Category Archives for Bet Din

Agreements To Arbitrate In Bais Din: Get It In Writing!

A recent decision from a New York State Supreme Court illustrates the importance of following proper procedure when arbitrating in Bais Din. In that case, a homeowner’s insurance company sued a Bais Yaakov school, alleging that work done to expand the school building had damaged their insured’s property, requiring the insurance company to pay substantial claims to its insured.

According to the facts in the decision:

Beth Jacob began construction to expand its building at 98-100 Lawrence Street, Brooklyn, New York, in late March or early April 2006. In mid-October 2006 Rabbi Michael Levi (Levi) was served with a summons to appear on behalf of Beth Jacob at the Beis Din Zedek Rabbinical Court of the Central Rabbinical Congress of the United States and Canada (Beis Din). The proceeding was initiated by Rabbi Aharon Zaberman and Eli Baumwolspiner. According to Beth Jacob, the parties appeared before the Beis Din on October 22, 2006. Levi asserts, in his affidavit, that Eli Baumwolspiner, Zaberman, and Levi signed an agreement to have the case heard by the Beis Din, after which the three-member panel of the Beis Din heard the parties’ arguments. While Levi contends that the Beis Din did not require Beth Jacob to pay any money to Baumwolspiner, and permitted the construction to continue, there are no documents submitted on this motion regarding the parties’ agreement to arbitrate, or the Beis Din’s determination. The Baumwolspiner’s maintain that they merely sought the Beis Din’s assistance in preventing further damage, but did not submit the issue of payment for the damages to the Beis Din for consideration.

The property owner’s insurance company, Tower Insurance, paid its insured for the damage and then sued the Bais Yaakov. The school argued that the court should “compel arbitration (in the Beis Din) on the ground that plaintiff’s subrogors are bound by their agreement to arbitrate, and Tower stands in their shoes.”

The insurance company argued that there was no agreement or contract binding the parties to adjudicate their claims before Bais Din.  The court agreed, noting that:

Beth Jacob has produced no written agreement to arbitrate, either from prior to the parties’ appearance at the Beis Din, or dating from that appearance. An agreement to arbitrate must be in writing in order to be enforced. CPLR 7501. Furthermore, that writing must make it clear what issues are to be arbitrated, and make the parties’ intention to arbitrate the dispute unequivocal.

The upshot is that parties who are in Bais Din should be certain that the agreement to arbitrate, as well as the scope of the arbitration, are well documented. To protect their authority, Batai Dinim should not proceed with a hearing unless and until all parties enter in such written agreements.

Interfering with business relationships

Rabbi Max Sutton’s recent column in Community discusses the halachot of interfering with another person’s contract or business relationship.  Rabbi Sutton uses hypotheticals to highlight the following questions:

  1. May one negotiate with a licensor for exclusive rights to a license currently held by a competitor?
  2. May a salesman who leaves an employer for a competitor lure company accounts to his new employer?  If he may, may he redirect unfulfilled orders from his old employer to his new employer?
  3. May an employee quit his job and open a business in direct competition with his previous employer?

The basic rule is that one may not induce a breach of contract, but one may compete for the same contract at the end of the contract term or when the contract has been fully performed.  The full article can be read here.

Rabbi Sutton applies the above rule to employment relationships in current business settings, but does not draw a distinction in this regard between contract employees and at-will employees.  An at-will relationship, which is more common, allows either party to terminate the employment relationship for any reason without liability.  It seems to me that making an offer to a competitor’s at-will employee is not the same as inducing a breach of an agreement, since the employer specifically assumed that risk when agreeing to the at-will employment or by not offering a contract for a specific term.

Saying that the competitor is inducing a breach of the agreement would imply that an at-will employment is something other than at-will, i.e., that terminating the employment is a breach of an agreement.  However, the understanding between employer and employee is that neither party is required to continue the relationship.  I would argue that just as it is not a breach of the agreement for the employee to look for another job, it is not an inducement to breach for a competitor to make an offer to the employee.

