Opinion
2219/05.
Decided June 19, 2006.
Joseph Haspell, Esq., Goshen, NY, Attorney for the Plaintiffs.
Greenwald Law Offices, Chester, NY, Attorneys for the Defendants.
By Decision and Order of this Court, dated February 23, 2006, this Court scheduled the above entitled matters for a joint Traverse hearing to determine whether the Defendants were properly served, thereby giving the Court personal jurisdiction over the respective Defendants. The traverse hearing was held on May 18, 2006 and continued on May 26, 2006.
The first witness to testify on behalf of the Plaintiffs was Michael Sprei. Mr. Sprei testified that he is an attorney and was asked by his uncle Harold Schwartz, one of the Plaintiffs herein, to serve process upon the Defendants, Quality Estates, LLC, Mendel Brach and Moshe Roth.
Prior to attempting service, he went to the New York State Department of State's website and searched for the business address of Quality Estates, LLC. The Department of State's records indicated that the address to which the Department of State would mail process, if service was accepted on behalf of the entity, was 236 Broadway in Brooklyn, New York.
Mr. Sprei that he was advised by Mr. Schwartz that Mendel Brach and Moshe Roth conduct business out of their homes, they generally arise late (around 10:00 a.m.), and they attend synagogue each day from approximately 10:00 a.m. to Noon. Mr. Sprei also testified that Mr. Schwartz advised him that service should not be attempted at the Berry Street address, since that location is locked, there is a security camera, and he would not be able to gain access to that location.
The witness testified that he took photographs of most of his attempts at service, and that either he or Mr. Schwartz took the photographs, which were all introduced into evidence. The photographs each contained a notation generated by the camera, which indicated the time at which each photograph was taken. The notations on the photographs had reversed whether the photographs were taken in the a.m. or in the p.m., and therefore, where the notation state a.m., it should have stated p.m., and vice versa.
Mr. Sprei testified that he attempted service at four different locations. He attempted service on Mr. Roth at two different locations because he had been advised that Mr. Roth was changing his address. The two addresses were at 1658 52nd Street in Brooklyn and at 146 Rutledge Street in Brooklyn.
He attempted to serve Mr. Brach at 29 Walton Street in Brooklyn, and Quality Estates at 236 Broadway, which was the address on the Department of State's website.
On each attempt at service at the residential addresses, he would knock on the door or ring the door bell, and wait for an answer. When no one answered the door, he would leave. On the final attempt at service at each address, he attached two copies of the Summons and Verified Complaint in each action (four copies in all) to the front door. One copy of the papers in each action was for service on the individual, and the other was to effect service on Quality Estates, LLC.
Mr. Sprei attempted to serve Mendel Brach at 29 Walton Street in Brooklyn, on Thursday, August 25, 2005 at 11:11 p.m.; Friday, August 26, 2005 at 2:18 p.m.; Tuesday, August 30, 2005 at 2:20 p.m.; and, Thursday, September 1, 2005 at 4:54 p.m. Mr. Sprei testified that, on September 1, 2005, he attached copies of the summonses and complaints to the door with duct tape, and then mailed copies to that address.
Mr. Sprei indicated that, with regard to service on Moshe Roth, he attempted service at 1658-52nd Street in Brooklyn, on Thursday, August 25, 2005 at 10:43 p.m.; Friday, August 26, 2005 at 4:13 p.m.; Sunday, August 28, 2005 at 10:35 a.m.; and, Monday, August 29, 2005 at 3:53 p.m. Mr. Sprei testified that he spoke to some workers at that location on the August 29th, but they did not give him any information about Mr. Roth's whereabouts. On Thursday, September 1, 2005 at 4:22 p.m., he attached copies of the Summonses and Complaints to the front door of the residence, and the following day, mailed copies to that address.
He also attempted service on Moshe Roth at 146 Rutledge Street, which was the second address they had for Mr. Roth. He attempted service on Thursday, August 25, 2005 at 11:19 p.m.; on Friday, August 26, 2005 at 2:25 p.m.; on Tuesday, August 30, 2005 at 2:14 p.m.; and finally, on Thursday, September 1, 2005 he made his final attempt at 5:09 p.m. He then affixed the papers to the door and mailed them on the following day to the Rutledge Street address.
The witness indicated that, with the exception of the mailings addressed to Quality Estates, LLC at the 236 Broadway address, none of the mailings were returned to him.
The process server also testified that he went to 236 Broadway in Brooklyn, where he made two attempts at service, one on Friday, August 26, 2005 at 2:36 p.m.; and on Tuesday, August 30, 2005 at 2:29 p.m. He testified that Quality Estates, LLC was not listed as a tenant on the door bell at 236 Broadway, but that the attorney, Barry Feerst, Esq., was listed. Mr. Sprei testified that he also checked with a neighbor at 236 Broadway, a baby supply store, and was advised that the neighbor had no knowledge of Quality Estates at that location.
