Preview
FILED: NASSAU COUNTY CLERK 09/03/2015 11:04 AM INDEX NO. 604244/2015
NYSCEF DOC. NO. 15 RECEIVED NYSCEF: 09/03/2015
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NASSAU
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PARTNERS IN SAFETY INC.,
Plaintiff, HON. Arthur Diamond
Assigned
- againstÂ
: Inde)( No. 604244/2015
CARDWORKS ACQUIRING LLC and
MERRICK BANK CORPORATION, :RETURN DATE: 9-11-15
Defendants.
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PLAINTIFF'S MEMORANDUM OF LAW IN
OPPOSITION TO DEFENDANTS' MOTION TO DISMISS
Dated: Garden City, New York
September 3, 2015
FRANKLIN C. HYMAN, P.C.
Attorney for Plaintiff
595 Stewart Avenue
Suite410
Garden City, NY 11530
(516) 745-0700
TABLE OF CONTENTS
Page(s)
TABLE OF AUTHORITIES .........................................................................2
PRELIMINARY STATEMENT ..................................................................... 3
POINT I ................................................................................................... 3
Plaintiff is not bound by Defendant's agreement
POINT II................................................................................................... 5
Defendant's documentary evidence is not conclusive, nor undeniable
POINT III ................................................................................................ 5
Plaintiff s venue selection based on the residence of the Defendants
in New York is correct and its Complaint cannot be dismissed
POINT IV ................................................................................................ 6
The triable issue of fact mandates the denial of Defendant's motion
POINT V ................................................................................................... 7
The forum selection clause in Defendant's agreement is invalid due to fraud
and overreaching
POINT VI ..................................................................................................8
Defendant's motion is based on pure speculation and surmise and must be denied
POINT VII .................................................................................................9
There should be a preliminary trial on the famed issue of which contract prevails
CONCLUSION................. ,.................................. ,....................................... 10
1
TABLE OF AUTHORITIES
Cases
DeSola Group v Coors Brewing Co., 199 AD2d 141,605 NYS2d 83 .................... 3,7
Colby v. Ben Const Corp., 57 Misc2d 850,293 NYS2d 759 .............................. .4
.Lorbrook Corp v. G&T Industries, Inc., 162 AD2d 69,562 NYS2d 978 ............... .4
Joseph Schultz & Cov. Camden Fire Ins. Ass'n. (1952) 304 NY 143
106 NE2d 273 ............................................................................4
Lally v. Cronen (1928) 247 NY 58; 159 NE 723 remittur denied
247 NY 575, 161 NE 188 ....................................................................................4
Hyde Park Owners Corp. v. Kew Gardens Tenant League 118 AD3d 670,
987 NYS2d 399 (2014 2nd Dept.) ..............................................................5
Sunset Cafe Inc. v. Melt's Suif & Sports Corp., 103 AD3d 707, 959 NYS2d 700 .....5
United States Fid & Guar Co v. Ragusa, 600 NYS2d 40 (1 st Dept. 1993) ..............6
Freifeld v. Native Am. Energy Group Inc., 2010 NY Misc. Lexus
44592010 NY Slip Op 32524 CU)................. ,'" .. , ............................. 7
International Roofing Corp. v. Van Der Verr, 43 Misc2d 93,250 NYS2d 387 ........9
Federal Housecraft v. Faria, 28 Misc2d 155 .................................................9
Statutes:
New York Civil Practice and Rules (CPLR) Section 3211(a)(1) .....................5
New York Civil Practice and Rules (CPLR) Section 503 (a) and 509 ..............5
2
PRELIMINARY STATEMENT
Plaintiff, Partners in Safety Inc. (Plaintiff) through their attorneys, Franklin C. Hyman,
PC respectfully submits the following memorandum oflaw in opposition to the CPLR
3211(a)(l) motion to dismiss (founded upon documentary evidence) by Defendants Cardworks
Acquiring LLC (Cardworks) and Merrick Bank Corporation (the Bank) (collectively the
"Defendants").
