DeOliveira v Custom Made |
2015 NY Slip Op 50956(U) [48 Misc 3d 1204(A)] |
Decided on June 10, 2015 |
Civil Court Of The City Of New York, Queens County |
Buggs, J. |
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. |
This opinion is uncorrected and will not be published in the printed Official Reports. |
Sarah
DeOliveira, Plaintiff,
against Custom Made, Defendant. |
Recitation, as required by CPLR §2219 (a), of the papers
Upon the foregoing cited papers, the decision on the motion by defendant CustomMade Ventures LLC [sued herein as Custom Made ("Custom Made")] to compel arbitration is as follows:
The motion is granted, and the matter herein is stayed.
This is a motion by defendant Custom Made to compel arbitration and to stay this matter pursuant to an arbitration clause contained in an alleged agreement entered into by the parties over the Internet. It is undisputed by the parties that Custom Made operates an Internet website that allows consumers to connect with artisans who custom design items, such as furniture and jewelry. Plaintiff, Sarah DeOliveira, ("DeOliveira") on or about June 10, 2014 became a registered user under the name "Sarah B", which she does not deny in her opposition papers. According to the parties, in order to enter into the Custom Made website, DeOliveria was required to agree with Custom Made's terms and conditions agreement, or Buyer Agreement ("the agreement"). Among the agreement's terms was an arbitration clause. The arbitration clause stated that any issues related to the parties' dealings had to be arbitrated, and that only the arbitrator could decide if the arbitration agreement was enforceable. Pursuant to the agreement, arbitration was to occur in the Commonwealth of Massachusetts. According to Custom Made, DeOliveira could not have placed an order for a loft bed [*2]without consenting to the agreement.
In support of the motion, Custom Made submitted the affidavit of its President, Seth Rosen, a copy of the agreement; an attorney affirmation; e-mails between DeOliveira and Custom Made's attorney; a copy of the order form; an e-mail from Custom Made's counsel to DeOliveira dated January 23, 2015 explaining the alleged agreement and advising that any claims should proceed to arbitration; and a memorandum of law.
In opposition, DeOliveira submitted her affidavit, which was prepared with the assistance of a pro bono attorney. She objects to the arbitration agreement, and states that while she agreed to Custom Made's terms and conditions, she was required to do so to enter the website. DeOliveira alleged that as a layperson, she did not understand that to which she was agreeing; that the agreement is unfair, since it mandates that arbitration occur in the Commonwealth of Massachusetts; that the provisions of the contract are in small print; that the Dispute Resolution Program portion of the contract contradicts the arbitration clause; and that she was robbed of personal items when the artisan/carpenter and his assistants selected from the website came to her home. She alleged that the arbitration clause in the agreement is in violation of New York consumer protection laws, and that moreover, that the issue regarding the arbitration clause is moot, since she subsequently rescinded any alleged agreement. Further, plaintiff submitted additional documents for the Court's consideration of this motion; those documents have not been considered herein, as the Court considers the submission of such documents to be in support of an improper surreply.
DeOliveira argues that pursuant to General Business Law ("GBL") § 399-c, mandatory arbitration clauses in consumer contracts are unenforceable. GBL § 399-c, in relevant part, reads as follows:
Under the Federal Arbitration Act ("FAA"), however, there is a strong policy favoring enforcing arbitration agreements (see 9 USC § 1 et seq.). The applicable section, Chapter 1, §2, provides:
A written provision in any maritime transaction
Whether an agreement to arbitrate is governed by the FAA depends on whether there is an enforceable agreement to arbitrate, and if there is, whether the agreement involves a transaction which affects interstate commerce (9 USC § 2; see also Allied Bruce Terminix Cos. v Dobson, 513 US 265 [1995]; Matter of Diamond Waterproofing Sys v Liberty Owners Corp., 4 NY3d 247 [2005]). By enacting Section 2 of the FAA, Congress precluded State Courts from invalidating arbitration provisions in contracts except "upon such grounds as exist at law or in equity for the revocation of any contract" (9 USC § 2; see Doctor's Assocs., Inc. v Casarotto, 517 US 681 [1996], Ginsburg, J.]). Thus the Supreme Court of the United States ("U.S. Supreme Court") has held that the FAA preempts any State law which burdens an agreement to arbitrate (see Marmet Health Care Center v Brown, 565 US at __, __, 132 S.Ct. 1201 [2012]; Perry v Thomas, 482 US 483 [1987]; Southland Co. v Keating, 465 US 1 [1984]; Doctor's Assocs., Inc. v Hamilton, 150 F3d 157 [2d Cir 1998]).
