Gustaff v Marathon Healthcare Corp/Monarch Staffing

[*1] Gustaff v Marathon Healthcare Corp/Monarch Staffing 2009 NY Slip Op 50020(U) [22 Misc 3d 1105(A)] Decided on January 8, 2009 Supreme Court, Kings County Schack, J. 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 This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on January 8, 2009
Supreme Court, Kings County

Valerie Gustaff, Plaintiff,

against

Marathon Healthcare Corp/Monarch Staffing formerly, MT ULTIMATE HEALTHCARE CORP, Defendant.



22611/08



Petitoner, pro se:

Valerie Gustaff

St. Albans NY

Defendant:

Steven B Shapiro, Esq

NY NY

Arthur M. Schack, J.

The instant action is a last ditch effort by plaintiff VALERIE GUSTAFF [GUSTAFF] to sue for damages as a result of alleged sexual harassment, wrongful employment termination and discrimination in violation of Executive Law § 296 (part of New York State's "Human Rights Law"). Defendant MONARCH STAFFING, INC. [MSI] moves, pursuant to CPLR Rules 3211 (a) (1), (a) (5), (a) (8) and (a) (10), to dismiss plaintiff's complaint with prejudice against MSI for: failure to state a cause of action and lack of personal jurisdiction over MSI; and, for reasonable attorneys' fees and costs. Plaintiff on August 21, 2008 filed the summons and on August 22, 2008 the amended complaint in this matter with the office of the Kings County Clerk. Defendant MSI filed the instant motion on September 3, 2008 with the office of the Kings [*2]County Clerk.

Plaintiff GUSTAFF never submitted any opposition papers to the instant motion. Counsel for MSI and pro se plaintiff GUSTAFF appeared for oral argument on the instant motion, on November 14, 2008. I reserved decision. Defendant MSI's motion to dismiss MSI with prejudice from the complaint is granted, pursuant to CPLR Rule 3211 (a) (8), in that plaintiff failed to obtain personal jurisdiction over corporate defendant MSI. This renders the other CPLR Rule 3211 claims moot.

Background

Plaintiff GUSTAFF alleges in her complaint that she was hired in February 2005 by a company that she names in the caption as "MARATHON HEALTHCARE CORP/MONARCH STAFFING formerly, MT ULTIMATE HEALTHCARE CORP," and in ¶ 2 of her amended complaint as "Marathon Healthcare Corp/Monarch Staffing formerly MT Ultimate Healthcare," with its address as 45 Main Street, Suite 617, Brooklyn, NY 11201. She alleges that in August and September 2005 she was sexually harassed by a co-worker, Maude McCalman. Then, she complained to MacDonald Tudeme, the company's Chief Executive Officer. Mr. Tudeme, according to ¶ 6 of the amended complaint, "[i]nstead of rectifying the situation . . . proceeded to touch my breasts more than once and I warned him that I would go to the EEOC [U.S. Equal Employment Opportunity Commission]." Next, she alleges that she faxed her complaint to the EEOC, and in ¶ 8, that Mr. Tudeme "was furious and fired me."

Plaintiff filed charges with the EEOC, on July 12, 2006, for alleged violations of Title VII of the 1964 Civil Rights Act, as codified in 42 USC §2000e et seq, [¶ 10 of exhibit 3 of motion]. The EEOC, on September 22, 2006, dismissed the charges [exhibit A of complaint and exhibit 4 of motion] by stating that "[t]he EEOC has adopted the findings [unknown to this Court] of the state or local fair employment practices agency that investigated the charge," and informed plaintiff of her "Right to Sue" within 90 days of receipt of the EEOC notice.

Plaintiff then brought a federal action against "MT Ultimate Healthcare." In her

federal court complaint (Valerie Gustaff v MT Ultimate Healthcare, US Dist Ct, ED NY,

No. 06-CV-5496), dated October 4, 2006,for alleged violations of Title VII of the 1964 Civil Rights Act, as codified in 42 USC §2000e et seq, she claimed that "[i]t is my best recollection that I filed a charge with the New York State Division of Human Rights or the New York City Commission on Human Rights regarding defendant's alleged discriminatory conduct on 10/19/05 [¶ 9 of exhibit 3 of motion]." Again, plaintiff's complaint did not disclose any decision from either of these administrative agencies.

