Opinion
June 15, 1992
Appeal from the Supreme Court, Suffolk County (Hand, J.).
Ordered that the order is modified, on the law, by deleting the provisions thereof which (1) declared that the loan agreement is valid, (2) granted the defendant's cross motion for summary judgment, and (3) dismissed the second cause of action in the amended complaint for the recovery of all payments made under the agreement, and substituting therefor provisions denying the cross motion and reinstating the second cause of action; as so modified, the order is affirmed insofar as appealed from, without costs or disbursements, and the matter is remitted to the Supreme Court, Suffolk County, for further proceedings consistent herewith.
Under ordinary circumstances, the laws of New Jersey would apply to the transaction herein under New York's "center of gravity" approach to choice of law issues (see, Miller v Miller, 22 N.Y.2d 12; Auten v. Auten, 308 N.Y. 155; Tuthill Fin. v Cartaya, 133 A.D.2d 343). However, inasmuch as a question exists regarding whether the defendant is a New York partnership only nominally operating in New Jersey in order to evade New York's usury laws (see, Rols Capital Co. v Bottone, 170 A.D.2d 495; Conner Gen. Contr. v. Rols Capital Co., 145 A.D.2d 452), summary judgment is denied and the matter is remitted to the Supreme Court so that the plaintiffs may explore this question during discovery or, if necessary, at a trial.
We further note that, while choice of law provisions such as that contained in the parties' installment note are generally given effect by the courts of this State (see, Freedman v Chemical Constr. Corp., 43 N.Y.2d 260, 265, see, e.g., Monsanto v Electronic Data Sys. Corp., 141 A.D.2d 514), such provisions will not be honored where the jurisdiction whose law is to be applied has no reasonable relation to the agreement or where the enforcement of the provision would violate a fundamental public policy of New York (see, Gambar Enters. v. Kelly Servs., 69 A.D.2d 297; North Am. Bank v. Schulman, 123 Misc.2d 516). Since the precise status of the defendant as a business entity and the legitimacy of its business practices have not yet been determined, enforcement of the choice of law provision at this juncture would be inappropriate. Bracken, J.P., Sullivan, Eiber and Pizzuto, JJ., concur.