Summary
In Scarcella v. America Online, Inc. (11 Misc 3d 19) the Appellate Term affirmed Judge Samuels' decision holding that AOL's forum selection clause was unenforceable in an action brought in the Small Claims Part of the Civil Court.
Summary of this case from STRUJAN v. AOLOpinion
570315/05.
December 28, 2005.
Appeal from two orders of the Civil Court of the City of New York, New York County (Debra Rose Samuels, J.), dated September 8, 2004, and March 28, 2005, respectively. The first order denied defendant's motion to dismiss the action. The second order granted defendant's motion for reargument, and, upon reargument, adhered to the court's prior determination.
Michael C. Marcus, New York City, and Schlam Stone Dolan LLP, New York City ( Jeffrey M. Eilender and John M. Lundin of counsel), for appellant.
Russell Scarcella, respondent pro se.
McCOOE, J.P., DAVIS and GANGEL-JACOB, JJ., concur.
OPINION OF THE COURT
Orders, dated September 8, 2004 and March 28, 2005, affirmed, without costs.
Civil Court properly concluded that the forum selection clause set forth in the electronic America Online, Inc. (AOL) membership agreement, which required that any dispute against AOL be litigated in Virginia, was unenforceable in the limited context of this small claims case. Plaintiff made a sufficient showing that enforcement of the forum selection clause in the parties' "clipwrap" agreement would be unreasonable in that he would be deprived not only of his preferred choice to litigate this $5,000 controversy in the Small Claims Part, but, for all practical purposes, of his day in court ( see British W. Indies Guar. Trust Co. v. Banque Internationale A Luxembourg, 172 AD2d 234). This is particularly so in view of the costs and inconvenience attendant to litigating this claim in Virginia; the $2,000 monetary limit of the Virginia Small Claims Court ( see Va Code Ann § 16.1-122.3), which would preclude plaintiff from seeking the full amount of his $5,000 claim; and perhaps most importantly, defendant's unqualified right to transfer the matter out of the Virginia Small Claims Court ( see Va Code Ann § 16.1-122.4). Enforcement of the forum selection provision in these circumstances would frustrate the stated legislative goal of providing a "simple, informal and inexpensive procedure" for the disposition of small claims ( see CCA 1802). Law Offs. of Cory J. Rosenbaum v. Gateway, Inc. ( 4 Misc 3d 128 [A], 2004 NY Slip Op 50629[U] [2004]), relied upon by defendant, does not compel a contrary result since it involved the enforceability of a threshold agreement to arbitrate not shown to be onerous or unfair.