Demitro v Garsan Reality, Inc.
Annotate this CaseDecided on April 24, 2009
Supreme Court, Bronx County
Levonette Demitro, Plaintiff,
against
Garsan Reality, Inc., Defendant.
14425/2005
Plaintiff:
Kevin D. Gratt, Esq.
Gratt & Associates, P.C.
485 Lorimer Street
Brooklyn, New York 11221
718-963-3339
Defendant:
Joseph A. Altman, P.C.
1009 East 163rd Street
Bronx, New York 10459
718-328-0422
Lucindo Suarez, J.
Upon defendant's order to show cause dated October 21, 2008 and the
affidavit, affirmation and exhibits submitted in support thereof; plaintiff's affirmation in
opposition and the exhibits annexed thereto; defendant's reply affirmation and the affidavit and
exhibits annexed thereto; the order of the undersigned dated March 13, 2009 setting this matter
down for a traverse hearing on April 23, 2009; the appearance of counsel for plaintiff and
defendant on April 23, 2009 and the court's discussion with counsel; and due deliberation; the
court finds:
As the parties' submissions failed to raise an issue of fact, a hearing was not
required. Cf. Matter of Elliott v.
Butler, 8 NY3d 972, 868 NE2d 226, 836 NYS2d 544 (2007). The parties were informed
by the court that the motion would be decided, if possible, without a hearing, and both were
amenable.
Defendant Garsan Realty, Inc., incorrectly sued herein as Garsan Reality, Inc.,
moves to vacate its default after inquest and judgment, claiming through its president, Rodolfo
Gardon, Jr., that it was never served with, nor did it receive, the summons and complaint. The
affidavit of service of licensed process server Paul Umansky avers that on May 12, 2005 he
personally served one copy of the summons and complaint upon the New York State Secretary
of State. The captions of the summons and complaint and body of the complaint misspelled and
misstated the name of the intended defendant. The affidavit of service states defendant's address
to be 524 West 169th Street, New York, New York 10032. The affidavit was filed with the Clerk
of Bronx County on June 10, 2005. No further service was attempted.
Defendant provides its New Jersey certificate of incorporation filed February 16,
1988. The court has independently confirmed through a business entity search of the online
database of the New Jersey State Business Gateway Service that Garsan Realty, Inc. is a
registered domestic for-profit corporation incorporated in the State of New Jersey under
registration number 0100365554, and that there is no registered entity known as "Garsan Reality,
Inc." The court has [*2]furthermore conducted a corporation and
business entity search of the online database of the New York State Department of State
Division of Corporations, which yielded negative results for Garsan Realty, Inc., and for Garsan
Reality, Inc., confirming that neither is a domestic or foreign authorized corporation, either
active or inactive. Defendant further provides the State of New York Department of State
Receipt for Service of the summons and complaint. This receipt indicates that the Secretary of
State did not mail a copy of the summons and complaint but instead directed service to be made
pursuant to Business Corporation Law 307, which governs service upon foreign corporations not
authorized to conduct business in New York State and which does not obligate the Secretary of
State to do anything beyond merely receiving process.
Plaintiff does not dispute that at the time service was attempted, defendant was a
foreign corporation unauthorized to do business in the State of New York, despite owning
property situated in the Bronx. Accordingly, service upon defendant, where the initial service is
made by personal service upon the New York Secretary of State, would have been governed by
Business Corporation Law § 307(b), which states that Such [personal service upon the
Secretary of State] shall be sufficient if notice thereof and a copy of the process are:
(1) Delivered personally without this state to such foreign corporation by a person
and in the manner authorized to serve process by law of the jurisdiction in which service is
made, or
(2) Sent by or on behalf of the plaintiff to such foreign corporation by registered
mail with return receipt requested, at the post office address specified for the purpose of mailing
process, on file in the department of state, or with any official or body performing the equivalent
function, in the jurisdiction of its incorporation, or if no such address is there specified, to its
registered or other office there specified, or if no such office is there specified, to the last address
of such foreign corporation known to the plaintiff.
Service also required the filing of an affidavit of compliance, together with the
return receipt or other official proof of delivery or proof of refusal of service, if service was
made pursuant to Business Corporation Law § 3079(b)(2). See Business
Corporation Law § 307(c).
