This action involves a contract entered into between the Defendant, New Concepts Realty, Inc. ("New Concepts") and a non-party, NorVergence, Inc. ("NorVergence"), guaranteed by the Defendant, Charles E. Blood, ("Blood"), the President of New Concepts, for the purchase of discount telecommunication services. The contract included an Equipment Rental Agreement, which was subsequently assigned by NorVergence to the Plaintiff, and which lies at the heart of this litigation. There are numerous such actions around the country involving other customers of NorVergence and their assignees.

The Defendants allege that they were approached by a NorVergence salesperson, who represented that Nor Vergence could save New Concept up to sixty (60%) percent on its internet, telephone and cellular telephone services by bundling them into one (1) low cost, unlimited use, package. As part of this proposal, New Concept would lease telecommunications equipment, including a "Matrix box," which was to be installed by NorVergence.

The Defendants allege that on April 14, 2004 New Concepts, by its President, Blood, executed and/or initialed various documents, as part of this cost savings proposal, including a Credit Application, a Hardware Application, a Services Application and an Equipment Rental Agreement. Blood also individually signed a personal guarantee for the [*2]Equipment Rental Agreement. The proposal called for, inter alia, lease payments of $241.00 per month for sixty (60) months. The Defendants further allege that before these documents were signed, the NorVergence salesperson represented that they were "non-binding" and would only be used to determine if the Defendants qualified for the proposed services.

On May 7, 2004, Blood, on behalf of New Concepts, signed a Delivery and Acceptance Certificate, acknowledging New Concepts receipt and acceptance of all of the equipment described in the Equipment Rental Agreement, and specifically represented, "I have reviewed and I understand all of the terms and conditions of the Equipment Rental Agreement." Thereafter, on May 10, 2004, the Equipment Rental Agreement was executed by NorVergence. On that same day, unbeknownst to the Defendants, NorVergence assigned all of its rights, but none of its obligations, under the Equipment Rental Agreement to the Plaintiff.^[FN1]

The Plaintiff alleges that, in accordance with the Equipment Rental Agreement, it served a number of invoices upon the Defendants, none of which have been paid. The Defendants allege that NorVergence never installed the Matrix box and that the Matrix equipment cannot perform any of the services NorVergence claimed it could provide. The Defendants further allege that the Martix box, which was leased for $241.00 per month, actually retails for just $395.00. It is for these reasons, Defendants say, they did not make payments pursuant to the Equipment Rental Agreement.

On or about June 30, 2004 an involuntary petition for relief under Chapter 11 of the Bankruptcy Code was filed against NorVergence. On or about July 14, 2004 the Bankruptcy Court declared NorVergence to be a Chapter 11 debtor and immediately entered an order converting the case to one under Chapter 7 of the Bankruptcy Code.

The Plaintiff commenced this action for breach of the Equipment Rental Agreement on September 9, 2004. Service of the Summons and Complaint was made sometime thereafter; and, the Defendants, pursuant to stipulation, have waived any objection to the manner of service upon them.

The Defendants initially moved in the Supreme Court of Nassau County, where this action was commenced, for an order permitting them to interpose a motion to dismiss, given the fact that they had not served a timely Answer herein, and upon such leave being granted, for an order dismissing the Complaint. That motion was not decided; and, instead, by order (Davis, J.) dated March 17, 2005, the matter was transferred to this court pursuant to CPLR § 325(d). Thereafter, the Defendants' motion was re-filed with this court.

The Defendants allege that they have been give a number of extensions of time to plead or otherwise respond to the Complaint, with the last such extension, allegedly given [*3]on January 13, 2005, being open ended. The Plaintiff neither disputes this allegation nor objects to the Defendants being given leave to make the motion to dismiss. Accordingly, that branch of the Defendants' motion seeking leave to move to dismiss is granted; and, the court will consider the substantive issues raised by the Defendants' motion.

The Defendants, a Colorado corporation and a Colorado resident, allege that they conduct business solely in the State of Colorado, have never transacted business in the State of New York and have no connection or contact with the State of New York. The Defendants further allege that the transaction in question occurred in Colorado and that they have never directly transacted any business with the Plaintiff, which has its principal place of business in the State of New York. Based thereon, the Defendants argue that there is no basis for the exercise of long arm jurisdiction pursuant to CPLR § 302, and that, in accordance with CPLR § 327, New York is an inconvenient forum, requiring the matter to be heard in Colorado.

