[*1]
Canfi USA, Inc. v Dusica Dusica, Inc.
2008 NY Slip Op 51670(U) [20 Misc 3d 1130(A)]
Decided on July 31, 2008
Supreme Court, New York County
Tolub, J.
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and will not be published in the printed Official Reports.


Decided on July 31, 2008
Supreme Court, New York County


Canfi USA, Inc., Plaintiff,

against

Dusica Dusica, Inc., Defendant.




602335/07



ATTORNEY FOR THE PLAINTIFF:

CLYDE M. SCHAEFER, ESQ.

17 KELLY ROAD

CARMEL, NEW YORK , 10512

Phone : 1-845 225-7612

ATTORNEY FOR THE DEFENDANT:

BERKE & BERKE

590 MADISON AVENUE - 21ST FL.

NEW YORK, NEW YORK, 10022

Phone : 1-212 888-8787

Walter B. Tolub, J.

This is a motion by Defendant to dismiss the complaint pursuant to CPLR § 306-b and CPLR § 3211(a)(8).

FactsPlaintiff Canfi USA Inc. is a New York corporation with an office and principal place of business in New York. (Pl. Memo. Opp. Ex. A). Defendant Dusica Dusica, Inc., is a Florida corporation, listing its office and principal place of business as 525 South Flagler Drive, Palm Beach, Florida 33480 (the "Florida address"), with an additional office located at 67 Prince Street, New York, New York 10012 (the "New York address"). No documentation has been offered to show whether Defendant is authorized to do business in New York.

In January 2005, the parties entered into a contract

whereby Plaintiff, in exchange for a commission, would be the exclusive seller of Dusica Dusica goods in the United States. [*2]Plaintiff claims that notwithstanding this agreement, Defendant failed to pay Plaintiff commissions for the Fall 2005 and Spring-Summer 2006 seasons. This action, commenced on July 16, 2007, seeks to recover these commissions and additional damages.

On July 16, 2007, Plaintiff attempted service on Defendant by delivering a copy of the summons and complaint to Defendant's Prince Street address. This address was chosen because it was used by Defendant's president, Ms. Dusica Sacks, in company emails and on trade show documents. Three days after Plaintiff's service, an employee at the Prince Street location, Lauren

Simula, called Plaintiff's attorney to advise him that Ms. Sacks would be out of the country until further notice. On July 20, 2007, Plaintiff's attorney received a second communication from Defendant, in the form of a fax on Defendant's official letterhead, confirming the previous day's communication.

In response to this information, Plaintiff attempted personal service at the Florida address, listed in the contract of engagement between Plaintiff and Defendant. This was followed by mailing service to the Florida Secretary of State and to the Florida address. As a final attempt, Plaintiff attempted personal service on Ms. Sacks in January 2008, while she was in

New York to attend proceedings in an unrelated matter. It is this attempt at service that marks the genesis of the instant motion.

DiscussionBy this motion, Defendant seeks to dismiss the action, arguing that this court lacks personal jurisdiction over Defendant corporation because Plaintiff failed to serve process within 120 days of filing the complaint (CPLR § 306-b).

Pursuant to CPLR § 306-b, plaintiff must serve defendant with a summons and a copy of the complaint within 120 days of filing the complaint (CPLR § 306-b). Here, Plaintiff filed the summons and complaint on July 16, 2007. Pursuant to CPLR § 306-b, Defendant would have to be served no later than November 13, 2007. Plaintiff's attorney concedes that the last attempt to

serve Defendant occurred on January 11, 2008, almost 60 days past the statutory deadline mandated in CPLR § 306-b.

However, CPLR § 306-b provides for an extension of time for "good cause shown or in the interest of justice." (CPLR § 306-b). "Good cause" requires that plaintiff employ reasonable diligence when attempting process upon defendant (Spath v. Zack, 36 AD3d 410, 413 [1 Dept. 2007]). To meet the "interest of justice" standard, the court must make "a careful judicial analysis of the factual setting of the case and a balancing of the competing

interests." (Leader v. Maroney, Ponzini & Spencer, 97 NY2d 95, 105 [2001]). [*3]

In determining what constitutes the interest of justice, courts consider: (1) diligence on the part of the plaintiff; (2) when the statute of limitations will expire; (3) prejudice to defendant; (4) how quickly plaintiff asked for an extension; (5) how long plaintiff waited to attempt service; and (6) the merits of the cause of action (Id. at 105-106).

Plaintiff made numerous attempts to serve Defendant. First, Plaintiff personally served Defendant Dusica Dusica, Inc. on July 16, 2007, at 67 Prince Street, New York, New York 10012. Three days later, however, an employee at the New York location called Plaintiff's attorney to inform him that Ms. Sacks was out of the country until further notice. On July 20, 2007, Plaintiff's attorney received a fax memorializing the same information. Defendant argues that the fax stated that a separate corporation called Dusica Dusica New York, Inc. received process, not

Defendant.

The New York address was used in tradeshow pamphlets and emails written by Ms. Sacks, seemingly to designate the location of Defendant's New York office. Defendant claims that the 67 Prince Street location is occupied by two separate corporations: Dusica Dusica New York, Inc. occupies the upper level as a retail store and Dusica Dusica, Inc., Defendant in this matter,

occupies the basement showroom. Both corporations are owned by Ms. Sacks.

According to Defendant, Plaintiff served the wrong corporation by serving someone at the upper level retail store and, therefore, service was improper and defective. Plaintiff does not dispute this, and the court thus accepts the attempt to personally serve Defendant as defective. (See Credit Alliance

Corp. v. Arthur Andersen & Co., 101 AD2d 231, 235 [1 Dept 1984], revs'd on other grounds 65 NY2d 536 [1985]; United Lakeland Air Conditiong Co. v. Ahneman-Christiansen,Inc., 33 Misc 2d 606, 609 [NYSup 1962]; Beasock v. Dioguardi Enterprises, Inc., 130 Misc 2d 25, 28 [NY Sup 1985]).

