Sutton Place Rest. & Bar, Inc. v Garnett
2008 NY Slip Op 51215(U) [20 Misc 3d 1104(A)]
Decided on June 11, 2008
Supreme Court, New York County
Published by New York State Law Reporting Bureau
pursuant to Judiciary Law § 431.
This opinion is uncorrected and will not be
published in the printed Official Reports.
Sutton Place Rest. & Bar, Inc. v Garnett
Decided on June 11, 2008
Supreme Court, New York County
Sutton Place Restaurant and Bar, Inc. and Richard Kassis, individually, Plaintiff,
Ella Garnett, individually, Defendant.
Smith Mazure Director Wilkins Young & Yagerman, P.C.
Attorneys for Plaintiffs
Dansker & Aspromonte Associates
Attorneys for Defendant
Martin Shulman, J.
Plaintiffs move: (I) pursuant to "CPLR 221(e)[sic]", for renewal of their prior motion for a default judgment; (ii) pursuant to CPLR 3215(a), for a default judgment against defendant, who has not answered the complaint; and (iii) pursuant to CPLR 3215(d), for $1 million in damages plus interest, costs and disbursements occasioned by this action. Defendant cross-moves pursuant to "CPLR 3211(a)(2)[sic]" to dismiss the complaint for lack of personal jurisdiction due to improper service (see CPLR 3211[a]) or, alternatively, to compel plaintiffs to accept defendant's answer, annexed as exhibit C to the cross-motion.
Plaintiff Sutton Place Restaurant and Bar, Inc. ("Sutton Place") is a bar/restaurant on Manhattan's upper east side owned by plaintiff Richard Kassis ("Kassis"). Defendant Ella Garnett ("Garnett" or "defendant") is a former Sutton Place waitress.
The genesis of this action is a much publicized November 6, 2006, New York Post exposÉ about plaintiffs (exhibit A to complaint) occasioned by two other former waitresses filing a multi-million dollar sexual harassment/wrongful discharge suit against plaintiffs and various Sutton Place managers (McRedmond v. Sutton Place Restaurant & Bar, index no. 112845/06). According to the New York Post article, defendant told the reporter about plaintiffs' alleged [*2]practices of rating Sutton Place's female employees on a system comprised of scores for personality, sales and body, and the firing of fat employees (such as the other two waitresses). The article also quoted defendant describing how Sutton Place's executive manager used the security cameras to watch strippers using sex toys at bachelor parties and Kassis "having sex with a woman in a VIP room." Based on Garnett's statements to the New York Post reporter, plaintiffs brought this suit for defamation (Sutton Place) and intentional infliction of extreme emotional distress (Kassis).
The action was filed on November 15, 2006, and plaintiffs made various attempts to serve defendant, who was no longer in their employ. Garnett failed to timely answer the complaint and plaintiffs moved for a default judgment against her. That motion for a default judgment was inadequately supported in that it lacked a requisite affidavit of merits and non-military affidavit, and was denied by this court with leave to renew upon proper papers (see second exhibit B to moving papers). The instant motion is plaintiffs' second attempt, this time supported by a non-military affidavit (second exhibit C to moving papers) and the affidavit of Kassis, a person with personal knowledge of the facts (second exhibit D to moving papers).
On a motion for a default judgment, plaintiffs have the burden of showing proper service of the summons and complaint by a preponderance of the evidence (see Tirado v. City of New York, 200 AD2d 383 [1st Dept 1994]). Plaintiffs claim to have served defendant on three different occasions at three different places. Defendant counters that none of plaintiffs' purported services was valid.
Service of process in a state outside New York on a person domiciled in New York or subject to New York's jurisdiction pursuant to CPLR 301 or 302 is to be effected "in the same manner as service is made within the state" (CPLR 313). Garnett challenges the court's jurisdiction over her as well as the validity of the service.
Since plaintiffs have adduced no evidence that defendant was domiciled in New York in December 2006, her susceptibility to jurisdiction under CPLR 301 or 302 is the threshold issue. The thrust of plaintiffs' claims against defendant is defamation; thus, jurisdiction cannot be exercised pursuant to CPLR 302(a)(2) even though Garnett was a New York resident when she made the allegedly defamatory statements (Collesano v. Calabro, 115 AD2d 263 [4th Dept 1985]). CPLR 302(a)(1), however, does not contain the same exclusion for defamation claims; it allows the court to exercise personal jurisdiction over "any non-domiciliary" who "transacts any business within the state or contracts anywhere to supply ... services in the state."
