Opinion
147 CA 21-01188
04-22-2022
IRENE RICHARDS, EXECUTRIX OF THE ESTATE OF LOREN J. RICHARDS, DECEASED, AND INDIVIDUALLY AND AS SURVIVING SPOUSE OF LOREN J. RICHARDS, PLAINTIFF-RESPONDENT, v. HEDMAN RESOURCES LIMITED, DEFENDANT-APPELLANT, ET AL., DEFENDANTS. (ACTION NO. 1.) DAVID D. LAURES AND MADELYN J. LAURES, PLAINTIFFS-RESPONDENTS, v. AIR & LIQUID SYSTEMS CORPORATION, ET AL., DEFENDANTS, AND HEDMAN RESOURCES LIMITED, DEFENDANT-APPELLANT. (ACTION NO. 2.) ROGER J. ADAMEK, EXECUTOR OF THE ESTATE OF ANN M. ADAMEK, DECEASED, AND INDIVIDUALLY AS THE SURVIVING SPOUSE OF ANN M. ADAMEK, PLAINTIFF-RESPONDENT, v. HEDMAN RESOURCES LIMITED, DEFENDANT-APPELLANT, ET AL., DEFENDANTS. (ACTION NO. 3.)
CLYDE & CO U.S. LLP, NEW YORK CITY (PETER J. DINUNZIO OF COUNSEL), FOR DEFENDANT-APPELLANT. LIPSITZ, PONTERIO & COMERFORD, LLC, BUFFALO (DENNIS P. HARLOW OF COUNSEL), FOR PLAINTIFFS-RESPONDENTS.
CLYDE & CO U.S. LLP, NEW YORK CITY (PETER J. DINUNZIO OF COUNSEL), FOR DEFENDANT-APPELLANT.
LIPSITZ, PONTERIO & COMERFORD, LLC, BUFFALO (DENNIS P. HARLOW OF COUNSEL), FOR PLAINTIFFS-RESPONDENTS.
PRESENT: WHALEN, P.J., CENTRA, PERADOTTO, NEMOYER, AND WINSLOW, JJ.
Appeal from an order of the Supreme Court, Erie County (Deborah A. Chimes, J.), entered May 13, 2021. The order, among other things, denied that part of the motion of defendant Hedman Resources Limited seeking to vacate the default liability judgments granted in favor of plaintiffs.
It is hereby ORDERED that the order so appealed from is unanimously affirmed without costs.
Memorandum: Plaintiffs commenced these actions and moved for orders permitting substituted service on Hedman Resources Limited (defendant) pursuant to CPLR 311 (b). Defendant was a Canadian-based corporation that is now defunct, having stopped all business in 2007 and having its corporate charter cancelled in 2016. Supreme Court granted the motions and issued orders allowing plaintiffs to serve defendant by serving the summonses and complaints on a responsible person of suitable age and discretion at the virtual office of defendant's President and Chief Executive Officer (CEO). Defendant defaulted, and plaintiffs obtained default liability judgments against it, with the issue of damages reserved for trial. The court thereafter denied defendant's motion, brought almost five years later, insofar as it sought to vacate the default judgments and dismiss plaintiffs' complaints for lack of personal jurisdiction. We now affirm.
Contrary to defendant's contention, we conclude that the court providently exercised its discretion in allowing substituted service on defendant pursuant to CPLR 311 (b) (see Safadjou v Mohammadi [appeal No. 3], 105 A.D.3d 1423, 1424 [4th Dept 2013]). Substituted service pursuant to that section is permissible if service would be impracticable "under [CPLR 311 (a)] or any other law" (CPLR 311 [b]). CPLR 311 (a) (1) provides in relevant part that personal service on a corporation shall be made by delivering the summons "to an officer, director, ... or... any other agent authorized by appointment or by law to receive service. A business corporation may also be served pursuant to [Business Corporation Law §§ 306 or 307]." Plaintiffs do not dispute that Business Corporation Law § 307, which governs service of process on an unauthorized foreign corporation, applies here. Thus, plaintiffs could have acquired personal jurisdiction over defendant by serving it pursuant to either CPLR 311 (a) (1) or Business Corporation Law § 307 (see Halas v Dick's Sporting Goods, 105 A.D.3d 1411, 1413-1414 [4th Dept 2013]; Van Wert v Black & Decker, 246 A.D.2d 773, 774 [3d Dept 1998]). We therefore agree with defendant that plaintiffs were required to show that service was impracticable under both CPLR 311 (a) (1) and Business Corporation Law § 307 before the court could order substituted service (see CPLR 311 [b]).
"[A] 'plaintiff seeking to effect expedient service must make some showing that the other prescribed methods of service could not be made'" (Markoff v South Nassau Community Hosp., 91 A.D.2d 1064, 1065 [2d Dept 1983], affd 61 N.Y.2d 283 [1984]), but a plaintiff is not required to submit proof of actual prior attempts to serve the party pursuant to those methods (see Safadjou, 105 A.D.3d at 1424; Astrologo v Serra, 240 A.D.2d 606, 606 [2d Dept 1997]). Without such a showing of impracticability, a court is without power to direct expedient service (see Joseph II. v Luisa JJ., 201 A.D.3d 43, 49 [3d Dept 2021]; David v Total Identity Corp., 50 A.D.3d 1484, 1485 [4th Dept 2008]; Corbo v Stephens, 272 A.D.2d 502, 503 [2d Dept 2000]).
Contrary to defendant's contention, plaintiffs established that service pursuant to both CPLR 311 (a) (1) and Business Corporation Law § 307 would be impracticable. With respect to CPLR 311 (a) (1), plaintiffs' counsel established that he had made prior attempts to personally serve defendant's President and CEO, defendant's sole remaining officer, without success. With respect to Business Corporation Law § 307, plaintiffs submitted evidence that defendant had ceased operations in 2007 and that, since late 2007, it no longer had an office address. Plaintiffs thereby established that service pursuant to Business Corporation Law § 307 would be impracticable (see generally Chan v Onyx Capital, LLC, 156 A.D.3d 1361, 1363 [4th Dept 2017], lv denied 31 N.Y.3d 903 [2018]).
We have considered defendant's remaining contentions and conclude that none warrants reversal or modification of the order.