Borges v. Entra America Incorp.
NEW YORK COUNTY
Defendant Adela Ivan (“Ivan” or “defendant”) moved by order to show cause for an order as follows:
1. vacating the default judgment entered herein pursuant to CPLR §§317 and 5015(a); and
2. for such other and further relief as considered just by this Court.
Plaintiff Jose Borges (“Borges” or “plaintiff”) opposed the motion and cross-moved for an order as follows:
1. pursuant to CPLR §306-b, extending the time within which to serve the summons and complaint in this action; and
2. pursuant to CPLR §308(5), deeming service of the summons and complaint on defendant Ivan to be sufficient service.
Defendant Ivan opposed the cross-motion. Both the motion and cross-motion are consolidated herein for disposition.
On or about August 4, 2003, plaintiff filed a Summons With Notice in Supreme Court, New York County, under Index No. 114016/03.1 Almost two months later, on October 10, 2003, plaintiff allegedly caused the Summons With Notice to be served on defendant Ivan.2 In particular, plaintiff’s process server, Juan D. Aguirre (“Aguirre” or “process server”), alleges in his affidavit of service that he served defendant Ivan on October 10, 2003 at 3:25 P.M., by delivering the Summons With Notice to a “Co-Worker” Jamal Jbara, at defendant’s actual place of business located at 1133 Broadway, Suite 908, New York, New York (“Actual Place of Business” or “Subject Premises”). In his affidavit of service, Aguirre also alleged to have mailed the Summons With Notice to defendant’s Actual Place of Business that same day at 7:30 P.M.
On December 18, 2003, plaintiff filed a Verified Complaint with Supreme Court, New York County, amplifying the Summons With Notice.3 (See, Exhibit “B” to the Motion). In or about August, 2004, plaintiff moved, inter alia, to enter a default judgment against defendant Ivan. By decision and order dated August 13, 2004, the Hon. Leland DeGrasse, J.S.C., granted plaintiff’s motion to enter a default judgment against defendant Ivan. (See, Exhibit “A” to the Motion). On that same day, Justice DeGrasse transferred this action to the Civil Court pursuant to CPLR §325(d).
In or about January, 2005, defendant Ivan moved for the relief requested herein. On or about February 10, 2005, plaintiff made his cross-motion. By decision and order dated February 22, 2005, the Hon. Ellen Gesmer, J.C.C., granted the motion to the extent of setting this matter down for a traverse hearing on the issue of service.
Traverse Hearing & Witnesses
On April 6, 2005, this Court conducted a traverse hearing. Plaintiff testified on his own behalf and called Aguirre and defendant Ivan as witnesses. Defendant also testified on her own behalf and called her niece, Angelica Pinna (“Pinna”) as a witness. This Court credits the testimony of defendant Ivan and Pinna.
Burden of Proof
In this traverse hearing plaintiff bears the burden of proof in establishing, by a preponderance of the credible evidence, that service on the defendant Ivan was properly effectuated. See, Continental Hosts, Ltd. v. Levine, 170 AD2d 430, 565 NYS2d 222 (2d Dept 1991); Frankel v. Schilling, 149 AD2d 657, 540 NYS2d 469 (2d Dept 1989).
Delivery and Mail Service to Defendant’s Actual Place of Business
Generally, CPLR §308 governs the method of personal service of a summons with notice or summons and complaint on an individual. The first and preferred method of service is personal delivery to the individual within the State. CPLR §308(1). As an immediate alternative to personal delivery, service can be effected as follows:
1. by leaving the summons with notice or summons and complaint within the state with a person of suitable age and discretion at the defendant’s actual place of business, dwelling place, or usual place of abode; and
2. by mailing the summons with notice or summons and complaint to the defendant at defendant’s last known residence or sending the summons with notice or summons and complaint via first class mail to the defendant’s actual place of business in an envelope marked “personal and confidential” and without any indication that it is from a lawyer or concerns an action.
