Court Rules on Venue in a Subrogation Action

The word “venue” refers to the location (county) in which a lawsuit will be heard and in which the trial will occur (if it proceeds all the way to trial).  The plaintiff (i.e., the one filing the lawsuit) initially chooses the venue when he/she files a “Summons and Complaint” with the court clerk at one of New York’s 62 counties.  The venue chosen must be “proper” and the defendant (i.e., the one responding to the lawsuit) can object if she/he feels the plaintiff did not file the lawsuit in the correct county – or if the county chosen is not convenient to the witnesses.  Generally, the venue is based on the “residency” of the plaintiff or the defendant.  If the plaintiff is a corporation – such as a subrogating insurance company – and the defendant “resides” in a county different than the plaintiff, the issue of which venue if most appropriate gets a bit more complicated, as demonstrated by a New York City judge earlier this month.

“Bush” entered into a contract with “Masten” to purchase a commercial building (restaurant) in Burnt Hills (Saratoga County), New York.  The Bushes desired to have someone inspect the premises prior to closing on it.  The building was “de-winterized” to allow for the inspection to occur.  While “de-winterized,” a water leak occurred, causing water damage to the building.  Seneca Insurance brought a subrogation action against Bush, claiming Bush was the one who improperly de-winterized and allowed the leak to occur.  (The decision is unclear, but presumably Seneca is Masten’s insurance company that paid to repair the premises owned by Masten.)   Seneca sued in Manhattan, New York County.  For those of you not familiar with New York State geography, Manhattan is over three hours’ drive southeast of Saratoga County. Seneca had initially based its venue on the fact that Seneca has its principal place of business in Manhattan.  The Bushes, not surprisingly, filed a motion to have the case moved out of Manhattan to upstate. They asked that the case instead be heard in Schenectady County.  Apparently the Bushes live in Schenectady County (which is adjacent to Saratoga County).

The judge denied the motion.  The judge noted that venue is proper “in any county where one of the parties resided when the action was commenced” and that, for corporations, “residency is in the county where the corporation’s principal office is.”  One of the bases for changing the venue of a case is where “the convenience of material witnesses and the ends of justice will be promoted by the change.” [1]  The Bushes argued that most, if not all of the important witnesses regarding the flood resided in the Schenectady/Saratoga counties area. The judge initially denied the motion because the Bushes failed to make a proper showing by affidavits.  The Bushes filed a second motion and the judge again declined to change venue.

Bottom Line:  There may be strategic advantages as to which county to “venue” your subrogation action. Considerations include your attorney’s familiarity with the judges, the ability to obtain a relatively quick trial date, and whether the jury pool in the county would tend to be “pro-subrogation” and decide in your favor.  In New York, the subrogating carrier gets to pick venue initially when the suit is filed.  As this one judge in Manhattan demonstrates, it is not easy for a defendant to move the case to another county once it is filed in a proper county by the plaintiff.

[1] CPLR 510(3)

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