Kores Manufacturing Corp. v. Standard Packaging Corp.

Appellate Division of the Supreme Court of New York

Kores Manufacturing Corp. v. Standard Packaging Corp.

31 A.D.2d 622, 295 N.Y.S.2d 862, 1968 N.Y. App. Div. LEXIS 2658

CourtAppellate Division of the Supreme Court of the State of New York

DecidedDecember 17, 1968

StatusPublished

Cited by2 cases

This text of 31 A.D.2d 622 (Kores Manufacturing Corp. v. Standard Packaging Corp.) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Kores Manufacturing Corp. v. Standard Packaging Corp., 31 A.D.2d 622, 295 N.Y.S.2d 862, 1968 N.Y. App. Div. LEXIS 2658 (N.Y. Ct. App. 1968).

Pincite

Opinion

Orders entered on July 25, 1968 referring specified issues to a Special Referee and staying action by defendant against plaintiff, unanimously reversed on the law, with $30 costs and disbursements to .appellant and the motion of plaintiff to settle the terms of a Statement is denied, with leave to renew, if available, upon completion of defendant’s action for rescission and damages. No provision of the CPLR, treating of simplified procedures, permits the sending of issues to a Referee. (CPLR 3031-3037.) And if the underlying contract is challenged, as here, on the premise of fraud in the inducement, as distinguished from its making, the [623]*623simplified procedures are stalemated. The establishment of a valid written contract under the substantive law (CPLR 3033) is basic to the sections coming into play. The instant question can only be the subject of a plenary action wherein the parties may evoke all of the attendant pretrial procedures. Submission to the New York Simplified Procedure for Court Determination of Disputes is by contractual consent only and if the contract is vitiated, its terms are voidable. In the case before us, if the contract is found to be fraudulently induced, the plaintiff cannot pursue the simplified procedures. These procedures have been properly described as a form of “ judicial arbitration”. (Seventh Annual Report of N. Y. Judicial Conference, 1962, p. 94.) And “ a court will enjoin arbitration (1) where fraud or duress, practiced against one of the parties, renders the agreement voidable”. (See, Matter of Exercycle Corp. [Marotta], 9 N Y 2d 329, 334; also, Sabo v. Delman, 3 N Y 2d 155, 161.) Thus, if defendant maintains, as it does here in its action, that ■the underlying contract was fraudulently brought about, it cannot be held to have surrendered all the broad legal safeguards afforded it by the normal trial processes of a plenary trial, and which are circumscribed by the workings of the New York Simplified Procedure for Court Determination of Disputes, in the avowed purpose of achieving expedition. Concur — Steuer, J. P., Capozzoli, McGivem and McNally, JJ.

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Orders entered on July 25, 1968 referring specified issues to a Special Referee and staying action by defendant against plaintiff, unanimously reversed on the law, with $30 costs and disbursements to .appellant and the motion of plaintiff to settle the terms of a Statement is denied, with leave to renew, if available, upon completion of defendant’s action for rescission and damages. No provision of the CPLR, treating of simplified procedures, permits the sending of issues to a Referee. (CPLR 3031-3037.) And if the underlying contract is challenged, as here, on the premise of fraud in the inducement, as distinguished from its making, the [623]*623simplified procedures are stalemated. The establishment of a valid written contract under the substantive law (CPLR 3033) is basic to the sections coming into play. The instant question can only be the subject of a plenary action wherein the parties may evoke all of the attendant pretrial procedures. Submission to the New York Simplified Procedure for Court Determination of Disputes is by contractual consent only and if the contract is vitiated, its terms are voidable. In the case before us, if the contract is found to be fraudulently induced, the plaintiff cannot pursue the simplified procedures. These procedures have been properly described as a form of “ judicial arbitration”. (Seventh Annual Report of N. Y. Judicial Conference, 1962, p. 94.) And “ a court will enjoin arbitration (1) where fraud or duress, practiced against one of the parties, renders the agreement voidable”. (See, Matter of Exercycle Corp. [Marotta], 9 N Y 2d 329, 334; also, Sabo v. Delman, 3 N Y 2d 155, 161.) Thus, if defendant maintains, as it does here in its action, that ■the underlying contract was fraudulently brought about, it cannot be held to have surrendered all the broad legal safeguards afforded it by the normal trial processes of a plenary trial, and which are circumscribed by the workings of the New York Simplified Procedure for Court Determination of Disputes, in the avowed purpose of achieving expedition. Concur — Steuer, J. P., Capozzoli, McGivem and McNally, JJ.

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31 A.D.2d 622, 295 N.Y.S.2d 862, 1968 N.Y. App. Div. LEXIS 2658, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kores-manufacturing-corp-v-standard-packaging-corp-nyappdiv-1968.

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