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THE CHOICE OF FORUM CLAUSE (ARIZONA) IN THE CONTRACT IS ENFORCEABLE AND IS NOT AFFECTED BY AN ARGUMENT QUESTIONING THE VALIDITY OF A CHOICE OF LAW CLAUSE; THE FACT THAT THE NEW YORK PLAINTIFF WILL HAVE TO TRAVEL TO ARIZONA DOES NOT AFFECT THE ENFORCEABILITY OF THE CHOICE OF FORUM CLAUSE (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, determined defendant’s motion to dismiss the New York complaint based upon the choice of forum clause (Arizona) in the contract should have been granted. Plaintiff argued the contract was illegal under New York law. But a choice of forum clause is independent from a choice of law clause:

The contract between the parties provided that Arizona law would govern “the rights and obligations” of the parties under the contract. It further provided that all disputes arising out of the contract “shall be subject to the exclusive jurisdiction and venue of the state or federal courts sitting in Maricopa County, Arizona.” That forum selection clause is prima facie valid and enforceable unless shown by plaintiff 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’ ” … .

In opposition to the motion, plaintiff argued that the contract’s “pay-if-paid” provision, together with a provision prohibiting plaintiff from contacting clients of defendant, rendered the contract void as against public policy of New York. Plaintiff’s argument, however, “is misdirected [inasmuch as t]he issue [it] raise[s] is really one of choice of law, not choice of forum” … . ” ‘[O]bjections to a choice of law clause are not a warrant for failure to enforce a choice of forum clause’ ” … . Plaintiff has not shown that enforcement of the forum selection clause contravenes New York public policy … . Nor has plaintiff shown that enforcement would be unreasonable or unjust or alleged that the clause was the result of fraud or overreaching … . Plaintiff’s further argument in opposition to the motion—i.e., that it would be a hardship for plaintiff’s owner to go to Arizona to litigate this dispute—is an insufficient basis on which to deny the motion … . The fact that New York may be a more convenient forum is immaterial inasmuch as defendant’s motion is based on the parties’ contract and not on the doctrine of forum non conveniens … . Prestige Lawn Care of WNY, LLC v Facilitysource, LLC, 2024 NY Slip Op 06483, Fourth Dept 12-20-24

Practice Point: Consult this decision for a discussion of a choice of forum clause versus a choice of law clause versus the doctrine of forum non conveniens.

 

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