Opinion
117328/08.
June 30, 2009.
This action arises out a lease of real property located in Garfield, New Jersey in Bergen County (the Property) between plaintiff New Bridgeland Warehouses, LLC as landlord, and defendant Home Depot U.S.A., Inc., as tenant, for a proposed Home Depot store. Defendant now moves, pursuant to CPLR 327 (a), for an order dismissing the complaint on the ground of forum non conveniens. For the reasons set forth below, defendant's motion is denied.
Background
Plaintiff is the owner of the Property (Complaint, ¶ 3). On July 24, 2006, plaintiff and defendant entered into a written lease (the Lease [Aff. of James C. Scott, Exh C]), for a portion of the Property for the construction and operation of a Home Depot store ( id., ¶¶ 5, 10). The premises demised to defendant under the Lease consist of approximately 183,644 square feet of ground area, together with the improvements thereon to be constructed by defendant (the Premises) ( id., ¶ 6). The Lease provides that it "shall be construed and enforced in accordance with the laws of the State [New Jersey] in which the Demised Premises are situated" (Lease, § 19.01 [i]).
Pursuant to the Lease, plaintiff was required to take certain steps before possession of the Premises could be delivered to Home Depot (Complaint, ¶ 7). Such steps included what the Lease defined as "Governmental Approvals," which plaintiff was required to obtain by a date certain, on or before 730 days after execution of the Lease:
[T]his Lease is expressly subject to and conditioned upon Landlord obtaining, at its sole cost and expense, the appropriate and necessary final non-appealable governmental approvals, permits and licenses . . . which will enable Tenant to perform Tenant's Work so as to substantially conform to Exhibit A and which will enable Tenant to operate a Home Depot home improvement store . . . and which will enable Landlord to perform Landlord's Work so as to conform to Exhibit A and Exhibit B (collectively, the "Governmental Approvals"). Promptly after the execution of this Lease, Landlord shall, at its own cost and expense, apply for and thereafter diligently pursue the obtaining of the Governmental Approvals; provided, however, that if on or before the expiration of 730 days after the execution of this Lease, Landlord has not received the Government Approvals, then this Lease shall automatically cease and terminate at the expiration of said 730 day period
(Lease, § 19.19 [a]).
Exhibit B to the Lease contains a statement of "Landlord's Work" pursuant to the Lease. Included in Landlord's Work are the steps plaintiff was required to take with respect to the Government Approvals:
Landlord shall obtain the Government Approvals, including but not necessarily limited to the following:
a. Township of Garfield site plan approval;
b. Bergen County Planning Board approval;
c. State of New Jersey Department of Transportation approval (if necessary);
d. State of New Jersey Department of Environmental Protection for the Water Main Extension and Treatment Works Approval application (if necessary)
e. Bergen County Soils Conservation District approval; and
f. Any and all necessary permits; approvals and/or authorizations from applicable governmental authorities associated with soil erosion and construction storm water management plan requirements;
g. Any NJDEP approvals relating to investigation and/or Remediation of any Hazardous Substances which maybe identified by the Further Testing as more specifically provided herein.
(Lease, Exh B, § II, ¶ 3).
Plaintiff contends that it obtained all of the Governmental Approvals within the 730-day period outlined in the Lease (Complaint, ¶ 19). Defendant, however, has taken the position that the Government Approvals were not timely obtained within the 730-day period ( id., ¶ 35). By letter dated September 12, 2008, defendant advised plaintiff that the Lease had automatically terminated on July 23, 2008, since plaintiff had failed to obtain all required governmental approvals within 730 days from the execution of the Lease on July 24, 2006 ( see Aff. of James J. Scott, Exh E).
In this action, plaintiff requests the issuance of a declaratory judgment declaring that the Lease is in full force and effect, and has not terminated pursuant to § 19.19 (a) of the Lease.
