Arbitration Clauses with Unfilled Arbitrator Blanks Remain Enforceable; Courts May Appoint a Rabbinical Tribunal Under CPLR 7504

1. Introduction

Matter of Klein (Human Care Servs. for Families & Children, Inc.) (2026 NY Slip Op 03717) arises from a dispute between neighboring property interests within a shared residential development structure in Sullivan County. Petitioners (unit owners and board members of the Venetian Villas Condominiums) and respondent (a neighboring property owner) were bound by a recorded Declaration of Covenants, Easements and Restrictions Affecting Ralhal Residential Development (the “declaration”), expressly described as “a covenant which runs with the land.”

After respondent began operating a summer camp for children with special needs, petitioners alleged violations of the declaration (including claimed misuse of easements/rights-of-way, pro rata maintenance disputes, and “relentless noise pollution”). The declaration contained an arbitration clause with blanks—disputes “shall be submitted for resolution to Rabbi _______ of _______, New York.” Petitioners nonetheless served a CPLR 7503 demand naming a Beth Din of America rabbi/tribunal; respondent did not move to stay arbitration within 20 days.

The key issues on appeal were:

  • Whether the blank-filled arbitration clause meant no agreement to arbitrate existed (affecting CPLR 7503(c)’s 20-day preclusion rule).
  • Whether Supreme Court could appoint an arbitrator/tribunal under CPLR 7504, and whether appointing the Beth Din of America was an abuse of discretion.
  • Whether the proceeding was defective for failure to join allegedly necessary parties (other condominium developments signatory to the declaration).
  • Whether a preliminary injunction in aid of arbitration was properly granted under CPLR 7502(c).
  • Whether the appeals were moot/waived due to timing of the stay request and the fact arbitration proceeded.

2. Summary of the Opinion

The Appellate Division, Third Department:

  • Denied petitioners’ motion to dismiss the appeals as moot.
  • Affirmed the orders compelling arbitration, holding that the arbitration clause was enforceable despite blanks and that Supreme Court properly appointed the Beth Din of America under CPLR 7504.
  • Affirmed denial of respondent’s renewal motion(s), finding no reasonable justification for not presenting the purportedly new facts earlier.
  • Reversed the portion of the January 8, 2025 order granting a preliminary injunction, holding petitioners failed to show the arbitration award would be rendered ineffectual without provisional relief and failed to establish irreparable injury/balance of equities.

3. Analysis

3.1. Precedents Cited (and How They Shaped the Decision)

A. CPLR 7503(c) preclusion and the “no agreement” exception

  • Matter of Fiveco, Inc. v Haber, 11 NY3d 140 (2008): The court relied on Fiveco for the core rule that a party must move to stay arbitration within 20 days of a proper demand or be precluded from objecting—but also for the critical qualification that the 20-day bar does not apply where the claim is that the parties never agreed to arbitrate.
  • Matter of Matarasso [Continental Cas. Co.], 56 NY2d 264 (1982): Used to define the boundary between (i) asserting no arbitration agreement was ever made (permitting later judicial review), and (ii) asserting an existing agreement is invalid/unenforceable due to noncompliance with conditions (typically subject to CPLR 7503(c) preclusion if not timely raised).
  • Matter of Jandrew [County of Cortland], 84 AD3d 1616 (3d Dept 2011) and Matter of Giamo [Visscher], 94 AD3d 1395 (3d Dept 2012): These cases informed the waiver/mootness analysis—specifically, whether a party “waive[d] the right to a judicial determination of the arbitrability of the dispute” by participating or delaying. The court treated respondent’s position as a “no agreement” challenge preserved by seeking a stay before engaging in arbitration.

B. Joinder of necessary parties

  • Overocker v Madigan, 113 AD3d 924 (3d Dept 2014) and Cascade Bldrs. Corp. v Rugar, 154 AD3d 1152 (3d Dept 2017): Cited to emphasize that dismissal for nonjoinder requires a concrete showing that absent parties “might be inequitably affected” or that complete relief cannot be accorded among existing parties.
  • Buckley v MacDonald, 231 AD2d 599 (2d Dept 1996): Referenced as a comparator—suggesting circumstances where joinder concerns may be more compelling than the record presented here.

