Opinion
No. CV–023619–14/NY.
01-20-2016
MBF LEASING LLC, Plaintiff, v. Salih INCI, Defendant.
Eliyahu Babad, Esq., Joseph I. Sussman, P.C., Cedarhurst, Attorneys for Plaintiff. Salih Inci, for Unrepresented Defendant.
Eliyahu Babad, Esq., Joseph I. Sussman, P.C., Cedarhurst, Attorneys for Plaintiff.
Salih Inci, for Unrepresented Defendant.
PAUL A. GOETZ, J.
Recitation, as required by CPLR § 2219(a), of the papers considered in the review of Defendant's motion to dismiss and change venue:
Papers Numbered
| Defendant's Motion to Dismiss and change venue | 1 |
| Plaintiff's Affirmation in Opposition | 2 |
Plaintiff, MBF Leasing LLC (“Plaintiff”), brought this action against Defendant, Salih Inci (“Defendant”), seeking to recover one thousand three hundred fifty dollars ($1,350.00) under a personal guarantee of obligations pertaining to an equipment finance lease agreement (lease agreement”) for a merchant payment processing machine. Plaintiff also seeks three hundred thirty-seven dollars and fifty cents ($337.50) for legal fees incurred to enforce the agreement. The parties entered into the lease agreement in California. The stated address on the lease agreement for Plaintiff is in Burr Ridge, Illinois. Also, according to the lease agreement, the vendor/supplier of the equipment, has a California address (Camarillo, California). The case is in New York County Civil Court of the City of New York pursuant to a forum selection provision in the lease agreement requiring that any disputes between the parties be heard in the State and County of New York. Unrepresented Defendant now moves to dismiss the complaint with prejudice on the grounds that the credit card processing machine he received did not work. In the alternative, Defendant requests that “the case be moved from New York and be held in a appropriate court in the State of California.”
Unrepresented Defendant attests that he is “a small merchant [ ] who allegedly owes Plaintiff only $2,201.66; my travel expenses to the State of New York will be prohibitively high and will be unfair to me ...”
Plaintiff opposes Defendant's motion asserting that on a motion to dismiss the Court must accept the facts in the complaint as true. Citing Anagnostou v. Stifle, (204 A.D.2d 61, 611 N.Y.S.2d 525 [1st Dept 1994] ), Plaintiff argues Defendant waited too long to move for dismissal on forum non conveniens grounds. Plaintiff further opines that forum selection clauses are prima facie valid and enforceable and that even if the Court were to entertain motion to dismiss based on forum non conveniens grounds, citing, inter alia, Sterling Nat. Bank v. Eastern Shipping Worldwide, Inc., (35 A.D.3d 222, 826 N.Y.S.2d 235 [1st Dept 2006] ), and Continental Ins. Co. v. Garlock Sealing Technologies, LLC, (23 A.D.3d 287, 805 N.Y.S.2d 18 [1st Dept 2005] ), Defendant's assertions are merely conclusory and Defendant does not demonstrate why traveling to New York would be gravely difficult or inconvenient. Finally, Plaintiff argues that unrepresented Defendant's affidavit is defective because it lacks a certificate of conformity pursuant to CPLR section 2309.
Dismissal based on defective equipment
Defendant alleges in his affidavit in support of his motion that “[t]hey sent [a] broken credit card machine, which I could not use it at all.” Defendant further attests that he called Plaintiff “a number of times and notified them about the issue, the problem has not resolved.” Defendant further states that he “returned the credit card terminal within 30 days after receiving [it].”
At this stage of the litigation, the allegations in the complaint are accepted as true. (Barker v. Amorini, 121 A.D.3d 823, 995 N.Y.S.2d 89 [2nd Dept 2014] ). The documentary evidence annexed to Defendant's motion does not resolve the dispute (CPLR § 3211[a][1] ; JBCR, LLC v. Chicago Title Ins. Co., 2015 N.Y.App.Div. LEXIS 4219 [2nd Dept] ) and an affidavit is not considered documentary evidence. (Id. ). To the extent that Defendant argues Plaintiff fails to allege a cause of action (CPLR § 3211[a][7] ), factual disputes are beyond the scope of a motion to dismiss. (Garcia v. Rhea, 85 A.D.3d 549, 924 N.Y.S.2d 790 [1st Dept 2011] ).
