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Current Developments in the Commercial Divisions of the
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Posted: June 15, 2014

Court Refuses to Enforce Alleged Parol Forum Selection Clause

On June 12, 2014, Justice Demarest of the Kings County Commercial Division issued a decision in Zucker v Ron Waldmann, Basel, LLC, 2014 NY Slip Op. 50914(U), rejecting an argument that a parol forum selection clause applied to an action on a written contract without a forum selection clause.

In Zucker, the defendant moved to dismiss on several grounds, including lack of personal jurisdiction. The trial court held that it lacked personal jurisdiction over the defendants, rejecting the plaintiff’s argument that the parties had agreed in a telephone call that any dispute would be litigated in New York. The court explained:

Plaintiff, in his affidavit, attests that [the defendants] specifically agreed with him that any and all disputes concerning his investment could be taken care of in a court action here in New York. He claims that this agreement as to New York jurisdiction was reached during a telephone call made to him in Brooklyn before he signed the Investment Agreement. He states that he accepted [the individual defendant’s] word on this, without insisting that he put it in writing. While conceding that the Investment Agreement does not mention this aspect of their agreement, plaintiff points to the fact that the Investment Agreement does not specifically state that it constitutes the entire agreement between him and [defendants]. He further states that he relied upon this representation . . . executing the Investment Agreement, and claims that since [the individual defendant] was also a New York City resident at that time, he thought that it made sense that they would have access to New York courts in the event of a dispute. He argues that there is an issue of fact as to whether [the parties] agreed that all disputes among them could be litigated in New York. . . . Here, there is no forum selection clause contained in the Investment Agreement. When parties set down their agreement in a clear, complete document, their writing should as a rule be enforced according to its terms, and evidence outside the four corners of the document as to what was really intended but unstated or misstated is generally inadmissible to add to or vary the writing. Thus, since the written Investment Agreement between the plaintiff and Basel was unambiguous, parol evidence to add terms to this agreement is inadmissible.

(Internal quotations and citations omitted).

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