Action Dismissed For Failure Timely to Serve Summons and Complaint

On February 7, 2019, Justice Platkin of the Albany County Commercial Division issued a decision in Plank, LLC v. Dutch Vil., LLC, 2019 NY Slip Op. 50188(U), dismissing an action for failure timely to serve the summons and complaint, explaining:

CPLR 306-b requires service of process to be made within 120 days of the filing of the summons and complaint. However, a court may, in the exercise of discretion, grant a motion for an extension of time within which to effect service for good cause shown or in the interest of justice.

Good cause and interest of justice are two separate and independent statutory standards. To establish good cause, a plaintiff must demonstrate reasonable diligence in attempting service. 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. Inasmuch as Plank did not make any effort to serve defendants within the 120-day period following the filing of the summons and complaint.

Plank's lack of reasonable diligence is not, however, an absolute bar to relief under the more flexible interest-of-justice standard:

The interest of justice standard requires a careful judicial analysis of the factual setting of the case and a balancing of the competing interests presented by the parties. Unlike an extension request premised on good cause, a plaintiff need not establish reasonably diligent efforts at service as a threshold matter. However, the court may consider diligence, or lack thereof, along with any other relevant factor in making its determination, including expiration of the Statute of Limitations, the meritorious nature of the cause of action, the length of delay in service, the promptness of a plaintiff's request for the extension of time, and prejudice to defendant.

In determining whether to grant an extension of time in the interest of justice, no single factor is determinative.

For the reasons that follow, the Court finds, in the exercise of discretion, that Plank has failed to establish that an extension of the 120-day period in which to complete service of process is warranted in the interest of justice.

It is undisputed that Plank did not exercise any diligence in effecting service of process within the 120-day period following the filing of the summons and complaint. Further, Plank did not complete service of process until November 6, 2018, more than six months after the statutory deadline. Thus, there was both a lack of diligence and a protracted delay.

Plank blames its failure to properly and timely serve defendants on its status as a pro se plaintiff and its lack of awareness of the 120-day requirement of CPLR 306-b. However, as defendants observe, Plank is a limited liability company ("LLC") and, as such, must prosecute a civil action through an admitted attorney. Thus, the law does not permit Plank to represent itself in this Court, whether through its sole member or otherwise. Accordingly, Plank's excuse for its noncompliance with CPLR 306-b flows directly from its decision to attempt to commence this commercial action in Supreme Court without the benefit of counsel, in contravention of CPLR 321(a).

Moreover, defendants assert, without contradiction, that the law firm now representing Plank in this action has represented Plank for more than two years in connection with various aspects of the underlying contract dispute. The Court also is mindful that Plank is a commercial contractor that has been involved in a number of other lawsuits in this Court, including at least one action that was assigned to the undersigned for trial. Thus, Plank is a reasonably sophisticated commercial entity with the resources and experience to conduct its litigation matters properly and in compliance with the CPLR.

The Court also has considered the issue of prejudice, and it finds that neither side has demonstrated substantial prejudice. Defendants claim that they will sustain prejudice by reason of making payments on a bond that was substituted for an invalid lien, but the proof they adduce fails to conclusively establish the claimed invalidity. And Plank itself concedes that it will continue to retain all of its contractual rights and remedies as against Dutch Village and can press claims on the same exact salient facts even if this action is dismissed.

Upon a balancing of all relevant factors, the Court finds that the interests of justice do not favor relieving Plank of its highly improvident decision to proceed with the commencement of complex commercial litigation on an unauthorized pro se basis on the eve of the expiration of its statute of limitations, despite having previously retained counsel in connection with the underlying contractual disputes and having been involved in other lawsuits in Supreme Court. And having rejected Plank's excuse for its protracted delay and lack of diligence in effecting service of process, the Court finds that the interests of justice do not otherwise favor the relief sought by Plank.

(Internal quotations and citations omitted) (emphasis added).

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.