[*1]
Bongo-Astier v Carefree Lifestyles, Inc.
2010 NY Slip Op 50673(U) [27 Misc 3d 1211(A)]
Decided on March 18, 2010
Civil Court Of The City Of New York, New York County
Engoron, J.
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and will not be published in the printed Official Reports.


Decided on March 18, 2010
Civil Court of the City of New York, New York County


Yamilee Bongo-Astier, Plaintiff,

against

Carefree Lifestyles, Inc., LARRY RUDOLPH, ANTHONY MAROTTA and GARY MAROTTA, Decision and Order, Defendants.




21993/09

Arthur F. Engoron, J.



Upon the foregoing papers the instant motion is granted in part and denied in part.

In this action plaintiff Yamilee Bongo-Astier alleges that defendant Carefree Lifestyles, Inc. scammed her with a classic "bait and switch": they enticed her with an offer to rent a certain vacation property in Florida; pursuant to a purported written contract ("the contract"), she paid them a deposit totaling $22,540; and one day before the rental was to begin they told her that the property was unavailable but offered her a substitute that she had previously rejected as unsuitable. She refused the "switch"; they refused to refund her deposit; and the instant lawsuit ensued.

Defendants now move to dismiss the complaint on two unrelated grounds: first, that the contract contains a forum-selection clause stating that "All lawsuits will occur in Dade County, Florida"; and, second, that as the contract was with the corporate defendant, the individual defendants are protected by the "corporate veil" and are not personally liable.

Forum-Selection Clause

Plaintiff argues that the forum-selection clause is not mandatory, as it does not use such terms as "shall" or "exclusive." Rather, plaintiff argues, the clause in question is a consent-to-personal-jurisdiction clause. This Court finds that argument unavailing as a matter of contract interpretation and logic: if "all lawsuits will occur in Dade County," then none can occur in New York County.

Plaintiff also argues, in effect, that the forum-selection clause is not binding because the contract was entered into in bad faith, was permeated with fraud, etc., and, thus, was void ab initio. The problem with this argument, as this Court sees the matter, is that the Court cannot simply take the plaintiff's word for it, and if defendants are compelled to come into New York to demonstrate that the contract was not entered into in bad faith and is binding, then they have lost much of the [*2]value of the forum-selection clause, for which they bargained and to which plaintiff agreed.

Then again, what if defendants really are perpetrating scams on countless New Yorkers, who are forced to go all the way to Florida to vindicate their rights after having innocently entered into contracts in New York? Even if some of our fleeced denizens do just that, and are vindicated, defendants will get to keep the rest of their ill-gotten gains.

From time immemorial judges have sustained potentially meritorious claims pursuant to an ancient legal doctrine: "We are not going to let them get away with this." But how can the Court assume defendants are getting away with something without giving them the right to tell their side of the story, which would be in a lawsuit in New York, not Dade, County, which would violate the intent of the forum-selection clause?

In this particular case, at least, the Court can do that because there is no affidavit from an individual with personal knowledge (or, indeed, from anyone) even attempting to justify or defend against what is alleged to be, and for all that appears may actually be, a scam from the get-go. An intentional scam would permeate the contract with fraud and render it void ab initio and unenforceable.

Numerous recent cases have vitiated forum-selection clauses. As summarized in Strujan v AOL, 12 Misc 3d 1160(A), 2006 NY Slip Op 50981(U) (Civ Ct, NY County 2006) (Moulton, J.):

A contractual forum selection clause is enforceable unless it is shown by the challenging party to be unreasonable, unjust, in contravention of public policy, invalid due to fraud or overreaching, or it is shown that a trial in a selected forum would effectively deprive a party of her day in court.


See also, DeSola Group, Inc. v Coors Brewing Co., 199 AD2d 141 (1st Dept 1993) ("[as] plaintiff's allegations of fraud pervading the Agreement would render the entire Agreement void, the forum selection clause contained therein is unenforceable"); Oxman v Amoroso, 172 Misc 2d 773, 780 (Yonkers City Ct, 1997) (court refused to "allo[w] defendant to solicit and sell its services in New York State while at the same time chilling and extinguishing meritorious claims by forcing injured consumers to bring suit in a distant and economically inaccessible forum"). As stated in Oxman, "Forum selection clauses are among the most onerous and overreaching of all clauses that may appear in consumer contracts. The impact of these clauses is substantial and can effectively extinguish legitimate consumer claims . . . ." Even the United States Supreme Court has subjected certain "forum-selection clauses . . . to judicial scrutiny for fundamental fairness." Carnival Cruise Lines v Shute, 499 US 585, 595 (1991).

This Court might not go as far as the courts in DeSola and Oxman did in vitiating forum-selection clauses, because anybody can allege fraud. But, as noted above, in the instant case we have very specific allegations of fraud by a person with personal knowledge, and we have no refutation from the other side. This Court does not think it is asking too much of a [*3]defendant seeking to dismiss a case by relying on a burdensome forum-selection clause to submit an affidavit explaining the basics of the contract and justifying defendant's actions thereunder. The covenant of good faith and fair dealing implied in every contract would seem to require no less. Furthermore, New York State has a strong interest in protecting its citizens from (alleged) out-of-state predators. Finally, at least in this case, requiring defendant to defend in New York should not be particularly onerous, given that defendant apparently maintains a strong New York presence, including keeping offices and advertising within the state.

The Individual Defendants

Although she contracted with the corporate defendant, plaintiff alleges that the individual defendants are "abusing the corporate form" and are therefore personally liable. Defendants respond that Larry Rudolph is simply an employee of the corporation and that the other two individuals are corporate officers who did not contract with plaintiff and are otherwise protected by the corporate form. The instant action must be dismissed as to the individual defendants for two independent reasons. First, this court does not have subject matter jurisdiction to pierce the corporate veil. 19 W. 45th St. Realty Co. v Darom Elec. Corp., 233 AD2d 184, 185 (1st Dept 1996) ("piercing the corporate veil is a form of equitable relief . . . which Civil Court does not have jurisdiction to grant"). Second, plaintiff has not alleged that she had personal dealings with either of the corporate officers, and there is no evidence that Larry Rudolph is anything other than an employee of the corporation. Dismissal is without prejudice to being brought in a court of competent jurisdiction upon a proper set of allegations.

Conclusion

Based on the foregoing, defendants' motion to dismiss is granted solely to the extent of dismissing, without prejudice, plaintiff's claims against the individual defendants, and severing said individuals from the subject action. Defendants' motion is denied to the extent that it seeks dismissal as against the corporate defendant, which is hereby directed to serve and file an answer to the complaint within 30 days of the date hereof.

Dated:March 18, 2010

Arthur F. Engoron, J.C.C.