Defendant, Intek Integration Technologies, Inc., moves to dismiss plaintiffs complaint pursuant to CPLR 3211 (a) (1) on the ground that the parties’ software license agreement contained a forum selection clause requiring that the action be brought in the State of Washington. Intek also moves to dismiss because plaintiff failed to serve the summons and complaint in the manner required by CPLR 306-b. Plaintiff, CooperVision, Inc., cross-moves for an order pursuant to CPLR 306-b validating plaintiff’s second attempted service on defendant, or authorizing such other and further service as the court may direct.
The Software Licensing and Implementation Agreements
In early September 2003, CooperVision contracted with Intek Integration Technologies, a specialist in the design, development and implementation of warehouse management systems software, to purchase software and to provide services in connection with an automation project designed to modernize its distribution process at its facility in Henrietta, New York. Before contracting with Intek, CooperVision hired a warehouse management consultant who prepared a request for information, and directed it to several vendors, including Intek. Intek responded in May 2003, stating that its product warehouse librarian WMS software would meet CooperVision’s needs. In July 2003, CooperVision requested a proposal for Intek’s product, and in August 2003, Intek sent CooperVision its so-called RFP response. The RFP response sent to CooperVision by Intek provided: “The responses provided in this RFP process will be made part of the final contract between the winning company and CooperVision. Any changes to those responses after the contract award will be made only if authorized by CooperVision in writing.” (RFP response § 1.9 at 9.) Intek then drafted and sent to CooperVision a “Letter of Commitment.” Joseph E Stannard, the vice-president of Logistics for CooperVision, maintains in his affidavit that the letter of commitment was executed by both parties (the exhibit contained in CooperVision’s motion papers, however, is in blank). The letter of commitment contemplated that the parties would “enter into an agreement to procure a Warehouse Management System from Intek Integration Technologies, as proposed in Intek’s RFF response dated August 13, 2003, to CooperVision’s RFF dated July 24,
Thereafter, in September 2003, the parties executed the two agreements which are at issue on this motion. The first was a warehouse librarian software license agreement, executed by Intek on September 4, 2003, and by CooperVision on September 8, 2003. This agreement contained the disputed forum selection clause. The second agreement was the warehouse librarian implementation agreement, also executed by Intek on September 4, 2003, and by CooperVision on September 8, 2003. The parties also executed a contract addendum on September 11, 2003, which CooperVision contends called for still more agreements, which would be executed in the future during the so-called initial warehouse analysis phase of the project. The addendum contemplated that “final software functionality requirements, implementation requirements, vendor and customer responsibilities, test plan methodology, and schedules will be established” during the warehouse analysis phase and that these several requirements and responsibilities “must be agreed to,” and “will be guided by the original RFP Response submitted by Intek.”
The implementation agreement, which did not contain the forum selection clause, provided that Intek would provide CooperVision “with the hardware, software and services” defined in the agreement, and that “Intek will configure, integrate, implement, and test the hardware, 3rd Party Software, and warehouse librarian product (collectively referred to as the ‘Warehouse Librarian System’)” for CooperVision at CooperVision’s Henrietta facility The implementation agreement also provided that Intek would “provide services to assist” Cooper-Vision “in the data conversion, system training and system start up to put the Warehouse Librarian System into production.”
The software license agreement, on the other hand, granted to CooperVision certain nonexclusive rights or a license to use the software programs identified in section 14 of the agreement, and more particularly in schedule A. The software license agreement defined the permissible uses that CooperVision may make of the software program, restricted CooperVision from transferring its rights in the product to a third party, and prohibited CooperVision from making copies or otherwise transferring the program to any computer system other than the designated server. The agreement identified Intek’s proprietary rights and
The software license agreement also contained a choice of law provision (laws of the State of Washington), and a forum selection clause: “The parties agree that King County in the State of Washington shall be the proper forum for any action, including arbitration, brought under this Agreement.” The same clause provided that, if Intek requested, CooperVision would “certify under oath that you have fully and faithfully observed all the terms and conditions of this agreement,] ” and that Intek could “at reasonable times and upon 24 hours notice, inspect your premises and equipment to verify that all of the terms and conditions of this agreement are being observed.”
The Forum Selection Clause
The issue before the court is whether the defendant is entitled to dismissal of the complaint pursuant to CPLR 3211 (a) (1) on the ground that the software license agreement contains a forum selection clause requiring the action to be brought in the State of Washington. On any motion to dismiss under CPLR 3211 the pleading is afforded a liberal construction and the facts as alleged are presumed to be true. (Leon v Martinez,
Intek contends that the implementation agreement incorporates the software license agreement by reference, and that therefore the forum selection clause in the latter applies to the entirety of the parties’ dealings. We start with some first principles. Forum selection clauses are “prima facie valid and should be enforced unless enforcement is shown by the resisting
“To set aside that clause, [plaintiff] was required to show that ‘enforcement would be unreasonable and unjust or that the clause is invalid because of fraud or overreaching, i.e., a trial in the contractual forum would be so gravely difficult and inconvenient that the challenging party would, for all practical purposes, be deprived of his or her day in court.’ ” (Bell Constructors v Evergreen Caissons,236 AD2d 859 , 860 [4th Dept 1997], quoting Price v Brown Group,206 AD2d 195 , 198 [4th Dept 1994].)
