Supreme Court, Orange County, September 24, 2018

DLA Piper LLP (US), New York City (Shand S. Stephens, Anthony P. Coles and Joseph Alonzo of counsel), for defendants.

Westerman Ball Ederer Miller Zucker & Sharfstein, LLP, Uniondale (Andrew S. Lewner of counsel), for plaintiffs.

It is ordered that the motion is disposed of as follows: plaintiffs (collectively, Milmar) are affiliated New York companies, engaged in the production and distribution of food products, which are required by New York law to provide workers' compensation insurance for their employees. Defendants provide products and services in connection with workers' compensation insurance coverage. Beginning in 2013, Milmar was covered under a workers' compensation program (the EquityComp Program) created, patented and implemented by defendants.

There are essentially three components to this Program:

1. Standard workers' compensation insurance policies issued to Milmar by defendants Continental Indemnity Company (Continental) and California Insurance Company (California), with rates and forms approved by New York's Department of Financial Services or its predecessor, the New York Insurance Department;

2. A reinsurance agreement (the Reinsurance Treaty) between defendant Applied Underwriters Captive Risk Assurance Company, Inc. (AUCRA) and affiliates of defendant Applied Underwriters, Inc. (AU), including Continental and California; and

3. A Reinsurance Participation Agreement (RPA) between AUCRA and Milmar.

Milmar commenced this action, complaining that the RPA is illegal and fraudulent, and seeking, inter alia, a declaratory{**61 Misc 3d at 816} judgment that the RPA is void and unenforceable under the New York Insurance Law, equitable rescission of the RPA and money damages for sums paid under the RPA in excess of premiums due under the Continental and California insurance policies.

Defendants move, inter alia, (1) to dismiss Milmar's claims against AUCRA on the ground that the RPA designates the courts of Nebraska as the exclusive forum for resolving "any matter concerning this Agreement that is not subject to the dispute resolution provisions of Paragraph 13 hereof,"^[FN1] and (2) to dismiss Milmar's claims against all remaining defendants on the ground that AUCRA is a necessary party who cannot be joined in this New York action.

I. The Nebraska Forum Selection Clause

A. The Issues on Defendants' Motion

Defendants move pursuant to CPLR 3211 (a) (1) (i.e., on the basis of documentary evidence) to dismiss Milmar's claims against AUCRA on the ground that the RPA designates the courts of Nebraska as the exclusive forum for resolving "any matter concerning this Agreement that is not subject to the dispute resolution provisions of Paragraph 13 hereof."

Milmar, in opposition, contends that (1) Nebraska law, not New York law, governs the enforceability of the RPA's forum selection clause; (2) the forum selection clause is unenforceable under Nebraska's Choice of Forum Act, Nebraska Revised Statutes § 25-414; (3) Milmar's claims are not within the scope of the RPA's forum selection clause; (4) the forum selection clause should be set aside on the ground of fraudulent inducement; (5) due process concerns preclude enforcement of the Nebraska forum selection clause against Milmar; and (6) AUCRA is collaterally estopped from enforcing the Nebraska forum selection clause.

B. The Legal Standard Governing Defendant's CPLR 3211 (a) (1) Motion

CPLR 3211 (a) (1) provides that "[a] party may move for judgment dismissing one or more causes of action asserted{**61 Misc 3d at 817} against him on the ground that: . . . a defense is founded upon documentary evidence." "[A] contractual forum selection clause is documentary evidence that may provide a proper basis for dismissal pursuant to CPLR 3211 (a) (1)" (Lischinskaya v Carnival Corp., 56 AD3d 116, 123 [2d Dept 2008] [citations omitted], lv denied 12 NY3d 716 [2009]; Landmark Ventures, Inc. v Birger, 147 AD3d 497 [1st Dept 2017]). "[A] dismissal is warranted only if the documentary evidence submitted conclusively establishes a defense . . . as a matter of law" (Leon v Martinez, 84 NY2d 83, 88 [1994]; Walker, Truesdell, Roth & Assoc., Inc., Trustee of Greenwich Sentry, L.P. Litig. Trust v Globeop Fin. Servs. LLC, 43 Misc 3d 1230[A], 2013 NY Slip Op 52318[U], *2 [Sup Ct, NY County 2013]).

C. The RPA's Choice-of-Law and Forum Selection Provisions

The RPA provides in pertinent part as follows:

"14. Participant hereby irrevocably and unconditionally submits to the exclusive jurisdiction of the Courts of Nebraska for the purpose of enforcing any arbitration award rendered hereunder and all other purposes related to this Agreement, and agrees to accept service of process in any case instituted in Nebraska related to this Agreement and further agrees not to challenge venue in Nebraska provided such process is delivered in accordance with the applicable rules for service of process then in effect in Nebraska. . . .

"16. This Agreement shall be exclusively governed by and construed in accordance with the laws of Nebraska and any matter concerning this Agreement that is not subject to the dispute resolution provisions of Paragraph 13 hereof shall be resolved exclusively by the courts of Nebraska without reference to its conflict of laws."

