West Coast Realty Servs., Inc. v Holness

[*1] West Coast Realty Servs., Inc. v Holness 2007 NY Slip Op 51449(U) [16 Misc 3d 1117(A)] Decided on August 1, 2007 Supreme Court, Kings County Lewis, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 August 1, 2007
Supreme Court, Kings County

West Coast Realty Services, Inc./ WEST CAPITAL GROUP INC, Plaintiff,

against

Chrissy Holness, REAL PROPERTY HOLDINGS, LLC, NEW YORK CITY DEPARTMENT OF FINANCE, NEW YORK CITY TRANSIT ADJUDICATION BUREAU, PEOPLE OF THE STATE OF NEW YORK, and LAUREN JONES, Defendants.



25460/05



Plaintiff's Atty: Knuckles & Komosinski, PC

Defendant's Atty: Maria Augusto

Yvonne Lewis, J.

Real Property Holdings, LLC, ("RPH"), the defendant, by Order to Show Cause, dated May 2, 2007, seeks to stay the transfer of a Referee's Deed, and to vacate the foreclosure sale of 730 Quincy Street Brooklyn, NY whereby the plaintiff, West Coast Realty Services ("WCR") sold the subject property on April 5, 2007. RPH, in an affidavit given by its President, Joseph Derima claims that, [1] the plaintiff never served the corporation with the summons and complaint; [2] that he was not aware of the mortgage held by WCR; and [3] that he wasn't made aware of the foreclosure until after the auctioning of the subject property. Additionally, RPH states that the mortgage procured by the former owner and co-defendant, Chrissy Holness is invalid because Ms. Holness had no standing to procure a mortgage on the property.

WCR argues that it properly served RPH with process and submitted copies of the Judgment of Foreclosure and Sale, as well as with copies of the Notice, Terms, and Memorandum of Sale. Plaintiff also argues that the defendant, RPH, is now in default as it never answered the complaint or otherwise appeared, and that the proper time to do so has now since

expired.

Further, WCR asserts that RPH is not entitled to an order vacating the default judgment. WCR argues that, [1] the defendant has offered no meritorious defense to this action and [2] that the defendant only provides the Court with "unsubstantiated conclusionary allegation[s]" to rebut its process server's affidavit. WCR also provides a copy of the deed granted to Ms. Holness, dated March 30, 1998 and recorded May 15th 1998, a copy of the subject mortgage, dated February 18, 1999 and recorded March 17th, 2005, and, a copy of the deed from Chrissy Holness to RPH, dated June 2, 2005, to evidence RPH's knowledge (either actual or constructive) of the subject mortgage.

In its Affirmation in Reply, RPH more specifically argues that the plaintiff served foreclosure notice to the NYS Department of State who then incorrectly forwarded notice to the corporation, in care of "Joseph R. Berima," instead of (the correctly spelled) "Joseph. R. [*2]Derima," and that the defendant consequently never received notice. Additionally, RPH argues that "the State [is] to take additional reasonable steps to contact the property owner before it can sell his property." (Jones v. Flowers 547 U.S. 220 (U.S.2006)).RPH argues thatneither the State nor the Plaintiff made any additional attempts to properly serve it even though the address of the owner was local and within the county of the premises foreclosed.

"Service of process on the Secretary of State as agent of a domestic limited liability company shall be made by personally delivering to and leaving with the Secretary of State, or his or her deputy Service of process on such limited liability company shall be complete when the Secretary of State is so served. The Secretary of State shall promptly send one of such copies by certified mail, return receipt requested, to such limited liability company at the post office address on file in the Department of State specified for that purpose." (See Limited Liability Company Law § 303).