The Plaintiff argues that jurisdiction is properly acquired over the Defendants in New York by virtue of a forum selection clause contained in the Equipment Rental Agreement which reads as follows:

APPLICABLE LAW: ... This agreement shall be governed by, construed and enforced in accordance with the laws of the State in which Rentor's principal offices are located or, if this Lease is assigned by Rentor, the State in which the assignee's principal offices are located, without regard to such State's choice of law considerations and all legal actions relating to this lease shall be venued exclusively in a state or federal court located within that State, such court to be chosen at Rentor or Rentor's assignee's sole option. (bold in original)

The Plaintiff also points to the following language which appears immediately above Blood's signature on his personal guarantee: THE SAME STATE LAW AS THE RENTAL WILL GOVERN THIS GUARANTY. YOU AGREE TO JURISDICTION AND VENUE AS STATED IN THE PARAGRAPH TITLED APPLICABLE LAW OF THE RENTAL. (bold and capitalization in original)

The Defendants argue that this forum selection clause is invalid and unenforceable. The Defendants claim that the forum selection clause lacks specificity, failing to advise the parties of the actual forum(s) in which suit may be maintained, is part of an agreement obtained by fraud and overreaching, and its enforcement would be unjust and unreasonable, virtually denying the Defendants their day in court.

It is not disputed that the Defendants' motion will rise or fall on the validity and enforce ability of the forum selection clause. The Plaintiff does not dispute that the Defendants have no minimum contacts with the State of New York. As such, if the forum selection clause is determined to be invalid or unenforceable this court will not have jurisdiction over the person of the Defendants; and, the Defendant's motion to dismiss [*4]will have to be granted. Conversely, if the forum selection clause is determined to be valid and enforceable, the Defendants will be deemed to have consented to New York's jurisdiction over them and render New York a convenient forum as a matter of law. Zurich Insurance Company v. R. Electric, Inc., 5 AD3d 338, 773 NYS2d 560 (1st Dept. 2004); National Union Fire Insurance Company of Pittsburgh, PA. V. Williams, 223 AD2d 395, 637 NYS2d 36 (1st Dept. 1996)

It is well accepted policy that forum selection clauses are prima facie valid and enforceable unless shown to be unreasonable. M/S Bremen v. Zapata Off-Shore Company, 407 U.S.1, 92 S.Ct. 1907 (1972) Brooke Group Ltd. v. JCH Syndicate 488, 87 NY2d 530, 640 NYS2d 479 (1996); LSPA Enterprise, Inc. v. Jani-King of New York, Inc., 31 AD3d 394, 817 NYS2d 657 (2nd Dept. 2006) They are enforced "because they provide certainty and predictability in the resolution of disputes ...." Brooke Group Ltd. v. JCH Syndicate 488, supra .; M/S Bremen v. Zapata Off-Shore Company, supra .; Premium Risk Group, Inc. v. Legion Insurance Company, 294 AD2d 345, 741 N.Y.S.2d563 (2nd Dept. 2002) and, in theory, "avoid litigation over personal jurisdiction and disputes over the application of the long-arm statute (CPLR 302[a])." National Union Fire Insurance Company of Pittsburgh, PA. V. Williams, supra .

Before a forum selection clause will be set aside, it must be demonstrated that it is invalid due to fraud or overreaching, that its enforcement would be unreasonable or unjust or that "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." British West Indies Guaranty Trust Co., Ltd. v. Banque Internationale A Luxembourg, 172 AD2d 234, 567 NYS2d 731 (1st Dept. 1991); Best Cheese Corporation v. All-Ways Forwarding Int'l, Inc., 24 AD3d 580, 808 NYS2d 694 (2nd Dept. 2005); Fleet Capital Leasing/Global Vendor Finance v. Angiuli Motors, Inc., 15 AD3d 535, 790 NYS2d 684 (2nd Dept. 2005)

The Defendants argue that the forum selection clause herein is unenforceable because it is unconscionable and imprecise. Specifically, the Defendants suggest that because the clause allows for claims to be brought in the State where the "Rentor" [NorVergence] maintains its principal place of business [New Jersey] or in the State where any assignee of the Equipment Rental Agreement maintains its principal place of business, at the time of its execution the agreement would allow for jurisdiction to potentially lie in any one (1) of the fifty (50) states or in a foreign country. The Defendants argue that this alone invalidates the forum selection clause.