D. Which state's law governs?

[1] "It is the well-settled policy of the courts of this State to enforce contractual provisions for choice of law and selection of a forum for litigation" (Boss v American Express Fin. Advisors, Inc., 15 AD3d 306, 307 [1st Dept 2005] [internal quotation marks omitted], affd 6 NY3d 242 [2006]; see also Culbert v Rols Capital Co., 184 AD2d 612, 613 [2d Dept 1992], citing Freedman v Chemical Constr. Corp., 43 NY2d 260, 265 [1977]). New York courts will enforce a foreign choice-of-law provision so long as the chosen forum bears a reasonable relation to the{**61 Misc 3d at 818} agreement and the enforcement of a foreign rule of law does not violate a fundamental public policy of New York (see Boss v American Express Fin. Advisors, Inc.; Culbert v Rols Capital Co.; Gambar Enters. v Kelly Servs., 69 AD2d 297, 303 [4th Dept 1979]). Nebraska, as the principal place of business of AUCRA, one of the contracting parties, clearly bears a reasonable relation to the RPA. Neither party has asserted, much less demonstrated, that Nebraska law violates this state's fundamental public policy. Hence, the RPA's Nebraska choice-of-law provision is enforceable in this action.

[2] Nebraska law imported via the RPA's choice-of-law provision applies to "substantive" issues only:

" '[U]nder common-law rules matters of procedure are governed by the law of the forum' (Martin v Dierck Equip. Co., 43 NY2d 583, 588 . . . ). 'On the other hand, matters of substantive law fall within the course chartered by choice of law analysis' (Tanges v Heidelberg N. Am., 93 NY2d 48, 53 . . . ). New York courts therefore apply contractual choice of law clauses only to substantive issues (see Sears, Roebuck & Co. v Enco Assoc., 43 NY2d 389, 397 . . . )" (Education Resources Inst., Inc. v Piazza, 17 AD3d 513, 513 [2d Dept 2005]; see also USA-India Export-Import, Inc. v Coca-Cola Refreshments USA, Inc., 46 Misc 3d 1215[A], 2015 NY Slip Op 50091[U], *7 [Sup Ct, Westchester County 2015]).

[3] As the court in USA-India Export-Import, Inc. observed, "[t]here is a division in authority as [to] whether the law of the forum chosen pursuant to a choice of law clause governs the enforceability of the forum selection clause." (Id. at *7.) It "appeared" to that court on the basis of federal case law that "the rule is that '[q]uestions of venue and the enforcement of forum selection clauses are essentially procedural, rather than substantive, in nature,' " wherefore it applied New York law in determining the enforceability of a Georgia forum selection clause in a contract with a Georgia choice-of-law provision (id. at *7-8;^[FN2] see also New York Trans Harbor LLC v Derektor Shipyards Conn., LLC, 19 Misc 3d 1134[A], 2008 NY Slip Op{**61 Misc 3d at 819} 50998[U], *2-3 [Sup Ct, Kings County 2008] [per the same federal case law, applying New York law to determine enforceability of English forum selection clause in contract with English choice-of-law provision]). Another New York court, addressing a contract with New Jersey choice-of-law and forum selection provisions, held to the contrary that New Jersey law, not New York law, must be used to determine the meaning and enforceability of the contract's forum selection clause (see Compunnel Software Group, Inc. v Spectrasoft Tech., Inc., 21 Misc 3d 1129[A], 2008 NY Slip Op 52278[U], *1-2 [Civ Ct, NY County 2008]).

The case at bar is only further complicated by the fact that the parties' agreement to a Nebraska choice-of-law provision effectively incorporated in the RPA, Nebraska Revised Statutes § 25-414, a Nebraska statute which specifically concerns the enforcement of forum selection clauses (see Woodmen of World Life Ins. Socy. v Puccio, 1 Neb App 478, 482, 499 NW2d 85, 87-88 [1993], overruled on other grounds by Woodmen of the World Life Ins. Socy. v Yelich, 250 Neb 345, 351, 549 NW2d 172, 175-176 [1996]). However, Nebraska courts have not definitively determined whether the law of the forum or the law designated in the contract governs the enforceability of a contractual forum selection clause. Faced with an agreement containing Pennsylvania choice-of-law and forum selection clauses, the Nebraska Supreme Court observed that analysis of the enforceability of the forum selection clause was complicated by the foreign choice-of-law provision and wrote:

"When a party to such an agreement files suit in a state that is not designated by either the forum selection clause or the choice-of-law clause, it is necessary to determine which state's law will govern the enforceability of the forum selection clause itself. However, because in the present case we determine that the forum selection clause . . . is enforceable under either Nebraska law or Pennsylvania law, we need not decide which jurisdiction's law governs the question of enforceability of the forum selection clause" (Polk County Recreational Assn. v Susquehanna Patriot Commercial Leasing{**61 Misc 3d at 820} Co., Inc., 273 Neb 1026, 1036-1037, 734 NW2d 750, 759 [2007]).

In the parallel circumstances present here, this court similarly finds that analysis under New York law and under Nebraska law leads to the same result, and hence, that it is unnecessary to decide which jurisdiction's law governs the enforceability of the RPA's Nebraska forum selection clause.

E. The forum selection clause is enforceable under New York law.

" 'Forum selection clauses are enforced because they provide certainty and predictability in the resolution of disputes' (see Brooke Group v JCH Syndicate 488, 87 NY2d 530, 534 [1996])" (Boss v American Express Fin. Advisors, Inc., 6 NY3d 242, 247 [2006], supra).

