LG FUNDING LLC v. ADVANCED PHARMA CR LLC

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Supreme Court, Nassau County, New York.

LG FUNDING, LLC, Plaintiff, v. ADVANCED PHARMA CR, LLC, Samantha Amamba a/k/a Samantha Diane Amamba, and Ivette Lopez, Defendants.

Decided: November 27, 2017

Amos Weinberg, Great Neck, for defendants. Law Office of Alan J. Sasson, P.C., Kew Gardens Hills (Gene Rosen of counsel), for plaintiff.

In this action, plaintiff, LG Funding, LLC, seeks to recover from defendants for an alleged breach of a September 20, 2016 Merchant Agreement between LG Funding and defendant Advanced Pharma CR, LLC.   The individual defendants guaranteed Advanced Pharma's performance.   Defendants now move to change venue to Kings County, following their demand of August 3, 2017 to change venue, pursuant to CPLR 511.

Defendants argue that they all reside out of state and, since LG Funding's principal office is located in Kings County, that is the only proper venue for this action.   LG Funding does not contest that its principal office is in Kings County and that Nassau County has no connection whatsoever to the underlying facts in this action.   Instead, LG Funding argues that defendants agreed in the Merchant Agreement and the respective guarantees that LG Funding could bring an action against them in any court located in New York State and that defendants waived any objection to venue.   Therefore, LG Funding asserts, it was within its rights pursuant to CPLR § 501 to choose Nassau as the county to try this action.

The Merchant Agreement provides, in relevant part, as follows:

This agreement shall be governed by and construed in accordance with the laws of the State of New York, without regards to any applicable principals of conflicts of law.   Any suit, action or proceeding arising hereunder, or the interpretation, performance or breach hereof, shall, if LG so elects, be instituted in any court sitting in New York State, (the “Acceptable Forums”).   The parties agree that the Acceptable Forums are convenient, and submit to the jurisdiction of the Acceptable Forums and waive any and all objections to jurisdiction and venue.

 Contractual forum selection clauses are enforceable in New York. See Brooke Group Ltd. v. JCH Syndicate, 488 87 N.Y.2d 530, 534, 640 N.Y.S.2d 479, 663 N.E.2d 635 (1996).   As explained in Brooke Group, forum selection clauses are enforced because they provide certainty and predictability in the resolution of disputes.   Id. They are deemed prima facie valid and enforceable unless shown by the resisting party to be unreasonable.   Id., see also Hirschman v. National Textbook Co., 184 A.D.2d 494, 584 N.Y.S.2d 199 (2d Dept.1992).

 Therefore, had the parties selected Nassau County as the forum to resolve a contractual dispute there is little doubt on the facts as presented that defendants' motion would be denied.   But the parties did not agree to fix Nassau, or any other county, as the place for trial.   Instead, they merely agreed to submit any dispute to “any court sitting in New York.” Presumably, this means either federal or state court.   It is certainly less likely that the parties (and particularly the foreign defendants) meant suit could be brought in any court within the 54,555 square miles that comprise New York State.

If LG Funding is correct, it could have selected Chautauqua County (Mayville, New York) as the venue for this action, approximately 440 miles from this courthouse.   Or perhaps, Clinton County (Plattsburgh), a mere 330 miles away.   The point being, a so-called forum selection clause that doesn't select a forum but instead merely identifies a state in which suit could be brought does not provide certainty or predictability to the parties as to where a dispute may be resolved.

Article 5 of the CPLR concerns venue;  i.e., the county in which suit may be brought.   The parties did not fix a county for trial as contemplated by CPLR § 501.   An intent to deviate from the statutory protections contained in CPLR § 503 should be set forth clearly and unambiguously.   That intent is not manifest from the contractual language relied upon by LG Funding.

 The provision in the Merchant Agreement that the parties “waive any and all objections to jurisdiction or venue” does not change the analysis.   Such a waiver, by itself, cannot be enforceable unless the parties agreed to a selected county in which to venue an action in the first instance.   But see Merchant Cash & Capital, LLC v. Portland Wholesale Jewelry, LLC, 2017 WL 3442563 (Sup.Ct. Nassau Co.2017).

This court is not the first to address this issue and prior decisions reach different results.   Cf., Merchant Cash & Capital, LLC v. Laulainen, 55 Misc.3d 349, 48 N.Y.S.3d 889 (Sup.Ct. Nassau Co.2017) and Merchant Cash & Capital, LLC v. Beachside Home Care, LLC, 2017 WL 3897055 (Sup.Ct. Suffolk Co.2017).   For the reasons set forth above, this court agrees with the holding in Laulainen.

Accordingly, it is hereby

ORDERED, that defendants' motion to change venue of this action to Kings County is granted;  and it is further

ORDERED, that the Clerk of the Supreme Court of Nassau County is directed to transfer the above-entitled action to the Clerk of the Supreme Court of Kings County forthwith.   Defendants shall serve a copy of this order upon plaintiff, the Clerk of Nassau County, and the Clerk of Kings County within 14 days from the date of this order.

Given the foregoing, it would be improper to decide LG Funding's cross motion.   Therefore, the cross-motion is referred to the assigned Justice in Supreme Court, Kings County, for a decision.

LEONARD D. STEINMAN, J.

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