Opinion
L & T 066908-19/NY
12-20-2019
GEORGE WASHINGTON BRIDGE BUS STATION DEVELOPMENT VENTURE LLC, Petitioner-Landlord, v. INHO BEAUTY INC. d/b/a In Beauty Supply, Respondent-Tenant, XYZ Corporation, Respondent-Undertenant.
For Petitioner: Kreisberg & Maitland LLP, Attn: Gabriel Mendelberg, 75 Maiden Lane, Suite 603, New York, New York 10038, (212) 629-4970 For Respondent: Solomon Zabrowsky, Esq., 250 West 57th Street, Suite 1301, New York, New York 10107, (212) 265-2800
For Petitioner: Kreisberg & Maitland LLP, Attn: Gabriel Mendelberg, 75 Maiden Lane, Suite 603, New York, New York 10038, (212) 629-4970
For Respondent: Solomon Zabrowsky, Esq., 250 West 57th Street, Suite 1301, New York, New York 10107, (212) 265-2800
Elena Baron, J.
Recitation, as required by CPLR 2219(a), of the papers considered in the review of this motion
Papers Numbered
Notice of Motion with Supporting Affidavit, Affirmation and Exhibits 1, 2, 3
Opposition to Motion and Cross Motion with Supporting Affidavit, Affirmation, and Exhibits 4
Reply Affidavit, Affirmation, and Exhibits 5, 6
Upon the foregoing cited papers, the Decision/Order on these motions is as follows:
Petitioner, George Washington Bridge Bus Station Development Venture LLC (Petitioner or Landlord), commenced this proceeding on August 28, 2019 against respondents Inho Beauty Inc. d/b/a In Beauty Supply (Respondent or Tenant) and XYZ Corporation. Landlord moves before this court to dismiss Tenant's affirmative defenses and for summary judgment, seeking a final judgment of possession, a warrant of eviction, a money judgment in the amount of $163,593.61 and attorneys' fees to be determined at an inquest. Tenant opposes the motion and cross-moves for summary judgment dismissing the proceeding on the ground of lack of personal jurisdiction for failure to comply with RPAPL service requirements, among other things. Tenant argues that Landlord's attempted service of the petition, the notice of petition and the 14-day notice on Tenant was improper, because the attempts were made at an address Landlord knew or should have known would not succeed since the store had not yet opened for business, as known by Landlord. The dispositive issue here is whether conspicuous-place service at a premises that is not yet operating as a business is proper, when the Landlord is aware that the business is not yet open to the public. The court finds that it is not. Accordingly, Landlord's motion is denied and Tenant's cross motion is granted to the extent of dismissing the proceeding, for the reasons set forth herein.
In its notice of motion, Petitioner seeks to dismiss the proceeding against XYZ Corporation without prejudice.
Background
The petition describes the premises sought to be recovered (the premises) as "4211 Broadway, Space No.w1.3, lower level, New York, New York 10033, as identified in Exhibit ‘1’ hereto, at the Broadway Marketplace at George Washington Bridge."
In its verified answer, Respondent asserts seven affirmative defenses. The second affirmative defense alleges lack of personal jurisdiction on the ground that service of the notice of petition and petition was improper and did not comply with the CPLR and/or RPAPL 735. In particular, the second affirmative defense alleges "that inter alia the Petitioner knew and or should have known that the Respondent Tenant was not in actual occupancy of the demised premises and had not even opened up for business and that no success at service was possible at the demised premises." The third affirmative defense alleges that the petition fails to state a cause of action as service of the rent demand was improper and did not comply with the CPLR and/or RPAPL 735, for the same reasons given in the second affirmative defense.
According to the sworn affidavit of service, Petitioner's process server served the rent demand at Broadway Marketplace at "George Washington Bridge 4211 Broadway, Space # W1, 3, Lower Level, New York, NY 10033" by affixing a copy of the demand upon the entrance door to "said property" on August 7, 2019 at 12:50 p.m., after attempts at personal or substitute service were made on August 6, 2019 at 10:54 a.m. and on August 7, 2019 at 12:50 p.m. The process server, Juan Delgado, averred that he was "unable to gain admittance" to the property or "to find a person of suitable age and discretion willing to receive same."
