In re the Arbitration between Grande' Vie, LLC & Estate of Panaggio , 940 N.Y.S.2d 740 ( 2012 )

Appeal and cross appeal from a judgment of the Supreme Court, Monroe County (Ann Marie Taddeo, J.), entered April 13, 2011. The judgment, among other things, granted the motion of petitioners to stay arbitration, and denied the motion of respondent to compel arbitration.

It is hereby ordered that the judgment so appealed from is reversed on the law without costs, petitioners’ motion is denied, and respondent’s motion seeking to compel arbitration is granted.

Memorandum: Petitioners Anthony J. Marasco and Anthony M. DiMarzo and Michael Panaggio (decedent), whose estate is the respondent herein, were equal members of petitioners Grande’ Vie, LLC and Grande’ Vie Realty, LLC. The operating agreements of the companies provided that the purchase price of a deceased member’s interests would be paid to his estate. When decedent died in 2008, respondent sought arbitration on the value of decedent’s interest in the companies. Petitioners filed a petition to stay arbitration, which was granted. After an appraiser selected by petitioners rendered his written appraisal of the value of decedent’s interest in the companies, petitioners moved by order to show cause to confirm the appraisal and to stay arbitration of any issues resolved by that appraisal. Respondent moved for an order compelling arbitration or for alternative relief.

Supreme Court erred in granting petitioners’ motion to confirm the appraisal and to stay arbitration, and in denying respondent’s motion to compel arbitration. The operating agreements had both an appraisal and an arbitration clause, which gives rise to an issue of arbitration (see Matter of Dimson [Elghanayan], 19 NY2d 316, 324 [1967]). The arbitration clause provided that all controversies or claims arising out of the operating agreements shall be submitted to arbitration. Indeed, the arbitration clause also noted that, if the matter submitted to arbitration involved a dispute as to the value of a member’s interest, one of the arbitrators shall be a certified public accountant. The appraisal clause provided that the parties were to notify a certain individual “(the ‘Appraiser’), to calculate the Fair Value of the Company. In the event the Appraiser or its successor in interest is no longer in business then the purchasing member shall notify [another named individual] or if he is no longer in business, any MAI appraiser (the ‘Successor Appraiser’).” When the two named individuals in the appraisal clause declined to appraise decedent’s interest, petitioners asked an MAI appraiser to value the companies and decedent’s interest therein. The appraisal clause further provided that “[t]he Fair Value of the Membership Interest being purchased shall be determined by the Appraiser, . . . and] the Appraiser’s final determination shall be binding on the selling Member and the purchasing Member(s). ”

It is well settled that, “when parties set down their agreement in a clear, complete document, their writing should as a rule be enforced according to its terms” (W.W.W. Assoc. v Giancontieri, 77 NY2d 157, 162 [1990]). “Where an agreement is clear and unambiguous, a court is not free to alter it and impose its personal notions of fairness” (Welsbach Elec. Corp. v MasTec N. Am., Inc., 7 NY3d 624, 629 [2006]). By the plain wording of the appraisal clause, the MAI appraiser was the “Successor Appraiser,” but only the “Appraiser’s” determination would be final and binding on the parties. We therefore conclude that the parties intended that, where the “Appraiser” was not available to value the companies and the member’s interest, the matter should be submitted to arbitration (cf. Dimson, 19 NY2d at 323). In light of our determination, we do not address the remaining contentions of the parties.

All concur except Bindley, J., who dissents and votes to modify in accordance with the following memorandum.