The affidavit of service relied upon by plaintiff does not indicate that the service
upon the Secretary of State was followed by any type of additional service, nor does plaintiff
claim to have attempted such service. Nor has plaintiff filed an affidavit of compliance with
Business Corporation Law § 307. Despite the affidavit of defendant's president, Rodolfo
Gardon, Jr., dated February 16, 2009 plainly indicating that Mr. Gardon had actual notice of the
action, plaintiff's defects in service are "jurisdictional and [do] not constitute a mere
irregularit[y]' subject to cure." Flannery v. GMC, 86 NY2d 771, 773, 655
NE2d 176, 176, 631 NYS2d 135, 135 (1995) (dismissing complaint); see also Lansdowne
Fin. Servs., Ltd. v. Binladen Telecom. Co., 95 AD2d 711, 463 NYS2d 826 (1st Dep't 1983)
(rejecting claim of "actual notice"). "[S]trict compliance with the procedures of
Business Corporation Law § 307 is required to effect service on an unauthorized foreign
corporation." Flick v. Stewart-Warner Corp., 76 NY2d 50, 57, 555 NE2d 907, 910, 556
NYS2d 510, 513 (dismissing complaint) (citations omitted), rearg denied 76 NY2d 846,
559 NE2d 1289, 560 NYS2d 130 (1990).
[*3]
Even were defendant authorized to do business
in New York, regardless of the name on the summons and complaint, the Secretary of State
receipt put plaintiff on notice that no mailing would be performed and that there was a potential
irregularity. Plaintiff took no further steps to ascertain defendant's true corporate status or
investigate. See Mojica v. Palladium, 185 AD2d 796, 586 NYS2d 963 (1st Dep't 1992).
Further, since the Secretary of State's obligation under Business Corporation Law 306 is to
"promptly send [the summons and complaint] . . . to such corporation, at the post office address,
on file in the department of state, specified for the purpose," and there was no such address, the
named defendant being nonexistent, defendant could not have received notice by plaintiff's
chosen method of service. See Pereira v. Oliver's Restaurant, Inc., 260 AD2d 358, 687
NYS2d 704 (2d Dep't 1999). Since proper service was never effectuated, plaintiff did not acquire
jurisdiction over the defendant, see Guarino v. West-Put Contr. Co., 289 AD2d 290, 734
NYS2d 499 (2d Dep't 2001), regardless of defendant's actual notice of the action through other
means, see e.g. Baker v. Latham Sparrowbush Assoc., 808 F. Supp. 981 (S.D.NY 1992).
The cases cited by plaintiff are inapplicable and do not lead to a different result under these
circumstances.
The plaintiff derived the address noted in the affidavit of service from a 2005 title
report listing the 1988 deed to defendant. It was not reasonable for plaintiff to rely on seventeen
year old information for an accurate address for service of process. See, e.g., Bevona v. Blue
Star Realty Corp., 264 AD2d 586, 694 NYS2d 656 (1st Dep't 1999).
Where a plaintiff has failed to properly serve the defendant, all subsequent
proceedings are "null and void." Ananda Capital Partners, Inc. v. Stav Elec. Sys. (1994)
Ltd., 301 AD2d 430, 430, 753 NYS2d 488, 489 (1st Dep't 2003). Plaintiff never having
acquired jurisdiction over the defendant, and the statute of limitations having expired, plaintiff's
complaint should therefore be dismissed. See Maldonado v. Maryland Rail Commuter Serv.
Admin., 91 NY2d 467, 695 NE2d 700, 672 NYS2d 831 (1998) ("resuscitative remedy" of
CPLR 306-b(b) unavailable where action untimely commenced because of failure to name
existing entity and effect proper service); see also Cadlerock Joint Venture, L.P. v.
Uddin, 303 AD2d 188, 755 NYS2d 597 (1st Dep't 2003); Haberman v. Simon, 303
AD2d 181, 755 NYS2d 596 (1st Dep't 2003); Security Pac. Natl. Trust v. Chunassamy,
289 AD2d 151, 734 NYS2d 438 (1st Dep't 2001).
Accordingly, it is
ORDERED, that defendant's application is granted; and it is further
ORDERED, that the judgment in the amount of one hundred fifty-three thousand
thirty-nine dollars ($153,039.00) entered on November 19, 2007 is vacated in its entirety; and it
is further
ORDERED, that the decision and order of the undersigned dated October 1, 2007,
which granted plaintiff judgment against defendant after inquest conducted September 26, 2007,
is vacated in its entirety; and it is further
ORDERED, that the order of this court (Hon. Nelson S. Romàn, J.S.C.) dated
June 8, 2006 which granted plaintiff a judgment of default over defendant is vacated in its
entirety; and it is further
ORDERED, that plaintiff's complaint is dismissed in its entirety, with prejudice; and
it is further
ORDERED, that the clerk of the court is directed to enter judgment in favor of the
[*4]defendant dismissing the complaint.
This constitutes the decision and order of the court.
Dated: April 24, 2009
____________________________
Lucindo Suarez, J.S.C.
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