"The parties to an agreement 'may freely select a forum which will resolve any disputes over the interpretation or performance of the contract' (Brooke Group v JCH Syndicate 488, . . . ). Such a forum selection clause is prima facie valid and enforceable 'unless it is shown by the challenging party to be unreasonable, unjust, in contravention of public policy, invalid due to fraud or overreaching, or it is shown that a trial in the selected forum would be so gravely difficult that the challenging party would, for all practical purposes, be deprived of its day in court' (LSPA Enter., Inc. v Jani-King of N.Y., Inc., 31 AD3d 394, 395 . . . ). 'Absent a strong showing that it should be set aside, a forum selection agreement will control' (Di Ruocco v Flamingo Beach Hotel & Casino, 163 AD2d 270, 272 . . . )." (Horton v Concerns of Police Survivors, Inc., 62 AD3d 836, 836 [2d Dept 2009] [citations omitted], lv denied 13 NY3d 706 [2009]; see also Trump v Deutsche Bank Trust Co. Ams., 65 AD3d 1329, 1331 [2d Dept 2009]; Sterling Natl. Bank v Eastern Shipping Worldwide, Inc., 35 AD3d 222 [1st Dept 2006].)

Milmar has not attempted to demonstrate that the Nebraska forum selection clause is unenforceable under New York law, claiming instead that the matter is governed by Nebraska law, and specifically, Nebraska Revised Statutes § 25-414.

[4] There is no evidence that it would be unreasonable, unjust, or in contravention of New York public policy to require Milmar to abide by its agreement to litigate its claims against AUCRA in Nebraska.{**61 Misc 3d at 821}

Moreover, the RPA's Nebraska forum selection clause may be invalidated due to fraud or overreaching only if the fraud/overreaching is specific to the forum selection clause itself (see Sterling Natl. Bank v Eastern Shipping Worldwide, Inc., 35 AD3d at 223; British W. Indies Guar. Trust Co. v Banque Internationale A Luxembourg, 172 AD2d 234 [1st Dept 1991]; Studebaker-Worthington Leasing Corp. v New Concepts Realty, Inc., 25 Misc 3d 1, 7 [App Term, 2d Dept, 9th & 10th Jud Dists 2009]; Signature Fin. LLC v Neighbors Global Holdings, LLC, 281 F Supp 3d 438, 446 [SD NY 2017] [surveying New York law]). Milmar's claim of fraud and overreaching is directed to the RPA as a whole, and not specifically to the forum selection clause. The only exception to this rule is where the fraud so pervades the parties' agreement as to render it void ab initio (see DeSola Group v Coors Brewing Co., 199 AD2d 141, 142 [1st Dept 1993], citing Matter of Weinrott [Carp], 32 NY2d 190 [1973]; Studebaker-Worthington Leasing Corp. v New Concepts Realty, Inc.; Signature Fin. LLC v Neighbors Global Holdings, LLC). Milmar has made no such showing, and another court, recently confronted with this very issue in another EquityComp case, held that the RPA could not be voided ab initio on the basis of claims much like Milmar's against AUCRA here (see AGL Indus., Inc. v Continental Indem. Co., 2018 WL 3510387,*3, 2018 US Dist LEXIS 121224, *7 [ED NY, July 19, 2018, No. 17-CV-4179 (PKC)(RER)]).^[FN3]

Finally, Milmar has not shown that a trial in Nebraska would be so gravely difficult that it would, for all practical purposes, be deprived of its day in court. Applying a forum non conveniens analysis in accord with what it takes to be Nebraska law, Milmar claims only that Nebraska is not a reasonably convenient place for the trial of this action. Under New York law,{**61 Misc 3d at 822} however, "[w]here a party to a contract has agreed to submit to the jurisdiction of a court, that party is precluded from attacking the court's jurisdiction on forum non conveniens grounds" (Honeywell Intl. Inc. v ARC Energy Servs., Inc., 152 AD3d 444, 444 [1st Dept 2017]; Sterling Natl. Bank v Eastern Shipping Worldwide, Inc., 35 AD3d at 223).

In view of the foregoing, Milmar has failed to carry its heavy burden under New York law of showing that the RPA's Nebraska forum selection clause should be set aside.

F. The forum selection clause is enforceable under Nebraska law.

"Under Nebraska law, the enforceability of a forum selection clause is evaluated by the terms of the Choice of Forum Act" (codified at Neb Rev Stat § 25-414) (Ameritas Inv. Corp. v McKinney, 269 Neb 564, 572, 694 NW2d 191, 200 [2005]). Nebraska Revised Statutes § 25-414 (1) provides:

"If the parties have agreed in writing that an action on a controversy may be brought in this state and the agreement provides the only basis for the exercise of jurisdiction, a court of this state will entertain the action if (a) the court has power under the law of this state to entertain the action; (b) this state is a reasonably convenient place for the trial of the action; (c) the agreement as to the place of the action was not obtained by misrepresentation, duress, the abuse of economic power, or other unconscionable means; and (d) the defendant, if within the state, was served as required by law of this state in the case of persons within the state or, if without the state, was served either personally or by certified mail directed to his last-known address."