Finally, Mr. Sprei testified that he did not attempt to serve papers at 388 Berry Street in Brooklyn.
The next person to testify was one of the Plaintiffs, Harold Schwartz, who testified that he is familiar with the Defendants and has socialized with them in the past. He indicated that he was aware that the Defendants were operating their business at 388 Berry Street in Brooklyn. He described 388 Berry Street as a building with a vestibule and, upon entry, the door to the Defendants' office was on the right. The door to the Defendant's office is locked and requires that visitors be buzzed in. In addition, there are video surveillance cameras to observe who is at the door. Mr. Schwartz testified that he directed that no attempts be made to serve process at that address because he anticipated that they could not gain admission, because of the lock and security system.
Mr. Schwartz acknowledged that the Notes, which are the subject of the litigation, list the Defendants' address at 388 Berry Street. He also admitted that when the payments were not made, he forwarded a default notice to both 388 Berry Street address and to the home addresses of the Defendants. He did not send a default notice to 236 Broadway. He further acknowledged that he has conducted business with the Defendants at 388 Berry Street.The witness also testified that the Defendants observe the Sabbath on Saturdays.
The Defendants then produced a number of witnesses in support of their claims.
The Defendant, Mendel Brach testified that he and Moshe Roth are in the business of owning, operating and developing property, and that they are partners in Quality Estates, LLC.
Mr. Brach testified that they currently operate their business at 388 Berry Street in Brooklyn, New York, and that, four or five years ago, they had operated their business at 236 Broadway. He indicated that they no longer operate the business at that location, although he continues to have a professional relationship with Barry Feerst, Esq., who maintains an office at that address.
He acknowledged that he is personally acquainted with the Plaintiffs and has socialized with the Plaintiff, Harold Schwartz, in the past.
He testified that he is married and has six children, and that he lives in Brooklyn at 29 Walton Street. During the months of July and August, his family stays at their summer residence in Woodridge, New York, and while he returns to the city on Mondays, Tuesdays and Wednesdays, he seldom stays overnight.
He testified that he usually gets up at approximately 6:00 a.m., and goes to Shul for about an hour. After that, he visits various job sites, before arriving at the office at approximately 8:15 a.m. Mr. Brach testified that the front door to the building at 388 Berry Street is open between 9:00 a.m. and 5:00 p.m., but the door to his office is always locked and any visitors need to be buzzed in. He also testified that the camera system at the office is not presently in operation. Finally, he testified that he does not conduct business from his residence.
On cross-examination, he indicated that it was possible he received the default notices that were sent to him, but he did not remember.
The next witness to testify on behalf of the Defendants was Moshe Roth, who testified that he resides at 1658 52nd Street, Brooklyn, New York, and that he is a partner in the Defendant, Quality Estates, LLC. He testified that the business' current address is 388 Berry Street in Brooklyn, and that, approximately four years ago, it had operated from 236 Broadway in Brooklyn.
He testified that he knows the Plaintiff, Harold Schwartz, and that the Defendants have conducted business with him in the past, including many meetings at the 388 Berry Street location. He also testified that he has met with Mr. Schwartz for business at 236 Broadway, but that it was at the offices of his attorney, Barry Feerst, Esq., who maintains an office at that location.
He also confirmed that the Defendants have socialized with the Plaintiff in the past, and, similar to Mr. Brach, Mr. Roth testified that he does not normally conduct business out of his residence.
Mr. Roth testified that, during the summer of 2005, he and his family went to their summer home in Woodridge. They stayed there until approximately Labor Day, when they returned to Brooklyn in time for the start of the children's school year. He testified that, during the summer months, he returned often to New York City to conduct business, and that he would occasionally stay overnight. The Defendant testified, however, that during the summer he stays at his parents' home in Williamsburg to avoid using the air conditioning at his own home.
Mr. Roth testified that the notes and mortgages, which are the subject of this litigation, were signed at Mr. Schwartz's office. Mr. Roth further testified that the first notice he received of this litigation was when he received the judgments in the mail at his residence. Mr. Roth denied that he received the default notices (Plaintiff's # 12 in evidence) at his home address.
Mr. Roth acknowledged that he currently resides at 1658 52nd Street in Brooklyn, and that he moved to this address some time after the summer of 2005. He previously lived at 146 Rutledge Street in Brooklyn, and he testified that he still owns the property at that address. He also testified that he continued to receive mail at both addresses after the move.
During a deposition, Mr. Roth testified that, prior to moving to his new residence, his usual routine was to attend prayers in the morning and to return to his home sometime between 10:00 a.m. and Noon. When he moved to his new residence after the summer, he no longer returned home after prayers, but instead went to the office directly from shul.
Finally, he testified that, if he was unable to pick up the mail from both residences, someone from the office would retrieve his mail and then bring it to him at the office.
