Spellmans Marine Inc. v. HC Composites L.L.C.

• Decision Date: 29 August 2022
• Docket Number: Index No. 611493/2022
• Citation: Spellmans Marine Inc. v. HC Composites L.L.C., 77 Misc.3d 318, 178 N.Y.S.3d 379 (N.Y. Sup. Ct. 2022)
• Parties: SPELLMANS MARINE INC., Plaintiff, v. HC COMPOSITES L.L.C. d/b/a World Cat, Defendant.
• Court: New York Supreme Court

77 Misc.3d 318

178 N.Y.S.3d 379

SPELLMANS MARINE INC., Plaintiff,

v.HC COMPOSITES L.L.C. d/b/a World Cat, Defendant.

Index No. 611493/2022

Supreme Court, Suffolk County, New York.

Decided on August 29, 2022

DIANA PATRICIA DILEONARDO, ESQ., BELLAVIA BLATT, PC, Attorney for Plaintiff, 200 Old Country Road, Suite 400, Mineola, NY 11501

CHRISTOPHER SCHIERLOH, ESQ., CASEY & BARNETT, LLC, Attorney for Defendants, 305 Broadway, Suite 1202, New York, NY 10007

James Hudson, J.

Upon due deliberation it is

ORDERED that for the reasons set forth herein, the Plaintiff's motion (mot. seq. 001) for a preliminary injunction is denied under the circumstances presented( CPLR 6301 ).The temporary restraining order issued in connection with this motion is vacated and set aside.It is further

ORDERED that the Defendant's motion (mot. seq. 002) for dismissal of the Complaint is granted ( CPLR 3211 [a][1] ).It is further

ORDERED that the Plaintiff's complaint is dismissed.

The PlaintiffSpellmans Marine Inc.(Hereinafter referred to as Spellmans) is a boat dealer located in Suffolk County New York.Plaintiff entered into a contract with the DefendantHC Composites LLC d/b/a World Cat (Hereinafter referred to as World Cat), manufacturer to sell the latter's watercraft (Plaintiff's exhibit "B"NYSCEF Doc. 5).This was an exclusive agreement whereby World Cat covenanted that it would set aside a specific geographic area for the Plaintiff's retail sales.The Defendant is attempting to exercise the non-renewal clause of the contract.Desiring to maintain the dealership relationship, the Plaintiff has commenced the lawsuit at hand sounding, inter alia , in breach of contract.In its complaint, Spellmans seeks a judgment against Defendant for permanent injunctive relief preventing World Cat from terminating the parties’ dealer agreement relating to the marketing of the Defendant's boats.Plaintiff also seeks money damages predicated on an alleged violation of the New York General Business Law(§§ 810 - 816 ) the "Vessel Dealer Act".It is further averred that the Defendant breached the duty of good faith and fair dealing implied in the parties’ dealer agreement and violated its fiduciary duty to the Plaintiff.To preserve its status as a World Cat dealer during the pendency of this case, Spellmans’ has moved (mot. seq. 001) for a preliminary injunction ( CPLR 6301 )The Defendant has Cross-moved (mot. seq. 002) for an Order of dismissal CPLR 3211 (a)(1).

The Court would be remiss if it did not thank Counsel for their thorough and eloquent briefs.As noted by the Court at the conclusion of oral argument, their respective clients were well served by such advocates.

In the case of Merling v. Ash Dev., LLC , 198 A.D.3d 743, 156 N.Y.S.3d 257(2d Dept.2021), the Court held "The party seeking a preliminary injunction must demonstrate (1) a likelihood of success on the merits, (2) danger of irreparable harm in the absence of an injunction, and (3) a balance of the equities in favor of the injunction"(see159 Smith, LLC v. Boreum Hill Prop. Holdings, LLC ,191 A.D.3d 741, 742, 141 N.Y.S.3d 486(2021);Arcamone–Makinano v. Britton Prop., Inc. ,83 A.D.3d 623, 624, 920 N.Y.S.2d 362(2011) )."The purpose of a preliminary injunction is to preserve the status quo until a decision is reached on the merits"( 159 Smith, LLC v. Boreum Hill Prop. Holdings, LLC ,191 A.D.3d at 742, 141 N.Y.S.3d 486[internal quotation marks omitted];seeArcamone–Makinano v. Britton Prop., Inc. ,83 A.D.3d at 624, 920 N.Y.S.2d 362 ).

