Irrigation & Industrial Development Corp. v. Indag S. A.

Majority

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Irrigation & Industrial Development Corporation, Appellant, v Indag S. A., Respondent.

Argued September 8, 1975;

decided October 16, 1975

Richard L. Bond and Stephen B. Camhi for appellant.

I. The majority of the court below abused its discretion in dismissing the action on the ground of forum non conveniens after both

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parties had selected New York and actively litigated here. (Silver v Great Amer. Ins. Co., 29 NY2d 356 ; Varkonyi v S. A. Empresa De Viacao Airea Rio Grandense [Varig], 22 NY2d 333 ; Taylor v Interstate Motor Frgt. System, 309 NY 633 ; Field v Jordan, 14 AD2d 845 ; Mirabella v Banco Ind. De La Republica Argentina, 43 AD2d 489 .) II. Indag is estopped by its prior wrongful conduct from belatedly asserting that New York is an inconvenient forum and the majority’s (of the court below) exercise of discretion in favor of a party with unclean hands was an abuse of discretion. (Matter of Nowakowski, 2 NY2d 618 ; Mossew v To Market, Inc., 3 AD2d 189 ; Puritan Sportswear Corp. v Shure, 307 F Supp 377 ; Gottesman v General Motors Corp., 222 F Supp 342 ; Wilder v Boynton, 63 Barb 547 .) III. The majority of the court below erred by depriving Irrigation & Industrial Development Corporation of its right under CPLR 3217 to seek reimbursement of its attorneys’ fees and costs as a condition to dismissal of action No. 1. (Ludin v Mittelman, 281 App Div 894 ; DeLaurentis v Bercowitz, 27 AD2d 869 .)

Daniel V. Duff, Jr., and Richard K. Ellingboe for respondent.

I. The record establishes that New York is an inappropriate forum; having taken all relevant factors into consideration, including Indag’s earlier motion against Irrigation & Industrial Development Corporation, the court below properly exercised its discretion in dismissing Irrigation & Industrial Development Corporation’s action against Indag on the ground of forum non conveniens. (Silver v Great Amer. Ins. Co., 29 NY2d 356 ; Gulf Oil Corp. v Gilbert, 330 US 501 ; Auten v Auten, 308 NY 155 ; Catapodis v Onassis, 2 Misc 2d 234 ; Schwartz v Zim Israel Nav. Co., 15 Misc 2d 576 ; Export Ins. Co. v Mitsui S. S. Co., 26 AD2d 436 ; Vanity Fair Mills v Eaton Co., 234 F2d 633 , 352 US 871 ; Heller v National Gen. Corp., 39 AD2d 688 ; Taurus, Inc. v Boeck Fuel Co., 38 AD2d 702 , 39 AD2d 519 ; Slaughter v Waters, 41 AD2d 810 .) II. There is no basis in the circumstances or in the law for Irrigation & Industrial Development Corporation’s assertion that Indag is estopped from claiming forum non conveniens and the court below was correct in rejecting this assertion. (Matter of Meachem v New York Cent. R. R. Co., 8 NY2d 293 ; Werking v Amity Estates, 2 NY2d 43 ; Wilder v Boynton, 63 Barb 547 ; Lundin v Mittelman, 281 App Div 894 .) III. No reviewable question is presented since the court below properly exercised its discretion in applying the doctrine of forum non conveni

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ens. (Varkonyi v S. A. Empresa De Viacao Airea Rio Grandense [Varig], 22 NY2d 333 ; Taylor v Interstate Motor Frgt. System, 1 NY2d 925 ; Pharo v Piedmont Aviation, 29 NY2d 710 .)

In this action for damages for breach of contract, for a declaration that certain bills of exchange executed by plaintiff in favor of defendant are void and invalid, and for an order canceling and requiring return of these bills of exchange, Special Term denied defendant’s motion to dismiss on the grounds of lack of jurisdiction and forum non conveniens. The Appellate Division, however, by a divided court, reversed and granted the motion, holding that Special Term’s failure to dismiss the action on the ground of forum non conveniens was an "improvident exercise of discretion”.

Defendant, a Swiss corporation whose only office is located in Lausanne, Switzerland, is a manufacturer and distributor of irrigation equipment in Europe and Africa. On occasion it has acted as a distributor of such equipment manufactured by plaintiff, a New York corporation. This action focuses on a March, 1971 agreement designed to recapitalize defendant in order to remedy its serious financial difficulties. Although others were parties to that agreement, it is sufficient for our purposes to note that plaintiff agreed to take a minority stock position in defendant, to take over defendant’s stock in two Spanish subsidiaries, and to draw five bills of exchange against itself to defendant’s order. The agreement also dealt with future use of certain manufacturing and sales licenses, purchases from the Spanish companies acquired by plaintiff, and the like.

In March, 1972 defendant presented the first bill of exchange to plaintiff for payment in accordance with its terms; plaintiff, however, refused payment. Two months later defendant served and filed a motion for summary judgment in lieu of complaint on an instrument for the payment of money only, pursuant to CPLR 3213. Plaintiff opposed summary judgment contending that it would have defenses and counterclaims arising out of alleged breaches of the 1971 agreement. Special Term, finding certain triable issues of fact, denied the motion and directed defendant to serve a formal complaint. Defendant, rather than serving a complaint, attempted to serve a

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notice of voluntary discontinuance pursuant to CPLR 3217 (sub [a]).^[1] Two days later plaintiff commenced this action.

