308 E. 49, LLC v K.T. Corp. U.S.A.
Annotate this CaseDecided on December 15, 2022
Supreme Court, New York County
308 East 49, LLC and SABIN HOLDINGS, LLC, Plaintiffs,
against
K.T. Corporation U.S.A. and KATSUYUKI KUROSU, Defendants.
Index No. 654330/2021
Troia & Associates, New York, NY (John P. Langevin of counsel), for plaintiff.
No appearance for defendant Kurosu. Gerald Lebovits, J.
In this action on a commercial lease and guarantee, plaintiffs 308 East 49, LLC and Sabin Holdings LLC (collectively, landlord) move without opposition for default judgment under CPLR 3215 against defendant-guarantor Katsuyuki Kurosu.[FN1] The motion is denied and the action is dismissed as against Kurosu for lack of personal jurisdiction due to improper service.
A plaintiff seeking default judgment must establish proper service, defendant's default, and the facts constituting plaintiff's claim. Landlord cannot establish proper service. Kurosu's guarantee, executed in 2005, waived his right to personal service under the CPLR. (NYSCEF No. 13 at 3.) It provided that landlord could instead serve process on him by simultaneous mailings (one certified mail, the other prepaid first-class mail) directed to a specified Manhattan apartment address. (Id.) But landlord has not shown that it properly served Kurosu at that address. The record reflects that landlord's attempt to serve Kurosu there by personal service was unsuccessful: Landlord's process server executed an affidavit indicating that upon attempting to effect service, he was informed by building security that no one by that name lived in the building, and that no one had lived in the specified apartment for nearly a year. (NYSCEF No. 8.)
The affirmation of landlord's counsel states that at some unspecified time, landlord also mailed the summons and complaint to the address given in the guarantee (attaching pictures of the envelopes). (NYSCEF No. 10 at ¶ 18 [affirmation]; NYSCEF No. 18 [envelopes].) But it is not clear from counsel's affirmation whether he himself conducted this mailing; or, if not, whether his statement is otherwise based on personal knowledge. Landlord's motion papers do not include an affidavit of service with respect to the mailing made to the New York address. The pictures of the envelopes do not themselves contain any indication of their contents—nor any dates. In any event, counsel states in his affirmation that the envelopes "were returned to Plaintiff's counsel's office by the United States Postal Service."[FN2] (NYSCEF No. 10 at ¶ 18.)
Given the failure of service at the New York address, the affirmation of landlord's counsel also relies on a mailing of the summons and complaint, by the means specified in the guarantee, to a Hawaii address at which landlord had located Kurosu.[FN3] (NYSCEF No. 10 at ¶¶ [*2]19-20.) As with the New York mailing, though, counsel's affirmation does not indicate the basis for his knowledge that process was sent to the Hawaii address. (See id.) Nor do the certified-mail receipt and tracking information provided by landlord indicate what was sent to that address. (See NYSCEF No. 19). Additionally, the mailing occurred in March 2022 (see NYSCEF No. 10 at ¶ 20), well outside the 120-day period set by CPLR 306-b. Landlord has not (then or now) sought leave to extend the time for service retroactively. And, all else aside, the fact remains that Kurosu's guarantee did not consent to service of process by mail directed to an address in Hawaii.
To be sure, that Kurosu apparently vacated the service address given in the guarantee, without notifying landlord or updating the guarantee, left landlord in a difficult position. But landlord could have sought an order from this court permitting expedient service under CPLR 308 (5) by some other means or directed to some other address. Landlord did not do so. Absent proper service, this court lacks personal jurisdiction over Kurosu.[FN4]
Accordingly, it is
ORDERED that landlord's motion for default judgment under CPLR 3215 against defendant Kurosu is denied, and the action is dismissed as against Kurosu for lack of personal jurisdiction due to improper service (no costs); and it is further
ORDERED that landlord serve a copy of this order with notice of its entry on defendant K.T. Corporation, U.S.A.; on defendant Kurosu by certified mail, return receipt requested directed to his last-known address; and on the office of the County Clerk, which shall enter judgment accordingly.
12/15/2022 FootnotesFootnote 1:Defendant-tenant K.T. Corporation U.S.A. has appeared and answered. (NYSCEF No. 9.)
Footnote 2:For reasons that do not appear in the record, no return-to-sender stamps or comparable markings appear on the envelopes.
Footnote 3:The landlord also attempted personal service at the Hawaii address, but concedes that several attempts was unsuccessful. (See NYSCEF No. 10 at ¶ 15 [counsel's affirmation]; NYSCEF No. 17 at 2 [affidavit of service].) The record does not reflect why landlord's process server did not, following multiple successful attempts, rely on nail-and-mail service under CPLR 308 (4).
Footnote 4:Even if this court were to have personal jurisdiction over Kurosu, landlord has not provided proof of the facts constituting its claim against him. In December 2020, Landlord sent a demand letter to Kurosu at the address on file for tenant, stating that as of the end of the lease on November 30, 2020, the amount of $203,018.43 remained outstanding in unpaid rent, additional rent, and late fees. (NYSCEF No. 7 at 1.) The landlord also said that after applying the landlord's security deposit to that arrearage, tenant (and thus Kurosu) still owed a balance of $130,026.43. (Id. at 2.) Landlord's complaint and default-judgment motion, on the other hand, claim a different total outstanding balance through November 30, 2020, namely $209,768.30. (See NYSCEF No. 1 at ¶¶ 17-18 [complaint]; NYSCEF No. 10 at ¶ 10 [counsel's affirmation].) Those filings do not discuss whether that balance should be reduced by the amount of tenant's security deposit. And landlord has not provided a rent ledger that might clarify these discrepancies. Furthermore, the lease reflects that the premises were to be used as a restaurant. (NYSCEF No. 11 at 1.) As a result, Kurosu would appear to be shielded from liability for tenant's rent defaults between March 7, 2020, and November 30, 2020, under New York City Administrative Code § 22-1005. Landlord's papers do not address that issue, either.
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