Pursuant to the FAA, arbitration clauses are voidable under grounds which would suffice to set aside an agreement, such as fraud, duress, and unconscionability (see Doctor's Assocs., Inc. v Casarotto, 517 US 681 [1996]). Absent a specific statute or law or public policy consideration, an arbitration clause must be enforced. The U.S. Supreme Court has further held that issues related to the contract should be considered by the arbitrator, and not the Court. Whether the arbitration clause and/or the agreement are void or voidable is a consideration for the arbitrator, not the Court (see Buckeye Check Cashing, Inc. v Cardegna, 546 US 440 [2006]; Rubin v Sona Int. Co., etal, 457 F.Supp. 2d 191 [SDNY 2006]).
In that DeOliveira admitted to voluntarily accepting Custom Made's terms and conditions in order to enter its website, the Court herein finds that the parties entered into a valid agreement to arbitrate any issues arising out of the transaction (see Highland HC, LLC v Scott, 113 AD3d 590 [2014]). The fact that she did not read the terms and conditions prior to consenting to them is of no legal consequence. "[A] party cannot generally avoid the effect of a document on the ground that he or she did not read it or know its contents." (Cash v Titan Financial Services, Inc., 58 AD3d 785, 788 [2009]).
The Court further finds that the purchase of the services provided by Custom Made is a transaction involving commerce within the meaning of the FAA (9 USC § 2; see also Allied Bruce Terminix Cos. v Dobson, 513 US 265 [1995]; N.J.R. Assoc. v Tausend, 19 NY3d 597 [2012]). Custom Made, a Web-based company located in Massachusetts, matches customers to artisans and craftspeople via the Internet for the creation and purchase of custom-made items. While the transaction between DeOliveira and Custom Made, one of "services purchased," falls under the [*3]definition of "consumer goods" in GBL §399-c, subsection (b), that statute and section of law are inapplicable in this case: the defendant company is Massachusetts-based, DeOlivera is domiciled in Queens, New York, and according to the papers submitted in this matter, the"Maker" of the loft bed with drawers and desktop DeOlivera purchased is in Ashland, Ohio. Therefore, the agreement, with its arbitration clause, clearly affects interstate commerce. Consequently, GBL §399-c is preempted by the Federal Arbitration Act (see Allied Bruce Terminix Cos. v Dobson, 513 US 265 [1995]); see Ayzenberg v Bronx House Emanuel Campus, Inc., 93 AD3d 607 [2012]; Schiffer v Slomins, Inc., __ Misc 3d ___ , 2015 NY Slip Op 25101 [2d Dept, 9th & 10th Jud Dists 2015]). "General Business Law §399-c is a categorical rule prohibiting mandatory arbitration clauses in consumer contracts, and thus, at least where there exists a nexus with interstate commerce, is displaced by the FAA." (Schiffer, __ Misc 3d ___ at ___, 2015 Slip Op 25101, *4 [2d Dept, 9th & 10th Jud Dists 2015]) .
DeOliveira also contends that the forum selection clause contained in the arbitration agreement is onerous, since it states that the parties must arbitrate the case in Massachusetts. However, whether the forum selection clause is enforceable should also be determined by the arbitrator, not the Court (see Buckeye Check Cashing, Inc. v Cardegna, 546 US 440 [2006]).
Based on the foregoing, the defendant's motion to compel arbitration is granted, and this matter is stayed pursuant to CPLR § 7503(a) pending the outcome of the arbitration proceeding.
The foregoing constitutes the decision and order of the Court.
County of Queens