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OFFICERS AND EMPLOYEES OF DEFENDANT CORPORATION, ALTHOUGH NON-SIGNATORIES, CAN ENFORCE THE ARBITRATION PROVISION OF THE CONTRACT BETWEEN PLAINTIFF AND THE CORPORATION 2ND DEPT.

The Second Department, reversing Supreme Court, determined individual defendants, who were officers and/or employees of defendant corporation McGowan Builders, Inc, could enforce the agreement to arbitrate made between plaintiff and the corporation:

Here, the alleged misconduct attributed to the individual defendants in the complaint related to their behavior as employees and officers of McGowan Builders. Since “a corporation can only act through its officers and employees” … , any breach of the agreement would necessarily have to occur as a result of some action or inaction attributable to an officer or employee of McGowan Builders. As the Court of Appeals has recognized under similar circumstances, a rule allowing corporate officers and employees to enforce arbitration agreements entered into by their corporation “is necessary not only to prevent circumvention of arbitration agreements but also to effectuate the intent of the signatory parties to protect individuals acting on behalf of the principal in furtherance of the agreement” … . Under the circumstances of this case, the individual defendants were entitled to enforce the arbitration provision contained in the subcontract agreement between McGowan Builders and the plaintiff … . Accordingly, the Supreme Court should have granted that branch of the motion of the moving defendants, including the individual defendants, which was to compel arbitration of the causes of action alleging conversion, unfair competition, and tortious interference insofar as asserted against them. Degraw Constr. Group, Inc. v McGowan Bldrs., Inc., 2017 NY Slip Op 05580, 2nd Dept 7-12-17

ARBITRATION (OFFICERS AND EMPLOYEES OF DEFENDANT CORPORATION, ALTHOUGH NON-SIGNATORIES, CAN ENFORCE THE ARBITRATION PROVISION OF THE CONTRACT BETWEEN PLAINTIFF AND THE CORPORATION 2ND DEPT)/CONTRACT LAW (ARBITRATION, OFFICERS AND EMPLOYEES OF DEFENDANT CORPORATION, ALTHOUGH NON-SIGNATORIES, CAN ENFORCE THE ARBITRATION PROVISION OF THE CONTRACT BETWEEN PLAINTIFF AND THE CORPORATION 2ND DEPT)/CORPORATION LAW (ARBITRATION, OFFICERS AND EMPLOYEES OF DEFENDANT CORPORATION, ALTHOUGH NON-SIGNATORIES, CAN ENFORCE THE ARBITRATION PROVISION OF THE CONTRACT BETWEEN PLAINTIFF AND THE CORPORATION 2ND DEPT)

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