In the case at bar, WCR provides evidence of a valid Affidavit of Service of the Summons and Complaint (See "Exhibit B") to Denis Keaveney, a Special Deputy of the Secretary of State, a person authorized to accept service of process for a limited liability company. RPHs' argument that "the State [is] to take additional reasonable steps to contact the property owner before it can sell his property," pursuant to United States Supreme Court Case, Jones v. Flowers 547 U.S. 2000, is taken out of context and is not applicable. In Jones, the Court held that due process requires additional efforts to give notice when the government becomes aware that its first attempt at notification failed. (Id.).Nowhere in RPHs' argument does it demonstrate that the Secretary of State was in any way aware of the misspelling of the individual agent's name, or that the mailed notice was not received. Therefore, "[t]he reasonableness and hence the constitutional validity of [the] chosen method may be defended on the ground that it [was] in itself reasonably certain to inform those affected." (Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306,315 (U.S 1950)). Consequently, this Court finds that service on the Secretary of State, pursuant to Limited Liability Company Law §303, was reasonable because it was personally served to a suitable agent of the LLC, and a copy was sent to the only address on file. Additionally, the letter was never returned to the government, and there was therefore no indication that the letter was not received. Furthermore, the entity information on file, which incorrectly recorded Mr. Derima's name, as "Mr. Berima," in no way makes the efforts of the Secretary of State to forward notice "unreasonable".

In order to overcome the presumption of valid service, the defendant must come forward with a sworn denial containing facts sufficient on its face to rebut the propriety of service. (See Rosario v Beverly Rd. Realty Co., 38 AD3d 875 [2nd Dept 2007]). An unsubstantiated denial of service of the summons and complaint by a partner of a company is insufficient to rebut the prima facie showing of the process server's affidavit. (Id. at875; See also, Commissioners of State Ins. Fund v. Nobre, Inc. [NY App. Div. 2006]) In the matter, sub judice, WCR established that it effectively served Defendant by delivery to the Secretary of State, RPH did not contend that the address on file was incorrect, and the mere denial was insufficient to rebut the presumption of proper service created by the process server's Affidavit of Service.

Any relief sought to vacate a default judgment, pursuant to CPRL § 317, is unavailable to the defendant, RPH, since its agent was properly served. RPH provided no more than an Affidavit submitted by Joseph Derima stating that he was "never served the summons and complaint in this matter." That assertion lacks any factual basis and is therefore insufficient to [*3]rebut the designated agent's Affidavit of Service, nor does it constitute a meritorious defense. Additionally, Defendant does not contend that the address on file was incorrect.

"A person served with a summons other than by personal delivery to him or to his agent for service designated under (CPRL) Rule 318 may be allowed to defend the action within one year after he obtains knowledge of entry of the judgment upon a finding of the court that he did not personally receive notice of the summons in time to defend and has a meritorious defense." (See CPRL § 317).

"The court which rendered a judgment or order may relieve a party from it upon such terms as may be just, on motion of any interested person with such notice as the court may direct, upon the ground of excusable default, if such motion is made within one year after the service; or [upon a finding of] lack of jurisdiction to render the judgment or order." (See CPRL § 5015(a)(1) and § 5015(a)(4) respectively)).

Although pursuant to CPRL § 5015(a)(1) a defendant may seek a vacatur of default regardless of the means of service, the defendant is still required to provide the court with evidence of an excusable default. Here, although, RPH insists that it was unaware of both the mortgage held by Chrissy Holness and the Foreclosure, WCR provided search results from the Office of the Register's Parcel Identifier clearly evidencing an assignment of the mortgage prior to the defendant's purchase of said property. RPH, therefore, fails to provide the Court with any excusable default that would make this avenue of relief available to it. Lastly, the fact that CPRL§ 5015(a) (4), does not require proof of a meritorious defense or an excusable default, is inconsequential since the Court has already determined that service on RPH was not improper.

WHEREFORE, on the basis of all the foregoing, this Court denies the defendant Real Property Holdings' request to dismiss the foreclosure sale to nullify the plaintiff West Coast Realty Services' validly obtained mortgage. This constitutes the decision of the court.

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JSC