Aero, Inc. v Aero Metal Prods., Inc NY Slip Op 32090(U) January 4, 2017 Supreme Court, Erie County Docket Number: Judge: Henry J.

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1 Aero, Inc. v Aero Metal Prods., Inc NY Slip Op 32090(U) January 4, 2017 Supreme Court, Erie County Docket Number: Judge: Henry J. Nowak Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various state and local government websites. These include the New York State Unified Court System's E-Courts Service, and the Bronx County Clerk's office. This opinion is uncorrected and not selected for official publication.

2 [* FILED: 1] ERIE COUNTY CLERK 01/04/ :38 PM INDEX NO /2013 NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 01/04/2017 STATE OF NEW YORK SUPREME COURT : COUNTY OF ERIE AERO, INC., vs. Plaintiff, DECISION INDEX NO AERO METAL PRODUCTS, INC., SERVOTRONICS, INC., Defendants. HON. HENRY J. NOW AK, J.S.C. Justice Presiding Plaintiff Aero, Inc. (Aero) moves for leave to reargue and/or renew its motion for dismissal and summary judgment, which this court denied in a July 12, 2016 memorandum decision and order. CPLR 2221 ( d) (2) provides that a motion to reargue "shall be based upon matters of fact or law allegedly overlooked or misapprehended by the court in determining the prior motion, but shall not include any matters of fact not offered on the prior motion." A motion to renew may be based "upon new facts not offered on the prior motion that would change the prior determination" (CPLR 2221 [e] [2]). The first issue that Aero claims the court misapprehended was the issue of privity presented in its res judicata argument. The court previously ruled because defendant Aero Metal Products, Inc. (AMP) was not a party to the arbitration between Nicholas D. Trbovich, Jr., it did not have a full and fair opportunity to contest the issues presented. Aero claims that while AMP was technically not a party to the arbitration, the result is binding upon it because AMP and Page 1 of 4

3 [* 2] defendant Servotronics, Inc. (Servotronics) were and are in privily in both this litigation and the prior arbitration. Aero also claims that Servotronics sufficiently represented the interests of AMP in the arbitration. Defendants contend that res judicata is inapplicable here, not because AMP was not a party to the arbitration, but because Aero was not a party to the arbitration, and could not have been a party to the arbitration because it did not have an arbitration agreement with Servotronics. Accordingly, Servotronics could not have asserted its present counterclaims against Aero in the Trbovich arbitration. Furthermore, this action is a fundamentally different proceeding than the arbitration. The arbitration was an internal employment dispute focused on Servotronics' decision to terminate Nicholas D. Trbovich, Jr. This action is a contractual dispute arising from lease agreements between Servotronics, AMP, and Aero. In its initial decision, this court found that Aero's reliance upon res judicata was inapplicable because the affirmative defense and counterclaims at issue here do not arise out of the same transaction as the claims adjudicated in the arbitration. In regard to the privity argument, Aero was unable to establish an identity of parties, because neither AMP nor Aero were parties to the arbitration. The court agrees with defendants that Servotronics could not have made its claims against Aero in that proceeding and that res judicata does not apply. Next, Aero raises the doctrine of judicial estoppel, whereby "a party is precluded from inequitably adopting a position directly contrary to or inconsistent with an earlier assumed position in the same proceeding or in a prior proceeding" (Clifton Country Rd. Assocs. v Vinciguerra, 252 AD2d 792, 793 [3rd Dept 1998]). Specifically, Aero claims that Servotronics alleged in the arbitration that Nicholas D. Trbovich, Jr. engaged in improper acts in his capacity Page 2 of 4

4 [* 3] as President, CEO and Director of Servotronics, but defendants now allege that Trbovich undertook those same acts as an agent of Aero. Aero's judicial estoppel arguments were not raised in the initial motion and cannot be raised on its motion to reargue. Aero also claims the court overlooked the scope of the arbitration - that the arbitrator considered not only claims of fraud by Nicholas D. Trbovich, Jr., but also misrepresentations by Pamela Trbovich and Russell Kamis, two agents of Aero. Aero argues that not even though Mrs. Trbovich and Mr. Kamis were not parties to the arbitration, their alleged misrepresentations were raised in the arbitration, and the arbitrator noted some of them in the decision. The court did not overlook the possibility that the arbitrator considered conduct by Mrs. Trbovich and Mr. Kamis. However, that possibility does not preclude the affirmative defenses and counterclaims now asserted against Aero, because the arbitrator did not decide whether Mrs. Trbovich and Mr. Kamis made misrepresentations to Servotronics. The only issue to be addressed in the arbitration was whether Nicholas D. Trbovich, Jr. committed willful malfeasance, thereby denying him the benefits that he sought. "Collateral estoppel is available 'only when it is clear that the prior determination squarely addressed and specifically decided the issue' " (Frankel v JPA1organ Chase & Co., 76 AD3d 664, 668 [2nd Dept 20 IO], quoting 0 'Connor v G&R Packing Co., 53 NY2d 278, 280 [ 1981 ]). Because that internal employment dispute at the arbitration was distinct from the present fraud claim involving the two corporate entities, collateral estoppel was found to be inapplicable. The court finds no reason to reconsider this determination. The last argument raised by Aero on its motion to reargue is that the court misapplied case law regarding the ability of a party to compel arbitration as a basis for denying the prior Page 3 of 4

5 [* 4] motion. Such case law was responsive to Aero's argument that Servotronics' affirmative defense and counterclaims at issue were barred by the arbitration provision of Mr. Trbovich's employment agreement. Again, because Aero was not a party to that employment agreement, it could not enforce that arbitration provision. Accordingly, the court cannot find that it misapprehended any law or facts in that respect. Pursuant to CPLR 2221 (e) (2) and (e) (3), a motion to renew must be "based upon new facts not offered on the prior motion that would change the prior determination;" and "shall contain reasonable justification for the failure to present such facts on the prior motion." The only additional facts that Aero claims to present on its motion to renew are details that were set forth in a brief submitted during the arbitration in Aero fails to explain how this information was unavailable when it submitted its underlying motion. Because Aero has failed to offer new facts that were unavailable at the time of its prior motion, the court will consider this motion as only one seeking leave to reargue (see Williams v Bee Miller, Inc., 100 AD3d 143, 146 [4th Dept 2012]). For the reasons stated, the court denies the motion to reargue in all respects. Submit order accordingly. DATED: January 4, 2017 Page 4 of 4