Sabo v Candero

[*1] Sabo v Candero 2005 NY Slip Op 50583(U) Decided on March 31, 2005 Supreme Court, Rockland County Sherwood, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 31, 2005
Supreme Court, Rockland County

Abram Sabo, Plaintiff,

against

Alberto Candero and CANDERO REALTY CORP., Defendants.



3991/03

William E. Sherwood, J.

The parties entered into a Stock Purchase Agreement (Agreement) dated July 16, 1998 which requires that any action brought to enforce the provisions of the Agreement be brought in New York County Supreme Court. Plaintiff commenced this action in New York County Supreme Court seeking damages for, among other things, breach of the Agreement. In his answer to the complaint (and in answer to the amended complaint) Defendant, Alberto Candero (Candero), asserted a counterclaim alleging that plaintiff breached the Agreement. By Decision and Order dated January 29, 2003, New York County Supreme Court [Kornreich, JSC], denied plaintiff's summary judgment motion and Candero's cross motion for summary judgment. By an order dated February 13, 2003, Justice Kornreich granted Candero's motion to dismiss and granted plaintiff permission to refile the action as a shareholder derivative action. Thereafter, by Decision and Order dated May 9, 2003, Justice Kornreich vacated her Order of February 13, 2003 and granted plaintiff's application to serve an amended complaint asserting his claims in the form of a shareholder's derivative action.

Upon service of the amended complaint, Candero served a demand for change of venue and thereafter moved for an order pursuant to CPLR 510 and CPLR 511 changing the venue of this action to this court. This court denied that application and Candero has moved to reargue. For the reasons set forth below, the motion to reargue is granted and upon reargument the motion to change venue is denied on different grounds than those set forth in this Court's Order of March 26, 2004.

While the motion was under consideration, the court requested additional [*2]memoranda from the parties concerning the timeliness of Candero's demand and motion to change venue. Candero argues that, under the Agreement's choice of forum clause, he was foreclosed from seeking a change of venue earlier and that his application was properly made because the amended complaint asserts claims which do not implicate the contractual venue provision. Based upon the submissions on the motion to reargue, the court now finds that it need not reach the issue of whether the demand or motion for change of venue were timely. This is because venue selected by the plaintiff is proper under the Agreement's choice of forum clause.

The venue selected by the plaintiff is proper for two reasons. First, the third cause of action of the amended complaint asserts a claim for breach of the Agreement. Candero admits that such a claim would make venue in New York County Supreme Court proper. Second, in answer to the first complaint and in answer to the amended complaint, Candero asserts a counterclaim against plaintiff alleging that plaintiff breached the Agreement. By asserting a counterclaim for breach of the Agreement in response to plaintiff's initial complaint and in the amended complaint, venue is controlled by the Agreement's choice of forum clause. Thus, venue is proper under CPLR 501.

While a counterclaim does not ordinarily affect venue, the assertion of a counterclaim subject to mandatory venue requirements will govern venue. Papp v Moutsinas, 188 AD2d 868 (3rd Dept 1992) [defendant's counterclaim affecting real property within meaning of CPLR 507 required denial of defendant's motion for change of venue]; Sterling Commercial Corp. v Bradford, 32 AD2d 952 (2nd Dept 1969) [the demand for judgment in the counterclaim affected title to real property requiring a change of venue to the county where the property was located]; Zaczek v Zaczek, 27 Misc 2d 740 aff'd, 14 AD2d 808 (2nd Dept 1961) [defendant granted change of venue where his counterclaim sought partition]; Nicoletto v Pettit Supply Corp. of Huntington, 254 AD2d 750 (2nd Dept 1938) [defendant granted change of venue where counterclaim brought the action within the scope of statutory venue provisions]. Thus, where a counterclaim asserts a claim which is subject to specific venue provisions, the counterclaim will determine venue. Such is the case here. Candero's counterclaim for breach of the Agreement requires that the venue of the action be in New York County Supreme Court pursuant to CPLR 501.

The other venue rules of Article 5 of the CPLR are "trumped" by an agreement fixing venue as authorized in CPLR 501. A.C.E. Elevator Co. Inc. v V.J.B. Construction Corp., 192 Misc 2d 258, 261 (S Ct Kings 2002) [contractual venue designation overides the mandate of CPLR 507 which would require venue of a mechanic's lien foreclosure action be in the county where the property is located]. Given the primacy to be accorded a contractual choice of forum, Candero's arguments for change of venue based upon other provisions [*3]of CPLR Article 5 lack any weight. The only instance where the primacy of a contractual venue provision will be ignored is where it is demonstrated "that there is a reason to believe that an impartial trial cannot be had in the proper county" CPLR 510(2), CPLR 501. No such claim is advanced by Candero.

Pursuant to court rules, a postage paid self addressed envelope must be provided to the court should a party wish to receive a copy of the court's decision on a motion.

Dated: New City, New York

March _____, 2005

___________________________

HON. WILLIAM E. SHERWOOD

JUSTICE OF THE SUPREME COURT

APPEARANCES:

Wichler & Gobertz, P. C.

Attorneys for Defendants

400 Rella Boulevard

Suffern, NY 10901

Jacob Azoulay

Attorney for Plaintiff

113-05 Queens Boulevard

Forest Hills, NY 11375