Defendants/third-party plaintiffs Partners on Fourth, LLC and Iconic Builders, LLC move for an order, pursuant to CPLR 306-b and CPLR 311, extending their time to serve the Third-Party Summons and Third-Party Complaint on defendant/third-party defendant Knockdown Contracting, Inc., and permitting alternate service upon that party.

Under index no. 29274/10, Cipriano Septimo commenced an action against Partners on Fourth LLC, Knockdown Contracting, Inc., Iconic Builders LLC., Brownstone Agency, Inc., and New Hampshire Insurance Company, seeking damages for physical damage and related losses allegedly caused to Mr. Septimo's property at 160 Fourth Avenue, Brooklyn, by work performed at the adjoining premises at 158 Fourth Avenue ("Action No. 1.") In their Verified Answer to Verified Complaint in Action No. 1, defendants Partners on Fourth, LLC and Iconic Builders, LLC allege a cross-claim for common-law indemnification against defendant Knockdown Contracting, Inc.

Under index no. 29385/10, New Hampshire Insurance Company a/s/o Cipriano Septimo commenced an action against the defendants named in Action No. 1, with the exception of Brownstone Agency, Inc., seeking damages for payments made to its insured, Cipriano Septimo, for losses related to the work performed by Defendants at 158 Fourth Avenue ("Action No. 2.") In their Verified Answer to Verified Complaint in Action No. 2, defendants Partners on Fourth, LLC and Iconic Builders, LLC allege a cross-claim for common-law indemnification against defendant Knockdown Contracting, Inc.

Affidavits of service of the respective answers with cross-claims of Partners on Fourth and Iconic Builders in Action No. 1 and Action No. 2 show that in each action Knockdown Contracting was served "c/o Cindy Whitman, Giaimo Associates, LLP" at an address in Kew Gardens, Queens. Service was made in Action No. 1 on March 18, 2011 and in Action No. 2 on March 21, 2011.

With a Default Judgment Order in Action No. 2, dated December 16, 2011, Justice Herbert Kramer granted plaintiff New Hampshire Insurance Company's motion for default judgment against Knockdown Contracting, Inc., with "Inquest to be held at time of trial."

With a Joint Discovery Order, showing only the caption and index number of Action No. 1, dated June 8, 2012, Justice Yvonne Lewis granted the motion of an unidentified party, and joined Action No. 1 and Action No. 2 "for the purpose of discovery only." [*2]

The court's civil case management database shows that Action No. 1 is still assigned to Justice Lewis. After Justice Kramer's death in 2012, Action No. 2 was assigned to this Court.

On April 25, 2013, Partners on Fourth, LLC and Iconic Builders, LLC commenced their third-party action under index number 75254/13 against Knockdown Contracting, Inc. and four parties new to the litigation, i.e., Moretrench American Corporation d/b/a Moretrench Geotec, Biltmore Contracting, Inc., Oweis Engineering, Inc. and WSP Cantor Seinuk.

Except for the filing of the third-party action, the Affirmation in Support submitted by the moving parties' counsel reveals no activity in either Action No. 1 or Action No. 2 since the June 8, 2012 Joint Discovery Order, and no substantive activity in either action since the December 16, 2011 Default Judgment Order in Action No. 2. The court's civil case management database indicates that three motions are pending in Action No. 1, but counsel provides no information as to their nature or status.

As against defendant/third-party defendant Knockdown Contracting, Inc., the Third-Party Complaint alleges four causes of action, designated "contractual indemnity," "breach of contract," "common law indemnity," and "contribution." To the extent based upon contract, these claims are based upon an alleged contract dated August 16, 2007.

To the extent this motion seeks an extension of time to serve the Third-Party Summons and the Third-Party Complaint upon Knockdown Contracting, Inc., Third-Party Plaintiffs rely on CPLR 306-b, which requires service within 120 days of commencement of the action, but allows the court to extend the time for service "upon good shown or in the interest of justice."