By virtue of the RPA's Nebraska choice-of-law provision, section 25-414 became an inherent part of the RPA. In a Nebraska case involving a contract with Nebraska choice-of-law and forum selection clauses, the court wrote:

"The law of this state is an inherent part of every contract; every contract is made with reference to and subject to the existing law; and every law affecting the contract is read into it and becomes a part thereof. Haakinson & Beaty Co. v. Inland Ins. Co., 216 Neb. 426 . . . (1984). Therefore, § 25-414(1) is part of the subject contract" (see Woodmen of the World Life Ins. Socy. v Puccio, 1 Neb App at 482, 499{**61 Misc 3d at 823} NW2d at 88; see also Charter Oak Oil Co., Inc. v Applied Underwriters, Inc., 2017 WL 4018845, *7, 2017 US Dist LEXIS 147181, *19 [D Conn, Sept. 12, 2017, No 3:17-cv-00689 (SRU)], affd on reconsideration 2018 WL 1046787, 2018 US Dist LEXIS 30199 (D Conn, Feb. 26, 2018, No. 3:17-cv-0689 [SRU]).

"Under the Act, Nebraska courts are generally directed to enforce forum selection clauses unless certain statutory exceptions apply. A party seeking to avoid a contractual forum selection clause bears a heavy burden of showing that the clause should not be enforced, and, accordingly, the party seeking to avoid the forum selection clause bears the burden of proving that one of the statutory exceptions applies." (Polk County Recreational Assn. v Susquehanna Patriot Commercial Leasing Co., Inc., 273 Neb 1026, 1037, 734 NW2d 750, 759 [2007], supra.)

Based on the express language of Nebraska Revised Statutes § 25-414, the Nebraska Supreme Court, in Ameritas Inv. Corp. v McKinney, held that the Nebraska Choice of Forum Act governs the enforceability of a contractual forum selection clause only if the parties' "agreement provides the only basis for the exercise of jurisdiction," that is, "where the court would have no jurisdiction but for the fact that the parties have consented to its exercise by the choice-of-forum agreement." (269 Neb at 572, 694 NW2d at 200 [emphasis added].) Thus, as that same court reiterated in the Polk County case, "a challenge which claims that a forum selection clause naming Nebraska as the forum does not meet the requirements of the Act is properly viewed as a challenge to the personal jurisdiction over the defendant by the Nebraska court" (273 Neb at 1033, 734 NW2d at 756 [emphasis added]).

Had Milmar commenced its action in Nebraska, the Nebraska courts would have had personal jurisdiction over defendant AUCRA regardless of the RPA's forum selection clause. Per Milmar's complaint (¶ 16), defendant AUCRA is an Iowa corporation with its principal place of business located in Omaha, Nebraska. AUCRA is subject to general jurisdiction in the courts of Nebraska by virtue of the location of its principal place of business therein (see Daimler AG v Bauman, 571 US 117, 137 [2014]). Therefore, the Nebraska courts would on Milmar's claims have personal jurisdiction over AUCRA quite{**61 Misc 3d at 824} aside from the RPA's forum selection clause. By its very terms, then, the Nebraska Choice of Forum Act would not apply to Milmar's action against AUCRA (see Neb Rev Stat § 25-414; Ameritas Inv. Corp. v McKinney; Polk County Recreational Assn. v Susquehanna Patriot Commercial Leasing Co., Inc.).

The analysis might well be otherwise if this were a case of AUCRA as plaintiff attempting to sue Milmar as defendant in Nebraska, for it is unclear whether the courts of Nebraska would have personal jurisdiction over Milmar, a New York corporation, "but for the fact that the parties have consented to its exercise by the choice-of-forum agreement." (See Ameritas Inv. Corp. v McKinney, 269 Neb at 573, 694 NW2d at 201.) In just such a case, where a Nebraska insurer commenced an action in Nebraska against an out-of-state insured, a Nebraska court applied the Choice of Forum Act to invalidate the parties' Nebraska forum selection clause on the ground, per Nebraska Revised Statutes § 25-414 (b), that Nebraska was not "a reasonably convenient place for the trial of [the] action." (See Applied Underwriters, Inc. v Dinyari, Inc., 2008 WL 2231114, *4-6, 2008 Neb App LEXIS 101, *10-18 [May 20, 2008, No. A-07-058].)

Here, however, where Milmar as plaintiff is suing AUCRA as defendant, it cannot rely simply on its own lack of contacts with Nebraska as grounds for invoking the Choice of Forum Act. Given defendant AUCRA's substantial connection with Nebraska, the RPA's Nebraska forum selection clause would plainly not be "the only basis for the exercise of jurisdiction" over AUCRA in a Nebraska action on Milmar's claims, and hence the Choice of Forum Act by its express terms does not here apply (see Neb Rev Stat § 25-414).

This court is aware of two cases wherein other courts, reasoning as does Milmar here, have allowed plaintiffs to invoke Nebraska Revised Statutes § 25-414 to challenge a forum selection clause even though the defendant was subject to general jurisdiction in Nebraska courts. However, (1) for reasons discussed above, such an application of section 25-414 cannot be squared with the language of the statute or with the Nebraska Supreme Court's decisions in Ameritas and Polk County; and (2) as shown below, neither of those two cases remains good law for the point at issue.

