On September 24, 2025, Justice Cohen of the New York County Commercial Division issued a decision in Fendt v. AFF-PSA Bronx-9D, Inc., 2025 NY Slip Op. 33587(U), enforcing a stipulation to arbitrate, explaining:
Petitioner James Fendt (“Petitioner”) moves for an order (i) pursuant to CPLR 2104, enforcing a stipulation between the parties and directing Respondent Eric Anderson to cooperate with Petitioner in good faith and take all necessary action to identify and appoint a replacement arbitrator and submit the “Arbitration Issues” (as defined in the Stipulation) to binding arbitration, and/or, in the alternative (ii) vacating the prior conditional discontinuance of this case and restoring the case to active status in the event the conditions for discontinuance have not been satisfied. The motion is unopposed.
For the reasons stated below, Petitioner’s motion is GRANTED.
The Stipulation, dated September 6, 2022, provides that “[t]he remainder of this proceeding concerning the dissolution of A&F Inc. and [Respondent’s] Buyout Election is hereby discontinued without prejudice…on the condition that [Petitioner and Respondent] shall and herewith contemporaneously submit to binding arbitration…before Hon. (ret.) Stephen G. Crane (“Arbitrator”) the issues of (a) determining the fair value…of [Petitioner’s] interest in A&F Inc…(b) the required purchase price that [Respondent] must pay for the Shares; and (c)…the manner and payment terms of the buyout…(collectively, the “Arbitration Issues”).”
Petitioner asserts that Respondent delayed the commencement of the arbitration for years through various means until ultimately the parties’ chosen Arbitrator retired from JAMS. Thereafter, Respondent refused to agree on an alternate arbitrator despite repeated follow-up from Petitioner.
Parties may enforce a conditional stipulation of discontinuance in the underlying action. The Court may also, in its discretion, relieve parties of a stipulation which cannot be performed according to its terms. When a stipulation meets the requirements of CPLR 2104, as is the case here, the Court should interpret and enforce it in the manner of an independent contract. Implied in every contract is a covenant of good faith and fair dealing which is breached when a party to a contract acts in a manner that, although not expressly forbidden by any contractual provision, would deprive the other party of the right to receive the benefits under their agreement.
Respondent does not oppose Petitioner’s allegations that it has acted in bad faith to frustrate the parties’ agreement to arbitrate, nor has Respondent appeared to argue that the agreement to arbitrate cannot be enforced because the Arbitrator is now unavailable as a result of Respondent’s delay. The rules of the arbitral forum the parties selected have provisions that govern what occurs under these circumstances. JAMS Rule 15(g) provides that if, for any reason, the Arbitrator who is selected is unable to fulfill the Arbitrator’s duties, a successor Arbitrator shall be chosen in accordance with this Rule.
(Internal quotations and citations omitted).