To the extent this motion seeks an order permitting service upon Knockdown by service upon Catlin Insurance Company and RSUI Indemnity Company, Third-Party Plaintiffs rely on CPLR 311(b), which authorizes the court to allow alternate service if service within the 120-day period prescribed by CPLR 306-b is "impracticable."

In support, counsel for Third-Party Plaintiffs asserts that service upon Knockdown, presumably pursuant to CPLR 311(a)(1), is "not feasible on the Secretary of State because Knockdown voluntarily dissolved in January 2013," counsel "is unable to locate a corporate office or serve it at its last known address," and "service upon Catlin Insurance Company and RSUI Indemnity Company is the only method reasonably calculated to apprise Knockdown of the pending lawsuit." (See Affirmation in Support ¶ 18.)

Third-Party Plaintiffs served Catlin Insurance Company and RSUI Indemnity Company with their motion by service on the New York State Insurance Department, and RSUI has appeared and opposes the motion. Third-Party Plaintiffs submit copies of Certificates of Liability Insurance dated August 27, 2007 that their counsel asserts were provided to Third-Party Plaintiffs in connection with the work that is the subject of this action, and that show Catlin and RSUI Indemnity as providing [*3]insurance coverage for Knockdown. The Certificates are not authenticated or otherwise rendered admissible as evidence, but RSUI does not challenge the Certificates in its opposition, although it contends that any such coverage does not warrant service upon the insured through service on the insurer.

It is important to note that the showing Third-Party Plaintiffs make on this motion is limited to such circumstances as may have existed when the Third-Party Summons and Third-Party Complaint were filed. Third-Party Plaintiffs make no showing as to circumstances as may have existed in March 2011, when they served Knockdown with their cross-claims in Action No. 1 and Action No. 2.

Moreover, Third-Party Plaintiffs cite only one judicial authority for their motion, the First Department's single-paragraph ruling that a trial court properly exercised its discretion in allowing a plaintiff to serve a defunct corporation by serving its insurer (see Cives Steel Company v Unit Builders, Inc., 262 AD2d 164 [1st Dept 1999].) Third-Party Plaintiffs provide no caselaw as to the "good cause" or "interest of justice" standards in CPLR 306-b, or the "impracticability" standard in CPLR 311(b):

As to CPLR 306(b):

" 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 . . . By contrast, good cause may be found to exist where the plaintiff's failure to timely serve process is a result of circumstances beyond the plaintiff's control . . .

If good cause for an extension is not established, courts must consider the interest of justice' standard . . . The interest of justice does not require reasonably diligent efforts at service, but courts, in making their determinations, may consider the presence or absence of diligence, along with other factors . . . The interest of justice standard is broader than the good cause standard . . . , as its factors also include the expiration of the statute of limitations, the meritorious nature of the action, the length of delay in service, the promptness of the request by the plaintiff for an extension, and prejudice to the defendant." (Bumpus v New York City Tr. Auth., 66 AD3d 26, 31-32 [2d Dept 2009]; see also Leader v Maroney, Ponzini & Spencer, 97 NY2d 95, 103-106 [2001].)

As to CPLR 311(b), "impracticability" is repeatedly said to be "not capable of easy definition" and "depend[ent] upon the facts and circumstances of the particular case." (See Markoff v South Nassau Community Hosp., 91 AD2d 1064, 1065 [2d Dept 1983], aff'd 61 NY2d 283 [1984]; Safadjou v Mohammadi, 105 AD3d 1423, 1424 [4th Dept 2013].) "Impracticability" is a less [*4]stringent standard than "due diligence," and does not require a showing that all other prescribed methods have been attempted. (See Matter of Kaila B., 64 AD3d 647, 648 [2d Dept 2009]; Contimortgage Corp. v Isler, 48 AD3d 732, 734 [2d Dept 2008]; State St. Bank & Trust v Coakley, 16 AD3d 403 [2d Dept 2005]; Tremont Fed. Sav. & Loan Assn. v Ndamusa, 144 AD2d 660, 660-61 [2d Dept 1988].)