In her affidavit, a different process server, Kristen Maysonet (Maysonet), states that on August 8, 2019, she mailed copies of the rent demand "at the property sought to be recovered" by certified mail return receipt requested and by prepaid regular first class mail. Maysonet also sent additional mailings to Inho Beauty Inc. at 1429 St. Nicholas Avenue, New York, NY 10033 and to Inho Shin at 30 Jeffrey Lane, Great Neck, NY 11020. Certified mail receipts are attached to the affidavit of service, showing mailings to the aforesaid addresses. However, unlike the additional mailings, there is no return receipt requested stamp on the receipt for mailing to the premises.
The sworn affidavit of service for the notice of petition and petition states that on September 5, 2019, at 9:13 a.m., Juan Delgado affixed a copy of the notice of petition and petition on the entrance door of the premises, described as "Broadway Marketplace at George Washington Bridge 4211 Broadway, Space # W1.3, Lower Level, New York, NY 10033," after two unsuccessful attempts of personal or substitute service on September 4, 2019 at 2:49 p.m. and on September 5, 2019 at 9:13 a.m. Again, Mr. Delgado averred that he was "unable to gain admittance" to the property or "to find a person of suitable age and discretion willing to receive same."
Maysonet averred that she mailed a copy of the notice of petition and petition on September 5, 2019 to respondent at the premises by certified mail return receipt requested and by prepaid regular first class mail. The same additional mailings were made as were made with the rent demand. Certified mailing receipts attached as exhibits to Petitioner's motion papers show that, unlike the additional mailings, there is no return receipt requested stamp on the certified mail receipt for the premises.
Motion and Cross Motion
The court will first consider Tenant's cross motion for summary judgment, which seeks to dismiss the proceeding for lack of personal jurisdiction. Tenant argues that this court has no jurisdiction over Landlord, given Landlord's failure to comply with the requirements of the RPAPL. In particular, Tenant asserts that Landlord attempted service of the rent demand and the notice of petition and petition at an address that Landlord "knew or should have known" would not succeed because Landlord knew that the store had not yet opened for business.
In support of its cross motion and in opposition to Petitioner's motion, Respondent submits an affidavit from its president, Inho Shin. The president avers that the store has not yet opened for business. The president further avers that Petitioner "knows that any attempt to successfully serve the papers ... would fail" and that Petitioner "knows where [Respondent is] conducting business and should have served the papers there."
In support of its motion, Petitioner submits an affidavit from Stephen Winiarski, an "authorized agent" for GBW Marketplace Management, LLC, the managing member of Petitioner. While Mr. Winiarski acknowledges that Respondent has not yet opened for business, Petitioner asserts that conspicuous-place service was proper for several reasons. Mr. Winiarski avers that Respondent has been in sole physical and legal possession and occupancy of the premises since 2018, that Respondent conducts daily renovation work at the premises and that it possesses the keys to the premises. Additionally, Petitioner asserts that Respondent has formally designated the premises as the proper place for service of process with the Department of State (DOS). Petitioner submits a printout from the DOS website, current through September 30, 2019, showing that Respondent directed the DOS to mail process to Inho Shin at 4211 Broadway, Suite 13, New York, New York 10033. Further, Petitioner asserts that Inho Shin does not dispute receiving the rent demand and the notice of petition and petition through the conspicuous-place service. Petitioner, relying on Seward Park Hous. Corp. v. Flowers on Essex, LLC (47 Misc 3d 1213[A], 2014 NY Slip Op 51937[U] [Civ Ct, NY County 2014] ) and ( EBC Amro Asset Mgt. v. Kaiser , 256 AD2d 161 [1st Dept 1998] ), argues that the absence of an affidavit from Respondent affirmatively stating that it was not served precludes this court from making a finding of improper service.