C. Court appointment of an arbitrator when selection mechanism is missing or incomplete

  • Matter of 166 Mamaroneck Ave. Corp. v 151 E. Post Rd. Corp., 78 NY2d 88 (1991): The principal authority supporting the proposition that an arbitration clause does not fail merely because it lacks a workable method for selecting an arbitrator; courts may fill that gap pursuant to statute.
  • Matter of Silberman v Farkas, 179 AD3d 1075 (2d Dept 2020) and Matter of Basil Castrovinci Assoc., Inc. v District 65 Pension Plan, 16 AD3d 493 (2d Dept 2005): Used to frame the “abuse of discretion” review of a court’s appointment decision under CPLR 7504, supporting deference where the court considered relevant circumstances and made a reasonable appointment.

D. Renewal standards

  • Holtz v Blackstone Bldrs. Holding Co., LLC, 235 AD3d 1207 (3d Dept 2025) and Wright v State of New York, 192 AD3d 1277 (3d Dept 2021): These cases supported a strict application of CPLR 2221(e)’s requirements—new facts plus “reasonable justification” for not presenting them earlier.

E. Preliminary injunction in aid of arbitration

  • Matter of Patrolmen's Benevolent Assn. of the City of New York, Inc. v City of New York, 119 AD3d 1 (1st Dept 2014), revd on other grounds 26 NY3d 1044 (2015): Provided the familiar three-part preliminary injunction factors (likelihood of success, irreparable harm, balance of equities) in the arbitration context, alongside CPLR 7502(c)’s additional “rendered ineffectual” requirement.
  • Uber Tech., Inc. v American Arbitration Assn., Inc., 204 AD3d 506 (1st Dept 2022) and Kalyanaram v New York Inst. of Tech., 63 AD3d 435 (1st Dept 2009): Reinforced that conclusory allegations and failure to show irreparable harm/ineffectual award are fatal to injunctive relief connected to arbitration.

F. Appellate issue preservation/abandonment

  • Zwickel v Underhill Land LLC, 243 AD3d 973 (3d Dept 2025): Cited for the proposition that an appeal may be deemed abandoned if the appellant fails to raise issues in the appellate brief.

3.2. Legal Reasoning

A. Why the blank-filled clause still constituted an agreement to arbitrate

The court drew a sharp line between (i) a clause so deficient that it shows the parties never agreed to arbitrate, and (ii) a clause that clearly mandates arbitration but is incomplete as to arbitrator identity/selection. Here, the declaration expressly required that certain disputes “shall be submitted for resolution” to a rabbi in New York. That language, in the court’s view, was sufficient to establish assent to arbitration as a dispute-resolution forum. Therefore, respondent could not recharacterize the clause’s incompleteness as the absence of any agreement.

B. Filling the selection gap via CPLR 7504 (and why the Beth Din of America appointment stood)

The court treated the missing arbitrator identity and location blanks as a classic CPLR 7504 problem: where “the arbitration agreement does not provide for a method of appointment,” the court “shall appoint an arbitrator” upon application. Supreme Court’s selection of a Beth Din of America panel (three rabbis, at least two attorneys) was upheld because:

  • The declaration’s text did not exclude the Beth Din of America or require a different rabbinic authority.
  • The record showed the court considered competing arguments, including religious concerns and the tribunal’s reputation.
  • The standard of review was abuse of discretion, and the appointment was within a reasonable range of choices.

C. CPLR 7503(c), waiver, and why the appeal was not moot

Although respondent did not move within 20 days after the demand, the Third Department treated respondent’s objection as a “no agreement” contention that can be entertained outside the 20-day period. The court also found no waiver because respondent sought a stay from the Appellate Division before it participated in arbitration, preserving a judicial determination of arbitrability despite arbitration later proceeding.