Discussion
In support of its motion to dismiss on the grounds of forum non conveniens, defendant contends that New York is an inconvenient forum for the litigation of this action, and that New Jersey is the only state which has a connection to this case, and which would be convenient for the parties. Defendant argues that New Jersey law governs, the real property underlying the Lease is located in New Jersey, and nearly every witnesses and entity involved with the Lease and Government Approval process is located in New Jersey, as is most of the documentation concerning the New Jersey state, county, local and autonomous agencies. According to defendant, lease negotiations were conducted on behalf of plaintiff commencing in November 2004 by its Vice President-Retail Counsel, Lee D. Ratner, from its Paramus office, and later, by its Morristown, New Jersey counsel, Riker Danzig, from September 2005 to the Lease execution on July 24, 2006. Moreover, defendant argues, all of the Governmental Approvals that plaintiff was required to obtain have a New Jersey nexus, because the professionals retained by plaintiff in conjunction with its pursuit of the Governmental Approvals are either from New Jersey, or are doing business in New Jersey, and defendant's architect for the project, Ian J. McCarthy, is based in Franklin Township, New Jersey.
In opposition to the motion, plaintiff contends that New York County would be as convenient a forum for the parties as would the equivalent New Jersey Court.
It is well settled that, New York courts "need not entertain causes of action lacking a substantial nexus with New York" ( Martin v Mieth, 35 NY2d 414, 418). The doctrine of forum non conveniens, codified in CPLR 327 (a), "permits a court to stay or dismiss such actions where it is determined that the action, although jurisdictionally sound, would be better adjudicated elsewhere" ( Islamic Republic of Iran v Pahlavi, 62 NY2d 474, 478-479, cert denied, 469 US 1108). The central focus of the forum non conveniens inquiry is to ensure that trial will be convenient, and will best serve the ends of justice ( see Piper Aircraft Co. v Reyno, 454 US 235; Capital Currency Exch., N. V. v National Westminster Bank PLC, 155 F3d 603 [2d Cir 1998], cert denied 526 US 1067). If the balance of conveniences indicates that trial in plaintiff's chosen forum would be unnecessarily burdensome for the defendant or the court, then dismissal is proper ( see id.).
New York courts consider the availability of an adequate alternative forum and certain other private and public interest factors when evaluating New York's nexus to a particular action, and deciding whether to dismiss an action on the ground of forum non conveniens ( Islamic Republic of Iran v Pahlavi, 62 NY2d 474, supra). The burden is on the defendant challenging the forum to demonstrate the relevant private or public interest factors which militate against accepting the litigation ( Brodherson v V. Ponte Sons, 209 AD2d 276, 277 [1st Dept 1994] ["It is well settled that the burden of establishing that New York is an inconvenient forum rests squarely with the party challenging that forum"]). That burden, however, is a difficult one to satisfy. "Generally, 'unless the balance is strongly in favor of the defendant, the plaintiff's choice of forum should rarely be disturbed'" ( Anagnostou v Stifel, 204 AD2d 61, 61 [1st Dept 1994] [citation omitted]); see also Sweeney v Hertz Corp., 250 AD2d 385, 386 [1st Dept 1998] ["It is well settled that a plaintiff's choice of forum should not be disturbed absent a balance of factors strongly favoring the defendants"]).
Although not every factor is necessarily articulated in every case, collectively, the courts consider and balance the following factors in determining an application for dismissal based on forum non conveniens: existence of an adequate alternative, forum; situs of the underlying transaction; residency of the parties; the potential hardship to the defendant; location of documents; the location of a majority of the witnesses; and the burden on New York courts ( see Islamic Republic of Iran v Pahlavi, 62 NY2d 474, supra; World Point Trading PTE, Ltd. v Credito Italiano, 225 AD2d 153 [1st Dept 1996]; Evdokias v Oppenheimer, 123 AD2d 598 [2d Dept 1986]). The state of plaintiff's residence "is generally 'the most significant factor'" in determining a forum non conveniens motion ( Sweeney v Hertz Corp., 250 AD2d at 386 [citation omitted]). A motion to dismiss on the ground of forum non conveniens is subject to the discretion of the trial court, and no one factor is controlling ( Islamic Republic of Iran v Pahlavi, 62 NY2d 474, supra; see also Matter of New York City Asbestos Litigation, 239 AD2d 303 [1st Dept 1997]). Moreover, when as here, the defendant seeks to disturb the plaintiff's choice of forum to a sister state, defendant "bears the burden of clearly showing that [the plaintiff's choice] will not serve to achieve the ends of justice and that [defendant's choice] is better suited to accomplish that end." ( Calla v Shulsky, 139 Misc 2d 881, 883 [Sup Ct, NY County 1988], affd 148 AD2d 60 [1st Dept 1989]).
