his right to a jury trial or to submit to mandatory arbitration The question of whether an arbitration agreement existed is for the Court and not for the arbiter to decide. Here, as in Meyer, Meetup.com a) did not adequately present the terms of service buttons and assent language in a large enough font to be deemed fair assent, and b) the arbitration terms were hidden in the middle of the agreement, rather than clearly presented near the check box. Beyond the similarities to the Meyer case (in which the Court ruled that there was no enforceable arbitration agreement), here, the Meetup.com community guidelines were totally hidden when signing up, and the terms of those community guidelines (which were incorporated into the terms of service) were hidden through illegal hyperlink ellipses. The Meyer Court continued: The Court finds that plaintiff Meyer did not have reasonably conspicuous notice of Uber s User Agreement, including its arbitration clause, or evince unambiguous manifestation of assent to those terms. Most importantly, the Uber registration screen, as explained supra, did not adequately call users attention to the existence of Terms of Service, let alone to the fact that, by registering to use Uber, a user was agreeing to them of 31

26 These are the same facts as are presented here before this esteemed Court. e. THE ARBITRATION PROVISIONS ARE ILLUSORY The arbitration provisions are illusory because Defendant s arbitration terms wholly prevent any consumer from finding justice through arbitration. JAMS consumer minimum standards (see Mann Affidavit Exhibit G ) require that the consumer only pay $250 to conduct mediation and arbitration. However, section 12.2 of the Meetup terms of service states that damages in all cases will be limited to $100, or the yearly cost of the fees of using Meetup, which is for most users usually $0, or perhaps at most, $150: Our liability to you or any third parties in any circumstance is limited to the greater of (a) the amount of fees, if any, you pay to us in the twelve (12) months prior to the action giving rise to liability, and (b) $100. Based on this clause, no rational consumer of Meetup, Inc s services would ever bring any dispute to mediation/arbitration. The consumer would pay $250 to JAMS for mediation, and upon victory, receive only $100 or $150 in return. That is the definition of unconscionability, and is wholly illegal as per Teleserve Sys. V. MCI Telcoms. Corp, 230 A.D.2d 585, because it removes all legal remedies from the consumer: the consumer is barred from filing a lawsuit, left only with arbitration, but through arbitration, the consumer would always leave poorer than when he arrived. In other words: this agreement is wholly illusory because it leaves ZERO redress for any would-be plaintiff. Specifically, the Teleserve Court stated: Petitioner s challenges to the arbitration clauses, which seek reformation on the grounds of unconscionability and duress, are for the Court to determine It is well established under both CPLR 7503 and 9 USC 4 that a party may resist enforcement of an agreement to arbitrate on any basis that could provide a defense to or ground for the revocation of any contract, including fraud, unconscionability, duress, of 31

27 overreaching conduct, violation of public policy, or lack of contractual capacity We conclude as a matter of law, the filing fee requirement is unreasonable, unjust, and unconscionable on its face and may not be enforced That filing fee is patently excessive and bears no reasonable relation to the arbitration forum s administrative expenses in processing the claim The practical effect of such an oppressive and burdensome fee is to bar arbitration of petitioner s claims against MCI. The fee thus is against public policy, which favors and encourages arbitration as an alternative to litigation Further, the onerous filing fee requirement renders the contractual remedy of arbitration so gravely difficult and inconvenient as to be illusory. Similarly, the requirement of a JAMS filing fee of $250 (at a minimum) makes the entire agreement to settle disputes via arbitration wholly a ruse, since Meetup, Inc. attempts to cap the damages at $150. As a result, not one of the many tens of thousands of Meetup users worldwide can ever arbitrate a claim and win. Or rather, even if such user did win, he would essentially always lose. This is unconscionable and a violation of public policy. f. STATUTES OF LIMITATIONS MAY NOT BE MODFIED Section of the agreement improperly attempts to contract away the 6-year statute of limitations on contract matters to one year. This too, of course, is unconscionable and a violation of public policy. *** The Court may not compel arbitration in this case because the threshold issue is whether the arbitration provisions and indeed the contract itself are enforceable. The above case law and the facts at hand show that the agreement and the arbitration provisions are not enforceable because not only are the arbitration provisions themselves unconscionable, fraudulent in the inducement, and illusory, but so is the contract in its entirety unconscionable, fraudulent in the inducement, and illusory of 31

28 As Judge Rakoff stated in Meyer, At bottom, what is at stake is the integrity and credibility of electronic bargaining. If this agreement, forced upon consumers of Meetup, Inc s services, is permitted to remain enforceable, the very integrity and credibility to which Judge Rakoff refers is at stake of greatly deteriorating. 5. THE ARBITRATION PROVISIONS ARE UNCLEAR & CONTRADICTORY, AND THUS VOID. a. APPLICABLE LAW. NY CPLR 7501 as well as Shah v. Monpat Constr. Inc., 65 A.D.3d 541, make clear that any arbitration agreement must be clear, explicit, and unequivocal. As Matter of Waldron, 61 NY2d 181, makes even clearer, 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. b. DEFENDANT SUBMITTED INTO EVIDENCE TWO DIFFERENT ARBITRATION AGREEMENTS, ARGUING THAT THEY ARE IDENTICAL. Defendant attorney Mescall affirms in his affirmation (Mann Affidavit Exhibit D ), section 9, that Plaintiff signed and agreed to the precise arbitration provisions contained therein. Meanwhile, Defendant attorney Karnofsky in his affidavit (Mann Affidavit Exhibit E ), affirms that Plaintiff signed the precise arbitration provisions contained in Defendant Exhibit A. Both Defendant attorneys argue that the terms presented are identical. However, the arbitration provisions presented, and in particular, section 13.2 of both documents, are not identical. In fact, section 13.2 in Attorney Mescall s version cites terms of service terms dated November 22, 2016 which is impossible, since Plaintiff filed this lawsuit three days prior on November 19, 2016 and could never have signed a terms of service dated November 22, of 31