To establish jurisdiction pursuant to CPLR 302(a)(1), plaintiffs must show by a preponderance of the evidence (Charles Abel, Ltd. v. School Pictures, Inc., 40 AD2d 944 [4th Dept 1972]; Preferred Elec. & Wire Corp. v. Duracraft Products, Inc., 114 AD2d 407 [2d Dept 1985]; Green Point Sav. Bank v. Taylor, 92 AD2d 910 [2d Dept 1983]) that defendant was "engaged in such a continuous and systematic course of 'doing business' here as to warrant a finding of [her] 'presence' in this jurisdiction" (Simonson v. Int'l Bank, 14 NY2d 281, 285 ), and that the alleged defamation had a substantial connection to her activities in New York (Montgomery v. Minarcin, 263 AD2d 665 [3d Dept 1999]; World Wrestling Federation Entertainment, Inc. v. Bozell, 142 F Supp 2d 514 [SDNY 2001]). The court finds that plaintiffs have met this burden. It is undisputed that defendant lived in New York and worked for plaintiffs, and the alleged defamation clearly stems from her employment with plaintiffs. Where, as here, "the defamation complained of arises from or is connected with the transaction of [*3]business in the State, jurisdiction may be acquired pursuant to CPLR 302(a)(1)" (Legros v. Irving, 38 AD2d 53, 55 [1st Dept 1971], app dism 30 NY2d 653 ).
Having established long-arm jurisdiction over defendant, plaintiffs must then show that she was properly served. The first purported service was made on December 12, 2006, when a copy of the summons and complaint was left with Garnett's mother in Lynchburg, Virginia. CPLR 308(2), which "is to be strictly construed" (Foster v. Cranin, 180 AD2d 712, 712-713 [2d Dept 1992]), provides that personal service of a summons and complaint may be effected on an individual by delivering the summons "to a person of suitable age and discretion at the actual place of business, dwelling place or usual place of abode of the person to be served" and mailing the summons to that person by first class mail.
It is unclear whether defendant was actually present at her mother's house at that time. According to Garnett, she went there to visit her family but had not lived there "for quite a while prior" to December 12, 2006, and her mother just accepted the papers without saying if she lived there or not (defendant's affidavit ¶ 4, exhibit A to cross-moving papers). The process server's affidavit (first exhibit B to moving papers) states that he served defendant in Lynchburg, Virginia on December 12, 2006, "by leaving a true copy at the usual place of abode with member of family over the age of 16. Ann Hoskins/mother." Aside from there being no evidence that her parents' home in Lynchburg was defendant's "usual place of abode" (Mourtil v. Chi Ming Peng, 295 AD2d 582, 583 [2d Dept 2002], lv den 99 NY2d 507 ; New York State Higher Education Services Corp. v. Perchik, 207 AD2d 1040 [4th Dept 1994]), no mailing is mentioned in the affidavit. Hence, the affidavit is patently flawed since on its face it cannot evidence proper service pursuant to CPLR 308(2), especially in light of defendant's denial of service. "The sworn denial by [defendant] that she had been served requires a hearing to determine whether she was in fact served" (Green Point Savings Bank v. Taylor, supra, 92 AD2d 910).
On December 15, 2006, plaintiffs made a second attempt at substituted service on Garnett, this time by 'nail and mail' pursuant to CPLR 308(4), at 206 Prospect Park West, Brooklyn, New York, which according to a Lexis/Nexis public records search subsequently conducted by plaintiffs' counsel on March 12, 2007 (exhibit C to plaintiffs' reply papers), was defendant's penultimate address. According to the process server's affidavit (first exhibit C to moving papers), that address was either defendant's "actual place of business, dwelling place, or usual place of abode."
Nothing in the server's affidavit further identifies defendant's connection to that Brooklyn address and there is no indication as to whether the copy mailed was sent by first class mail or otherwise a potential fatal defect (see Slutzky v. Aron Estates Corp., 157 Misc 2d 749, 753-754 [Sup Ct, Rockland Co, 1993], citations omitted; see Cohen v. Shure, 153 AD2d 35, 37-38 [2d Dept 1989]). According to the affidavit, after four unsuccessful daytime attempts at personal service during November and December 2007 [sic], the affiant served defendant by "affixing a true copy to the door" on December 15, 2007 [sic] and, on an unspecified date presumably prior to January 11, 2007 (the date of the affidavit), depositing "in an official depository ... of the U.S. Postal Service" a second copy of the summons and complaint addressed to defendant "in a postpaid, unmarked sealed wrapper with 'Personal & Confidential' written on it" (first exhibit C to moving papers). In light of the vagueness of the process server's affidavit and defendant's affidavit denying she lived with her mother in Lynchburg at that time, the validity of this service also cannot be determined without an evidentiary hearing, especially given the lack of evidence [*4]as to the outcome of this purported service, such as an envelope showing the copy mailed to defendant was refused or unclaimed by her (cf. Adirondack Transit Lines, Inc. v. Lapaglia, 128 AD2d 228, 231 [3d Dept 1987]).