In Woodmen of the World Life Ins. Socy. v Puccio, as in the case at bar, the parties entered into an agreement containing Nebraska forum selection and choice-of-law provisions. Puccio{**61 Misc 3d at 825} nevertheless brought suit as plaintiff in his home state of West Virginia. After attempting unsuccessfully to invoke the Nebraska forum selection clause in the West Virginia court, the Society sought a declaratory judgment in Nebraska that the parties' forum selection clause was valid and binding. Holding that Puccio's action was governed by section 25-414, a Nebraska intermediate appellate court wrote: "If Nebraska is not a 'reasonably convenient place' for Puccio's action, the Model Uniform Choice of Forum Act would not require the district court to accept Puccio's case, and Puccio would be free to file in a more convenient forum." (Puccio, 1 Neb App at 482, 499 NW2d at 88.) However, the Nebraska Supreme Court subsequently held that the Puccio court should never have reached the merits of the case, and that "[t]o the degree that Puccio permitted the use of a declaratory judgment action to obtain judicial review of a judgment of another forum, it is overruled." (Woodmen of the World Life Ins. Socy. v Yelich, 250 Neb 345, 351, 549 NW2d 172, 176 [1996].) Under the circumstances, this court does not regard Puccio as an authoritative source of Nebraska law on this point.

Charter Oak Oil Co., Inc. v Applied Underwriters, Inc. (2017 WL 4018845, 2017 US Dist LEXIS 147181 [D Conn, Sept. 12, 2017, No. 3:17-cv-00689 (SRU)]), like the case at bar, involves the "EquityComp" insurance program, an east coast plaintiff insured, Nebraska-based insurance defendants including AUCRA, and the RPA containing Nebraska forum selection and choice-of-law provisions. When the insured brought suit in Connecticut Superior Court (its home state), and after a notice of removal to the Federal District Court for the District of Connecticut, the defendants moved to enforce the forum selection clause and have the case dismissed or transferred to Nebraska. The District Court incongruously, and in this court's view erroneously, concluded that the forum selection clause was the only basis for laying jurisdiction of the plaintiff insured's case in Nebraska, even though the defendant—there as here—was a corporation subject to general jurisdiction in Nebraska. (2017 WL 4018845, *7-11, 2017 US Dist LEXIS 147181, *17-33.) Regardless, on motion for reconsideration, the District Court recognized that it had erred in analyzing the issue of the enforceability of the forum selection clause pursuant to Nebraska Revised Statutes § 25-414, since in federal court the relevant analysis is prescribed by federal law (see Martinez v{**61 Misc 3d at 826} Bloomberg LP, 740 F3d 211 [2d Cir 2014]). Accordingly, the District Court on reconsideration abjured any reliance upon its prior holding with respect to section 25-414 (see Charter Oak Oil Co., Inc. v Applied Underwriters, Inc., 2018 WL 1046787, *6-7, 2018 US Dist LEXIS 30199, *13-18 [D Conn, Feb. 26, 2018, No. 3:17-cv-0689 (SRU)]).

[5] In view of the foregoing, this court holds that the Nebraska Choice of Forum Act cannot be invoked to invalidate the RPA's forum selection clause in the circumstances of this case. Since the parties' agreement would not provide the only basis for the Nebraska courts' exercising personal jurisdiction over defendant AUCRA, the section 25-414 statutory exceptions to the enforceability of the forum selection clause are inapplicable (see Neb Rev Stat § 25-414; Ameritas Inv. Corp. v McKinney; Polk County Recreational Assn. v Susquehanna Patriot Commercial Leasing Co., Inc.; cf. Applied Underwriters, Inc. v Dinyari, Inc.).

Consequently, Milmar's contention that Nebraska is not a reasonably convenient place for the trial of this action does not constitute grounds for invalidating the forum selection clause in this case. Under Nebraska law, as under New York law, to invalidate the forum selection clause on constitutional due process grounds Milmar would have to demonstrate that trial in Nebraska would be "so gravely difficult and inconvenient" that it would be deprived of its day in court. (See Ameritas Inv. Corp. v McKinney, 269 Neb at 572, 694 NW2d at 200; Polk County Recreational Assn. v Susquehanna Patriot Commercial Leasing Co., Inc., 273 Neb at 1039, 734 NW2d at 757.) Milmar does not even attempt to establish that bringing suit in Nebraska in accordance with the RPA forum selection clause to which it agreed would be "so gravely difficult and inconvenient" that it would be deprived of a remedy. Finally, in Nebraska, as in New York, a forum selection clause may not be invalidated based on allegations of fraud relating to the procurement of the contract as a whole rather than to the forum selection clause specifically. (See Polk County Recreational Assn. v Susquehanna Patriot Commercial Leasing Co., Inc., 273 Neb at 1040, 734 NW2d at 761.)

Thus, Milmar has also failed to carry its burden under Nebraska law of showing that the RPA's Nebraska forum selection clause should be set aside.{**61 Misc 3d at 827}

G. Milmar's claims are within the scope of the forum selection clause.

The RPA designates the courts of Nebraska as the exclusive forum for resolving "any matter concerning this Agreement . . . . " RPA ¶ 16 states:

"This Agreement shall be exclusively governed by and construed in accordance with the laws of Nebraska and any matter concerning this Agreement that is not subject to the dispute resolution provisions of Paragraph 13 hereof shall be resolved exclusively by the courts of Nebraska without reference to its conflict of laws."