Discussion
RPAPL 711(2) provides, in pertinent part, that a written demand for rent must be served upon a respondent as prescribed in RPAPL 735. RPAPL 735 permits service of the notice of petition and petition by personal delivery or by substitute service or, if upon reasonable application personal delivery or substitute service cannot be made, by conspicuous-place service (see Eight Assoc. v. Hynes , 102 AD2d 746, 748 [1st Dept 1984], affd 65 NY2d 739 [1985] ). The "reasonable application" standard requires "some expectation of success" in gaining admittance and finding a person on the premises to whom delivery may be made (id. ; Joseph v. Dan Lyu , 58 Misc 3d 159[A], 2018 NY Slip Op 50250[U] [App Term, 2d, 11th & 13th Jud Dists 2018] ).
While it appears that the Court of Appeals, the First Department's Appellate Term, and the First Department's Appellate Division have not directly addressed the issue of whether it is proper to resort to conspicuous-place service at a premises that is not yet operating as a business, the Second Department's Appellate Term has. In Joseph v. Dan Lyu , the Appellate Term dismissed a petition in a commercial nonpayment proceeding where the landlord resorted to conspicuous-place service after two attempts to serve tenant at the premises, when the landlord was aware that the tenant had never opened a restaurant or any other business at the premises. The court found that the landlord's attempts at service "at the vacant commercial premises did not constitute a ‘reasonable application’ ( RPAPL 735 ) prior to resorting to conspicuous-place service, and the service was defective" ( 2018 NY Slip Op 50250[U], *2).
In ZOT, LLC v. Crown Assoc. (22 Misc 3d 133[A], 2009 NY Slip Op 50215[U] [App Term, 2d, 11th & 13th Jud Dists 2009] ), the Appellate Term in the Second Department found that conspicuous-place service was improper where the landlord did not dispute the tenant's principal's averment that the landlord knew that the tenant's restaurant was closed, because of a kitchen ceiling collapse, at the times that service was attempted and the papers were affixed to the restaurant's outer gate.
Similarly, in 91 Fifth Ave. Corp. v. Brookhill Prop. Holdings LLC (51 Misc 3d 811 [Civ Ct, NY County 2016] ), the respondent argued that the petitioner's process server failed to make a "reasonable application" to effectuate service because the petitioner resorted to conspicuous-place service when it knew that the petitioner had not yet moved into the premises because of ongoing construction work. The Court agreed and found that it lacked personal jurisdiction over the respondent ( 51 Misc 3d at 815 ). The court noted that the petitioner's reply to the respondent's cross motion did not include an affidavit from someone with personal knowledge alleging that the respondent had moved its business to the premises (id. ). Accordingly, the court determined that the respondent's allegation that "it had not yet moved into the subject premises is deemed admitted" (id. ).
Here, it is undisputed that Tenant's business is not yet open to the public. Further, Landlord has failed to submit an affidavit from someone with personal knowledge controverting Tenant's allegations as stated in Inho Shin's affidavit that Landlord knew where Tenant was conducting business and "should have served the papers there." As the court noted in 91 Fifth Ave. Corp. (51 Misc 3d at 815 ), facts appearing in the movant's papers that the opposing party does not controvert may be deemed to be admitted (quoting Madeline D'Anthony Enters., Inc. v. Sokolowsky , 101 AD3d 606, 609 [1st Dept 2012] ). Accordingly, the court finds that Landlord has admitted that Tenant is not conducting business at the premises and that Landlord knew where Tenant was conducting business, yet failed to attempt service there.
Landlord's reliance on the computer printout, dated October 1, 2019 and current through September 30, 2019, indicating that Tenant designated "Inho Shin, 4211 Broadway, Suite 13, New York, New York 10033" as the place to which DOS should mail process if accepted on behalf of Tenant, is unavailing. This printout does not show that Tenant was conducting business at the premises at the time of service of the rent demand in August 2019. Nor does it show that Tenant was conducting business at the premises at the time of service of the notice of petition and petition on September 5, 2019. Tenant's designation of 4211 Broadway, Suite 13, New York, New York 10033 as the address for the secretary of state to mail process does not mean that a process server would be successful in gaining entry to the premises and finding someone to accept service on behalf of Tenant. Further, Landlord did not attempt to serve the secretary of state as an agent of Tenant pursuant to Business Corporation Law section 306, which would have been proper personal service under RPAPL 735(1) and CPLR 311(a)(1) (see Manhattan Embassy Co. v. Embassy Parking Corp. , 164 Misc 2d 977, 979 [Civ Ct, NY County 1995] ).