"Once the impracticability standard is satisfied, due process requires that the method of service be reasonably calculated, under all the circumstances to apprise' the defendant of the action." (Contimortgage Corp. v Isler, 48 AD3d at 734 [quoting Mullone v Central Hanover Bank & Trust Co., 339 US 306 (1950)]; see also Safadjou v Mohammadi, 105 AD3d at 1424.

Since due diligence appears to be a sufficient, but not necessary, condition for relief under both CPLR 306-b and CPLR 311(b), it is a fair place to start on this motion. CPLR 306-b expressly applies to third-party actions, but expresses no different standard of application. This court is unaware of any judicial authority that states, one way or the other, whether the statute should be applied any differently to a third-party action.

But delay in the commencement and service of third-party actions creates particular problems. Unlike delay in the commencement of the underlying claim, which is controlled by the applicable statute of limitations, most third-party actions, seeking primarily indemnity and contribution, are not quite so controlled. "The statute of limitations on a claim for indemnity or contribution accrues only when the person seeking indemnity or contribution has paid the underlying claim." (Tedesco v A.P. Green Indus., Inc., 8 NY3d 243, 247 [2007].)

Delay in the commencement and service of a third-party action inevitably puts the other parties and the court to the often difficult choice between two undesirable courses, i.e, a further delay in the action to accommodate the disclosure interests of the new party or parties, or the inefficiencies, and possible contradictory verdicts, upon severance. (See, for example, Whippoorwill Hills Homeowners Assn., Inc. v Toll at Whippoorwil, L.P., 91 AD3d 864, 865 [2d Dept 2012]; Marek v E.W. Howell Co., Inc., 63 AD3d 803, 804 [2d Dept 2009].) Particularly where, as here, there is reasonable certainty that due diligence prior to commencement of the third-party action would have obviated any difficulty with service, there appears to be no good reason for the statute to be applied in a way that would provide incentive for delay.

Here, Third-Party Plaintiffs offer no explanation for the two-year gap between the service of their answers with cross-claims in Action No. 1 and Action No. 2 and their commencement of the third-party action. As to Knockdown Contracting specifically, there is no explanation for their failure to appreciate the significance of the 2007 contract that is the basis for the contractual claims added in the Third-Party Complaint.

Third-Party Plaintiffs essentially acknowledge that, had the third-party action been commenced and service attempted prior to January 2012 when Knockdown voluntarily dissolved, service could have been made through the Secretary of State. (See Affirmation in Support ¶ 18.) [*5](Counsel says January 2013, but a review of the submitted printout from the Department of State website shows a dissolution in January 2012.) There is no indication that any attempt was made to obtain from the Department of State any filings made in connection with the dissolution, which might contain information that would allow proper service.

The only "due diligence" demonstrated is a visit in May 2013 to the business location of Knockdown Contracting, which was vacant; a determination that the telephone service for that address was disconnected; and a telephone call to Giaimo Associates, LLP at the address for Knockdown's registered agent for service of process, when counsel "was advised by a secretary that Cindy Whitman does not work at, nor is associated with, Giaimo Associates, LLP" (see Affidavit in Support ¶ 14.) There is no indication of any attempt to find another location for either Knockdown Contracting, or Cindy Whitman, or to discover the reason for Giaimo Associates, LLP's listing as the address for service of process.

Counsel asserts that "[t]he signature on the subcontract [with Knockdown] is illegible" (see Affirmation in Support ¶ 18), which is correct, but Third-Party Plaintiffs also submit a document dated January 6, 2009 with "final information" about the contract, which is signed on behalf of Knockdown by "Jaibo Santiago, President." Although Santiago is not a rare name in this City, it is not so common as to defy investigation.