Plaintiff's federal action was dismissed without prejudice for lack of personal jurisdiction. According to the July 10, 2007 memorandum and order of the Hon. Sandra L. Townes [exhibit 5 of motion], plaintiff GUSTAFF served the wrong corporation. "MT Ultimate Healthcare Corp.," a Nevada corporation, registered with the New York State Secretary of State on February 19, 2004, but plaintiff served "MT Ultimate Services, Inc.," a different Nevada corporation, which was not incorporated until November 14, 2005, several months after the alleged discriminatory conduct occurred. Further, Judge Townes held, at page 6 of her memorandum and order, that "[e]ven assuming that the two corporations were one and the same, plaintiff failed to effect proper service upon the corporation because she failed to serve Tarkowski [President of MT Ultimate Services, Inc.] with a copy of the summons." Judge Townes continues, on page 7, that [*3]"this service of process was inadequate under [Fed Rules Civ Pro Rule 4 (e) (1)], even assuming Tarkowski was an officer or agent authorized to accept service on behalf of defendant corporation."

Plaintiff never appealed the July 12, 2007 judgment [exhibit 6 of motion] based upon Judge Townes memorandum and order. The time to appeal expired on August 10, 2007 [Fed Rules App Pro Rule 3 (a), 4 (a)]. Plaintiff filed a notice of motion for an extension of the time and a notice of appeal on March 4, 2008 [exhibit 7 of motion]. Judge Townes, in her June 20, 2008 memorandum and order, denied the extension of time to appeal [exhibit 8 of motion].

It appears that plaintiff, failing to receive any redress in federal court, commenced the instant action, for alleged violations of Executive Law § 296. Defendant MSI argues that plaintiff is barred from this action because her ninety-day window to sue after receipt of the EEOC "Right to Sue" letter applies to state court as well as federal court. Further, MSI claims that even if plaintiff could still sue MSI, it never obtained personal jurisdiction over MSI.

The only affidavit of service attached to the instant amended complaint was executed on August 22, 2008 by New York City Deputy Sheriff W. Murray. Deputy Sheriff Murray states that on that date he served various papers, including the summons and complaint, at "45 Main Street, Room 617, Brooklyn, NY 11201," on "Marathon Health Care, a domestic corporation, by delivering a true copy of each [summons and amended complaint] to Milqueya Beltre who is Coordinator [job title]; I knew the corporation to be that listed in the papers served and I knew the title of the person named above and that he/she was authorized to accept service."

Keith Moore, corporate Secretary of MSI, in his August 27, 2008-affidavit in support of the motion, claims that MSI was never served with a summons and complaint. Further, he claims that Marathon Healthcare Corp. "is completely unrelated to MSI, a publicly traded corporation with offices only in California; Marathon does not share any facilities, management, staff, officers, directors, employees, agents or offices with MSI nor does Marathon share any common ownership interest with MSI."

The August 22, 2008 service of process against MSI is defective because plaintiff GUSTAFF never obtained personal jurisdiction over defendant corporation MSI. The three-year statute of limitation to sue MSI for alleged discriminatory conduct in September 2005, under Executive Law § 296, expired in September 2008. (CPLR § 214). It is too late to serve MSI again. Therefore, plaintiff GUSTAFF's amended complaint against defendant MSI is dismissed with prejudice.

Discussion

CPLR § 311 (a) (1) deals with personal service upon a corporation, stating in relevant part:

Personal service upon a corporation . . . shall be made by delivering

the summons as follows: 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.A business corporation may also be served pursuant to section threehundred six or three hundred seven of the business corporation law.

Business Corporation Law (BCL) §§ 306 and 307 deal with service of process on authorized [*4]agents and unauthorized foreign corporations. These statutes authorize the New York Secretary of State to act as an agent for domestic and various types of foreign corporations for service of process at the Secretary of State's Albany, New York office.

This Court, in attempting to discover if there is any relationship between MSI and the captioned defendant "MARATHON HEALTHCARE CORP/MONARCH STAFFING formerly, MT ULTIMATE HEALTHCARE CORP," examined corporate filings with the U.S. Securities and Exchange Commission. According to the December 19, 2005 Form 8-K filing of "MT Ultimate Healthcare Corp.," "Marathon Healthcare Corporation" was a wholly owned subsidiary of "MT Ultimate Healthcare Corp.," and on December 15, 2005, "MT Ultimate Healthcare Corp." purchased from Macdonald and Marguerite Tudeme, and disposed of all, the outstanding shares of "Marathon Healthcare Corporation." Then, both Macdonald and Marguerite Tudeme immediately resigned as corporate officers and directors of "MT Ultimate Healthcare Corporation," "to pursue other interests." Next, according to the March 31, 2006 Form 8-K filing of MSI, "MT Ultimate Healthcare Corp." changed its corporate name, effective that day, to "Monarch Staffing, Inc." MSI is a Nevada corporation with its principal executive offices located at 18301 Von Karman, Suite 250, Irvine, CA 92612. The latest SEC filing shows that the above Irvine, CA address is still the business address for MSI. A corporate search with the Division of Corporations of the New York State Department of State reveals that MSI is not registered in New York as a corporation, but its former incarnation, "MT Ultimate Healthcare Corp." is an active registered Nevada corporation, without a registered agent, and the address to which the Department of State will mail process if accepted upon its behalf in Albany is "45 Main Street, Suite 617, Brooklyn, New York 11201."