Accordingly, Defendant's motion to dismiss with prejudice based on defenctive euipment is denied.
Change of venue to California
This Court lacks authority to transfer a case to a California court. (See New York City Civil Court Act). Therefore, the Court will treat the unrepresented Defendant's motion as a request to dismiss based on inconvenient forum grounds. (See CPLR § 327 ).
Quoting from Anagnostou v. Stifle (204 A.D.2d 61, 611 N.Y.S.2d 525 [1st Dept 2004] ) Plaintiff argues “[g]enerally, unless the balance is strongly in favor of the defendant, the plaintiff's choice of forum should rarely be disturbed.” (Id. ). Plaintiff concludes, again quoting from Anagnostou, that Defendant has not meet his “particularly high burden to carry in light of the substantial delay in not raising [his] argument that New York is an inappropriate forum.” (Id. ).
Anagnostou involved a dispute over ownership of six paintings by Andy Warhol located in New York. (Id. ) Defendants moved to dismiss the action on, inter alia, forum non conveniens grounds arguing the case should be heard in Greece. (Id. ) The trial court granted the motion and the First Department reversed. (Id. ). The First Department noted that by the time the defendants brought their inconvenient forum motion a “significant degree of activity had already taken place,” to wit, a preliminary injunction had issued, Defendants had made an unsuccessful motion for summary judgment and discovery had commenced. (Id. ). Moreover, the defendants were New York domicillaries and the nominal owner of the paintings, the decedent's estate, was being administered in New York. (Id. ).
This case is clearly distinguishable from Anagnostou. Here, Defendant resides in California, not New York, and the dispute does not involve valuable personal property located in New York but a dispute over damages of $1,350.00 for an alleged breach of a lease agreement entered into in California. In addition, Defendant has not substantially delayed making his inconvenient forum motion and there has not been a significant amount of activity in this case. The Court granted Defendant's motion to vacate a default judgment on July 7, 2015. That same day the Court issued a disclosure order and adjourned the case for a phone conference on November 16, 2015, the return date of the instant motion.
Having determined that Defendant has not substantially delayed in brining his forum non conveniens motion and that there has not been a significant amount of activity in this case, the Court will not address whether Plaintiff's choice of forum and the forum selection clause should be enforced.
It is long established in New York that “[f]orum selection clauses which are prima facie valid ... are enforced because they provide certainty and predict ability in the resolution of disputes.” (Sterling Nat. Bank, 35 A.D.3d at 222, 826 N.Y.S.2d 235 ; quoting Brooke Grp., Ltd. v. JCH Syndicate 488, 87 N.Y.2d 530, 534 [1996] [internal citations omitted] ). “The very point' of forum selection clauses, which render the designated forum convenient as a matter of law, is to avoid litigation over personal jurisdiction as well as disputes arising over the application of the long-arm statute.” (Sterling Nat. Bank, 35 A.D.3d at 222, 826 N.Y.S.2d 235 quoting Nat. Union Fire Ins. Co. of Pitt., Pa. v. Williams, 223 A.D.2d 395, 397–98, 637 N.Y.S.2d 36 [1st Dept 1996] ) Therefore, “it is the well-settled policy of the courts of this State to enforce contractual provisions for choice of law and selection of a forum for litigation.' “ (Id. [citations omitted] see also Brax Capital Group, LLC v. WinWin Gaming, Inc., 83 A.D.3d 591, 922 N.Y.S.2d 43 [1st Dept 2011] [finding jurisdiction over defendant guarantor pursuant to CPLR § 302(a)(1) and because he was subject to the forum selection clause and the finding of personal jurisdiction “did not violate defendant's right to due process, since his conduct and connection with this State were such that he should reasonably have anticipated being brought into court.”]; Sydney Attractions Grp. Pty., Ltd. v. Schulman, 74 A.D.3d 476, 902 N.Y.S.2d 82 [1st Dept 2010] [finding no reason to depart from the well-settled policy of the courts of this State to enforce forum selection clauses.] ).
