Thales Cryogenics, B.V. v Tri-Gem Intl., Inc.

[*1] Thales Cryogenics, B.V. v Tri-Gem Intl., Inc. 2006 NY Slip Op 51945(U) [13 Misc 3d 1222(A)] Decided on October 5, 2006 Supreme Court, Nassau County Austin, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. As corrected in part through December 6, 2006; it will not be published in the printed Official Reports.

Decided on October 5, 2006
Supreme Court, Nassau County

Thales Cryogenics, B.V., Plaintiff,

against

Tri-Gem International, Inc. and James Kang, Defendants.



2243/05



COUNSEL FOR PLAINTIFF

McCusker, Anselmi, Rosen,

Carvelli & Walsh, P.A.

156 West 56th Street Suite 1702

New York, NY 10019

COUNSEL FOR DEFENDANT

Guararra & Zaitz

100 Park Avenue 20th Floor

New York, NY 10017

Leonard B. Austin, J.

Plaintiff moves for summary judgment on it first cause of action. Defendants cross-move to dismiss this action on the grounds of forum non-conveniens and

contractual forum selection clause.

BACKGROUND

Plaintiff, Thales Cryogenics, B.V. ("Thales"), alleges that, on April 3, 2003, it received a fax from Defendant, James Kang ("Kang"), an agent of Tri-Gem International, Inc. ("Tri-Gem"), requesting a price quote on engines manufactured by Thales. The engines were to be shipped to the Defense Procurement Agency of the Republic of Korea.

Thales furnished Kang with a price quote for the engines.The parties then exchanged a series of e-mails regarding the price.

On July 15, 2003, Kang sent a purchase order for 112 engines at the agreed upon price to Thales. The purchase order indicates the payment terms as "Net 30". Thales confirmed by purchase order by fax dated July 18, 2003. The confirming fax set forth the number of units and the price and the terms of payment as "Net 30 days". The confirming fax indicated delivery "FCA Eindhoven, according inco-terms 2000 to Korea" as well as the general terms and conditions of the sale by Thales which were applicable to the transaction. The fax contained two possible delivery schedules, one taking into account Thales possible other commitments and one excluding their other possible commitments. Both proposed delivery schedules required full delivery by December 24, 2003.

Delivery time was dependent upon receipt of an original End User Statement from the Korean Government to obtain an export license.

In response to confirming fax, Kang sent an e-mail to Thales indicating that Tri-Gem would have its customer prepare the End User Certificate and send the original to Thales. This fax requested one full shipment at the end of December 2003 rather than several partial shipments.

Thales manufactured the engines. On December 10, 2003, Thales shipped the engines to the Defense Procurement Agency of the Republic of Korea, Busan, Korea. A bill of lading reflecting the shipment of the goods was issued on December 29, 2003.

On December 22, 2003, Thales issued an invoice to Tri-Gem demanding payment of the full amount due on the contract. Thales has not received payment.

Tri-Gem has not submitted any evidence in opposition to Thales' motion for summary judgment. Instead, it relies upon Article 18.1 of Thales' General Terms and [*2]Conditions of Sales which provide that the agreement would be governed by Dutch law, under the exclusion of the Vienna Convention on the Sale of Goods. Tri-Gem asserts that Thales has failed to establish its entitlement to judgment as a matter of law under Dutch law.

Tri-Gem further asserts Article 19.1 of Thales General Terms and Conditions of Sales contains a venue selection provision that requires this action be brought in the court of competent jurisdiction in Almelo, The Netherlands. Since the action was commenced in an improper venue, the action must be dismissed.

DISCUSSION

A. Contractual Choice of Law

The party moving for summary judgment must make a prima facie showing of entitlement to judgment as a matter of law. Lesocovich v. 180 Madison Avenue Corp.,

81 NY2d 982 (1993); and Zuckerman v. City of New York, 49 NY2d 557 (1980). Thales has failed to make such a showing based upon the law applicable to this case.