Mr. Roth was the last witness to testify on behalf of the Defendants.
The Plaintiff then called Mr. Schwartz as a rebuttal witness. Mr. Schwartz testified that he forwarded ten letters to the Defendants, Mendel Brach, Moshe Roth, and Quality Estates, LLC, on his behalf, and on behalf of Peter Greenblum and Outreach Center.
The letters were all dated August 1, 2005, and advised the Defendants that they were in default on their terms and conditions of their notes and mortgages, and that the Plaintiffs were demanding payment within 10 days of the date of the letter, otherwise legal action would be commenced.
The letters were sent to Mr. Moshe Roth and Quality Estates, LLC at 1658 52nd Street, Brooklyn, New York, and at 146 Rutledge Street in Brooklyn, New York. Letters were also sent to Mr. Mendel Brach and Quality Estates, LLC at 29 Walton Avenue, Unit 17A, Brooklyn, New York 11206. Mr. Schwartz testified that he prepared the letters, he witnessed Mr. Greenblum signing his letters, and he made arrangements for the letters to be mailed. At the hearing he produced Certificates of Mailing from the United States Postal Service. He testified that none of the documents were returned to him by the United States Postal Service as undeliverable.
Mr. Schwartz also testified about his relationship with the Defendants. He indicated that, within their community, the people who had summer homes in the Catskills would generally leave late Thursday night or early Friday morning. He indicated that he rode with Mr. Brach to the Catskills one weekend, late on Thursday evening or possibly Friday morning, and returned either late Sunday night or early Monday morning.
Mr. Schwartz also testified that there were many occasions when he contacted the Defendants at home, during normal working hours regarding business between them.
Conclusions of Law
The sole issue for the Court to determine is whether or not the Plaintiffs exercised "due diligence" prior to attaching the Summons and Complaint to the Defendant's doors and mailing them a copy pursuant to CPLR § 308(4).
The Court finds it curious that the Plaintiff would take photos of each attempt that was made to serve process in this particular case. In the words of William Shakespeare, the Plaintiffs "doth protest too much" that they properly effected service. Although the Plaintiffs attempted to effect service in such a manner so as to meet the minimum requirements of CPLR § 308(4), it appears that the Plaintiffs have crafted their service, based on their personal knowledge of the Defendants' schedules, to ensure that the Defendants would not receive actual, timely, notice of the action.
"The lady doth protest too much, methinks." — From Hamlet (III, ii, 239).
The Court notes, initially, that at the time that service was made, the records of the Department of State had 236 Broadway as the official address for service of process upon Quality Estates. No attempt was made, however, to effect service in accordance with Section 303 of the Limited Liability Company Law.
It has been held that "nail and mail service" is not sustainable unless there is proof that the process server first attempted with "due diligence" to cause service to be made in accordance with the provisions of CPLR 308(1), (2) ( Kasovitz v. Weiszman, 110 AD2d 117, 493 NYS2d 335 [2nd Dept., 1985] Because there is a reduced likelihood that a defendant will actually receive the summons when it is served pursuant to CPLR 308(4), the requirement of "due diligence" must be strictly observed ( State of New York Higher Educ. Services Corporation v. Cacia, 235 AD2d 986, 652 NYS2d 883 [3rd Dept., 1997]).
The Plaintiffs in this case made four attempts at service at the residential addresses of the individual Defendants, however, each attempt was made at a time when the Defendant would be expected to be out of town (Thursday evening through Sunday Evening) or were made on weekday afternoons when the Defendants were at work. The Plaintiff also studiously avoided attempting to serve the Defendants at their actual place of business, 388 Berry Street. The Plaintiff specifically instructed the process server not to attempt service at the business address, because it was anticipated that they could not gain entry at that address.
The testimony developed at the hearing made it clear that the Plaintiff was aware that the Defendant's actual place of business was at 388 Berry Street. Plaintiff was also aware that the 236 Broadway address was the address of Defendant's attorney, but that the Defendants were not operating their business from that address. The Court also notes that the Notes which are the subject of this litigation gave the Defendant's business address at 388 Berry Street.
It is the Plaintiffs who bear the burden of establishing that personal jurisdiction over the Defendant was obtained ( Smith v. Wilson, 130 AD2d 821, 515 NYS2d 146 [3rd Dept., 1987]). In Barnes v. City of New York, 51 NY2d 906, 434 NYS2d 991 the Court of Appeals observed that "in determining the question of whether due diligence has been exercised, no rigid rule could properly be prescribed," and it has been also held that "the due diligence requirement refers to the quality of the efforts made to effect personal service, and certainly not to their quantity or frequency" ( Friedman v. Telsco, 253 AD2d 846, 678 NYS2d 364 [2nd Dept., 1984], Bernardo v. Barrett, 87 AD2d 832, 449 NYS2d 272 [2nd Dept., 1982]).
