Opinion
27254/08.
Decided April 24, 2009.
Carney McKay, Attorneys at Law, By: John F. Carney, Esq., Attorneys for Plaintiff, Pelham, New York.
John J. Caracciolo, Esq., Attorney for Defendants, Huntington, New York.
This is an action to collect fees allegedly owed by FSA Main Street, LLC ("FSA") and Main Street North, LLC ("Main Street") (collectively "Defendants") to Tener Consulting Services, LLC ("Plaintiff") based on Defendants' nonpayment of invoices for tax related services rendered by Plaintiff. Defendants move, pursuant to CPLR 510 and 511, to change the venue of this action from Westchester County to Queens County on the grounds that no party to this action is a resident of Westchester County. Plaintiff opposes the motion.
A.Background and Facts
This action for declaratory judgment, breach of contract and account stated was commenced by the filing of a Summons and Complaint on December 18, 2008. Plaintiff asserts that venue is proper based on Plaintiff's residence in Westchester County. Defendants, both limited liability companies, were served pursuant to section 303 of the Limited Liability Company Law through service on the Secretary of State on January 9, 2009. On January 23, 2009, Defendants served a demand on Plaintiff to voluntarily change the venue to Queens County, but Plaintiff opposed the transfer. On or about February 4, 2009, Defendants answered the Complaint, denying its material allegations, asserted counterclaims against Plaintiff and individual defendants Damien P. Tener, Vincent Chin and Douglas Layne who are alleged to be managers, officers, employees and/or agents of Plaintiff, and filed the present motion. Since the filing of this motion, Plaintiff has served and filed an amended complaint to assert additional fees being due and owing based on invoices submitted to Defendants in January 2009 and Defendants have served and filed their amended answer.
Defendants have filed a Supplemental Summons, filed on February 5, 2009, which names Damien P. Tener, Vincent Chen, and Douglas Layne as additional counterclaim defendants. However, the Court has not been furnished with an affidavit of service and has not received any papers from, or on behalf of, any of these three individuals. While the Supplemental Summons lists two addresses (stated collectively) for these three persons, one of which is in Westchester County, Plaintiff's opposition papers, dated February 20, 2009, makes no mention of the prospect that there is, or may be, a counterclaim defendant who is resident in Westchester County.
According to the Amended Complaint, Plaintiff is in the business of assisting entities in obtaining tax relief, including through a New York City program known as the Industrial Commercial Incentive Program ("ICP"). Plaintiff contends that it was hired by Defendants by letter dated August 17, 2004 to obtain ICP tax relief for Defendants in connection with their redevelopment project in Flushing, New York. The Engagement Letter sets forth the compensation to be paid for Plaintiff's services. In essence, while Plaintiff's services in obtaining a tax exemption for Defendants' redevelopment projects would inure to Defendants for 25 years, based on the terms of the Engagement Letter, Plaintiff was only to receive compensation for the services it provided for the first five years of those 25 years. The Engagement Letter was signed by Brian S. Pun on behalf of both Defendants. According to the Complaint and the Amended Complaint, Plaintiff rendered services and obtained tax relief for Defendants for the tax period 2007-2008 for which Plaintiff submitted invoices and Defendants paid. Plaintiff later submitted invoices to Defendants for tax period 2008-2009 — i.e., Plaintiff submitted an invoice dated February 18, 2008 in the amount of $95,510.20 to Defendant FSA for Plaintiff's services in obtaining $382,040.82 worth of tax relief for FSA. Plaintiff also submitted a second invoice in the amount of $36,614.76 dated February 18, 2008 to Defendant Main Street for Plaintiff's services in obtaining $146,459.04 worth of tax relief for Main Street. The Amended Complaint adds claims for fees due based on an invoice submitted to Defendant FSA dated January 19, 2009 in the amount of $45,796.47, and an invoice submitted to Defendant Main Street dated January 19, 2009 in the amount of $14,378.36.