Milmar argues:

"[T]he claims asserted by Milmar are not subject to that clause. Indeed, Milmar has not asserted any claim or right arising under or relating to the RPA. Rather, Milmar has asserted claims that the RPA is invalid under New York Insurance Law (Counts I, II, III), New York's General Business Law (Count V), equity (Count IV) and under New York common law (Count VI). Nowhere in its Complaint does Milmar seek to enforce any aspect of the RPA or any right thereunder. To the contrary, it is Milmar's contention that the RPA is void, invalid and unenforceable. Said differently, Milmar has not asserted a single claim under the RPA; Milmar's claims relate to Defendant's conduct prior to the execution of the RPA" (mem at 11).

The court is not aware of any pertinent Nebraska authority concerning the meaning and scope of a contractual forum selection clause. As a matter of general principles of contract interpretation, the scope of a forum selection clause depends upon the intention of the parties reflected in the wording of the clause and the facts of the case (see e.g. Terra Intl., Inc. v Mississippi Chem. Corp., 119 F3d 688, 693 [8th Cir 1997], cert denied 522 US 1029 [1997]).

The term "concerning" is defined by the Merriam-Webster Dictionary as meaning "relating to" or "regarding" (Merriam-Webster Online Dictionary, concerning [http://unabridged.merriam-webster.com/unabridged/concerning]). "[T]he ordinary meaning of [the phrase 'relating to'] is a broad one—'to stand in some relation; to have bearing or concern; to pertain; refer; to bring into association with or connection with' " (Central{**61 Misc 3d at 828} States Found. v Balka, 256 Neb 369, 374, 590 NW2d 832, 837 [1999], quoting Black's Law Dictionary 1158 [5th ed 1979]). While this court has located no Nebraska decisions construing the term "concerning," the Nebraska Supreme Court has held that its functional equivalent—the phrase "relating to"—is "to be read broadly and should be interpreted as being comprehensive of the subject indicated." (Citizens of Humanity, LLC v Applied Underwriters Captive Risk Ass. Co., Inc., 299 Neb 545, 569, 909 NW2d 614, 632 [2018]; Central States Found. v Balka, 256 Neb at 375, 590 NW2d at 837.)

The RPA's forum selection clause—defined in terms of "any matter concerning" the RPA—must accordingly be construed as broad in scope and "comprehensive of the subject indicated." Contrary to Milmar's suggestion, then, that clause is not limited to claims involving the enforcement of rights under the RPA, nor may claims that the RPA is void, invalid and unenforceable be deemed categorically beyond its scope. Rather, Milmar's non-contractual claims against AUCRA fall within the broad scope of the Nebraska forum selection clause if they "concern" or stand in some discernible relationship to the RPA.

Courts have articulated in different ways the factors bearing on whether such a relationship exists. In Terra Intl., Inc. v Mississippi Chem. Corp., the court wrote:

"Although determining the scope of a forum selection clause is a rather case-specific exercise, several courts have offered further guidance on this issue and have articulated variously phrased general rules regarding the circumstances in which a forum selection clause will apply to tort claims. The Third Circuit has indicated that where tort claims 'ultimately depend on the existence of a contractual relationship' between the parties, such claims are covered by a contractually-based forum selection clause. Coastal Steel Corp. v. Tilghman Wheelabrator Ltd., 709 F.2d 190, 203 (3d Cir.), cert. denied, 464 U.S. [*3]938 . . . (1983). In Manetti-Farrow, Inc. v. Gucci America, Inc., 858 F.2d 509, 514 (9th Cir.1988), the Ninth Circuit stated that '[w]hether a forum selection clause applies to tort claims depends on whether resolution of the claims relates to interpretation of the contract.' The First Circuit has phrased its test slightly differently, explaining that 'contract-related tort claims involving the same operative facts as a parallel claim for breach of contract should be heard in the forum selected{**61 Misc 3d at 829} by the contracting parties.' Lambert v. Kysar, 983 F.2d 1110, 1121-22 (1st Cir.1993)." (119 F3d at 694; see also BioCapital, LLC v BioSystem Solutions, Inc., 2009 WL 1815056, *4, 2009 Conn Super LEXIS 1502, *10-12 [June 1, 2009, No. FSTCV085009331S].)

Here, the resolution of all of Milmar's claims against AUCRA relates to interpretation of the RPA (see Manetti-Farrow, Inc. v Gucci Am., Inc.):

• Count I is premised on the allegation that "[t]he RPA purports to charge rates to Plaintiffs in connection with Workers' Compensation policies in amounts in excess of the rates approved by [the] New York State Department of Insurance." (Complaint ¶ 118.)

• Count II is premised on the allegation that "[t]he RPA describes a reinsurance agreement between Plaintiffs, collectively a New York business engaged in the food service industry, and AUCRA, an insurance company." (Complaint ¶ 129.)

• Count III is premised on the allegation that representations relating to the EquityComp program were false and misleading due to "run-off" loss development factors contained in the RPA. (Complaint ¶¶ 140-144.)

• Counts IV, V and VI are premised on allegations that "the RPA was prohibited by law and not a guaranteed cost policy." (Complaint ¶¶ 149, 150, 158, 167, 170.)

