Opinion
Decided January 27, 2009.
Craig Stuart Lanza, Esq. of Balestriere Lanza PLLC for plaintiff.
Andrew M. Cuomo, New York State Attorney General, by Hilary R. Kastleman, Assistant Attorney General for defendant.
This is a putative class action proceeding commenced by petitioner, an individual residing in Tompkins County, against the New York State Division of Lottery ("defendant" or "NY Lottery") seeking injunctive relief, the imposition of a constructive trust and compensatory and punitive damages on the ground that respondent has committed fraud in its print, radio, television and on-line advertising by overstating the likelihood of winning the Take Five game.
Defendant NY Lottery moved, by Order to Show Cause, for an extension of its time to serve a motion to change venue and also extending its time to serve its answer or a pre-answer motion to dismiss (motion sequence No. 001). The Order to Show Cause contained a temporary restraining order (TRO) staying NY Lottery's time to serve its motion to change venue pending a hearing on the Order to Show Cause and further staying defendant's time to serve its answer or motion to dismiss until either: (1) 20 days after defendant receives notice from plaintiff of a new return date in the transferee court; or (2) 10 days after defendant receives notice from plaintiff that defendant's motion for a change of venue has been denied.
Before the Court issued a decision on the defendant's motion for an extension of time, the NY Lottery then moved for an order: (1) pursuant to CPLR §§ 503, 510 and 511 changing venue from New York County to Schenectady County; and (2) continuing the TRO and extending the stay of defendant's time to serve its answer or its pre-answer motion to dismiss until thirty (30) days after it receives notice from plaintiff or the Court of a decision on its motion to change venue or after service of the order on its motion with notice of entry (motion sequence #002).
Motion sequence #001 and motion sequence #002 have been consolidated for purposes of disposition and are decided as follows:
Prefatorily, it appears that by opposing defendant's motion for a change of venue without reasserting the issue of untimeliness as to that application, plaintiff has essentially abandoned its opposition to the Court granting defendant an extension of time within which to make the motion for a change of venue and to serve its answer. Nevertheless, in order to ensure that all issues are appropriately considered and resolved, the Court will proceed to address the issues raised in NY Lottery's motion for an extension of time.
Defendant contends that its delay in answering the complaint and/or moving to dismiss or change venue is attributable to various considerations such as the possibility of moving to dismiss the proceeding based upon a lack of subject matter jurisdiction and determining whether venue of the action was proper in New York County, as well as various personal difficulties of the Assistant Attorney General assigned to the case. The NY Lottery, upon reviewing the allegations of the complaint, is of the opinion that venue is more properly placed in Schenectady County since the respondent's principal place of business is in that county, the relevant witnesses concerning its marketing decisions and administration of the Take Five game are located in Schenectady County and no particular actions alleged in the complaint specifically took place in New York County. Defendant also contends that plaintiff would suffer no prejudice due to the extension.
The plaintiff opposes the motion on the ground that he has already consented to two extensions of time in which defendant was to answer and defendant has demonstrated no good cause for any further extension. Plaintiff contends further that in discussions between Assistant Attorney General Hilary Kastleman, counsel for the NY Lottery, and plaintiff's attorney relative to the dismissal of a similar action commenced in federal court, venue of the later filed state court action was specifically contemplated as being in New York County. In addition, plaintiff claims that he and the other members of the putative class will be prejudiced by the delay because the longer the proceeding is delayed the more consumers will buy Take Five lottery tickets based upon defendants fraudulent statements.
A motion for change of venue predicated upon plaintiff's choice of an improper county (CPLR § 510) or convenience of material witnesses (CPLR § 510) must be served with the answer or before the answer is served (CPLR § 511 [a]). Thus, because the time for serving an answer to the complaint is admittedly overdue, an application for an extension of time within which to serve an answer together with an extension to serve a motion to change venue must be made to the Court.
CPLR § 3012 (d) provides that the Court in its discretion may extend the time to serve an answer "upon such terms as may be just and upon a showing of reasonable excuse for delay or default." Although the principal excuses for the delay proffered by defense counsel in this case appear to be in the nature of "law office failure" ( e.g., pre-existing caseload deadlines, a planned vacation and absences of counsel for medical reasons), the court is not precluded from exercising its discretion to excuse a delay based upon law office failure ( see, CPLR § 2005). Considering the absence of any demonstrable prejudice to plaintiff, the delay in answering is of relatively short duration, and that public policy favors the resolution of cases on the merits, the defendant's delay in answering and or moving shall be excused in the exercise of the Court's discretion.
