LEASECOMM CORPORATION v. Barbara Iarrobind a/k/a Barbara Iarrobino, Respondent.

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Supreme Court, Appellate Term, New York.

LEASECOMM CORPORATION, Appellant, v. LONG ISLAND CELLULAR LTD., Defendant, Barbara Iarrobind a/k/a Barbara Iarrobino, Respondent.

Decided: March 28, 2007

Present:  McCABE, J.P., TANENBAUM and LIPPMAN, JJ. Edwards Angell Palmer & Dodge LLP, New York City (Andrew P. Fishkin of counsel), for appellant.

Appeal from a decision of the District Court of Suffolk County, Fourth District (C. Steven Hackeling, J.), entered on August 31, 2005, deemed an appeal from a judgment of the same court, entered August 31, 2005 (see CPLR 5520[c] ).  The judgment, insofar as appealed from, after a nonjury trial, dismissed the complaint as against defendant Barbara Iarrobind.

Judgment, insofar as appealed from, reversed without costs, complaint reinstated against Barbara Iarrobind, and matter remanded to the court below for a new trial.

In this action commenced in August 2004, the finance lease agreement dated October 19, 2001, executed by the corporate defendant and guaranteed by the individual defendant, contained a forum selection clause designating Massachusetts as the forum where any disputes arising from the agreement must be litigated.   The corporate defendant defaulted in this action.   The individual defendant did not seek a dismissal on the ground of forum non conveniens pursuant to CPLR 327 and/or enforcement of the forum selection clause.   On May 29, 2003, in an unrelated matter, plaintiff entered into a stipulated final judgment and order in a federal court action brought by the Federal Trade Commission wherein plaintiff was, inter alia, “permanently restrained and enjoined from instituting collection suits against customers in a forum other than the county where the customer resides at the commencement of the action․” It is undisputed that the subject lease was the type of lease, and the individual defendant the type of customer, described in the federal court stipulated final judgment and order.   After trial, the court below dismissed the complaint against the individual defendant on the ground that plaintiff failed to disclose the stipulated final judgment and order pursuant to an oral order directing discovery.

The court's dismissal of the complaint pursuant to CPLR 3126, after trial, on the ground that plaintiff failed to disclose to defendant the aforementioned stipulated final judgment and order was an improvident exercise of the court's discretion since defendant did not move to strike the complaint for noncompliance with a discovery order (see Simpson v. City of New York, 10 A.D.3d 601, 781 N.Y.S.2d 683 [2004] ).   In any event, actions should be decided on the merits whenever possible (see Simpson, 10 A.D.3d at 602, 781 N.Y.S.2d 683;  Traina v. Taglienti, 6 A.D.3d 524, 774 N.Y.S.2d 391 [2004];  see generally Nieves v. City of New York, 35 A.D.3d 557, 826 N.Y.S.2d 647 [2006] ), and the drastic remedy of dismissing the complaint should not be employed absent a clear showing that the failure to comply with an order to disclose documents was willful, contumacious, or in bad faith (see Simpson, 10 A.D.3d at 602, 781 N.Y.S.2d 683;  Traina, 6 A.D.3d at 524, 774 N.Y.S.2d 391).   There is nothing contained in the record establishing that plaintiff's failure to disclose the stipulated final judgment and order prior to trial was willful, contumacious, or in bad faith.

Although forum selection clauses are prima facie valid and enforceable, neither party is seeking to enforce it.   It is well settled that parties to a contract may waive contractual clauses (see generally 22A N.Y. Jur. 2d, Contracts § 376).

Finally, while this court has the power, it declines under the circumstances in this case to make findings of fact (see generally Reed v. Hudson, 7 Misc.3d 136(A), 2005 N.Y. Slip Op. 50787[U], 2005 WL 1253308 [App. Term, 2d & 11th Jud. Dists.] ).   Accordingly, the judgment dismissing the action must be reversed, and the matter remanded to the court below for a new trial.