Hudson N. Mgt., LLC v Hudson N. Mgt. Westchester Corp.
Annotate this CaseDecided on April 19, 2018
Supreme Court, Westchester County
Hudson North Management, LLC and JUDITH SPEIGHT, Plaintiffs,
against
Hudson North Management Westchester Corporation, CRAIG PERUSINI and BRIAN SCALLY, Defendants.
61492/2017
Appearances
Maniatis & Dimopoulose, P.C.
Attorneys for Plaintiff
Via NYSCEF
Clair & Gjertsen, Esqs.
Attorney for Defendants
via NYSCEF
Lawrence H. Ecker, J.
The following papers numbered 1 through 7 were read on the motion of defendants HUDSON NORTH MANAGEMENT WESTCHESTER CORPORATION ("Hudson North Westchester")and CRAIG PERUSINI made pursuant to CPLR 3211(a)(8), to dismiss the complaint for lack of personal jurisdiction as against HUDSON NORTH MANAGEMENT, LLC and JUDITH SPEIGHT ("plaintiffs"):
PAPERS NUMBERED
Notice of Motion, Affirmation, Exhibits A-C 1-5
Affidavit in Opposition 6
Reply Memorandum 7
Upon the foregoing papers, the decision and order of the court is as follows:
This is an action to collect on a contract of sale of a business from plaintiff to defendants which was executed on June 1, 2016. The complaint in this action was filed on August 4, 2017. Affidavits of Service on defendants Scally, Perusini, Hudson North Westchester (via Mary Mick) were filed on August 29, 2017. An affidavit of mail service on all three defendants was filed on November 27, 2017. Defendants Hudson North Westchester and Perusini allege on this motion that the court does not have personal jurisdiction over them as the summons and complaint were not properly served.
The affidavit of service of the summons and complaint on Hudson North Westchester [NYSCEF No. 10] states that on August 15, 2017, at 2:31 p.m. a copy of the requisite papers were served on Mick at the offices of Hudson North Westchester, Mick willingly accepted personal service, and Mick stated that she was authorized by Hudson North Westchester to accept service.
In the affidavit of service on Perusini [NYSCEF No. 9], the process server avers that he attempted to serve Perusini at his residence on Friday, August 11, 2017 at 8:37 a.m., Saturday, August 12, 2017 at 12:09 p.m., and Monday, August 14, 2017 at 6:30 p.m. On the third attempt, the process server affixed a true copy of the papers to the door of Perusini's residence. The process server avers that he was unable, with due diligence, to find a witness or person of suitable age having called there. In addition, on August 15, 2017, a copy of the papers were mailed to Perusini at the home address in an envelope bearing the legend "personal and confidential" and which did not indicate on the outside thereof that the communication was from an attorney or concerned action against the witness. The process server does not allege that he attempted to serve Perusini at work, although it is undisputed that plaintiffs knew Perusini's place of employment at the time of the attempted service of process.
Motion by Perusini
Perusini, who does not deny receiving actual notice of the lawsuit, argues that the affix and mail service was inadequate to confer jurisdiction because the three attempts to serve him were at his residence and plaintiffs were also obligated to try to serve defendant at his place of business (the address of which was known to plaintiffs) in order to obtain personal jurisdiction. Plaintiffs counter that multiple, diverse attempts to serve at the actual dwelling place, such as at issue here, constitute sufficient "due diligence" under CPLR 308 and that, therefore, there is no additional requirement that an attempt be made to serve at a defendant's known place of business before affix and mail service may be utilized.
"Service of process upon a natural person must be made in strict compliance with the statutory methods of service set forth in CPLR 308" (HSBC Mortgage Corp. (USA) v Hollender, __ AD3d ___, 2018 NY Slip Op. 01907 [2d Dept 2018]; see Washington Mut. Bank v Murphy, 127 AD3d 1167 [2d Dept 2015]). CPLR 308 requires that service be attempted by personal delivery of the summons "to the person to be served" (CPLR 308[1] ), or by delivery "to a person of suitable age and discretion at the actual place of business, dwelling place or usual place of abode" (CPLR 308[2] ). A defendant's eventual awareness of pending litigation will not affect the absence of jurisdiction over him or her where service of process is not effectuated in compliance with CPLR 308 (Washington Mut. Bank v Murphy, supra).
