Plaintiff Bankers Healthcare Group, LLC ("BHG" or the "Plaintiff"), a Florida Limited Liability Company, commenced this action by filing a summons and complaint on June 23, 2025 (Doc. No. 1). Plaintiff seeks damages in the amount of $130,281.77 for breach of contract against Defendant Matthew Murphy ("Murphy" or the "Defendant").^[FN1] Plaintiff alleges that Defendant signed a promissory note for the sum total of $227,477.88 and that Defendant defaulted on that obligation (ibid, ¶¶6, et seq.). Defendant filed a pre-answer motion to dismiss (Notice of Motion, Doc. No. 6). Defendant asserts the complaint must be dismissed as the Court lacks personal jurisdiction over the Defendant, Defendant was improperly served, and Plaintiff failed to arbitrate, and alternatively seeks a transfer of venue to Prince George's County Maryland (ibid). Plaintiff opposes the motion (Doc. Nos. 24, et seq.).

It is self-evident that a court have subject matter jurisdiction before it can act. "As relevant here, a judgment or order issued without subject matter jurisdiction is void, and that defect may be raised at any time and may not be waived because it goes to the 'competence' of the court" (Henry v. New Jersey Tr. Corp., 39 NY3d 361, 367 [2023], internal quotations and citations omitted; see also Bankers Healthcare Group v. Cooper, Sup. Ct., Onondaga Cty., March 12, 2021, DelConte, J., Index No. 008078/2019, Doc. No. 36). "The fact that subject-matter jurisdiction cannot be waived and may be raised by a court sua sponte (see majority op at 10-12) is a consequence of the way in which subject-matter jurisdiction limits our power: that is, it is the kind of limit on our authority that cannot be cured by the consent of the parties" (Henry at [*2]380).

This Court has reviewed a virtually identical contract utilized by Plaintiff and found that jurisdiction does not lie in a New York State Court (see Bankers Healthcare Group, LLC v. Pediatric Assoc., Inc, 2023 NY Misc. LEXIS 3160, *5 [Sup. Ct. Onondaga Cty. 2023]). In both Pediatric Assoc. and the instant matter, the contracts are not governed by New York law as required by General Obligations Law §5-1401 (see DDR Real Estate Servs. v. Burnham Pac. Props., 1 Misc 3d 802, 805 [Sup. Ct., Monroe County 2003], aff'd 12 AD3d 1182 [Fourth Dept. 2004]). As in Pediatric Assoc., the subject contract does not meet the one-million dollar threshold required by General Obligations Law §5-1402. Plaintiff is a Florida limited liability company (see Complaint, Doc. No. 1, ¶1), Defendant Murphy is a Maryland domiciliary (ibid, ¶3). The Parties and the underlying contract have no connections to New York other than the purported designation of Onondaga County as a proper venue. This clause, and the contract overall, does not comply with the requirements of the General Obligations Law. Despite Plaintiff's claims that jurisdiction is proper, there is no constitutional or statutory basis for the Court to have subject matter jurisdiction.

Plaintiff claims the action may be properly maintained in New York State Courts (see Bankers Healthcare Group, LLC v. Pasumbal, 210 AD3d 1385 [Fourth Dept. 2022]). While Plaintiff is correct in that the "choice of law language in Pasumbal is identical to the Financing Agreement language in this matter" (Affirmation, Doc. No. 24, ¶9), the Fourth Department did not address the General Obligations Law. Another distinguishing fact between Pasumbal and the instant matter is that beyond filing a pro se answer with the trial court (Index No. 006484/2020, Doc. No. 8), Defendant Pasumbal did not participate in either of the summary judgment motions or the appeal (Index No. CA22-00190).

Plaintiff refers to federal court decisions to bolster its position. However, those decisions hardly provide a deep analysis of the subject matter jurisdiction issue vis-à-vis the General Obligations law before the Court. The court in Bankers Healthcare Group, LLC v. TCEx, LLC makes a passing comment that "Section 5-1402 is not a limitation on the use and effectiveness of forum selection clauses. Rather, it contains a statutory mandate that a clause designating New York as the forum shall be enforceable, in cases involving $1 million or more, regardless of any inconvenience to the parties" (Bankers Healthcare Group, LLC v. TCEx, LLC, 2024 WL 841236, p. 9 [N.D.NY, Feb. 28, 2024], citations omitted). In Bankers Healthcare Grp., LLC v. Goldsol, Inc., the court makes no mention of General Obligations Law §5-1402 (No. 5:23-CV-1458 (GTS/TWD), 2024 WL 3451037, at *3-5 [N.D.NY July 18, 2024]). General Obligations Law §5-1402 provides:

"Notwithstanding any act which limits or affects the right of a person to maintain an action or proceeding, including, but not limited to, paragraph (b) of section thirteen hundred fourteen of the business corporation law and subdivision two of section two hundred-b of the banking law, any person may maintain an action or proceeding against a foreign corporation, non-resident, or foreign state where the action or proceeding arises out of or relates to any contract, agreement or undertaking for which a choice of New York law has been made in whole or in part pursuant to section 5-1401 and which (a) is a contract, agreement or undertaking, contingent or otherwise, in consideration of, or relating to any obligation arising out of a transaction covering in the aggregate, not less than one million dollars, and (b) which contains a provision or provisions whereby such foreign corporation or non-resident agrees to submit to the jurisdiction of the courts of [*3]this state" (General Obligations Law §5-1402).

