In a September 13, 2010 decision by Justice Bucaria, the court declined the defendant’s motion to transfer the venue of the action from Nassau to New York County based on a forum selection clause contained in the parties’ memorandum of understand. While a forum selection clause providing for the location of a trial is prima facie valid, a party is not bound by such clause where it disaffirms the agreement and asserts that it is permeated with fraud. The court found that, through allegations that the defendant was a “corporate shell game and a matter of theft by means of deceit,” the plaintiffs were disaffirming the memorandum of understanding and, thus, were not bound by the forum selection clause.
However, in light of the plaintiffs’ characterization of the defendant, the court denied the plaintiffs’ motion to compel a meeting of the shareholders pursuant to BCL § 602, and to compel an accounting upon finding that: (1) it was unclear what purpose the shareholder meeting would serve, and (2) it was neither appropriate nor practical for the directors to render an accounting at a shareholders meeting. The court granted the plaintiffs’ motion for an order granting permission to inspect the defendant’s books and records, pursuant to BCL § 624(e), concluding that, although the plaintiffs’ discovery was beyond the specific documents permitted under the BCL, the plaintiffs established a proper purpose for the need for the inspection.