On May 29, 2025, the First Department issued a decision in CSI IT, LLC v. Dungey, 2025 NY Slip Op. 03244, holding that a case was properly dismissed in favor of a prior pending action even though the agreement at issue included a New York forum selection clause, explaining:
Supreme Court providently exercised its discretion in dismissing the complaint on the ground that there is a prior pending action in Florida which involves a broader set of parties and issues than the instant action, was commenced before the New York action, and has discovery already underway.
The forum selection clause in defendant’s severance agreement selecting New York as the appropriate jurisdiction does not require a different result. Defendant showed that enforcement of the forum selection clause would be unreasonable or unjust under these circumstances. As found by the Florida court, the plaintiff in that action, CSI IT Holdings, LLC (Holdings), plaintiff’s parent company, sued defendant for conduct in alleged breach of non-competition and non-solicitation restrictions in Holdings’ LLC Agreement. Accordingly, defendant’s counterclaim, alleging that CSI IT, LLC (CSI), plaintiff in this action, and Holdings breached the severance agreement, which partially released him from his non-competition restriction, was compulsory. Thus, Holdings’ initiation of the Florida action compelled defendant to litigate to a binding conclusion his counterclaim against Holdings and CSI in a jurisdiction other than the one the parties selected, lest he waive the claim.
In denying Holdings’ and CSI’s motion to dismiss defendant’s counterclaim on the grounds that Florida was an improper venue based on the forum selection clause in the severance agreement, the Florida court found that Holdings waived its right to enforce the forum selection provision in the Severance Agreement by instituting the Florida action. This finding further weighs against enforcing the forum selection clause here in order to avoid reaching an inconsistent result.
(Internal quotations and citations omitted).