Business Corporations Law ("BCL") §1314[b] and Banking Law §200-b[2] set forth specific instances where a foreign entity or non-resident may be sued in New York Courts (BCL §1314[b] & Banking Law §200-b[2]). General Obligations Law §5-1402 sets forth an exception to the limited circumstances where a foreign entity or non-resident may be sued in New York Courts. General Obligations Law §5-1402 then sets the conditions to be met to invoke the jurisdiction of New York Courts against a foreign entity or non-resident. First, the "action or proceeding arises out of or relates to any contract, agreement or undertaking for which a choice of New York law has been made in whole or in part pursuant to section 5-1401" (General Obligations Law §5-1402, emphasis added). The financing agreement specifically designates "the substantive and procedure laws of the State of Florida" shall govern (Financing Agreement, Doc. No. 2, p. 3). The Parties specifically designated Florida law in contravention to General Obligations Law §5-1402. This is not a case where the contract is silent as to the choice of law. There was an affirmative decision to designate Florida law as controlling. Our inquiry should end there, but even assuming that the designation of Florida's substantive and procedure law somehow satisfies General Obligations Law §5-1402 requirement that New York law be chosen in order to secure venue in New York Courts (or the Court takes it upon itself to rewrite the contractual language), the statute goes on to set further conditions.

One condition precedent is that the value of the contract is at least one million dollars (General Obligations Law §5-1402). That is not met here as the Financing Agreement is for "the total sum of Two Hundred Twenty-Seven Thousand, Four Hundred Seventy-Seven DOLLARS and Eighty-Eight CENTS ($227,477.88), which represents the total of payments of principal plus interest due and which will become due hereunder from the date of this Agreement until the maturity date of this Agreement" (Financing Agreement, Doc. No. 2, p. 2).

General Obligations Law further requires that the "foreign corporation or non-resident agrees to submit to the jurisdiction of the courts of this state" (General Obligations Law §5-1402). This last condition is the sole one met by the financing agreement (Financing Agreement, Doc. No. 2, p. 3).

As the instant financing agreement neither designates New York law as controlling nor satisfies the minimum value as required by General Obligations Law, the venue clause of the financing agreement is not valid. While Plaintiff insists it was the "intent" of the Parties to utilize New York Courts, they failed to accomplish such intention by not complying with General Obligations Law §5-1402. Plaintiff asks a rhetorical question in a footnote, whether Delaware corporations such as Ford, Walmart, and Meta should be limited to file actions only in Delaware (Affirmation, Doc. No. 24, Footnote 11). This is a red herring. This Court would not have jurisdiction over a contract dispute between Ford and a Maryland landscaper over the default on the purchase of an $80,000 truck. Each case must be judged on the facts presented. The facts of this case are a Florida limited liability company suing a Maryland domiciliary in New York Courts, where the underlying agreement was not consummated in, nor otherwise has ties to, New York State.

In another footnote, Plaintiff asserts that New York CPLR controls (Affirmation, Doc. No. 24, Footnote No. 9: "Citations to the NY CPLR only relate to procedural law, not substantive law. The NY CPLR governs procedural matters in this case"). Despite the assertion by counsel, the Parties specifically contracted that: "The terms of the Financing Agreement and [*4]all loan documents executed herewith shall be governed by and construed in accordance with the substantive and procedure laws of the State of Florida, exclusive of the principles of conflict of laws" (Financing Agreement, Doc. No. 2. p. 3, emphasis added). "A court may not rewrite terms of a contract that are clear and unambiguous. A court should not by construction add or excise terms or distort the meaning of those used and thereby make a new contract for the parties under the guise of interpreting their writing" (Cameron Hill Constr., LLC v Syracuse Univ., 2016 NY Misc. LEXIS 5141, *45 [Sup. Ct. Onondaga Cty. 2016], citing Reiss v. Fin. Performance Corp., 97 NY2d 195, 199 [2001]). The affirmative designation of Florida law as controlling the agreement invalidates the purported choice of venue selecting Onondaga County, and thereby New York Courts, pursuant to General Obligations Law §5-1402.

The Court agrees with Plaintiff on one point, that the Fourth Department has spoken on this issue already. In DDR Real Estate, the trial court dealt with a near identical situation with two foreign entities whose contract contained a choice of law clause designating Maryland law, but a forum clause designating either state or federal courts in New York (DDR Real Estate, supra). The trial court went on to state:

"In order for the choice of forum provision under section 5-1402 to apply, there has to be a choice of New York law (General Obligations Law § 5-1402 [1]; see Creative Resources, Inc. v Rumbellow, 244 AD2d 383, 664 N.Y.S.2d 86 [2nd Dept 1997]). This requirement, that the parties' agreement choose New York law to govern any disputes, is consistent with the public policy purposes of sections 5-1401 and 5-1402. Here, the only choice of law made by the parties involved in this action is to apply the laws of the State of Maryland. The parties did not agree that the law of New York State was their choice of law, either in whole or in part. Further the argument that choosing New York as a forum necessarily implies that the procedural law of New York is chosen is unpersuasive" (DDR Real Estate Servs. v. Burnham Pac. Props., 1 Misc 3d 802, 807-808 [Sup. Ct., Monroe County 2003], aff'd 12 AD3d 1182 [Fourth Dept. 2004]).

General Obligations Law demands foreign contracting parties meet basic criteria to have their case heard in New York Courts: one, that New York law be controlling (in whole or in part), two, that the value of the agreement exceed one-million dollars, and three, that they parties agree to submit to jurisdiction in New York (General Obligations Law §5-1402). One out of three may be acceptable for a batter in baseball, but for the General Obligations law it is a strikeout.

NOW, THEREFORE, upon reading and filing the papers with respect to the Motion, and due deliberation having been had thereon, it is hereby

ORDERED and ADJUDGED, that the action is dismissed for want of subject matter jurisdiction; and it is further

ORDERED, that Defendant's motion to dismiss is moot.