Opinion
2011-06-27
Diane ALLEYNE–CHRISTOPHER, Plaintiff, v. ALLSTATE PROPERTY AND CASUALTY INS. CO., Defendant.
Sharon A. Telford, Esq. Law Offices of Sharon A. Telford, Esq., Brooklyn, for Plaintiff. Allan S. Hollander, Esq. Bruno, Gerbino and Soriano, L.P., Melville, for Defendant.
Sharon A. Telford, Esq. Law Offices of Sharon A. Telford, Esq., Brooklyn, for Plaintiff. Allan S. Hollander, Esq. Bruno, Gerbino and Soriano, L.P., Melville, for Defendant.
DEVIN P. COHEN, J.
Upon review of the foregoing papers, after oral argument and following a traverse hearing, the defendant's motion to dismiss the complaint for lack of personal jurisdiction is denied.
On or about October 7, 2009, plaintiff commenced this action for breach of contract to recover under an insurance policy issued by defendant. Plaintiff's process server delivered a copy of the Summons and Complaint to the office of plaintiff's personal Allstate agent, James Tomeo, located at 499 Jericho Turnpike, Mineola, N.Y. 11501. Defendant did not serve an answer to plaintiff's complaint and, on or about December 24, 2009, plaintiff served defendant with a copy of a Notice of Default. On January 28, 2010, plaintiff served a Notice of Inquest on defendant.
Defendant subsequently moved by Order to Show Cause to vacate the judgment on the grounds that it did not receive the Summons and Complaint due to improper service. In an order dated March 18, 2010, Hon. Reginald Boddie vacated the judgment, without written opposition from plaintiff, and permitted defendant either to serve an answer or move with respect to the complaint within 20 days. On March 24, 2010, defendant served an answer alleging a number of affirmative defenses, including lack of personal jurisdiction due to improper service. Defendant subsequently moved to dismiss pursuant to CPLR 3211(a)(8) for lack of personal jurisdiction due to improper service.
Defendant's Motion to Dismiss
In its motion papers, defendant contends that Allstate agents, such as James Tomeo, are not employees of Allstate. Rather, defendant argues, Allstate agents are “independent agents” who are not authorized to accept service of process on behalf of Allstate. Defendant submits the affidavit of Allstate Special Investigations Unit claims representative Charles Robelen, III, in support of its motion to dismiss. Defendant describes Allstate agents, such as James Tomeo, as “independent contractors who maintain a contractual relationship with Allstate. This contractual relationship exclusively allows the agents to take applications for Allstate's policies, bind coverage and accept payments of insurance premiums” (affidavit of Charles Robelen, III, at 1). Defendant further argues that given this relationship, an Allstate agent of this nature is not an “officer, director, managing or general agent, or cashier or assistant cashier” or “any other agent authorized by appointment or by law to receive service” as required to effect personal service on a corporation (CPLR 311) ( Id. at 2). Mr. Robelen is a not a corporate officer of Allstate nor does he claim to have any expertise in defendant's corporate structure or the contractual relationship between defendant and Mr. Tomeo. Notably, defendant does not argue that Mr. Tomeo's office was not served, but only that the service was not effective against Allstate as a corporation.
Plaintiff contends that service was properly effected. First, plaintiff argues that James Tomeo was plaintiff's personal insurance agent and that all of plaintiff's dealings related to her Allstate insurance policy were conducted through his office. Plaintiff counsel's affirmation describes that the office had a large Allstate sign outside. All correspondence related to plaintiff's Allstate policy was received on Allstate stationary indicating the address as that of Mr. Tomeo's office (affidavit of plaintiff at 2). Finally, plaintiff argues that when the process server asked whether any individual in the office was authorized to accept service on behalf of Allstate, he was directed to Evelyn Francis, Mr. Tomeo's secretary, who assured the process server that she was authorized to do so (affidavit of James Massiah at 1). Plaintiff points out that Ms. Francis willingly signed a copy of the Summons as an indication of her apparent authority to accept service ( id. at 2).
Based on the arguments made by both sides, on October 4, 2010 this court issued an interim order setting the matter down for a traverse hearing to determine whether and to what extent the plaintiff's personal insurance agent and his staff were cloaked with apparent authority to accept service on defendant's behalf, and the extent to which defendant's actions or inactions created that apparent authority. After several adjournments granted at the request of both sides, a hearing was held wherein testimony was heard from each side.
The Hearing
At the hearing, plaintiff offered the testimony of process server James Massiah. Mr. Massiah testified that he served the Summons and Complaint in this matter (Transcript at 5). Mr. Massiah testified that there was an “Allstate” sign on the building and that he was told by individuals inside that he was in an “Allstate office” (Transcript at 5–6). Mr. Massiah further testified that when he indicated he was there to serve a Summons and Complaint on Allstate, he was told that Ms. Francis would be able to assist him (Transcript at 6). Mr. Massiah went on to state that when he told Ms. Francis he was there to serve process she looked in the computer to confirm that the plaintiff was a client and then told him that she could take the papers (Transcript at 7–8). According to Mr. Massiah, Mrs. Francis then read the document and signed a “received copy” receipt (Transcript at 8–9).