“Actual place of business” includes “any location that the defendant, through regular solicitation or advertisement, has held out as its place of business.” CPLR §308(6). However, when the defendant retires and vacates his/her place of business, the defendant’s prior offices do not constitute the defendant’s “actual place of business” for service under CPLR §308(2) unless defendant’s acts were calculated to mislead the plaintiff as to defendant’s “actual place of business.” See, Continental Hosts, Ltd. v. Levine, 170 AD2d 430, 565 NYS2d 222 (2d Dept 1991); Balendran v. North Shore Medical Group, P.C., 251 AD2d 522, 674 NYS2d 724 (2d Dept 1998); Feinstein v. Bergner, 48 NY2d 234, 422 NYS2d 356 (1979). In addition, the process server’s reliance on representations from defendant’s former employee or colleague that he/she was authorized to accept service for defendant does not obviate plaintiff’s burden to prove that service was made to defendant’s “actual place of business” under CPLR §308(2). Continental Host, Ltd. v. Levine, supra.
The McKinney’s Practice Commentaries on CPLR §308(2) has an excellent recitation of the additional mailing requirement, in pertinent part, as follows:
When the mailing is made to the defendant’s actual place of business, the envelope must be labeled “personal and confidential” and must not indicate on the outside, in any way, that the contents concern litigation or that the communication is from an attorney. Noncompliance with this requirement was held to be a jurisdictional defect in Pesner v. Fried, 1990, 166 AD2d 512, 560 NYS2d 795 (2d Dep’t). Presumably, the envelope restrictions are designed to protect the defendant from gossip and embarrassment at the office. Such restrictions are somewhat odd in light of the fact that a process server may make an actual delivery of process to a co-worker at the defendant’s place of business. In any event, no envelope restrictions apply when the mailing is made to the defendant’s last known residence. Ridgeway v. St. John’s Queens Hosp., 1993, 199 AD2d 490, 606 NYS2d 44 (2d Dep’t).
The statute specifies that mailing to the actual place of business is to be by “first class mail.”
(See, McKinney’s Practice Commentaries by Vincent C. Alexander at C 308:3 at 25-26).
Process Server’s Rules
Under Title 20 of the New York City Administrative Code (“Adm. Code”) all pro-fessional process servers who serve process five or more times in any one year are required to obtain a license from the New York City Department of Consumer Affairs or face both civil and criminal penalties for failure to do so. See, Adm. Code, §§20-403 and 404. (Formerly §B32-451.0). General Business Law (“GBL”) §89-cc provides that licensed process servers maintain a log book as follows:
1) Each process server shall maintain a legible record of all service made by him [her] as prescribed in this section. Such records shall be kept in chronological order in a bound, paginated volume. Corrections in records shall be made only by drawing a straight line through the inaccurate entry and clearly printing the accurate information directly above the inaccurate entry. All other methods of correction, including but not limited to erasing, opaquing, obliterating or redacting, are prohibited. See also, 6 RCNY §2-233. Pursuant to 22 NYCRR §208.29, process servers are required to produce their log books and licenses for traverse hearings as follows: Whenever the court has scheduled a hearing to determine whether process was served validly and timely upon a party, and where a process server will testify as to the service, the process server shall be required to bring to the hearing all records in the possession of the process server relating to the matter at issue. Where the process server is licensed, he or she also shall bring the license to the court. (Emphasis added).
If a process server fails to comply with the rules and regulations of the New York City Department of Consumer Affairs, his/her license may be suspended or revoked. See, Barr v. Department of Consumer Affairs of the City of New York, 70 NY2d 821, 523 NYS2d 435 (1987). Specifically, if the process server fails to produce certain documentation such as a log book, note sheets or process server’s license at the traverse hearing, some trial courts have dismissed the actions for failure to strictly comply with the above rules and regulations. See, Rose Assocs. v. Becker, 153 Misc 2d 900, 583 NYS2d 144 (Civ Ct, NY County 1992); First Commercial Bank of Memphis, N.A. v. Ndiaye, 189 Misc 2d 523, 733 NYS2d 562 (Sup Ct, Queens County 2001). However, more recently, the Appellate Term, Second Department, held that the process server’s failure to offer the log book into evidence does not necessarily create an inference that the process server “lacked credibility” and these procedural infirmities alone do not justify dismissal of the action. See, Hudson House, LLC v. Gabriel, 195 Misc 2d 453, 759 NYS2d 287 (App Term, 2d Dept 2002).
Findings of Fact and Conclusions of Law
Aguirre has been employed as a process server for sixteen years and is currently licensed by the New York City Department of Consumer Affairs. The license was issued March 29, 2004, and it expires on February 28, 2006. (See, Plaintiff’s Exhibit “1”). Aguirre testified that he received his first license in 1989 and it subsequently has been renewed every two years to date. However, Aguirre failed to produce any documentation that he was a licensed process server on the alleged date of service of this action on October 10, 2003.
