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Allied Business Intelligence, Inc v. Tim Rhodes

SUPREME COURT OF THE STATE OF NEW YORK APPELLATE TERM: 9th and 10th JUDICIAL DISTRICTS


August 11, 2011

ALLIED BUSINESS INTELLIGENCE, INC., APPELLANT,
v.
TIM RHODES,
RESPONDENT.

Appeal from an order of the District Court of Nassau County, First District (Andrea Phoenix, J.), dated July 14, 2010.

Allied Bus. Intelligence, Inc. v Rhodes

Appellate Term, Second Department 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 August 11, 2011

PRESENT: NICOLAI, P.J., TANENBAUM and LaCAVA, JJ

The order denied plaintiff's motion for leave to enter a default judgment.

ORDERED that the order is reversed, without costs, and plaintiff's motion for leave to enter a default judgment is granted.

Plaintiff commenced this action to recover, among other things, the $4,000 it had advanced to defendant for a market research analysis report that defendant was required, but failed, to produce pursuant to an agreement between the parties dated November 6, 2008. The agreement contained a forum selection clause, which provided that, "[a]ny dispute arising out of this agreement shall be heard in the State of New York, the County of Nassau." Defendant failed to appear and answer, and plaintiff moved for leave to enter a default judgment. By order dated July 14, 2010, the District Court denied plaintiff's unopposed motion because the complaint failed to allege that defendant's breach of contract stemmed from his business activities in Nassau County.

It is well settled that: "parties to a contract may freely select a forum which will resolve any disputes over the interpretation or performance of the contract. Such clauses are prima facie valid and enforceable unless shown by the resisting party to be unreasonable. Forum selection clauses are enforced because they provide certainty and predictability in the resolution of disputes" (Brooke Group v JCH Syndicate 488, 87 NY2d 530, 534 [1996] [citations omitted]). The burden is on the party attacking the clause to demonstrate: "that enforcement would be unreasonable and unjust or that the clause is invalid because of fraud or overreaching, such that a trial in the contractual forum would be so gravely difficult and inconvenient that the challenging party would, for all practical purposes, be deprived of his or her day in court" (British W. Indies Guar. Trust Co. v Banque Internationale A Luxembourg, 172 AD2d 234 [1991]).

In this case, defendant did not appear in the action to challenge the validity of the forum selection clause on the aforementioned grounds, even though plaintiff had duly served him with the summons and complaint. Thus, there was no basis for the District Court to refuse to enforce the forum selection clause. Accordingly, the order is reversed and plaintiff's motion for leave to enter a default judgment is granted.

Nicolai, P.J., Tanenbaum and LaCava, JJ., concur.

Decision Date: August 11, 2011

20110811

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