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Astarita v. Acme Bus Corp.

Supreme Court, Nassau County

February 14, 2017

Joanne Fuller Astarita, Plaintiff,
v.
Acme Bus Corp., ABA Transportation Holding Co., Inc., Baumann & Son Buses, Inc. and Robert J. Heartland, Defendants.

          Wilson Grochow & Druker, Attorneys for Plaintiff Joanne Fuller Astarita Lawrence Wilson, Esq., of counsel

          Lewis Brisbois Bisgaard & Smith LLP, Attorneys for Defendants ABA Transportation Holding Co. Inc., Baumann & Son Buses, Inc. and Robert J. Heartland Naomi Skura, Esq., of counsel

          HON. JACK L. LIBERT J.S.C.

         By order dated November 22, 2016, the undersigned directed a change of venue from Nassau County to Suffolk County. Plaintiff moved for leave to reargue asserting that the court misapplied the law in its interpretation of two contradictory documents of the Department of State. The documents in conflict are i) the certificate of incorporation of Defendant Acme Bus Corp. ("Acme") listing its principal place of business as "145 Lawrence Avenue, Cedarhurst, County of Nassau" and ii) the "Entity Information" excerpted from the Department of State database which lists Acme's principal executive office as "3355 Veterans Memorial Hwy, Ronkonkoma, New York" which is a Suffolk County location. The database is readily available to the public on the Department of State's website. Because of the paucity of decisions and some conflicting decisions concerning the application of BCL 408 (biennial registration requirements for corporations) to CPLR 503 (siting of venue) the reargument requested by plaintiff is appropriate.

         Background

         Plaintiff seeks damages for personal injuries arising out of a vehicular accident that occurred in Suffolk County on July 5, 2016. The summons and complaint designates Nassau County as the proper venue alleging Acme is a resident of Nassau County because its principal office is located in that county. Acme alleges that Suffolk County is the proper venue because it is a resident of Suffolk County with its principal office located at 3355 Veterans Memorial Highway, Ronkonkoma, New York, 11779.

         CPLR §503 (a) and (c) provide that the place of trial "shall be in the county in which one of the parties resides when [the action] was commenced" (§503 (a)) and that a "domestic corporation shall be deemed a resident of the county in which its principal office is located."(§503 (c)). The party seeking a change of venue must prove that either "(1) the county designated for that purpose is not a proper county; or (2) there is a reason to believe that an impartial trial cannot be had in the proper county; or (3) the convenience of material witnesses and the ends of justice will be promoted by the change". (CPLR §510).

         In support of its assertion that Nassau County is an improper venue, Acme submits a current print out from the New York State Division of Corporations database which lists the "Principal Executive Office" of Acme Bus Corp. as "3355 Veterans Memorial Highway, Ronkonkama, [Suffolk County] New York, 11779." The affidavit of Robert J. Froehlich, a corporate manager of Acme confirms that this corporate defendant maintains its principal office in Suffolk County. In support of its position that Acme resides in Nassau County, plaintiff submits Acme's original certificate of incorporation filed in 1960 and never amended. That certificate designates the office of corporation to be "145 Lawrence Avenue, Town of Hempstead, Village of Cedarhurst, County of Nassau, State of New York."

         Discussion

         For nearly 160 years the county designated in certificate of incorporation was the exclusive determinant of "residence" of that corporation irrespective of any subsequent physical relocation of corporate offices (see Western Transportation Company v Scheu et al., 5 E.P. Smith 408, 19 NY [1859]).

Unless the Legislature intended that the certificate should be conclusive, as to the location of the principal office, it is difficult to see any adequate motive for requiring the statement [in the certificate of incorporation] to be made. It is in no manner essential to the existence of a corporation that the place of its principal office should be fixed, or even that it should have any such office. We can, however, see obvious reasons why it is expedient that corporations should be deemed to have a location for certain purposes, among which is that of taxation; and that this should be definite and certain, and not subject to fluctuation or doubt. When the question is left open to parol proof, serious difficulties and embarrassments must often arise. What makes the office of a corporation its principal office? Is it the residence of its officers? or does it depend upon the amount of the business done, or the number of clerks kept at a particular office? These and other like questions are of difficult solution where the question is left open and at large, and necessarily tend to produce controversies and litigation. To avoid disputes upon the subject, was, I apprehend, one motive for requiring the location to be fixed by the certificate... the object of the Legislature, in requiring these corporations to designate the location of their principal office in the certificate filed, must have been to produce that certainty on the subject, which could not otherwise be attained, and that the provision did not originate in any supposed necessity for having the "principal office" and the place of the principal business of the corporation identical.

(Id. at 410, 411).

         Western is still good law and is frequently cited. (see, Data-Guide Inc. v. Marcus, 170 F.Supp. 559, 561, E.D.NY, In re General Assignment for Benefit of Creditors of Norma Footwear Corp., 153 N.Y.S.2d 80, 82, N.Y.A.D. 1 Dept., Fletcher Cyclopedia Law of Private Corporations s 4042). A divided First Department upheld this 19th century rule in Discolo v River Gas & Wash Corp. et al., 41 A.D.3d 126, 837 N.Y.S.2d 95, 2007 NY Slip Op. 04712; but the dissenting opinion of Presiding Justice Saxe (Justice Malone joining) states:

The majority relies on the often-cited rule that the sole legal residence of a corporation for venue purposes is the county designated in its certificate of incorporation (citing Hill v Delta Intl. Mach. Corp., 16 A.D.3d 285 [2005]; see also Velasquez v Delaware Riv. Val. Lease Corp., 18 A.D.3d 359, 360 [2005]). I do not dispute that this is the prevailing rule. But, I find it difficult to accept that the law requires an unthinking, automatic application of this rule where a more recent document, which the law requires a corporation to file every two years with the Department of State, lists the corporation's "principal executive office" at a location other than the "principal office" listed in the certificate of incorporation... It is particularly offensive to permit a defendant to use this rule as a shield to avoid a lawsuit in the only county ...

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