The Satmar Saga Continues

In yet another Satmar lawsuit, this one involving control of the cemetary where the previous Rebbe is buried, Justice Victor J. Alfieri ruled that the parties are required to arbitrate the dispute before a Bais Din (Beth Din). The judge based his decision on a provision in the Congregation’s bylaws stating that “a member of the Congregation shall [or "must", depending on the varying interpretations from the Yiddish] be expelled if that member declines to appear before a Rabbinical Court [alternatively, "submit to a Din Torah"].”

The Court stated that “since the Congregation’s bylaws are a secular corporate document adopted by its members pursuant to New York State law,this Court finds that the Congregation and its members adopted the Rabbinical Court, i.e., the Din Torah (Rabbinical Court proceeding) as the alternative dispute resolution between and among members of its congregation. As such, this Court finds that the parties are required to arbitrate the within action before the Rabbinical Court. ” A copy of the decision is available here.

I am not sure that the judge realizes the implications of this decision. As I understand it, this means that any individuals who consider themseleves members of the Satmar congregation are legally obligated to arbitrate every dispute, even those not involving control of the Congregation or its assets. If, for example, two Satmar individuals have a business dispute and one of them sues in court, the court could compel arbitration instead. Am I reading this wrong?

Obligations of a guarantor in halacha

Rabbi Max Sutton, Rosh Bet Din Aram Soba in Jerusalem, published an article in the May 2010 issue of Community on the halachot of loan guarantors and sureties.  Rabbi Sutton writes:

There are two basic types of guarantee arrangements. The first is known as an ordinary guarantor (arev). An ordinary guarantor is a third party that agrees to be responsible for a debt only if the principal debtor defaults. Hence, the creditor is required to attempt to collect from the debtor, and only after he fails to pay is the guarantor held responsible. The second type of a guarantee relationship is known as a surety-ship (arev kablan). This arrangement enables the creditor to demand payment from either the debtor or the surety, whichever he chooses. The creditor need not exhaust any legal remedies against the principal debtor before holding the surety responsible for payment. Even if the debtor can make payment, the creditor has the right to collect from a surety the moment the debt is due. Once the debt is paid by either a guarantor or a surety, they may then pursue all legal remedies to collect from the debtor the money they laid out to the creditor on his behalf.

The article presents three cases which illustrate the following difficulties:

  1. Where the creditor made multiple loans, only some of which were guaranteed, how are partial payments by the debtor allocated between the loans?
  2. Where there are multiple guarantors for a single loan, how are partial payments by the debtor allocated between the remaining obligations of the guarantors?
  3. Are oral guarantees enforceable?

After discussing the issues, Rabbi Sutton concludes by summarizing the Bet Din’s ruling on each case.  The full article can be read here.

Arkaos: Litigation in non-Jewish courts

In an earlier post I discussed a teshuvah of Rav Ovadiah Yosef as to whether a non-yoresh (e.g., a daughter if the decedent leaves a son and a daughter) may claim a portion of an estate in court under local law. After summarizing Rav Ovadiah Yosef’s ruling that dina demalchuta dina does not apply, I wrote the following:

The remainder of the teshuvah addresses the serious prohibition of litigating disputes in non-Jewish courts (See Rambam, Yad Hachazakah, Sanhedrin 26:7). Rav Ovadiah Yosef writes that this applies even if the results under halacha and civil law are the same, and even if the decedent instructed his children to resolve the estate under a civil court’s jurisdiction. In a lengthy footnote, he writes that it is also prohibited to appear before a Jewish judge who will apply secular law – in fact, in such cases the disregard for the Torah is even more pronounced.

