Kalamata Capital Grp. v. Crito Logistics, LLC

Full title: KALAMATA CAPITAL GROUP, LLC, Plaintiff, v. CRITO LOGISTICS, LLC d/b/a…

Court: Supreme Court, Ontario County

Date published: Jul 13, 2023

2023 N.Y. Slip Op. 32348 (N.Y. Sup. Ct. 2023)

Opinion

Index No. 133829-2022

07-13-2023

KALAMATA CAPITAL GROUP, LLC, Plaintiff, v. CRITO LOGISTICS, LLC d/b/a CRITO LOGISTICS; CRITO LOGISTIC; MYL TRANSPORT, LLC; MYL LOGISTICS HOLDINGS, LLC, GARM LOGISTICS, LLC and MAURICE GARCIA, Defendants.

HONORABLE J. SCOTT ODORISI ACTING SUPREME COURT JUSTICE

Unpublished Opinion

Special Term - On Submission July 11, 2023

DECISION AND ORDER

HONORABLE J. SCOTT ODORISI ACTING SUPREME COURT JUSTICE

This collections lawsuit arises out of a Merchants Cash Advance Agreement ("MCAA"). Pending before this Court is Defendants' motion to change venue, and also for discovery relief [NYSCEF Docket # 32- Motion # 2], Based upon a review of: Docket #'s 32-36 - all submitted in support of the motion; and, Docket #'s 37-43 - all submitted in opposition to the motion, this Court hereby DENIES IN PART AND GRANTS IN PART the motion for the reasons set forth hereinafter.

LAWSUIT FACTS

Background Information and Procedural History

Plaintiff is a New York company providing receivable financing. Defendants are located in Texas. On or about July 6, 2022, the parties entered into a $200,000 MCAA, which the individual Defendant guaranteed. The MCAA had a New York venue provision, and also a venue objection waiver. Sometime later, Defendants allegedly failed to make payments and owes $227,422.20.

This breach of contract lawsuit was commenced on September 2, 2022, and the Summons notes Plaintiffs address as 80 Broad Street, Suite 1201, New York. Defendants answered denying liability, and raised twenty-nine affirmative defenses. This Court held a discovery conference on Plaintiffs compel motion, at which Defendant was given forty-five days to provide his banking records.

Brief Summary of Motion Contentions

By way of a motion filed February 14, 2023, Defendants ask for a change of venue to New York County; to wit: Plaintiffs place of business.¹ Defendants first contend that the MCAA's forum selection clause is unlawful. Also, Defendants argue that venue in Ontario County deny them their day in court because counsel is too far away. Defendants note a recent venue motion decision, as well as instances of Plaintiffs consent to change venue. As to discovery, Defendants submit that Plaintiff acted in bad faith by not engaging in a preliminary conference before making a compel motion. Defendants ask for extra time for discovery, and that Plaintiff be ordered to sit for a deposition.

1 Defendants' Attorney Affirmation is an improper "briefermation" [Docket # 33]. See 22 NYCRR § 202.8 (c); In re Taylor, 265 AD 858 (2d Dept 1942); Commercial Division Local Rule 6 (d).

Plaintiff opposes the motion on the ground that multiple courts have upheld contract venue provisions such as the one at hand, and Defendants' counsel's claim of travel inconvenience does not justify a transfer.

Defendants did not reply by the June 16^th deadline [Docket # 46].

LEGAL DISCUSSION

Defendants are not entitled to a different venue, but they may have some limited discovery relief.