On October 10, 2003, Aguirre averred to have entered the offices of defendant Entra America, Inc. located at 1133 Broadway, Suite 908, in New York County, to effectuate service on the defendant. At some unspecified time on that date, Aguirre alleged to have spoken to defendant Jamal Jbara (“Jbara”) and “told him I had papers to serve on the corporation, himself, and Adela Ivan.” (See, Transcript at p. 10, lines 10-11). Initially, Aguirre claimed that Jbara responded that “he would accept the papers on behalf of himself, the corporation and on Adela Ivan.” (See, Transcript at p. 10, lines 13-15). Jbara also allegedly stated that defendant Ivan “is not here at the moment, but I’ll make sure she gets these papers.” (See, Transcript at p. 10, lines 19-20). On cross-examination, Aguirre clarified his prior testimony to the extent that Jbara never responded that he would accept service on behalf of defendant Ivan, but Jbara may have only stated that he would take the papers. (See, Transcript at p. 13, lines 5-9).
Significantly, Aguirre neither testified nor produced written proof of any mailing of an additional copy of the Summons With Notice sent to defendant’s last known residence or actual place of business in an envelope marked “personal and confidential” and without any indication that it is from a lawyer or concerns an action as required by CPLR §308(2).
Borges testified that the last time he went to Entra America, Inc.’s offices was in the summer of 2002. At that time, Borges conceded that Ivan was not present. However, Borges stated that Jbara and another individual, Alfred Placeres, was in the Entra America, Inc.’s offices. Borges also claimed that sometime in Fall, 2000, Entra America, Inc.’s secretary called on Ivan’s behalf to schedule a meeting for Ivan and Borges and the secretary also took messages for Ivan. Borges and Ivan neither attended such a meeting nor did Ivan return his phone calls. At all times, Borges alleges that no one informed him that Ivan retired and vacated Entra America, Inc.’s offices in or about December, 2001.
Ivan was the sole shareholder and president of Entra America, Inc. where she worked at its offices for approximately 14 years. In or about December 28, 2001, Ivan sold the shares of Entra America, Inc. to defendant Jbara, which allegedly operates an “immigration/tax /divorce services business” (See, Plaintiff’s Exhibit “5” and Defendant’s Exhibit “A”). After “selling the business” in December, 2001, Ivan retired and vacated the offices of 1133 Broadway, Suite 908, New York, New York and only returned once in November, 2003 to her prior offices for personal reasons. Thereafter, Ivan did not receive a salary from Entra America, Inc.
Ivan denied signing two certified mail return receipts that was allegedly mailed to Entra America, Inc.’s offices in or about early January, 2003. These return receipts were postmarked and dated January 8, 2003 and allegedly bore Ivan’s signature. (See, Plaintiff’s Exhibits “3” and “4”). Ivan credibly testified that she could not have signed the return receipts on January 8, 2003 because she was visiting her daughter in Lowell, Massachusetts at the time. Ivan went to Lowell, Massachusetts to visit her daughter for the holidays at the end of December, 2002 and remained there until January 12, 2003. Ivan returned on January 12, 2003 to prepare a baby shower for her daughter in New York City on January 19, 2003. (See, Defendant’s Exhibit “D”).
Ivan’s niece, Angelica Pinna, confirmed that Ivan was with her from January 3, 2003 through January 12, 2003 in Lowell, Massachusetts visiting her cousin Yolanda and her husband John Calos. Ivan and Pinna both returned together to New York traveling on an Acela train. Pinna also corroborated Ivan’s testimony that they left on January 12, 2003 because the following week was her cousin’s surprise baby shower ” . . . and so we had to prepare the party favors and do the final preparations for the shower . . . ” (See, Transcript at p. 76, lines 23-25).
Conclusions of Law
Aguirre’s service of process on October 10, 2003 suffers from procedural and substantive infirmities. Procedurally, the process server failed to produce written proof that he was duly licensed with the New York City Department of Consumer Affairs on the date of service. The production of a current license after the date of service lacks probative value. Aguirre also failed to produce the log book that he must maintain so as to record the service herein in a specified manner as required by law. (See, 22 NYCRR §208.29).