New York will enforce contractual choice of law provisions provided that the law of the jurisdiction selected bears a reasonable relationship to the agreement and the law selected does not violate fundamental public policy of the State of New York. Welsbach Electric Corp. v. Mastec North America, Inc., 23 AD3d 639 (2nd Dept. 2005); and Culbert v. Rols Capital Co., 184 AD2d 612 (2nd Dept. 1992). Article 18.1 of the contract upon which Thales moves for summary judgment provides that the agreement is to be governed by Dutch law under the exclusion of the Vienna Convention on the Sale of Goods.

Dutch law bears a reasonable relationship to the agreement and the transaction. Thales is located in Eindhoven, The Netherlands. The engines that were subject of the agreement were manufactured at their plant in The Netherlands. They were shipped from Rotterdam directly to South Korea.

On this motion, neither of the parties has placed any material establishing the Dutch law relevant to this transaction before the Court Therefore, the Court cannot determine whether enforcement of Dutch law would violate New York's public policy.

Thales' assertion that it is the obligation of Tri-Gem to establish that, under the relevant provisions of Dutch law, it would not be entitled to judgment as a matter of law misstates the law of summary judgment. Since the contract specifically provides that it is to be interpreted in accordance with Dutch law, Thales has the obligation of pleading and proving the Dutch law applicable to this transaction. See, Siegel, New York Civil Practice 4th §216; and CPLR 3016(e), 4511(b).

The burden to establish the existence of triable issues of fact does not shift to the party opposing the motion unless and until the movant establishes a prima facie entitlement to judgment as a matter of law. Winegrad v. New York University Medical Center, supra; Widmaier v. Master Products, Mfg., 9 AD3d 362 (2nd Dept., 2004); and Ron v. New York City Housing Auth., 262 AD2d 76 (1st Dept., 1999). Thales has failed to establish that it is entitled to judgment as a matter of law under Dutch law under the exclusion to the Vienna Convention on Sale of Goods. Therefore, the burden of establishing the existence of triable issues of fact never shifted to the defendant.

In its reply papers, Thales asserts the choice of law language is ambiguous. Therefore, the choice of law provisions set forth in Uniform Commercial Code §1-105 [*3]should be applied. This would require the application of New York law.

The question of whether an agreement is ambiguous is an question or law to be determined by the court. W.W.W. Associates, Inc. v. Giancontieri, 77 NY2d 157 (1990); and 9394 LLC v. Farris, 10 AD3d 708 (2nd Dept. 2004). An agreement is not ambiguous simply because the parties urge a different interpretation of the terms of the agreement. Bethlehem Steel Co. v. Turner Const. Co., 2 NY2d 456 (1957); and Elletson v. Bonded Insulation Co., Inc., 272 AD2d 825 (3rd Dept. 2000).

In this case, the choice of law provision of the agreement upon which Thales relies is not ambiguous.

Even if it was, Thales' argument that New York law applies would not entitle it to summary judgment. Once an agreement is found to be ambiguous, the court must consider parol or extrinsic evidence to determine the intent of the parties. See, South Road Assocs., LLC. v. IBM Corp., 4 NY2d 272 (2005); and 767 Third Avenue, LLC v. Orix Capital Markets, LLC, 26 AD3d 216 (1st Dept. 2006). Where the terms of an agreement are ambiguous, its interpretation presents questions of fact which may not resolved on a motion for summary judgment. Pepco Const. of New York, Inc. v. CNA Ins. Co., 15 AD3d 464 (2nd Dept. 2005); and Jackson Heights Medical Group, P.C. v. Complex Corp., 222 AD2d 409 (2nd Dept. 1995).

Since Thales has failed to establish a prima facie entitlement to judgment as a matter of law, its motion for summary judgment must be denied.

B. Forum Selection

Defendants assert the action should be dismissed because Article 19.1 of the contract contains a forum selection provision requiring all actions arising out of the contract be brought in Almelo, The Netherlands.

Contractual forum selection clauses are prima facie valid and enforceable. Premium Risk Group, Inc v. Legion Insurance Company, 294 AD2d 345 (2nd Dept. 2002); and Koko Contracting Inc. v. Environmental Asbestos Removal Corp., 272 AD2d 585 (2nd Dept. 2000).

However Article 19.2 grants Thales the option of bringing an action arising out of the contract in any court that would have jurisdiction.

