| Dr. Energy Saver of Hudson Val., Inc. v Salesforce, Inc. |
| 2025 NY Slip Op 51272(U) [86 Misc 3d 1253(A)] |
| Decided on June 20, 2025 |
| Supreme Court, Orange County |
| McElduff, Jr., 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| This opinion is uncorrected and will not be published in the printed Official Reports. |
Dr. Energy
Saver of Hudson Valley, Inc., Plaintiff,
against Salesforce, Inc., Defendant. |
The Court has considered the following submissions on Defendant's motion to dismiss the complaint pursuant CPLR § 3211(a)(1) based upon the forum selection clause contained in the parties' contract documents:
1. Defendant's Notice of Motion, Carroll Affirmation in Support together with Exhibit 1, Memorandum of Law in Support;
2. Barfield Affirmation in Opposition, Giraudin Affirmation in Opposition together with Exhibits 1 through 3;
3. Memorandum of Law in Reply.
Plaintiff entered into a contract for the purchase of business software from the Defendant by signing two Order Forms containing the Defendant's terms of sale. The parties do not dispute that each Order Form, preceding the signature block therein, specified that each Order Form was governed by the terms of the Salesforce MSA (Main Services Agreement), which was reviewable via a hyperlink found at https://www.salesforce.com/company/msa.jsp. (See Order Forms, contained in Exhibit 1 of the Carroll Affirmation). At Section 12.9, the Salesforce MSA required that the venue for any dispute or lawsuit between the parties of the Salesforce MSA (domiciled in North America) must be placed in a court in San Francisco, California. (See [*2]Salesforce MSA, contained in Exhibit 1 of the Carroll Affirmation). While the Defendant is headquartered in California, Plaintiff's headquarters are in New York.
In this action, Plaintiff seeks a declaratory judgment stating that the Salesforce MSA and Order Forms have been terminated in accordance with the express terms of the Salesforce MSA, as well as an award of damages for Defendant's alleged breach of the Salesforce MSA. (See Complaint, contained in Exhibit 1 of the Carroll Affirmation).
By the instant motion, Defendant seeks an order dismissing the action for improper venue/forum pursuant to the Salesforce MSA's forum selection clause.
A. The validity of the forum selection clause.
In New York, a forum selection clause is prima facie valid and, absent a strong showing that it should be set aside, will be upheld. Bell Constructors, Inc. v. Evergreen Caissons, Inc., 236 AD2d 859, 860 (4d Dept. 1997).
In opposition to the motion to dismiss, Plaintiff argues that the Salesforce MSA's forum selection clause was not specifically incorporated into the Order Forms, citing CooperVision, Inc. v. Intek Integration Technologies, Inc. [7 Misc 3d 592 (Sup. Ct. 2005)]. In CooperVision, the parties simultaneously executed several separate agreements. Of these agreements, the Plaintiff sued under the "implementation agreement," which did not contain a forum selection clause. One of the other simultaneously signed agreements, the "software license agreement," contained a forum selection clause. The implementation agreement did, however, contain an integration clause, which stated that the multiple, simultaneously signed agreements represented the "entire contract" between the parties. The implementation agreement additionally contained a "order of preference" clause to specify which agreement controlled if a conflict between the separate agreements' terms arose. The CooperVision court found that the absence of any express incorporation of the forum selection clause by reference, coupled with the inclusion of an "order of preference" clause, meant that the drafter intended that each agreement have and maintain its own identity in the absence of a conflict.[FN1]
Here, the parties' Order Forms expressly stated that they were to be "governed by" the Salesforce MSA and, further, directed the parties to a hyperlink to view the terms of the Salesforce MSA. The terms of the Salesforce MSA contained the forum selection provisions. This express inclusion of the Salesforce MSA by reference, thus subjecting the parties to the terms and conditions of the Salesforce MSA, is valid and enforceable in New York. See, e.g., [*3]Movado Grp., Inc. v. Mozaffarian, 92 AD3d 431, 432 (1st Dept. 2012) (holding that the credit agreement, which identified the terms and conditions as those contained on each invoice, was sufficient to put defendants on notice that there was an additional document of legal import to the contract they were executing; parties' credit agreement incorporated by reference the terms and conditions on invoices, which included a New York forum selection clause).