The Court has no difficulty concluding that Third-Party Plaintiffs were not reasonably diligent in attempting to make proper service upon Knockdown Contracting, even ignoring the delay in commencing the third-party action. Indeed, the lack of due diligence might fairly be characterized as "extreme" (see Slate v Schiavone Constr. Co., 4 NY3d 816, 817 [2005].) As noted above, however, lack of due diligence is not dispositive for purposes of either CPLR 306-b or CPLR 311(b).

There is far from a compelling showing that an extension is warranted "in the interest of justice" (see CPLR 306-b). Although "[t]he statute of limitations need not actually expire for a court to extend the time of service under CPLR 306-b in the interest of justice" (see Bumpus v New York City Tr. Auth. 66 AD3d at 37n3), here, as shown above, it has yet even to accrue. Other than proferring a copy of a Trade Contract dated August 16, 2007 between third-party plaintiff Partners on Fourth, LLC and Knockdown Contracting Inc., which is neither authenticated, acknowledged, or otherwise rendered admissible as evidence (see Fairlane Fin. Corp. v Greater Metro Agency, Inc., 109 AD3d 868, 870 [2d Dept 2013]), Third-Party Plaintiffs do not even attempt to make a showing as to the merit of their contract claims. (See Knodeeva v Chi Chung Yip, 84 AD3d 1030, 1031 [2d Dept 2011].) Indeed, although the Third-Party Complaint alleges a breach of contract by reason of Knockdown's failure to obtain liability insurance for the benefit of Third-Party Plaintiffs, they rely on certificates of insurance in support of their application to make service on the carriers.

Balanced against those factors, however, there appears to be a lack of prejudice to Knockdown to the extent that it is presumably aware of the underlying actions and the claims for indemnity asserted by the defendants/third-party plaintiffs in those actions, and is deemed to know the contents of its own contracts. (See Rosenzweig v 600 North Street, LLC, 35 AD3d 705, 705-06 [*6][2d Dept 2006].) Although, in the third-party context, prejudice to the other parties might fairly be considered, here, all other parties in Action No. 1, Action No. 2, and the third-party action were served on the motion, but none has opposed it, either as to CPLR 306-b or CPLR 311(b).

Indeed, it is this lack of opposition from any other party that inclines the Court to grant the motion to the extent that its seeks an extension pursuant to CPLR 306-b, but only as to the "interest of justice" ground. Moreover, although efficiencies and the avoidance of contradictory findings have not been specified as material in the caselaw to date, the Court notes that, in this case, it makes little sense for claims of common-law indemnity and contribution to be determined in Action No. 1 and Action No. 2, with issues as to contractual indemnity and contribution reserved for a separate action.

As for CPLR 311(b), however, there is no "interest of justice" basis for relief in addition to the statutory standard of "impracticability." Nonetheless, in applying the analogous provision for alternate service upon an individual (see CPLR 308[5]), the Court of Appeals has taken note of "the plaintiff's need, the public interest, the reasonableness of the plaintiff's efforts under all of the circumstances to inform the defendant, and the availability of other safeguards for the defendant's interests." (See Dobkin v Chapman, 21 NY2d 490, 503 [1968].)

Still, the Court finds it difficult to find "impracticability" here in light of the "extreme" lack of due diligence, at least as reflected in the showing made by Third-Party Plaintiffs on this motion. Moreover, a court determination without practical effect has little value to anyone, and, here, there is a serious question as to whether the proposed alternate method of service is "reasonably calculated, under all the circumstances, to apprise" the third-party defendant of the action. (See Mullone v Central Hanover Bank & Trust Co., 339 US at 314, quoted in Contimortgage Corp. v Isler, 48 AD3d at 734.

