New York Miscellaneous Reports


(2006) 2006 NY Slip Op 51459(U) IN THE MATTER OF THE
Petitioner, v. MICHAEL GESMUNDO, Respondent. 9465/06.
Supreme Court of the State of New York, Westchester County.
Decided July 26, 2006.

[EDITOR’S NOTE: This case is unpublished as indicated by the
issuing court.] Biedermann, Hoenig & Ruff, New York, New
York, Attorneys for Petitioner.

Carton & Rosoff, P.C., Harrison, New York, Attorneys for


Upon the foregoing papers, it is Ordered and adjudged that
this petition is disposed of as follows:

Respondent had commenced an arbitration proceeding
against petitioner under the New York State Lemon Law
Statute, embodied in Section 198-a of Article 11-A of the
General Business Law. Petitioner herein has commenced this
special proceeding seeking an Order permanently staying
said arbitration as time-barred. Specifically, petitioner
contends that because the original retail sale and
delivery of the subject vehicle took place on February 11,
2002,[fn1] more than four years prior to the commencement
of the arbitration proceeding, respondent’s arbitration
is time-barred under Section 198-a, subdivision (j).
Petitioner notes that while the sale of the subject
vehicle to respondent had occurred on September 9, 2003,
there is no statutory toll for the purchase of used

Respondent opposes the petition, arguing that there are
questions of fact related to whether the subject vehicle is
in fact a new or used vehicle, which properly are addressed
by the arbitrator. Moreover, respondent notes that the
immediate previous owner of the subject vehicle had been a
dealership in Maryland, which apparently had obtained
ownership just four months after the original sale, which
change in ownership is otherwise unexplained and,
respondent argues, raises questions about whether the
vehicle was a dealer demonstration vehicle, and thus
outside of the definition of a consumer to which the
four-year statute of limitations applies. Respondent also
argues that if the subject vehicle previously had been
rejected by any original consumer as defective, the first
delivery could be determined to be null and void since
respondent had been misled about the car’s history and its
being free of defects, and thus equity requires that the
issue of vehicle’s status be construed against petitioner.
Finally, respondent argues that petitioner repeatedly had
promised to resolve respondent’s car problem by providing
respondent with a new vehicle, and thereafter had avoided
respondent when it came time to actually effect their
agreement, eventually resulting in petitioner’s withdrawing
its promise exactly four years after the asserted original
delivery date. Since the timing of petitioner’s actions
demonstrate that it purposefully had lulled respondent into
non-action so that the statute of limitations would run,
respondent urges that petitioner should be estopped from
pleading the statute of limitations.

By way of reply, petitioner argues that there is no issue
as to whether this subject vehicle was new or used, as
claimed by respondent. Petitioner concedes that the New Car
Lemon Law applies to the vehicle although it was sold used
because the vehicle was purchased within 2 years from the
date of the original delivery.

Further, petitioner has submitted an affidavit from
Marianne Caulfield, a managing attorney in the Consumer
Litigation Department of BMW of North America, LLC, wherein
she states that she has researched the vehicle’s history, a
copy of which Customer History report is submitted along
with her affidavit, and she has determined that the
original purchaser was an individual and that the vehicle
never was used as a demonstration vehicle. According to Ms.
Caulfield, it is custom and practice for title of a vehicle
to be transferred to a dealership when a vehicle is traded
in, as here had occurred. Therefore, since the date of the
original delivery of the vehicle was February 11, 2006,
petitioner reasserts that respondent’s demand for
arbitration must be deemed time-barred.