Here, a balancing of the relevant factors reveals that defendant has not met the "heavy burden" of demonstrating that this action should be dismissed on forum non conveniens grounds ( see Yoshida Printing Co. v Aiba, 213 AD2d 275 [1st Dept 1995]) and thus, defendant's motion to dismiss is denied.
A balancing of the equities clearly establishes that New York is an appropriate forum for this action. First, the record indicates that there is a substantial nexus between this action and New York.
In support of its opposition to the motion, plaintiff submits the affidavits of Sandeep Mathrani, Executive Vice President, Retail Division of Vornado Realty Trust (Vornado), plaintiff's parent company, and John Ostrowski, a Vice President in Vornado's Retail Division. According to Mathrani, Vornado's headquarters, and the offices of its top executives, including its Chairman and CEO, are located at 888 Seventh Avenue in Manhattan, and the nerve center of Vornado's operations, and those of its subsidiary entities, including plaintiff, is its Manhattan office (Mathrani Aff., ¶ 3). Mathrani alleges that he is responsible for all retail properties owned and managed by Vornado and its affiliated entities, including the negotiation of leases both personally and in collaboration with those working under his supervision; providing final approval for the terms and provisions of all such leases; and executing such leases on behalf of Vornado or its affiliated entities ( id., ¶ 1).
Ostrowski alleges that he works under the direct supervision and direction of Mathrani, and his job responsibilities include the negotiation of leases for various properties owned by Vornado and its affiliates and subsidiaries, comprising both existing shopping centers and new retail developments (Ostrowski Aff., ¶ 2). All of the terms of a potential lease must be approved by Mathrani, who customarily signs finalized leases on behalf of Vorndo, or its affiliate or subsidiary which holds title to the property in question, in his New York office ( id.).
As set forth in the Mathrani and Ostrowski affidavits, the parties began negotiations for defendant's lease of the Property for the construction and operation of a Home Depot home improvement store in 2004 (Mathrani Aff., ¶ 41 Ostrowski Aff., ¶ 4). Mathrani and Ostrowski, who was Vornado's contact person in the negotiations, conferred frequently in person at Mathrani's New York office and by telephone conversations Mathrani conducted from his New York office (Mathrani Aff., ¶ 5; Ostrowski Aff., ¶¶ 5, 10). Mathrani had ultimate authority over Lease negotiations, and from his New York office, made the final decisions as to what terms would be offered to defendant and accepted by plaintiff (Mathrani Aff, ¶ 5; Ostrowski Aff., ¶ 10). Mathrani executed the Lease on plaintiff's behalf at his New York office (Mathrani Aff., ¶ 16).
Further evidence submitted by plaintiff demonstrates that this case has significant connections to New York. Plaintiff maintains its principal office at Vornado's headquarters in Manhattan, and is authorized to conduct business in New York State ( see Aff. of Alexander Lycoyannis, Exh B), as is defendant ( see id., Exh C). Moreover, publicly available documents establish that defendant has a significant presence in New York. According to its most recent 10-K statement on file with the Securities and Exchange Commission, defendant maintains 100 home improvements stores in New York State alone ( see id. Exh D [excerpt of defendant's 10-k statement for the fiscal year ending 3/2/08]).
