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Khing v. Lin

United States District Court, Eastern District of New York

January 26, 2015

MICHAEL KHING and MKS SUSHI, INC., Plaintiffs,
v.
NAY LIN, NAY HLA, and SUSHI AVENUE, INC., Defendants.

LAW OFFICES OF VINCENT S. WONG, Attorney for Plaintiffs

MADIGAN, DAHL & HARLAN, P.A., Attorneys for Defendants

MEMORANDUM & ORDER

STERLING JOHNSON, JR., U.S.D.J.

The instant action was brought by plaintiff Michael Khing (“Khing”), a resident of New York, against individual defendants (and siblings) Nay Lin (“Lin”), and Nay Hla (“Hla”), residents of Minnesota, and Sushi Avenue, Inc. (“Sushi Avenue”), a Minnesota corporation with its principle place of business in Minnesota. Lin and Hla are the owners and operators of Sushi Avenue, a business that runs sushi kiosks in grocery stores and supermarkets. On February 7, 2005, Khing and Sushi Avenue entered into a contract (the “Agreement”). Pursuant to the Agreement, Defendants sold sushi and related foodstuff to Khing, who then sold the sushi at a sushi bar located inside a Gourmet Garage supermarket in the Soho section of Manhattan. The Agreement entitled Khing to roughly 67% of the gross proceeds, minus certain administrative costs. Khing alleges to have paid $3, 500 upfront to Defendant Lin to secure the contract.

Khing claims that, little by little, Defendants decreased his salary in contravention of the Agreement. Specifically, he alleges that “[a]fter 7 months…Khing received a phone call from Lin who informed him that Khing’s share…would be reduced to 60%.” Khing alleges that it was further reduced to 58%.

The parties entered a second agreement on March 12, 2010. In it, the parties agreed that Khing’s compensation would be 60% of gross sales. However, according to the allegations of the Amended Complaint, “[s]tarting around the end of 2012 and continuing into 2013 Defendants began to delay paying” and sent partial payments, such that Plaintiff was still receiving partial payments in January 2014 for sales made in July 2013. Plaintiff claims he is still owed $118, 282.66.

Both agreements contain the following provisions:

It is the intention of the parties to this agreement that this agreement and the performance under this agreement, and all suits and special proceedings under this agreement, be construed in accordance with an under and pursuant to the laws of the State of Minnesota, and that, in any action, special proceeding and other proceeding [t]hat may be brought arising out of, in connection with or hereby [sic] reason of this agreement, the laws of the State of Minnesota, shall be applicable and shall govern to the exclusion of the law of any other forum, without regard to the jurisdiction in which any action or special proceeding may be instituted.
[…]
Any and all suits for any and every breach of this contract may be instituted and maintained in any court of competent jurisdiction in the county of Dakota, State [of] Minnesota.

Plaintiff filed the instant action in this Court on June 27, 2014. Defendants move to dismiss pursuant to 12(b)(1) for lack of subject matter jurisdiction or, in the alternative, on the grounds of forum non conveniens. Based on the submissions of the parties, and for the reasons stated below, the motion is DENIED.

DISCUSSION

“Questions of venue and the enforcement of forum selection clauses are essentially procedural, rather than substantive, in nature.” Jones v. Weibrecht, 901 F.2d 17, 19 (2d Cir. 1990). Therefore, “the district court has the power to ‘decline jurisdiction as a means of enforcing a valid forum selection clause in a contract.’” Carematrix of Massachusetts, Inc., v. Kaplan, 385 F.Supp.2d 195, 197 (S.D.N.Y. 2005) (quoting Mediter. Shipping Co. S.A. Geneva v. POL-Atl., 229 F.3d 397 (2d Cir. 2000)); see also Liberty USA Corp. v. Buyer’s Choice Ins. Agency, LLC, 386 F.Supp.2d 421, 423-424 (S.D.N.Y. 2005) (collecting cases).

The parties do not dispute that Phillips v. Audio Active Ltd., 494 F.3d 378 (2d Cir. 2007), governs the four-part test used to determine whether a forum selection clause mandates dismissal. That test asks (1) whether the clause was reasonably communicated to the party it is being offered against; (2) whether the clause is mandatory or permissive; and (3) whether the claims and parties of the instant action are subject to the clause. Id. at 383. If these three elements are met, the clause is presumptively enforceable and the party resisting enforcement has the opportunity to demonstrate that the clause ought not to ...


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