The Defendants point out that there is a significant body of authority, consisting primarily of unreported cases, involving this very forum selection clause, which supports their position. The Defendants cite Sterling National Bank v. Chang, 10 Misc 3d 131(A), 809 NYS2d 484 (App. Term, First Dept. 2005); Sterling National Bank v. Borger, Jones & Keeley-Cain, (Civ. Ct. NY Co.); Sterling National Bank v. 4 Seasons Windows Inc. (S.C. NY Co.); Studebaker-Worthington Leasing Corp. v. A-1 Quality Plumbing [*5]Corporation, (S.C. Nassau Co.); Sterling National Bank v. Til Mar Design (Civ. Ct. NY Co.); Sterling National Bank v. David Stanley Consultants, LLC (S.C. NY Co); Sterling National Bank v. Home Mortgage Co., Inc. (S.C. NY Co.); Sterling National Bank v. Insurance Center of Patrick, Inc., (Civ. Ct. NY Co.); Sterling National Bank v. Battery Power, Inc. (S.C. NY Co.); Sterling National Bank v. Kings Manor Estates, LLC, 9 Misc 3d 1116(A), 808 NY S.2d 920 (Civ. Ct. NY Co.); Studebaker-Worthington Leasing Corp. v. Codisco, Inc. (S.C. Nassau Co.); IFC Credit Corp v. Eastcom, Inc., 2005 WL 43159 (N.D. Ill. 2005) and IFC Credit Corp v. Aliano Bros. General Contractors, Inc., 2005 WL 643288 (N.D. Ill. 2005)

Among these cases, the court notes that Sterling National Bank v. Chang, supra . does not invalidate the forum selection clause, but, in denying the motion of the plaintiff therein for summary judgment, holds that the clause is subject to challenge; Sterling National Bank v. Home Mortgage Co., Inc., supra . actually denied the motion of the defendants therein to dismiss, the defendants having waived their jurisdictional objection; Sterling National Bank v. Battery Power, Inc., supra . simply denied the motion of the plaintiff therein for summary judgment; Sterling National Bank v. Kings Manor Estates, LLC, supra . did not invalidate the forum selection clause, but granted the motion of the defendant therein for a stay of the proceedings; and, the United States District Court for the Seventh Circuit, reversed the holdings in IFC Credit Corp v. Eastcom, Inc., supra .and IFC Credit Corp v. Aliano Bros. General Contractors, Inc., supra ., finding the forum selection clause involved herein to be clear and specific, noting that "naming names is not the only method of dispelling ambiguity" and recognizing that the clause herein "designates the state of suit unequivocally: it is the headquarters state of either Nor Vergence or, if the contract has been assigned, of the assignee." IFC Credit Corp v. Aliano Bros. General Contractors, Inc., 437 F.3d 606 (7th Cir. 2006).

The Plaintiff points to its share of related actions in New York and around the country which have addressed this same forum selection clause and have found it valid and enforceable. The Plaintiff cites to IFC Credit Corp v. Aliano Bros. General Contractors, Inc., supra .; Studebaker-Worthington Leasing Corp. v. O'Keefe Architects, Inc., (S.C. Nassau Co.); Studebaker-Worthington Leasing Corp. v. Manatee Radiation Oncology, Inc. (S.C. Nassau Co.); Studebaker-Worthington Leasing Corp. v. Tim Barrett Designs, Inc. (S.C. Nassau Co.); Studebaker-Worthington Leasing Corp. v. The Boys and Girls Club of Carlsbad Foundation (S.C. Nassau Co.)^[FN2]; Sterling National Bank v. Exposures Unlimited Inc., (Civ. Ct. NY Co.); Edge Telecom, Inc. v. Sterling Bank, 143 P.3d 1155 (Colo. Ct. App. 2006); Preferred Capital, Inc. v. Associates in Urology, 453 F.3d 718 (6th Cir. 2006); and Preferred Capital, Inc. v. Aetna Maintenance, Inc., 2006 WL 3421829 (6th Cir. 2006). [*6]

It would appear from the foregoing, and other cases addressing the forum selection clause herein, that the majority of nisi prius decisions rendered on the issue invalidate the clause; the appellate decisions around the country, both state and federal, favor the clause's validity. The court does, however, note a recent decision of the Supreme Court of Ohio, Preferred Capital, Inc. v. Power Engineering Group, Inc., 112 Ohio St.3d 429, 860 NE2d 741 (Ohio S.C. 2007) which held:

that when one party to a contract containing a floating forum-selection clause possesses undisclosed information of its intent to assign its interest in the contract almost immediately to a company in a foreign jurisdiction, the forum-selection clause is unreasonable and against public policy absent a clear showing that the second party knowingly waived personal jurisdiction and assented to litigate in any forum.

