On September 2, 2026, the Second Department issued a decision in Breslin Brookhaven, LLC v. Rose, 2026 NY Slip Op. 05156, holding that the assignee of a contract may compel an arbitration under the contract’s arbitration clause, explaining:
On a motion to compel or stay arbitration, a court must first determine whether the parties agreed to arbitration and, if so, whether the dispute generally falls within the scope of their arbitration agreement. Arbitration is a matter of contract, grounded in agreement of the parties. Thus, when deciding whether the parties agreed to arbitrate a certain matter, ordinary state law principles that govern the formation of contracts apply. If the parties have broadly agreed to settle any dispute arising out of a contract between them by arbitration, once it appears that there is, or is not a reasonable relationship between the subject matter of the dispute and the general subject matter of the underlying contract, the court’s inquiry with respect to the arbitrability of the dispute is ended.
Inasmuch as an arbitration clause is a contractual right, the general rule is that only a party to an arbitration agreement is bound by or may enforce the agreement. However, a nonsignatory to an arbitration clause may, in certain situations, compel a signatory to the clause to arbitrate the signatory’s claims against the nonsignatory despite the fact that the signatory and the nonsignatory lack an agreement to arbitrate. This Court has held that an assignee of a contract may avail itself of an arbitration clause contained therein.
Here, the operating agreement’s arbitration provision, which requires the parties to submit all disputes arising out of or relating to matters set forth in this Agreement to arbitration, is sufficiently broad to encompass the instant dispute. Further, as the agreement permitted Rose to assign his interest in the LLC to a third party and did not preclude an assignee from enforcing the arbitration provision, AVR was entitled to enforce the agreement’s arbitration provision. Finally, the defendants have not waived their right to arbitrate the instant dispute by appearing in a separate action and litigating it on the merits. Accordingly, that branch of the defendants’ motion which was pursuant to CPLR 7503(a) to compel arbitration and stay all proceedings in this action pending completion of the arbitration should have been granted.
(Internal quotations and citations omitted).
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