The Plaintiff's alleged failure to read the terms and conditions of the Salesforce MSA, to access the hyperlink or to request a physical copy of the terms stated in the hyperlink prior execution of the Order Forms is the equivalent of a failure to read a contract or to exercise ordinary diligence to ascertain and understand the terms of the agreement before signing it. See, e.g., Doyle v. PA Sports Authenticator, 76 Misc 3d 38 (App. Term, 2d Dept., 11th & 13th Jud. Dist.) (where there was a clause on the front of a form contract referring to terms appearing on the reverse side, party was bound by the forum selection clause on the reverse side notwithstanding the party's failure to read it); Hotel 71 Mezz Lender LLC v. Falor, 64 AD3d 430 (1st Dept. 2009) (holding that, in commercial transactions, a party to a contract has an obligation to exercise ordinary diligence and to inquire, if necessary, to understand the contract's terms and that ignorance of the terms is not a defense; further holding that the defendant's duty to make inquiry and to read and understand the subject loan guaranty did not diminish merely because she was provided with only a signature page before executing the guaranty agreement).
Accordingly, Defendant's incorporation by reference to the Salesforce MSA, which contained the forum selection clause, was valid and applicable to the parties' dispute at bar.
B. The enforceability of the forum selection clause.
A 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 the selected forum would be so gravely difficult that the challenging party would, for all practical purposes, be deprived of its day in court. U.S. Merch., Inc. v. L & R Distributors, Inc., 122 AD3d 613, 614 (2d Dept. 2014) (holding the forum selection clause was unreasonable).
A forum selection clause is "unreasonable" where, for instance, neither of the parties reside in the subject forum, the agreement has no connection to the subject forum and where the execution and performance of the agreement have no connection to the subject forum. U.S. Merch., Inc. v. L & R Distributors, Inc., 122 AD3d 613, 614 (2d Dept. 2014).
Here, the Defendant's business headquarters is located in the forum of San Francisco, California, thus making it sufficiently reasonable for its contract to designate that forum, especially in the absence of any case authority from the Plaintiff showing otherwise. Further, Plaintiff's alleged inconvenience and expense related to litigating this case in California (due to Plaintiff's representatives and witnesses residing in New York) is not sufficient to demonstrate the unreasonable or unjust factors required to override a valid forum selection clause. See Bell Constructors, Inc. v. Evergreen Caissons, Inc., 236 AD2d 859, 860 (4d Dept. 1997) (Defendant failed to show that enforcement would be unreasonable or unjust by alleging that it would suffer [*4]considerable economic hardship and loss of business time if compelled to defend the action in New York versus Colorado, where all of its representatives, witnesses and business records were located).
Regarding contravention of public policy, Plaintiff has failed to identify any particular New York public policy or legal authority therefor to demonstrate a contravention of public policy by the forum selection clause at bar.
Regarding fraud or overreaching, general allegations of fraud or overreaching related to the contract are insufficient to nullify a forum selection clause; instead, the allegations of fraud or overreaching must go to the forum selection clause itself or, alternatively, be so pervasive as to render the entire contract void ab initio. Milmar Food Grp. II, LLC v. Applied Underwriters, Inc., 61 Misc 3d 812 (Sup. Ct. 2018).
Here, Plaintiff has made no showing of fraud or overreaching whatsoever.
Regarding the "gravely difficult" ground, mere distance, alone, is not sufficient to establish this ground. See, e.g., MBF Leasing, LLC v. Reicks, 40 Misc 3d 1216(A) (Civ. Ct. 2013). Furthermore, Plaintiff has not offered any evidence that it would incur travel or other expenses, disproportionate to the damages sought, such that it would be so financially prohibitive that, for all practical purposes, plaintiff would be deprived of its day in court. See, e.g., M.B.S. Moda, Inc. v. Fuzzi S.P.A., 38 Misc 3d 1208(A) (Sup. Ct. 2013).
Accordingly, Plaintiff has failed to demonstrate that the forum selection clause is unenforceable.
For the above-stated reasons, it is hereby
ORDERED that Defendant's motion to dismiss the complaint is granted, and the complaint is hereby dismissed.
This constitutes the Decision and Order of the Court.