Khan Enter. Constr., Inc. v P & K Contr., Inc.
Annotate this CaseDecided on September 11, 2006
Supreme Court, Nassau County
Khan Enterprise Construction, Inc., Plaintiff,
against
P & K Contracting, Inc., and HARTFORD FIRE INSURANCE COMPANY, Defendants.
03555-06
COUNSEL FOR PLAINTIFF
Theodore Gilbert & Assocs.
185 Great Neck Road
Great Neck, New York 11021
COUNSEL FOR DEFENDANTS
Dunnington, Bartholow & Miller, LLP
477 Madison Avenue - 12th Floor
New York, New York 10022
Leonard B. Austin, J.
Defendants move to transfer venue of this action from Nassau County to Bronx County.
BACKGROUND
Plaintiff Khan Enterprises Construction Inc. ("Khan") entered into a contract with Defendant P & K Contracting Inc. ("P&K") to preform certain construction work being performed at P.S. 64 in the Bronx. Khan alleges it performed the work it was required to perform pursuant to the contract and any change orders. Thus, Khan claims that P & K owes $123,551.50 for the work it performed on the project.
Defendant Hartford Fire Insurance Company ("Hartford") issued a payment bond for the work being performed at P.S. 64. Khan has filed a claim with Hartford for payment which Hartford has failed to pay.
Khan commenced this action seeking to recover the balance due for the work it claims to have performed at P.S. 64.
Khan designated Nassau County as the venue of this action. Venue of the action is premised upon Khan's principal office being in Nassau County. However, Defendants raised as their second affirmative defense that venue was improper.
Paragraph 3(c) of the Hartford payment bond contains a provision requiring any action brought under the bond to be brought in the political subdivision of the state in which the project is located. Defendants assert that based upon this provision, venue of this action should be transferred to the Bronx, the county in which P.S. 64 is located.
DISCUSSION
This motion involves the procedure the court should employ when the plaintiff improperly designates venue and the defendant fails to follow the statutorily prescribed method for obtaining a change of venue.
Plaintiff may commence an action in any county in which any party to the action resides. CPLR 503. See also, Siegel, New York Civil Practice 4th §118. In this case, venue is premised upon Khan's principal place of business being in Nassau County. CPLR 503(c).
Khan's designation of venue is improper. The sole residence of a domestic corporation, for venue purposes, is the county designated as its principal place of business in its certificate of incorporation even if the corporation maintains offices in another county. Hamilton v. Corona Ready Mix, Inc., 21 AD3d 448 (2nd Dept. 2005); and Graziuso v. 2060 Hylan Blvd. Restaurant Corp., 300 AD2d 627 (2nd Dept. 2002). See also, Siegel, New York Civil Practice 4th §119. Notwithstanding the locale of Plaintiff's principal office, its certificate of incorporation designates Queens County as the location of its principal place of business. Thus, if venue is based upon Khan's residence, venue should have been placed in Queens.
By selecting an improper county, Plaintiff forfeited its right to select venue. Ruiz v. Lazala, 26 AD3d 266 (2nd Dept. 2006); and Greenberg v. Kruse, 23 AD3d 347 (2nd Dept. 2005).
However, Defendants have failed to follow the statutory procedure for obtaining a change of venue as of right. To obtain a change of venue as of right, the defendant must serve a demand to change venue either with the answer or before the answer is served. CPLR 511(a). The demand should indicate the county which the defendant asserts is the proper county. CPLR 511(b). Within five (5) days of service of such a demand, plaintiff can either serve a written consent to change venue to the county designated by the defendant or serve an affidavit stating why the county chosen by plaintiff is correct and the county chosen by defendant is not. CPLR 511(b); and Siegel, New York Practice 4th §123. If the defendant serves a demand to change venue and plaintiff responds to the demand by asserting that venue is proper, then defendant [*2]must move within fifteen (15) days to change venue. CPLR 511(b). If the defendant follows this procedure and the county selected by the plaintiff is improper and the county selected by the defendant is proper, venue should be transferred to the county selected by the defendant. Id.
If defendant does not follow this procedure, then a motion to transfer venue becomes one addressed to the discretion of the court. Siegel, New York Practice 4th §123; and 1 New York Civil Practice CPLR ¶ 511.05.
In this circumstance, the Court must determine whether the change of venue will promote the ends of justice (CPLR 510[3]) or whether the contractual venue provision mandates a change of venue (CPLR 501).
Venue must be placed in the county in which one of the parties resides when the action is commenced. CPLR 503. Khan is a resident of Queens County for venue purposes. Department of State records reflect that P&K is a foreign corporation authorized to do business in New York with New York County designated as its principal office in this state. Hartford is a foreign insurance corporation located in Hartford, Connecticut. Therefore, venue in the Bronx would be improper but for the provisions of the bond.
The precise issue raised in this motion was previously decided in Frontier Excavating, Inc. v. St. Paul Fire and Marine Ins. Co., 50 Misc 2d 232 (Sup.Ct. Erie Co.), aff'd. 26 AD2d 794 (4th Dept. 1966); and Flush Metal Partition Corp. v. Guy H. Nuovo Corp., 57 Misc 2d 900 (Sup.Ct. Queens Co. 1968). In both Frontier Excavating and Flush Metal, a sub-contractor commenced an action against the bonding company on a
payment bond which contained a venue provision.
In Frontier Excavating, plaintiff commenced the action in Erie County based upon its principal office. The bond contained a provision which required actions brought on the bond be brought in New York County. In Flush Metal, the bond had a provision requiring action on the bond brought in the political subdivision in the state in which the project was located. The language of the bond in Flush Metal is almost identical to the language contained in the Hartford bond involved in this action. In both Frontier Excavating and Flush Metal, the courts directed a change of venue to the county designated in the bond.
This Court finds nothing which distinguishes this case from either Frontier Excavating or Flush Metal. Therefore, venue should be changed to Bronx County.
Khan's reliance upon this Court's decision in Citicorp Vendor Finance Inc. v. Thierno, 11 Misc 3d 1089(A) (Sup. Ct. Nassau Co. 2006) is misplaced. In Citicorp Vendor, the plaintiff moved to strike defendant's affirmative defense of improper venue. Defendant did not cross-move to change venue or take any other action to contest venue in Nassau County. Since improper venue is not properly raised as an affirmative defense, this Court granted Citicorp's motion and struck the affirmative defense of improper venue.
In this case, Defendants have moved to change venue. Under the circumstances presented and in the exercise of discretion, Defendants' motion should be granted and venue of this action transferred to Bronx County.
Accordingly, it is,
ORDERED, that Defendants' motion to change venue of this action from Nassau County to Bronx County is granted; and it is further,
ORDERED, that the County Clerk of Nassau County upon service of a copy of this order with Notice of Entry and payment of any required fees, is directed to transfer its file in [*3]this action to the County Clerk of Bronx County.
This constitutes the decision and Order of the Court.
Dated: Mineola, NY_____________________________
September 11, 2006Hon. LEONARD B. AUSTIN, J.S.C.
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