Court Grants Extension of Time To Serve Defendant Even Though Plaintiff Did Not Provide Good Cause for Failure Timely to Serve

On November 5, 2018, Justice Livote of the Queens County Commercial Division issued a decision in FCS Group, LLC v. Chica, 2018 NY Slip Op. 33433(U), extending a plaintiff's time to serve even though the plaintiff did not show good cause for failing timely to serve, explaining:

CPLR 32ll(a)(8) provides that a party may move the court to dismiss a cause of action against him where the court lacks personal jurisdiction over that defendant. For a Court to have personal jurisdiction over a corporate defendant, service of process must be made upon 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. Section 306(b) of the Business Corporation Law provides that service of process upon a corporate defendant may be completed by personally serving the secretary of state as agent for that defendant.

CPLR 306-b states in pertinent part that: if service is not made upon a defendant within the time provided in this section, the court, upon motion, shall dismiss the action without prejudice as to that defendant, or upon good cause shown or in the interest of justice, extend the time for service.

The time provided to effectuate service upon a defendant after commencement of an action is one hundred twenty days.

To establish good cause, a plaintiff must demonstrate reasonable diligence in attempting service . Good cause may also be found to exist where the plaintiff's failure to timely serve process is a result of circumstances beyond the plaintiff's control. However, good cause will not exist where a plaintiff fails to make any effort at service, or fails to make at least a reasonably diligent effort at service.

In the absence of good cause shown courts must consider the interest of justice standard of CPLR 306-b. The interest of justice standard does not require reasonably diligent efforts at service, but courts, may consider the presence or absence of diligence, along with other factors.

Additional factors to be considered include the expiration of the statute of limitations, the meritorious nature of the action, the length of delay in service, the promptness of a request by the plaintiff for an extension, and prejudice to the defendant.

Here, plaintiff has failed to demonstrate good cause for failing to serve defendant MAVI within 120 days after commencement of this action. While plaintiff has shown diligence in its attempts to serve defendant MAVI, as evidenced by the affidavit of plaintiff's process server, plaintiff has failed to explain why it did not serve process on the secretary of state as agent for MAVI. Thus, plaintiff has failed to show good cause in its failure to serve defendant MAVI by serving process on the secretary of state within 120 days after commencement of this action.

Regarding the attempted service of defendant Chica, plaintiff explains, in its papers, that it attempted to serve defendant Chica by visiting the defendant's last known address, but received no answer after ringing the doorbell. Plaintiff's process server then conducted a database search and found a "David Chica" listed at 62-82 60th Drive; the same address listed on the New York State Department of State Division of Corporations website for MAVI. Plaintiff made several more attempts to serve defendant Chica at this 60th Drive address, but was unsuccessful. Plaintiff's process server was unable to locate a forwarding address for defendant Chica. Accordingly, plaintiff has demonstrated good cause for its failure to serve defendant Chica through its diligence in attempting to effectuate service, which was unsuccessful due to circumstances outside the plaintiff's control.

Although plaintiff has not demonstrated good cause in its attempts to serve defendant MAVI, it has demonstrated that, in the interest of justice, its service of defendant MAVI should be considered timely, nunc pro tunc.

To extend time of service in the interest of justice under CPLR 306-B, the court may weigh several factors. Here, the length in delay of service outside the 120-day time frame was minimal (seven days) and plaintiff has shown, in its papers, that defendant MAVI had actual notice of the suit according to defendant Haque's deposition testimony. There is also an indication that defendant MAVI sought to avoid service by plaintiff because plaintiff's process server called the number listed for MAVI, where a female answered the phone by saying "MAVI" and immediately hung up after the process server asked for MAVI's location. This is not disputed in defendants' reply. Furthermore, defendants have failed to demonstrate that they would be prejudiced.by granting of plaintiff's cross-motion because defendants had notice of the underlying action, as evidenced by defendant Haque's testimony explaining that he not only told defendants MAVI and Chica about the lawsuit, but also that defendant MAVI is paying for defendant Haque's legal representation.

(Internal quotations and citations omitted).

The rules regarding how you start a lawsuit and bring the defendants into it can sometimes be esoteric. As shown here, there are rules regarding how long a plaintiff has to serve a defendant. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client have a question regarding the proper way to serve a defendant, bringing them into a lawsuit.