• Count VI is premised in addition on the allegation that "[t]he RPA . . . alters the structure of the insurance relationship and results in [an] alleged 'profit-sharing' scheme that has no element of insurance." (Complaint ¶ 171.)

[6] Each of these allegations quite plainly rests upon an interpretation of the RPA and its terms, and it is equally plain that definitive judicial interpretation of the RPA will be necessary to resolve Milmar's claims. This consideration—given the Nebraska Supreme Court's repeated holdings that the phrase "relating to" (the functional equivalent of "concerning") is "to be read broadly and should be interpreted as being comprehensive of the subject indicated" (see Citizens of Humanity, LLC v AUCRA, 299 Neb at 569, 909 NW2d at 632; Central States Found. v Balka, 256 Neb at 375, 590 NW2d at 837)—is sufficient in this court's view to bring Milmar's claims within the{**61 Misc 3d at 830} broad scope of the RPA's provision requiring that "any matter concerning [the RPA]" be resolved exclusively by the courts of Nebraska.

One Federal District Court, in Charter Oak Oil Co., Inc. v Applied Underwriters, Inc., has held to the contrary that claims similar to Milmar's here fell outside the scope of a forum selection clause which applied to "any legal suit, action, or proceeding arising out of, related to or based upon" the RPA (2017 WL 4018845, *4, 2017 US Dist LEXIS 147181, *11 [D Conn, Sept. 12, 2017, No. 3:17-cv-00689 (SRU)] [emphasis added], affd on reconsideration 2018 WL 1046787, *4-6, 2018 US Dist LEXIS 30199, *8-16 [D Conn, Feb. 26, 2018, No. 3:17-cv-0689 (SRU)]). For a number of reasons, this court declines to follow Charter Oak:

1. Disregarding a Nebraska choice-of-law provision in the RPA, the Charter Oak court applied federal law, not Nebraska law, to determine the meaning and scope of the forum selection clause. The court's analysis in that regard contravenes the holding of the Second Circuit in Martinez v Bloomberg LP (740 F3d 211, 224 [2d Cir 2014], supra), that "questions about the meaning and scope of a forum selection clause—are resolved under the substantive law designated in an otherwise valid contractual choice-of-law clause."

2. In contravention of the Nebraska Supreme Court's holdings that "[t]he phrase 'relating to' is to be read broadly and should be interpreted as being comprehensive of the subject indicated" (see Citizens of Humanity, LLC v Applied Underwriters Captive Risk Assur. Co., Inc., 299 Neb at 569, 909 NW2d at 632 [emphasis added]; Central States Found. v Balka, 256 Neb at 375, 590 NW2d at 837 [emphasis added]), the Charter Oak court held to the contrary that "the Forum Selection Clause can only capture claims that are strictly 'related to . . . [the RPA], or the transactions contemplated [t]hereby', and not merely claims that are related to events or issues that are themselves related to the RPA or the transactions contemplated thereby." (2018 WL 1046787, *6 n 10, 2018 US Dist LEXIS 30199, *14 n 10 [emphasis added].)

3. In so holding, the Charter Oak court recognized that its decision was at odds with those of a number of other courts within the Second Circuit (see Roby v Corporation of Lloyd's, 996 F2d 1353, 1357-1361 [2d Cir 1993]; SLSJ, LLC v Kleban, 2015 WL 1973307,*15, 2015 US Dist LEXIS 57074, *44-48 [D Conn, Apr. 30, 2015, No. 3:14-cv-390 (CSH)]; In re Libor-Based Fin. Instruments Antitrust Litig., 2015 WL 4634541,*29, 2015{**61 Misc 3d at 831} US Dist LEXIS 107225, *177-181 [SD NY, Aug. 4, 2015, No. 11 MDL 2262 NRB], amended 2015 WL 6243526, 2015 US Dist LEXIS 147561 [SD NY, Oct. 20, 2015, No. 11 MDL 2262 (NRB)]).

4. Taking its cue from a dissenting opinion in Mitsubishi Motors Corp. v Soler Chrysler-Plymouth, Inc. (473 US 614, 645 [1985] [Stevens, J., dissenting]), the Charter Oak court fabricated its own test out of whole cloth without even adverting to, much less applying, the tests formulated in an extensive body of federal case law for determining whether non-contractual claims are within the scope of a contractual forum selection clause (see e.g. Terra Intl., Inc. v Mississippi Chem. Corp. [summarizing case law]).

In view of the foregoing, this court regards Charter Oak as unpersuasive, and adheres to its determination that Milmar's claims fall within the scope of the RPA's forum selection clause.

H. AUCRA is not collaterally estopped from relying on the RPA's Nebraska forum selection clause.

Milmar contends that AUCRA is collaterally estopped from relying on the RPA's Nebraska forum selection clause by virtue of three prior decisions holding that this clause was unenforceable under Nebraska law (see Applied Underwriters, Inc. v Dinyari, Inc., 2008 WL 2231114, 2008 Neb App LEXIS 101 [May 20, 2008, No. A-07-058], supra; AUCRA v E.M. Pizza, Inc., Dist Ct, Douglas County, 2017, docket No. C116-9385; Charter Oak Oil Co., Inc. v Applied Underwriters, Inc., 2017 WL 4018845, 2017 US Dist LEXIS 147181 [D Conn, Sept. 12, 2017, No. 3:17-cv-00689 (SRU)], supra).