Defendant offered the testimony of Evelyn Francis. During her testimony Ms. Francis stated that she works for Allstate and answers the phone with “Good morning, Allstate” but that she receives her checks from the “Jim Tomeo Agency” (Transcript at 16–17, 24). Ms. Francis acknowledged that she signed the subject Summons and Complaint but stated that she did not know what it was when she signed the document (Transcript at 29–30). Ms. Francis further testified that, prior to this occurrence, she had never been told by Mr. Tomeo not to accept service on behalf of Allstate (Transcript at 19). However, Ms. Francis stated that another Allstate agent she had previously worked for had told her not to accept service on behalf of Allstate (Transcript at 19).
Defendant next called James Tomeo to the stand. Mr. Tomeo testified that he is an exclusive agent under an independent contract with Allstate and that he can only write with other carriers with the approval of Allstate (Transcript at 38). Mr. Tomeo recalled that his contract with Allstate states that he may not accept process on behalf of Allstate but he did not have a copy of the contract with him in court (Transcript at 32). Mr. Tomeo confirmed that he does have an Allstate sign outside of his office (Transcript at 38). Furthermore, Mr. Tomeo stated that, as part of his agreement with Allstate, Allstate sends marketing and retention letters as well as bills to customers on his behalf (Transcript at 44, 47). These letters are printed on Allstate letterhead and list Mr. Tomeo's office address as well as Mr. Tomeo's scanned signature (Exhibit 1 and Transcript at 44). Mr. Tomeo testified that he provided the signature sample to Allstate as part of the contract when he began working for Allstate (Transcript at 45). Mr. Tomeo further testified that, although most premium payments are sent directly to Allstate at an Ohio address, he is authorized to, and does, accept premium payments on behalf of Allstate (Transcript at 47–50). Mr. Tomeo testified that he has deposit slips for depositing such payments into various bank accounts in Allstate's name (Transcript at 50–51). Mr. Tomeo explained that he has discretion to choose to deposit payments to accounts at any of four different banks (Transcript at 51).
Defendant next called Charles Robelen to the stand. Mr. Robelen stated that he is an SIU investigator for Allstate, that he works in a claims office, and that his job is to investigate “questionable claims” (Transcript at 57) Mr. Robelen reiterated the assertions of his affidavit that, as an SIU investigator, it is his understanding that Allstate Agents like Jim Tomeo are independent contractors and are not authorized to accept service on behalf of Allstate (Transcript at 58). Mr. Robelen further testified that, while he is not aware of any specific written company policy regarding service, he has been informed by his superiors that only officers of Allstate and the Secretary of State are authorized to accept service on behalf of Allstate (Transcript at 59–60). Mr. Robelen did acknowledge that the receptionist in his office at Allstate is permitted to accept service of process (Transcript at 60). Mr. Robelen does not claim to be an officer or director of Allstate and there is not testimony that he is involved in creating agency agreements.
Discussion
CPLR 311(a)(1) requires personal service on a corporation to be made by delivering the summons to “an officer, director, managing agent, general agent, cashier, or assistant cashier, or to any other agent authorized by appointment or by law to receive service.” In general, “[m]anifestations of the principal to the other party to the transactions are interpreted in light of what the other party knows or should know instead of what the agent knows or should know” (Restatement [Second] of Agency § 49a [1957] ).
In accordance with this principle, courts have held that in addition to the individuals specifically listed in the statute, service may also be made upon individuals the defendant corporation “cloaks with authority” ( see Fashion Page v. Zurich Ins. Co., 50 N.Y.2d 265, 428 N.Y.S.2d 890, 406 N.E.2d 747 [1980];Rokicki v. 24 Hour Courier Serv., 282 A.D.2d 664, 665, 723 N.Y.S.2d 411 [2d Dept. 2001] ). Thus, courts have held that where a corporate defendant holds out the address of an entity with which it does business as defendant's own business address, without any explanation or disclaimer that it cannot be served there, defendant cloaks that entity with apparent authority to receive service of process on its behalf ( see Gabriel v. Beth Israel Med. Ctr., 121 Misc.2d 351, 467 N.Y.S.2d 536 [N.Y. City Civ. Ct., N.Y. County 1983] [defendant estopped from asserting that billing service not authorized to accept service where every indication given to plaintiff was that the address served was defendant's business address and defendant gave no explanation that it was the address of a billing service only] ). Courts will also uphold service upon an individual whose title is not explicitly listed under the statute where the process server “makes proper inquiry of defendant's employee and delivers the summons in accordance with his or her direction” ( Dunn v. Pallett, 66 A.D.3d 1179, 889 N.Y.S.2d 682 [3d Dept. 2009] ).
