Opinion
00 Civ. 1035 (WK)
October 4, 2001
Bruce H. Babitt Wolman, Babitt King, L.L.P., New York, NY, For Plaintiff.
Melissa Brill, Cozen And O'Connor, New York, NY, For Defendants.
Daniel V. Folt, Cozen And O'Connor, Wilmington, DE, For Defendants.
ORDER
Defendants DPC Acquisition Corp. ("DPC"), The New Dana Perfumes Corp. ("New Dana"), Marcafin, S.A. ("Marcafin"), and Perfumes Dana Do Brasil ("Dana Brasil") (hereinafter collectively referred to as "Defendants") have moved this Court to bifurcate issues in this case in advance of arbitration. Specifically, Defendants have asserted what they refer to as three "pre-arbitration" defenses to the enforceability of the arbitration provision at issue in Plaintiff Norbert Becker's ("Plaintiff") amended Employment Agreement. Although Defendants seek to preserve their rights to arbitration by indicating that they will move to pursue arbitration if the Agreement is enforceable, they simultaneously argue that, under these three defenses, the underlying Agreement may be unenforceable and, pursuant to Section 4 of the Federal Arbitration Act, see 9 U.S.C. § 4, seek a trial as to the enforceability of the agreement prior to any further arbitration efforts.
Before considering whether arbitration can be compelled, a court must determine whether there exists a valid agreement to arbitrate at all under the contract in question. Clarendon National Ins. Co. v. Lan (S.D.N.Y. 2001), 152 F. Supp.2d 506, 514. As such, "before a party can be required to submit to arbitration, it is entitled to a judicial determination of the threshold question of whether it entered into an agreement which obliges it to consent to arbitration." PMC, Inc. v. Atomergic Chemetals Corp. (S.D.N.Y. 1994), 844 F. Supp. 177, 181.
Although each of these cases addresses the threshold determination as to the validity of the arbitration agreement which a court must make when faced with a motion to compel arbitration, such a determination is similarly applicable here. Similar to parties challenging the enforceability of a contract in the context of a motion to compel and seeking an initial trial on the issue prior to any arbitration under Section 4 of the Federal Arbitration Act, Defendants also seek a separate trial pursuant to Section 4 and thus must similarly demonstrate that a trial is warranted in this instance.
Where a party has questioned the enforceability of the arbitration agreement, "the party putting the agreement to arbitrate in issue must present `some evidence' in support of its claim before a trial is warranted." Sphere Drake Ins. Ltd. v. Clarendon National Ins. Co. (2d Cir. August 28, 2001) 2001 WL 968391, *3, citing Interocean Shipping Co. v. Nat'l Shipping Trading Corp. (2d Cir. 1972) 462 F.2d 673, 676. See also PMC, Inc., 844 F. Supp. at 181 (holding that "[t]o qualify for a judicial determination of this issue, a party must provide an `unequivocal denial that the agreement has been made, and some evidence to substantiate the denial.'")
We direct Defendants to submit a concise supplemental memorandum in support of their motion to bifurcate the issues by October 26, 2001. This supplemental memorandum should solely address the issue of whether Defendants are entitled to a trial, under Section 4 of the Federal Arbitration Act, as to the enforceability of the amended Employment Agreement under the three defenses at issue in their initial memorandum. Plaintiff may then, if he so chooses, file a concise supplemental memorandum in opposition to Defendants' motion by November 26, 2001, which similarly addresses only whether Defendants are entitled to a trial as to the enforceability of the agreement under these defenses (i.e. whether Defendants have failed to present "some evidence" substantiating their claims under these defenses). Neither Plaintiff's nor Defendants' memoranda may exceed 15 pages in length.
SO ORDERED.