On this appeal, plaintiff challenges the dismissal, contending that the Appellate Division abused its discretion and that defendant is estopped by its prior conduct from asserting under CPLR 327 that the action should be heard in another forum.

This court will not ordinarily interfere with the Appellate Division’s exercise of discretion in granting or denying a motion to dismiss on the ground of forum non conveniens unless there has been an abuse of discretion as a matter of law or unless the Appellate Division, in exercising that discretion, has failed to take into account all the various factors entitled to consideration. (Silver v Great Amer. Ins. Co., 29 NY2d 356 , 361; Varkonyi v S. A. Empresa De Viacao Airea Rio Grandense [Varig], 22 NY2d 333 , 337, mots for rearg den 22 NY2d 972 , 973.)

Plaintiff’s position on this appeal is that the Appellate Division abused its discretion as a matter of law by not giving controlling weight to the fact that defendant had earlier attempted to use the New York courts to recover on plaintiff’s bill of exchange. In making that argument, we think that plaintiff would give too much weight to that fact.

Certainly, the fact that defendant chose to use our courts so as to utilize the simplified procedure under CPLR 3213 is one factor which the lower courts should consider in passing on a motion to dismiss on the ground of forum non conveniens, especially where, as here, the same claim which forms the basis of this action likely would have been asserted as a counterclaim in the earlier action had defendant served a complaint. However, it is but one of many factors; the court’s overall focus must relate to the question of whether New York is an inconvenient forum and whether another is available "which will best serve the ends of justice and the convenience of the parties.” (Silver v Great Amer. Ins. Co., 29 NY2d 356 , 361, supra.) It is clear from the opinion below that the Appellate Division did consider all the relevant factors: it found that plaintiff deals extensively in Europe with foreign

* The Appellate Division agreed with Special Term’s finding that defendant’s attempt to unilaterally discontinue that action was ineffective, and that service upon defendant’s attorneys was effective to confer jurisdiction over defendant in this action. (CPLR 303.) That issue is not before us on this appeal, and we do not pass on it.

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corporations whereas defendant transacts no business in the United States; that the 1971 agreement was negotiated and executed in Switzerland; that one of the parties to that agreement is not subject to jurisdiction in New York; that the agreement provides that the Swiss courts have jurisdiction to adjudicate any litigation arising thereunder; that performance occurred exclusively in Europe and North Africa; that the trial and any pretrial discovery will principally involve European witnesses and documents located in Switzerland; and that all the relevant events took place in Switzerland and the Iberian Peninsula and bear no relation to New York. Under these circumstances, we conclude that the Appellate Division did not, as a matter of law, abuse its discretion in determining that New York is an inconvenient forum. (See Fertel v Resorts Int., 35 NY2d 895 ; Sannazzari v Pan Amer. World Airlines, 35 NY2d 690 ; compare Martin v Mieth, 35 NY2d 414 .)

Accordingly, the order appealed from should be affirmed.

Judges Gabrielli, Jones, Wachtler, Fuchsberg and Cooke concur; Chief Judge Breitel taking no part.

Order affirmed, with costs.

Cases cited

Silver v. Great American Insurance 29 NY2d 356 N.Y. 1972-01-06 at 361 p. 523, p. 525
Varkonyi v. S. A. Empresa De Viacao Airea Rio Grandense 22 NY2d 333 N.Y. 1968-06-14 at 337 p. 523, p. 524, p. 525
Taylor v. Interstate Motor Freight System 309 NY 633 N.Y. 1956-02-17 p. 523
Mirabella v. Banco Industrial De La Republica Argentina 43 AD2d 489 N.Y. App. Div. 1974-02-28 p. 523
In re the Estate of Nowakowski 2 NY2d 618 N.Y. 1957-04-12 p. 523
Mossew v. To Market, Inc. 3 AD2d 189 N.Y. App. Div. 1957-01-29 p. 523
Wilder v. Boynton 63 Barb 547 N.Y. Sup. Ct. 1872-09-03 p. 523
Laurentis v. Bercowitz 27 AD2d 869 N.Y. App. Div. 1967-03-06 p. 523
Gulf Oil Corp. v. Gilbert 330 US 501 SCOTUS 1947-03-10 p. 523
Auten v. Auten 308 NY 155 N.Y. 1954-12-31 p. 523
Catapodis v. Onassis 2 Misc 2d 234 N.Y. Sup. Ct. 1956-04-04 p. 523
Schwartz v. Zim Israel Navigation Co. 15 Misc 2d 576 N.Y. Sup. Ct. 1958-10-30 p. 523
Export Insurance v. Mitsui Steamship Co. 26 AD2d 436 N.Y. App. Div. 1966-11-22 p. 523
Heller v. National General Corp. 39 AD2d 688 N.Y. App. Div. 1972-05-18 p. 523
Slaughter v. Waters 41 AD2d 810 N.Y. App. Div. 1973-04-05 p. 523
Claim of Meachem v. New York Central Railroad 8 NY2d 293 N.Y. 1960-10-21 p. 523
Werking v. Amity Estates, Inc. 2 NY2d 43 N.Y. 1956-07-11 p. 523
Pharo v. Piedmont Aviation, Inc. 29 NY2d 710 N.Y. 1971-10-20 p. 524
Fertel v. Resorts International, Inc. 35 NY2d 895 N.Y. 1974-12-18 p. 526
Sannazzari v. Pan American World Airlines, Inc. 35 NY2d 690 N.Y. 1974-10-08 p. 526
Martin v. Mieth 35 NY2d 414 N.Y. 1974-11-27 p. 526