An agreement that is clear and unambiguous will be enforced in accordance with its terms. South Road Assocs., LLC v. International Business Machines Corp., supra; Greenfield v. Philles Records, Inc., 98 NY2d 562 (2002); and W.W.W. Assocs. v. Giancontieri, supra. Thus, the Court will determine the intent of the parties from the language of the agreement. Greenfield v. Philles Records, Inc., supra.

Terms of a contract are to be interpreted in accordance with their plain meaning.

Computer Associates International, Inc. v. U.S. Balloon Manufacturing Co., Inc., 10 AD3d 699 (2nd Dept. 2004); and Tikotzky v. New York City Transit Auth., 286 AD2d 493 (2nd Dept. 2001).

The court is to give "...practical interpretation to the language employed and the parties reasonable expectations." Slamow v. Del Col, 174 AD2d 725, 726 (2nd Dept. 1991), aff'd. 79 NY2d 1016 (1992). See also, AFBT-II, LLC v. Country Village on Mooney Pond, Inc., 305 AD2d 340 (2nd Dept. 2003); and Del Vecchio v. Cohen, 299 [*4]AD2d 426 (2nd Dept. 2001).

Articles 19.1 and 19.2(a) must be read together. Article 19.1 provides that disputes arising out of the agreement shall be "...settled by the competent court in Almelo." Article 19.2(a) specifically grants the Contractor (Thales) the "...power to opt for the court that is competent in accordance with the law to settle any dispute." Thus, Thales was granted the option bringing an action arising out of the contract in Almelo or any other court that would have personal jurisdiction over the parties and subject matter jurisdiction over the dispute. This Court unquestionably has personal jurisdiction over the parties and subject matter jurisdiction over the dispute.

To the extent the agreement can be read as a mandatory contractual venue provision, Thales' commencement of this action constitutes a waiver of that provision.

"Waiver is the voluntary abandonment or relinquishment of a know right, which, except for such waiver, the party would have enjoyed (citations omitted)." P & D Cards and Gifts, Inc. v. Matejka, 150 AD2d 660, 662 (2nd Dept. 1989).

CPLR 327(a) does not require dismissal simply because the plaintiff is a foreign corporation. The party seeking dismissal on this basis must establish that the selection of New York as the venue will not serve the interests of substantial justice. Banco Ambrosiano, S.P.A. v. Artoc Bank & Trust Co., 62 NY2d 65 (1984); and Yoshida Printing Co., Inc. v. Aiba, 213 AD2d 275 (1st Dept. 1995); and Stamm v. Deloitte and Touche, 202 AD2d 413 (2nd Dept. 1994).

It is hard to comprehend how Tri-Gem, a domestic corporation whose principal office is located in Great Neck, will be inconvenienced by having the action tried in Nassau County. See. Wittisch v. Wittisch, 210 AD2d 138 (1st Dept. 1994).

Defendants have failed to establish that any witnesses whose testimony is material to its defense and whose testimony could be compelled in The Netherlands will be unavailable in New York. See, Zainal v. America-Europe-Asia International Trade and Management Consultants, Ltd., 248 AD2d 279 (1st Dept. 1998); and Neville v. Anglo American Management Corp., 191 AD2d 240 (1st Dept. 1993).

The fact that some of the witnesses may not speak English, that documents may have to be translated into English or that the court may have to apply foreign law does not render New York an inconvenient forum Yoshida Printing Co., Ltd. v. Aiba, supra.

Since Nassau County is a proper venue for this action and Defendants have failed to establish that the contractual venue provision or substantial justice mandates this action be tried in another venue, Defendants' cross-motion to dismiss must be denied.

Accordingly, it is,

ORDERED, that Plaintiff's motion for summary judgment is denied; and it is further,

ORDERED, that Defendants' cross-motion to dismiss the complaint is denied; and it is further, [*5]

ORDERED, that counsel for the parties are directed to appear for a preliminary conference on November 20, 2006 at 9:30 a.m.

This constitutes the decision and order of this Court.

Dated: Mineola, NY

October 5, 2006

____________________________

Hon. LEONARD B. AUSTIN, J.S.C.