However, a contractual forum selection clause, ... may be set aside if it is shown by the resisting party to be unreasonable or unjust, or that the clause is invalid because of fraud or overreaching, such that a trial in the contractual forum would be so gravely difficult and inconvenient that the challenging party would, for all practical purposes, be deprived of his or her day in court.
(Northern Leasing Systems, Inc. v. French, 48 Misc.3d 43, 44–45 [App T 1st Dept 2015] ; citing Sterling Natl. Bank, 35 A.D.3d at 222, 826 N.Y.S.2d 235 ).
Generally, in cases where forum selection clauses have been enforced, the parties have been sophisticated businesses or business people as the movant seeking non-enforcement of the clause. For example, in Sterling National Bank, the Court observed that “defendant corporation, a sophisticated business entity, agreed when it originally entered into the lease agreement that venue would be placed in New Jersey ...” (35 AD3d at 223 [emphasis provided] ). In National Union Fire Insurance Company, the Court noted, “Plaintiff ... provided a bond to Franklin Cimarron Pointe Associates, a failed real estate limited partnership, guarantying the payment of promissory notes given to its lender by defendant investors ... The promissory notes contemporaneously executed contain choice of law and selection of forum clauses that exclusively designate Pennsylvania as the forum for litigation of disputes.” (223 A.D.2d at 395 [emphasis provided] ). Another common thread in Sterling National Bank and National Union Fire Insurance Company is that both cases involved forum selection clauses designating litigation in states sharing boarders with New York, New Jersey in Sterling National Bank and Pennsylvania in National Union Fire Insurance Company.
In Brax Capital Group, the defendant was a corporate executive with intertwining corporate and personal roles involved in procuring investors for a corporation that he chaired. (83 AD3d at 591 ). The defendant in Brax “sent others to New York who acted on his behalf in dealing with investment bankers involved in obtaining financing for the corporation.” (Id. ) It is also worth noting that the Court in Brax based its finding of personal jurisdiction over the defendant not just on the forum selection provision but also pursuant to New York's long arm statute (CPLR § 302 ).
The defendant in Sydney Attractions Group was not a business but an individual with a dispute with a Australian company, the plaintiff, over a deed. (74 AD3d at 476 ). The Sydney Attractions Court noted that the forum selection clause requiring that disputes be resolved in the Courts of the State of New South Wales and of the Commonwealth of Australia could not be unilaterally waived by the plaintiff because it was not only for the plaintiff's benefit but also for the other Australian company that was a party to the contract. (Id. ).
This case is distinguishable from the above cited authorities. Here, the Defendant is neither a sophisticated business entity (Sterling National Bank ), nor an investor (National Union Fire Insurance ), nor a party seeking investors in a corporation (Brax ), but small merchant in California. Unlike Sydney Attractions Group, where the plaintiff sought to unilaterally waive the forum selection clause, here, Plaintiff seeks to enforce the forum selection clause.
This case is also distinguishable from Continental Insurance Company cited by Plaintiff its affirmation in opposition. In Continental Insurance Company, the First Department held that the Defendants failed to demonstrate that substantial justice would be served by moving the case to Pennsylvania. (23 AD3d at 288 ). In so holding the First Department observed that “the record indicates that there is a substantial nexus between this action and New York, five of the insurance policies at issue having been issued, negotiated, brokered and paid for here and the circumsances giving rise to the underlying action having in large part occurred here. Defendants made no showing that retention of the action would unduly burden New York Courts.” (Id. [citations omitted] ).