As instructive as all of these cases are, none of them are binding on this court. There is now, however, appellate authority in this state, addressing this very forum selection clause, which is binding authority. In Sterling National Bank v. Eastern Shipping Worldwide, Inc., 35 AD3d 222, 826 NYS2d 235 (1st Dept. 2006), the Appellate Division, First Department unanimously reversed the dismissal of the plaintiff's complaint on forum non conveniens grounds and upheld the forum selection clause, noting:

The forum selection clause itself clearly provides that if the lease has been assigned, as was the case herein, then the venue of any legal action shall be in the state where the principal headquarters of the assignee is located, in this matter, New York.^[FN3]

Given the fact that neither the Court of Appeals nor the Appellate Division, Second Department has spoken directly on this issue, the nisi prius courts, including this court, are bound thereby. Mountain View Coach Lines, Inc. v. Storms, 102 AD2d 663, 476 NYS2d (2nd Dept. 1984):

the doctrine of stare decisis requires trial courts in this department to follow precedents set by the Appellate Division of another department until the Court of Appeals or this court pronounces a contrary rule (citations omitted).

See also: People v. Turner, 5 NY3d 476, 806 NYS2d (2005); Nassau County v. Bigler, 1 Misc 3d 910(A), 781 NYS2d 626 (Nassau Co. S.C. 2001); People v. Brisotti, 169 Misc 2d 672, 652 NYS2d 206 (App. Term. 1st Dept. 1996)

Accordingly, this court finds the forum selection clause herein is clear and specific enough to survive the court's scrutiny and shall be enforced, absent Defendants [*7]demonstration that the forum selection clause was obtained because of fraud or overreaching, or is so manifestly unfair as to effective deprive the Defendants of their day in court.

On the issue of alleged fraud or overreaching, the Defendants go to great lengths to spell out numerous actions and/or investigations commenced by various Attorneys General throughout the country, the Federal Trade Commission and other entities alleging, inter alia, fraud on the part of NorVergence in procuring the telecommunications contracts and the Equipment Rental Agreements. As the Defendants point out, some of these actions and/or investigations have resulted in settlements with a number of the assignees of NorVergence, including the Plaintiff herein. Based thereon, as well on the Defendants' own allegations concerning the manner in which the agreement and the Terms and Conditions thereof were signed and initialed, the Defendants argue that the entire agreement between the Defendants and NorVergence is tainted with fraud and is void ab initio. As such, according to the Defendants, the forum selection clause must fall as well.

The Defendants' reliance on DeSola Group, Inc. v. Coors Brewing Company, 199 AD2d 141, 605 NYS2d 83 (1st Dept. 1993) for its stated proposition that "Since ... allegations of fraud pervading the agreement would render the entire agreement void, the forum selection clause contained therein is unenforceable (citation omitted)", is misplaced.

This statement by the court, upon which the Defendants rely, is nothing more than dicta, the court itself noting "the forum selection clause is inapplicable since plaintiff's complaint does not pertain to the Agreement." It should also be noted that Rokeby-Johnson v. Kentucky Agricultural Energy Corp., 108 AD2d 336, 489 NYS2d 69 (1st Dept. 1985), upon which the court in DeSola Group, Inc. relied in allowing general allegations of fraud to defeat the clause, as opposed to allegations specific to the forum selection clause itself, was subsequently overruled by Columbia Casualty Company v. Bristol-Meyers Squibb Company, 215 AD2d 91, 635 NY2d 173 (1st Dept. 1995); See: Brooke Group Ltd. v. JCH Syndicate 488, supra ., also decided after Rokeby-Johnson. The Defendants' reliance on Sterling National Bank v. Chang, supra . for this same proposition is similarly misplaced, as the court therein gave the defendant the opportunity to demonstrate that the forum selection clause itself was invalid because of fraud or overreaching.

While the Defendants' allegations of fraud directed at NorVergence, and the findings of various Attorneys General, make a compelling argument against the validity of the contracts in general, and even raise some question as to whether or not the Plaintiff herein is a good faith purchaser for value of the Equipment Rental Agreement, they, alone, are not enough to raise an issue of fraud herein as to the provisions of the forum selection clause. The prevailing rule in this state is that to invalidate the clause on the ground of fraud and overreaching the fraud alleged must be specific to the jurisdictional [*8]provision itself. British West Indies Guaranty Trust Co., Ltd. v. Banque Internationale A Luxembourg, supra .; Zurich Insurance Company v. R. Electric, Inc., supra .; Serling National Bank v. Eastern Shipping Worldwide, Inc., supra .