Defendant has not met its burden of "clearly showing that New York will not serve the ends of justice and that New Jersey is better suited to accomplish that end." ( Calla v Shulsky, 139 Misc 2d at 883). Plaintiff presents evidence that Ostrowski spoke most frequently with two individuals who were acting on defendant's behalf, neither of whom reside in New Jersey: W. Daniel Hicks, who is defendant's counsel in Atlanta, Georgia, where defendant is based, and Chuck Coker, an employee of defendant who lives in Pennsylvania (Ostrowski Aff., ¶¶ 6-7). According to Ostrowski, Hicks frequently negotiated by telephone with Ostrowski from his home in Atlanta, and Coker also frequently negotiated with Ostrowski by telephone when he was in Pennsylvania ( id.). In fact, Ostrowski, who must travel frequently to various Vornado properties, was often in New York State and elsewhere in the northeastern United States, other than New Jersey, during many of these telephone conversations ( id., ¶ 7). In addition, substantive in-person negotiations were held between the parties at various International Council of Shopping Center conventions in Las Vegas, Philadelphia and New York City between 2004 and 2006 ( id., ¶ 9).
Thus, this action — which solely relates to whether or not the Lease is in effect has a significant nexus to New York State, such that it cannot be shown that justice can only be achieved by litigating this action in New Jersey.
Furthermore, "the central focus of a forum non conveniens inquiry is, as the term suggests, convenience and in this age of high mobility, the term's inhibiting operation has little to do with geography where a sister state is concerned [citation omitted]" ( Calla v Shulsky, 139 Misc 2d at 883). It is apparent that it would not be difficult or inconvenient for defendant to litigate this action in New York. Defendant's litigation counsel maintains an office in New York Country, and, according to Office of Court Administration records, the counsel of record, John P. Belardo, Esq., is an attorney admitted to practice in New York State. Thus, it is certainly convenient for counsel to litigate this matter in New York County.
Although defendant contends that the motion to dismiss must be granted because several witnesses in this case are located in New Jersey ( see Def Mem., at 4-5), this contention is rejected. Almost all of the individuals and entities that defendant references are plaintiff's witnesses. Plaintiff asserts that its witnesses will voluntarily appear at its direction as necessary ( see Mathrani Aff., ¶ 9 ["it is no inconvenience for anyone associated with Plaintiff to come to New York County and . . . Plaintiff will arrange for the production of any person wherever directed by this Court"]; see also Yoshida Printing Co. v Aiba, 213 AD2d at 275 [defendant "could not demonstrate that (the) testimony (of certain witnesses) would be unavailable (in New York). Most of the named witnesses are employees of plaintiff whose availability has been offered at no expense to defendant"]).
In addition, defendant mentions only one of its witnesses, Ian J. McCarthy, its architect, as being located in New Jersey. Defendant's argument that this witnesses's location warrants dismissal on forum non conveniens grounds is rejected. That witness's location, Franklin Lakes, New Jersey, is within the greater New York metropolitan area, and located approximately 42 miles from the New York County courthouse ( see Lycoyannis Aff., Exh G). New York courts have repeatedly found no inconvenience in litigants traveling from an area of New Jersey within the New York metropolitan area to New York City ( see Brodherson v V. Ponte Sons, 209 AD2d at 277 ["there is no indication that defendants will be unduly burdened in a New York forum, especially in light of the fact that the New Jersey County in which they seek to have this matter heard is just short drive across the George Washington Bridge, as defendants have readily observed"]; Boxer v Paige, 66 AD2d 664, 664 [1st Dept 1978] ["defendants reside in nearby Fort Lee, Bergen County, New Jersey, and their alleged eyewitnesses reside in the City of North Bergen, Hudson County, New Jersey, not unreasonably distant from the place of trial. Defendants have failed to make any showing that they would be so greatly inconvenienced by an action in this state as to warrant a dismissal for forum non conveniens"]).