As New Moon Shipping Co., Ltd. v MAN B & W Diesel AG (
“Words in a contract are to be construed to achieve the apparent purpose of the parties. Although the words might ‘seem to admit of a larger sense, yet they should be restrained to the particular occasion and to the particular object which the parties had in view.’ ” (Hooper Assoc. v AGS Computers,
“2. Entirety of Agreement
“This Agreement, the Order Acknowledgment in Schedule A, Software License Agreement, and Warehouse Analysis document represent the entire contract between Intek and the Customer as to the subject matter of the Agreement. In the event of any conflict between these documents as to their subject matter, it is agreed that the following order of precedence will be applied to the documents:
“1. Software License Agreement
“2. Implementation Agreement (this ‘Agreement’)
“3. Order Acknowledgment Specified in Schedule A “4. Warehouse Analysis Document as signed and accepted by Intek and the Customer “5. Warehouse Librarian Documentation” (emphasis supplied).
The absence of any express incorporation by reference, coupled with the choice of an “order of preference” clause, which is triggered only in the event of a “conflict between these documents as to their subject matter,” means that the drafter (Intek) intended that each agreement have and maintain its own identity in the absence of a conflict. (Cf., National Union Fire Ins. Co. of Pittsburgh, Pa. v Williams,
Nevertheless, it is the general rule that written contracts executed simultaneously and for the same purpose must be read and interpreted together. (Nau v Vulcan Rail & Constr. Co.,
“rule, however, does not require that the two separate instruments must be deemed consolidated and one for all purposes or that a separate and independent provision of one, such as a jurisdictional paragraph, which has no bearing on the construction to be placed on the two instruments is to be . . . incorporated in the other.” (Kent v Universal Film Mfg. Co.,200 App Div 539 , 550 [1st Dept 1922] [emphasis supplied]; see 22 NY Jur 2d, Contracts § 258 [“the rule that simultaneous instruments about a matter are to be construed together does not require that the instruments be consolidated for all purposes”].)
Inasmuch as the forum selection clause in the software license agreement has no bearing on the construction to be placed on the two contracts, the stated general rule does not require, in and of itself, that it be read as incorporated into the implementation agreement. That is the specific holding of Kent. The question thus devolves to whether Intek has met its burden on this preanswer CPLR 3211 motion to conclusively establish that the provisions of these two agreements require that it does.
Intek relies in large measure on the order of precedence clause. Yet, Intek fails to point to any conflict in “the subject
In any event, the presence in one agreement of a forum selection clause and the absence in the other agreement of a similar clause does not concern the “subject matter” of these agreements, one of which concerned protection of Intek’s intellectual property rights, and the other of which governed the work to be provided by Intek to CooperVision in connection with its sale and installation of the software at the Henrietta facility. Forum selection clauses are provisions of an administrative or dispute-resolving nature, and do not concern an agreement’s subject matter. For these reasons, the order of precedence clause has no application to this motion.
The mere reference to the software license agreement as part of the “entire agreement” of the parties, without an express provision making the forum selection clause applicable to disputes arising under the implementation agreement, means that the parties intended that the forum selection clause be confined to the software license agreement. The implementa
In New York, this rule finds expression in the construction contract cases, which hold that general “incorporation clauses in a construction subcontract, incorporating prime contract clauses by reference into a subcontract, bind the subcontractor only as to prime contract provisions relating to the scope, quality, character and manner of the work to be performed by the subcontractor.” (Bussanich v 310 E. 55th St. Tenants,
Applying these principles to this case, the parties could not have intended to incorporate the forum selection clause of the software license agreement into the implementation agreement, because they did not (or more precisely Intek did not) choose sufficiently specific language to do so. In another context, Intek made specific reference to individual provisions of the software license agreement pertaining to warranty that were specifically incorporated by reference into the implementation agreement (at 1Í 6 [b]). In addition, although schedule A was generally incorporated in paragraph 2 of the implementation agreement together with the software license agreement, the implementation agreement elsewhere incorporated several specific provisions of schedule A. In other words, when specific incorporation of a particular provision of an otherwise generally incorporated document was intended, it was accomplished by express language in the implementation agreement. The failure to do so in connection with the forum selection clause, therefore, is telling, and forecloses Intek’s argument. (Lodges 743 & 1746, Intl. Assn. of Machinists & Aerospace Workers, AFL-CIO v United Aircraft Corp., 534 F2d 422, 441 [2d Cir 1975] [“Strike Settlement Agreements (cannot) be read as incorporating by reference all relevant provisions of the collective bargaining contracts negotiated concurrently with them. Had that been the desire of the contracting parties, they could have done so expressly”].)