Turning then to defendant's motion to change venue, on November 26, 2008, NY Lottery served plaintiff with a demand for a change of venue to Schenectady County. When plaintiff did not serve a written consent to such change pursuant to CPLR § 511 (b), defendant made the instant motion. In support of its motion, defendant submits, inter alia, the affirmation of William J. Murray, defendant's Deputy Director and General Counsel. He contends that venue is mandatory in Schenectady County because no party to the action resides in New York County, the NY Lottery maintains its principal office in Schenectady County, the Director and CEO of the NY Lottery, Gordon Medenica, maintains his principal office in the same county, the substantive determinations concerning marketing and advertising campaigns for the "All You Need is a Little Bit of Luck" of the Take Five lottery game were made at defendant's Sales and Marketing unit in Schenectady County, and the NY Lottery officials who are potential witnesses in the action namely the Director of Sales and Marketing, Randall Lex, and the co-Directors of Advertising, Debbie Myers and Debra Hewitt, all maintain their offices in Schenectady County and neither maintain an office nor reside in New York County. Defendant further contends that such witnesses would be substantially inconvenienced if this case goes to trial in New York County as it would require three hours of travel time by train in each direction. Lastly, all of the records pertaining to the NY Lottery's Little Bit of Luck Take Five lottery campaign are maintained in Schenectady County.
Plaintiff opposes the motion for a change of venue largely on the same ground as was mentioned in his opposition to the defendant's motion for an extension, to wit, that in discussions between the parties relative to the plaintiffs withdrawal of a prior federal court action seeking the same relief as sought herein and re-filing of the action in State court, the parties contemplated that plaintiff would re-file in New York County.
Defendant responds by affirmation of Assistant Attorney General Hilary Kastleman. Ms. Kastleman denies that she consented on behalf of defendant to venue in New York County of any subsequently filed State court action after plaintiff withdrew the federal court action. AAG Kastleman also notes that the plaintiff in the federal court action resided in Richmond County and that resellers of New York lottery tickets, some of whom resided in New York County, were named as defendants in that action. Conversely, in the instant action, none of the parties are residents of New York County.
It is axiomatic that as a general rule venue of transitory actions shall be placed in the county in which any of the parties resided at the time the action was commenced (CPLR § 503 [a]). Since venue in a putative class action will be determined prior to any application to certify the class, the residence of any named party to the action, rather than potential members, will be determinative of the proper venue ( see, Kidd v Delta Funding Corp., 270 AD2d 81, 82-82 [1g Dept. 2000]). Here, it is not disputed that plaintiff is a resident of Tompkins County.
With respect to defendant, plaintiff in his complaint states in paragraph 9 that NY Lottery is an agency of the State of New York with its principal place of business at One Broadway Center, Schenectady, New York. There is no express provision in the CPLR with respect to venue of matters involving State agencies. However, by extension of the CPLR provisions which hold that corporate residence is where the corporation has its principal place of business, NY Lottery may be deemed to reside in Schenectady County. Accordingly, since neither party to this action resides in New York County the instant action is not properly venued in New York County. Moreover, by selecting an improper county, plaintiff forfeited his right to select venue ( see, Ruizv Lazala, 26 AD3d 366 [2d Dept. 2006]). Defendant has its principal place of business in Schenectady and both the relevant decisions and transactions were made and the pertinent witnesses are located in that county. Therefore, the instant action should be transferred to Schenectady County.
In reaching this determination, the Court considered plaintiffs argument that the parties had agreed to venue any state court action in New York County. However, AAG Kastleman specifically denies agreeing that venue would be placed in New York County. In its opposition, plaintiff relies on CPLR 501 and the case of Flush Metal Partition Corp. v Guy H Nuovo Corp. ( 57 Misc 2d 900 [Sup. Ct., Queens Co. 1968]). However, both the statutory provision and the case of Flush Metal Partition Corp. provide simply that the parties may by written agreement made before an action is commenced fix the place of trial. There is nothing in the record to indicate nor does plaintiff contend that the parties entered into a written agreement to place venue in New York County. In the absence of any statutory or decisional law to support the proposition that an alleged oral agreement as to the place of trial shall be sufficient for venue purposes, the Court cannot credit plaintiff's contention in this regard.
Accordingly, it is
ORDERED, that the defendant's motion for an extension of time to move for a change of venue is granted (motion sequence #001) and the defendant's motion for a change of venue is deemed timely; and it is further
ORDERED, that defendant's motion to change venue of this action from New York County to Schenectady County is granted (motion sequence #002); and it is further ORDERED, that the Clerk of this Court, upon service of a copy of this order with notice of entry and payment of appropriate fees, is directed to transfer its file in this action to the Clerk of the Supreme Court, County of Schenectady; and it is further
ORDERED, that defendant shall serve its answer to the complaint or its pre-answer motion to dismiss within twenty (20) days of service of this decision and order with notice of entry
This constitutes the decision and order of the court.