Prior to discussing the question of injunctive relief, however, the Court must first consider the Defendant's cross-motion which challenges New York as the proper forum for this dispute and seeks dismissal of the Complaint.

In determining the viability of a CPLR 3211 (a)(1) motion, the court in Encore Lake Grove Homeowners A'ssn, Inc. v. Cashin Assocs., P.C. , 111 A.D.3d 881, 882, 976 N.Y.S.2d 143[2d Dept.2013] stated:

"A motion to dismiss a complaint based upon documentary evidence utterly refutes the plaintiff's factual allegations, conclusively establishing a defense as a matter of law."( Id. , citingNunez v. Mohamed , 104 A.D.3d 921, 922, 962 N.Y.S.2d 338[2d Dept.2013];seeLeon v. Martinez , 84 N.Y.2d 83, 88, 614 N.Y.S.2d 972, 638 N.E.2d 511[1994];Cervini v. Zanoni , 95 A.D.3d 919, 920-921, 944 N.Y.S.2d 574[2d Dept.2012];Rubinstein v. Salomon , 46 A.D.3d 536, 539, 849 N.Y.S.2d 69[2d Dept.2007];Shaya B. Pac., LLC v. Wilson, Elser, Moskowitz, Edelman & Dicker, LLP , 38 A.D.3d 34, 38, 827 N.Y.S.2d 231[2d Dept.2006];see alsoBoard of Managers of 100 Congress Condominium v. SDS Congress, LLC , 152 A.D.3d 478, 59 N.Y.S.3d 381[2d Dept.2017] ).

"To succeed on a motion to dismiss pursuant to CPLR 3211 (a)(1), the documentary evidence that forms the basis of the defense must be such that it resolves all factual issues as a matter of law, and conclusively disposes of the plaintiff's claim"(B&A Realty Management, LLC v. Gloria , 192 A.D.3d 851, 144 N.Y.S.3d 443, 446[2d Dept.2021], quotingTeitler v. Pollack & Sons , 288 A.D.2d 302, 302, 733 N.Y.S.2d 122[2d Dept.2001];seeHeld v. Kaufman , 91 N.Y.2d 425, 430-431, 671 N.Y.S.2d 429, 694 N.E.2d 430[1988];Leon v. Martinez ,supra.;Museum Trading Co. v. Bantry , 281 A.D.2d 524, 721 N.Y.S.2d 822[2d Dept.2001];Jaslow v. Pep Boys–Manny, Moe & Jack , 279 A.D.2d 611, 719 N.Y.S.2d 822[2d Dept.2001];Brunot v. Eisenberger & Co. , 266 A.D.2d 421, 698 N.Y.S.2d 882[2d Dept.1999] ).

The proffered document "must be unambiguous and of undisputed authenticity"[ Fontanetta v. Doe , 73 A.D.3d 78, 86, 898 N.Y.S.2d 569(2d Dept.2010) ].Acceptable proof includes "mortgages, deeds, contracts and any other papers, the contents of which are essentially undeniable"[ Carr v. Wegmans Food Mkts., Inc. , 182 A.D.3d 667, 668, 122 N.Y.S.3d 391(3d Dept.2020) ].It is also beyond cavil that "As a term of the contract between the parties a contractual forum selection clause is documentary evidence [citations omitted]" ( Lischinskaya v. Carnival Corp. , 56 A.D.3d 116, 123, 865 N.Y.S.2d 334, 338[2d Dept.2008]

In support of its Cross-motion, World Cat relies upon the language in Articles Ten and Eleven of the Dealership agreement.