In apparent recognition of these holdings, the Defendants also argue that the forum selection clause was procured by fraud and overreaching because it was hidden by NorVergence's salesperson and they were not put on notice of same. The Defendants' reliance on Lerner v. Karageoris Lines, Inc., 66 NY2d 479, 497 NYS2d 894 (1985) for the proposition that consumer contracts in New York must be in ten (10) point type is misplaced, as the transaction here in question is not a consumer contract, but an arms length transaction between two (2) commercial enterprises. The Defendants' reliance on Oxman v. Amoroso, 172 Misc 2d 773, 659 NYS2d 963 (Yonkers City Ct. 1997) is likewise in error. No one would dispute that the subject forum selection clause, as the rest of the agreement, was in small print; but, even the Defendants acknowledge that it was noticeable. Specifically, the Defendants admit that the forum selection clause appears in "bold font" (DeVoe Affirmation 1/30/07, ¶ 50) and do not deny that the personal guarantee signed by Blood contains a specific reference to "JURISDICTION AND VENUE AS STATED IN THE PARAGRAPH TITLED APPLICABLE LAW OF THE RENTAL." (capitalization and bold in original)

Having had the opportunity to read the forum selection provision before the documents were signed and initialed, the Defendants will be deemed to have read same and will be conclusively bound by same. Da Silva v. Musso, 53 NY2d 543, 444 NYS2d 50 (1981); Guerra v. Astoria Generating Company, LP, 8 AD3d 617, 779 NYS2d 563 (2nd Dept. 2004); Florence v. Merchants Central Alarm Company, Inc., 51 NY2d 793, 433 NYS2d 91 (1980), [the court noting: "In this commercial setting, where the language ... is clear, there is no necessity to resort to a magnifying glass and lexicon' (see Gross v. Sweet, 49 NY2d 102, 107, 424 NYS2d 365, 400 NE2d 306), no governing statute and no special relationship between the parties that would warrant relieving [them] of their contract."]

The Defendants further argue that even in the absence of fraud, overreaching, and/or the lack of specificity the forum selection clause should not be enforced because it would "be so gravely difficult and inconvenient that defendants would, for all practical purposes, be deprived of their day in court." (Cohen Affirmation 3/28/06, ¶ 49) The Defendants, however, provide nothing to support this broad conclusory statement other than the fact that their witnesses are in Colorado and that travel to New York for trial would be onerous. The distance alone, however, does not render a trial in New York so difficult as to deprive the Defendants their day in court. See: Koko Contracting, Inc. v. Continental Environmental Asbestos Removal Corp., 272 AD2d 585, 709 NYS2d 825 (2nd Dept. 2005) [upholding forum selection clause mandating trial in Colorado not New York]; Bell Constructor, Inc. v. Evergreen Caissons, Inc., 236 AD2d 859, 654 NYS2d 80 (4th Dept. 1997) [upholding forum selection clause mandating suit in New York not [*9]Colorado]; Boss v. American Express Financial Advisors, Inc., 6 NY3d 242, 811 NYS2d 620 (2006) [upholding forum selection clause requiring suit in Minnesota, not New York]; Zurich Insurance Company v. R. Electric, Inc., supra . [upholding jurisdiction in New York, instead of Hawaii, pursuant to a forum selection clause].

Moreover, as the court noted in Sterling National Bank v. Eastern Shipping Worldwide, Inc., supra .:

Indeed, defendant corporation, a sophisticated business entity, agreed when it originally entered into the lease agreement that venue would be placed in New Jersey and, in our view, cannot now be heard to argue that the change in venue from New Jersey to New York, as the result of the subsequent assignment, is so oppressive as to warrant rendering the provision void.

The court has considered the Defendants' remaining arguments and find them to be without merit.

Based upon all of the foregoing, that branch of the Defendants' seeking an order dismissing the Complaint is denied; and, it is

ORDERED, that the Defendants shall serve their Answer upon the Plaintiff within thirty (30) days of service of this order, with Notice of Entry, upon them.

All other matters not decided herein are hereby denied

This constitutes the decision and order of this court.

Dated: Hempstead, New York

February 22, 2007

___________________________

ANDREW M. ENGEL

J.D.C.