In support of its argument that an independent insurance agent is not authorized to accept service on behalf of an insurance company defendant cites Hotel Glenmore, Inc. v. American Eagle Fire Ins. Company, 280 A.D. 445, 114 N.Y.S.2d 234 [4th Dept. 1952]. Hotel Glenmore dealt specifically with the question of whether or not a local soliciting and underwriting agent should be considered a “managing agent” within the meaning of section 228 of the Civil Practice Act (the predecessor to CPLR 311) for the purposes of accepting service. The court held that service of process on a local fire insurance agent was invalid service on the insurance company because the local insurance agents did not have “general powers of management or authority otherwise to act for the companies” ( Hotel Glenmore, 280 A.D. 445, 114 N.Y.S.2d 234).
The instant case is distinguishable from Hotel Glenmore on a number of grounds. First, Hotel Glenmore was decided in 1952 and dealt with the interpretation of an earlier statute governing service of process on a corporation. Second, the court in that case only addressed the interpretation of the statutory term “managing agent” and none of the other titles designated as individuals who may accept service. Furthermore, since Hotel Glenmore, “the trend has been to enlarge rather than diminish the list of those who may accept process on behalf of a corporation” ( Fashion Page, 50 N.Y.2d 265, 271, 428 N.Y.S.2d 890, 406 N.E.2d 747). Not only has the list of individuals who may accept service under the statute been expanded, but courts have increasingly interpreted the terms of CPLR 311 more liberally ( see Id. at 271, 428 N.Y.S.2d 890, 406 N.E.2d 747 [“the statute should be liberally construed”] ).
In this case, Mr. Tomeo's own description of the contractual duties he performs for Allstate fit the category of “cashier,” a position specifically designated under the statute for the acceptance of service (CPLR 311[a] [1] ). Mr. Tomeo accepts premium payments on Allstate's behalf and deposits them into a bank account in Allstate's name. Furthermore, the billing statements sent from Allstate contain both Mr. Tomeo's address and an Allstate address in Ohio. The statements indicate that payments may be made either by mail to the Ohio address or directly to the individual Allstate agent. Mr. Tomeo clearly acts, functionally, as a cashier on behalf of the corporation.
Everything about plaintiff's dealings with Mr. Tomeo and his office indicated to plaintiff, and to the reasonable layperson, that plaintiff was conducting business directly with Allstate. All correspondence sent to the plaintiff was sent by Allstate, on Allstate stationary, with Mr. Tomeo's scanned signature, and the only address indicated (except on the bills) was that of Mr. Tomeo's office. Allstate does not claim to have given any disclaimer or other indication to plaintiff that this office was not an address where it would accept service. Despite Ms. Francis' testimony that she knew from a prior employer not to accept service on behalf of Allstate, given that her signature appears on the face of the copy of the summons and complaint itself, the court does not find credible her explanation that she was not aware that she was signing to accept service. The court finds the testimony of plaintiff's process server credible in stating that he made proper inquiry of Ms. Francis and delivered the summons in accordance with her direction ( see Dunn v. Pallett, 66 A.D.3d 1179, 889 N.Y.S.2d 682 [3d Dept. 2009] ).
Mr. Tomeo's relationship with defendant Allstate involved the power to exercise a good deal of discretion and control, and to make extensive use of the trappings of Allstate's corporate identity. Ultimately, the court finds that, through its conduct, defendant Allstate cloaked Mr. Tomeo and his office with apparent authority to receive service of process on its behalf. In fact, the defendant appears to have done so deliberately, deriving benefit from the branding effect of having its affiliated agencies appear to represent community outposts of a parent company. “Under these circumstances, the plaintiff's process server acted reasonably and with due diligence' and it was reasonable for the process server to believe that [the party who accepted service] was authorized to accept service on behalf of [defendant]” (Aguilera v. Pistilli Constr. & Dev. Corp., 63 A.D.3d 765, 767, 882 N.Y.S.2d 145 [2d Dept. 2009]citing Rokicki, 282 A.D.2d at 664, 723 N.Y.S.2d 411;and see Fashion Page, 50 N.Y.2d 265, 428 N.Y.S.2d 890, 406 N.E.2d 747;Eastman Kodak Co. v. Miller & Miller Consulting Actuaries, 195 A.D.2d 591, 601 N.Y.S.2d 10 [2d Dept. 1993]; Seda v. Armory Estates, 138 A.D.2d 362, 525 N.Y.S.2d 651 [2d Dept. 1988] ).
The court notes that defendant's default was previously vacated by Judge Boddie's order of March 18, 2010. However, that prior order, while permitting defendant to answer or move with respect to the instant complaint, makes no findings with respect to personal jurisdiction and so does not preclude the current finding that defendant was properly served.
For the foregoing reasons, defendant's motion to dismiss for lack of personal jurisdiction is denied.
This constitutes the decision and order of the court.