Plaintiff then attempted personal service at 525 South Flagler Drive, Palm Beach, Florida 33480, the Florida address given in the contract. Plaintiff claims that from July to October of 2007, process servers in Florida attempted service but were unsuccessful. Thereafter, plaintiff sent a copy

of the pleadings to the Florida Secretary of State, pursuant to Florida Statute § 48.161. However, this attempt at service was improper. To properly effectuate service upon a foreign corporation, plaintiff must use methods proscribed by New York law. Whether a foreign corporation is authorized to do business in New York affects what methods constitute proper service. The

parties failed to attach documentation establishing whether Defendant is authorized to do business in New York therefore, the court must analyze the attempts according to both standards. [*4]

Pursuant to BCL § 306(b), a plaintiff must personally deliver two copies of process to the Secretary of State of New York, a deputy or any person authorized to accept service for a foreign corporation authorized to do business in New York. The Secretary of State would then forward a copy of process to the defendant. (BCL § 306(b)).

For foreign corporations not authorized to do business in New York, process must be personally delivered to the Secretary of State of New York, and then personally delivered or mailed to the foreign corporation as mandated in BCL § 307. (BCL § 307).

Plaintiff admittedly did not deliver a copy of the summons and complaint to the Secretary of State of New York. Therefore, mailing service to the Secretary of State of Florida does not effectuate service.

After mailing a copy of the pleadings to the Florida Secretary of State, Plaintiff sent a copy of the summons and complaint, along with an acknowledgment by the Florida Secretary of State that the pleadings were received, to 525 South Flagler Drive, Palm Beach, Florida 33480. The package was returned to Plaintiff because no such street existed in Palm Beach. (Pl.

Ex. N). Plaintiff then searched the internet and found that Ms. Sacks' address was actually 525 South Flagler Drive, Apt. 10A, West Palm Beach, Florida 33401. Attempts by process servers to serve Ms. Sacks at that address were also unsuccessful.

Defendant argues that Plaintiff knew that the correct address for Defendant was in West Palm Beach, that Plaintiff should have searched the internet for Ms. Sacks' personal address and, finally, that the difference between the addresses was mere scrivener's error. Defendant provides no supporting evidence to establish this claim. Instead, Plaintiff shows that the address

listed in the contract was 525 South Flagler Drive, Palm Beach, Florida 33480, not 525 South Flagler Drive, Apt. 10A, West Palm Beach, Florida 33401. Furthermore, Plaintiff was under no obligation to search for the personal address of Defendant's president as argued by Defendant. Plaintiff's duty was to search for the corporation's address on file with the "appropriate official in the jurisdiction of the corporation's incorporation." (Barr, Altman, Lipshie, Gerstman, New York Civil Practice Before Trial, [James Publishing 2007] § 9:443, citing BCL § 307.)

Finally, the court doubts that the discrepancy between the addresses was mere scrivener's error. Ms. Sacks initialed the contract page containing the address, and the claimed breach

did not occur until 15 months after she signed the contract, giving Defendant sufficient time to notice and correct the error.

The last attempt to serve Defendant was made on January 11, 2008. Plaintiff's attorney learned that Ms. Sacks would be in New York to attend proceedings related to a different matter. While those proceedings were on a break, Plaintiff's attorney [*5]served Ms. Sacks with the complaint and summons in the courthouse hallway.

Generally, a party located in New York to attend a hearing is immune from personal jurisdiction based solely on tagging. (Mathews v. Tufts, 42 Sickels 548 [1882].) To obtain immunity, defendant must show that: "(1) he or she is in fact a nonresident, (2) whose sole purpose in appearing in New York is to attend the judicial proceedings, and (3) there were no other means of acquiring jurisdiction over his or her person other than personal service in New York" (Brause 59 Co. v. Bridgemarket Associates, 216 AD2d 200 [1 Dept. 1995], citing Moreo v. Regan, 140 AD2d 313 [2nd Dept 1988]). Whether this rule applies to the situation at hand is of no issue since personal service was attempted beyond the 120-day time period proscribed in CPLR § 306-b. Therefore, the attempt is improper and cannot confer jurisdiction over Defendant corporation.

Pursuant to the factors described in Leader v. Maroney, Ponzini & Spencer, 97 NY2d 95 (2001), a time extension is warranted to allow Plaintiff to properly serve Defendant. Plaintiff exercised diligence in attempting to serve Defendant. Even though each attempt at service was defective, they were made in a timely and diligent manner. (Spath v. Zack, 36 AD3d at 413). The statute of limitations has not yet expired (CPLR § 213), and Defendant would not be prejudiced. Although Plaintiff did not make a formal application for a time extension to properly serve Defendant, the court can exercise its discretion under CPLR § 306-b, the informal request in Plaintiff's opposition papers suffice (Slate v. Schiavone Const. Co., 10 AD3d 1, 4 [1st Dept 2004], revs'd on other grounds 4 NY3d 816 [2005]; citing Kurtz v. American Export Industries, Inc., 49 AD2d 557 [1 Dept 1975]).

Accordingly, it is

ORDERED that Defendant Dusica Dusica, Inc.'s motion to dismiss the action is denied; and it is further

ORDERED that the within Complaint is deemed served; and it is further

ORDERED that Defendant shall serve an answer within 20 days.

This memorandum opinion constitutes the decision and order of the court.

Dated:

____________________________

HON. WALTER B. TOLUB, J.S.C.