B.The Parties' Contentions
Defendants contend that on January 23, 2009, a demand for a change of the place of trial from the County of Westchester to the County of Queens was served on Plaintiff's counsel, John F. Carney, Esq. (Affirmation of John J. Caracciolo, Esq. dated February 4, 2009 ["Caracciolo Aff."] at ¶ 7). In response, Plaintiff's counsel served Defendants' counsel with an Affidavit of Martin B. Tener, Plaintiff's Managing Member, wherein Mr. Tener averred that Plaintiff's "principal place of business as stated in the articles of organization of the company is 15 Randall Place, Pelham, New York, which is located in Westchester County, New York" (Affidavit of Martin B. Tener, sworn to January 28, 2009 ["Tener Aff."], a copy of which is annexed to the Caracciolo Aff.).
As a result to Plaintiff's refusal to consent to a voluntary transfer, Defendants filed the instant motion. In support of their motion, Defendants argue that Westchester is not the proper venue for this action since Defendant FSA is a resident of Queens County and "Plaintiff is not a resident of Westchester County according to Limited Liability Law section 102(s) . . ." (Caracciolo Aff. at ¶ 9). To show that Plaintiff's residence is not in Westchester County, Defendants' counsel annexes a document to his affirmation which he describes as "a printout from the website of the Secretary of State" (Caracciolo Aff. at ¶ 9), but he does not indicate who downloaded the document, how it was downloaded, or that it is a true and accurate representation of the electronic record found on the Secretary of State's website.The document states the following:
NYS Department of State
Division of Corporations
Entity Information
Selected Entity Name: TENER CONSULTING SERVICES LLC
Selected Entity Status Information
Current Entity Name: TENER CONSULTING SERVICES LLC
Initial DOS Filing Date: APRIL 13, 2000
County:NEW YORK
Jurisdiction:NEW YORK
Entity Type:DOMESTIC LIMITED LIABILITY CORPORATION
Current Entity Status: ACTIVE
Selected Entity Address Information
DOS Process (Address to which DOS will mail process if accepted on behalf of entity)
TENER CONSULTING SERVICES LLC
15 RANDALL RD.
PELHAM, NEW YORK 10803
Registered Agent
NONE
Based on the footer of the document, it appears that the document was downloaded and printed on 2/3/2009 from a web address containing the following information:
http://appsest8.dos.state.ny.us/corp_public/CORPSEARCH.ENTITY_INFORMATION?p
In support of their position that Queens County is the appropriate venue for this action, Defendants rely on an Affidavit from Stanley Kung, Officer/Manager of FSA, who avers that FSA "now resides and has at all times resided in Queens County" (Affidavit of Stanley Kung, sworn to February 4, 2009 at ¶ 2). Defendants further rely on an identical printout from the New York State Department of State ("DOS") for FSA which lists Queens as the county of FSA's residence ( see exhibit annexed to the Caracciolo Aff.).
In opposition to Defendants' motion, Plaintiff simply relies on a Memorandum of Law and does not submit any evidence in support of its venue selection, e.g., Plaintiff does not submit any affidavit from a person with knowledge of the facts, specifically, for example, Mr. Tener. While Defendants, in support of their motion, submit the Tener Affidavit, the Court notes that the Tener Affidavit's claim that Plaintiff's principal place of business is in Pelham is predicated upon the statement that this is as "stated in the articles of organization of the company." But the Articles of Organization were not attached to the Tener Affidavit and Plaintiff has not submitted them on this motion.
In its Memorandum of Law, Plaintiff relies on Defendants' printout from DOS's website, which indicates that Plaintiff designated an address in Pelham as the address for service of process. Based on its service of process address, Plaintiff argues that venue is proper in Westchester County since "[a]s shown by the Department of State Information Sheet that is annexed to defendants' papers, plaintiff's address is in Pelham, New York, where process may be served upon it. This has been held to be a proper basis for venue" (Plaintiff's Mem. of Law in Opp. at 1, citing Altidort v Louis, 287 AD2d 669 [2d Dept 2001]).
In their Reply, Defendants argue that by not annexing "its Articles of Organization . . . with its Opposition papers" (Reply Affirmation of John J. Caracciolo, Esq. dated February 27, 2009 ["Reply Aff."] at ¶ 10), Plaintiff admits "that said Articles do not state that Plaintiff's office' is located in Westchester County" ( id. at ¶ 11). Defendants further request that their motion be granted on default and that this Court not consider Plaintiff's opposition as it was untimely ( i.e., Defendants served Plaintiff with their motion papers on February 5, 2009, with the motion's return date scheduled for February 27, 2009, yet Plaintiff did not serve its opposition until February 21, 2009). Finally, Defendants request that this Court impose sanctions ( e.g., the costs associated with bringing this motion pursuant to CPLR 8202 and 22 NYCRR § 130.1-1) against Plaintiff based on its conduct in failing to consent to the change of venue after Defendants' demand, thereby necessitating the present motion, and in continuing to oppose the motion based on its frivolous position that Plaintiff's residence is in Westchester County.
C.Legal Analysis
As an initial matter, Defendants are correct that Plaintiff was a day late in serving its opposition to Defendants' motion ( i.e., its papers should have been served on February 20, 2009). However, because the one day delay did not cause any prejudice to Defendants as this Court has considered Defendants' Reply, the Court has exercised its discretion in considering Plaintiff's untimely papers ( see Kavakis v Total Care Sys., 209 AD2d 480 [2d Dept 1994]; DJS Med. Supplies, Inc. v Travelers Prop. Cas. Ins. Co., 2009 NY Slip Op 50584[U], 2009 WL 920460 [App Term, 2d, 11th 12th Jud Districts 2009]).
Turning to the merits of Defendants' motion, the Court finds that Defendants are correct and their motion should be granted as there is no party that resided in Westchester County at the time of the institution of this action.
CPLR 503 is the main venue setting provision, which provides that "the place of trial shall be in the county in which one of the parties resided when it was commenced" (CPLR 503[a]). The general rule in New York is that the plaintiff may bring the action in any county in which any party resides (Siegel's NY Prac § 118 at 211 [4th ed]) and the choice initially belongs to the plaintiff and is usually based on a number of considerations ( id.). More often than not, the plaintiff chooses to sue at home ( id.).
Here, Defendants have followed the procedures for changing venue based on the lack of Plaintiff's residence in Westchester County by serving a demand on Plaintiff (CPLR 511[b]) that the action be tried in Queens County, the county of Defendant FSA's residence and, thereafter, by moving to transfer this action pursuant to CPLR 510(1) on the grounds that the county designated is not a proper county as Plaintiff does not reside in Westchester County.
On a motion to change venue pursuant to CPLR 510 and 511, it is defendant's burden to establish that plaintiff has no residence in the county which he/she has designated ( Merendino v Lloyd, 172 AD2d 594 [2d Dept 1992]; Bradley v Plaisted, 277 AD 620 [3d Dept 1951], lv denied 278 AD2d 727 [3d Dept 1951]).
It is well settled that the sole legal residence of a limited liability company ("LLC"), like a corporation, for venue purposes is the county where the LLC's principal office is located as set forth in the LLC's articles of organization (and for a corporation, its certificate of incorporation) ( Graziuso v 2060 Hylan Blvd Rest. Corp., 300 AD2d 627, 628 [2d Dept 2002], see also Altidort v Louis, 287 AD2d 669, 670 [2d Dept 2001]; Panco Dev. Corp. v Platek, 262 AD2d 292, 293 [2d Dept 1999]; Cottone v Real Estate Indus., 246 AD2d 572, 573 [2d Dept 1998]; Cenziper v Gross, 175 AD2d 226, 227 [2d Dept 1991]; Nixon v Federated Dept. Stores, 170 AD2d 659 [2d Dept 1991]; Saal v Claridge Hotel Casino, 152 AD2d 631, 632 [2d Dept 1989]; Papadakis v Command Bus Co., 91 AD2d 657, 658 [2d Dept 1982]; CPLR 503[c]).
