Bankers Healthcare Group, LLC (“Plaintiff”) sought damages of $130,281.77 in New York Supreme Court, Onondaga County for breach of contract against Matthew Murphy (“Defendant”). Plaintiff alleged that Defendant defaulted on a promissory note for $227,477.88. Defendant filed a pre-answer motion to dismiss asserting that the complaint must be dismissed as the court lacks personal jurisdiction over him, he was improperly served, and Plaintiff failed to arbitrate, and alternatively a transfer of venue to Prince George’s County, Maryland.
The New York Supreme Court, Onondaga County in Syracuse reviewed a virtually identical contract utilized by Plaintiff and found that jurisdiction does not lie in a New York State Court (see Bankers Healthcare Group, LLC v. Pediatric Assoc., Inc, 2023 NY Misc. LEXIS 3160, *5 [Sup. Ct. Onondaga Cty. 2023]). In both Pediatric Assoc. and this case, the contracts are not governed by New York law as required by General Obligations Law §5-1401. As in Pediatric Assoc., the subject contract does not meet the one-million-dollar threshold required by General Obligations Law §5-1402. Plaintiff is a Florida limited liability company. Defendant is a Maryland domiciliary. The Parties and the underlying contract have no connections to New York other than the purported designation of Onondaga County as a proper venue. This clause, and the contract overall, does not comply with the requirements of New York General Obligations Law. Despite Plaintiff’s claims that jurisdiction is proper, there is no constitutional or statutory basis for the Court to have subject matter jurisdiction.
New York Business Corporations Law §1314[b] and Banking Law §200-b [2] set forth specific instances where a foreign entity or non-resident may be sued in New York Courts. New York General Obligations Law §5-1402 then sets the conditions to be met to invoke the jurisdiction of New York Courts against a foreign entity or non-resident. First, the “action or proceeding” arises out of or relates to any contract, agreement or undertaking for which a choice of New York law has been made in whole or in part pursuant to New York General Obligations Law §5-1402. The financing agreement specifically designates “the substantive and procedure laws of the State of Florida” shall govern. The Parties specifically designated Florida law in contravention to New York General Obligations Law §5-1402.
The precedent that the value of the contract is at least one million dollars (New York General Obligations Law §5-1402) was not met here as the Financing Agreement is for the total sum of $227,477.88. New York General Obligations Law further requires that the “foreign corporation or non-resident agrees to submit to the jurisdiction of the courts of this state” (General Obligations Law §5-1402). This last condition is the only one met by the financing agreement.
The terms of the Financing Agreement and all loan documents were governed by and construed in accordance with the substantive and procedure laws of the State of Florida. The affirmative designation of Florida law as controlling the agreement invalidates the purported choice of venue selecting Onondaga County, and thereby New York Courts, pursuant to General Obligations Law §5-1402.
New York General Obligations Law requires foreign contracting parties meet all three basic criteria to have their case heard in New York Courts: one, that New York law be controlling (in whole or in part); two, that the value of the agreement exceed one-million dollars; and three, that they parties agree to submit to jurisdiction in New York. The action was dismissed on September 17,2025 for want of subject matter.
If Bankers Healthcare Group, LLC or BHG Financial has sued you and/or your business in Onondaga County, New York Supreme Court, you should consult with a commercial debtor lawyer as soon as possible before a default judgment is filed against you. The law firm of Friedman & Ranzenhofer, PC with offices in Syracuse and throughout NY state has over 71 years’ experience dealing with creditors on behalf of debtors. We will explain all of your legal options, including how our law firm can defend you in any lawsuit or claim brought by BHG Financial or Bankers Healthcare Group, LLC. We are here to help you through every step of the litigation process. For more information on commercial debt defense, contact our experienced debt settlement lawyers today for a free consultation by calling our Syracuse, NY law office at 315.864.5715 or completing this contact form.