"The fundamental consideration underlying every case in which the validity of service is at issue is whether the service was under all the circumstances reasonably calculated to afford the prospective defendant the required notice" ( Cooney v. East Nassau Medical Group, 136 AD2d 392, 528 NYS2d 364 [1st Dept., 1988], Sartor v. Utica Taxi Center, Inc., 260 F.Supp.2d 670 [SDNY, 2003]). For example, the Courts have found a lack of due diligence in the following instances: three weekday attempts, during normal working hours, at Defendant's residence during times "when it should reasonably have been concluded that appellant was in transit to or from his place of employment" ( Kasovitz v. Weiszman, supra.), See, also, State of New York Higher Educ. Services Corporation v. Cacia, supra., which also held that attempts at service made only during working hours have been held to be insufficient as a matter of law to satisfy the due diligence requirement.). In Mike Lembo Sons, Inc. v. Robinson, 99 AD2d 872, 472 NYS2d 750 [3rd Dept., 1984] the Court found a lack of due diligence where no attempts were made at service at the Defendant's home, and two of the three attempts at Defendant's business were made after 5:00 p.m., the presumed closing time of the business. In Pizzolo v. Monaco, 186 AD2d 727, 588 NYS2d 910 [2nd Dept., 1992], a medical malpractice case, the Court found that the Plaintiffs had not exercised due diligence when they failed to attempt to serve the doctor at the hospital, when his employment there was evident from the complaint itself.
In the case at bar, the Plaintiff's process server indicated that he was specifically advised by the Plaintiff that the Defendants could be found at home on weekday mornings, but no attempts at service were made at those times. Both the process server and Mr. Schwartz also indicated that he was specifically instructed not to attmept service at the Defendant's actual place of business at 388 Berry Street.
The Plaintiff, Harold Schwartz testified on rebuttal that he was aware that it was the practice of the Defendants, who have summer homes in the Catskills, to leave on Thursday evening or early Friday morning and to not return until Sunday or Monday.
Therefore, although the affidavits of service may appear to be sufficient on their face, in the particular circumstances presented herein, the Court finds that the Plaintiff has failed to sustain its burden of proving due diligence. The process server testified that he was advised that the Defendants would leave their homes in the morning to go to synagogue and then to work. Therefore, the Plaintiff did not reasonably expect to find the Defendant at home during the service attempts on Tuesday afternoon. The Plaintiff testified on rebuttal that he was aware that the Defendants' families would not be found at home at all during the summer, and that the Defendants would not be expected to be found at their homes in Brooklyn on Thursday evening, Friday, or Sunday, which is when all of the remaining attempts were made. In each case, the Plaintiff attempted personal service at a time when he could reasonably conclude that the Defendants would not be at home. In addition, the Plaintiff avoided even a single attempt at service at the Defendant's actual place of business, even though he was personally aware of the address at which they were conducting business, and it was the address provided on the Notes and Mortgages which are the subject of this litigation.
Therefore, based on the foregoing, the Court finds that the Plaintiff has failed to establish that they satisfied the due diligence requirements of Section 308(4) of the CPLR, and therefore, the Plaintiffs did not acquire personal jurisdiction over the Defendants.
WHEREFORE, it is hereby
ORDERED that the Judgment awarded by this Court, by Decision and Order, dated December 13, 2005, in the action of Peter Greenblum and Harold Schwartz v. Quality Estates, LLC, Mendel Brach and Moshe Roth (Index # 2219/05) is hereby vacated and the action is dismissed; and it is further
ORDERED that the Judgment awarded by this Court, by Decision and Order, dated December 13, 2005, in the action of Outreach Center v. Quality Estates, LLC, Mendel Brach and Moshe Roth (Index # 2220/05) is hereby vacated and the action is dismissed; and it is further
ORDERED that any restraining notices which were served, based upon the Judgments previously entered in this action, are vacated; and it is further
ORDERED that the Defendants shall have twenty (20) days from the date of service of this Order, with notice of entry thereon, to serve their responses to the Motions for Summary Judgment in Lieu of a Complaint in the actions, Outreach Center v. Quality Estates, LL, Mendel Brach Moshe Roth, Index # 160/06, and Peter Greenblum and Harold Schwartz v. Quality Estates, LL, Mendel Brach Moshe Roth, Index # 161/06. By Order dated February 23, 2006, the Court had previously extend the time for the Defendants to put in an answer, or a motion to dismiss, pending the Court's determination at the joint traverse hearing.
This memorandum shall constitute the Decision and Order of this Court. The original Decision and Order, together with the motion papers have been forwarded to the Clerk's office for filing. The filing of this Order does not relieve counsel from the obligation to serve a copy of this order, together with notice of entry, pursuant to CPLR § 5513(a).