Service Sta. Realty Corp. v Universal Fuel Serv. Corp., Super Gas Sta. Inc.
Annotate this CaseDecided on May 11, 2005
District Court of Nassau County, First District
Service Station Realty Corp., Petitioner(s)
against
Universal Fuel Service Corp., Super Gas Station Inc., Respondent(s)
SP 478/05
Scott Fairgrieve, J.
Petitioner Service Station Realty Corp. commenced a non-payment proceeding against the main tenant Universal Fuel Service Corp. and the undertenant Super Gas Station alleging that rent of $4,202.50, late charges of $210.12, and attorney fees of $1,000.00 are owed with respect to the gasoline service station located at 3880 Long Beach Road, Island Park, New York.
Respondents failed to appear in February, 2005 and a judgment of possession, warrant with no stay and money judgment in the sum of $5,412.62 were entered against respondents.
Respondents have moved by order to show cause to vacate the judgment on the grounds that the Court lacks personal jurisdiction over respondents pursuant to CPLR 3211(A)(8).
The affidavits of service for both tenant Universal Fuel Service Corp. (hereinafter "Universal") and Super Gas Station (hereinafter "Super Station") are identical in that service was made by delivery to "John Smith" "who refused to divulge his true name." "John Smith" is described as being a male, brown skin, black hair, 21 - 35, 5'4" - 5'8", and 131 - 160 lbs. and is a managing agent.
Two affidavits are submitted to vacate the default judgment. Yisroel Rabinowitz (principal [*2]of Universal) alleges that his company rented the premises from petitioner in 2003 and then subleased the premises in 2004 to Super Station. Mr. Rabinowitz swears that the petitioner's owner Osgur Yetim stated: "Osgur advised me at the time that he would either accept Super Station's operation as a subtenant, assign the lease, or enter into a new lease with Super Station."
Rent payments by undertenant Super Station were accepted by petitioner and 3 checks are submitted for the months of September, October and November in the sum of $4,000.00, $4,100.00 and $4,100.00, respectively.
Respondent Universal denies that they employ a "John Smith" who matches the description presented.
Ari Werzberger (principal of Super Station) states in his affidavit that the undertenant submitted rent payments directly to petitioner without reservation. Mr. Werzberger denies that a "John Smith" matching the description presented in the affidavit of service is employed by the undertenant. In fact, a Mr. Weisz is the manager and "very pale skin and noticeably is dressed in Chassidic attire."
Mr. Werzberger states that Super Station operates the station and not Universal; therefore service couldn't be effectuated on Universal because they have no one working there.
Ozgur Yetim (President of petitioner) denies that Universal had the right to transfer the operation of the premises to Super Station and denies giving consent to the transfer. The attorney for petitioner argues that the service upon respondents is valid because:
The argument advanced by the respondents essentially boils down to the following: the respondents have illegally transferred the occupancy of the premises and by their own wrongdoing, they have made it impossible for a process server to ascertain which party was actually present at the station and operating same at the time of service. Respondents are estopped from claiming that the individual served was not their authorized agent.
DECISION
Pursuant to RPAPL 735, personal delivery of the notice of petition and petition upon a corporation may be accomplished by personal service of the papers to one of the categories listed in CPLR 311, which states: (a) Personal service upon a corporation or governmental subdivision shall be made by delivering the summons as follows:[*3]1.Upon any domestic or foreign corporation, to an officer, director, managing or general agent, or cashier or assistant cashier or to any other agent authorized by appointment or by law to receive service.
Thus, in Landlord and Tenant Practice in New York, Daniel Finkelstein and Lucas A. Ferrara, § 14:144, the following is stated: Personal delivery to a corporate respondent under NY Real Prop. Acts Law § 735 should comply with N.Y.C.P.L.R. 311(a)(1), which governs service of process upon a corporation in civil actions. The latter statute permits personal delivery to be made upon an officer, director, managing or general agent, cashier or assistant cashier, or any other agent authorized by appointment or law to receive service on the entity's behalf.
In Manhattan Embassy Co. v. Embassy Parking Corp., 164 Misc 2d 977, 627 NYS2d 245 (City Civ Ct [1995]), the court held: Personal delivery to a corporate respondent under RPAPL 735(1) must comply with CPLR 311 (1) (Milchman v. Wonderful Discount Ctr., Inc., NYLJ, Jan. 5, 1993, at 22. col. 4 [Civ Ct, NY County]), which permits the corporation to be served by delivery of the papers to the enumerated corporate officials or to "any other agent authorized by appointment or by law to receive service." Delivery of papers to a mere employee, without any inquiry as to the employee's status in the corporate hierarchy or any effort to determine whether the employee is authorized to accept service is therefore insufficient to effect personal delivery on the corporation (unless, by some stroke of fortune, the employee turns out to be an authorized agent or enumerated corporate official). (See, Fashion Page, Ltd. v. Zurich Ins. Co., 50 NY2d 265, 428 NYS2d 890m 406 NE 2d 747 [1980]).