In addition, defendant is based in Atlanta Georgia. If any witnesses must travel to the Northeast to testify as witnesses at trial or depositions, it makes no practical difference where within the New York metropolitan area they must travel once they arrive here — either New York City or suburban northern New Jersey would be of equal convenience:
Pennsylvania is no more convenient to any party since none of them presently live there. Nor does any witness. While we are aware that Pennsylvania and New York are contiguous to New Jersey we also note that Verona, New Jersey, where plaintiffs reside, is decidedly closer to New York County than the nearest party of Pennsylvania. Defendant [a Florida resident] has not shown that it is anymore difficult for him to travel to New York than Pennsylvania
( Meshulam v Brill, 144 AD2d 311, 312 [1st Dept 1988]; see also American BankNote Corp. v Daniele, 45 AD3d 338, 339 [1st Dept 2007] ["Factors militating in favor of permitting plaintiffs to proceed in New York include that . . . key witnesses who conducted the forensic investigation that brought to light defendants' alleged wrongdoing reside in the New York metropolitan area, and other witnesses who will testify concerning defendants' impropriety are located in the United States, France and India, making an Argentine forum no more convenient for these witnesses than New York"]).
Defendant also contends that New York County is an inconvenient forum because certain documents are located in New Jersey. This argument is completely without merit. Most, if not all, of the documents that are critical to a determination of this action are already in the possession of the parties, and copies thereof can be annexed to a summary judgment motion. To the extent that the production of any witnesses or documents located in New Jersey must be compelled, CPLR 3108 authorizes New York courts to issue a commission or letter rogatory to compel disclosure from out-of-state individuals.
Thus, the Supreme Court, New York County, is as convenient for the litigation of this action as is the Superior Court of Bergen County.
Defendants have also failed to make any showing that retention of this action would unduly burden New York courts. Plaintiff seeks a declaration that it timely obtained all Governmental Approvals required under the Lease that were necessary for defendant to construct its Home Depot store, and that thus, the Lease is in full force and effect. There is nothing extraordinary about this case that takes it outside the realm of the types of cases that this court handles every day. Indeed, judges in the Supreme Court, New York County routinely interpret the language of commercial leases, and resolve disputes arising thereunder.
Finally, it is of little significance that the Lease calls for the application of New Jersey law. The Appellate Division, First Department, has routinely rejected the notion that the necessity of applying foreign law should result in a forum non conveniens dismissal, and has repeatedly held that New York Courts are capable of interpreting and applying the law of other states, including New Jersey, and even foreign countries ( see Travelers Cas. and Sur. Co. v Honeywell, Intl., Inc., 48 AD3d 225, 226 [1st Dept 2008] ["while the choice-of-law issues presented by this litigation have not yet been adjudicated, New York courts are capable of applying New Jersey law should that necessity arise"]; Mionis v Bank Julius Baer Co., 9 AD3d 280, 282 [1st Dept 2004] ["the courts of this State are fully capable of applying Greek law, should such law be found governing in this case"]; Yoshida Printing Co., Ltd. v Aiba, 213 AD2d at 275 ["Neither the fact that plaintiff is a Japanese corporation, whose witnesses may speak Japanese, nor the potential necessity of applying Japanese law, renders New York an inconvenient forum"]).
Significantly, the Lease provides only that New Jersey law would apply to its interpretation; it does not contain a forum selection clause agreeing to the jurisdiction of New Jersey courts with respect to any lawsuits arising under the Lease, as is common in many commercial leases and contracts. Thus, the parties expressly recognized that disputes under the Lease would not necessarily be litigated in New Jersey, but in any court, like this one, that has jurisdiction of the dispute.
Accordingly, a balancing of the equities demonstrates that New York is an appropriate, and that no superior forum for this matter exists. Therefore, defendant's motion to dismiss on forum non conveniens grounds is denied.
The court has considered the remaining arguments, and finds them to be without merit.
Accordingly, it is hereby
ORDERED that defendant's motion to dismiss is denied; and it is further
ORDERED that defendant shall answer the complaint within thirty days of the date of this decision and order; and it is further
ORDERED that counsel shall appear for a preliminary conference on August 21, 2009, at 9:30 am in Part 11, room 351, 60 Centre Street, New York, NY.