It appears to be that, once "impracticability" is established, alternate service pursuant to CPLR 308(5) or CPLR 311(b) will be permitted by service upon the defendant's liability insurance carrier. (See Cives Steel Co. v Unit Builders, Inc., 262 AD2d 164 [1st Dept 1999]; Beacom v Mangone Homes, Inc., 233 AD2d 470, 471 [2d Dept 1996]; Thomas v Pauyo, 203 AD2d 450, 451 [2d Dept 1994]; Rego v Thom Rock Realty Co., 201 AD2d 270 [1st Dept 1994]; Esposito v Ruggerio v Liberty Mut. Ins. Co., 193 AD2d 713 [2d Dept 1993]; Saulo v Noumi, 119 AD2d 657, 658 [2d Dept 1986]; see also Harkness v Doe, 261 AD2d 846, 846 [4th Dept 1999] [service upon carrier and by publication]; Gibson v Salvatore, 102 AD2d 861, 862 [2d Dept 1984] [service upon attorney retained by insurer to represent defendant].)

Early decisions had reflected reluctance to permit service upon the insurer in the absence of "some showing of the actual relationship between insurer and insured" (see Winterstein v Pollard, 50 Misc 2d 354, 355 [Sup Ct, Nassau County 1966] [Meyer, J.]; see also Lerman v Church, 54 Misc 2d 402, 402 [Sup Ct, NY County 1967); or some participation by the insurer in post-accident proceedings (see Todd v Hammer, 59 Misc 2d 147, 149 [Sup Ct, NY County 1969].) [*7]

There must still be an appropriate showing of coverage (see Phillips v Salano, 40 AD3d 950, 952 [2d Dept 2007]; Smith v Waters, 232 AD2d 545 [2d Dept 1996]); or where there is coverage, some relationship between the insurer and the defendant to be served (see Giannizzero v Herzel, 170 AD3d 647 [2d Dept 1991].)

Here, as noted above, Third-Party Plaintiffs submit copies of two Certificates of Liability Insurance, each dated August 30, 2007, showing Knockdown Contracting Inc. as "Insured" and Catlin Insurance Company and RSUI Indemnity Co. as "Insurers Affording Coverage." One of the Certificates shows the "Certificate Holder" as Partners on Fourth, LLC, the other shows Commerce Bank/North and others, none of which is shown to be related to either Third-Party Plaintiff. Indeed, there is no showing of the relationship of any coverage described in the Certificates and any of the matters alleged in Action No. 1, Action No. 2, or the Third-Party Complaint. As with the Trade Contract, no attempt is made to authenticate the documents or render them admissible in evidence.

But RSUI Indemnity, the only alleged insurer to appear on the motion and oppose, does not challenge the authenticity of the Certificates or the fact of coverage. Although there is no proof based upon personal knowledge, counsel acknowledges that RSUI provided excess coverage to Knockdown. (See Affirmation in Opposition to Motion for Extension of Time to Effect Service and For Substitute Service ¶ 12.) Counsel also asserts that "RSUI last insured Knockdown in 2008," and that Third-Party Plaintiffs "likely had more frequent contact with Knockdown than RSUI did and cannot locate them" (see id. ¶ 10.)

Although service through an insurer might be found "reasonably calculated to give defendant notice of the proceeding" even though the insurer has no knowledge of the defendant's whereabouts (see Gibson v Salvatore, 102 AD2d at 862-63), RSUI makes points that arguably distinguish the caselaw that permits service through an insurer. An excess carrier might well have a different relationship with its insurer than a primary carrier; and, indeed, depending upon the nature of the action, a plaintiff may well have a closer relationship with the defendant than the defendant's insurer. This latter point might also apply to a primary insurer like Catlin Insurance. However, none of this is supported by any proof from a person with knowledge.

Given the Court's determination on "impracticability," there is no need to resolve these issues on this incomplete record.

To the extent the motion of Third-Party Plaintiffs seeks an extension of time to serve third-party defendant Knockdown Contracting, Inc., the motion is granted and the time extended for an additional 120 days from the date of this Decision and Order. The motion is otherwise denied.

The Court is this date mailing a copy of this Decision and Order to the parties who appeared on the motion. [*8]

December 2, 2013___________________

Jack M. Battaglia

Justice, Supreme Court