Defendant's motion is based solely on their contention that the parties agreed to a forum
selection provision in their contract mandating that this action be brought in the State of Utah.
Accordingly, plaintiffs opposition will be based solely on that issue.
POINT I
PLAINTIFF IS NOT BOUND BY DEFENDANT'S AGREElVIENT
A forum selection clause is inapplicable where Plaintiff s complaint does not pertain to
the agreement containing such clause. See DeSola Group v Coors Brewing Co., 199 AD2d 141,
605 NYS2d 83
This action arises out of Plaintiffs allegation that it was improperly charged
approximately $25,000 in service fees by Defendants in violation of the parties' written
agreement.
As to the written agreement being sued on, Plaintiff respectfully refers the Court to the
accompanying Affidavit of Amy Snyder sworn to August 25, 2015, and her Exhibit I annexed
thereto (the "Snyder Aff." or "Snyder"). I
I Snyder has actual knowledge of the facts as opposed to the affidavit of Russell Berman who has no personal
knowledge of any facts concerning the transaction between the parties.
3
According to Snyder, the contractual obligations allegedly breached are set forth in the
Merchant Application and Agreement she signed dated 7-12-13. (Exhibit I attached to her
affidavit) She denies any other agreement. 2
At the time Plaintiff executed Exhibit I, Defendants, through their sales agents, gave
Snyder a copy and said that is all that she needed.
Notably Exhibit I does not have a forum selection provision.
New York adheres to the fundamental principal of contract law that a party cannot be
held to have contracted if there was no assent. Joseph Schultz & Co v. Camden Fire Ins. Ass'n.
(l952) 304 NY 143, 106 NE2d 273 Mutual assent is essential to the formation of a contract.
Lally v. Cronen (1928) 247 NY 58; 159 NE 723 remittur denied 247 NY 575, 161 NE 188.
See also; Lorbrook Corp v. G&T Industries, Inc., 162 AD2d 69,562 NYS2d 978 where
the Court held that where a party unilaterally adds an ·'additional term" to a contract fixing a
specific state as the forum state for litigation, it does not become part of the parties' agreement
because it materially alters the prior agreement not agreed to. Such an attempt was held to be an
unsuccessful ploy.
When a party attaches no validity to a contract they are not bound by its venue clause.
Colby v. Ben Const Corp., 57 Misc2d 850, 293 NYS2d 759. Wherein the Court stated:
"The claimant could not be deprived of a trial in a proper county by a provision in an
agreement which she sought to have declared void for any purpose. (emphasis added)
2According to Snyder, she was never given, nor did she agree to, or see, the alleged Merchant Agreement that
defendants are relying on.
4
Accordingly, there is definitely a triable issue of fact as to which contract prevails and
whether Plaintiff has contractually submitted to any forum selection clause.
This issue of fact mandates the denial of Defendant's motion.
POINT V
THE FORUM SELECTION CLAUSE IN DEFENDANT'S
AGREEMENT IS INVALID DUE TO FRAUD AND OVERREACHING
A contractual forum selection clause providing that a trial shall be in a particular state is
prima facie valid and enforceable unless it is shown to be unreasonable, unjust, in contradiction
of public policy, invalid due to fraud or overreaching .... Freifeld v. Native Am. Energy Group
Inc. 2010 NY Misc. Lexus 4459 2010 NY Slip Op 32524 (U). (Supreme Nassau Justice Stephen
A. Bucaria.)
Where a party claims that an agreement is permeated with fraud and void from the
beginning, a forum selection clause is unenforceable. DeSola Group v. Coors Brewing Co. 199
AD2d 141; 605 NYS2d 83.
