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Geico v. Star and Strand Transportation, Inc.

Supreme Court, Albany County

September 26, 2019

GEICO a/s/o SHARON DYE, Plaintiff,
Star and Strand Transportation, Inc., and PATRICK COONS, Defendants.

          Law Office of Bryan M. Kulak By: Christen Ferrara, Esq. Attorneys for Plaintiff

          Boeggeman, Corde, Ondrovic & Hurley, P.C. By: Richard G. Corde, Esq. Attorneys for Defendants

          David A. Weinstein, J.

         The matter now before me arises out of an automobile accident that took place on June 8, 2016 in the City of Albany, Albany County, involving a vehicle driven by defendant Patrick Coons and one driven by Sharon Dye, the subrogor of plaintiff GEICO. Coons' automobile was owned by defendant Star and Strand Transportation, Inc. ("Star"). The complaint alleges that Dye sustained property damage of $7, 168.10, and GEICO incurred rental costs of $1, 450 as a result of the accident (Complaint ¶¶ 15-16). Plaintiff seeks to recover these costs (a total of $8, 618.10) in this subrogation action.

         The complaint avers that Dye is a resident of Albany County, and Coons is a resident of Nassau County [1] (Complaint ¶¶ 2, 5). The pleading does not identify a principal place of business for Star, but lists its address as Troy, NY, in Rensselaer County, which is also listed as its principal place of business in the affirmation of defendants' counsel (see Defendants' Attorney Affirmation ["Def Aff"] ¶ 4).

         In its complaint, GEICO placed venue in Orange County, stating as the basis for such that it is "Plaintiff's place of business." Defendant filed an answer, listing improper venue among its defenses. It subsequently served a Demand for Change of Venue dated July 22, 2019, seeking to have this case heard in the County of Albany. The present motion seeking such a change of venue followed.

         Defendants make their motion pursuant to CPLR 511, on the ground that venue was improperly placed in Orange County in the first instance, and alternatively under CPLR 510, on the ground that the convenience of the witnesses would be served by the transfer. [2] Since I grant the motion on the first ground, I need not address the second.

         CPLR 509 provides that "the place of trial of an action shall be in the county designated by the plaintiff, unless the place of trial is changed to another county by order upon motion, or by consent...." Here, plaintiff premises its placement of venue in Orange County on CPLR 503. CPLR 503(a) states:

"Except where otherwise prescribed by law, the place of trial shall be in the county in which one of the parties resided when it was commenced; the county in which a substantial part of the events or omissions giving rise to the claim occurred; or, if none of the parties then resided in the state, in any county designated by the plaintiff. A party resident in more than one county shall be deemed a resident of each such county."

         The statute further provides that a corporation "shall be deemed a resident of the county in which its principal office is located" (CPLR 503[c]). As a general rule, foreign corporations doing business in New York must designate '[t]he county within this state in which its office is to be located" (Business Corporation Law ["BCL"] § 1304[a][5]), and the "principal office" for purposes of venue has generally been deemed to be the one designated under the BCL (see American Builders & Contractors Supply Co., Inc. v Capitaland Home Imp. Showroom, LLC, 128 A.D.3d 870, 871 [2d Dept 2015]["[f]or purposes of venue, the sole residence of a foreign corporation is the county in which its principal office is located, as designated in its application for authority to conduct business filed with the State of New York..., regardless of where it transacts business or maintains its actual principal office"] [citing numerous cases]; see also Janis v Janson Supermarkets LLC, 161 A.D.3d 480 [1st Dept 2018] [designation under BCL controlling, even if corporation does not have an office in that county]).

         Plaintiff notes that as a foreign insurer, it is exempt from the BCL designation requirement. For this proposition it points to Insurance Law § 1102(d), a statute which while it makes no reference to the BCL provision, allows the Superintendent of Financial Services to issue a license to an out-of-state insurer to do business in this State upon submission of certain information, including the location of the corporation's home office, but not including the New York county where its principal office is to be located.

         Geico argues that since an out-of-state insurer is not required to designate a county where its office is located, it may select any county where it has an office as an appropriate place for venue under CPLR 503. There is a line of trial court authority which lends support to this view (see State Farm Ins. Co. v. Brother Transp., Inc., 15 Misc.3d 1110');">15 Misc.3d 1110 [A] [Sup Ct, Nassau Cty Feb 15, 2007]; Pennsylvania Mfrs. Ass'n Ins. Co. v. Liberty Mut. Ins. Co., [Sup Ct, Westchester Cty Apr 26, 2006], citing General Acc. Fire & Life Assur. Corp. v Allcity Ins. Co., 53 Misc.2d 596 [Sup Ct, Nassau Cty 1967]).

         As stated in State Farm Ins. Co., the rationale for these rulings is that "allowing a foreign insurance company residence in any county where they maintain an office is consistent with CPLR §503(a), which provides that a party residing in more than one county shall be deemed a resident of each such county" (15 Misc.3d 1110');">15 Misc.3d 1110[A], at *2). It does not follow, however, that this provision allows a court to rewrite the statute to expand the definition of "resident" under CPLR Article 5 in the first instance. But that is just what the interpretation proffered by Geico would do, by allowing a foreign insurance corporation to place venue not just at the location of its "principal office" as provided by the statutory text, but where any of its offices is located. Neither section 503(a) nor any other of the CPLR's venue provisions supports such a reading.

         To the contrary, there are two alternative conclusions which may flow from the fact that foreign insurers need not register its principal office, neither of which are in conflict with the statute's language. First, it could be held that no "principal office" exists in this State, and the plaintiff must therefore select an alternative basis for venue. Indeed, the statute specifically contemplates that there may be a circumstance where none of the parties has a "residence" in the State (see CPLR 503[a]). The second possibility is that where there is no BCL certification, some other understanding of the term "principal office" may be used (see Dubiac v Travelers Ins. Corp.,121 Misc.2d 1090');">121 Misc.2d 1090 [Sup Ct, New York Cty 1983] ["Nothing in the CPLR states that there is no principal office absent a designation" under the BCL; insurer's admission in pleadings as to county of principal office sufficed for purposes of CPLR 503(c)]). Indeed, a number of decisions have specifically identified a "principal office" of a foreign insurance corporation for purposes of placing venue (see HVT, Inc. v. Safeco Ins. Co. of America, 77 A.D.3d 255');">77 A.D.3d 255 [2d Dept 2012] [finding venue in county that insurer attested via affidavits was its "principal place of business"]; Providence Washington Ins. Co. v Squier Corp. 31 A.D.2d 514 [1st Dept 1968]["Since it appears that plaintiff [foreign insurer] maintains its principal office for the conduct of its business in ...

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