Bayly, Martin & Fay, Inc. v. Glaser

Order entered June 22, 1982 in Supreme Court, New York County (Rubin, J.), affirmed, without costs. When respondent agreed to work for petitioner BMF New York (a subsidiary of BMF International) as president of BMF Services and senior vice-president of BMF New York, three interlocking contracts were executed simultaneously: an employment agreement, a “stock purchase” agreement and a guarantee agreement of all obligations of BMF Services “contained in the Employment Agreement (Exhibit ‘A’) and 851 Stock Purchase Agreement (Exhibit ‘B’) attached to Employment Agreement” (clause 1). The sixth “whereas” paragraph of this third agreement specifically incorporated the employment contract into the guarantee document and the eighth “whereas” paragraph notes that respondent was “not willing to sign the Employment Agreement (Exhibit ‘A’) or the Stock Purchase Agreement attached to the Employment Agreement without” the guarantee. (Emphasis supplied.) Further, paragraph 11 of the employment agreement provides for the disposition of the stock purchase agreement if employment terminated, and unequivocally incorporates the latter into the former. Clearly, then, these three documents are more than merely related, having as their gravamen the employment of respondent in the above-named executive positions. We disagree with the dissent’s comprehension of the provision in the stock purchase agreement requiring a “national certified public accounting firm” to perform certain calculations. The plain effect of this paragraph is to require an accountant to arrive at a repurchase price to be paid to respondent for his shares. Plugging numbers into a formula, however, is not helpful in a dispute over the valuation of the stock where there are claims of misappropriation, conversion and waste of income and assets. After this calculation is performed, it is almost certain that the arbitrator will require testimony from the accountant detailing the source and veracity of his precalculation figures, including assessment of the income and tax statements issued by plaintiff BMF Corp. It may be that the arbitrator will then require alternative calculations to be performed. But respondent’s three allegations (misappropriation, conversion and waste) are beyond the scope of the paragraph calling for computation by an accountant. Because of the State policy of giving broad, full effect to arbitration clauses (Matter ofWeinrott [Carpi, 32 NY2d 190,196), we believe the disputes arising under the three agreements should be resolved through the arbitration procedure provided for by the primary agreement, the one for employment. (Cf. Matter of Stone [Freezer}, 280 App Div 103, affd 304 NY 649; Siegel v Ribak, 43 Mise 2d 7, 10.) Concur — Carro, J. P., Fein and Kassal, JJ. Bloom, J., concurs in part and dissents in part in a memorandum and Silverman, J., dissents in part in a memorandum as follows: