The following e-filed documents, listed by NYSCEF document number (Motion 002) 30, 31, 32, 33, 34, 35, 36, 37, 38, 40 were read on this motion to/for STAY.

This is an action on a merchant-cash-advance agreement, brought by the merchant-cash-advance funder, plaintiff Colonial Funding Network, Inc., against the merchant, defendant Swift Health Care, Inc., and the merchant's guarantor, defendant Sam Amuzu. In February 2018, this court granted plaintiff's unopposed motion for default judgment against defendants (see NYSCEF No. 21), and judgment was entered on this court's order at the end of that month (see NYSCEF No. 27). In January 2024, plaintiff served a restraining notice on a bank account of defendant Swift (the assets of which were sold to different owners after the judgment was entered). (See NYSCEF No. 31 at ¶¶ 1, 4, 8.) Swift now moves by order to show cause to vacate the restraining notice and to vacate the underlying default judgment against it. (See NYSCEF [*2]No. 30.) The motion is granted.

Swift contends, among other things, that the judgment must be vacated under CPLR 5015 (a) (4) for lack of personal jurisdiction due to improper service. A motion to vacate on this ground "has no stated time limit and can be made at any time." (Caba v Rai, 63 AD3d 578, 580 [1st Dept 2009].) This court agrees that personal jurisdiction over Swift was absent here, and therefore that the judgment must be vacated as against Swift.

Personal jurisdiction has two independent elements: (i) "[T]he power, or reach, of a court over a party, so as to enforce judicial decrees"; and (ii) "service of process, which implicates due process requirements of notice and opportunity to be heard." (Keane v Kamin, 94 NY2d 263, 265 [1999].) Swift is a Texas corporation doing business in Texas. Plaintiff contends that the first element is nonetheless satisfied because Swift consented in the underlying cash-advance agreement to the jurisdiction of the New York courts. (See NYSCEF No. 40 at 3-4, citing NYSCEF No. 10 at 3 § 4.5.) Consent is a proper basis for the exercise of personal jurisdiction under CPLR 301.^[FN1] (See Pichardo v Zayas, 122 AD3d 699, 702 [2d Dept 2014].)

Even assuming that Swift has made itself amenable to this court's authority, plaintiff still must have properly served Swift with process in this action. Plaintiff contends that service was validly made on Swift in 2018 pursuant to Business Corporation Law (BCL) § 307. (See NYSCEF No. 40 at 4.) This court disagrees.

BCL § 307 (a) provides that a foreign corporation that is not authorized to do business in New York, but which is nonetheless subject to the personal jurisdiction of the New York courts under CPLR article 3, may be served using that statute. A plaintiff relying on BCL § 307 must (i) deliver a copy of the summons and complaint to the Secretary of State (id. § 307 [b]); (ii) provide notice to defendant of that delivery and a copy of the papers being delivered (id.); and (iii) file an affidavit of compliance attesting both to delivery and to the follow-up notice (id. § 307 [c]). Notice may be given to the defendant through registered mail, return-receipt requested. (Id. § 307 [b] [2].) If the plaintiff chooses this method, its affidavit of compliance must attach either "the return receipt signed by such foreign corporation or other official proof of delivery" or, upon a refusal to accept delivery, "the original envelope with a notation by the postal authorities that acceptance was refused." (Id. § 307 [c] [2].) A "failure by the plaintiff to strictly comply with the requirements of the statute"— including filing of a satisfactory affidavit of compliance—will deprive the court of personal jurisdiction. (Flannery v General Motors Corp., 214 AD2d 497, 497-499 [1st Dept 1995].)

Plaintiff filed an affidavit of service reflecting that it delivered process to the Secretary of State; and that it mailed a copy of process to Swift in Texas by registered mail, return receipt [*3]requested. (See NYSCEF No. 3.) The affidavit of mailing does not, however, state that plaintiff mailed notice to Swift that plaintiff had served the Secretary of State, as BCL § 307 (b) (2) expressly requires. More fundamentally, plaintiff's affidavits do not include the statutorily required return receipt signed by Swift (or proof that Swift refused to accept delivery of the registered mailing). Instead, plaintiff provides only a copy of the mailing receipt, rather than the return receipt. (See NYSCEF No. 3 at 3.) That is not enough. (See Greenland Asset Mgt. Corp. v MicroCloud Hologram, Inc., 2023 NY Slip Op 51145[U], at *2 [Sup Ct, NY County 2023], citing SST Found. v Intern. Footnotes (HK) Ltd., 2008 WL 10589514, at *3 [Sup Ct, NY County 2008] [explaining that "service under BCL § 307 [b] [2] is . . . not effective upon mailing"].)

To the contrary, in construing BCL § 307, the Court of Appeals has emphasized that the statutory requirement of including the mail receipt with the affidavit of compliance, thereby proving "that the required actual notice has been given," is "no[] mere procedural technicalit[y] but [a] measure[] designed to satisfy due process requirements of actual notice." (Flick v Stewart-Warner Corp., 76 NY2d 50, 56 [1990].) That due-process consideration has added force when applied to cases like this one, in which defendant lacks any connection to New York and is therefore less likely to receive notice of the suit against it through some other means.

Plaintiff did not validly serve Swift in 2018. Absent valid service, this court lacked personal jurisdiction when it granted plaintiff's unopposed default-judgment motion against Swift. The judgment entered against Swift in the absence of personal jurisdiction—and the methods employed by plaintiff to enforce that judgment—must therefore be vacated.

Accordingly, it is

ORDERED that Swift's motion to vacate the February 27, 2018, judgment entered against it is granted; and it is further

ORDERED that plaintiff's claims are dismissed as against Swift, no costs; and it is further

ORDERED that the information subpoena with restraining notice issued by plaintiff to PNC Bank, and any other restraining notices, executions, or the like issued by plaintiff to enforce its judgment as against Swift, are vacated; and it is further

ORDERED that plaintiff shall serve a copy of this order with notice of its entry on all parties to this action; on all parties to whom plaintiff issued the post-judgment-enforcement process referenced in the preceding paragraph; and on the office of the County Clerk (by the means set forth in the court's e-filing protocol, available on the e-filing page of the court's website, https://ww2.nyco urts.gov/courts/1jd/supctmanh/E-Filing.shtml), which shall vacate the February 27, 2018, judgment against Swift and update its records accordingly.