Summary
holding that forum selection clause which provided that any dispute “shall be brought in the New York Supreme Court, Onondaga County” was mandatory, not permissive
Summary of this case from Paduano v. Express Scripts, Inc.Opinion
02-CV-0182
June 12, 2002
GOODWIN PROCTOR, LLP, J. TODD HAHM, ESQ., ANTHONY S. FIOTTO, ESQ., SHEPARD M. REMIS, ESQ., JOHN B. ELLEMAN, ESQ., BOND, SCHOENECK KING, LLP, Syracuse, New York, Attorneys for Plaintiff.
DANIEL B. BERMAN, ESQ., HANCOCK ESTABROOK, LLP, Syracuse, New York, Attorneys for Defendant.
STEPHEN GREINER, E DANIEL ROSENTHAL, ESQ., WILLKIE FARR GALLAGHER, WILHELMINA DE HARDER, ESQ., New York, New York, Attorneys for Defendant.
MEMORANDUM DECISION AND ORDER
On January 11, 2002, plaintiff instituted this action in the Supreme Court of the State of New York, County of Onondaga. The lawsuit is concerned with the performance of a lease agreement entered between the parties August 7, 1996. The lease called for defendant to operate a Rainforest Café theme restaurant in plaintiff's Palisades Center shopping mall in Clarkstown, New York, continuously until January 31, 2009. The complaint alleges that defendant breached the lease agreement on or about December 31, 2001, when it suddenly ceased operating the restaurant without warning or notice to plaintiff. Plaintiff seeks specific performance of the lease agreement, over $200,000.00 liquidated and actual damages, costs and attorney fees.
On February 12, 2002, defendant filed a Notice of Removal pursuant to 28 U.S.C. § 1332(a) and § 1441(a), on the grounds of diversity of citizenship between the parties and plaintiff's demand for recovery in excess of $75,000 from defendant. On March 13, 2002, plaintiff moved pursuant to 28 U.S.C. § 1447(c) to remand the case to state court asserting that defendant's removing the case to federal court was improper because a forum selection clause in the lease mandates that all disputes arising under the lease or between the parties must be litigated in the New York State Supreme Court, Onondaga County.
The lease clause containing the forum selection clause states:
23.14 Law Governing Effect: Gender This Lease, and any disputes concerning this Lease, shall be governed by the laws of the State of New York and any dispute concerning the application or any interpretation of any portion of the Lease or the conduct of the parties shall be brought in the New York Supreme Court, Onondaga County. Tenant consents to service of process at the Premises in the event Tenant does not maintain a separate business office within the state where the Premises is located. This lease shall be binding upon and inure to the benefit of the parties hereto and their respective legal representatives, successors and permitted assigns, except as expressly provided otherwise. Use of the neutral gender shall be deemed to include the masculine and feminine.
A forum selection clause is a significant factor that figures centrally in a district court's determination of whether to remand a case. Stewart Organization, Inc. v. Richo Corporation, 407 U.S. 22 [ 487 U.S. 22], 29, 108 U.S. 2239, 2243, 101 L.Ed.2d 56 (1988). "The authority and forum selection clause is given controlling weight in all but the most exceptional cases." Id. at 33, 2246 (Kennedy, J., concurring). When a choice of forum agreement is "made in an arm's-length negotiation by experienced and sophisticated businessmen, absent some compelling and countervailing reason it should be honored by the parties and enforced by the courts." M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 12, 92 S.Ct. 1907, 1914, 32 L.Ed.2d 513 (1972)
Defendant argues that the forum selection clause is susceptible to the interpretation that suits must be adjudicated in the New York State Court, Onondaga County and does not necessarily designate that court to the exclusion of federal courts sitting in New York. In some cases the forum selection clause may be read as reflecting only consent by the contracting parties to adjudication of any disputes in a specified forum, without mandating that the dispute be resolved there. This mandatory/permissive distinction can be critical because an agreement conferring jurisdiction in one forum will not be interpreted as excluding jurisdiction elsewhere unless the agreement contains specific language of exclusion on its face. John Boutar and Son v. Attiki Importers, 22 F.3d 51, (2d Cir. 1994).
The general rule is that "[w]hen only jurisdiction is specified the clause will generally not be enforced without some further language indicating the parties' intent to make jurisdiction exclusive. Id at 52. However, if mandatory venue language is employed, the clause will be enforced. Id. at 53 The pertinent part of the forum selection in question states "This Lease, and any dispute concerning this Lease, shall be governed by the laws of the State of New York and any dispute concerning the application or any interpretation of any portion of this Lease or the conduct of the parties shall be brought in the New York Supreme Court, Onondaga County." This clause plainly provides that jurisdiction and venue will be limited solely to the New York Supreme Court in Onondaga County. The language of this provision shows that the parties intended only one forum could decide their disputes and the court finds the clause to be mandatory It necessarily follows that the forum selection clause is enforceable absent a showing by defendant that it is unreasonable to give it effect under the circumstances. Roby v. Lloyd's of London, 996 F.2d 1353, 1363 (2d Cir. 1993). The defendant has not suggested or offered evidence of any possible unreasonableness that enforcement of the forum selection clause would actuate, accordingly, plaintiff's motion is GRANTED and the instant case is remanded to the New York State Supreme Court.
IT IS SO ORDERED