One reader objected that although I provided a citation to the Rambam, I did not quote him in context. So here it is in full, with my approximate translation, and a few comments:

כל הדן בדייני עכו”ם ובערכאות שלהן אע”פ שהיו דיניהם כדיני ישראל הרי זה רשע וכאילו חרף וגדף והרים יד בתורת משה רבינו שנאמר ואלה המשפטים אשר תשים לפניהם לפניהם ולא לפני עכו”ם לפניהם ולא לפני הדיוטות. היתה יד העכו”ם תקיפה ובעל דינו אלם ואינו יכול להוציא ממנו בדייני ישראל יתבענו לדייני ישראל תחלה. אם לא רצה לבא נוטל רשות מבית דין ומציל בדיני עכו”ם מיד בעל דינו

One who litigates before non-Jewish judges or in their courts, even if their laws correspond to Jewish law, is an evil person, and it is as though he blasphemed God and raised his hand (in arrogance) against the Torah; for it says, “And these are the laws that you should place before them” — before them (i.e., the elders of Israel), not before non-Jews; before them, not before judges who are not ordained.

When under non-Jewish rule, if one’s adversary is powerful and will not cooperate with a ruling of a Bet Din, he must first attempt to sue his adversary in Bet Din. If his adversary refuses to appear in Bet Din, he may obtain the Bet Din’s permission and sue in non-Jewish court.

The Rambam’s source is Gittin 88b, which derives the prohibition from the pasuk quoted by the Rambam, “ואלה המשפטים אשר תשים לפניהם” — “and these are the laws you should place before them.” Interestingly, however, the Gemara does not compare litigation in non-Jewish courts to blasphemy and high-handedness, and the commentators on the Rambam do not point to the Rambam’s source for such strong condemnation.

The language the Rambam uses appears to be derived from the following pesukim, said with regard to idolatry:

וְהַנֶּפֶשׁ אֲשֶׁר תַּעֲשֶׂה בְּיָד רָמָה מִן הָאֶזְרָח וּמִן הַגֵּר אֶת ה הוּא מְגַדֵּף וְנִכְרְתָה הַנֶּפֶשׁ הַהִוא מִקֶּרֶב עַמָּהּ
כִּי דְבַר ה’ בָּזָה וְאֶת מִצְוָתוֹ הֵפַר הִכָּרֵת תִּכָּרֵת הַנֶּפֶשׁ הַהִוא עֲוֹנָה בָהּ

A person who shall act high-handedly, whether native or convert, he blasphemes God; that person shall be cut off from among his people, for he scorned the word of God and broke His commandments; that soul shall surely be cut off, its sin is within it. (Bemidbar 15:30-31)

The similarity between our subject and intentional idolatry is apparent in the reason provided for the punishment — “for he scorned the word of God.” Clearly, the Rambam does not mean that litigating in a non-Jewish court is a transgression as serious as idolatry — it is not explicitly prohibited by the Torah and it does not carry the same punishment as idolatry. Nevertheless, by resolving a monetary dispute outside of the system of the Torah one turns his back on the Torah’s system of justice.

Another point worth mentioning along these lines: Rashi in Mishpatim cites a Midrash which states that we learn from the proximity of the laws of the altar to monetary laws that during the time of the Temple, the Sanhedrin were to be situated near the altar. Keli Yakar in Mishpatim discusses at great length the conceptual relationship between the altar and justice. Such connections also seem to indicate that a litigant’s abandonment of the Sanhedrin by resorting to non-Jewish courts is on some level also an abandonment of the altar, reinforcing the Rambam’s comparison of litigation in non-Jewish courts to idolatry and blasphemy.

The Rambam writes that one may only bring suit in non-Jewish courts if his adversary refuses to appear in bet din, and after obtaining bet din’s permission. There may be other exceptions that should be discussed if and when they arise, such as bringing suit to recover against a defendant who is insured — the insurance policy would be unavailable in bet din, and any chillul Hashem may be mitigated by the understood objective of the lawsuit.

So why is it that there are so many reported cases involving Orthodox Jewish litigants fighting their battles in state and federal courts? We posted on HAFTR’s appeal of a Bet Din award to a teacher. Right or wrong (and the Appellate Division said HAFTR was wrong), HAFTR had, so far as I can tell, no business seeking to have a bet din award vacated in state court.