Intek seeks to avoid the force of this analysis by attempting to characterize CooperVision’s stated causes of action as, at least in part, including claims under the software license agreement. Intek refers, however, only to the allegation that Cooper-Vision prepaid Intek substantial sums of money “largely for
Finally, the court agrees with CooperVision’s effort to liken this case to Sempra Energy Trading Corp. v Algoma Steel, Inc. (
Accordingly, the documentary evidence produced by Intek on this motion does not conclusively establish as a matter of law the applicability of the forum selection clause.
The motion to dismiss on the ground that CooperVision’s service was on the administrative assistant to Intek’s CEO, who was not authorized to accept service, and that CooperVision’s second attempted service was accomplished outside the 120-day period of CPLR 306-b, is denied. The process server’s affidavit alleged that the administrative assistant “advised she could accept service.” Intek says now that she was not authorized to accept service, but Intek fails to allege that she did not make the representation to the process server attributed to her, nor does Intek seek to establish that it would have been unreasonable in the circumstances for the process server to accept her at her word; she was, after all, the administrative assistant to the CEO. (Fashion Page v Zurich Ins. Co., 50 NY2d 265, 273 [1980]; Arvanitis v Bankers Trust Co.,
The Motion to Dismiss the Tort Claims
The cause of action for fraud survives the motion to dismiss for a failure to state a cause of action at this stage of the proceedings. “A cause of action for fraud may arise when one misrepresents a material fact, knowing it is false, which another relies on to its injury.” (Graubard Mollen Dannett & Horwitz v Moskovitz,
Intek relies on the integration and modification clauses of the agreements to defeat the reasonable reliance element of the fraud claims. As CooperVision contends, however, these clauses are insufficiently specific to defeat CooperVision’s claims. “[A] general merger clause is ineffective ... to preclude parol evidence that a party was induced to enter the contract by means of fraud.” (Manufacturers Hanover Trust Co. v Yanakas,
Intek’s argument in its reply papers, drawn from the rule that statements of opinion and predictions of future events cannot support a fraud claim (Koagel v Ryan Homes,
“representations of opinion or predictions of some thing which it is hoped or expected will occur in thefuture will not sustain an action for fraud[,] ... a statement concerning a future act which is made with the knowledge or intention that the act would not occur, as the complaint alleges that these representations were made, is deemed a statement of ‘a material existing fact sufficient to support a fraud action.’ ” (Chase Manhattan Bank, N.A. v Perla, 65 AD2d 207 , 210 [4th Dept 1978], quoting Channel Master Corp. v Aluminium Ltd. Sales,4 NY2d 403 , 407 [1958].)
The allegations of the complaint are of the latter variety, and therefore defendant’s motion to dismiss the fraud claim is denied.
CooperVision sets forth two causes of action in negligence, one of which, the fifth cause of action, CooperVision has agreed to drop from the complaint. Intek’s motion to dismiss the fifth cause of action is granted. CooperVision, however, opposes the motion to dismiss the negligent misrepresentation claim. Intek contends that the parties had no special relationship to support a cause of action for negligent misrepresentation. (Clark-Fitzpatrick, Inc. v Long Is. R.R. Co.,
The motion to dismiss the unjust enrichment claim is also denied. In the context of a preanswer motion to dismiss in which the complaint also states a valid cause of action for fraud in the inducement, “recovery under the equitable doctrine of quantum meruit is not precluded in the event the contracts are voided.” (Niagara Mohawk Power Corp. v Freed,
For the reasons stated above, the motion to dismiss on the ground that the parties selected the State of Washington as the proper forum is denied. The motion to dismiss on the ground of failure of service is denied. The motion to dismiss the tort claims is granted in part and denied in part. The fifth cause of action is dismissed. The remaining tort claims survive this preanswer motion to dismiss.
Notes
. As plaintiff points out, without the forum selection clause in the mix, it makes absolutely no sense under forum non conveniens principles to litigate this dispute in the State of Washington. (CPLR 503 [a].)
. As Cooper Vision contends, the fact that the implementation agreement also had a choice of law provision which was identical to the choice of law provision in the software license agreement, signals that the agreements were separate, because acceptance of Intek’s incorporation argument would mean that the choice of law provision of the implementation agreement would be “mere surplusage.” (National Union Fire Ins. Co. of Pittsburgh, Pa. v Williams,