While these procedural defects alone would not create an inference that the process server “lacked credibility” so as to negate proper service, there are other substantive infirmities that present considerable problems. See, Hudson House, LLC v. Gabriel, supra. For instance, the process server neither testified at what time nor even which “papers” he delivered to Jbara on Ivan’s behalf. While Jbara may have said that Ivan was not in the office at the moment that he would accept certain “papers” on Ivan’s behalf and Jbara would give Ivan the “papers,” the process server failed to ask Jbara whether Ivan is currently employed at the Entra America, Inc.’s offices. In other words, Aguirre failed to minimally ascertain if Jbara was actually Ivan’s “co-worker” for him to accept service pursuant to CPLR §308(2).
Significantly, assuming arguendo, that the papers Aguirre delivered to Jbara was the Summons With Notice and Jbara was Ivan’s co-worker, Aguirre also failed to state that he complied with the additional mailing requirement set forth in CPLR §308(2). In other words, the process server failed to testify that he sent the Summons With Notice to Ivan at defendant’s last known residence or to her actual place of business in an envelope labeled “personal and confidential” and without any indication it is from a lawyer or concerns this action. Noncompliance with this strict requirement is a jurisdictional defect in effecting service. See, CPLR §308(2); Pesner v. Fried, 166 AD2d 512, 560 NYS2d 795 (2d Dept 1990).
Notwithstanding the above, this Court concludes that Ivan was retired and vacated Entra America, Inc.’s offices in or about December, 2001, approximately eight months prior to the date of service herein. Plaintiff’s argument that the two return receipts that Ivan allegedly signed on January 8, 2003 indicated that Ivan continued to work at Entra America, Inc.’s offices is contrary to weight of the evidence. This Court also concludes pursuant to CPLR §4536 that Ivan did not sign the two return receipts based on a comparison of the return receipts and the other known signatures of Ivan which were submitted into evidence. (See, Plaintiff’s Exhibits “3,” “4,” and “5”; Defendant’s Exhibits “D” and “E”).
In addition, this Court credits both Ivan’s and Pinna’s testimony that Ivan was visiting her daughter in Lowell, Massachusetts on the alleged date of delivery and signature of the two return receipts on January 8, 2003. Therefore, Ivan could not have signed these two return receipts. The inescapable conclusion is that Ivan retired and vacated her prior offices in or about late December, 2001. Thus, Entra America, Inc.’s offices could not have constituted Ivan’s “actual place of business” for service of process pursuant to CPLR §308(2). Moreover, plaintiff has failed to prove that Ivan’s or even Jbara’s acts were calculated to mislead the plaintiff as to defendant’s “actual place of business.” In fact, the record is clear that neither the plaintiff nor the process server conducted an ample investigation to determine Ivan’s last known residence and/or her actual place of business. See, Continental Hosts, Ltd. v. Levine, supra.
Accordingly, this Court determines based on the preponderance of the credible evidence that defendant Ivan was not served properly pursuant to CPLR §308. Inasmuch as improper service of the Summons With Notice is a justifiable excuse to vacate the default judgment and defendant Ivan has set forth a colorable meritorious defense to this action, this Court vacates the default judgment.
Based on the foregoing, this Court grants defendant Ivan’s motion to vacate the default judgment. Defendant Ivan may serve and file an answer or move to dismiss for lack of personal jurisdiction based on this Court’s determination within 45 days of notice of entry of this decision and order4. Plaintiff’s cross-motion is respectfully referred to the Hon. Ellen Gesmer, J.C.C. for disposition with her prior consent.
The foregoing constitutes the decision and order of this Court. Courtesy copies of this decision and order have been mailed to counsel for the parties.
1. Unfortunately, neither party submitted a copy of the Summons With Notice on this round of motion practice and at the traverse hearing.
2. Neither party attached a copy of the affidavit of service of the Summons With Notice to their Motion and Cross-Motion.
3. Once again, neither party attached a copy of the affidavit of service of this Verified Complaint to this round of motion practice. In addition, neither party stated the circumstances surrounding the filing of this Verified Complaint.
4. Defendant failed to move to dismiss for lack of personal jurisdiction in her motion papers and counsel orally moved for such relief at the hearing. Plaintiff objected to defendant’s motion to dismiss. This Court could not entertain defendant’s oral motion to dismiss because of due process considerations and the plaintiff’s cross-motion to extend plaintiff’s time to serve the summons and complaint had not been decided.