An LLC's articles of organization must set forth the county where the LLC's principal office is located (New York Limited Liability Law § 203[e][2]). Section 102(s) defines the office of the LLC to be the location listed on the Articles of Organization; and such office need not be a place where business activities are conducted by the LLC.
Thus, regardless of whether or not the limited liability company has an office in another county or has moved its principal place of business, the courts hold that for purposes of determining a corporation's residence, the principal office is determined solely by the designation of the corporation's principal place of business in its filings with the Secretary of State ( Graziuso v 2060 Hylan Blvd. Rest. Corp., supra, 300 AD2d at 627, Papadakis v Comand Bus Co., supra, 91 AD2d at 658). Once it is determined that plaintiff's venue selection is without basis, courts hold that plaintiff has "forfeited [its] right to select the place of venue by selecting an improper venue in the first instance" ( Papadakis, supra, 91 AD2d at 658).
Here, it was Defendants' burden to provide prima facie evidence that Plaintiff is not a resident of Westchester County. To this end, the only evidence provided was a printout from a website maintained by DOS, but Defendants' counsel did not provide any authentication for how this document came into being.
In opposing the motion, Plaintiff has provided no evidence that its principal place of business designated in its Articles of Organization is located in Westchester County. While it would have been a simple matter for Plaintiff to have provided a copy of the articles, it did not do so.
Plaintiff's reliance on Altidort v Louis ( 287 AD2d 669 [2d Dept 2001] is misplaced. In that case, the plaintiff's stated basis for venue in Kings County was defendant's address for service of process. But plaintiff also produced defendant's certificate of incorporation which showed Kings as the county in which its principal office was located. The court stated that it is well settled law that the sole residence of a domestic corporation for venue purposes is the county designated in its certificate of incorporation, despite its maintenance of an office or facility in another county ( Altidort, 287 AD2d at 670). Therefore, the basis for the court's holding that venue was proper in Kings County was not because the address for service of process was located in Kings County, but because the certificate of incorporation had Kings County as the county of defendant's principal place of business.
At least one other court has been faced with the issue presented in this motion — namely, whether a printout from DOS's website "is admissible, and, if so, whether it is sufficient to prove [defendant's principal place of business]" ( Brown v SMR Gateway 1, LLC and GMRI, Inc. d/b/a Red Lobster Restaurants, 2009 NY Slip Op 50516[U] at * 3, 22 Misc 3d 1139[A] [Sup Ct Kings County 2009]). In that case, the court noted that pursuant to State Technology Law § 306, in any proceeding in which the CPLR is applicable,"an electronic record . . . may be admitted into evidence pursuant to the provisions of article forty-five of the [CPLR] . . . including, but not limited to [CPLR § 4539] . . ." ( id. at *2). In holding that the printout from DOS's website was admissible as "an exception to the hearsay rule under CPLR 4518(a), business records exception and under State Technology Law § 306," ( id. at *4), the court found that defendants had satisfied their burden of showing that Kings County was not defendant's county of residence since the web document indicated that defendant's county of residence was New York.