The Court must decide if the aforementioned provisions in the contract allow for New York to hear this dispute in addition to our sisterstate of North Carolina.

Forum selection clauses fall into two categories, mandatory and permissive.( Boss v. American Express Financial Advisors, Inc. ,6 N.Y.3d 242, 811 N.Y.S.2d 620, 844 N.E.2d 1142[2006] )."[M]andatory forum selection clauses provide that the specified forum is the exclusive or sole forum in which the matter may be heard" ( Walker, Truesdell, Roth & Assocs., Inc. v. Globeop Fin. Servs. LLC , 43 Misc. 3d 1230(A), 993 N.Y.S.2d 647(Sup. Ct., N.Y. County2013 Justice Marcy Friedman), aff'd sub nom.New Greenwich Litig. Tr., LLC v. Citco Fund Servs. (Eur.) B.V. , 145 A.D.3d 16, 41 N.Y.S.3d 1[1st Dept.2016].A permissive clause allows a party the option of suing either in the designated forum or "in another forum having jurisdiction over the defendants" ( Walker, Truesdellat 5 citing See e.g.Orix Credit Alliance, Inc. v. Mid–South Materials Corp.,816 F. Supp. 230[S.D.N.Y.1993]

In the case before us, the Forum clause in the World Cat Dealership agreement states:

"ARTICLE10: GOVERNING LAW AND VENUE 10.1 This Agreement is made and entered into in Tarboro, North Carolina.This Agreement shall be construed and governed by the laws of the State of Florida without giving regards to its conflict of laws provisions.Dealer consents to the exclusive jurisdiction and venue of the state court in Edgecombe County, North Carolina for any lawsuit arising from or relating to this Agreement or the Parties’ relationship, and Dealer hereby waives any objections Dealer may have to jurisdiction and venue of the lawsuit."

There is a body of caselaw which collectively opine that a forum selection clause is mandatory when the parties agree "that a specified forum "shall" hear a matter or that the forum is "exclusive."( Walker, Truesdell, Roth & Assocs., Inc.supra at 5 citing See e.g.Micro Balanced Prods. Corp. v. Hlavin Indus. Ltd . , 238 A.D.2d 284, 284–285, 667 N.Y.S.2d 1[1st Dept.1997];Erie Ins. Co. of New York v. AE Design, Inc. ,104 A.D.3d 1319, 1320, 961 N.Y.S.2d 710[4th Dept.2013], lv denied12 NY3d 702[2013];Investools Inc. v. Waltz ,2006 WL 4682091[Sup. Ct., N.Y. County2006];Hur v. Carvel Corp. ,2001 WL 1568413, *2[Sup. Ct., Nassau County2001].

The language in Article Ten of the Contract i.e. "consents to the exclusive jurisdiction and venue" of North Carolina, can have only one interpretation.The forum selection clause is mandatory.The Plaintiff does not dispute that this provision is in the contract.Spellmans’ position is that the Articles in the agreement relating to forum and venue are unenforceable due to NY GBL §§ 810 - 816(the "Vessel Dealer Act").This statute provides protections to a boat dealer vis-à-vis a manufacturer.

Specifically, NYGBL § 812 requires that notice of intention to exercise a non-renewal provision in a contract be given ninety days prior to terminating the agreement.NYGBL § 815 details penalties for non-compliance.It also includes the following language "4.The provisions of this article shall be in addition to any legal or equitable right that any party has pursuant to any other provision of law or pursuant to any agreement between the parties".NYGBL § 816 states, "No manufacturer or distributor shall, as a condition of entering into any agreement or contract with a dealer or in any dealer agreement, require any dealer to waive any provision or right granted pursuant to this article."

The above-mentioned statutes clearly detail protections for the Plaintiff that do not exist under the terms of the contract.The question to be resolved is whether they serve to mandate...