"Service pursuant to CPLR 308(4), commonly known as affix and mail service, may be used only where service under CPLR 308[1] or [2] cannot be made with 'due diligence' (CPLR 308[4]" (HSBC Mortgage Corp. (USA) v Hollender, supra; see Feinstein v Bergner, 48 NY2d 234 [1979]). Since CPLR 308(4) does not define "due diligence," it has been interpreted and applied on a case-by-case basis (see HSBC Mortgage Corp. (USA) v Hollender, supra; Barnes v City of New York, 51 NY2d 906 [1980]). The "due diligence" requirement may be met with "a few visits on different occasions and at different times to the defendant's residence or place of business when the defendant could reasonably be expected to be found at such location at those times" (HSBC Mortgage Corp. (USA) v Hollender, supra; Estate of Waterman v Jones, 46 AD3d 66 [ 2d Dept 2007]; Wells Fargo Bank NA v Besemer, 131 AD3d 1047 [2d Dept 2015]). Here, the court finds that the three attempts, made on a weekday morning, weekend afternoon and a weekday night, at different times, were sufficient in terms of diverse efforts to serve defendant at his home.
This finding, however, does not complete the analysis applicable to determining whether jurisdiction was obtained over defendant under the facts presented here. The question remains whether the process server was required, in addition to the visits to the residence, to endeavor to serve papers on defendant at his workplace, the address of which plaintiff undisputedly knew, in order to satisfy the "due diligence" standard of affix and mail service pursuant to CPLR 308 [4]. In determining the question of whether due diligence has been exercised, no rigid rule can properly be prescribed (see Barnes v City of New York, supra; HSBC Mortgage Corp. (USA) v Hollender, supra; Estate of Waterman v Jones, supra; Wells Fargo Bank NA v Besemer, supra).
The issue of whether adequate attempts by a process server to effectuate service at a residence alone constitutes sufficient "due diligence," or whether the process server must still endeavor to ascertain defendant's place of business and attempt to serve papers there, has not been uniformly resolved. The Second Department recently indirectly visited the issue in HSBC Mortgage Corp. (USA) v Hollender (2018 NY Slip Op. 01907 [2d Dept 2018]). In that decision, the court concluded that the process server's affidavit, which reflected that he made three attempts to effect personal service at defendant's residence at different times on different days when defendant could reasonably be expected to be home, constituted prima facie evidence of proper service pursuant to CPLR 308(4). In response to defendant's argument that the process server was also required to attempt to serve defendant at his place of business, the court held that "under the circumstances here, the plaintiff was not required to attempt to serve her at her workplace," citing Deutsche Bank Natl. Trust Co. v White, 110 AD3d 759 [2d Dept 2013] and JP Morgan Chase Bank, N.A. v Szajna, 72 AD3d 902 [2d Dept 2010].
Interestingly, both Deutsche Bank Natl. Trust Co. v White, supra and JP Morgan Chase Bank, N.A. v Szajna, supra, involved situations where, like here, three attempts to serve the defendant at the defendant's dwelling were adequately completed but the process server never attempted to serve the defendant at the defendant's workplace. The Court held upheld service in both decisions based on the dwelling attempts, but also went on to hold that, "since there was no indication that [defendant] worked [*2]Saturdays or that [defendant's] workplace was readily ascertainable, the plaintiff was not required to attempt to serve the defendant at his workplace" (Deutsche Bank Natl. Trust Co. v White, supra, citing, JP Morgan Chase Bank, N.A. v Szajna, supra). Hence, the implication of the court's citation to these decisions in HSBC Mortgage Corp. (USA) v Hollender is that, at least in the Second Department, if a defendant's workplace is readily ascertainable, plaintiffs must attempt to serve defendant at the workplace in order to satisfy the "due diligence" standard of CPLR 308 (4). This conclusion is consistent, moreover, with a number of Second Department decisions on the matter (see, Wells Fargo Bank, N.A. v Besemer, supra (under the circumstances, where process server made three visits to home at different times and described in detail in the affidavit of service his unsuccessful attempt to obtain employment address for homeowner, the due diligence requirement was satisfied); see also Gurevitch v Goodman, 269 AD2d 355 [2d Dept 2000] (three attempts at home insufficient to establish "due diligence" where process server failed to show any attempt to ascertain defendant's business address and to effectuate personal service at that location); Serraro v Staropoli, 94 AD3d 1083 [2d Dept 2012] (for the purpose of satisfying the "due diligence" requirement of CPLR 308(4), it must be shown that the process server made "genuine inquiries about the defendant's whereabouts and place of employment"); Silber v Stein, 287 AD2d 494 [2d Dept 2001]; Moran v Harting 212 AD2d 517 [2d Dept 1995] (service is defective where process server made no attempt to ascertain defendant's business address and to effectuate personal service at that location); McNeely v Harrison, 208 AD2d 909 [2d Dept 1994]; Leviton v Unger, 56 AD3d 731 [ 2d Dept 2008]; Earte v Valente, 302 AD2d 353 [2d Dept 2003]; Pizzolo v Monaco, 186 AD2d 727 [2d Dept 1992]; see Prudence v Wright, 94 AD3d 1073 [2d Dept 2012]; compare, Wells Fargo Bank, N.A. v Besemer, supra (service sufficient where process server described in detail his unsuccessful attempt to obtain an employment address for the homeowner); Johnson v Waters, 291 AD2d 481 [2d Dept 2002]).
Of note, there are decisions from the First Department that appear to reach a different conclusion (Sartor v Utica Taxi Center, Inc., 260 F. Supp. 2d 670 [S.D.NY 2003]). In fact, in Brunson v Hill, 191 AD2d 334 [1st Dept 1993], the First Department explicitly found an exercise of "due diligence" sufficient to satisfy CPLR 308[4] even where it was specifically acknowledged that the process server, following adequate unsuccessful attempts to effectuate personal service upon defendant's residence, made no attempt to serve defendant at his place of business (see also Farias v Simon, 73 AD3d 569 [1st Dept 2010]; Hochhauser v Bungeroth, 179 AD2d 431 [1st Dept 1992]; but see, Kader v Kader, 132 AD3d 1376 [4th Dept 2015]; Greene Major Holdings, LLC v Trailside at Hunter, LLC, 148 AD3d 1317 [3d Dept 2017]). Regardless, this court's decision in the matter is governed by the precedent of the Second Department.
Applying the relevant governing principles to the specific facts at issue here, the court finds that the service on Perusini was insufficient to confer personal jurisdiction. Here, the three attempts, on a weekday morning, weekend afternoon and a weekday night, to make service on Perusini at his residence at different times on different days and affixing the papers to the door possibly constituted "due diligence" under CPLR [*3]308. (Deutsche Bank Natl. Trust Co. v White, supra, citing, JP Morgan Chase Bank, N.A. v Szajna, supra;). It is undisputed, however, that plaintiffs were well aware of defendant's workplace address at the time of attempted service. Applying the guidelines set forth by the Second Department and the general principles of fairness, therefore, under the facts presented here, as Perusini's employment address was easily obtainable and known by plaintiffs, the process server failed to exercise "due diligence" by not attempting to serve defendant at work. Accordingly, personal jurisdiction has not been obtained over Perusini.
Here, however, defendant and plaintiffs have a long standing relationship and it is undisputed that this action was commenced in a timely fashion. Under these particular circumstances, the interest of justice requires that fairness be maintained amongst the parties to the relevant contract. The extension afforded by CPLR §306-b is applicable where, as here, service is timely made within the 120-day period but is subsequently found to have been defective (Earle v Valente, supra). Moreover, the court has great latitude to extend the time to serve the summons and complaint upon good cause shown or in the interests of justice (CPLR § 306-b; Leader v Maroney, Ponzini & Spencer, 97 NY2d 95, 105-106 [2001]; Hourie v North Shore-Long Is. Jewish Health Sys., Inc.- Lenox Hill Hosp., 150 AD3d 707 [2d Dept 2017]). Here, defendant was aware of the claim and the action was timely commenced within the statute of limitations, resulting in no prejudice to defendant should the extension be granted. Accordingly, rather than granting that branch of the motion which was to dismiss the complaint insofar as asserted against Perusini for lack of personal jurisdiction over him, the court exercises its discretion to permit the plaintiffs, if they be so advised, to serve or re-serve process upon defendant within thirty days of the upload of this decision and order (see CPLR § 306—b; Abdeiqader v Abdelqader, supra).