The doctrine of collateral estoppel applies, of course, only if the very question before this court was previously decided against AUCRA in a previous case. For reasons explained above (supra at 824), the question presented in Dinyari and in E.M. Pizza was materially different from the question presented here because, in those cases, AUCRA sought to haul its insureds as defendants into court in Nebraska, thereby giving rise to issues concerning personal jurisdiction which are simply not relevant to this case, where Milmar is the plaintiff. This distinction does not apply to the Charter Oak case, but, as is also explained above (supra at 825-826), the Charter Oak court, on motion for reconsideration, recognized that it had erred in analyzing the issue of the enforceability of the forum selection clause under Nebraska law, and abjured any reliance upon its prior holding that the forum selection clause was unenforceable{**61 Misc 3d at 832} under Nebraska law (see 2018 WL 1046787, *6-7, 2018 US Dist LEXIS 30199, *13-18 [D Conn, Feb. 26, 2018, No. 3:17-cv-0689 (SRU)]).

Therefore, AUCRA is not collaterally estopped from relying on the RPA's Nebraska forum selection clause.

II. Conclusion

AUCRA has established on the basis of documentary evidence that Milmar's claims against it are subject to dismissal on the ground that the RPA designates the courts of Nebraska as the exclusive forum for resolving "any matter concerning this Agreement that is not subject to the dispute resolution provisions of Paragraph 13 hereof." Therefore, Milmar's claims against AUCRA are, pursuant to CPLR 3211 (a) (1), dismissed without prejudice, and Milmar is granted leave to recommence its action against AUCRA in the courts of the State of Nebraska.

III. AUCRA is a necessary party to this action.

CPLR 3211 (a) (10) provides that "[a] party may move for judgment dismissing one or more causes of action asserted against him on the ground that: the court should not proceed in the absence of a person who should be a party." Defendants move for dismissal of Milmar's claims against them on the ground that AUCRA is a necessary party who cannot be joined as a party herein due to the RPA's Nebraska forum selection clause.

A person should be joined as a party (1) "if complete relief is to be accorded between the persons who are parties to the action," or (2) if that person "might be inequitably affected by a judgment in the action." (See CPLR 1001 [a].) Defendants have made a compelling demonstration that AUCRA is a necessary party to all claims asserted in this action. Milmar has tacitly admitted the same by failing to interpose any response to this aspect of defendants' motion.

"Nonjoinder of a party who should be joined under section 1001 is a ground for dismissal of an action without prejudice unless the court allows the action to proceed without that party under the provisions of that section." (CPLR 1003.)

"In determining whether to allow the action to proceed, the court shall consider:

"1. whether the plaintiff has another effective remedy in case the action is dismissed on account of the nonjoinder;{**61 Misc 3d at 833}

"2. the prejudice which may accrue from the nonjoinder to the defendant or to the person not joined;

"3. whether and by whom prejudice might have been avoided or may in the future be avoided;

"4. the feasibility of a protective provision by order of the court or in the judgment; and

"5. whether an effective judgment may be rendered in the absence of the person who is not joined." (CPLR 1001 [b].)

[7] While dismissal of an action for nonjoinder of a given person is "a last resort" (see Saratoga County Chamber of Commerce v Pataki, 100 NY2d 801, 821 [2003], citing Siegel, NY Prac § 133 [3d ed 1999]), defendants have made a compelling showing, without opposition from [*4]Milmar, that the section 1001 (b) factors militate in favor of their motion for dismissal. The court notes in particular that Milmar has an effective remedy in Nebraska because all named defendants except Applied Risk Services of New York, Inc.—a peripheral defendant against whom no specific allegations are made in the complaint—are Nebraska corporations, or have their principal place of business in Nebraska, and are therefore subject to general jurisdiction in the courts of Nebraska. While this court arguably has the authority to stay the instant proceedings while Milmar is pursuing its claims against AUCRA in Nebraska (see First Natl. Bank of Amsterdam v Shuler, 153 NY 163, 170 [1897]), it appears that a stay in the circumstances here present would only lead to unnecessary delay and duplication of proceedings.

Therefore, defendants' motion pursuant to CPLR 3211 (a) (1) is granted, and by reason of the nonjoinder of AUCRA due to the Nebraska forum selection clause, Milmar's claims against all remaining defendants are dismissed without prejudice. The court accordingly declines to reach the other issues raised in defendants' motion papers.

It is therefore ordered that plaintiffs' claims against defendant Applied Underwriters Captive Risk Assurance Company, Inc. are dismissed without prejudice pursuant to the Nebraska forum selection clause in the parties' Reinsurance Participation Agreement, and it is further ordered, that plaintiffs' claims against defendants Applied Underwriters, Inc., Applied Risk Services, Inc., Applied Risk Services of New York, Inc., North American Casualty Company, Continental Indemnity Company, and California Insurance Company are dismissed without prejudice{**61 Misc 3d at 834} for nonjoinder of defendant Applied Underwriters Captive Risk Assurance Company, Inc. due to the aforesaid Nebraska forum selection clause.