Moreover, if, as Petitioner suggests, the premises is located at "4211 Broadway, Suite 13, New York, New York 10033," then Petitioner's affidavits of service are defective on their face, as they do not indicate that service was attempted at, or mailings were made to, suite 13. The court notes that the address for the premises listed on the sublease also includes suite 13. As noted above, unlike the certified mailing receipts for the additional mailings, there is no return receipt requested stamp on the certified mailing receipts for the premises, even though the affidavits of service stated that return receipt was requested. Additionally, as noted above, the affidavit of service for the rent demand indicates service upon, in pertinent part, "Space # W1, 3, not "Space #W1.3," which is the space number stated in the petition and the sublease. Accordingly, based on Petitioner's own submissions, the affidavits and the accompanying certified mailing receipts fail to raise a presumption of proper service and the cases petitioner relies upon are inapposite.
The full address for the premises listed on the sublease is "Space # w1.3 on the lower level consisting of approximately two thousand two hundred fifty-five (2,255) square feet of Floor Area, as shown inside the cross hatched area on Exhibit A . The Premises is also known as 4211 Broadway, Suite 13, New York, NY 10033."
Seward Park Hous. Corp. (2014 NY Slip Op 51937[U] ) and EBC Amro Asset Mgt. (256 AD2d 161 ), upon which petitioner relies, did not have the aforementioned defects in the affidavits of service and did not involve attempted service at an address where the Petitioner knew that the business was not yet open. Further, petitioner's reliance upon EBC Amro is unavailing since it is not clear whether an affidavit was submitted by the defendant in that case. EBC Amro relies on cases where the court states there were no affidavits submitted to contradict the affidavit of service (see e.g. Grunberg v. George Assoc. , 104 AD2d 745, 747 [1st Dept 1984] ; see also Sanders v. Newman & Leventhal , 115 AD2d 360 [1st Dept 1985] ). Here, the court finds that the affidavit submitted by the Respondent's president is sufficient to support a conclusion of improper service, particularly when considering the facts of this case, where conspicuous-place service was attempted on a business that the petitioner knew was not yet open to the public. The Respondent's actual receipt of the papers or notice of the lawsuit is insufficient to confer personal jurisdiction where, as here, the service violates the statute and is improper (see Feinstein v. Bergner , 48 NY2d 234, 241 [1979] ).
Lastly, the court finds unconvincing Mr. Winiarski's suggestion that it was proper to attempt to serve Tenant at the premises prior to resorting to conspicuous-place service because Tenant conducts daily renovation work there. Pursuant to the RPAPL, before resorting to conspicuous-place service, reasonable attempts to serve the notice of petition, petition and rent demand shall be made by personally delivering the papers to the respondent or by delivering them and leaving them with a person of suitable age and discretion who, in pertinent part, is employed at the property sought to be recovered. Even if Tenant is conducting daily renovation work at the premises, this alone does not mean that a process server would be able to gain admission to the premises and find someone of suitable age and discretion to serve. Petitioner's own process server indicated that, on four separate dates and times, it could not gain admittance to the premises or find a person of suitable age and discretion willing to receive process. Furthermore, it is not clear from petitioner's submissions how Mr. Winiarski, "an authorized agent" for the managing member of Petitioner, has personal knowledge of the work being performed at the premises. Accordingly, petitioner has failed to submit evidence from someone with personal knowledge showing that someone employed at the premises was regularly present there on a daily basis to accept process during normal business hours.
Conclusion
Given the aforementioned defects in service, including the improper conspicuous-place service on a business that has not yet opened to the public, the court lacks personal jurisdiction over Respondent. Accordingly, Petitioner's motion is denied, and Respondent's cross motion is granted to the extent of dismissing the proceeding.
This constitutes the decision and order of the court.