Bongo-Astier v Carefree Lifestyles, Inc.
Annotate this CaseDecided on March 18, 2010
Civil Court of the City of New York, New York County
Yamilee Bongo-Astier, Plaintiff,
against
Carefree Lifestyles, Inc., LARRY RUDOLPH, ANTHONY MAROTTA and GARY MAROTTA, Decision and Order, Defendants.
21993/09
Arthur F. Engoron, J.
Upon the foregoing papers the instant motion is granted in part and denied
in part.
In this action plaintiff Yamilee Bongo-Astier alleges that defendant Carefree
Lifestyles, Inc. scammed her with a classic "bait and switch": they enticed her with an offer to
rent a certain vacation property in Florida; pursuant to a purported written contract ("the
contract"), she paid them a deposit totaling $22,540; and one day before the rental was to begin
they told her that the property was unavailable but offered her a substitute that she had
previously rejected as unsuitable. She refused the "switch"; they refused to refund her deposit;
and the instant lawsuit ensued.
Defendants now move to dismiss the complaint on two unrelated grounds: first, that
the contract contains a forum-selection clause stating that "All lawsuits will occur in Dade
County, Florida"; and, second, that as the contract was with the corporate defendant, the
individual defendants are protected by the "corporate veil" and are not personally liable.
Forum-Selection Clause
Plaintiff argues that the forum-selection clause is not mandatory, as it does not use
such terms as "shall" or "exclusive." Rather, plaintiff argues, the clause in question is a
consent-to-personal-jurisdiction clause. This Court finds that argument unavailing as a matter of
contract interpretation and logic: if "all lawsuits will occur in Dade County," then none can occur
in New York County.
Plaintiff also argues, in effect, that the forum-selection clause is not binding because
the contract was entered into in bad faith, was permeated with fraud, etc., and, thus, was void ab
initio. The problem with this argument, as this Court sees the matter, is that the Court cannot
simply take the plaintiff's word for it, and if defendants are compelled to come into New York to
demonstrate that the contract was not entered into in bad faith and is binding, then they have lost
much of the [*2]value of the forum-selection clause, for which
they bargained and to which plaintiff agreed.
Then again, what if defendants really are perpetrating scams on countless New
Yorkers, who are forced to go all the way to Florida to vindicate their rights after having
innocently entered into contracts in New York? Even if some of our fleeced denizens do just
that, and are vindicated, defendants will get to keep the rest of their ill-gotten gains.
From time immemorial judges have sustained potentially meritorious claims
pursuant to an ancient legal doctrine: "We are not going to let them get away with this." But how
can the Court assume defendants are getting away with something without giving them the right
to tell their side of the story, which would be in a lawsuit in New York, not Dade, County, which
would violate the intent of the forum-selection clause?
In this particular case, at least, the Court can do that because there is no affidavit
from an individual with personal knowledge (or, indeed, from anyone) even attempting to justify
or defend against what is alleged to be, and for all that appears may actually be, a scam from the
get-go. An intentional scam would permeate the contract with fraud and render it void ab initio
and unenforceable.
Numerous recent cases have vitiated forum-selection clauses. As summarized in
Strujan v AOL, 12 Misc 3d 1160(A), 2006 NY Slip Op 50981(U) (Civ Ct, NY County
2006) (Moulton, J.):
A contractual forum selection clause is enforceable unless it is shown by the
challenging party to be unreasonable, unjust, in contravention of public policy, invalid due to
fraud or overreaching, or it is shown that a trial in a selected forum would effectively deprive a
party of her day in court.
See also, DeSola Group, Inc. v
Coors Brewing Co., 199 AD2d 141 (1st Dept 1993) ("[as] plaintiff's allegations of fraud
pervading the Agreement would render the entire Agreement void, the forum selection clause
contained therein is unenforceable"); Oxman v Amoroso, 172 Misc 2d 773, 780
(Yonkers City Ct, 1997) (court refused to "allo[w] defendant to solicit and sell its services in
New York State while at the same time chilling and extinguishing meritorious claims by forcing
injured consumers to bring suit in a distant and economically inaccessible forum"). As stated in
Oxman, "Forum selection clauses are among the most onerous and overreaching of all
clauses that may appear in consumer contracts. The impact of these clauses is substantial and can
effectively extinguish legitimate consumer claims . . . ." Even the United States Supreme Court
has subjected certain "forum-selection clauses . . . to judicial scrutiny for fundamental fairness."
Carnival Cruise Lines v Shute, 499 US 585, 595 (1991).
This Court might not go as far as the courts in DeSola and Oxman
did in vitiating forum-selection clauses, because anybody can allege fraud. But, as noted
above, in the instant case we have very specific allegations of fraud by a person with personal
knowledge, and we have no refutation from the other side. This Court does not think it is asking
too much of a [*3]defendant seeking to dismiss a case by relying
on a burdensome forum-selection clause to submit an affidavit explaining the basics of the
contract and justifying defendant's actions thereunder. The covenant of good faith and fair
dealing implied in every contract would seem to require no less. Furthermore, New York State
has a strong interest in protecting its citizens from (alleged) out-of-state predators. Finally, at
least in this case, requiring defendant to defend in New York should not be particularly onerous,
given that defendant apparently maintains a strong New York presence, including keeping
offices and advertising within the state.
The Individual Defendants
Although she contracted with the corporate defendant, plaintiff alleges that the
individual defendants are "abusing the corporate form" and are therefore personally liable.
Defendants respond that Larry Rudolph is simply an employee of the corporation and that the
other two individuals are corporate officers who did not contract with plaintiff and are otherwise
protected by the corporate form. The instant action must be dismissed as to the individual
defendants for two independent reasons. First, this court does not have subject matter jurisdiction
to pierce the corporate veil. 19 W. 45th St. Realty Co. v Darom Elec. Corp., 233 AD2d
184, 185 (1st Dept 1996) ("piercing the corporate veil is a form of equitable relief . . . which
Civil Court does not have jurisdiction to grant"). Second, plaintiff has not alleged that she had
personal dealings with either of the corporate officers, and there is no evidence that Larry
Rudolph is anything other than an employee of the corporation. Dismissal is without prejudice to
being brought in a court of competent jurisdiction upon a proper set of allegations.
Conclusion
Based on the foregoing, defendants' motion to dismiss is granted solely to the extent
of dismissing, without prejudice, plaintiff's claims against the individual defendants, and
severing said individuals from the subject action. Defendants' motion is denied to the extent that
it seeks dismissal as against the corporate defendant, which is hereby directed to serve and file
an answer to the complaint within 30 days of the date hereof.
Dated:March 18, 2010
Arthur F. Engoron, J.C.C.
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