Venue

Defendants' venue challenge fails. To begin, Defendants' motion does not provide the MCAA, or even reference its venue objection waiver clause. As Plaintiff asserts, and per the MCAA, Defendants waived any venue issue. See e.g. Boss v. Am. Express Fin. Advisors, Inc., 6 N.Y.3d 242, 246 (2006) (the parties "waived any privilege to have their claims heard elsewhere.") [Docket # 33, ¶ 19]. Even if not waived, Defendants' venue attack does not succeed. As the Fourth Department has decreed:

It is well-accepted policy that forum-selection clauses are prima facie valid. In order to set aside such a clause, a party must show that enforcement would be unreasonable and unjust or that the clause is invalid because of fraud or overreaching, such that a trial in the contractual forum would be so gravely difficult and inconvenient that the challenging party would, for all practical purposes, be deprived of his or her day in court

Fear &Fear, Inc, v. N.1.1. Brokerage, L.L.C., 50 A.D.3d 185,186 (4th Dept 2008) (emphasis added). See also Ministers and Missionaries Ben. Bd. v. Snow, 26 N.Y.3d 466,470 (2015); Bell Constructors, Inc, v. Evergreen Caissons, Inc., 236 A.D.2d 859, 860 (4th Dept 1997).

Besides case-law, CPLR Article 5 governs venue and it provides in relevant part that:

Subject to the provisions of subdivision two of section five hundred ten and section five hundred fourteen of this article, written agreement fixing place of trial, made before an action is commenced, shall be enforced upon a motion for change of place of trial.

CPLR 501 (emphasis added). See also CPLR 510 (2) (a court may change venue when "there is reason to believe that an impartial trial cannot be had in the proper county"); Tower Broadcasting, LLC v. Equinox Broadcasting Corp., 160 A.D.3d 1435,1436 (4th Dept 2018) (finding that the lower court properly denied motion to change the venue given agreement setting the same, and even though the real property that was the subject of the litigation was in another county).

Instead of recognizing Section 501, Defendants rely upon Section 510 (3) which allows a different venue when "the convenience of material witnesses and the ends of justice will be promoted by the change." CPLR 510 (3) (emphasis added).

A trial court is afforded a high level of deference when reviewing a motion to change venue. See McLaughlin v. City of Buffalo, 259 A.D.2d 1014 (4th Dept 1999). See also Cellino & Barnes, P.C. v. Law Office of Christopher J. Cassar, P.C., 140 A.D.3d 1732, 1735 (4th Dept 2016). "[A] motion for a change of venue is addressed to the sound discretion of the court, and absent a clear abuse the court's determination will not be disturbed on appeal." McLaughlin, 259 A.D.2d at 1014.

Here, Defendants have not overcome the MCAA's venue clause, nor do they defeat Plaintiffs venue choice under the same. As starting point, the MCAA's venue placement in any New York Court is not infirm as Defendants have not satisfied the standard articulated in Fear &Fear, Inc.. See also Bell Constructors, Inc, v. Evergreen Caissons, Inc., 236 A.D.2d 859, 860 (4th Dept 1997) (the defendant failed to show that forum enforcement would be unreasonable or unjust and failed to allege that the clause was the result of fraud or overreaching).

Additionally, Defendants do not make out a case for a transfer under CPLR 510 (3). Unlike other cases where this Court granted a new venue as the MCAA excluded the selected county, the present MCAA is broader and has a statewide scope. Furthermore, there is no sworn proof that material witnesses are inconvenienced. Yes, Plaintiffs office is located in New York County, and defense counsel's office is also downstate. However, distance alone, without more, is insufficient to avoid the negotiated, broad MCAA venue clause. This is not to say that a defendant could not never make out a proper CPLR 510 (3) change, but the instant motion does not do so.²

2 This Court pauses to note that Plaintiff, and similar businesses, have inundated upstate courts with their litigation, and should be mindful of unnecessarily taxing judicial resources.

In sum, Defendants must continue to defend itself here in Ontario County.

Discovery

Defendants' discovery application is proper only to the extent that it requests a Scheduling Order, which the Court will promptly issue.

CONCLUSION

Based upon all of the foregoing, it is the Decision and Order of this Court that Defendants' motion is DENIED IN PART AND GRANTED IN PART. The motion is DENIED as to the request for a change of venue, but GRANTED as to the need for discovery deadlines. Any relief requested, but not specifically granted, is denied.