In the case at bar, Plaintiffs are claiming fraud and overreaching evidenced by the
Defendant's representatives having Snyder sign Exhibit I, giving her a copy and representing to
her that that was all that was needed, when they obviously took it back to their office; made
some changes;3 added four (4) pages of Terms and Conditions, (which had "buried" therein the
forum selection clause in question); and after getting it just the way they wanted it to read, they
signed their copy four (4) days later and intentionally didn't send their changes or "Terms and
Conditions" to Plaintiff to accept or reject.
3 Filled in the entire top of page 1; added "No PCI fees", "month to month", and the percentages to "methods of
acceptance", (all on page 2)
7
POINT VII
THERE SHOULD BE A PRELIMINARY TRIAL ON THE
FAMED ISSUE OF WHICH CONTRACT PREVAILS
In an analogous situation where there is a firm challenge as to whether or not there is a
binding and valid contract containing a jury waiver provision, then the party resisting the
contract should be afforded the privilege of a preliminary trial by jury on that defense on framed
issues. International Roofing Corp. v. Van Der Verr 43 Misc2d 93, 250 NYS2d 387
See also an analogous case of Federal Housecraft v. Faria 28 Misc2d 155 where the court
denied ajury waiver holding that there should be a preliminary trial on the issue of the fraud in
the inception of the contract stating:
"Otherwise the party seeking such a trial would be at a
disadvantage in having to proceed to trial without a jury
by virtue of a waiver provision in an agreement which
may be void in its entirety for want oflegal consent."
In the case at bar, Plaintiff is suing on the only contract given to them. They do not
acknowledge the contract presented by Defendants; on the contrary Plaintiff declares Defendants
contract to be void as to them, and attaches no validity to it for any purpose. Accordingly,
Plaintiff should be afforded at the very least a preliminary trial, to determine which contract
prevails. This trial should be either a bench trial, or jury trial, either parties' choice.
9
CONCLUSION
For the reasons stated above, Defendant's motion should be denied entirely or a
preliminary trial should be held on the framed issue of which contract prevails.
Dated: September 3, 2015
Fr ·n C. Hyman
Attorney for Plaintiff
595 Stewart Avenue, Suite 410
Garden City, New York 11530
(516) 745-0700
10
Preview
FILED: NASSAU COUNTY CLERK 09/03/2015 11:04 AM INDEX NO. 604244/2015 NYSCEF DOC. NO. 15 RECEIVED NYSCEF: 09/03/2015 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NASSAU ---------------------------------------------------------------------)( PARTNERS IN SAFETY INC., Plaintiff, HON. Arthur Diamond Assigned - against : Inde)( No. 604244/2015 CARDWORKS ACQUIRING LLC and MERRICK BANK CORPORATION, :RETURN DATE: 9-11-15 Defendants. ---------------------------------------------------------------------)( PLAINTIFF'S MEMORANDUM OF LAW IN OPPOSITION TO DEFENDANTS' MOTION TO DISMISS Dated: Garden City, New York September 3, 2015 FRANKLIN C. HYMAN, P.C. Attorney for Plaintiff 595 Stewart Avenue Suite410 Garden City, NY 11530 (516) 745-0700 TABLE OF CONTENTS Page(s) TABLE OF AUTHORITIES .........................................................................2 PRELIMINARY STATEMENT ..................................................................... 3 POINT I ................................................................................................... 3 Plaintiff is not bound by Defendant's agreement POINT II................................................................................................... 5 Defendant's documentary evidence is not conclusive, nor undeniable POINT III ................................................................................................ 5 Plaintiff s venue selection based on the residence of the Defendants in New York is correct and its Complaint cannot be dismissed POINT IV ................................................................................................ 6 The triable issue of fact mandates the denial of Defendant's motion POINT V ................................................................................................... 