D. Necessary parties: why dismissal was not warranted

Respondent argued other signatories to the declaration needed to be joined, especially regarding sewer usage and expense allocation. The court rejected dismissal because petitioners’ utility/expense assertions were generalized and undeveloped in the record, while the bulk of the dispute focused on noise and trespass. Respondent did not demonstrate that absent parties would be inequitably affected or that complete relief between the litigants could not be awarded.

E. Renewal: why “new facts” were insufficient

The claimed new evidence concerned alleged original intent to select an arbitrator based on certain religious affiliations and Jewish law. The court held renewal was properly denied because respondent did not provide a reasonable justification for delay, and because the “new” material largely tracked arguments respondent had already made (that the parties were Hasidic and intended certain rabbinic courts).

F. Preliminary injunction in aid of arbitration: why it was reversed

CPLR 7502(c) authorizes provisional relief only when, absent the injunction, the ultimate arbitration award may be rendered ineffectual. The court found petitioners’ showing deficient: the motion relied on unsupported, conclusory attorney attestations; petitioners did not establish irreparable harm, did not show an award would be ineffectual, and did not address balance of equities. This was an abuse of discretion, requiring reversal of the injunction portion of the order.

3.3. Impact

  • Drafting consequences for land-use declarations and covenants: The decision signals that New York courts may enforce an arbitration mandate in recorded covenants even when the arbitrator designation is incomplete, treating the omission as curable via CPLR 7504 rather than fatal.
  • Religious arbitration administration: Courts may appoint a rabbinical tribunal (including a well-known institutional beth din) where the agreement contemplates rabbinic arbitration but lacks specifics, so long as the appointment is consistent with the agreement’s text and reasonable.
  • Sharper limits on injunctions pending arbitration: The reversal reinforces that parties cannot obtain broad “status quo” restraints in aid of arbitration without competent proof of irreparable harm and the specific CPLR 7502(c) showing that an award would be rendered ineffectual.
  • Joinder strategy in multi-party property regimes: A party seeking dismissal for nonjoinder must substantiate, on the record, how absent signatories will be affected; speculative or undeveloped references to shared systems (like utilities) may not suffice.

4. Complex Concepts Simplified

  • “Covenant which runs with the land”: A recorded promise or restriction that binds future owners, not just the original signers. Buying the property typically means taking subject to (and benefiting from) the covenant’s terms.
  • CPLR article 75: New York’s statutory framework for arbitration-related court proceedings (e.g., compelling arbitration, staying arbitration, confirming/vacating awards).
  • CPLR 7503(c) “20-day rule”: If served with a demand for arbitration, a party generally must seek a stay within 20 days or lose certain objections. But if the objection is that no arbitration agreement was ever made, courts may still hear it later.
  • CPLR 7504 appointment power: If an arbitration agreement lacks a workable arbitrator-selection method, the court can appoint an arbitrator.
  • Preliminary injunction “in aid of arbitration” (CPLR 7502(c)): A court may grant temporary relief pending arbitration only where needed to prevent the arbitration award from becoming meaningless, and only if traditional injunction factors (likelihood of success, irreparable harm, balance of equities) are met.
  • “Renewal” (CPLR 2221(e)): A request to revisit a decision based on genuinely new facts that would change the result, plus a good reason those facts were not provided earlier.
  • Beth Din: A Jewish rabbinical tribunal that can serve as an arbitral forum when parties agree to submit disputes to it.

5. Conclusion

The Third Department’s central contribution is its practical enforcement approach to incomplete arbitrator designations in recorded property declarations: an arbitration clause that clearly mandates arbitration is not rendered void merely because it leaves blanks for the arbitrator’s name/location. Instead, CPLR 7504 supplies a judicial mechanism to appoint an arbitrator, and courts will review that appointment for abuse of discretion. At the same time, the decision tightens the gate for injunctions pending arbitration, requiring concrete proof that the award would be rendered ineffectual without provisional relief and that traditional injunction factors are satisfied.