Commercial Division Blog
Posted: September 8, 2018 / Categories Commercial, Court Rules/Procedures
BCL §1312 Does Not Bar Action By Foreign Corporation That Did Not Do Business in New York
On August 14, 2018, Justice Ash of the Kings County Commercial Division issued a decision in Radiance Capital Receivables Twelve LLC v. JPMorgan Chase Bank, N.A., 2018 NY Slip Op. 32092(U), holding that BCL 1312 does not bar an action by a foreign corporation that did not do business in New York, explaining:
[I]t is well established that BCL §1312[a) constitutes a bar to the maintenance of an action by a foreign corporation found to be doing business in New York without having obtained the required authorization to do business there. The purpose of section 1312 of the Business Corporation Law and its predecessor statutory provisions is not to enable defendants to avoid contractual obligations but to regulate such foreign corporations which are in fact conducting business within the State so that they shall not be doing business under more advantageous terms than those allowed a corporation of this State.
Absent proof establishing that the plaintiff is doing business in New York, it is presumed that the plaintiff is doing business in its State of incorporation and not in New York. The party invoking the statutory barrier bears the burden of proving that the corporation's business activities in New York were not just casual or occasional, but so systematic and regular as to manifest continuity of activity in the jurisdiction.
Here, upon reargument, the Court finds that there is no basis to dismiss this proceeding pursuant to BCL §1312[a). Joseph failed to show that Petitioner's activities in New York have been so systematic and regular as to manifest continuity of activity in the jurisdiction. Moreover, Petitioner represents that, at the present time, its only activity in New York relates to the enforcement of the judgment at issue here. Joseph fails to present any fact to the contrary.
(Internal quotations and citations omitted).
New York procedural law is relatively straightforward, but there are rules, like the rule discussed in this decision, that can be traps for the unwary. Contact Schlam Stone & Dolan partner John Lundin at firstname.lastname@example.org if you or a client have a question regarding New York procedural law.