In this case there is no substantial nexus with New York because the lease agreement was signed by Defendant in California and the vendor/supplier of the equipment is located in California. Moreover, Defendant resides in California, where his business is located.
This case is more on point with Northern Leasing Sys., Inc. v. French than with the other cited authorities discussed above. In French, the Court found that the parties' dispute had no substantial nexus with New York because the lease agreement was signed in California, where the defendant's business and the equipment were located and where Defendant is a resident with no ties to New York. (48 Misc.3d at 45 ). Quoting from Silver v. Great American Insurance Company (29 N.Y.2d 356, 361 [1972] ), the Court in French observed that “our courts should not be under any compulsion to add to their heavy burdens by accepting jurisdiction of a cause of action having no substantial nexus with New York.” (Id. ). After noting the defendant's advanced age and that the amount in dispute was minor, the Court held that it would be unreasonable to enforce the forum selection provision and granted the defendant's motion to dismiss on forum non conveniens grounds. (Id. ).
Like the defendant in French, Defendant signed the lease agreement in California, where he resides and where his business is located. In addition, also like French, the amount in dispute is minor ($2,201.66). (Id. ).
Moreover, there is a concern, as expressed by the courts in Sterling National Bank and French, that New York trial courts not be overburdened by actions having no substantial nexus with New York. According to the Court's internal case management system, out of approximately 28,000 filings in New York County Civil Court in 2015, 7,548 filings were for cases similar to this case (lease finance agreements entered into outside New York City with New York City forum selection clauses for relatively small amounts). While not every single pending case involves a defendant outside the New York City metropolitan area, the undersigned, as one of two judges assigned to hear these cases since April, 2015, has observed that the vast majority of the cases involve defendants located in far flung locations. The sheer number of similar cases filed reveals that this Court is indeed overburdened with cases having no substantial nexus to New York City.
Plaintiff's final argument in opposition to Defendant's motion is that unrepresented Defendant's affidavit is defective because it lacks a certificate of conformity pursuant to CPLR section 2309(c). Regarding certificates of conformity, the First Department observed in Matapos Technology Limited v. Campania Andina De Comercio Ltda, “the courts are not rigid about this requirement. As long as the oath is duly given, authentication of the oath giver's authority can be secured later, and given nunc pro tunc effect if necessary. The absence of such a certificate is a mere irregularity, and not a fatal defect.” (68 A.D.3d 672, 891 N.Y.S.2d 394 ).
Defendant's motion to dismiss includes a “Certificate of Acknowledgment of Notary Public” with a California Notary Public seal and signature. The seal indicates that the notary's commission expires on January 7, 2018, and the notary certifies that Defendant proved to the notary he is the person whose name is subscribed on the motion to dismiss. Under these circumstances, the Court determines that a certificate of conformity is not necessary. (Id . ). The court is not deciding the case on the merits but rather merely making a determination that “in the interest of substantial justice the action should be heard” in a California Court. (CPLR § 327[a] ). Indeed, in a case with similar facts (California resident, relatively small amount in dispute), this Court held that the forum selection clause was substantively unconscionable. (Lease Finance Group LLC v. Indries, 49 Misc.3d 1219[A] [Civ Ct N.Y. Co 2015] ).
Therefore, for the foregoing reasons, Defendant's motion to dismiss is GRANTED on condition that he stipulate to waiving enforcement of the forum selection clause in the parties' lease agreement and any statute of limitations defenses that may have arisen while this case has been pending until sixty days from the date of entry of this order. (Wild v. University of Pennsylvania, 115 AD3d 994 [2nd Dept 2014] [upholding dismissal but modifying to condition dismissal based on the defendant's waiver of jurisdictional and statute of limitations defenses] ).
Accordingly, it is hereby
ORDERED Defendant's motion to dismiss is GRANTED ON CONDITION that he stipulate to waiving enforcement of the forum selection clause in the parties' lease agreement and any statute of limitations defenses that may have arisen while this case has been pending until sixty days from the date of entry of this order.
This Constitutes the Decision and Order of the Court.