I have no idea how the Satmar factions justify their drawn-out legal battles in state court. As I noted in a comment to Avrohom’s post on a recent decision in the Satmar litigation, something is seriously wrong when the chillul Hashem rises to the level that a state court judge feels compelled to write:

This is an enormously difficult case, involving as it does a bitter battle between two factions whose differences are extremely hard for outsiders to understand. It has produced, as Justice Barasch tells us in an epilogue to his opinion, attempts by people claiming allegiance to one faction or the other “to discredit, intimidate and improperly influence” the Supreme Court, with the result “that there are judges who would prefer to decline any assignment involving members of this group of litigants” (5 Misc 3d 1023[A], 2004 NY Slip Op 51515[U], *13, *14). I join Justice Barasch—as, I am sure, do all my colleagues—in saying that this behavior is intolerable, and in expressing the hope that the proper authorities will deal with it.

Just the other day, Judge Demarest of the Brooklyn Supreme Court issued an opinion of great interest that we’ll hopefully get to soon.

Opinion of Rav Ovadiah Yosef on yerushah and intestacy

Rav Ovadiah Yosef, in his collection of responsa, Yehaveh Daat, volume 4, responsum 65, addresses the following question: May a family member who is not a yoresh (halachic heir), but is legally entitled to a share of a decedent’s estate, claim a portion of the estate in civil court under the doctrine of dina demalchutah dina?

Before turning to his analysis, it should be noted that the teshuvah (responsum) involves the distribution of the estate of a decedent who died without a will. It does not address whether a will would be recognized by halacha or whether any halachic workaround, such as reliance on what the Rama refers to as “shtar chatzi zachar,” is appropriate.

I. Scope of Dina Demalchutah Dina

Source

The source for the doctrine of dina demalchutah dina (literally, “the law of the kingdom is the law”) is a Gemara (Gittin 10b) which discusses the validity of contracts executed in non-Jewish courts. The Gemara states that a contract that merely records the terms of an independent transaction is valid and is admissible as evidence in halacha. However, there is a disagreement as to the validity of a contract that effectuates a transaction. One opinion states that the Torah incorporates the law of the jurisdiction under the doctrine of dina demalchutah dina. A second opinion disagrees and holds that contracts executed in a non-halachic manner are not valid according to halachah.

Opinion of the Rambam

The majority of Rishonim, including Rif and Rambam, quote the latter opinion as halacha. They don’t entirely reject dina demalchutah dina, but limit its application to laws that directly benefit the government, such as taxes and customs, and not to the laws of private transactions or disputes. Shulchan Aruch codifies the halacha according to these opinions (Choshen Mishpat 68:1).

Opinion of the Ramban

Other Rishonim, including Ramban, Rashba and Rosh, disagree. They hold that civil laws enacted for good of the general population are recognized by halacha in private transactions. Rama (Ch.M. 68:1) cites this opinion as halacha.

II. Halacha

Rav Ovadiah Yosef, applying strict adherence to the opinion of Shulchan Aruch, writes that the accepted halacha (at least for Sepharadim) is that dina demalchutah dina only applies to tax and other fiscal laws, but not to laws regulating transactions or disputes between private parties. Therefore, halacha does not recognize the legal inheritance rights of a legal heir who is not a yoresh.

Rav Ovadiah Yosef continues – even according to the opinions cited by the Rama, that civil laws are generally recognized by halacha, the doctrine of dina demalchutah dina does not apply to the laws of inheritance. Civil laws are recognized by halacha only if the Torah is neutral on the subject of the law. Dina demalchutah dina does not apply if the local law contradicts halacha. As the Rama writes, “otherwise all of the laws of Israel will be nullified.”

The Bet Yosef quotes a teshuvah of the Rashba in this regard. The Rashba was asked to rule on a dispute over the estate of a deceased woman. The woman’s surviving husband claimed that pursuant to halacha he inherited the assets she had brought into the marriage. The woman’s father claimed that under local law those assets were to be returned to him, and that local law should apply under the doctrine of dina demalchutah dina.

The Rashba wrote that uprooting the laws of yerusha by relying on dina demalchutah dina effectively uproots all of the laws of the Torah. If dina demalchutah had priority over the laws of the Torah, he said, then we would have no need for the Mishnah and Talmud; we would simply teach and apply the law of the land in every situation.