Plaintiffs' third and final attempt, made in early March 2007, was inchoate. On two consecutive days, a licensed process server went to 491 12th Street in Brooklyn, New York, the "current" address listed in the Lexis/Nexis search, and saw different names on the mailbox. A neighbor told him defendant had moved out of that address about a year before, and referred him to a nearby bar where she used to work. There, a bartender acquainted with Garnett told the process server that she had stopped working there about a year before, when she moved out of state. Upon learning this information, the affiant ceased his efforts (first exhibit D to moving papers).
At this point, it would have been appropriate for plaintiffs to seek judicial assistance pursuant to CPLR 308(5), and a different method could have been devised, such as serving defendant's counsel if she refused to reveal her current address (see, e.g., Coutts Bank (Switzerland) Ltd. v. Anatian, 275 AD2d 609, 610 [1st Dept 2000]; Kenworthy v. Van Zandt, 71 Misc 2d 950 [Civ Ct, NY Co, Shainswit, J, 1972]). Instead, plaintiffs made their initial, defective motion for a default judgment. On April 27, 2007, in apparent response to that motion, defendant's counsel, Paul Dansker ("Dansker"), filed a notice of his appearance as an attorney on defendant's behalf and an answer to plaintiffs' complaint, alleging, inter alia, improper service (second affirmative defense) and lack of personal jurisdiction (third affirmative defense). The answer, dated April 26, 2007, was verified by defendant's counsel because "[d]efendant is not presently in the county where [her] attorneys ... have their office" (exhibit A to plaintiffs' reply papers). Plaintiffs rejected that answer as untimely. In her cross-motion, Garnett seeks to compel plaintiff to accept a different, amplified answer (exhibit C to cross-moving papers).
The burden of establishing jurisdiction is borne by the party asserting it (Jacobs v. Zurich Ins. Co., 53 AD2d 524 [1st Dept], app dism 40 NY2d 844 ). Here, despite their submitting affidavits of service on defendant, the court finds that plaintiffs have not met that burden. With no evidence tendered to establish the propriety of the locations used for substituted service and mailing, the affidavits submitted by plaintiffs do not establish valid service under CPLR 308 and 313 (see Esposito v. Billings, 103 AD2d 956 [3rd Dept 1984]). A properly executed affidavit of service gives rise to a presumption of valid service (cf. Engel v. Lichterman, 62 NY2d 943, 944-945 ). However, it is a presumption rebuttable by proof to the contrary. A process server's affidavit is not conclusive proof of service if there is a sworn denial of receipt (Empire Nat'l Bank v. Judal Constr. of New York, Inc., 61 AD2d 789 [2d Dept 1978]). The affidavit is evidence to be considered by the court in determining the validity of service (see Laurence v. Hillcrest Gen. Hosp.-GHI Group Health, Inc., 119 AD2d 808 [2d Dept 1986]). As discussed above, a hearing is required to determine if service was actually made.
Should service on defendant be found to have been properly effected, another factual issue arises, which in the interest of judicial economy will be addressed now rather than risk a second reference. If defendant's jurisdictional challenge fails, she will be "required to set forth both a reasonable excuse for [the] default and a meritorious defense" in order to defeat plaintiffs' motion for a default judgment pursuant to CPLR 3215 (Time Warner City Cable v. Tri State Auto, Inc., 5 AD3d 153 [1st Dept], lv dism 3 NY3d 656 , citing Perez v. Villa Josefa Realty Corp., 293 AD2d 306 [1st Dept 2002]). For purposes of the instant motions, the [*5]meritorious defense requirement is met by defendant's averment that "[e]verything [she] said to the New York Post reporter was true" (exhibit B to Dansker opposing affirmation, ¶ 2; see Silverman v. Clark, 35 AD3d 1, 12 [1st Dept 2006]; Dillon v. City of New York, 261 AD2d 34, 39 [1st Dept 1999]; Matovcik v. Times Beacon Record Newspapers, 46 AD3d 636, 638 [2d Dept 2007]). However, whether defendant had a reasonable excuse for the default cannot be ascertained without an evidentiary hearing. Two factors make this a complicated issue: the mystery of Garnett's residence and/or whereabouts, and the attorneys' inability to agree on facts.