This Court is somewhat hesitant to allow the printout to suffice as the only evidence of Plaintiff's county of residence when Defendants could have readily obtained and provided to this Court a certified copy of Plaintiff's Articles of Organization from DOS. On the other hand, there are specific exceptions to the hearsay rules with regard to documents maintained by governmental agencies given the inherent reliability of such documents. It would seem that the fact that these documents were obtained by downloading them from the government's website rather than through the physical receipt of them from the governmental agency itself is somewhat of a distinction without a difference. In this regard, the Court notes that the Appellate Division, Second Department, has recently cited with approval a number of cases in which trial courts have taken judicial notice of documents that the courts themselves have downloaded from government websites ( see Kingsbrook Jewish Med. Ctr. v Allstate Ins. Co., 2009 NY Slip Op 000351, 871 NYS2d 680 [2d Dept 2009], citing Munaron v Munaron , 21 Misc 3d 295 [Sup Ct Westchester County 2008]; Parrino v Russo, 19 Misc 3d 1127 [A], 2008 WL 1915133 [Civ Ct Kings County 2008]; Nairne v Perkins , 14 Misc 3d 1237[A], 2007 WL 656301 [Civ Ct Kings County 2007]; Proscan Radiology of Buffalo v Progressive Cas. Ins. Co., 12 Misc 3d 1176 [A], 2006 WL 1815210 [Buffalo City Ct. 2006]; see also Bernstein v City of New York, 2007 NY Slip Op 50162[U], 14 Misc 3d 1225[A] [Sup Ct Kings County 2007]; Miriam Osborn Memorial Home Assn. v Assessor of City of Rye, 9 Misc 3d 1019 [Sup Ct Westchester County 2005]). There is every reason to believe that the information that appears on governmental websites is a reasonably reliable reflection of what the hard copies on file with the government show.
It is, of course, important that a party seeking to rely upon information found on a website provide the Court with an affidavit that would establish a proper evidentiary foundation. It is the website that reflects the information; providing the Court with a printout of such information is, it would seem, the functional equivalent of providing a photograph that depicts a particular condition. But a photograph is not admissible without proper authentication. Here, the purportedly downloaded information is not authenticated.
While Court could deny the present motion, without prejudice to renewal upon a proper foundation for these printouts, the Court, rather than invite the delay and additional expense inherent in such a course, has taken it upon itself to check the website and now verifies that the printouts are identical to the documents as they appear on DOS's website. Thus, the evidence before the Court is that Plaintiff's principal place of business as described in its Articles of Organization is in New York County, as that is what the Department of State indicates, contrary to Mr. Tener's self-serving assertion (which he has not supported by providing a copy of the Articles of Organization to the Court). Further evidence that Plaintiff's principal place of business is in New York County is that all of the invoices annexed to the Amended Complaint have Plaintiff's address as 166 Fifth Avenue, New York, New York 10010.
Based on the foregoing, Plaintiff's selection of venue in Westchester County is improper and, because Defendants have shown that FSA resides in Queens County, a change of venue to Queens County is warranted. Upon these grounds, as well as the standards set forth above, the Court grants Defendants' motion to change the venue of this action to Queens County pursuant to CPLR 503, 510 and 511.
CONCLUSION
The Court has considered the following papers in connection with this motion:
1)Defendants' Motion to Change Place of Trial dated February 3, 2009; Affidavit of John J. Caracciolo, Esq. in Support of Motion to Change Place of Trial, sworn to February 4, 2009, together with the exhibits annexed thereto; Affidavit of Stanley Kung in Support of Motion to Change Place of Trial, sworn to February 4, 2009, submitted with proof of due service;
2)Defendant's Memorandum of Law dated February 3, 2009 submitted with proof of due service;
3)Affirmation of John F. Carney, Esq. in Opposition to Defendants' Motion to Change Venue dated February 20, 2009;
4)Memorandum of Law in Opposition to Transfer of Venue Motion dated February 20, 2009, submitted with proof of due service; and
5)Reply Affirmation of John J. Caracciolo, Esq. dated February 27, 2009, submitted with proof of due service.
Accordingly, for the reasons stated and based upon the papers aforesaid, it is hereby
ORDERED that the motion by Defendants FSA Main Street, LLC and Main Street North, LLC for a change of venue is granted and the place of trial for the above-entitled action will be transferred from the County of Westchester to the County of Queens; and it is further
ORDERED that the Clerk of the Supreme Court, Westchester County, is directed to deliver to the Clerk of the Supreme Court, Queens County, all papers filed in the action and certified copies of all minutes and entries; and it is further
ORDERED that the application of Defendants FSA Main Street, LLC and Main Street North, LLC for an award of costs and/or sanctions against Plaintiff is denied.
The foregoing constitutes the Decision and Order of the Court.