Opinion
Index No. 653698/2020 Motion Seq. Nos. 003 004
05-26-2022
GLOBE COTYARN PVT., LTD. Plaintiff, v. ROYAL HERITAGE HOME, LLC, Defendant.
Unpublished Opinion
MOTION DATE 01/06/2022, 11/18/2021
DECISION+ ORDER ON MOTION
HON. ANDREW BORROK, Justice:
The following e-filed documents, listed by NYSCEF document number (Motion 003) 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 44, 45, 46, 48, 49, 50 were read on this motion to/for DISMISSAL
The following e-filed documents, listed by NYSCEF document number (Motion 004) 52, 53, 54, 55, 57, 61, 62, 63, 64, 65, 66, 67, 68, 69, 70, 71, 73, 74, 75, 76, 77, 78, 79 were read on this motion to/for AMEND CAPTION/PLEADINGS
Upon the foregoing documents, the motion seeking to dismiss the complaint pursuant to BCL 1312 (Mtn. Seq. No. 003) is granted. On the record before the Court, Globe Cotyarn PVT, LTD (the Seller) is doing business in New York within the meaning of BCL 1312 by meeting with at least 10 customers and selling over $11 million to them over many years (ParkwoodFurniture Co. v OK Furniture Co., 429 N.Y.S.2d 240, 241 [2d Dept 1980]) and has failed to register to do business here in New York.
BCL 1312 provides that registration of a foreign company doing business in New York is necessary for the foreign company to maintain a lawsuit in New York:
A foreign corporation doing business in this state without authority shall not maintain any action or special proceeding in this state unless and until such corporation has been authorized to do business in this state and it has paid to the state all fees and taxes
imposed under the tax law or any related statute, as defined in section eighteen hundred of such law, as well as penalties and interest charges related thereto, accrued against the corporation(BCL1312[a]).
Reference is made to the prior Decision and Order (the Prior Decision; NYSCEF Doc. No. 17) dated April 20, 2021, pursuant to which this Court denied Royal Heritage Home, LLC (the Buyer)'s motion to dismiss without prejudice because the Buyer had failed to demonstrate sufficient evidence that the Seller was doing business in New York such that registration was required (i.e., the Court held that merely alleging two prior lawsuits brought by the Seller where the Seller had alleged that it was owed approximately $2 million from two New York customers was insufficient).
As discussed above, the record before the Court is now very different. Discovery has since confirmed that the Seller has been doing business in New York from 2015 and has sold more than $11 million worth of its merchandise here (NYSCEF 43; NYSCEF Doc. No. 34 at Interrogatory No. 17) where it has met with multiple New York customers (NYSCEF Doc. No. 35, Interrogatory No. 18; NYSCEF Doc. No. 50, 97:25-98:4) and is seeking to hire additional New York salespersons (NYSCEF Doc. No. 50, 100:16-24). It is undisputed that the Seller has failed to register to do business in New York State in accordance with BCL 1312 (NYSCEF Doc. No. 36). Therefore, dismissal is appropriate, the Buyer's motion is granted and the complaint is dismissed without prejudice.
The motion seeking leave to file an amended counterclaim (Mtn. Seq. No. 004) must also be granted because the amended counterclaim (NYSCEF Doc. No. 54) is not palpably improper and does not result in any prejudice to the Seller (Vue Mgt.Jnc. v Photo Assoc, 81 A.D.3d 569, 569 [1st Dept 2011]). The counterclaims have always been premised on the Seller's alleged misrepresentations of the thread count and fabric composition of the bedsheets it sold to the Buyer (Greenburgh Eleven Union Free Sch. Dist. v Nat'l Union Fire Ins. Co., 298 A.D.2d 180, 181 [1st Dept 2002]). The letter (the Texas Complaint Letter; NYSCEF Doc. No. 63), dated April 26, 2021, from the Texas Department of Agriculture to the Seller and the Buyer and the Vartest Laboratories' tests (NYSCEF Doc. No. 77), dated January 19, 2022, provide additional insight into the issues underlying the Buyer's original counterclaims (NYSCEF Doc. No. 19). The Texas Complaint Letter which the Seller received was discussed at the deposition of the Buyer's president, Michael Kaplan (NYSCEF Doc. No. 78; 81:5-8). Thus, the amended counterclaim filed months after the original counterclaim results in no prejudice.
The court has considered the parties' remaining arguments and finds them unavailing. Accordingly, it is
ORDERED that Royal House Home, LLC's motion to dismiss pursuant to BCL 1312 is granted and the complaint is dismissed without prejudice; and it is further
ORDERED that Royal House Home, LLC's motion to amend the counterclaim pursuant to CPLR 3025(b) is granted; and it is further
ORDERED that the parties shall appear for a status conference on June 24, 2022 at 12:00 PM.