Non-receipt of process due to use of an incorrect address constitutes a reasonable excuse for a default (cf. Spearman v. Atreet Corp., 238 AD2d 194 [1st Dept 1997], citing Micarelli v. Regal Apparel, Ltd., 52 AD2d 524 [1st Dept 1976]) and a notice sent to an incorrect address by a party with actual notice of the correct address is a nullity (cf. Masselli v. Dime Sav. Bank of New York, 202 AD2d 303 [1st Dept 1994]). In this context, the court notes that despite having submitted various affidavits in connection with the motions at bar defendant has been very careful not to disclose, even in the broadest terms, the location of either her "actual place of abode" in December 2006 or her current residence, going so far as to not name the county in the "State" (rather than Commonwealth) of Virginia in which her affidavits were executed (see defendant's affidavits dated October 25 and November 8, 2007). In his affirmation in support of defendant's cross-motion, Dansker averred only that at that time defendant lived elsewhere in Virginia (¶ 4, exhibit B to cross-moving papers). While this is certainly deliberately reticent, there is no evidence that Garnett has crossed the line and purposely deceived plaintiffs and this court so as to evade service (compare NYS Higher Education Services Corp. v. Perchik, supra, 207 AD2d at 1041; Kenworthy v. Van Zandt, supra). "[P]otential defendants ordinarily have no affirmative duty to keep those who might sue them abreast of their whereabouts" (Feinstein v. Bergner, 48 NY2d 234, 241-242 ). However, if the use of an incorrect address is a direct result of the non-recipient's own failure to keep a current address on file with the appropriate governmental entities (e.g., Department of Motor Vehicles), the court has the discretion to consider various factors, including "the length of time for which the address had not been kept current," in determining whether the default is to be excused (cf. Eugene Di Lorenzo, Inc. v. A.C. Dutton Lumber Co., Inc., 67 NY2d 138 ).
The real factual dispute centers around how each side's attorneys represent objective facts in their respective affirmations. Dansker argues that defendant's "relatively short delay of 2-1/2 months" in answering the complaint is excusable because plaintiffs' counsel had given him assurances that plaintiffs would not seek a default and there was a tentative agreement to have plaintiffs discontinue this suit in exchange for Garnett's testimony in the wrongful discharge and sexual harassment suit brought by the other waitresses (see Dansker opposing affirmation, ¶¶ 11-19; Dansker supporting affirmation, ¶ 13; Hoffer affirmation, ¶ 7). Plaintiffs' lawyers, Joel Simon and Anna A. Higgins, whose factual accounts were also made under penalty of perjury, have a diametrically opposed view of reality. They maintain that Dansker never requested or received an extension of time to file an answer, and that the settlement discussions (which never materialized) cannot constitute a reasonable excuse for defendant's failure to timely answer the complaint because those discussions took place only after plaintiffs made the initial motion for a default (see Simon affidavit at exhibit D to plaintiffs' reply papers, ¶¶ 6-8, 14-17; Higgins reply affirmation, ¶¶ 51-54, 58-59, 70, 79).
Accordingly, it is hereby [*6]
ORDERED that the issue of whether defendant was properly served is hereby referred to a Special Referee to hear and determine. If the Special Referee determines that defendant was validly served, he is to immediately proceed to hear and determine, in accordance with this decision, the issue of whether defendant had a reasonable excuse for her failure to timely answer the complaint. If, in the course of determining this latter issue, the Special Referee determines that one of the attorneys has been less than truthful under oath, he is to also submit recommendations to this court and what, if any, action to take about such attorney; and it is further
ORDERED that unless the parties stipulate earlier to waive jurisdictional objections in exchange for allowing defendant to answer the complaint belatedly without penalty, counsel, within 30 days from the date of this order, shall serve a copy of this order with notice of entry and a completed information sheet on the Special Referee Clerk in the Motion Support Office (Room 119 at 60 Centre Street), who is directed to place this matter on the calendar of the Special Referee's Part (Part 50R) for the earliest convenient date; and it is further
ORDERED that plaintiffs' motion and defendant's cross-motion shall be held in abeyance pending receipt of the report of the Special Referee and a motion pursuant to CPLR 4403.
This decision constitutes the order of the court. Courtesy copies of this decision have been
provided to counsel for the parties.
Dated:New York, New York
June 11, 2008
Hon. Martin Shulman, J.S.C.