Finally, petitioner argues that respondent’s estoppel
argument should be rejected because the alleged
misrepresentations upon which said defense is predicated
were made by Westchester BMW, an independent dealership,
and not by BMW of North America, LLC, petitioner herein. In
any event, petitioner argues that what transpired merely
occurred within the context of trade-in negotiations,
“which do not rise to the level of fraud as a matter of
law.”It is settled law that in arbitration proceedings,
questions of law and fact are for the arbitrators to
determine. See Korein v. Rabin, 29 AD2d 351, 355 (1st Dept.
1968). It previously has been held that the issue of
whether a party has established the criteria necessary to
qualify as a consumer under the Lemon Law is for the
arbitrator to determine, see Chrysler Motors Corp. v.
Schachner, 138 Misc 2d 501, 508 (1988), revd. on other
grnds., 166 AD2d 683 (2nd Dept. 1990), and that whether a
vehicle is “new” is also an issue for the arbitrator. See
Matter of Subaru (Mckelvey), 141 Misc 2d 41, 42 (Sup.Ct.
1988). Similarly, questions of procedural arbitrability,
i.e., those concerning whether conditions precedent to an
obligation to arbitrate have been met, such as, but not
limited to, time limits, notice, waiver, laches, estoppel
and like defenses to arbitrability, also are generally for
the arbitrators to decide. See Howsam v. Dean Witter
Reynolds, Inc., 537 U.S. 79, 84-85 (2002), quoting Moses H.
Cone Mem. Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 25
(1983); Diamond Waterproofing Systems, Inc. v. 55 Liberty
Owners Corp., 4 NY3d 247 (2005). Further, it has been held
that where there is a broad arbitration agreement between
the parties, statute of limitation issues and issues
regarding whether or not a contract was induced by fraud are
to be determined by the arbitrator. See Diamond Sys. v. 55
Liberty, 4 NY3d 247, 252 (2005); May v. Anspach, 24 AD3d
671 (2nd Dept. 2005); Matter of Merritt Eng’g Consultants,
P.C. v. 55 Liberty Owners’ Corp., 18 AD3d 210 (2005);
Kidder, Peabody & Co., Inc. v. Weiner, 269 AD2d 119 (1st
Dept. 2000). However, where, as here, there are statutory
time limitations, the issue of whether a proceeding is
time-barred should be decided by the Courts in the first
instance. See Matter of Smith Barney v. Luckie, 85 NY2d
193, 201 (1995).

Nevertheless, respondent herein has raised the issue of
the applicability of the doctrine of equitable estoppel.
With respect to said doctrine, same is applicable only:

when the actions of the defendant lulled the Plaintiff
into inaction to allow the statute of limitations to
expire. Incorporated Village of Rockville Centre v. Town
of Hempstead, 278 AD2d 279 (2nd Dept. 2000); and East
Midtown Plaza Housing Co., Inc. V. City of New York, 218
AD2d 628 (1st Dept. 1995). “[D]efendant may be estopped to
plead the Statute of Limitations where Plaintiff was
induced by fraud, misrepresentation or deception to
refrain from filing a timely action (citations omitted).”
Simcuski v. Saeli, 44 NY2d 442, 448, 449 (1978). “[T]he
doctrine of estoppel is only available to a Plaintiff who
commences an action within a reasonable time after the
facts giving rise to the estoppel have ceased to be
operational (citations omitted).” Campbell v. Chabot, 189
AD2d 746 (2nd Dept. 1993). The Plaintiff asserting
equitable estoppel must establish the Defendant’s
specific actions kept Plaintiff from timely commencing
the action. Zumpano v. Quinn, ___ N.Y.3d ___, 2006 WL
395229 (2006).

Wiesel v. Rubinstein, 12 Misc 3d 1168(A) (Sup.Ct. Nass. Co.
2006); see, also Doe v. Holy See (State of Vatican City),
17 AD3d 793, 794 (3rd Dept. 2005).

Based upon the application of the foregoing principles of
law to the record at bar and upon consideration of the
parties’ respective arguments, the Court denies the
petition to permanently stay arbitration finding that the
issue of whether petitioner is equitably estopped from
asserting a statute of limitations defense is one for the
arbitrator to determine after presentment of all of the
facts. This Court is not persuaded by petitioner’s argument
that any misrepresentations made to respondent cannot serve
to equitably estop petitioner from invoking a statute of
limitations defense since respondent’s unrefuted averment
is that Tom McDonagh at Westchester BMW had told him that
BMW of North America had instructed McDonagh to negotiate
with respondent “in the best interest of BMW, Westchester
BMW and [him]self,” arguably rendering Westchester BMW an
agent of BMW of North America and thus ultimately
responsible for any wrongdoing chargeable to Westchester

The Temporary Restraining Order set forth in the May 19,
2006, Order to Show Cause is hereby vacated and this matter
shall proceed to arbitration.

[fn1] This date is provided on the subject vehicle’s Motor
Vehicle History Report.