7 The forum selection clause in Defendant's agreement is invalid due to fraud and overreaching POINT VI ..................................................................................................8 Defendant's motion is based on pure speculation and surmise and must be denied POINT VII .................................................................................................9 There should be a preliminary trial on the famed issue of which contract prevails CONCLUSION................. ,.................................. ,....................................... 10 1 TABLE OF AUTHORITIES Cases DeSola Group v Coors Brewing Co., 199 AD2d 141,605 NYS2d 83 .................... 3,7 Colby v. Ben Const Corp., 57 Misc2d 850,293 NYS2d 759 .............................. .4 .Lorbrook Corp v. G&T Industries, Inc., 162 AD2d 69,562 NYS2d 978 ............... .4 Joseph Schultz & Cov. Camden Fire Ins. Ass'n. (1952) 304 NY 143 106 NE2d 273 ............................................................................4 Lally v. Cronen (1928) 247 NY 58; 159 NE 723 remittur denied 247 NY 575, 161 NE 188 ....................................................................................4 Hyde Park Owners Corp. v. Kew Gardens Tenant League 118 AD3d 670, 987 NYS2d 399 (2014 2nd Dept.) ..............................................................5 Sunset Cafe Inc. v. Melt's Suif & Sports Corp., 103 AD3d 707, 959 NYS2d 700 .....5 United States Fid & Guar Co v. Ragusa, 600 NYS2d 40 (1 st Dept. 1993) ..............6 Freifeld v. Native Am. Energy Group Inc., 2010 NY Misc. Lexus 44592010 NY Slip Op 32524 CU)................. ,'" .. , ............................. 7 International Roofing Corp. v. Van Der Verr, 43 Misc2d 93,250 NYS2d 387 ........9 Federal Housecraft v. Faria, 28 Misc2d 155 .................................................9 Statutes: New York Civil Practice and Rules (CPLR) Section 3211(a)(1) .....................5 New York Civil Practice and Rules (CPLR) Section 503 (a) and 509 ..............5 2 PRELIMINARY STATEMENT Plaintiff, Partners in Safety Inc. (Plaintiff) through their attorneys, Franklin C. Hyman, PC respectfully submits the following memorandum oflaw in opposition to the CPLR 3211(a)(l) motion to dismiss (founded upon documentary evidence) by Defendants Cardworks Acquiring LLC (Cardworks) and Merrick Bank Corporation (the Bank) (collectively the "Defendants"). Defendant's motion is based solely on their contention that the parties agreed to a forum selection provision in their contract mandating that this action be brought in the State of Utah. Accordingly, plaintiffs opposition will be based solely on that issue. POINT I PLAINTIFF IS NOT BOUND BY DEFENDANT'S AGREElVIENT A forum selection clause is inapplicable where Plaintiff s complaint does not pertain to the agreement containing such clause. See DeSola Group v Coors Brewing Co., 199 AD2d 141, 605 NYS2d 83 This action arises out of Plaintiffs allegation that it was improperly charged approximately $25,000 in service fees by Defendants in violation of the parties' written agreement. As to the written agreement being sued on, Plaintiff respectfully refers the Court to the accompanying Affidavit of Amy Snyder sworn to August 25, 2015, and her Exhibit I annexed thereto (the "Snyder Aff." or "Snyder"). I I Snyder has actual knowledge of the facts as opposed to the affidavit of Russell Berman who has no personal knowledge of any facts concerning the transaction between the parties. 3 According to Snyder, the contractual obligations allegedly breached are set forth in the Merchant Application and Agreement she signed dated 7-12-13. (Exhibit I attached to her affidavit) She denies any other agreement. 