See also, Macerich Queens Limited Partnership v. M.I.E. Hospitality, Inc., 192 Misc 2d 276, 746 NYS2d 341 (Civil Ct, City of New York [2002]), also supporting personal service upon corporation by meriting standards of CPLR 311.
Likewise, Rasch's Landlord & Tenant, Robert F. Donald, § 42:5 states: "Under the Real Property Actions and Proceedings Law, service of the notice of petition and the petition may be made by personally delivering them to the respondent. This constitutes personal service. Although filing proof of service is required, personal service is complete immediately upon personal delivery to the respondent."
In the case at bar, the evidence shows that Universal had turned over operation of the station to the undertenant Super Station and had no employees present at the premises. Thus, service upon [*4]the alleged employee of the undertenant was insufficient to gain jurisdiction over the tenant Universal. See, Landlord and Tenant Practice in New York, § 14:154: "Absent a "unity of interest," and the delivery of the requisite number of copies, service of a notice or pleading upon a commercial subtenant may be found insufficient to confer jurisdiction over the tenant."
Also supporting this principal of law is Robbins Fulton Corp. v. Berger Tiles of Brooklyn, Inc., NYLJ, June 6, 1988, p 28, col 1 (App Term, 2nd & 11th Dists) stating: "In this . . . holdover proceeding, Landlord's service of process on a manager of the subtenant did not result in jurisdiction over the tenant."
In World's Busiest Corner Corporation v. Line 42nd Street Theatre Corp., 134 Misc 2d 281, 510 NYS2d 796 (Civ Ct, City of NY [1986]), the court refused to sustain service of the eviction papers on the tenant and undertenant because there was no proof of unity of interest of the tenant and subtenant to sustain service upon the theatre manager.
In the case at bar, no unity of interest has been proven to sustain service over Universal by delivery of the papers to the undertenant's alleged employee. There is no proof of common ownership and management.
The attorney for the petitioner argues that the service should be sustained because the transfer of the property was illegal and therefore respondents should be estopped from denying valid service on the individual served.
The Court rejects this argument because petitioner certainly knew that the undertenant Super Station was operating at the premises which is supported by the cashing of the 3 checks from the undertenant. In fact, such a circumstance could be grounds of waiver of the prohibition against assignment on subletting. See, Brentsum Realty v. D'Urso, 182 AD2d 604, 582 NYS2d 216 (2d Dept 1992).
Counsel also argues paragraph 27 of the lease rider which states: All notices given pursuant to this Lease shall be deemed to be properly served if delivered personally or sent by certified mail return receipt requested addressed to Lessee at the sales facility address as shown in the introduction of this Lease and to Lessor at its office address. Date of service of a notice served by certified mail shall be the date deposited with the United States Postal Service.
There is no showing that petitioner complied with this provision by giving notice to Universal. To the extent that the above clause is relied upon to circumvent the service provisions of RPAPL 735, this is rejected by the Court. The lease cannot vary the requirements of RPAPL 735. See, Lana Estates v. National Energy, 123 Misc 2d 324, 473 NYS2d 912 (Civ Ct, NYC [1984]), [*5]wherein the court refused to allow a lease provision to vary the service requirements of RPAPL 735: This court concludes that the statutory requirements of RPAPL 735 can not be modified or restricted by the terms of contractual lease obligations as to service, place of service, or other manner of notice. Where a conflict exists between procedural contractual obligations in a lease, as to the manner of notice, and the requirements of RPAPL 735, as to the manner of notice, such conflict or discrepancies must be resolved in favor of the statutory requirements (150 East 73rd Street Corporation v. Wehringer, NYLJ, April 17, 1975, p 2, col 4 [App Term, 1st Dept]; Palumbo v. Estate of Clark, 94 Misc 2d 1, 403 NYS2d 874; Court Square Bldg., Inc. v. Harris, 140 Misc 542, 251 NYS 193).
See also, Besdine Management Company v. Sheldon, NYLJ, May 7, 1990, p 28, col 3 (App Term, 1st Dept) holding: "We note that the service requirements of NY Real Prop. Acts Law § 735 cannot be modified or restricted by the terms of tenant's lease as to the manner or place of service."
This Court is unable to resolve the issue on whether the service upon the undertenant was valid. Therefore a hearing is necessary to determine this issue.
CONCLUSION
The proceeding against the tenant Universal is hereby dismissed without prejudice to renewal. The proceeding against undertenant shall be determined at a traverse to be held in Civil 1, Room 279, of the First District Court, 99 Main Street, Hempstead, New York on May 24, 2005, at 9:30 a.m., before the undersigned.
So Ordered:
DISTRICT COURT JUDGE
Dated: May 11, 2005
CC:Jonathan A. Stein, P.C.
Spada, Ardam, Sibener & Miller, P.C.
SF/mp
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