Thus, personal service on MSI had to be made upon the New York Secretary of State in Albany, New York as an "other agent authorized by law to receive service," or upon "an officer, director, managing or general agent, or cashier or assistant cashier." In this action, Ms. Beltre, the "Coordinator," who accepted personal service from Deputy Sheriff Murray on August 22, 2008, did it on behalf of "Marathon Health Care," not MSI. Even if she had accepted service on behalf of MSI, Ms. Beltre is not "an officer, director, managing or general agent, or cashier or assistant cashier"of MSI. Service is necessary upon the officers named in CPLR § 311 (a) (1) to give a corporation notice that a lawsuit against it has been commenced. "Delivery of the summons to the officials or employees designated by the Legislature fulfills the statutory aim since their positions are such as to lead to a just presumption that notice to them will be notice to the corporation' (Tauza v Susquehanna Coal Co., 220 NY 259, 269 [1917] . . . [Cardozo, J.]). (Fashion Page, Ltd. v Zurich Insurance Co., 50 NY2d 265, 271-272 [1980]).

MSI is correct in asserting that plaintiff GUSTAFF's August 22, 2008 service of the amended complaint against MSI upon Ms. Beltre, a person who is an employee of a separate corporate entity and not MSI's agent for service of process, is defective in the absence of plaintiff demonstrating that "Marathon Health Care" was either a wholly-owned subsidiary of MSI or dominated by MSI. Donley v Gateway 2000, Inc. (266 AD2d 184 [2d Dept 1999]), is a case with a fact pattern similar to the instant case. In Donley v Gateway, the Court held:

In support of its cross motion to dismiss the complaint pursuant

to CPLR 3211 (a) (8), the defendant, Gateway 2000, Inc., asserted,

inter alia, that service of process pursuant to CPLR 311 (a) (1) was [*5]

defective because the individual to whom the summons and complaint

were delivered was neither its employee nor an agent authorized by

appointment or law to accept service on its behalf. The defendant

asserted that the individual who was served is an employee of Gateway

Country Stores, Inc., a separate corporate entity, and not its agent for

the purpose of accepting service of process. No evidence was submitted

by the plaintiff tending to show that Gateway Country Stores, Inc., is

a wholly-owned subsidiary of the defendant, or is so dominated by the

defendant that it acts as a "mere department" of the defendant [citations

omitted]. Under these circumstances, the motion was properly denied,

and the complaint dismissed.

(See Dewey v Hillcrest General Hospital, 201 AD2d 609 [2d Dept 1994]; Cadlett v St. John's Episcopal Hospital, 134 AD2d 394 [2d Dept 1987]; Gajdos v Haughton Elevator, Div. of Reliance Elec. Co., 109 AD2d 729 [2d Dept 1985]).

In the instant action it is obvious that MSI somehow learned about the August 22, 2008 service upon "Marathon Health Care," since the motion to dismiss is dated August 29, 2008, one week later. "The fact that a defendant has received prompt notice of the action is of no moment (see, e.g., De Zego v Donald F. Bruhn, M.D., P.C., 67 NY2d 875 [1986]). Notice received by means other than those authorized by statute does not bring a defendant within the jurisdiction of the court." (Macchia v Russo, 67 NY2d 592, 595 [1986]). "When the requirements for service of process have not been met, it is irrelevant that defendant may have actually received the documents." (Raschel v Rish, 69 NY2d 694, 697 [1986]). (See H. v M., 47 AD3d 629 [2d Dept 2008]; County of Nassau v Letosky, 34 AD3d 414 [2d Dept 2006]; Hillary v Grace, 213 AD2d 450 [2d Dept 1995]; Reed v Trailways Bus Systems, 146 AD2d 763 [2d Dept 1989]).

Therefore, plaintiff GUSTAFF never obtained personal jurisdiction over defendant MSI. Since the statute of limitations for an Executive Law § 296 action has expired, the complaint against defendant MSI is dismissed with prejudice.

Conclusion Accordingly, it is

ORDERED, that the motion of defendant MONARCH STAFFING, INC. to dismiss plaintiff VALERIE GUSTAFF's complaint with prejudice against defendant MONARCH STAFFING, INC., for lack of personal jurisdiction, pursuant to CPLR Rule 3211 (a) (8), is granted.

This constitutes the Decision and Order of the Court.

ENTER [*6]

HON. ARTHUR M. SCHACKJ. S. C.