Failure to Serve Complaint

Plaintiff’s have 120 days from the time they file the complaint with the County Clerk to serve the Defendant.  When the Plaintiff fails to serve, the Defendant may move to dismiss the complaint under CPLR 306-b.  “Although Plaintiff’s failed to properly effect service of process, his [Plaintiff’s] cross motion for an order extending his time to serve the summons and complaint should have been granted in the interest of justice.  (CPLR 306-b.)  Interest of justice requires a careful judicial analysis of the factual setting of the case and a balance of the competing interests of the parties.” (Leader v. Maroney, Pnzini & Spencer, 97 N.Y.2d 95, 105 [2001]).

Service of Process

“While a process server’s sworn affidavit of service ordinarily constitutes prima facie evidence of proper service (Bankers Trust Co. of Cal. v. Tsoukas, 303 A.D.2d 343, 343-344), where there is a sworn denial that delivery to the Defendant was accomplished, the affidavit of service is rebutted and the Plaintiff must establish jurisdiction by a preponderance of the evidence at a hearing.” (internal citations omitted.)  Toyota Motor Credit Corp v. Lam, 93 A.D.3d 713 (2d Dep’t 2012.)  Unless the process server is unavailable to testify at the hearing, the process server’s written affidavit is deemed hearsay, and it is inadmissible at the hearing.  CPLR 4531; Anton v. Anton, 101 A.D.3d 819 (2d Dep’t 1984).  It is not admissible as a business record because it was prepared primarily in anticipation of litigation.

Note that if the process server does appear at the hearing, the affidavit may be used to:

1) Refresh the process server’s recollection, or

2) As evidence under the past recollection recorded exception to the hearsay rule, provided the server cannot totally and accurately recall the details of effectuating the service.  Alexander, Practice Commentaries, McKinney’s Cons Law of N.Y. Book 7B, CPLR 306:20 at 451-52.

DEFAULT JUDGMENT

Should a New York court submit a default judgment against a Defendant, that party has one year to vacate the default, upon a successful showing of reasonable excuse, lack of prejudice to the Plaintiff and an affidavit of merit to Defendant’s defense.  Unless the Defendant can show he was never properly served (in which case there is no time restraint), a court will deny the motion if an attempt to vacate was made after the one year had passed.  CPLR 5015(a)(1).  See Cuadra v. City of New York

Jurisdiction–Suing a Foreign Corporation

How can you sue a foreign corporation, such as a hotel in a New York court?  One way is by ascertaining whether the local hotel is an agent of a larger subsidiary which has significant business contacts in New York.  However, getting jurisdiction is tough because the hotel must have minimum contacts with the State of New York.  “It is settled that a finding of agency for jurisdictional purposes cannot be inferred from the mere existence of a parent-subsidiary relationship (Frummer v. Hilton Hotels Intl., 19 N.Y.2d 533, 538 cert denied 389 U.S. 923.)  Control over a subsidiaries activities must be so complete  that the subsidiary is, merely a department of the parent. (Delagi v. Volkswagenwek AG of Wolfsburg, Germany, 29 N.Y.2d 426, 432.)

Note: Many hotels and resort chains are including forum selection clauses in their contracts.  The U.S. Supreme Court has upheld such clauses, unless the clause was intended to discourage vacationers from pursuing legitimate claims against it.  See also, Paragon Holmes Inc v. Carter, 56 Misc.2d 463, aff’d 30 A.D.2d 1052 (2d Dep’t 1968.)

Forum Selection Clauses

Forum selection clauses are prima facie valid and will not be set aside except for fraud or overreaching or if enforcement would be so unreasonable and unjust as to make a trial in the selected forum ‘so gravely difficult and inconvenient that the challenging party would, for all practical purposes, be deprived of his or her day in court.’ (British W. Indies Guar. Trust Co. v. Banque Internationale, 172 A.D.2d 234.)