Motion by Hudson North Westchester
Hudson North Westchester argues that personal jurisdiction was not obtained over it because Mick is a receptionist, an employee without authority to make managerial decisions, was not authorized by the company to accept service on its behalf, and "is not and has never been any of the particular functionaries described in CPLR 311 who are the only proper recipients of service of process for a corporation" [NYSCEF No. 29].
Plaintiffs counter that Mick has worked for defendants Perusini and Scally for many years, not only as a receptionist at Hudson North Westchester, but is an Assistant Manager at defendants other company (Garthchester Realty). In addition, plaintiffs contend that Mick is authorized to accept all mail, certified mail and packages, and emphasize that Mick told the process server that she had authority to accept service on behalf of Hudson North Westchester.
CPLR §311[a][1] provides that personal service upon a corporation, foreign or domestic, shall be made by delivering the summons "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." It should be noted, further, that, under appropriate circumstances, service on other employees will be upheld where the process server makes proper inquiry of a defendant's employee and delivers the summons in accordance with his or her direction (Dunn v Pallett, 66 AD3d 1179 [3d [*4]Dept 2009]; Fashion Page v Zurich Ins. Co., 50 NY2d 265[1980]). The Court of Appeals has declined to read the statute in a narrow and technical manner, determining instead that the statute should be liberally construed (Dunn v Pallett, supra; Marine Midland Realty Credit Corp. v Welbilt Corp., 145 AD2d 84 [ 3d Dept1989], quoting, Fashion Page v Zurich Ins. Co., supra).
It is well established that an affidavit of service is presumptively valid, and a traverse hearing is not required absent specific factual allegations in rebuttal (see Purzak v Long Island Housing Services, Inc., 149 AD3d 989 [2d Dept 2017]; Mileski v MSC Industrial Direct Co., Inc., __ AD3d __, 2018 NY Slip Op. 01460 [2d Dept 2018]). Defendant counters plaintiffs' prima facie evidence with an affidavit stating that Mick was a receptionist and was not authorized to accept service of process on its behalf, although it does not deny that Mick told the process server that she was authorized to accept service on defendant's behalf. Accordingly, questions of fact exist warranting a traverse hearing as to whether Mick was authorized to accept service on behalf of the company, and, if not, was it reasonable, under the circumstances, for the process server to accept Mick at her word (Dunn v Pallett, supra; see Matter of Bart-Rich Enterprises, Inc. v Boyce-Canandaigua, Inc., 8 AD3d 1119 [4th Dept 2004]; Purzak v Long Island Housing Services, Inc., supra).
The court has considered the additional contentions of the parties not specifically addressed herein. To the extent any relief requested by either party was not addressed by the court, it is hereby denied. Accordingly, it is hereby
ORDERED that the motion of defendant CRAIG PERUSINI made pursuant to CPLR 3211(a)(8), to dismiss the complaint as against him based on lack of personal jurisdiction is granted only to the extent that service upon him is held to be ineffective; and it is further
ORDERED that plaintiffs HUDSON NORTH MANAGEMENT, LLC and JUDITH SPEIGHT are granted permission, pursuant to CPLR § 306-b, to effect service of the summons and complaint, filed in this action August 4, 2017, on CRAIG PERUSINI by personal service as required by law, said service to be made within thirty (30) days of the upload of this decision and order in NYSCEF; and it is further
ORDERED that the motion of defendant HUDSON NORTH MANAGEMENT WESTCHESTER CORPORATION pursuant to CPLR 3211(a)(8), to dismiss the complaint as against it based on lack of personal jurisdiction is granted to the extent that a traverse hearing shall be conducted; and it is further
ORDERED that the parties shall appear at the Settlement Conference Part of the Court, Room 1600, on June 12, 2018, at 9:15 a.m. for the scheduling of a traverse hearing.
The foregoing constitutes the Decision/Order of the court.
Dated: White Plains, New York
April 19, 2018
E N T E R
HON. LAWRENCE H. ECKER, J.S.C.
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