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Chalom v. Areivim USA
Citation: 2022 NY Slip Op 04895Docket: 2019-08186
Court: Appellate Division of the Supreme Court of the State of New York; August 10, 2022; New York; State Appellate Court
Original Court Document: View Document
In Chalom v. Areivim USA (2022 NY Slip Op 04895), the Appellate Division, Second Department upheld a lower court's decision denying Areivim USA's motion to dismiss a breach of contract complaint filed by Grace Chalom and her children. The contract in question involved charitable funds that were to be paid to Chalom's family upon her husband's death. The contract included both waiver and arbitration clauses, which stipulated that members waived the right to sue and agreed to arbitration by the Rabbinical Committee for disputes. Upon the husband's death, Areivim USA refused to disburse the funds, prompting the plaintiffs to file suit. Areivim USA argued that the plaintiffs were required to arbitrate the dispute rather than pursue a lawsuit. The Supreme Court determined that the arbitration clause did not preclude the plaintiffs from bringing a plenary action and that their waiver only limited substantive review of the merits, not the ability to bring the suit itself. The Appellate Division agreed, emphasizing that arbitration agreements must be enforced according to their terms but noted that such agreements do not serve as a defense to a plenary action. The court concluded that there were unresolved threshold questions regarding the arbitrability of the dispute, justifying the denial of the motion to dismiss. The order was affirmed, with costs awarded to the respondents.