Continental Casualty Company, et al., Plaintiffs–Respondents, v. AR CAPITAL (2020)

Order, Supreme Court, New York County (Joel M. Cohen, J.), entered August 12, 2019, which denied defendants AR Capital, LLC, Bellevue Capital Partners, LLC, Nicholas Schorsch, Edward Weil, William Kahane, and Peter Budko's motion to dismiss the complaint pursuant to CPLR 3211(a)(4) or CPLR 327, or alternatively, to stay the action, unanimously affirmed, with costs.

Supreme Court providently exercised its discretion in denying defendants' motions to dismiss pursuant to CPLR 3211(a)(4) based on another action pending, or pursuant to CPLR 327 for forum non conveniens, or alternatively, to stay this action, which was filed a day before defendants-appellants commenced an action against plaintiffs in Delaware, seeking to litigate most, but not all, of the same issues.  New York courts generally follow the first-in-time-rule, which instructs that “the court which has first taken jurisdiction is the one in which the matter should be determined and it is a violation of the rules of comity to interfere” (City Trade & Indus., Ltd. v. New Cent. Jute Mills Co., 25 N.Y.2d 49, 302 N.Y.S.2d 557, 250 N.E.2d 52 [1969];  White Light Prods. v. On The Scene Prods., 231 A.D.2d 90, 94, 660 N.Y.S.2d 568 [1st Dept. 1997] ).  However, “chronology is not dispositive,” especially, where, as here, this action at the early stages of litigation or filed in close proximity (IRX Therapeutics, Inc. v. Landry, 150 A.D.3d 446, 447, 55 N.Y.S.3d 4 [1st Dept. 2017] ).  Nevertheless, here New York has a more substantial nexus to the parties and the dispute, and this action is more comprehensive than the Delaware action.

Moreover, the fact that “New York is the logical and proper place ․ to go forward,” negates any inference that this constitutes preemptive litigation intended to deprive defendants of their chosen forum (Seneca Ins. Co. v. Lincolnshire Mgt., 269 A.D.2d 274, 275, 703 N.Y.S.2d 127 [1st Dept. 2000] ), and defendants-appellants offer no compelling reason why they should be entitled to their choice of forum.  Defendants also bear some responsibility for the duplicative litigation, given that they commenced the Delaware action after learning that plaintiffs had commenced this action.