III. Litigation in non-Jewish courts

The remainder of the teshuvah addresses the serious prohibition of litigating disputes in non-Jewish courts (See Rambam, Yad Hachazakah, Sanhedrin 26:7). Rav Ovadiah Yosef writes that this applies even if the results under halacha and civil law are the same, and even if the decedent instructed his children to resolve the estate under a civil court’s jurisdiction. In a lengthy footnote, he writes that it is also prohibited to appear before a Jewish judge who will apply secular law – in fact, in such cases the disregard for the Torah is even more pronounced.

IV. Conclusion

Rav Ovadiah Yosef concludes that it is forbidden for the non-yorshim to appear in secular court to claim a portion of the estate. If the yorshim wish to share the estate with the non-yorshim, they should execute halachic transfers under the supervision of a bet din.

Heter Iska arbitration rights forfeited by defendant’s participation in litigation

The Appellate Division, Second Department affirmed a decision of the lower court that denied defendant Eli Weinstein’s motion to compel arbitration. The parties had signed a Heter Iska that contained an arbitration clause. (Although not mentioned in the decision, presumably it required the parties to go to Bais Din).

1 1/2 years after the litigation started, Weinstein, the defendant in the case, moved to compel arbitration based on the Heter Iska. He claimed that “he had not retained a copy of the Iska Contract and had ‘completely forgotten that it contained an arbitration provision.’”

The court held that a “defendant in an action who has the right to arbitrate a claim may forfeit or waive that right by acts inconsistent with the intention to arbitrate,” and found that “under these circumstances, Weinstein’s conduct evinced an intent over an extended period of time to litigate, rather than to arbitrate… Accordingly, the Supreme Court properly denied Weinstein’s motion to compel arbitration and stay the actions.”

The decision can be found here.

Neither court indicated that there was anything wrong with the Heter Iska or the arbitration clause. Rather, the decision was based on Weinstein’s failure to timely assert his right to arbitrate by first litigating for 1 1/2 years.

The decision also does not indicate how Weinstein “refreshed his recollection” of the arbitration clause since he claimed he did not keep a copy of the Heter Iska. A copy may have been produced by his adversaries in the course of discovery. If that was the case, and if Weinstein moved to compel arbitration as soon as he was reminded of the clause, than the court’s decision may be incorrect. As noted in the decision, the reason that a party may be found to have waived the right to arbitrate is to prevent a defendant from using the courtroom “as a convenient vestibule to the arbitration hall so as to allow a party to create his own unique structure combining litigation and arbitration.” If that was clearly not Weinstein’s intent, then maybe he didn’t waive or forfeit his right to arbitrate at all.

Appellate Division reverses decision and order that vacated Beth Din award

The New York Appellate Division, Second Department, reversed an order of the New York Supreme Court that vacated an arbitration award by the Beth Din of America.

The Supreme Court order vacated the award of the Beth Din which reinstated a tenured teacher at a salary greater than that agreed upon in the teacher’s contract. The court found, among other things, that the award ran counter to public policy. The Supreme Court decision can be accessed here.

The Appellate court reversed the decision finding that “. . .Supreme Court incorrectly granted that branch of HAFTR’s cross petition which was to vacate the arbitration award, since the petitioner demonstrated that he was a tenured teacher at HAFTR and, as such, had certain rights, including the right to have his employment terminated only for cause, barring emergent financial circumstances not at issue here…In response, HAFTR failed to rebut this showing by demonstrating the applicability of any of the statutorily enumerated grounds for vacatur of the award.”

The Appellate court also held that the $100,000 annual salary designated in the award was not irrational because “HAFTR concedes in its brief, the petitioner’s average annual compensation during his last seven years at HAFTR was greater than $100,000. It was, therefore, not irrational for the panel of arbitrators to set the petitioner’s future annual salary at $100,000.” As reported on January 21, 2009 in the Jewish Week, with overtime the teacher was earning $118,000 at the time he was let go, plus health insurance and a pension.

The Appellate Division decision can be found here.