2 At the time Plaintiff executed Exhibit I, Defendants, through their sales agents, gave Snyder a copy and said that is all that she needed. Notably Exhibit I does not have a forum selection provision. New York adheres to the fundamental principal of contract law that a party cannot be held to have contracted if there was no assent. Joseph Schultz & Co v. Camden Fire Ins. Ass'n. (l952) 304 NY 143, 106 NE2d 273 Mutual assent is essential to the formation of a contract. Lally v. Cronen (1928) 247 NY 58; 159 NE 723 remittur denied 247 NY 575, 161 NE 188. See also; Lorbrook Corp v. G&T Industries, Inc., 162 AD2d 69,562 NYS2d 978 where the Court held that where a party unilaterally adds an ·'additional term" to a contract fixing a specific state as the forum state for litigation, it does not become part of the parties' agreement because it materially alters the prior agreement not agreed to. Such an attempt was held to be an unsuccessful ploy. When a party attaches no validity to a contract they are not bound by its venue clause. Colby v. Ben Const Corp., 57 Misc2d 850, 293 NYS2d 759. Wherein the Court stated: "The claimant could not be deprived of a trial in a proper county by a provision in an agreement which she sought to have declared void for any purpose. (emphasis added) 2According to Snyder, she was never given, nor did she agree to, or see, the alleged Merchant Agreement that defendants are relying on. 4 Accordingly, there is definitely a triable issue of fact as to which contract prevails and whether Plaintiff has contractually submitted to any forum selection clause. This issue of fact mandates the denial of Defendant's motion. POINT V THE FORUM SELECTION CLAUSE IN DEFENDANT'S AGREEMENT IS INVALID DUE TO FRAUD AND OVERREACHING A contractual forum selection clause providing that a trial shall be in a particular state is prima facie valid and enforceable unless it is shown to be unreasonable, unjust, in contradiction of public policy, invalid due to fraud or overreaching .... Freifeld v. Native Am. Energy Group Inc. 2010 NY Misc. Lexus 4459 2010 NY Slip Op 32524 (U). (Supreme Nassau Justice Stephen A. Bucaria.) Where a party claims that an agreement is permeated with fraud and void from the beginning, a forum selection clause is unenforceable. DeSola Group v. Coors Brewing Co. 199 AD2d 141; 605 NYS2d 83. In the case at bar, Plaintiffs are claiming fraud and overreaching evidenced by the Defendant's representatives having Snyder sign Exhibit I, giving her a copy and representing to her that that was all that was needed, when they obviously took it back to their office; made some changes;3 added four (4) pages of Terms and Conditions, (which had "buried" therein the forum selection clause in question); and after getting it just the way they wanted it to read, they signed their copy four (4) days later and intentionally didn't send their changes or "Terms and Conditions" to Plaintiff to accept or reject. 3 Filled in the entire top of page 1; added "No PCI fees", "month to month", and the percentages to "methods of acceptance", (all on page 2) 7 POINT VII THERE SHOULD BE A PRELIMINARY TRIAL ON THE FAMED ISSUE OF WHICH CONTRACT PREVAILS In an analogous situation where there is a firm challenge as to whether or not there is a binding and valid contract containing a jury waiver provision, then the party resisting the contract should be afforded the privilege of a preliminary trial by jury on that defense on framed issues. International Roofing Corp. v. Van Der Verr 43 Misc2d 93, 250 NYS2d 387 See also an analogous case of Federal Housecraft v. Faria 28 Misc2d 155 where the court denied ajury waiver holding that there should be a preliminary trial on the issue of the fraud in the inception of the contract stating: "Otherwise the party seeking such a trial would be at a disadvantage in having to proceed to trial without a jury by virtue of a waiver provision in an agreement which may be void in its entirety for want oflegal consent." In the case at bar, Plaintiff is suing on the only contract given to them. They do not acknowledge the contract presented by Defendants; on the contrary Plaintiff declares Defendants contract to be void as to them, and attaches no validity to it for any purpose. Accordingly, Plaintiff should be afforded at the very least a preliminary trial, to determine which contract prevails. This trial should be either a bench trial, or jury trial, either parties' choice. 9 CONCLUSION For the reasons stated above, Defendant's motion should be denied entirely or a preliminary trial should be held on the framed issue of which contract prevails. Dated: September 3, 2015 Fr ·n C. Hyman Attorney for Plaintiff 595 Stewart Avenue, Suite 410 Garden City, New York 11530 (516) 745-0700 10